Bºorºº ºntº
Interºſ. ſummer. Jamniºiº.
IN THE MATTER OF
PASSENGER TARFFS and RATE-WARS,
- Mºore sºvº.
ºn Jºy ºn is so



IEEETOIR, DED THIDE
#(uſerstate {ſommerce {ommission,
IN THE MATTER OF PASSENGER TARIFFS AND RATE-WARs.
IMIEHIMIORAINIDUIM.
Filed Jan. 25, 1889.
CooDEY, Chairman :
In September 1888 first-class limited fares from St. Louis
to New York City, according to the tariffs on file in the office
of this Commission, were, and now are, as follows:
Vandalia Line and Pennsylvania Railroad ------- $23 50
Bee Line and New York Central & Hudson River
R. R. ------- * * * me sº sº ºs mºs º sº ºs º ºs = * * * * * * * *s ºse º º mºst sº º sº sºme º sº 22 00
Wabash, Michigan Central and West Shore------- 21 00
Ohio & Mississippi and N. Y., L. E. & W.--------- 20 00
Ohio & Mississippi, via Louisville ----------------- 19 00
Chicago & Alton, via N. Y., L. E. & W.----------- 20 00
Indianapolis & St. Louis, via N. Y., L. E. & W. --- 20 00
Wabash, via N. Y., L. E. & W.------------------ 20 00
The considerable differences in these rates, are noticeable:
the highest is seen to be 23 per cent. above the lowest. They
are understood to have been made by express or tacit assent
of the managers of the respective lines, and it may be
assumed that the differences in the price of tickets were ex-
pected to equalize the advantages of the respective routes in
sº
2
competing for business, so that each would be likely to secure
an equitable proportion of the traffic competed for. The
Ohio & Mississippi, having by way of Louisville the most
circuitous route, offered to those who would take it the
cheapest ticket. -
Rates corresponding to these were made from St. Louis to
Philadelphia, Baltimore and Washington. A so-called rate
war suddenly broke out, in the course of which large re-
ductions in the through rates were repeatedly made. The
Commission has given to officials of the leading roads an
opportunity for explanation, and the course taken while the
war lasted has been described by them as follows:
By one: “An unfortunate controversy with competing
lines leading east from St. Louis compelled this company to
make daily reductions in the rates named in our joint tariffs
now on file in the office of your Honorable Commission.
These reductions were made, however, without any arrange-
ments having been entered into with the several other car-
riers operating lines of railroad east of Indianapolis. It
was impossible, under the circumstances, to establish any
joint tariffs, and none therefore were made.
“Agents at local points between St. Louis and Indian-
apolis were instructed from day to day to sell tickets from
their respective stations to New York and other eastern ter-
minals at the same rates prevailing at the time of Sale for
tickets to such terminals from East St. Louis; and during
this same period our agents at St. Louis and other stations
between that city and Indianapolis, where tickets of the
proper form were kept for sale, were instructed from day to
day to sell tickets to non-competing and all other points
situate upon the direct through line, between St. Louis and
New York, over which rates less than the joint tariff rates
prevailed, and which were east of Indianapolis and West of
New York and other eastern terminals, at the same rates or
at rates not higher than those prevailing at the time from
East St. Louis to such eastern terminals. The rates from
3
East St. Louis referred to in these instructions were uniformly
the prevailing rates from St. Louis, less 25 cents per ticket.
The lowest rates at which we sold tickets from St. Louis to
eastern terminals referred to were as follows: to New York,
and to Philadelphia, $10.00 each ; to Baltimore and Wash-
ington, $6.50 each. These prices were reached by almost
daily reduction between September 20 and October 8, 1888.
So frequent were the changes that it would have been im-
possible for us to have agreed with our eastern connections
upon each change, and filed with your Honorable Com-
mission a joint tariff therefor; nor did we publish or file any
local tariffs showing these reduced rates. Our eastern con-
nections honored the tickets sold by us at the rates above
mentioned.”
The most noticeable feature of this historical statement is
the assumption of the writer that because of “an unfortunate
controversy " he suddenly found himself in circumstances
where he was at liberty to discard all thought of what the
law required of him, and all regard for the rights of con-
necting lines or of ticket buyers, in order that he might take
an effective part in the contention. He therefore proceeded
to make rates which were not notified to the Commission or
to the public in any regular way, to issue tickets for other
carriers at rates not assented to by them, and to sell tickets
to parties who might for aught he knew find them rejected
before their journey, begun in reliance upon them, was com-
pleted. “It was impossible under the circumstances,” we
are told, to do otherwise. The writer would have expressed
the exact meaning more accurately had he said it was im-
possible to plunge into the fray in the manner customary
in such cases and at the same time observe the require-
ments of the law and the rights of ticket purchasers and of
connecting lines, and therefore law and right were put aside
until the fray was over.
By another it is said: “Rates in several instances were
reduced even during one day's Sales; besides this rates were
4
reduced daily for quite a number of days to less than the
rates in effect for the preceding day, and that to quite a num-
ber of eastern points; the rates from St. Louis to different
points reached figures stated below, viz: New York, $6.50;
Philadelphia, $6.75; Baltimore, $6.50, Washington, $6.50.
Reduced rates were made on account of reductions made by
competing lines. As a rule instructions were given our
agents at points east of St. Louis during the period referred
to to make corresponding reductions to points east as were
made from our western terminal. There may possibly have
been instances where this rule was not fully apprehended,
but the general instructions were to follow the line of policy
indicated above. The tickets which were issued from St.
Louis to any eastern point were good to any intermediate
point so that in fact it was not regarded as necessary to give
a rate to every intermediate point, though, as a matter of
fact our rates were less in most instances to intermediate
points than they were to extreme eastern points.”
Here is a like assumption of an overruling necessity to
that noted above. The writer apparently hopes that the in-
structions to subordinates which “as a rule” were given,
though perhaps not “apprehended ” were nevertheless ob-
served, and that the “line of policy indicated * was followed.
But whether this was so or not, the one necessity of striking
effective blows in the controversy was paramount.
By a third the facts are thus stated: “It is true that dur-
ing the so-called rate war in which we were forced to become
unwilling parties, passenger tickets were sold at reduced and
varying rates from St. Louis to New York, and these prices
changed daily for some time. I do not understand, how-
ever, that rates so made came within the Interstate Com-
merce Act so as to require us to file copy of the same with
the Commission, as no general tariffs were agreed upon, and
could not well be, on account of the changes which were too
frequent to admit of general agreement.”
Here again an imperious necessity is encountered. The
5
writer is “forced to become an unwilling party” to a con-
troversy in the course of which he makes changes in his
rates with such rapidity that the law has no opportunity to
attach to them its commands. The law must be silent while
the fray is on.
As a matter of fact none of the parties to this “war” gave
any notice to the Commission of any one of these changes, nor
did it have from any one of them the least information on
the subject until, in consequence of reports of what was going
on, a call was made for it. -
The regular passenger fare from St. Louis to Indianapolis
immediately preceding this war was and now is $7.50; to
Cincinnati, $10.00; to Louisville, $8.00; to Chicago, $7.50.
Rates from St. Louis to all points east of those named were
and are higher than rates given to New York City and
other eastern terminals while the “controversy" was in pro-
greSS. &
It would be interesting to ascertain, if it were possible to
do so, what the real cause for this controversy was ; what in
other words it was that created this imperative and over-
powering necessity under which for the time the carriers
acted. No one of the carriers assumes the responsibility of
having begun the reduction of rates; evidently the party
who begun it has no reason upon which he is content
to stand to assign therefor. No specific act of wrong doing
by competitors is named as a reason, and if any one had a
grievance, it is not known that any attempt was made to
obtain redress by peaceful means. It has been intimated
to the Commission that hostilities had their origin in a be-
lief on the part of the official who inaugurated them that
his line was not getting the proportion of business that was
expected when the rates were arranged ; a belief that on in-
vestigation proved to be unfounded. We have no evidence
that this intimation is accurate, but the fact seems to be un-
questionable that the ordinary precautionary steps that in
other lines of business would be taken before converting a
6
state of amicable rivalry among competitors into a state of
destructive warfare, were omitted altogether.
Notice was taken of this subject in the Second Annual
Report of the Commission (page 22) as follows:
“Steadiness of rates, then, is an object to be kept in view
in the public interest. In a recent passenger-rate war be-
tween roads extending east from St Louis joint rates were in
some instances reduced several times in the course of a sin-
gle day, until they were made absurdly low, the reduction
being sometimes made without even waiting for the consent
of connecting roads, so that parties who had purchased tickets
would have found them not honored before they reached
their destination, and been subjected to great annoyance be-
fore redress could be obtained, had the connecting roads de-
clined, as they might have done, to accept the tickets and
share the losses. When the general passenger agents had
sufficiently subdued their belligerent mood, the rates were
suddenly advanced, with the inevitable result that parties
who had calculated on the low rates and been enticed from
their homes and seduced into taking any action in reliance
upon them, found themselves compelled to pay more than
they had reason to expect; they doubtless felt something the
same sense of being wronged that the people of a neutral
territory may be expected to feel when it is overrun by the
armies of belligerents.”
It is impossible to read the correspondence from which
Quotations are above made without a conviction that while
hostilities were in progress not one of the parties paused to
consider whether that which was being done was in con-
formity with the Act to regulate commerce. It seems quite
clear that in several respects the act was violated by some
of the carriers, and in some particulars by all of them. The
tickets in question necessarily all contemplated continuous
trips over the lines of connecting carriers, and were issued as
entitling purchasers to transportation accordingly. But in
some instances if not in all they appear to have been sold
without obtaining consent from the connecting lines. Never-
theless if purchasers accepted them as contracts according to
7
the terms on which they were sold, the initial carriers thereby
assumed in their dealings with the public to have the right to
make them, and took the risk of their patrons being im-
posed upon in case remote carriers should refuse to honor
them. Such a contract for joint transportation involves a
joint tariff. Interstate commerce cannot be taken out of the
provisions of the act by the assumption that the initial
carrier issues contracts without authority. There is at least
an implied authority; and actual authority in the present
case was shown by the fact that the tickets were honored.
Every reduction involved a new joint tariff; and it is there-
fore seen that the provisions of section six of the Act to reg-
ulate commerce which require the filing of joint rates with
the Commission were utterly ignored by the carriers. Nor
will it escape observation that the reason for ignoring them
was that they constituted an impediment to the sudden and
rapid changing of rates which was indulged in while what
the parties call the “unfortunate controversy " was pending.
Moreover, although the correspondence exhibits an effort
to convey the impression that the provisions of the fourth
section of the act were not violated during the period in
question, it is difficult for the Commission to accept what is
said as proof of an actual belief. This is especially difficult
in view of the guarded manner in which one of the writers
states his supposition that his rule was observed and his
policy carried out. But violations of this section have been
distinctly charged. One complaint made to the Commission
states facts as follows: The complaining party was aware of
the fact that on a day named the recognized rate from St.
Louis to New York by one of these roads was six dollars and
a half. On the following morning he took the cars for New
York at an intermediate station and was charged by the
same route sixteen dollars. This would seem to show either
that the fourth section of the Act was violated, or that the
rates were suddenly advanced without notice. But which-
ever may have been the case it is perfectly manifest that for
8
the time being the carriers engaged in the controversy paid
no attention whatever to the question whether any of the
parties concerned, themselves included, were or were not
conforming to the law. Apparently they devoted their
whole energies to making rates from hour to hour that
should at least preserve the relative advantages which had
been held by them respectively under the prior arrangement
of rates. In other words they disregarded altogether such
protection as the law would have afforded, and devoted
themselves to methods which they were accustomed to see
employed for the redress of violations of similar understand-
ings before the law which should now control them was
enacted.
After the parties had thus for a time indulged their bellig-
erent propensities, the rates were again restored by all the
competing routes to the figures before prevailing. These
rates may for all present purposes be assumed to be reason-
able: the carriers had established them and the Commission
is not advised that the public had been complaining of
them. It is fair to conclude that they resulted in satisfac-
tory revenue. The restoration was necessarily matter of
agreement, either express or implied, so that in the end after
suffering considerable losses, the belligerents came back to
exactly the positions in all respects, except as to the losses,
which had been occupied by them respectively before the
war began.
Assuming that the rates are reasonable, it is pertinent now
to ask: What is the significance of such an outbreak and
what good or even plausible reason can be assigned by any
of the parties for engaging in it 7 As usual in such cases
each carrier claimed that it was forced to do what it did by the
action of competitors, and now relies for a justification of its
conduct upon an overruling necessity which took away all
free will. The very excuse admits that there must have
been at least one offender, but no one admits itself to be the
one, or points to another as the guilty party. The conclu-
9
sion of the carriers thus presented to the public is, that the
action of some one not identified absolved all the others from
obligation to observe the law.
We cannot admit this conclusion. We cannot agree
that even if the facts were as they were assumed to be, the
act of one carrier forced upon the others the conduct they
indulged in. The compulsion, if there was one, must have
arisen from either an open or a secret reduction of the agreed
rate : This is supposed to have created the necessity of un-
hesitatingly meeting the cut rate at all hazards. But from
what does any such necessity arise?
It certainly does not arise from any requirement of the
Act to regulate commerce. That act does not require one
carrier to gauge its rates by those charged by another, but
when its rates are reasonable, allows them to be maintained.
The necessity if any must therefore spring from considera-
tions of business prudence and policy.
What is commonly said on behalf of the carriers in such
cases is, that unless the cut rate is met, traffic, which the
line making the rate would not under normal conditions
obtain, would flow to it, and be permanently lost by others
which are better entitled to it. We concede the likelihood
that a temporary loss would be suffered, but that it would
be permanent we do not think at all probable.
It is well known that travel has its convenient and its
favorite routes, and that it cannot be altogether diverted
from these by mere cheapness of rates. The very rates
established by the carriers for travel between St. Louis and
the Atlantic cities recognized this fact, for as is shown above,
the less desirable routes made considerably lower rates than
others. It is also well known that frequently there are
exceptional reasons for a traveller taking a particular
route though some other may be cheaper and in general
more convenient. It is not to assumed or believed,
therefore, that any cut made by one line could have
altogether taken the travel away from the others. But
10
if it did, there would be no reason to suppose the loss
would be permanent. Travel is by individual persons, at-
tracted to particular routes by the advantages which at the
time are offered ; and the effect of a rate which is so low
that it is impossible to maintain it, must cease immediately
or very soon after it ceases to be given. It is only where
the cut rate is not too low to be made profitable by the in-
creased business it may bring that the carriers can expect
anything more than a temporary advantage, since it is only
under such circumstances that it can be long continued.
And in the case under consideration no one pretends that
the low rate which was reached could possibly have been
long maintained. The cut was obviously a temporary ex-
pedient; a war measure to be retreated from when the im-
mediate object was accomplished.
In this case, then, if the several carriers had not met the
cut rate, they would for the time being have suffered some
loss of passenger traffic; probably the major part of that
which was competitive from St. Louis with the line reducing
the rate. There are no facts in possession of the Commission
which show that they would have lost anything more. How
long the cut rate would have been maintained if not met we
cannot know, but it is not by any means certain that meet-
ing the rate hastened its withdrawal. If the cut began in
misapprehension, the obvious remedy was to remove the
misapprehension by friendly conference : to retort with hos-
tile action was more likely to imbitter the difficulties than
speedily to remove them.
We may go farther and say that in all cases where
arrangements are broken up under which parties have
been competing for business with maintenance of reason-
able and steady rates, and when obviously only mutual
assent can restore the former relations, ordinary business pru-
dence will dictate that the first step taken should be in the
line of an attempt to bring about a better understanding.
Unfortunately in these cases instead of being the first step
11
it is very apt to be the last step thought of: the first ener-
gies are devoted to the infliction of mutual injuries.
Sometimes these are continued until the parties reach the
point of exhaustion; sometimes their folly is made apparent
Sooner; but in cases like the present where agreement ex-
press or implied at length restores precisely the state of
things existing before hostilities began, the intermediate in-
juries are by the very restoration shown to have been need-
less, if not positively wanton.
What a competitive line loses by making an unreasonably
low rate is not readily computed. In the case before us the
losses must have been considerable. These would include
first the direct loss on tickets sold at lower rates; next the
loss suffered from making the rates between intermediate
points and the same terminals conform to the requirements
of section four of the Act to regulate commerce. On a long
line like that between St. Louis and New York the losses on
intermediate traffic, if that section were observed, would have
considerably more than offset all possible losses that could
have come as a consequence of a steady observance of the
through rate. But the reductions would not be restricted
within the express requirements of section four: for rates
must have some regard for relative equality, and the effect
upon other classes of tickets than those issued for the com-
petitive traffic might have been very considerable.
Judging from the facts before us, there would seem to be no
avoiding the conclusion that the dictates of reasonable pru-
dence were disregarded by every one of the carriers that met
the cut rates. The losses from meeting them, if the other
reductions were made which an observance of the Act to
regulate commerce would render necessary, must have been
much greater than any which would have been at all likely
to result from maintaining the previous rates. But this is
not all: it was perfectly apparent from the first that the
only effectual and permanent remedy that the parties could
have for the difficulty which had arisen was to come to a
* 12
better understanding, and a prudent regard to their own in-
terest would have dictated that the steps taken should have
been chosen from their probable tendency to bring it about.
Hostile and retaliatory action naturally led in the other di-
rection. -
It is not for a moment to be conceded that any one of the
carriers involved in this controversy acted under any such
compulsion as their agents now bring forward in order to
excuse themselves. The imperative necessity under which
they claim to have acted was matter of pure assumption.
Some one of them voluntarily began to cut the rates, and
all the rest hastened to follow the example. Every one could
have abstained from doing what he did, and have continued
to observe the established rates if he had not chosen to do
the contrary. Each one, on a calculation of interest and to
the disregard of everything else, decided not to do so. But
when he chose to take part in reducing the rates, as he had
an unquestionable right to do, there was nothing in reason
or in the nature of things to preclude the reductions being
made in conformity with the law. All the parties however
elected the more reckless course. Had the law been observed
in the making and filing of joint rates, the process would
necessarily have been more slow and deliberate, and the re-
ductions it may be assumed would not have been likely to
reach the very low figures they finally attained. The dis-
regard of legal requirements was therefore apparently in-
jurious to the carriers as well as illegal, and not one of the
agents who took part in this reckless warfare, and while it
lasted made everything else yield to the supposed interest of
his employer, is now able to show that even when considered
from the point of view of selfish interest the action he took
was excusable. In any light in which it may be viewed it
deserves to be designated unwise, and as coming under the
condemnation, not only of the law, but of selfish policy
also. i
13
A still more extraordinary war in passenger rates was
found raging in the territory west, northwest and southwest
of Chicago at the beginning of December, 1888.
The roads in that section of the country had for several
months been disagreeing over freight rates, and there had
been such reductions as brought them to wery low figures.
The reductions were openly made, and called for no inter-
vention on the part of the Commission until the action of
the Chicago, St. Paul & Kansas City Railway Co., in re-
ducing the through rates from Chicago to St. Paul below
those to intermediate stations, seemed to demand its inter-
ference. (See Matter of Chicago, St. Paul & Kansas City Ry. Co.
2 Int. C. C. Rep. 231.) For a considerable time there was no
change in the passenger tariffs, but it was perhaps inevitable
that the difference in respect to freight rates should, with
no great delay, extend to passenger rates also. There were
besides some special causes for disturbance in the passenger
traffic. The Wisconsin Central which is a less direct line
between Chicago and St. Paul than some others, and cannot
offer equal inducements to travellers, claimed the privilege
of making a somewhat lower rate ; in other words, insisted
that the other lines should concede to it what is known as
a differential; and one or two of the other lines, which are
similarly circumstanced, were dissatisfied with their share
of the traffic under equal rates, and showed an inelination,
to make the like claim. The differential was not conceded,
and it was soon suspected and charged that one or more of
what were considered the weaker lines in the competition
for Chicago and St. Paul traffic were secretly cutting the
rates. The charge was denied, but the denial was appar-
ently not credited, and measures of retaliation were resorted
to which after a time involved all the roads engaged in the
passenger traffic between Chicago and St. Paul, Minneapolis,
Council Bluffs and Omaha, and also those engaged in the
like traffic between Chicago and St. Louis and between Chi-
cago and Kansas City, with the exception of the Illinois Cen-
14
tral. This last company is not, to the knowledge of the
Commission, charged by any one with participation in the
discreditable proceedings which for a time took place.
The war between the roads continuing, and no one ap-
pearing inclined to invite the intervention of the Commis-
sion, two of its members, at the beginning of December, pro-
ceeded to Chicago to investigate what was fast becoming a
public scandal.
When the Commissioners arrived in Chicago they found
that the business of selling tickets for passenger transporta-
tion between the cities named was being conducted almost
exclusively by ticket brokers who were evidently reaping
enormous profits out of it. For the purpose of the sale of
tickets the city offices of the several roads, and the general
offices also, might almost as well have been closed. The
brokers sold the tickets, and they did this in their own dis-
cretion for such prices as they could obtain. The evidence
was abundant that there was no uniformity in the prices
whatever.
This state of things seemed to call for Some investigation
into the business of these brokers. It was found that there
were twenty three offices kept by them in the city of Chicago
and a great many others in other parts of the country. Some
of these were handsome offices, prominently located, expen-
sively fitted up and supplied with a force of clerks exceeding
that required in the regular city ticket offices of the roads.
The proprietors call themselves “ticket brokers,” and they
repel the appellation of “scalpers,” which is very generally
applied to them by the public, and sometimes by railroad
men. Those in the leading cities of the country have formed
themselves into an association and interchange business.
One of the Chicago brokers has three offices in that city
and interests in offices elsewhere, and the evidence taken by
the Commission fairly tended to show that his annual profits
must exceed, perhaps considerably, the salary which the
people of the United States pay to their President. These
15
great profits are a drain upon the resources of the carriers;
and as those resources are wholly derived from the rates and
fares levied upon the public for services rendered, it becomes
of the utmost importance to ascertain, if we can, what iegiti-
mate reason there can be for this business existing.
The ticket “scalper” as he first makes his appearance in
the railroad business appears as a person engaged in impos-
ing upon the public something as evidence of a right to
transportation which is only apparently so, and which will
only be used through deceiving the conductor upon the train,
or through the conductor's dishonest or careless connivance.
Tickets not transferable but which have nevertheless passed
from the hands of the person to whom they were issued,
tickets limited in time and not made use of until the time
has expired, tickets partly used, and not by the conditions
of issue capable of further use, are all dealt in by such per-
sons, and it is frequently charged that they are sold by first
erasing dates or conditions that show them to have ceased
to be operative. This sort of business has always been ac-
counted thoroughly disreputable, and as it could only be
made profitable through frauds upon either the carrier or
the purchaser of the ticket—who often found what he had
bought refused on the train—the State legislature in Some cases
interfered and passed laws which were designed to bring the
business to an end. The chief difficulty in the way was the
fact that there were often valid tickets out which for
various reasons were not fully used; such, for example,
as a round trip ticket which had been used one way only.
Such tickets, if not made non-transferable, had a com-
mercial value, but as the holder might not know of persons
desiring to use them, or might not have the time or op-
portunity to find such persons, he naturally sold to any
one who would buy, and the tickets were sufficiently
numerous to tempt persons to engage in the purchase
and sale as a business. The legislature of Illinois
undertook to overcome the difficulty by requiring the rail-
16
road companies to redeem the unused part of a ticket by
paying for it a sum equal to the difference between the price
paid for the whole ticket and the cost of a ticket between the
points for which a portion of said ticket was actually used;
but where, as very frequently happened, especially in the
case of round trip tickets, the sale was at a considerable re-
duction from the regular tariff, the unused portion had a
commercial value exceeding the sum the railroad company
was required to pay to redeem it. The scalpers therefore
continued to buy and to sell, and when they were guilty of
no fraud or deception they were either not prosecuted for
violations of law, or, if prosecuted, were not convicted, and
the law became a dead-letter. How bold these, people have
at length become in their disregard of right and of law may
be seen from the paper the body of which is here given,
which in printed form is sent to persons supposed to have
in their possession evidences of a right to transportation.
The paper is issued from offices of ticket brokers in Mem-
phis, Tenn., and New Orleans, La., and with the omission of
the heading and signature is as follows:
“DEAR SIR:—As our facilities are such that we can handle
Editorial Mileage and Passes without risk on your part, on
our part, or on the part of the party that is travelling—if
you desire to sell your Mileage or Pass, by you filling out
the blank below, we will give you one and one-half (1}c.)
cents per mile on Passes or Mileage for any number of miles
on any Railroad. We never care to buy Passes or Mileage
unless the blank below is properly filled out ; which is to
insure us against risk. When the party we sell to has the
blank filled out, he knows just when to present his Pass or Book
for Passage. You are aware that most of the Editorial
Mileage and Passes expire January 1st, 1889, therefore if
you have anything you would like to sell, send it in at once.
The Passes and Books read “Not Transferable"—but you
are aware that the Courts have decided that all Railroad
Tickets, Passes, and Mileage are good and transferable until
used. So you can sell your book with safety, and we can
guarantee you no trouble. We refer you to any business
house or bank where we are doing business.
17
Hoping you will send in your pass and whatever mileage
you may have on any Railroad, or call upon us personally,
We remain, very respectfully yours,” &c.
The blank which is referred to is as follows:
“Enclosed you will find Mileage Book No. -- on ----
Railroad, No. of miles ----. What conductors are you ac-
quainted with and on what Division do they run from ----
to ----
Address------------------------------------------
A very slight inspection of this paper is conclusive of the
fact that it contemplates frauds upon the railroad compa-
nies, to be accomplished either by deceiving conductors or
by their connivance or acquiescenge. Passes and mileage
tickets are believed to be always made non-transferable, and
are therefore not salable unless a fraud is intended. But as
one of these brokers told the Commissioners, a new con-
ductor sometimes enforced the restriction and refused to
permit any one except the original party to travel upon the
ticket; in a little time he ceased to be particular, and the
tickets were received from any one.
It might be reasonably inferred that the railroad man-
agers, knowing the disreputable nature of the business such
men are engaged in and the injury to their roads therefrom,
would endeavor to bring the business to an end, or at least to
put such restraints upon it as a reasonable and prudent man-
agement of their own business would render practicable. It
was found, however, that in the country west and northwest
of Chicago the fact was quite otherwise. In some respects
the railroad business seemed to be managed with special ref-
erence to advancing the interest of these persons as if they
were objects of consideration who must be made to prosper
whether the roads did or not. In other particulars the
2
18
methods of the roads, though adopted in supposed advance-
ment of their own interest exclusively, nevertheless tended
in the same direction. The statement of a few facts will
render this plain.
It has been the practice of many railroad companies in-
stead of paying money for advertising and other printing,
to pay where they could in mileage tickets. It is not to be
supposed they expect that these will all be used by the per-
Sons to whom they are issued, and they must therefore con-
template their being sold. If sold, they naturally to some
extent at least would pass to the hands of persons making
the purchase and sale a business. Mileage tickets are also
largely sold by railroad companies to any one calling for
them, and the price put upon them is so much below the
price charged for other tickets entitling the holder to a cor-
responding transportation that a person desiring to take a
short journey by rail may find he can save money by pur-
chasing a thousand mile ticket and selling it at the end of
his journey instead of buying the customary ticket for that
journey alone. A mileage ticket issued with a restrictive
clause to one person might thus be used for a number of
trips by different persons, each one of whom would get his
transportation at something less than the regular rate, and
in addition one or more brokers would have a small profit
out of the ticket also. This misuse of mileage tickets is so
easy and the prevention so difficult, that the question seems
a pertinent one, whether it is or not unwise for the compa-
nies to make so great a difference as they do between the
mileage and other tickets, thereby inviting the purchase of
the former for fraudulent use. If the mileage tickets as now
sold, and now used and abused, can be afforded, a strong pre-
sumption arises that with the abuses cut off, a less rate for
the ordinary tickets could be accepted without the carriers
incurring loss thereby.
Mileage tickets, however, could not by themselves afford
a large source of income to ticket brokers. Other excep-
19
tional tickets are also used very extensively, and some of
these the brokers are able to handle in ways that result in
large profits. The carriers west of Chicago appear to do a
large business in the issue of what they call excursion tickets.
Some of these are tickets to public gatherings, such as agri-
cultural fairs, Grand Army gatherings, religious and politi-
cal conventions, etc., or they are tickets for students gathered
in educational institutions to go home and return when the
vacations occur. But the issue of these exceptional tickets
is not confined to such gatherings: it seems to be sup-
posed that under the provision in section 22 of the act to
regulate commerce “that nothing in this act shall apply
to the issuance of mileage, excursion or commutation pas-
senger tickets,” the companies are at liberty to issue almost
anything which they see fit to designate an excursion ticket,
and that in issuing it they are free from the obligation to
publish rates or otherwise observe the requirements of the
act. And having that liberty, investigation seemed to show
that they had exercised it on various excuses and on all
possible occasions. “Harvest Excursion tickets” have been
issued for travel into sections where important crops were
coming to maturity or were being gathered, as have also
holiday excursion tickets, and tickets for pleasure excur-
sions of various sorts. When the officers who issued these
tickets were asked for their definition of an “excursion
ticket,” they for the most part answered that it was a ticket
issued for a round trip at a reduced rate; but it was some-
times found that they were not even round trip tickets in
the ordinary sense, for they were issued for trips about the
country not contemplating a return by the same route.
The only characteristic feature of the tickets then seemed to
be, that they were issued at a reduced rate; and if this fact
relieved the carrier from the obligation imposed by the Act,
it was easy for it to rid itself, so far as passenger traffic was
concerned, from those obligations altogether. But clearly
this practice was an abuse, and in some particulars an eva-
20
sion of the law. It is not believed that Congress ever in-
tended that the words “excursion tickets” in the Act should
be given this broad and irresponsible construction.
The surprising fact to be mentioned in this connection is
that the railroad companies should be solicitous or even
willing to evade the Act in this way, or so greatly to stretch
its construction in order to cover doubtful cases. Many of
the so-called excursion tickets are issued at one fare for a
round trip, and the result of their being offered is that large
numbers of people buy the tickets with no thought of making
use of them for any such occasion as that for which they are
nominally issued, but in order to make use of them as a
means of cutting the regular rates. If for example an ex-
cursion is advertised from Chicago to St. Louis at one fare for
the round trip, a resident of St. Louis who happens to be in
Chicago, or any party having occasion to pass from Chicago
to or through St. Louis, may purchase one of these tickets,
use it for his own passage, for which he should have paid the
regular rate, and at St. Louis sell it to be used for a passage
from St. Louis to Chicago by some one else who also should
have paid the regular rate, and would have done so had not
this return ticket been in the market. The road thus loses
one fare, and as such tickets at St. Louis would naturally
fall into the hands of brokers, their issue tends to supply
this class of people with business. But the evidence showed
that the brokers themselves purchase these tickets, in blocks
of five or ten, perhaps, at a time, so that during the time
they are being sold nominally for a special occasion, and also
for an indefinite period afterwards, the regular travel is sup-
plied, not at the ticket offices of the companies, but at the
offices of ticket brokers. This class of tickets thus becomes
a great demoralizer of rates at all periods; their existence
on the market is conceded to be a great evil. Nevertheless,
railroad managers, instead of taking steps to reduce the evil
to a minimum, as they might naturally be expected to do,
seem more inclined to multiply excuses for issuing them,
21
and to embrace all possible occasions. Commonly the tickets
are issued on conditions which to a large extent would
preclude the abuses if the conditions were rigidly enforced,
but the great disparity between the excursion and the normal
rates would naturally lead to the taking of risks and would
invite falsehood and equivocation to secure the acceptance
of the excursion tickets by conductors if strict enforcement
of conditions were attempted. -
The Commission cannot believe that the railroad com-
panies are consulting their true interest in perpetrating this
condition of things. Many of the tickets as has already
been intimated, are not believed to be excursion tickets in
any properSense. But if they were properly such, and the right
to issue them were undoubted, the duty to provide against
the abuses practiced by means of them would seem to be
clear. The abuses are seen to be facilitated and increased
by the great difference made in price between these and the
ordinary tickets, and the question again arises as in the case
of mileage tickets whether this difference cannot prudently
be reduced, perhaps by some increase on the one side, and a
corresponding reduction on the other. At the same time
the carriers ought to give thought to the devising of a scheme
for the redemption by themselves of the unused portions of
tickets. A scheme for that purpose ought certainly to be
possible, and if possible ought to be devised and put in force
without delay.
But we have not as yet enumerated all the improper
sources of income of the ticket brokers. Indeed it is not
probable that the large number now prospering on railroad
revenues could make a living at all if they were not directly
aided by the railroad officials. It seems to be almost a
matter of course that when a war of rates begins, regular
tickets shall be put in the hands of the brokers to be sold
at such cut rate as shall be agreed upon. During the last
fall it was well known that the roads leading out of Chicago
had done this to a very large extent. The rates were thereby
22
cut between Chicago, St. Louis and Kansas City, and also
between Chicago and the cities to the northwest, nearly one-
half. The war carried on in part by this means nearly
broke up the Western States Passenger Association and by
November the roads seemed to be all tending to a condition
of exhaustion.
Efforts were made to bring this state of things to an end,
and in the last week in November representatives of the
roads came together and made under oath a report of the
number of tickets thus put into the hands of brokers and
still remaining out. The whole number was then found to
be about twelve thousand. Quite a number, however, had
been recalled from the brokers before the report was made,
but how many was not reported and not known. Agentleman
having considerable expert knowledge testified that in his
opinion the number then out would supply the market about
three months. He had made investigation as to the prices
at which the tickets had been put into the hands of brokers,
and gave the result of his investigation as follows: The
tickets reading over the lines from Chicago to Council
Bluffs would average a rate of $8.10 as against a tariff
rate of $12.50; those over lines to Minneapolis and St.
Paul would average first class $6.60 as against a tariff
rate of $11.50 and second class $4.67 as against a tariff rate
of $9.00; those over lines to Kansas City and Atchison
would average $6.42 and $7.00 respectively as against
a tariff rate of $12.50; and those over lines leading to
St. Louis would average $5.00 as against a tariff rate of
7.50. Some of the roads “protected themselves” against
the action of others—to use a favorite expression—by
supplying the brokers from day to day with tickets to be
sold at what were believed to be the current rates; in that
way escaping being caught with any considerable number
out. When that method was adopted, the broker would be
allowed as a “commission " a sum measured by the differ-
ence between the cut and the tariff rate—which might be
23
two, three or four dollars or more. One company at least
put tickets into the hands of brokers to be accounted for
weekly, after deducting the allowances. But the allowances
were not restricted to brokers; they were made to others
who brought purchasers of tickets to the regular offices, and
the purchaser by taking a friend along with him could have
had no difficulty in obtaining the allowance himself; in other
words, in obtaining a rebate.
This was done in the face of the provision of section 6 of
the Act, which explicitly provides that when any common
carrier shall have established and published its tariff of
fares it shall be unlawful for it to “charge, demand, collect
or, receive from any person or persons a greater or less com-
pensation * * * than is specified in such published
schedule of rates, fares and charges as may at the time be in
force.”
And also it was done in entire disregard of section 2 of
the Act, which prohibits unjust discrimination, and defines
it as charging to one person a greater or less sum than is
charged to another for a like service in the transportation of
passengers or property, under substantially similar circum-
stances and conditions. -
In respect to all these remarkable performances one thing
can be said to the credit of the railroad agents: they made
no attempt to conceal from the Commission what they had
done but exposed their folly freely, and in general admitted
that it was folly. In one case, but only one, an agent who
had testified in part was instructed by counsel not to appear
further unless counsel was present to protect him against
admissions of criminality. The precaution was wholly need-
less in his case as the fact was sufficiently brought out in
the testimony of others; as it was also again when it became
necessary for the principal to resort to legal proceedings in
order to get back from the supposed friendly broker the
tickets confided to him.
Of course some legal shield was needed for these dealings
24
with brokers, and it was supposed to be found in the right
to pay commissions. One railroad manager in a communi-
cation on the subject, addressed to a member of the Commis-
sion, expressed views which may perhaps be taken as the
same with those held by others. He said:
“In thinking over what was said yesterday afternoon
in regard to the passenger situation among the west-
ern roads, if I remember rightly, it was tacitly assumed
by all that the placing of tickets in the scalpers' hands,
and paying a commission to them for their sale, was illegal,
and I think you gave an explicit opinion to this effect. But
on reflection it appears to me that we perhaps arrived at
this conclusion too hastily. Is it illegal for any road to re-
munerate any agency for selling its tickets that it may
choose, by paying a commission on each and every ticket
sold 2 If this may be done is there any practical way of
putting a limit on the size of the commission ? Many things
enter into the expenses of maintaing a ticket office: for ex-
ample: the rent of a well situated office in a large city is of
necessity high. The office must be kept pleasant and at-
tractive for the public. Courteous and skillful attendance
must be secured. All of these things cost money. At their
regular ticket offices the railroads pay these expenses them-
selves, putting their men on a salary, but at the outside
offices, of ticket brokers or scalpers as they are called, all
these expenses are paid by the proprietor of the office, the
railroad reimbursing him once for all by the payment of a
commission.”
This presentation of excuse has a certain air of plausi-
bility, and one almost feels as he peruses it that the scalper
must some how be doing the railroad company a great favor
by living upon its revenues, and by keeping an office for
the exhibition of courteous deportment to the public. We
shall certainly make no mistake in assuming that for that
part of his business which consists in the sale of tickets
which are to be made use of by fraud and trickery, he needs
“courteous and skillful attendance” if he is to be successful.
Courtesy and skill we can well believe have a marketable
25
value in the offices of this class of persons beyond what
they have in most others.
But we discover in this communication what we often
meet with when parties are detected in the old abuses: they
indulge their passions first, and look about afterwards for
Some legal pretense which they can plausibly put forward
as a protection. The pretense in this case was a very shal-
low one. The Commissioners asked several experts, who
were brought before them for the purpose of giving evi-
dence, what would be a reasonable commission to allow on
the sale of tickets, and not one of them named an allowance
exceeding ten per cent. When more than that is allowed,
therefore, we must assume that the allowance is made for
Some other purpose than to make payment for services.
Whatever name shall be given to the purpose it is clear that
an evasion of the law which requires tickets to be sold at a
unform rate is intended. The broker is expected to sell at
less than the regular rate, and he would not make sales
unless he did.
The Commissioners also inquired of the experts whether
in their opinion if all the companies allowed commissions
equally any one of them would receive benefit therefrom,
and with one exception they answered No, and that the
payment of commissions is unjustifiable. The one excep-
tion was a ticket agent who declared that the brokers would
push his tickets and not those of other roads even when
acting for all, and at the same commission. As this would
manifestly be dishonest, we may say that the testimony
against commissions was unanimous, and that they consti-
tute an unwarrantable drain upon the corporate resources.
One of the extraordinary facts connected with such rate
wars has already been noticed in the preceding part of this
paper; namely, that the parties engaging in them know
from the first that they cannot continue indefinitely, and
must finally be settled on some basis which includes rates
mutually accepted or acquiesced in. Nevertheless the at-
26
tempt at a friendly understanding is very apt not to be
made until after, for a period more or less protracted, the
carriers have inflicted mutual injuries. The blows must
come first and attempts at reason be made later. In this
case the Wisconsin Central was charged with cutting the
rates in order to obtain a differential. The charge was de-
nied, the denial was not credited, and other roads instead
of causing an investigation to be made, proceeded to cut the
rates themselves. Now the cutting of rates would have no
value whatever except to show that the differential would
not be conceded; and one would suppose that this determi-
nation might be manifested in some way which would be
a good deal less destructive. But even if a cutting of rates
below what it would be reasonable to charge were found to
be necessary there can be no excuse for a carrier making it
the first resort: it should manifestly be resorted to only
after other means of redress had been tried and had proved
ineffectual.
But what is specially inexcusable, is the enlistment of the
ticket brokers and of other outsiders in the war which is
thus inaugurated. In all that has been said thus far about
ticket brokers, only the most responsible portion of them is
spoken of; the portion composing the American Ticket
Brokers’ Association. These persons, as has been said
already, repel the appellation “scalper,” and apply it them-
Selves to irresponsible parties whom the Association will not
receive as members. Whether this is for any other reason
than the want of such pecuniary responsibility as will
render it safe to do business with them, the Commission is
not advised, nor for the purposes of this paper is at all im-
portant. The fact—which is all we care to mention here—is
that besides the brokers who compose the Association, there
are also less reputable scalpers and runners who all find their
profit in the fray. Why it is that, when the managers can not
come to an agreement by themselves, they enlist and sub-
sidize all these parties, and give them standing and strength
27
which enables them to prey upon the roads at other times,
instead of calling in the Chairman of some of the railroad
associations, or some other party mutually trusted and relied
upon, or, if a violation of law is supposed to have been com-
mitted, bringing it to the notice of the Commission or of the
courts, is a question to which no one has attempted an
answer. And why especially the roads should engage in
the course of action above described, which is at once harm-
ful to themselves and an evasion of the law, when a strict
observance of the law in the making and publishing of rates
would to a large extent have protected them, is equally un-
explained. These are questions which are becoming of vital
interest to the stockholders in the roads. The Commission
has failed to obtain satisfactory answer to either of them."
It may be said in this case on behalf of the roads which
met the supposed cut of the Wisconsin Central, that if the
cut had not been met, it would have established in favor of
that company the differential demanded. This excuse is
plausible, and is perhaps as good an one as can be suggested
for such a case. But it does not answer the objection that
the cut is made as the first resort instead of the last, as, if
made at all, it should be. Nor does it constitute a defense
for resorting to the brokers instead of making the cut rate
the open and published rate as it should be.
The Commissioners were not informed by any of the war-
ring roads that they were pushed into the struggle by local
interests. How such interests may operate to influence
carriers engaged in such a warfare may be understood from
the following telegram sent and received on December 10th :
“SIOUx CITY, Dec. 10, 1888.
“A. H. Hanson, Illinois Central Railway:
“Reduced passenger rates still continue between Chicago
and St. Paul ; also between Omaha, Kansas City and Chi-
cago. What is the matter with the Illinois Central 2 Are
you willing to see all favors go to these other cities and
travel and business go to them while Sioux City is neglected ?
28
We can not understand why you stand idly by under these
circumstances.” -
The matter with the Illinois Central was that it was do-
ing exactly what it ought to do when it thus stood “ idly
by,” and declined to take part in a disreputable struggle.
It was not responsible for the injury which any town might
suffer by reason of the misconduct of others. It is no doubt
the case, however, that local appeals like this are sometimes
yielded to when they ought not to be. In fact it requires
some considerable firmness to resist them. The Illinois
Central is to be commended for its resistance in this in-
stance.
The sale of tickets at reduced rates through brokers while
the regular rates are nominally sustained, almost necessarily
results in a violation of the spirit if not of the letter of the
Long and Short Haul Clause of the Act to regulate com-
merce. For some considerable time it must have been pos-
sible to buy tickets from Chicago to Minnesota cities at rates
less than the open rates to some of the intermediate stations.
If during that time there were any purchases of tickets at
the open rates to such intermediate stations, the act was
violated. If there were no such purchasers it must have
been because all who had occasion to make use of the tickets
knew they could procure the through tickets for a less price,
and went to the brokers and procured and used them. But
it would be very remarkable if all persons who wanted such
tickets were possessed of this knowledge and acted upon it;
we may indeed fairly consider it incredible. Large classes
of people who are steadily employed at regular labor, and
who have little time for either reading or gossip, if they had
occasion to make a journey would be altogether unlikely to
know of these chances to obtain cut rates, and would buy
their tickets at the regular offices, thus losing the benefit of
the reductions which others, better informed, but also better
able to pay, would obtain. This is a common result of rate
29
wars; there is no equalizing the benefits of the reductions
while they continue, and the parties who chiefly appropriate
them are those having large interests in transportation, and
others who habitually are on the lookout for special oppor-
tunities and advantages.
Two facts which the managers engaged in these transac-
tions do not seem to have considered it may be well for them
to give Some attention to.
The first of these is that by their conduct they are admit-
ting that the price they consent to receive for their tickets
from brokers and others is a fair price and a reasonable
compensation for their services. If such transactions con-
tinue the Commission may feel obliged to take notice of and
act upon this admission; and should the open rate be re-
duced in consequence, the difficulty in getting back to the
old rates might be much more serious than it is when the
roads make the reductions themselves.
The second is that they are at the same time creating a
public opinion and belief that the regular open rates are
higher than they ought to be. If the opinion is erroneous
but nevertheless results in legislation injurious to the roads,
the owners of stocks have their servants who have been put
in charge of the roads to thank for it. It may be quite
worth the while of the stockholders to consider whether it
would not be wise to insist that these servants shall give
more attention to obeying the law and less to contrivances
whereby they may evade it. The Act to regulate commerce
is on the whole conservative and beneficial, and its most
rigorous provisions cannot inflict upon the carriers subject to
it so much mischief as the managers voluntarily bring upon
them by resorting to the old abuses in these rate wars.
In view of the facts above stated, and of facts somewhat
similar coming to the attention of the Commission from
other parts of the country, the Commission feels con-
strained to recommend that the Act to regulate commerce
be so amended as
30
First, To define what shall be considered excursion and
commutation tickets, and to so restrict their issue in inter-
state commerce as to prevent the abuses now so common.
Second, To prohibit all payment of commissions on the
sale of tickets for the transportation of persons by railroad
in interstate commerce, and all sale of such tickets except
by the regular agents of the carriers.
Third, To require the carriers to provide for the speedy
and convenient redemption of the whole or any parts or
coupons of any ticket or tickets which they may have sold,
as the purchaser for any reason has not used and does not
desire to use, at a rate which shall be equal to the difference
between the price paid for the whole ticket and the cost of a
ticket between the points for which the proportion of said
ticket was actually used.
The Commission also deem it proper in this connection to
repeat what it has said in its second annual report, that the
provision in the Act to regulate commerce against the Sud-
den raising of rates without notice ought to be clearly made
applicable to rates jointly made by two or more carriers, and
that notice of intention to reduce any rate which any carrier
subject to the Act makes or joins in making, ought to be re-
quired to be given a specified number of days before the
reduction should have effect.
BEFORE THE
INTERSTATE COMMERCE COMMISSION
Revenues of Rail carriers in off. •
cial classification TERRITORY, | peasºn, saw
Rate increases in official [ . . n--- -
CLASSIFICATION TERRITORY. | i. s. s. Docket No. 33s
PETITION FOR MODIFICATION OF ORDER
…sº-º-º-º-º-º-º-º-º-º-º-º-, * ~~~~es--~~~ *-**~~~~
HUGH L. BOND. J.R.,
GEORGE F. BROWNELL,
J. L. MINNIS, - .
O. E. BUTTERFIELD,
GEORGE STUART PATTERSON,
' ' ". . . . . Counsel.

BEFORE THE
INTERSTATE COMMERCE COMMISSION
DOCKET NO. 5860.
REVENUES OF RAIL CARRIERS IN OFFICIAL CLASSIFICA-
TION TERRITORY.
I. & S. Docker No. 333.
RATE INCREASES IN OFFICIAL CLASSIFICATION
TERRITORY.
PETITION FOR MODIFICATION OF ORDER
To THE HONORABLE
THE INTERSTATE COMMERCE COMMISSION:
Your petitioners, one hundred and twelve Rail-
road Companies, comprising the thirty-five (35)
Railroad Systems in Official Classification Terri-
tory, parties to the above-entitled proceedings, re-
spectfully petition the Commission for such a mod-
ification of the order of July 29, 1914, as will per-
mit the carriers to make effective the rates speci-
fied in the tariffs which were by said order directed
to be cancelled. Since the filing of the report and
entry of the order by the Commission in these cases,
facts and circumstances have arisen which, taken
in connection with the facts already before your
Commission, your petitioners believe will justify
2
the relief herein prayed for. These facts and cir-
cumstances are briefly as follows: -
Eirst. During the month of October, 1913, your
petitioners published and filed with this Commis-
sion the tariffs involved in these proceedings. At
the time of the filing of the report of the Commis-
sion there were available for the information of .
the Commission the annual reports of your peti-
tioners for the year ending June 30, 1913, as well
as the monthly reports of your petitioners up to
and including May, 1914. Since that time the com-
plete income accounts of your petitioners for the
fiscal year ending June 30, 1914, have become avail-
able.
The reports of your petitioners for the year end-
ing June 30, 1914, as compared with the year end-
ing June 30, 1913, show a decrease in total operat-
ing revenues of approximately $44,700,000, while
during that same period operating expenses have
increased about $23,300,000. After deductions of
taxes and deficit in outside operations there was
a decrease in operating income of approximately
$73,700,000, notwithstanding an increased prop-
erty investment. Thus the tendency toward a
diminishing operating income, found by the Com-
mission in its report, is emphasized by the figures
covering the complete year to June 30, 1914, while
the reports for July and such figures as are avail-
able for August, 1914, show a continuance of this
declining tendency, notwithstanding the extraordi-
nary efforts that have been made to reduce ex-
penses. -
3
Second. The unforeseen European war has
brought about an unparalleled destruction of
wealth and dislocation of credit throughout the
civilized world. It is certain that the competition
for capital will be keener and interest rates higher
for some years to come than in any corresponding
period within living memory. The emergency
thus resulting is extremely serious. It is con-
servatively estimated that the railroad companies
of the United States have obligations maturing in
the next fifteen months amounting to well over
five hundred millions of dollars, and it is impera-
tive in the public interest that these obligations
shall be duly met. A large part of this sum is
owed by your petitioners and they will further
need from time to time in the next few years
large amounts of money to provide for im-
provements which will be necessary in the
public interest to prevent a serious deterior-
ation in the standard of transportation service.
In order to compete effectively for this new capi-
tal they must have a material increase in revenues.
Third. The Commission in its report made cer-
tain tentative suggestions as to measures which
might be taken by the carriers to secure additional
revenue. Your petitioners are proceeding as rap-
idly as possible to put into effect the increase in
freight rates in Central Freight Association Ter-
ritory authorized by the report of the Commission
and are giving earnest attention to the other rec-
ommendations and suggestions of the Commission
with respect to other rates and practices.
4
It is believed, however, that the additional reve-
nue which may be secured by the adoption of
means other than a general advance in freight
rates can not be obtained in the near future, and
when secured will be inadequate to meet the needs
of the carriers for increased revenue in the pres-
ent situation. -
Wherefore, your petitioners ask that the Com-
mission modify the order aforesaid, so as to per-
mit the carriers to make effective the rates speci-
fied in the tariffs, which were by said order
diretced to be cancelled, except so far as they have
been or may be superseded by advances filed in
accordance with the report of the Commission,
and that your petitioners may have such other and
such further relief in the premises as to the Com-
mission may seem proper.
September 15, 1914.
DANIEL WILLARD,
Chairman, Presidents’ Committee,
on Behalf of the Railroad Con-
panies in Official Classification
Territory.
HUGH L. BOND, JR.,
GEORGE F. BROWNELL,
J. L. MINNIS,
O. E. BUTTERFIELD,
GEORGE STUART PATTERSON,
. Counsel.
FPO42-11-14-14-150
Interstate Commerce Commission,
At a General Session of the INTERSTATE COMMERCE
COMMISSION, held at its office in Washington, D.C.,
on the 27th day of August, A. D. 1912.
INVESTIGATION AND suspensION DoCKET No. 153.
IN THE MATTER OF THE INVESTIGATION AND SUSPEN-
SION OF ADVANCES IN RATES BY CARRIERS FOR THE
TRANSPORTATION OF LUMBER, IN CARLOADS, FROM
PRODUCING POINTS IN TENNESSEE, MISSISSIPPI, AND
OTHER STATES TO DESTINATIONS NORTH OF THE
OHIO RIVER AND TO CANADIAN DESTINATIONS.
It appearing, That there has been filed with the Interstate Com-
merce Commission by individual carriers and by E. H. Hinton, Agent
for carriers hereinafter named, tariffs containing schedules stating
new individual and joint rates and charges and new individual and
joint regulations and practices affecting such rates and charges, to
become effective, except as otherwise indicated herein, the first day
of September, 1912, designated as follows:
Alabama Great Southern Railroad Co.—Supplement No. 10 to I. C. C. No. 657.
Effective September 2, 1912.
Atlantic Coast Iline Railroad Co.—Supplement No. 8 to I. C. C. No. A-1244.
Atlanta, Birmingham & Atlantic Railroad.—Supplement No. 5 to I. C. C. No. 361.
Effective September 6, 1912.
Chicago & Eastern Illinois Railroad Co.—Supplement No. 14 to I. C. C. No. 2596.
Cincinnati, New Orleans & Texas Pacific Railway Company.—Supt. 3 to I. C. C.
3766; Supt. 2 to I. C. C. 3794; Supt. 4 to I. C. C. 3567.
Georgia & Florida Railway.—Supplement No. 9 to I. C. C. No. 132. Effective
September 10, 1912.
Illinois Central Railroad Company, Yazoo & Mississippi Valley Railroad Com-
pany.—Supplement No. 23 to I. C. C. No. 3999; Supplement No. 3 to I. C. C. No.
4363; I. C. §§.”.
The Kansas City Southern Railway Co.—Supplement No. 11 to I. C. C. No. 2948.
Pffective September 27, 1912.
Louisville & Nashville Railroad Co.—I. C. C. No. A–12341.
Missouri, Kansas & Texas Railway Co.—Supplement No. 42 to I. C. C. No. A–2210.
The Missouri Pacific Railway Company, St. Louis, Iron Mountain & Southern
Railway Co.—Supplement No. 12 to I. C. C. No. A–1923. Effective September 23,
1912. Supplement No. 8 to I. C. C. No. A–1937.
Mobile & Ohio Railroad Co.—I. C. C. No. A–926.
Nºville, Chattanooga & St. Louis Railway.—Supplement No. 6 to I. C. C. No.
1963—A.
58425—12
40
2
New Orleans Great Northern Railroad Co.—Supplement No. 4 to I. C. C. No. 230,
Effective September 17, 1912; Supplement No. 1 to I. C. C. No. 243, Effective Sep-
tember 9, 1912.
New Orleans & Northeastern Railroad, Alabama & Vicksburg Railway.—Supple-
ºn! No. 1 to I. C. C. No. 2709; I. C. C. No. 2712; Supplement No. 12 to I. C. C.
O. 2630. -
Seaboard Air Line Railway.—I. C. C. No. A-2499.
Njº" Railway Company.—I. C. C. No. A–5075; Supplement No. 21 to I. C. C.
O. 11880. -
Southern Railway Company in Mississippi.—Supplement No. 16 to I. C. C. No. 182,
Effective September 16, 1912.
Tennessee Central Railroad Company.—Supplement No. 11 to I. C. C. No. A-200,
Effective September 14, 1912; Supplement No. 6 to I. C. C. No. A-239, Effective
September 4, 1912.
Wicksburg, Shreveport & Pacific Railway.—Supplement No. 16 to I. C. C. No. 2679.
E. H. Hinton, agent.—Supplement No. 10 to 1. C. C. No. A–43.
It is ordered, That the Commission upon complaint, without formal
pleading, enter upon a hearing concerning the propriety of the
advances and the lawfulness of the rates, charges, regulations, and
practices stated in the schedules contained in said tariffs, excepting
the schedules of rates, charges, regulations, and practices set forth
in said The Missouri Pacific Railway Company, St. Louis, Iron Moun-
tain & Southern Ry. Co., Supplement No. 8 to I. C. C. No. A–1937
on page 7 thereof opposite to stations indicated by Index Nos. 1606–1
to 1606–8, inclusive; and in said the Vicksburg, Shreveport & Pacific
Railway, Supplement No. 16 to I. C. C. No. 2679, on page 4 thereof
in Item Nos. 266} and 266%.
It further appearing, That said schedules make certain advances in
rates for the transportation of Lumber in carloads, and the rights and
interests of the public appearing to be injuriously affected thereby,
and it being the opinion of the Commission that the effective date of
the schedules above designated should be postponed pending the
hearing and decision; therefore,
It is further ordered, That the operation of the schedules above desig-
nated contained in said tariffs be suspended, and that the use of the
rates, charges, regulations, and practices therein stated be deferred
until the 30th day of December, A. D. 1912.
And it is further ordered, That the several carriers hereinafter named
be made defendants to this proceeding, and that they be duly notified
of the time and place of the hearing above ordered, and that a copy
of this order be forthwith served upon E. H. Hinton, Agent, and upon
each of said defendants, viz:
Alabama & Mississippi Railroad Company;
Alabama Central Railroad Company;
Ahnapee & Western Railway Company;
Akron, Canton & Youngstown Railway Company;
Alabama & Wicksburg Railway Company;
Albany & Northern Railway Company;
Alabama Great Southern Railroad Company;
Alabama Central Railway;
Alabama, Tennessee & Northern Railroad Company;
Alabama Northwestern Railway Company;
Ann Arbor Railroad Company; -
*)
• D
Apalachicola Northern Railroad Company;
Arcadia & Betsey River Railway Company;
Arkansas Central Railroad Company;
Arkansas, Iouisiana & Gulf Railway Company;
Arkansas Southeastern Railroad Company;
The Arkansas Western Railway Company;
The Ashland & Western Railway Company;
The Atchison, Topeka & Santa Fe Railway Company;
Atlanta & St. Andrews Bay Railway;
Atlanta & West Point Railroad Company; --
Atlanta, Birmingham & Atlantic Pailroad Company, and H. M. Atkinson and S. L.
Schoonmaker, receivers thereof;
Atlantic City Railroad Company;
Atlantic Coast Line Railroad Company;
Augusta Southern Railroad Company;
Augusta Tramway & Transfer Company;
Bachman Valley Railroad Company of Maryland;
Baltimore & Ohio Chicago Terminal Railroad Company;
The Baltimore & Ohio Railroad Company;
The Baltimore & Ohio Southwestern Railroad Company;
Baltimore & Sparrows Point Railroad Company;
Baltimore Steam Packet Company;
Baltimore, Chesapeake & Atlantic Railway Company;
Bangor & Aroostook Railroad Company;
Bath & Hammondsport Railroad Company;
The Bay of Quinte Railway Company;
Beaver Dam Railroad Company;
Beaumont, Sour Lake & Western Railway Company;
The Belt Railway Company of Chicago;
Bessemer & Iake Erie Railroad Company;
Black & White River Transportation Company;
Birmingham & Atlantic Railroad Company;
Birmingham & Southeastern Railway Company;
Blakely Southern Railroad;
Bloomsburg & Sullivan. Railroad Company;
Blytheville, Leachville & Arkansas Southern Railroad Company;
Boston & Albany Railroad Company;
Boston & Maine Railroad; -
Boyne City, Gaylord & Alpena Railroad Company;
Bridgton & Saco River Railroad Company;
Brinson Railway Company; -
Brownstone & Middletown Railroad Company;
Brockville, Westport & North-Western Railway; e
Buffalo & Susquehanna Railway Company and H. I. Miller, receiver thereof;
Buffalo, Attica & Arcade Railroad Company; ]
Buffalo, Rochester & Pittsburgh Railway Company;
Bush Terminal Railroad Company;
Butler County Railroad Company;
Cache Valley Railroad Company;
Canadian Northern Ontario Railway Company;
Canadian Northern Quebec Railway Company;
Canadian Pacific Railway Company;
Cassville & Western Railway Company;
Catasauqua & Fogelsville Railroad Company;
Central Indiana Railway Company;
Central New England Railway Company;
Central of Georgia Railway Company;
The Central Railroad Company of New Jersey;
Central Hudson Steamboat Company; -
Central Ontario Railway;
Central Railroad Company of Pennsylvania;
Gentral Railway Company of Arkansas;
Central Vermont Railway Company;
Charleston & Western Carolina Railway Company;
Charlotte Harbor & Northern Railway Company;
Chattahoochee Valley Railway Company;
The Chesapeake & Ohio Railway Company;
4
The Chesapeake & Ohio Railway Company of Indiana;
Chesapeake Steamship Company;
Chesapeake Western Railroad Company;
The Chicago & Alton Railroad Company;
Chicago & Eastern Illinois Railroad Company;
Chicago & Erie Railroad Company;
Chicago & Illinois Midland Railway Company;
Chicago & Illinois Western Railroad;
Chicago & North Western Railway Company;
Chicago & Western Indiana Railroad Company;
Chicago & Wabash Valley Railway Company;
Chicago, Anamosa & Northern Railway Company;
Chicago, Burlington & Quincy Railroad Company;
Chicago Great Western Railroad Company;
Chicago, Indiana & Southern Railroad Company;
Chicago, Indianapolis & Louisville Railway Company;
Chicago Junction Railway Company;
Chicago, Kalamazoo & Saginaw Railway Company;
Chicago, Memphis & Gulf Railroad Company;
Chicago, Milwaukee & Gary Railway Company;
Chicago, Milwaukee & St. Paul Railway Company;
Chicago, Peoria & St. Louis Railway Company of Illinois, and J. P. Ramsey and
H. M. Merriam, receivers thereof;
Chicago, Ottawa & Peoria Railway Company;
The Chicago, Rock Island & Gulf Railway Company;
Chicago, Rock Island & Pacific Railway Company;
Chicago, St. Paul, Minneapolis & Omaha Railway Company;
Chicago, Terre Haute & Southeastern Railway Company;
Chicago, Zeigler & Gulf Railroad Company;
Cincinnati, Bluffton & Chicago Railroad Company;
Cincinnati, Burnside & Cumberland River Railway Company;
Cincinnati, Flemingsburg & Southeastern Railroad Company;
Cincinnati, Georgetown & Portsmouth Railroad Company;
The Cincinnati, Hamilton & Dayton Railway Company;
The Cincinnati, Lebanon & Northern Railway Company;
The Cincinnati, New Orleans & Texas Pacific Railway Company;
The Cincinnati Northern Railroad Company;
The Cleveland, Cincinnati, Chicago & St. Louis Railway Company;
Clyde Steamship Company;
Coal & Coke Railway Company;
Colfax Northern Railroad Company;
Columbia, Newberry & Laurens Railroad Company;
Copper Range Railroad Company; w
Cornwall & Lebanon Railroad Company;
Cornwall Railroad Company;
Coudersport & Port Allegany Railroad Company;
Crooked Creek Railroad & Coal Company;
Crittenden Railroad Company;
Crossett, Monticello & Northern Railway Company;
Cumberland & Pennsylvania Railroad Company;
Cumberland Valley Railroad Company;
Dansville & Mount Morris Railroad Company;
Danville & Western Railway Company;
The Dayton & Union Railroad Company; -
The Dayton, Lebanon & Cincinnati Railroad & Terminal Company;
The Delaware & Hudson Company;
Deering Southwestern Railway Company;
Delaware & Northern Railroad Company;
The Delaware, Lackawanna & Western Railroad Company;
Delaware River Transportation Company;
The Delaware Valley Railway Company;
De Queen & Eastern Railroad Company;
Detroit & Charlevoix Railroad Company;
Detroit & Mackinac Railway Company;
Detroit & Toledo Shore Line Railroad Company;
De troit, Grand Haven & Milwaukee Railway Company;
Detroit, Toledo & Ironton Railway Company and Geo. P. Johnson, receiver thereof;
5
Detroit, Toledo & Milwaukee Railroad Company;
The Dominion Atlantic Railway Company;
Doniphan, Kensett & Searcy Railroad Company;
Donora Southern Railroad Company;
Dry Fork Railroad Company;
Duluth, Missabe & Northern Railway Company;
The Duluth, South Shore & Atlantic Railway Company;
The Dunkirk, Allegheny Valley & Pittsburgh Railroad Company;
East Berlin Railway Company;
East Jordan & Southern Railroad Company;
Eastern Steamship Corporation;
East Jersey Railroad & Terminal Company;
The East St. Louis Connecting Railway Company;
The East Tennessee & Western North Carolina Railroad Company;
El Dorado & Wesson Railway Company; gº
Elgin, Joilet & Eastern Railway Company;
Emmittsburg Railroad Company; -
Erie & Michigan Railway & Navigation Company;
Erie Railroad Company;
Essex Terminal Railway;
Fairchild & Northeastern Railway;
The Ferdinand Railway Company, and Hugo C. Rothert, receiver thereof;
Fernwood & Gulf Railroad Company;
gºld Ocilla & Broxton Railroad Company, and H. M. Atkinson, receiver
ereof; -
Flint River & Northeastern Railroad Company;
Florida & Georgia Railway Company;
Florida Central Railroad Company;
Florida Railway Company; r
Fonda, Johnstown & Gloversville Railroad Company;
Fort Smith, Subiaco & Eastern Railroad Company;
Fort Smith & Western Railroad Company;
Fort Wayne, Cincinnati & Louisville Railroad Company;
Fourche River Valley & Indian Territory Railway Company;
Frederick Railroad Company;
Frontier Navigation Company;
Gainesville Midland Railway;
Galesburg & Great Eastern Railroad Company;
Galt Preston & Hespeler Railway;
Galveston, Beaumont & Northeastern Railway Company;
Genesee & Wyoming Railroad Company;
Georges Valley Railroad Company;
Georgia & Florida Railway;
Georgia Coast & Piedmont Railroad Company;
The Georgia, Florida & Alabama Railway Company;
Georgia Northern Railway Company of Georgia;
Georgia Railroad;
Georgia Southern & Florida Railway Company;
Georgia Southwestern & Gulf Railroad Company;
The Gettysburg & Harrisburg Railway Company;
Grafton & Upton Railroad Company;
Grand Rapids & Indiana Railway Company;
Grand Trunk Pacific Railway Company;
Grand Trunk Railway Company of Canada;
Grand Trunk Western Railway Company;
The Great Northern Railway Company;
Green Bay & Western Railroad Company;
Greenville Southern Railway;
Greenwich & Johnsonville Railway Company;
Gulf & Sabine River Railroad Company;
Gulf & Ship Island Railroad Company;
Gulf, Colorado & Santa Fe Railway Company;
Gulf Line Railway Company; *
Halifax & Southwestern Railway;
Hardy Creek & Eel River Railroad Company;
Hartford & New York Transportation Company;
The Hocking Valley Railway Company;
6
Hoboken Manufacturers Railroad Company;
Houston & Shreveport Railroad Company;
Houston & Texas Central Railroad Company;
The Houston East & West Texas Railway Company;
Hudson Navigation Company;
The Huntingdon & Broadtop Mountain Railroad & Coal Company;
Illinois Central Railroad Company;
The Illinois Southern Railway Company;
Illinois Terminal Railroad Company;
Illinois Traction System;
Indiana Harbor Belt Railroad Company;
Intercolonial Railway of Canada;
International & Great Northern Railway Company;
Interstate Car Transfer Company;
Interstate Railroad Company;
Iola & Northern Railroad Company;
Irondale, Bancroft & Ottawa Railway;
Ironton Railroad Company; -
Jamestown, Chautauqua & Lake Erie Railway Company and Geo. Bullock, re-
ceiver thereof;
Jonesboro, Lake City & Eastern Railroad Company;
Kane & Elk Railroad Company;
Kanona & Prattsburg Railroad Company;
The Kanawha & Michigan Railway Company;
Kansas City & Memphis Railway Company;
The Kansas City, Clinton & Springfield Railway Company;
The Kansas City Southern Railway Company;
Keeseville, Ausable Chasm & Lake Champlain Railroad Company;
Kentwood, Greensburg & Southwestern Railroad Company;
Kentucky & Indiana Terminal Railroad Company;
Kentucky & Tennessee Railway;
Kentwood & Eastern Railway Company;
Kewaunee, Green Bay & Western Railroad Company;
The Keweenaw Central Railroad Company;
The Kingston & Pembroke Railway Company;
Kingston Railroad Company.
La Crosse & Southeastern Railway Company;
Lackawanna & Wyoming Valley Railroad Company;
Lake Charles Railway & Navigation Company;
The Lake Erie, Alliance & Wheeling Railroad Company;
The Lake Erie & Western Railroad Company;
Lake Hancock & Cleremont Railroad Company;
The Lake Shore and Michigan Southern Railway Company;
Lauderdale & Northwestern Railroad Company;
Leetonia Railway Company;
Lehigh & Lackawanna Railroad Company;
The Lehigh & Hudson River Railway Company;
Lehigh & New England Railroad Company;
Lehigh Valley Railroad Company;
Lexington & Eastern Railway Company;
Liberty-White Railroad Company;
Litchfield & Madison Railway Company;
Little Falls & Dolgeville Railroad Company;
Little Kanawha Railroad Company;
Little River Railroad Company (of Tennessee);
Live Oak, Perry & Gulf Railroad Company;
The Long Island Railroad Company;
Lorain & West Virginia Railway Company;
Lotbiniere & Megantic Railway;
Louisiana Railway Company;
Louisiana & Arkansas Railway Company; *
The Louisiana & North West Railroad Company;
Louisiana & Pacific Railway Company; -
Louisiana Railway & Navigation Company;
Louisville & Jeffersonville Bridge Company;
Louisville & Nashville Railroad Company;
Louisville & Wadley Railroad Company;
‘O
7
Louisville, Henderson & St. Louis Railway Company;
Louisville, New Albany & Corydon Railroad Company;
Macon & Birmingham Railway Company and John B. Munson, receiver thereof;
Macon, Dublin & Savannah Railroad Company;
Macoupin County Railway Company; 8.
Madison Southern Railway Company;
Maine Central Railroad Company;
Mallory Steamship Company; -
Manchester & Oneida Railway Company;
Manhattan Navigation Company;
Manila & Southwestern Railway Company;
Manistee & Grand Rapids Railroad Company;
Manistee & Northeastern Railroad Company;
Manufacturers Railway Company;
Marbury & Kingston Railroad;
Marietta, Columbus & Cleveland Railroad Company;
Marinette, Tomahawk & Western Railway Company, and C. H. Grundy, receiver
thereof;
Marion & Rye Valley Railway Company;
Marshall & East Texas Railway;
Maryland, Delaware & Virginia Railway Company;
Maryland Electric Railways Company;
Maryland & Pennsylvania Railroad Company;
Mason City & Clear Lake Traction Company;
Memphis, Dallas & Gulf Railroad Company;
Merchants & Miners' Transportation Company;
Michigan Central Railroad Company;
Middleburgh & Scoharie Railroad Company;
Middlesex Transportation Company;
Midland Valley Railroad Company;
Milltown Air Line Railway;
Mineral Range Railroad Company;
Mineral Point & Northern Railway Company;
The Minneapolis & St. Louis Railroad Company;
The Minneapolis, St. Paul & Sault Ste. Marie Railway Company;
Mississippi Central Railroad Company; -
Mississippi Eastern Railway Company;
Mississippi Valley Railroad Company;
Missouri & Illinois Bridge & Belt Railroad Company;
Missouri & North Arkansas Railroad Company; s
Missouri, Kansas & Texas Railway Company;
The Missouri, Kansas & Texas Railway Company of Texas;
Missouri, Oklahoma & Gulf Railway Company;
Missouri, Oklahoma & Gulf Railway Company of Texas;
The Missouri Pacific Railway Company;
Missouri Southern Railroad Company;
Mobile & Ohio Railroad Company;
The Monongahela Connecting Railroad Company;
The Monongahela Railroad Company;
Monroe Railroad Company;
Montour Railroad Company; *
Montpelier & Wells River Railroad;
Morgan Line; -
Morgantown & Kingwood Railroad Company;
Morristown & Erie Railroad Company;
Mt. Jewett, Kinzua & Riterville Railroad Company;
Moshassuck Valley Railroad Company;
Muscatine North & South Railway Company;
Newport Packet Company;
Nashville, Chattanooga & St. Louis Railway;
Natchez, Columbia & Mobile Railroad Company;
Natchez & Louisiana Railway Transfer Company;
Natchez & Southern Railway Company;
Newark & Marian Railway Company;
New Brunswick Coal & Railway Company;
The New England Navigation Company;
New Iberia & Northern Railroad Company;
8
New Jersey & New York Railroad Company;
New Jersey & Pennsylvania Railroad Company;
New Jersey, Indiana & Illinois Railroad Company;
New Orleans & Northeastern Railroad Company;
New Orleans Great Northern Railroad Company;
New Orleans, Mobile & Chicago Railroad Company;
New Orleans, Natalbany & Natchez Railway Company;
New Orleans, Texas & Mexico Railroad Company;
New River, Holston & Western Railroad Company;
The New York & Long Branch Railroad Company;
New York & Ottawa Railway Company;
New York & Pennsylvania Railway Company;
New York, Philadelphia & Norfolk Railroad Company;
The New York Central & Hudson River Railroad Company;
The New York, Chicago & St. Louis Railroad Company;
The New York, New Haven & Hartford Railroad Company;
New York, Ontario & Western Railway Company;
New York, Susquehanna & Western Railroad Company;
Niagara, St. Catherines & Toronto Railway Company;
Norfolk & Western Railway Company;
Norfolk Southern Railroad Company;
Northampton & Bath Railroad Company;
Northern Alabama Railway Company;
The Northern Central Railway Company;
The Northern Ohio Railway Company;
Northern Pacific Railway Company;
North Louisiana & Gulf Railroad Company;
Oak Grove & Georgetown Railroad Company;
Ocala & Southwestern Railroad Company;
Ocala Northern Railroad Company;
Ocean Steamship Company of Savannah;
Ocilla, Pinebloom & Valdosta Railroad Company;
Ocilla Southern Railroad;
The Ohio River & Columbus Railway Company;
The Ohio Electric Railway Company;
Old Dominion Steamship Company;
Opelousas Gulf & Northeastern Railway Company;
The Orange & Northwestern Railroad Company;
Osceola, Little River & Western Railroad Company;
The Oshawa Railway Company;
Ottawa & New York Railway Company;
Overton County Railroad Company and Geo. A. Clark, receiver thereof;
Paragould & Memphis Railway Company;
Paris & Great Northern Railroad Company;
Pelham & Havanna Railroad Company;
Pennsylvania Terminal Railway Company; $
Pennsylvania Company;
The Pennsylvania Railroad Company;
Peoria & Pekin Union Railway Company;
Peoria Railway Terminal Company;
The Pemberton & Hightstown Railroad Company;
Pere Marquette Railroad Company and Newman Erb, Dudley E. Waters, and
Frank W. Blair, receivers thereof;
Perkiomen Railroad Company;
The Peoria & Eastern Railway Company;
Pennsylvania Southern Railroad Company;
Philadelphia & Reading Railway Company;
Philadelphia, Baltimore & Washington Railroad Company;
Philadelphia, Newton & New York Railroad Company;
The Pittsburgh & Lake Erie Railroad Company;
Pittsburgh & Moon Run Railroad Company;
Pittsburgh, Chartiers & Youghiogheny Railway Company;
The Pittsburgh, Cincinnati, Chicago & St. Louis Railway Company;
The Pittsburgh, Lisbon & Western Railroad Company;
lºitsburgh, Shawmut & Northern Railroad Company, and F. S. Smith, receiver
thereof; -
Pontiac, Oxford & Northern Railroad Company;
9
Preston & Berlin Railway Company;
The Potomac, Fredericksburg & Piedmont Railroad Company;
Quebec & Lake St. John Railway Company;
Quebec Central Railway Company;
Quebec Railway Light & Power Company’s Railway;
Quebec, Montreal & Southern Railway Company;
Quincy, Omaha & Kansas City Railroad Company;
Rahway Valley Railroad Company;
Rapid Railroad Company;
Raritan River Railroad Company;
Red Creek Railroad Company;
Red River & Gulf Railroad Company;
Register & Glennville Railway Company;
Reid Newfoundland Company;
Reynoldsville & Falls Creek Railroad Company;
The Rhode Island Company;
Richmond, Fredericksburg & Potomac Railroad Company;
Rockdale Railroad Company; -
Rock Island Southern Railroad Company;
Rock Island Southern Railway Company;
Rome & Northern Railroad Company, and John H. Reynolds, receiver thereof;
Rutland Railroad Company;
Sabine & Eastern Railway Company;
Sabine & Northern Railroad Company;
St. Johnsbury & Lake Champlain Railroad Company;
St. Joseph Valley Railway Company;
The St. Joseph & Grand Island Railway Company;
St. Louis & Hannibal Railway Company;
St. Louis & Missouri Southern Railway Company;
St. Louis & San Francisco Railroad Company;
St. Louis, Iron Mountain & Southern Railway Company;
St. Louis, Kennett & Southeastern Railroad Company;
St. Louis Merchants Bridge Terminal Railway Company;
St. Louis, San Francisco & Texas Railway Company;
St. Louis Transfer Railway Company;
St. Louis, Troy & Eastern Railroad Company;
St. Paul & Kansas City Short Line Railroad Company;
Salem, Winona & Southern Railroad Company;
Saline River Railway Company;
Sandersville Railroad Company;
Sandy River & Rangely Lakes Railroad Company;
Sanoody Valley Railroad Company;
Savannah & Statesboro Railway Company;
Seaboard Air Line Railway;
Sheffield & Tionesta Railway Company;
Shubuta & Southwestern Railroad Company;
Sibley, Lake Bisteneau & Southern Railway Company;
The Silver Lake Railway Company; .
Skaneateles Railway Company;
South Brooklyn Railway Company;
South Buffalo Railway Company;
South Dakota Central Railway Company;
South Manchester Railroad Company;
Southern Iowa Traction Company;
Southern Pacific Company;
Southern Railway Company;
Southern Railway Company in Mississippi;
South Georgia Railway Company;
The Staten Island Rapid Transit Railway Company;
Stewartstown Railroad Company;
Stony Creek Railroad Company;
Stuttgart & Rice Belt Railroad Company;
Sumter & Choctaw Railway Company;
Susquehanna, Bloomsburg & Berwick Railroad Company;
Susquehanna & New York Railroad Company;
Sylacauga & Wetumpka Railroad;
Sylvania & Girard Railroad Company;
10
Tabor & Northern Railway Company;
Talbotton Railroad Company;
Tallassee & Montgomery Railway Company;
Tampa & Jacksonville Railway Company;
Tampa Northern Railroad Company;
Tavares & Gulf Railroad Company;
Temisconata Railway Company;
Temiskaming & Northern Ontario Railway Company;
Tennessee & Cumberland River Railroad Company;
Tennessee & North Carolina Railroad Company;
Tennessee, Alabama & Georgia Railroad Company;
Tennessee Central Railroad Company;
Tennessee Railway Company;
Terminal Railroad Association of St. Louis;
Texarkana & Fort Smith Railway Company;
The Texas & Gulf Railway Company;
The Texas & Pacific Railway Company;
Texas, Arkansas & Louisiana Railway Company;
Texas City Terminal Company;
Texas, Oklahoma & Eastern Railroad Company;
Texas State Railroad;
* The Thousand Islands Railway Company;
Tidewater & Western Railroad Company;
The Timpson & Henderson Railway Company;
Tionesta Valley Railway Company;
Toledo & Ohio Central Railway Company;
Toledo & Western Railroad Company;
Toledo, Peoria & Western Railway Company;
Toledo, Saginaw & Muskegon Railway Company;
Toledo, St. Louis & Western Railroad Company;
Tombigbee Valley Railroad Company;
The Toronto, Hamilton & Buffalo Railway Company;
Tremont & Gulf Railway Company;
Trenton Transportation Company;
The Trinity & Brazos Valley Railway Company;
Trinity Valley & Northern Railway Company;
Tuckerton Railroad Company;
Tuskegee Railroad Company;
The Ulster & Delaware Railroad Company;
Unadilla Valley Railway Company; -
Union Point & White Plains Railroad Company;
Union Railroad Company (Pennsylvania);
Waldosta, Moultrie & Western Railroad Company;
The Valley Railroad Company (of Virginia);
Vandalia Railroad Company;
Vicksburg, Shreveport & Pacific Railway Company;
Victoria, Fisher & Western Railroad Company;
Virginia-Carolina Railway Company;
Virginia Southern Railroad Company;
Virginia & Southwestern Railway Company;
The Virginian Railway Company; -
The Wabash, Chester & Western Railroad Company; .
* Wabash Pittsburgh Terminal Railway Company, and H. W. McMaster, receiver
thereof;
The Wabash Railroad Company, and F. A. Delano, E. B. Pryor, and Wm. K. Bixby,
receivers thereof; r
Warren & Ouachita Valley Railway Company;
Warren, Johnsville & Saline River Railroad Company;
Washington, Baltimore & Annapolis Electric Railroad Company;
Washington Run Railroad Company;
Washington Southern Railway Company;
Wasiote & Black Mountain Railroad Company;
Waterloo, Cedar Falls & Northern Railway Company;
Watertown & Northern Railroad Company;
Waupaca-Green Bay Railway;
Western Allegheny Railroad Company;
Western & Atlantic Railroad;
11
The Western Maryland Railway Company;
The Western Railway of Alabama;.
West Jersey & Seashore Railroad Company;
West Shore Railroad Company;
West Side Belt Railroad and H. W. McMaster, receiver thereof;
West Virginia Midland Railroad Company; º
West Virginia Northern Railroad Company;
Wharton & Northern Railroad Company;
The Wheeling & Lake Erie Railroad Company and W. M. Duncan, receiver thereof;
Wiggins Ferry Company;
Williamsport & North Branch Railroad Company;
Williams Valley Railroad Company; -
Williamsville, Greenville & St. Louis Railway Company;
Wilkesbarre & Eastern Railroad Company;
The Winfield Railroad Company; g
Wisconsin & Michigan Railway Company;
Wise Terminal Company;
Wood River, Branch Railroad Company;
Wrightsville & Tennille Railroad Company; .
The Yazoo & Mississippi Valley Railroad Company;
The Youngstown & Ohio Railroad Company;
The Zanesville & Western Railway Company;
Zwolle & Eastern Railway Company.
By the Commission:
[SEAL.] JoBN H. MARBLE,
- Secretary.
, “y
~x.
‘. . . ; ; ; º
{, - . . . §
ºr BEFORE THE INTERSTATE COMMERCE COMMISSION.
GENERAL º'
Jul.10 ſºlº
IN THE MATTER
OF
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS
SUBJECT TO THE ACT TO REGULATE COM-
MERCE, INCLUDING THE METHOD OF
ASSOCIATION KNOWN AS THE “COM-
MUNITY OF INTEREST PLAN.”
ORDER AND TESTIMONY.
wASHINGTON:
Gover NMENT PRINTING OFFICE.
1902.
BEFORE THE INTERSTATE COMMERCE COMMISSION.
IN THE MATTER
OF
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS
SUBJECT TO THE ACT TO REGULATE COM-
MERCE, INCLUDING THE METHOD OF
ASSOCIATION KNOWN AS THE “COM-
MUNITY OF INTEREST PLAN.”
O ER, DE ER, A N ID T E S TIME O N Y.
- WASHINGTON:
Gov ERNMENT PRINTING OFFICE.
1902.
BEFORE THE INTERSTATE COMMERCE COMMISSION.
IN THE MATTER OF CONSOLIDATIONS AND COMBINATIONS OF
CARRIERS SUBJECT TO THE ACT TO REGULATE COMMERCE,
INCLUDING THE METHOD OF ASSOCIATION KNOWN AS THE
“COMMUNITY OF INTEREST PLAN.”
At a general session of the Interstate Commerce Commission, held
at its office in the city of Washington, D. C., on the 20th day of
December, 1901.
Present: Hon. Martin A. Knapp, chairman; Hon. Judson C. Clem-
ents, Hon. James D. Yeomans, Hon. Charles A. Prouty, Hon. Joseph
W. Fifer, Commissioners.
IN THE MATTER OF CONSOLIDATIONS AND COMBINATIONS OF CARRIERS SUB-
JECT TO THE ACT TO REGULATE COMMERCE, INCLUDING THE METHOD OF
ASSOCIATION KNOWN AS THE “COMMUNITY OF INTEREST’’ PLAN.
Whereas the twelfth section of the act to regulate commerce pro-
vides that the Commission “shall have authority to inquire into the
management of the business of all common carriers subject to the pro-
visions of this act, and shall keep itself informed as to the manner and
method in which the same is conducted,” and requires the Commission
“to execute and enforce the provisions of this act;”
And whereas it appears to the Commission that certain consolida-
tions and combinations of carriers subject to the act, including the
method of association known as the “community of interest” plan,
should be made the subject of investigation, to the end that the Com-
mission may be informed as to their formation, purposes, and modes
of operation, together with their effects upon the movement of inter-
state commerce and the rates received therefor, and to the further end
that it may be ascertained whether such consolidations, combinations,
and methods of association are unlawful under the act or have the
effect of violating any of its provisions:
Ordered, That a proceeding of investigation and inquiry into and
concerning the matters above recited be, and the same is hereby, insti-
tuted, and that such proceeding be set for hearing at the United States
court rooms, Monadnock Block, in the city of Chicago, Ill., on the 8th
day of January, 1902, at 10 o’clock a. m., the further hearing to be
continued at such times and places as may appear to be required.
BEFORE THE INTERSTATE COMMERCE COMMISSION.
IN THE MATTER OF CONSOLIDATIONS AND COMBINATIONS OF CARRIERS SUB-
JECT TO THE ACT TO REGULATE COMMERCE, INCLUDING THE METHOD OF
Association KNowN. As THE “community of INTEREST PLAN.”
J/earing at Chicago, Ill., January 8, 1902
Present: Hon. Martin A. Knapp, chairman ; Hon. Judson C. Clem-
ents, Hon. James D. Yeomans, Hon. Charles A. Prouty, Hon. Joseph
W. Fifer, Commissioners.
5
6 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
UNITED STATES COURT ROOM.
Chicago, Ill., January 8, 1903—10.30 a. m.
The CHAIRMAN. Gentlemen, please give us your attention. The
Commission has assigned this time and place for beginning an investi-
gation under an order entitled “In the Matter of Consolidations
and Combinations of Carriers Subject to the Act to Regulate Com-
merce and the Method of Association Known as the ‘Community of
Interest Plan.’” The Commission has requested the attendance at
this time and place of the following-named gentlemen: Mr. Hill, presi-
dent of the Great Northern Railway: Mr. Mellen, president of the
Northern Pacific Railway; Mr. Burt, president of the Union Pacific
Railroad; Mr. Harriman, president of the Southern Pacific Company;
Mr. Stubbs, traffic director of the Union Pacific and affiliated lines,
and Mr. Miller, understood to be traffic manager of the Northwestern
lines—I forgot to mention Mr. Harris, president of the Chicago, Bur-
lington and Quincy road. I would like to ascertain, before going further
who of those gentlemen are present or represented at this time. Is
anyone prepared to speak for Mr. Hill? (No response.) Is Mr.
Miller in the room? (Response was made on behalf of Mr. Miller to
the effect that he had stepped out of the room for a moment.) Does
anyone represent Mr. Mellen 4 (No response.) Mr. Harris is present.
Is Mr. Burt present or represented? (No response.) Does anyone
represent Mr. Stubbs? *
Mr. S. F. Booth. If it please the Commission, I would like to state
that Mr. Stubbs has been confined to his house for the last two weeks
with the grippe, and his physician advises him that it will be some time
before he can leave his home. Mr. Stubbs asked me to make this
Statement.
The CHAIRMAN. What is the nature of his illness?
Mr. Booth. The grippe.
The CHAIRMAN. What is his residence?
Mr. BOOTH. 824 North Park avenue.
The CHAIRMAN. You say he has not left his house for upward of
two weeks? -
Mr. BOOTH. Yes, sir.
The CHAIRMAN. And that his physician states he is not able to leave
his house, and will not be able to do so for some time to come? .
Mr. BOOTH. Yes, sir.
The CHAIRMAN. Mr. Miller is understood to be here. Is Mr. Harri-
man here or represented? (No response.) It is proper to say that
ordinarily in conducting investigations of this general nature and rail-
way officials of the character of those named are asked to be present,
a request from the Commission is regarded as equivalent to a subpoena,
and that method is ordinarily used. So in this case some days ago a
copy of the order in this proceeding was mailed to each of the gentle-
men named, with a note requesting them to be present at this time and
place with a view to their examination upon the matters embraced in
this inquiry. Upon information that Messrs. Hill and Miller would
meet engagements which would prevent them from being here, sub-
poenas were issued for their attendance, which were served yesterday.
Mr. Miller has appeared in obedience to that subpoena. He informs
the Commission that Mr. Hill can not be here on account of other
engagements. My associate reminds me that there is evidence that
the method of invitation which I have described has always been ade-
Quate in the fact that the railway officials who attended here yesterday
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 7
were here in obedience to request and not in obedience to subpoena.
Everyone who was asked to appear was here or presented adequate
excuse for not being present. -
It occurs to the Commission, from the nature of this investigation as
respects some of the railway combinations of public interest, that those
likely to be best informed and whose testimony would be most valu-
able are not present, and the Commission is disinclined to begin this
inquiry at this time under existing circumstances, and with only such
witnesses present as have responded to its request. Those at all famil-
iar with the subject must be aware that the persons whose knowledge
of these transactions is presumably most accurate and comprehensive
are, for one reason or another, absent from this hearing this morning,
and we are inclined to think it is unsuitable to commence the inquiry
with the examination of witnesses whose relation to these affairs
appears to be least important and controlling.
For this reason we have decided to postpone this hearing until the
24th day of this month at the United States court room here in Chi-
cago—presumably in this very room—at 10 o’clock in the morning,
and arrangements will be made, we trust, to secure the attendance of
the gentlemen who are absent this morning and of such others as we
think should be prepared to give their testimony before the Commis-
sion at that time. For the reasons suggested this inquiry stands
adjourned until the 24th day of this month, at 10 o’clock in the morn-
ing, in this court room.
At 10.45 a.m. the Commission adjourned.
Hearing at Chicago, Ill., January 24 and 25, 1902.
Present: Hon. Martin A. Knapp (chairman), Hon. Judson C. Clem-
ents, Hon. James D. Yeomans, Hon. Charles A. Prouty, Hon. Joseph
W. Fifer, commissioners.
Appearances: Mr. W. A. Day for the Commission, Mr. F. B. Kel-
logg for Northern Pacific, Mr. M. D. Grover for Great Northern.
The CHAIRMAN. Gentlemen, please give us your attention. The
Commission is here to conduct an inquiry under an order entitled “In
the matter of consolidations and combinations of carriers subject to
the act to regulate commerce, and the method of association known as
the ‘community of interest plan.” The first hearing of this matter
was assigned for the 8th day of this month, but for reasons then
stated was postponed until this day and hour. The Commission desires
to inquire whether there are any counsel present who desire to have
their appearances noted on the record in this proceeding.
The CHAIRMAN. It seems to the Commission unnecessary to make
any preliminary statement, inasmuch as the order under which the
inquiry is conducted recites the authority of the Commission and indi-
cates its nature and scope, and for the further reason that a copy of
this order has been sent to each of the gentlemen whose attendance
has been desired at this time. ‘The witnesses will be examined in the
first instance by Mr. Day, who comes here for that purpose, and if
there are no applications to delay or suggestions as to the Order in
which the inquiry shall be taken up, we will proceed according to the
plan which we have outlined among .
Mr. GROVER. If the Commission please, it will be an accommodation
if the Commission in the discharge of its duty will examine Mr. J. J.
Hill at as early a time as it conveniently can. While we are not insist-
8 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
ing on it, we will appreciate it if the Commission will examine him at
once or as early as possible—if not this forenoon, to designate some
time that Mr. Hill can be present for the purpose. -
The CHAIRMAN. Your statement perhaps implies that Mr. Hill
desires to leave the city as soon as possible.
Mr. GROVER. Yes, sir. He came here from New York for the pur-
pose of being examined.
The CHAIRMAN. Could you indicate at what hour, so that we may
know what time is at our disposal?
Mr. GROVER. He would return to New York as soon as the exami-
nation is completed, but desires to remain during such time as the
Commission desires to prosecute the inquiry.
Commissioner FIFER. What is the earliest train he wishes to leave on?
Mr. GROVER. He could leave this evening if he was at liberty.
The CHAIRMAN. The Commission will endeavor to accommodate Mr.
Hill and arrange for his examination in the course of the day. Mr.
Day, you may proceed.
Mr. DAY. Mr. Stubbs.
(No response.)
Mr. SPENCER. I know he is on his way over here.
The CHAIRMAN. Rather than wait indefinitely, we think you had
better call some other witness. -
Mr. DAY. Mr. Darius Miller.
DARIUS MILLER, being duly sworn, testified as follows:
Mr. DAY. Mr. Miller, give the stenographer your name and official
relation to---
Mr. MILLER. Darius Miller.
Mr. DAY. What is your present official railroad relation?
Mr. MILLER. First vice-president of the Chicago, Burlington and
Quincy Railway Company. .
Mr. DAY. Railway Company ?
Mr. MILLER. Yes, sir. -
Mr. DAY. How long have you been connected with the Chicago,
Burlington and Quincy Railway Company? -
Mr. MILLER. Since the 1st of January.
Mr. DAY. Prior to that time what railroad company were you con-
nected with ? -
Mr. MILLER. I was second vice-president of the Great Northern
Railway.
Mr. DAY. How long had you been connected with the Great North
ern Railway ?
Mr. MILLER. A little over two years.
Mr. DAY. As vice-president of that road, did you have charge of
the traffic department?
Mr. MILLER. Yes, sir.
Mr. DAY. Passenger as well as freight? -
Mr. MILLER. Yes, sir. gº -
Mr. DAY. Are you yet connected with the Great Northern?
Mr. MILLER. No, sir.
Mr. DAY. When did you first contemplate coming on to the Chicago
Burlington and Quincy - -
Mr. MILLER. I was elected vice-president in December.
Mr. DAY. December of this last year? t
Mr. MILLER. Yes, sir.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 9
Mr. DAY. Prior to that had you any intimation that you were to
take charge of the traffic department of the Chicago, Burlington and
Quincy? Prior to your election? ſº
Mr. MILLER. Certainly I had.
Mr. DAY. How long prior'
Mr. MILLER. A few weeks.
Mr. DAY. When was it stated to you or proposed to you that you
should come on to the Chicago, Burlington and Quincy
Mr. MILLER. I do not remember the date.
Mr. DAY. About when Ž -
Mr. MILLER. I think along in November.
Mr. DAY. Who made the proposition to you?
Mr. MILLER. Mr. Hill told me I had been selected.
Mr. DAY. How long was that—did you get that notification from any
other source?
Mr. MILLER. I was advised by the secretary of the Chicago, Bur-
lington and Quincy that I was elected.
Mr. DAY. After the election took place?
Mr. MILLER. Yes, sir.
Mr. DAY. Have you any official relations or traffic relations with the
Chicago, Burlington and Quincy Railroad Company'
Mr. MILLER. I am not an officer of that company.
Mr. DAY. What relation have you to it?
Mr. MILLER. I have none. -
Mr. DAY. What relation has the Chicago, Burlington and Quincy
Railway Company to the Chicago, Burlington and Quincy Railroad
Company ?
Mr. MILLER. It is the lessee of the railroad company. The railroad
company is leased to the Chicago, Burlington and Quincy Railway
Company.
Mr. DAY. The company of which you are traffic manager and sec-
ond vice-president is the lessee of the railroad company; is that right?
Mr. MILLER. Yes, sir.
Mr. DAY. Have you seen the lease?
Mr. MILLER. No, sir.
Mr. DAY. Where is the lease?
Mr. MILLER. I do not know.
Mr. DAY. Do you know its terms?
Mr. MILLER. No, sir.
Mr. DAY. Or any of them :
Mr. MILLER. I do not.
Mr. DAY. Do you know when the lease was made?
Mr. MILLER. I do not.
Mr. DAY. Has it been stated to you when it was made?
Mr. MILLER. No, sir.
Mr. DAY. Who told you there was a lease?
Mr. MILLER. It is just the general information I have, the same as
anybody else.
Mr. DAY. You are the vice-president and traffic manager of the
railway company and you hold your possession of that road under this
lease; is that right?
Mr. MILLER. Yes, sir.
Mr. DAY. You never saw the lease, do not know where it is, and never
heard anyone state its terms or any portion of its terms?
Mr. MILLER. No, sir.
10 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. While you were traffic manager of the Great Northern
road, was the Great Northern road or its officers a party to any agree-
ment or otherwise regarding the maintenance of rates in the territory
traversed by the Great Northern, in which it was a competitor of the
Northern Pacific 4 .
Mr. MILLER. All our rates were made by conference and agreement
with our competitors and connections.
Mr. DAY. When, as traffic manager of the Great Northern, did you
last meet with a similar officer or somebody representing the Northern
Pacific in regard to rates, the maintenance of rates, or the making of
rates?
Mr. MILLER. We were in conference almost daily.
Mr. DAY. With what Officer on the Northern Pacific'
Mr. MILLER. Mr. Hannaford.
Mr. DAY. That is the traffic manager and vice-president?
Mr. MILLER. Yes, sir. &
Mr. DAY. Did you have conferences with the traffic manager or any-
body representing the Union Pacific system on competitive traffic?
Mr. MILLER. Yes, sir.
Mr. DAY. Respecting rates on competitive traffic?
Mr. MILLER. Yes, sir.
Mr. DAY. How about the Canadian Pacific :
Mr. MILLER. Also the Canadian Pacific.
Mr. DAY. While you were traffic manager of the Great Northern
was there any arrangement between the representatives of these lines—
the Canadian Pacific, Northern Pacific, Great Northern, and Union
Pacific—or any two of them, regarding the apportionment of competi-
tive traffic'
Mr. MILLER. No, sir.
Mr. DAY. Did you have any understanding regarding the divisions
of the competitive traffic among those lines, or either of them?
Mr. MILLER. No, sir.
Mr. DAY. At no time?
Mr. MILLER. No, sir.
Mr. DAY. Was there any percentage of the traffic that it was under-
stood the Great Northern was entitled to—of the competitive traffic?
Mr. MILLER. No, sir.
Mr. DAY. Take the Pacific coast traffic.
Mr. MILLER. There was no understanding. -
Mr. DAY. The only understanding that you had with your competi-
tors was regarding rates?
Mr. MILLER. Yes, sir. *
Mr. DAY. There was never anything in the nature of a division of
traffic or an agreement to divide traffic?
Mr. MILLER. No, sir. º
Mr. DAY. Or to route it—how it should be routed?
Mr. MILLER. No, sir. -
Mr. DAY. No understanding or any agreement at anytime while
you were traffic manager of the Great Northern for a division of the
competing traffic between those roads or any two of them?
Mr. MILLER. That is correct.
Mr. DAY. Nor any understanding, tacit or otherwise?
Mr. MILLER. No, sir.
Mr. DAY. When you came over as the traffic manager of the Chicago,
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 11
Burlington and Quincy Railway Company, did you receive any instruc-
tions or advices respecting your duties as traffic manager?
Mr. MILLER. I did not.
Mr. DAY. From anybody ?
Mr. MILLER. From nobody.
Mr. DAY. You had no advice on the subject whatever 4
Mr. MILLER. No, sir.
Mr. DAY. There has been some reduction in rates on the Great
Northern road recently—you are aware of that?
Mr. MILLER. Yes, sir.
Mr. DAY. Did you participate in the making of those reductions?
Mr. MILLER. I did. -
Mr. DAY. Who did you confer with in regard to that?
Mr. MILLER. Mr. Hill.
Mr. DAY. Who else?
Mr. MILLER. The Northern Pacific-—the lines affected by it.
Mr. DAY. What lines were they -
Mr. MILLER. The Northwestern; the Chicago, Milwaukee and St.
Paul; the Northern Pacific; the Burlington, Cedar Rapids and North-
ern; the Omaha, and the Soo Line.
Mr. DAY. Did any other transcontinental lines participate in those
conferences, or any of them, except the Northern Pacific and Great
Northern ?
Mr. MILLER. That is all. They were the only lines affected.
Mr. DAY. When was that agreement made?
Mr. MILLER. It was made in December and the early part of this
month.
Mr. DAY. Where?
Mr. MILLER. At St. Paul.
Mr. DAY. State who were present besides Mr. Hannaford and
yourself.
Mr. MILLER. Marvin Hughitt, jr., of the Northwestern; Mr. Mar-
tin, of the Soo Line; Mr. J. T. Clark, of the Omaha; Mr. Simmons,
of the Burlington, Cedar Rapids and Northern, and Mr. J. H. Hiland,
of the Milwaukee.
Mr. DAY. When did that take place?
Mr. MILLER. The reduced rates took place the 25th of this month.
Mr. DAY. When were the conferences?
Mr. MILLER. Several in December and the early part of this month.
Mr. DAY. But the one that consummated the new schedule?
Mr. MILLER. It was in December, and the early part of this month.
Mr. DAY. When was it that you were notified that you were to come
on to the Burlington road?
Mr. MILLER. The middle of December.
Mr. DAY. These conferences or agreements were after
Mr. MILLER. I did not leave the Great Northern until the first of
the month.
Mr. DAY. But after you had been elected vice-president of the
Burlington?
Mr. MILLER. I took charge of the office.
Mr. DAY. You took charge of the Burlington on the 1st of Janu-
ary of this year. Since you came in as traffic manager have you
examined the traffic contracts of the Burlington road?
Mr. MILLER. I have not.
Mr. DAY. None of them?
12 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. MILLER. No, sir.
Mr. DAY. Have you any information respecting any of them with
competing lines?
Mr. MILLER. No, sir; I am not informed. r
Mr. DAY. Was there a traffic contract regarding the division of
traffic between the Burlington and the Union Pacific'
Mr. MILLER. No, sir; I think not. I know it.
Mr. DAY. Is there any traffic agreement regarding the allotment of
traffic or the division of traffic or the division of earnings between
the old Burlington Railroad Company and any of its competitors?
Mr. MILLER. I know of none.
Mr. DAY. Have you heard of any
Mr. MILLER. No, sir.
Mr. DAY. You have no information that any such exists?
Mr. MILLER. No, sir. - .
Mr. DAY. You have no intimation, I say, that any such exists?
Mr. MILLER. No, sir.
Mr. DAY. Have you had any conferences at all with Mr. Harriman
respecting your duties or functions on the Burlington road?
Mr. MILLER. I have not. -
Mr. DAY. Who is the president of the Burlington Railroad Com-
pany ?
Mr. MILLER. Mr. George B. Harris.
Mr. DAY. Who is president of the Chicago, Burlington and Quincy
Railway Company?
Mr. MILLER. Mr. George B. Harris.
Mr. DAY. As vice-president or traffic manager of the Great
Northern, did you enter into any arrangement with other lines respect-
ing a division of the trans-Pacific traffic—traffic that came and should
come to the Pacific coast terminals or any of them?
Mr. MILLER. No, sir.
Mr. DAY. Destined for points on or east of the Mississippi River?
Mr. MILLER. No, sir. - -
Mr. DAY. The Great Northern had no traffic agreements with the
Southern Pacific or Union Pacific respecting
Mr. MILLER. None for a division of business.
Mr. DAY. Any for a division of earnings?
Mr. MILLER. No, sir. -
Mr. DAY. Any joint expenses that they incurred respecting that
traffic :
Mr. MILLER. No, sir.
Mr. DAY. Or regarding steamship lines?
Mr. MILLER. No, sir.
Mr. DAY. Or space in them?
Mr. MILLER. No, sir.
Mr. DAY. Did the Great Northern and Northern Pacific have any
such agreements? -
Mr. MILLER. The Great Northern did not. I do not think the
Northern Pacific had.
Mr. DAY. With the Great Northern, I mean.
Mr. MILLER. No, sir. -
Mr. DAY. Did the Great Northern participate in the San Francisco
traffic, either from San Francisco or traffic destined to San Francisco’
Mr. MILLER. The Great Northern has through rates in, in connection
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 13
with the steamship companies. They haul a very small amount of
that business. They compete for it.
Mr. DAY. Was any concession made to the Great Northern regard-
ing that traffic?
Mr. MILLER. No, sir.
Mr. DAY. Was there any agreement that you should keep out of
that traffic, or keep in the same rate that the overland routes did?
Mr. MILLER. There was no agreement to keep out of the traffic.
We agreed to maintain the same rates.
Mr. DAY. Who did you agree with ?
Mr. MILLER. The other transcontinental roads.
Mr. DAY. Who? \
Mr. MILLER. Mr. Morton and Mr. Stubbs; there were other lines.
Mr. DAY. Can you name the others?
Mr. MILLER. The Missouri Pacific.
Mr. DAY. Mr. Stith?
Mr. MILLER. Yes, sir.
Mr. DAY. Who else?
Mr. MILLER. The Union Pacific, Mr. Munroe.
Mr. DAY. Is the Canadian Pacific in that?
Mr. MILLER. Yes, sir.
Mr. DAY. Is that agreement in writing?
Mr. MILLER. No, sir.
Mr. DAY. Where was it made?
Mr. MILLER. I do not remember where it was made. It was the
result of a number of conferences.
Mr. DAY. When was it made?
Mr. MILLER. A number of years ago.
Mr. DAY. How many years ago?
Mr. MILLER. Five or six years ago.
Mr. DAY. And has been lived up to since, so far as you know?
Mr. MILLER. Yes, sir. . -
M; DAY. Tell the Commission what was the substance of that agree
ment'.
Mr. MILLER. Simply that we would maintain rates the same as the
overland lines.
Mr. DAY. What was the consideration for the agreement?
Mr. MILLER. There was no consideration.
Mr. DAY. Oh, yes, there was a consideration.
Mr. MILLER. I do not know of it.
Mr. DAY. Why did you come together?
Mr. MILLER. Because rates were demoralized.
Mr. DAY. That is to say—by being demoralized, what do you mean?
Mr. MILLER. The tariff rates were not being maintained.
Mr. DAY. The only inducement to make this agreement was to
restore rates to the published tariffs?
Mr. MILLER. Yes, sir.
Mr. DAY. Was your road participating in this San Francisco traffic
at that time at rates below your published tariff rates?
Mr. MILLER. Yes, sir.
Mr. DAY. That, I suppose, was the result of competition?
Mr. MILLER. Yes, sir.
Mr. DAY. And you agreed then—these transcontinental lines, or
the gentlemen present, each for his own road—agreed that the tariff
rate should be restored and maintained?
14 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. MILLER. Yes, sir.
Mr. DAY. And you have acted on that agreement ever since, and are
to-day, and have lived up to it?
Mr. MILLER. Yes, sir.
Mr. DAY. You have stated all there was of that agreement?
Mr. MILLER. Yes, sir.
Mr. DAY. Was there anything else implied or understood between
you that you have not stated to the Commission?
Mr. MILLER. No, sir.
Mr. DAY. You have divulged everything relating to it completely?
Mr. MILLER. I have.
Mr. DAY. Were there any other agreements, or have there been
agreements, similar to that in which the Great Northern participated
in the last year or two?
Mr. MILLER. All our tariffs are made by agreements between our
competitors. *
Mr. DAY. Any other consideration for the making of any of them
than the maintenance of rates?
Mr. MILLER. That is all.
Mr. DAY. These agreed rates?
Mr. MILLER. Yes, sir.
Mr. DAY. Do you control the routing of traffic now over the Bur-
lington system?
Mr. MILLER. Yes, sir; I supervise it. .
Mr. DAY. You exercise the right or have the power to direct unrouted
traffic. Have you any agreement with connecting lines or competitors
respecting the routing of any undirected traffic?
Mr. MILLER. None that I am aware of now.
Mr. DAY. You have not taken up that question?
Mr. MILLER. No, sir.
Mr. DAY. Who, connected with the road of which you are vice-pres-
ident, is familiar with that?
Mr. MILLER. The general freight agent.
Mr. DAY. Mr. Miller .
Mr. MILLER. Yes, sir.
Mr. DAY. Is there any agreement or understanding between the
Burlington Railroad or the Burlington Railway Company and any of
its competitors or its connections respecting its share, or what shall be
its share of the middle West traffic—the Colorado-Utah traffic?
Mr. MILLER. I know of none. -
Mr. DAY. Have you heard of any ?
Mr. MILLER. No; sir.
Mr. DAY. At any time, either before you became vice-president or
subsequently'
Mr. MILLER. I know of none.
Mr. DAY. Or the percentage of the Colorado-Utah traffic that the
Burlington is entitled to ?
Mr. MILLER. No, sir; I do not. t
Mr. DAY. If an agreement of that nature existed, Mr. Miller, your
general freight agent is the man that knows all about it?
Mr. MILLER. #. Ought to; yes, sir.
Mr. DAY. Anybody else on the system?
Mr. MILLER. The president ought to know.
Mr. DAY. Do you know whether there has been any agreement by
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 15
the Burlington Railroad, or Burlington Railway Company, respecting
its share or its allotment of Pacific coast traffic &
Mr. MILLER. No, sir.
Mr. DAY. Traffic either to the Pacific coast or from the Pacific coast? .
Mr. MILLER. No, sir.
Mr. DAY. Respecting oil, sugar, fruit, coal, or tea?
Mr. MILLER. I know of none, and do not think there is any.
Mr. DAY. Why do you think that?
Mr. MILLER. I think I would have heard of it if there was.
Mr. DAY. Who has the authority on the Burlington system to-day
of making rates?
Mr. MILLER. The general freight agent, subject to the supervision
of my office and that of the president.
Mr. DAY. The general freight agent under your authority, and the
president directs you or controls you or restrains you?
Mr. MILLER. Yes, sir.
Mr. DAY. Have you had any conferences with either the president
of your own road or anybody else respecting your future policy regard-
ing rates on the Burlington system? - -
Mr. MILLER. No, sir.
Mr. DAY. Or the division of traffic?
Mr. MILLER. No, sir.
Mr. DAY. Or the allotment or moving of traffic :
Mr. MILLER. No, sir.
Mr. DAY. So far as your instructions are concerned, no matter from
what source they come, is the Burlington system to-day as independent
a proposition as it was prior to January 1, 1901?
Mr. MILLER. Yes, sir; in every way.
Mr. DAY. In no wise dependent upon or subject to the control or
direction of any other railway or railroad company or any other
corporation, excepting the Burlington Railroad itself?
Mr. MILLER. That is correct. -
Mr. DAY. Who are the directors of the Burlington Railroad Company ?
Mr. MILLER. I can not name them all.
Mr. DAY. Name those you can recollect.
Mr. MILLER. Mr. Harris—I can not name them.
Mr. DAY. You know some others, do you not?
Mr. MILLER. I have forgotten them. I saw the list, but have for-
gotten them.
Mr. DAY. Where was your company organized; in what State?
Mr. MILLER. I do not know that. I think in Iowa.
Mr. DAY. Do you know any of the officers of your company except
your president?
r. MILLER. Yes, sir.
Mr. DAY. Who? I mean the executive officers, general officers.
Mr. MILLER. I have met nearly all of them.
Mr. DAY. Who is the secretary of the company 4
Mr. MILLER. I do not know.
Mr. DAY. Where does he live?
Mr. MILLER. In Chicago. -
Mr. DAY. Any other vice-president besides yourself?
Mr. MILLER. No, sir.
Mr. DAY. You are first vice-president?
Mr. MILLER. First vice-president.
Mr. DAY. There are no others?
16 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. MILLER. No, sir.
Mr. DAY. Who is the general manager?
Mr. MILLER. Mr. Delano is general manager east of the Missouri
River.
Mr. DAY. Who is the manager west?
Mr. MILLER. Howard Elliott is manager at St. Louis of the Mis-
souri lines and Mr. Holdrege of the Burlington and Missouri River.
Mr. DAY. Is Mr. Ives a subordinate of yours?
Mr. MILLER. Yes, sir.
Mr. DAY. What is his title?
Mr. MILLER. General freight agent.
Mr. DAY. Where?
Mr. MILLER. At St. Louis.
Mr. DAY. Of the Missouri lines?
Mr. MILLER. Yes, sir.
Mr. DAY. Since you became traffic manager, have you issued any
instructions to these gentlemen or any of your subordinates respecting
the routing of traffic or the division of traffic?
Mr. MILLER. No, sir.
Mr. DAY. Or the increase or decrease of rates?
Mr. MILLER. No, sir. -
Mr. DAY. Or regarding departure from the published tariffs?
Mr. MILLER. No, sir.
Mr. DAY. On any commodity?
Mr. MILLER. I have not.
Mr. DAY. Had any conference with them respecting it or regarding
departure from the published tariffs?
Mr. MILLER. I have. -
Mr. DAY. When
Mr. MILLER. Within the last week.
Mr. DAY. Where?
Mr. MILLER. In Chicago.
Mr. DAY. Who was present?
Mr. MILLER. Mr. Ives, Mr. Thomas Miller, and Mr. Crosby.
Mr. DAY. I understood you to say, Mr. Miller, that in no manner
whatever have you received any instructions or any advices or any
recommendations from either Mr. Harriman or Mr. Hill, president of
the Great Northern, respecting the policy of the Burlington road under
your traffic management.
Mr. MILLER. I have not.
Mr. DAY. That is all I wish to ask Mr. Miller at this time.
The CHAIRMAN. Mr. Grover, do you desire to ask any questions of
Mr. Miller?
Mr. GROVER. I suggested to Mr. Miller whether he was not in error
as to the date when the question of the recent reductions made by the
Great Northern and Northern Pacific was taken up and whether the
matter was not under discussion as early as March.
Mr. MILLER. It has been under discussion for over a year.
The CHAIRMAN. Any further questions?
Commissioner PROUTY. About what is the mileage of the Great
Northern road, Mr. Miller?
Mr. MILLER. About 6,000 miles. -
Commissioner PROUTY. What is the mileage of the Northern Pacific?
Mr. MILLER. About the same.
Commissioner PROUTY. And of the Burlington road?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 17
Mr. MILLER. Eight thousand miles. -
Commissioner PROUTY. To what extent are the Northern Pacific
and Great Northern, by virtue of their physical location, competitors?
Mr. MILLER. I do not know that I understand the question.
Commissioner PROUTY. At what points are the Great Northern and
Northern Pacific road competitors?
Mr. MILLER. I should say out of about 2,000 stations they have
about 25 competing points.
Commissioner PROUTY. How important are those competing points?
Mr. MILLER. Some are very important, and some are not.
Commissioner PROUTY. Do both lines reach Duluth 2 r
Mr. MILLER. Yes, sir.
Commissioner PROUTY. Do both lines reach St. Paul ?
Mr. MILLER. Yes, sir.
Commissioner PROUTY. Do both lines reach Fargo?
Mr. MILLER. Yes, sir.
Commissioner PROUTY. Generally speaking, are they competitive
for business in Minnesota, and North Dakota, and South Dakota ?
Mr. MILLER. In North Dakota and Minnesota; not in South Dakota.
Commissioner PROUTY. How is it with respect to transcontinental
business?
Mr. MILLER. They are competitors at equal rates.
Jommissioner PROUTY. They are competitors for all transcontinental
business into the Northwest, are they not?
Mr. MILLER. Yes, sir.
Commissioner PROUTY. And they are also competitors with the
Southern Pacific and Union Pacific : -
Mr. MILLER. Yes, sir. -
Commissioner PROUTY. In your judgment, what part of the busi-
ness of the Northern Pacific and Great Northern may be called com-
petitive business?
Mr. MILLER. I should not think over 25 per cent.
Commissioner PROUTY. You think 25 per cent would be competitive
business?
Mr. MILLER. Probably; yes, sir.
Commissioner PROUTY. What part of that business is competitive
with southern lines, the Union Pacific and lines south of that?
Mr. MILLER. Very little.
Commissioner PROUTY. To what extent is the Burlington a competi-
tor with those two lines?
Mr. MILLER. It is not a competitor.
Commissioner PROUTY. Not at any point?
Mr. MILLER. Except possibly at Billings, a junction point.
Commissioner PROUTY. Is there a transcontinental freight associa-
tion?
Mr. MILLER. There is a transcontinental freight bureau for publish-
ing tariffs. -
Commissioner PROUTY. Do the Great Northern and Northern Pacific
both belong to that?
Mr. MILLER. The Great Northern does not. I do not know about
the Northern Pacific. -
Commissioner PROUTY. You said that five or six years ago the trans-
continental lines got together and agreed to maintain rates in conse-
quence of demoralization. That was about five years ago, was it?
526A–02 2
18 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. MILLER. There have been a great many conferences for years.
Commissioner PROUTY. You make that sort of an agreement about
every year, do you not?
. Mr. MILLER. Quite often.
Commissioner PROUTY. And it is always made in consequence of
demoralization of rates?
Mr. MILLER. Usually; yes, sir.
Commissioner PROUTY. When was the last agreement of that sort
made?
Mr. MILLER. I do not remember the date. It has been some time.
Commissioner PROUTY. What penalty has been ever devised for not
maintaining that agreement?
Mr. MILLER. I know of none.
Commissioner PROUTY. You simply get together and say, “We are
going to maintain these rates for the future.” Have rates been main-
tained at competitive points within the last year?
Mr. MILLER. No, sir.
Commissioner PROUTY. Are they maintained now 4
Mr. MILLER. I think they are in very good shape now.
Commissioner PROUTY. That is all. -
Commissioner CLEMENTS. I do not know if I understood you cor-
rectly, or whether you understood Mr. Day correctly, in regard to
the question as to this agreement to maintain rates. You say that that
grew out of demoralization and departure from the published rates.
Did not your agreement include not only an adherence to the published
rate, but also that the published rate itself should not be reduced from
time to time except by conferences with each other?
Mr. MILLER. That is correct.
Commissioner CLEMENTs. So it had the twofold purpose of enforc-
ing adherence to the published rate and also preventing a reduction of
the published rate from the point the rate is agreed upon. Now, are
not all the transcontinental lines competitive with each other in respect
to business that originates in the East and goes to the Pacific coast and
also in the opposite direction? -
Mr. MILLER. Yes, sir.
Commissioner CLEMENTs. So that the Burlington is a competitor
with the whole transcontinental family, is it not, in respect to through
business East and West?
Mr. MILLER. It does not reach the Pacific coast.
Commissioner CLEMENTS. But it is a link, and a very important one,
in regard to the large traffic that goes from coast to coast in both
directions?
Mr. MILLER. Yes, sir.
Commissioner CLEMENTs. And if it did not go over the Burlington
it would find its way over some other road. What did you say was
the mileage of the Great Northern ?
Mr. MILLER. About 6,000 miles.
Commissioner CLEMENTs. The annual report of that road made the
last day of June puts it at 4,054. Is that correct?
Mr. MILLER. That refers to the Great Northern proper. I am
speaking of the Great Northern system. -
Commissioner CLEMENTs. You have in mind something like 2,000
miles more that is controlled by them and makes separate reports?
Mr. MILLER. Yes, sir.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 19
Commissioner CLEMENTS. And the Northern Pacific is down at 5,000
and a little over. Does that also have some collateral lines that are
not reported by it?
Mr. MILLER. I do not know about that. My recollection is that it
is about 6,000 miles.
Commissioner CLEMENTS. That is all.
The CHAIRMAN. You were understood to say that the subject of rate
reductions has been under consideration for nearly a year past from
time to time?
Mr. MILLER. Yes, sir.
The CHAIRMAN. And the actual reductions took effect when Ž
Mr. MILLER. They take effect on the 25th of this month.
The CHAIRMAN. Will you indicate the extent of that reduction, both
as respects the amount of the charge and the territory to which it
applies?
Mr. MILLER. It is a reduction in the class rates to all points in
Minnesota, and North and South Dakota of about 12% per cent.
The CHAIRMAN. That is, the reduction to which you refer does not
apply to traffic moving to and from points beyond the States you have
named?
Mr. MILLER. No, sir.
The CHAIRMAN. And the reduction amounts probably to 12% per
cent?
Mr. MILLER. About that; approximately that.
The CHAIRMAN. On the various classes?
Mr. MILLER. Yes, sir; that is the average.
The CHAIRMAN. Does the transcontinental business, which is com-
petitive, move under class rates or commodity rates?
Mr. MILLER. Mostly under commodity rates.
The CHAIRMAN. The actual movement of transcontinental traffic at
class rates is comparatively small, is it not?
Mr. MILLER. Yes, sir.
The CHAIRMAN. The actual traffic being carried at
Mr. MILLER. What are known as commodity rates.
The CHAIRMAN. Has there been any reduction in those commodity
rates?
Mr. MILLER. No, sir.
The CHAIRMAN. They have remained as at present since about when?
Mr. MILLER. Well, I do not know. I am not familiar with it beyond
the past four or five years.
The CHAIRMAN. There has been no substantial change in that time
in the rates at which transcontinental traffic moved?
Mr. MILLER. About three years ago there was some reduction to
the North Pacific coast in a number of commodities.
The CHAIRMAN. You were familiar with the general movement of
traffic over the Chicago, Burlington and Quincy System prior to your
connection with it, I suppose?
Mr. MILLER. Only in a very general way. -
The CHAIRMAN. In point of fact, was there any considerable trans-
continental traffic which passed from one road to the other, say from
the Northern Pacific to the Chicago, Burlington and Quincy at Bill-
ings, either east or west bound?
Mr. MILLER. Yes, sir; a good deal.
The CHAIRMAN. Would that be true as to traffic originating on the
20 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
seaboard or east of Chicago, or only as to traffic originating at points
described as points in the middle West?
Mr. MILLER. It applies to the entire territory. -
The CHAIRMAN. Well, did the Chicago, Burlington and Quincy, mak-
ing connection with the Northern Pacific at Billings, constitute a
through route at joint tariffs which was an actual competitor for the
transcontinental business?
Mr. MILLER. Yes, sir.
The CHAIRMAN. Are you able to state approximately what percent-
age of transcontinental traffic passed by that route?
Mr. MILLER. I am not.
The CHAIRMAN. Was it large or small?
Mr. MILLER. It was considerable.
The CHAIRMAN. How is it at the present time?
Mr. MILLER. Quite a large—a very large movement of lumber and
shingles. n
The CHAIRMAN. Since you became traffic manager of the Chicago,
Burlington and Quincy has there been any change in the distribution
of traffic as between the Northern Pacific and Great Northern and
itself in any respect?
Mr. MILLER. No, sir.
The CHAIRMAN. That is, so far as the actual operation of the lines
and the actual movement of interstate traffic is concerned, no change
has occurred so far as you are aware?
Mr. MILLER. No, sir.
The CHAIRMAN. Any further questions, Mr. Grover or Mr. Kellogg?
Mr. GROVER. No, sir.
Mr. KELLOGG. No, sir. -
The CHAIRMAN. Anything further, Mr. Day ?
Mr. DAY. Is sugar in the class rates?
Mr. MILLER. I think that is a commodity.
Mr. DAY. How about flour?
Mr. MILLER. I think that is a commodity.
Mr. DAY. Coal?
Mr. MILLER. Commodity rate.
Mr. DAY. Grain?
Mr. MILLER. Commodity rate.
Mr. DAY. Tea’
Mr. MILLER. That is a commodity.
Mr. DAY. Oil?
Mr. MILLER. Oil is a commodity.
Mr. DAY. That is all, Mr. Miller.
The witness was excused.
J. C. STUBBs, being duly sworn, testified as follows:
Mr. DAY. Where do you reside?
Mr. STUBBs. At present, in Chicago.
Mr. DAY. How long have you lived in Chicago?
Mr. STUBBs. I suppose my residence might be considered to date
i. about the middle of July. My family have not been here that
OIl O’. - -
§. DAY. What is your official relation to the Union or Southern
Pacific systems?
Mr. STUBBs. My title is traffic director.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS 21
Mr. DAY. Of what?
Mr. STUBBs. Of both the Southern Pacific and Union Pacific.
Mr. DAY. Both systems. How long have you held that position?
Mr. STUBBs. Since about July.
Mr. DAY. Prior to that, what was your relation to the railroad
service? e
Mr. STUBBs. I was one of the vice-presidents of the Southern Pacific
Company prior to taking the present position.
Mr. DAY. You had been traffic manager of that system for how long?
Mr. STUBBs. Oh, practically for twenty years—probably seventeen
years the traffic manager, but connected with the traffic department
for thirty years.
Mr. DAY. Who appointed you traffic director of those two systems?
Mr. STUBBs. I suppose it was done by a vote of the boards. I do
not know. All my relation to the subject was with Mr. E. H. Harri-
man, chairman of the board.
Mr. DAY. Chairman of what board?
Mr. STUBBs. Chairman of the board of directors of the Southern
Pacific and chairman of the board of directors of the Union Pacific at
the time.
Mr. DAY. What instructions or advices were given you respecting
your future duties by Mr. Harriman or anyone else?
Mr. STUBBs. I have had no instructions except the general one that
H was to have the supervision of the traffic of those lines subject to his
instruction from time to time. That, perhaps, expresses it fully.
Mr. DAY. Was the power vested in you to make rates for those
systems?
Mr. STUBBs. Well, specifically, no. The power to make rates under
circumstances and conditions are vested in various officers from time
to time; general freight agents, for example, or general passenger
agents. You might say that my duties and relations to the traffic of
those companies are supervisory, and that would naturally include
the necessary authority to direct what rates should be made if occasion
required. g
Mr. DAY. Has there been a substantial change of rates on competi-
tive traffic to and from the Pacific coast or intermediate points since
you have been in charge of both systems?
Mr. STUBBs. From the Pacific coast, no; on Colorado traffic, so far
as the published rates, no; so far as the actual rates, they have been
very much demoralized—as we term it—or very much reduced. The
same to some extent with respect to Utah business. With respect to
all other territory the rates have been reasonably maintained; you
might say the tariff has been observed.
Mr. DAY. When reductions have been made, whether by publishing
a new tariff or publishing a rate as required by the statute or a change
without regard to the statute, under whose supervision or consent
was it?
Mr. STUBBs. Well, if it was an important reduction, general in its
nature, it would probably be referred to me.
Mr. DAY. Could you give the Commission one or two instances in
which that has occurred?
Mr. STUBBs, I do not know of any instance.
Mr. DAY. You are unable to recall any now?
Mr. STUBBs. I do not recall any; no, sir.
22 CONSOLIDATIONS AND COMBINATIONS OF CARBIERS.
Mr. DAY. Will you tell the Commission what instructions were given
you by Mr. Harriman respecting the functions you have exercised?
State it as fully as you can.
Mr. STUBBs. I think the statement I made descriptive of my under-
standing of my duties probably gives as full and definite a statement
as I could make. I suppose a great deal of my work is taken as a
matter of course—precedent and established usage. I can not recall
that I have ever had specific instructions from any officer. I am sup-
posed to go about my business and attend to it; and if there is any
doubt what is to be done, the proprieties as to any particular matter,
!". supposed to refer it to the chairman of the board and ask his
8,OIVIC6.
Mr. DAY. Have you asked his advice regarding reductions of rates,
whether according to the statute or otherwise?
Mr. STUBBs. I have not had occasion.
Mr. DAY. Or regarding the routing of traffic.’
Mr. STUBBs. I have as yet had no occasion to do so.
Mr. DAY. Whatever has occurred, then, in the management of the
traffic departments of those two systems up to this time has been
without any advice or instruction to you from those superior in
authority in the company?
Mr. STUBBs. Whatever change has been made from established
conditions has been forced by competitive conditions that made
instructions or conferences totally unnecessary—doing what your
eompetitors did or letting the business go.
Mr. DAY. What I want to ascertain is whether what has been done
has been done by direction of anybody superior in authority to
yourself?
Mr. STUBBs. In particular cases I do not recall any rate reduction
by advice of a superior officer.
Mr. DAY. In regard to the traffic to or from the Pacific coast or
intermediate points since you have been traffic manager of the two
systems, has there been a material change in the volume over one
route over the other?
Mr. STUBBs. Not the slightest change so far as I know.
Mr. DAY. Who has the routing of the undirected traffic to the
Pacific coast or from it?
Mr. STUBBs. Well, in controllable business or unrouted business
the routing would be in the hands of the initial line. Eastbound, if
it originated on the Southern Pacific, it would be in the hands of the
Southern Pacific, and westbound, if it originated on the line of the
Union Pacific, it would be in the hands of the Union Pacific, and so
with any other line. But that is a small portion. We regard it that
there is no controllable business to-day. -
Mr. DAY. What lines are in competition with the two systems you
are now directing for transcontinental traffic?
Mr. STUBBs. Well, all the lines in the country that share in that
business are to a degree competitors, in whole or in part, to my lines.
Mr. DAY. Who are the chief competitors for the Pacific coast traffic
and Asiatic traffic or traffic beyond the Pacific coast'
Mr. STUBBs. The Canadian Pacific, the Great Northern, the North-
ern Pacific, the Atchison, Topeka and Santa Fe, the Texas and Pacific,
the Missouri Pacific, the Rio Grande lines, the Chicago, Burlington
and Quincy, the Chicago, Rock Island and Pacific, west of the Missis-
sippi, and then all the lines east, more or less.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 23
Mr. DAY. The Burlington system is a competitor, then, of the Union
Pacific system :
Mr. STUBBs. The Burlington line is a competitor to the Union Pacific
on the North Pacific coast or Asiatic business, or trans-Pacific or Cali-
fornia business, in so far as it is a connection of the Northern Pacific.
It is a competitor of the Union Pacific in so far as it is a connection,
which it is to a considerable extent, of the Rio Grande line, and it is
a connection of the Southern Pacific.
Mr. DAY. Was it a competitor of the Union Pacific on transconti-
nental or Pacific coast traffic, and Colorado and Utah traffic, and Asiatic
traffic prior to January 1, 1901?
Mr. STUBBs. I think so.
Mr. DAY. And also to the Northern Pacific and Great Northern—a
competitor in fact?
Mr. STUBBs. Well, for the North Pacific coast business it may, ever
since it had a Billings route—it may be regarded as both a competitor
and a connection—a connection in so far as its Billings route goes and
a competitor in so far as its Denver route goes.
Mr. DAY. Has the Southern Pacific management, traffic or other-
wise, any agreement, in writing or otherwise, for a division or an
allotment of the trans-Pacific traffic?
Mr. STUBBs. No, sir. We have the general agreement that has
been already testified to, that is embraced in what we call the Trans-
continental Freight Association or Freight Bureau. That does not
possess any of the essentials of a pool or division of the traffic. It is
merely an agreement as to rates and as to classification. Every member
of that association has the right to change rates at will and is only
bound by its promise to give notice of I do not know how many
days—probably ten days’ notice, and have it published by Mr. Coun-
tiss, the joint agent.
Mr. DAY. Where is he?
Mr. STUBBs. In San Francisco.
Mr. DAY. Has the Southern Pacific or Union Pacific traffic manage-
ment or companies any agreement, either in writing or otherwise,
respecting a division of the Pacific coast traffic or any part of it with
any other lines?
Mr. STUBBs. I think not.
Mr. DAY. Any arrangement between your companies, the systems
you represent, and the Atchison, Topeka and Santa Feº .
Mr. STUBBs. Simply the general arrangement that we will consult
and agree upon rates. -
Mr. DAY. Nothing regarding the percentage of traffic which each
shall have?
Mr. STUBBs. No. t
Mr. DAY. Nothing on coal?
Mr. STUBBs. No.
Mr. DAY. Nor oil?
Mr. STUBBs. No.
Mr. DAY. Nor sugar?
Mr. STUBBs. No.
Mr. DAY. Nor tea!
Mr. STUBBs. No. -
Mr. DAY. Nor regarding fruit?
Mr. STUBBs. There is an understanding, but it is not in writing—
24 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
you might say it amounts to an understanding that so far as the Orange
business is concerned we will endeavor to work an equal division of
that traffic. That arises from the fact that it is about so divided in its
production on our local lines in California. There is about 50 per
cent of that produced on the lines owned by the Santa Fe, and about
50 per cent produced on the Southern Pacific, and so far as possible
we agree that we shall not interfere with each other's local business.
Mr. DAY. How was that effected? What is the understanding that
you will or will not do?
Mr. STUBBs. It is simply an understanding that we will maintain
the rates, will not cut rates. There are no coercive measures to force
the business on one line or the other.
Mr. DAY. Is it the agreement that you will not cut the published
rates, or will not lower the published rates by lawful rates?
Mr. STUBBs. Practically to maintain the lawful rates.
Mr. DAY. Is it agreed that you will not reduce the rates?
Mr. STUBBs. Without consultation. That is practically the under-
standing. There is no writing about it.
Mr. DAY. How long has that understanding been in effect?
Mr. STUBBs. Oh, for perhaps three years.
Mr. DAY. Who was it made between 2
Mr. STUBBs. Mr. Morton and Mr. Stubbs.
Mr. DAY. Where was it made?
Mr. STUBBs. I do not know whether it was made in San Francisco,
or New York, or Chicago. I can not recall.
Mr. DAY. What was said?
Mr. STUBBs. I can not say any more than it was embraced in that
fact. It was agreed that each line would leave to each line the product
on its lines locally at an equality of rates.
Mr. DAY. Is there not an understanding regarding the percentage
of the trans-Pacific traffic that the Atchison shall have or take?
Mr. STUBBs. No, sir; the Atchison has run its own lines, its own
steamers.
Mr. DAY. Where?
Mr. STUBBs. From San Diego.
Mr. DAY. Is it running them now?
Mr. STUBBs. I do not know whether they are running now or not.
Mr. DAY. Is there any agreement that the line shall be abandoned?
Mr. STUBBs. There is an understanding that after the 1st day of
April–I will not be sure about the 1st day of April—I believe, that
the Santa Fe will use the trans-Pacific lines working at San Francisco.
Mr. DAY. Is that what is popularly known as the Pacific Mail.
Mr. STUBBs. That is one of them.
Mr. DAY. What was the consideration for that proposal? How was
the Atchison to profit or benefit by that?
Mr. STUBBs. I think the understanding is that it will receive a fair
share of the traffic from those steamships.
Mr. DAY. Is that an agreement between the Southern Pacific Rail-
road officials, or the Union Pacific Railroad officials and the Atchison?
Mr. STUBBs. I do not think there is any agreement.
Mr. DAY. Or understanding? Is it an agreement between the steam-
ship company and the railroad or all three? . • *
Mr. STUBBs. I do not think there is anything more than the expecta-
tion of that result. -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 25
Mr. DAY. There has been no promise?
Mr. STUBBs. I think there has been no completed promise.
Mr. DAY. Well, what propositions were made?
Mr. STUBBs. Well, propositions were made to the effect that if you
work with the San Francisco line you will get a fair share of the
traffic.
Mr. DAY. That they will abandon the San Diego port?
Mr. STUBBs. It would not be stated that way, in my judgment. It
would be stated, if you work in connection with our lines through San
Francisco, we will see that you get a fair share of the business.
Mr. DAY. What steamship line at San Diego did the Atchison connect
With ? -
Mr. STUBBs. I do not recall the name of the line.
Mr. DAY. Is there not an agreement regarding the division of the oil,
the petroleum traffic—an understanding that the Atchison and your
road shall each take a certain percentage of the oil traffic, or sugar or
coal?
Mr. STUBBs. No, sir.
Mr. DAY. There is no agreement respecting coal or sugar or oil?
Mr. STUBBs. No, sir.
Mr. DAY. Have you an agreement—your roads, either of them—
your systems or either of them, with the Missouri Pacific respecting
division of traffic?
Mr. STUBBs. Not that I know of.
Mr. DAY. Or the Middle West or Colorado-Utah points, or Pacific
traffic or trans-Pacific traffic?
Mr. STUBBs. No, sir.
Mr. DAY. Is there any outstanding agreement or contract or under-
standing between the Southern Pacific system or the Union Pacific
system, or both of them, with any other competing railroad company
respecting the division of traffic in any commodity, or the percentage
of any commodity that one shall have or either shall have 4
Mr. STUBBs. Will the stenographer read the question?
(The question was repeated by the stenographer.)
Mr. STUBBs. I do not know of any. We have a general understand-
ing with all lines, competitors and connections—it is not very well
observed, however—which results in uniformity of tariffs and classifi-
cations. There is, so far as I know, no tariff for competitive business
that is not made the subject of a joint conference, and you might say a
joint agreement or understanding between all the lines interested in
them.
Mr. DAY. Since you have taken over the management of the two
systems have you issued any instructions to your subordinates at New
York or New Orleans or San Francisco respecting the routing of
unrouted traffic :
Mr. STUBBs. No, sir.
Mr. DAY. Or for the division of traffic :
Mr. STUBBs. No, sir. -
Mr. DAY. How is it when traffic is taken in the East by the South-
ern Pacific system or agencies at New York for San Francisco, as to
which route it shall take, the Union Pacific or the Southern Pacific
route?
Mr. STUBBs. Naturally it would go by the Southern Pacific, because
that is the long line. e
26 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. Has there been any change in the volume of traffic?
Mr. STUBBs. The Union Pacific agencies in New York and New
England still continue there and work the business as they always
have in connection with the rail lines.
Mr. DAY. The competition is as close?
Mr. STUBBs. There is absolutely no change in it.
Mr. DAY. The competition between the Union Pacific and the
Southern Pacific for traffic is as close now Ż
Mr. STUBBs. There is absolutely no change in it in any respect. It
is beyond control.
Mr. DAY. During the last two or three years was there a pool or
agreement respecting the traffic for the Philippines military traffic—
supplies and troops between the rail lines, the transcontinental lines?
Mr. STUBBs. I do not know of any.
Mr. DAY. Any understanding or agreement regarding it, or any
understanding respecting the division of it?
Mr. STUBBs. My knowledge of that is very uncertain; I am under
the impression that all lines competing for that business agreed to
put it in the hands of one man?
Mr. DAY. Who was he?
Mr. STUBBs. It is my impression—what is the name of the chair-
man of the Western Passenger Association?
Mr. SPENCER. Mr. McLeod.
Mr. STUBBs. It was in the hands of Mr. McLeod.
Mr. DAY. That related to passenger business?
Mr. STUBBs. Yes, sir.
Mr. DAY. Was there no agreement regarding freight traffic?
Mr. STUBBs. No, sir. -
Mr. DAY. No division resulted either of the earnings or of the traffic
itself?
Mr. STUBBs. I do not recall that there was.
Mr. DAY. But there was as regards passenger business?
Mr. STUBBs. As I have stated, that is my recollection.
Mr. DAY. Now, what was the scope of the agreement or understand-
ing regarding troops; the moving of troops?
Mr. STUBBs. The question was referred to Mr. McLeod. He was to
handle the business and direct its routing. &
Mr. DAY. And then what?
Mr. STUBBs. Divide the business as he saw
Mr. DAY. Divide the earnings?
Mr. STUBBs. Divide the earnings. It has never been carried out,
however, but that was the understanding.
Mr. DAY. Who participated in that understanding?
Mr. STUBBs. All of the roads west of Chicago.
Mr. DAY. All of them?
Mr. STUBBs. Yes, sir.
Mr. DAY. The traffic managers, do you mean, of all the lines west
of Chicago?
Mr. STUBBs. All of the roads west of Chicago interested in that
business. I do not know how many of them shared in the transporta-
tion of the business; I can not tell. -
Mr. DAY. Mr. McLeod, according to that understanding, was to
divide the purse?
Mr. STUBBs. Yes, sir.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 27
Mr. DAY. And the roads that carried the traffic did not contribute
to the pool?
Mr. STUBBs. There has never been any adjustment of the matter.
I do not think there has ever been any change made; but there was
an understanding of that sort.
Mr. DAY. Is there an understanding respecting troops moved now?
Mr. STUBBs. No, sir.
Mr. DAY. When was that understanding rescinded or terminated?
Mr. STUBBs. I think along toward December 31.
Mr. DAY. 1901%
Mr. STUBBs. Yes, sir. That is my recollection.
Mr. DAY. When did it become effective? When was it agreed upon?
Mr. STUBBs. I do not know.
Mr. DAY. About how long ago?
Mr. STUBBs. About a year ago. It may not be that long.
Mr. DAY. Did you participate in it?
Mr. STUBBs. Do you mean me personally
Mr. DAY. Yes, sir.
Mr. STUBBs. Yes, sir.
Mr. DAY. Who else was there?
Mr. STUBBs. I do not know; that is, I can not recall.
Mr. DAY. Was Mr. Morton there?
Mr. STUBBs. I do not remember.
Mr. DAY. Was the Great Northern in it?
Mr. STUBBs. I think not.
Mr. DAY. Or the Northern Pacific :
Mr. STUBBs. I think not.
Mr. DAY. The Canadian Pacific—no Ž
Mr. STUBBs. No.
Mr. DAY. The Burlington or Rock Island?
Mr. STUBBs. Naturally they may have been there; I can not tell.
Mr. DAY. Where did the meeting occur—here?
Mr. STUBBs. It is my impression it was here.
Mr. DAY. At Mr. McLeod’s Office?
Mr. STUBBs. I think so.
Mr. DAY. What has been the practical effect
Mr. STUBBs. I want it understood that my impression, the best of
my knowledge, is that there has never been any performance of the
agreement—of the understanding.
Mr. DAY. You understand, Mr. Stubbs, that the Union Pacific con-
trols the Southern Pacific system—railway system?
Mr. STUBBs. I might say I so understand it.
Mr. DAY. Its practical operation 4
Mr. STUBBs. Yes, sir.
Mr. DAY. And has done so since when Ž
Mr. STUBBs. I could not be positive; probably since the 1st of
January, 1901.
Mr. DAY. Are you a director of either of those companies—a director
or shareholder in either of those companies? -
Mr. STUBBs. Not a director so far as I know, and not a shareholder
in either of them so far as I know.
Mr. DAY. You are simply an administrative or executive officer?
Mr. STUBBS. My first answer answers that.
Mr. DAY. And you think the Union Pacific has controlled the opera-
tion of the Southern Pacific since about January 1 of last year? .
28 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. STUBBs. Well, I would hardly say that. I do not think the
Union Pacific Company has, but I think the Union Pacific—in fact, I
do not know. I should say, however, as a matter of opinion, that the
Union Pacific influence had elected the board that controls the Southern
Pacific.
Mr. DAY. You do not know anything about the fiscal affairs—the
stocks?
Mr. STUBBs. No, sir; not anything more than the ordinary public
would know.
Mr. DAY. You mean your opinion is practically from the press—
the public prints?
Mr. STUBBs. Yes, sir; I did not inquire; I had no occasion to know?
Mr. DAY. What has been the practical effect of the union—the opera-
tion of the two systems—upon the public, upon competition, and upon
the movement of traffic and cost to the public?
Mr. STUBBs. There has been no change whatever, so far as I can
observe. *
Mr. DAY. Just as absolutely, to all practical intents, as separate and
independent to-day as they were January 1, 1901?
Mr. STUBBs. Not separate and independent. You asked me the
practical effect. I suppose you mean by that the effect upon rates and
traffic?
Mr. DAY. Upon rates and traffic and competition.
Mr. STUBBs. I say I can not observe that there has been the slightest
change in the matter. You see there are so many other competitors
that still remain in the field, and I can not conceive of any possible
condition that is going to result in the way of benefit, in the matter of
handling the traffic, to the Union Pacific.
Mr. DAY. You see no benefit to the Union Pacific in the way of
handling the traffic?
Mr. STUBBs. Or in securing any considerable share of it. There
may be a gain in unconsigned or unrouted traffic. The disposition
would be to give the Union Pacific the benefit of all unconsigned or
unrouted traffic, but that is very small to-day; that is not worth talking
about.
Mr. DAY. I understand you to say that no action has been taken
about that?
Mr. STUBBs. I do not think there has been the slightest change in
the relations of the Southern Pacific to the Union Pacific or in any
other company in respect to the movement of traffic since -
Mr. DAY. Or in rates?
Mr. STUBBs. Or rates.
Mr. DAY. Or in competition between the two?
Mr. STUBBs. Or in competition between the two. I think an exam-
ination of the map will show that it would be almost impossible on
account of the other competitors which are not controlled.
Mr. DAY. Is there an agreement between the Union Pacific and
the Southern Pacific as to the share of traffic that each shall have of
traffic coming from the East by steamship to the Pacific coast?
Mr. STUBBs. From the Orient? .
Mr. DAY. Yes, sir. •
Mr. STUBBs. No; the Union Pacific and the Southern Pacific always
were joint owners of the Oriental and Occidental Steamship Company.
To that extent all the Oriental and Occidental business went over the
CONSOLIDATIONS AND COMEINATIONS OF CARRIERS. 29
Union Pacific. There is no difference in that respect between the pres-
ent and the time previous to the change in ownership of the Southern
Pacific.
Mr. DAY. I have heard it said, Mr. Stubbs, that there was an agree-
ment between the Southern Pacific and the Atchison, Topeka and
Santa Fe, or between the Union Pacific and the Atchison, Topeka and
Santa Fe, or an understanding by which percentages of the traffic was
apportioned one to the other, and that it was agreed as nearly as could
be that those percentages should be carried out in the actual division
of traffic. Is there anything in that?
Mr. STUBBs. Well, I have answered as to oranges.
Mr. DAY. Other than that?
Mr. STUBBs. I do not recall any.
The CHAIRMAN. Is that all, Mr. Day ?
Mr. DAY. That is all.
The CHAIRMAN. Mr. Grover, do you desire to ask any question?
Mr. GROVER. No, sir.
The CHAIRMAN. Or Mr. Kellogg?
Mr. KELLOGG. No, sir.
Commissioner PROUTY. Mr. Stubbs, doesn’t the Southern Pacific
reserve the right to route traffic received at San Francisco as it sees fit? .
Mr. STUBBs. No, sir; except in the case of oranges.
Commissioner PROUTY. Why does it reserve that right in the case
of oranges and not in the case of other commodities?
Mr. STUBBs. Because the conditions in respect to oranges got so bad
it was deemed expedient to undertake to route it.
Commissioner PROUTY. You do claim the rightin the case of oranges?
Mr. STUBBs. I claim we have the right in respect to all business.
Commissioner PROUTY. And that there is no reason why you should
not assume the same right as to all traffic if you saw fit?
* STUBBs. So far as the legal question is concerned, we have the
rio.ht.
ºmmissioner PROUTY. So as a legal question the Southern Pacific
might insist that all traffic from San Francisco should go to the Missouri
River by the Union Pacific.
Mr. STUBBs. So far as the legal right is concerned, but it would be
inexpedient to do it.
Commissioner PROUTY. The Union Pacific carries the traffic by one
route and the Southern Pacific by another and also connects with the
Union Pacific by the Central Pacific at Ogden'
Mſ. STUBBs. Yes, sir.
Commissioner PROUTY. The Union Pacific can only reach San Fran-
cisco over the Southern Pacific lines?
Mr. STUBBs. You might say that it is its only practical route.
Commissioner PROUTY. Is there any competition for San Francisco
business by the Northern routes?
Mr. STUBBs. Yes, sir.
Commissioner PROUTY. To what extent?
Mr. STUBBs. Well, the Great Northern and Northern Pacific all con-
tract business both via Seattle and via Portland.
Commissioner PROUTY. Mr. Miller has just testified that that com-
petition was very inconsiderable.
Mr. STUBBs. I do not think it amounts to a great deal, but it is there.
Commissioner PROUTY. So that traffic that moves to San Francisco
3() CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
moves there by the Southern Pacific, or the Santa Fe, or the Central
Pacific'
Mr. STUBBs. The bulk of the business is moved via Ogden, or via
Albuquerque, or via El Paso. That means the three Southern routes.
Commissioner PROUTY. The Southern Pacific reaches with its own
rails New Orleans?
Mr. STUBBs. Yes, sir.
Commissioner PROUTY. And by means of its steamship line it reaches
New York., -
Mr. STUBBs. Yes, sir.
Commissioner PROUTY. The Southern Pacific is a competitor, there-
fore, as a carrier all the way from the East to the West?
Mr. STUBBs. Competitor of what?
Commissioner PROUTY. A competitor of all other lines.
Mr. STUBBs. Practically.
Commissioner PROUTY. It carries by its own means of transportation
all the way from the East to the West?
Mr. STUBBs. In one sense, yes.
Commissioner PROUTY. Now, traffic from the East all rail can reach
the Southern Pacific at Ogden by a great many different routes?
Mr. STUBBs. Yes, sir.
Commissioner PROUTY. Consequently, the Union Pacific, if it gets
that haul from the Missouri River, is obliged to maintain its agencies
in New York or in the East, or in Chicago, as it always has'
Mr. STUBBs. It seems so.
Commissioner PROUTY. But the Union Pacific now controls the out-
let from Ogden by which this traffic by every line must go to San
Francisco. That is correct, is it not ?
Mr. STUBBs. The Union Pacific has the financial control of it.
Commissioner PROUTY. You are the director of traffic of the South-
ern Pacific and the Union Pacific?
Mr. STUBBs. Yes, sir.
Commissioner PROUTY. And you have the power, if it is of suffi-
cient consequence, to make every rate on either of those lines, sub-
ject to Mr. Harriman?
Mr. STUBBs. Subject to Mr. Harriman; yes, sir.
Commissioner PROUTY. You have the power to compel every agent
to maintain rates on those two lines, have you not?
Mr. STUBBs. Subject to Mr. Harriman’s instructions; yes, sir.
Commissioner PROUTY. If you think it best that those two lines
should advance the rate, you have the power to advance the rāte on
both lines, by both routes, at the same time?
Mr. STUBBs. It might be so said.
Commissioner PROUTY. So you reserve the right to make the east-
bound rates from the Pacific coast'
Mr. STUBBs. No, sir.
Commissioner PROUTY. Don’t you insist on the right, so far as your
connections are concerned, to name the east-bound rates from the Pacific
coast'
Mr. STUBBs. No, sir.
Commissioner PROUTY. How are those rates made? -
Mr. STUBBs. Rates are made by agreement between connecting
lines and by agreement between competing lines. If the proposition—
to give it to you in detail as I understand it—if the proposition, or
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 31
if the rate from San Francisco, say, to New York is advanced by the
Santa Fe or by the Southern Pacific or by any line, it will be sent to
Mr. Countiss, the joint agent, and if it is agreeable to all he will put
it in. If it is not agreeable to all, then the proponent of the rate must
give him notice that he wants the rate put in any way, and he will put
it in.
Commissioner CLEMENTS. Is there any competition now between
the Union Pacific and the Southern Pacific for this transcontinental
business?
Mr. STUBBs. Just as much as there ever was.
Commissioner PROUTY. Would you allow the agent of the Union
Pacific to cut the rate and take the business as against the Southern
Pacificº .
Mr. STUBBs. If there was no other competitor beside the Union
Pacific and the Southern Pacific and I was in the present position, I
would answer no; but under present conditions it is absolutely beyond
my control. -
Commissioner PROUTY. So, in fact, the agent of the Union Pacific
bidding against the Southern Pacific still reduces the rate if necessary
to get the business.
Mr. STUBBs. That is an academic statement; it is not practical at all.
The competition between the Southern Pacific and the Union Pacific,
so far as the Atlantic seaboard business is concerned, is just as active
to-day, through the influence of the connections of the Union Pacific,
and which the Union Pacific joins, as it ever was. There has been no
change whatsoever. - -
Commissioner PROUTY. What part of the business of the Southern
Pacific Company is transcontinental business?
Mr. STUBBs. What percentage do you mean?
Commissioner PROUTY. What percentage 2
Mr. STUBBs. It would be a mere guess for me to tell you.
Commssioner PROUTY. Have you any opinion about it?
Mr. STUBBs. I would not like to make a guess. I do not charge my
mind with that and I would hate to display my ignorance.
Commissioner PROUTY. Have you any opinion as to the proportion
of the Union Pacific’
Mr. STUBBs. I do not know anything about it; I have not inquired
about it.
Commissioner CLEMENTS. I understand you to say that all this busi-
ness is now operated under a verbal understanding or agreement
between the competing lines by which you are to maintain the rate
and also not to reduce the published rate by unlawful means without
notice. Is that still an existing practice or arrangement?
Mr. STUBBs. Well, I think it may be fairly stated—that a fair state-
ment would be—take, for example, the transcontinental lines in their
participation in the joint agency at San Francisco; they have promised
each other that they will not reduce the rates except by notice in the
manner I have explained.
Commissioner CLEMENTs. And who is the joint agent there?
Mr. STUBBs. 1 mentioned his name; Mr. Countiss.
Commissioner CLEMENTS. How long has he occupied that place and
that relation to transcontinental business?
‘Mr. STUBBs. I think four or five years.
Commissioner CLEMENTs. How long has this practice or understand-
ing been in effect?
32 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. STUBBs. I do not think it has ever ceased. I do not remember
a time when we did not have that kind of an understanding.
Commissioner CLEMENTs. When did it begin?
Mr. STUBBs. It has continued uninterruptedly. I do not recall; as
far back as I can remember. There may have been breaks in the
period when we did not have that organization, but they were compara-
tively brief.
Commissioner CLEMENTs. Does that practice or agreement not
include in any respect the division of the business or the proceeds?
Mr. STUBBs. Not in any way.
Commissioner CLEMENTs. That understanding is in operation now?
Mr. STUBBs. Yes, sir; in that sense.
Commissioner CLEMENTs. That is, that each one of these carriers is
under the promise to all the others not to reduce its tariffs, by publi-
cation or otherwise, without giving notice?
Mr. STUBBs. No, sir. -
Commissioner CLEMENTs. Through the joint agent?
Mr. STUBBs. Yes, sir.
Commissioner CLEMENTs. What length of notice does it require?
Mr. STUBBs. I can not say.
Commissioner CLEMENTs. Some specified time?
Mr. STUBBs. I think probably there is some understanding as to
sufficient notice to give them an opportunity to meet the rate.
Commissioner CLEMENTs. If other lines object to it, what is done
about it—if one or more lines object to it?
Mr. STUBBs. Then, if the proponent line says that it will insist on
putting it in, it is put in; and, naturally, it would be put in by all.
Commissioner CLEMENTs. The others would probably follow :
Mr. STUBBs. Naturally.
Commissioner CLEMENTs. Sometimes when a line proposes a rate
and insists on it going in, does not bring all the others down to it?
Has that been a matter of actual result'
Mr. STUBBs. It would be a pure guess if I answered it. I suppose
there have been times when objections have been sustained, but I
should say that in the majority of cases the proposed rate has been
made effective. *
Commissioner CLEMENTs. What is the mileage of the Union Pacific
and the Southern Pacific combined?
Mr. STUBBs. It would be a mere guess. It is easily obtained.
Commissioner CLEMENTs. You need not stop to do it now. What
you say now in regard to the matter of competition between these two
systems, if I understand you, is that it has not been practical by their
consolidation in the way referred to to eliminate competition by other
carriers, and therefore they have not been effective—this union has not
been effective in holding up rates because of other outside competitors?
Mr. STUBBs. I can see no effect on rates in any way by reason of the
control, if it is a control, of the Southern Pacific lines by the Union
Pacific.
Commissioner CLEMENTs. But you would not permit one to com-
pete with the other by reduction of the rate, unless it was made neces-
sary by the action of some other competitor?
Mr. STUBBs. I think it would be human nature if they were com-
petitors each of the other. I think joint ownership would reduce
competition, but the competition is so large and there are so many
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 33
competitive factors that I can not see that any union between the
Union Pacific and the Southern Pacific is going to affect the competi-
tion at all.
Commissioner CLEMENTs. You do not permit one to cut the rate
against the other unless some other road is involved?
Mr. STUBBs. I would not. I would try to maintain the published
rates.
Commissioner PROUTY. Taking the last five or six years, Mr.
Stubbs, have transcontinental rates over the southern lines, the
Southern Pacific, the Santa Fe, and the Union Pacific, been maintained?
Mr. STUBBs. I think they have been better maintained than any
other set of rates in the country. To say that they had been main-
tained, strictly maintained, in all cases would be stretching my
Commissioner CLEMENTs. Have you had the same occasion to agree
to maintain rates as Mr. Miller has testified to ?
Mr. STUBBs. We have had this joint agency, as you might call it,
of Mr. Countiss.
Commissioner PROUTY. Are transcontinental rates maintained now?
Mr. STUBBs. At present?
Commissioner PROUTY. At present.
Mr. STUBBs. I think they are better maintained than any other rates.
I think you might say they are fairly maintained to-day.
Commissioner PROUTY. Compare to-day with six months ago,
are they better maintained? Are they better maintained than six
months ago?
Mr. STUBBs. No; I should say they were about the same.
Commissioner PROUTY. About the same to-day as they have been 3
Mr. STUBBs. Yes, sir; I think so. There is always an improvement
just after the 1st day of January 2
Commissioner PROUTY. Your opinion does not accord with that
Of Mr. Miller.
Mr. STUBBs. He may have better information than I have.
Commissioner PROUTY. Are your expenses paid by the Union Pacific
or Southern Pacific, or jointly oy both
Mr. STUBBs. I understand my salary and expenses are spread over
all the lines.
Commissioner PROUTY. Chargeable to all?
Mr. STUBBs. Yes, sir.
Mr. GROVER. Is the Northern Pacific or the Great Northern a party
to the bureau of Mr. Countiss?
Mr. STUBBs. I think not. I am not sure about that.
Mr. DAY. Have you any connection with the Burlington system?
Mr. STUBBs. The Burlington system may be said to be a connection
of ours through the Rio Grande lines by way of Ogden for California
business. It is a connection.
Mr. DAY. Do you look upon it in any different sense from what you
regard the Union Pacific? -
Mr. STUBBs. Well, I think as between the two, if I had the oppor-
tunity, I would take the Union Pacific. - -
Mr. DAY. It is not a part of your system?
Mr. STUBBs. It is a connection of ours, and a valued connection.
Mr. DAY. But aside from being a connection you have nothing to do
with its management or with routing traffic over it?
Mr. STUBBs. No, sir.
526A–02. 3
34 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
The CHAIRMAN. Have you any questions, Mr. Kellogg, that you
desire to ask?
Mr. KELLOGG. No, sir.
The CHAIRMAN. Mr. Stubbs, you are excused for the present. It
may be the Commission will want to call you again. We will now take
a recess until 2 o’clock. º
The Commission at 12.30 took a recess.
AFTER RECESS,
2 O'CLOCK P. M.
The CHAIRMAN. Gentlemen, please give your attention. Mr. Day,
whom will you call next? -
Mr. DAY. Mr. Hill.
J. J. HILL, being duly sworn, testified as follows:
Mr. DAY. Will you please give your full name to the stenographer?
Mr. HILL. James J. Hill.
Mr. DAY. And state your official relation to the Great Northern
Railroad Company. ^
Mr. HILL. I am president of the company.
Mr. DAY. How long have you been president?
Mr. HILL. Since its formation.
Mr. DAY. Also a director?
Mr. HILL. Yes, sir.
Mr. DAY. What official relation do you sustain to the Northern
Pacific Company ? - -
Mr. HILL. None whatever.
Mr. DAY. Have you at any time within the past two years?
Mr. HILL. Yes, sir.
Mr. DAY. Prior to the year 1901?
Mr. HILL. During 1901 I was elected a director of that company,
but I notified the parties that I was not eligible and resigned at the first
meeting. -
Mr. DAY. Prior to that you had not been a director or officer of the
Northern Pacific'
Mr. HILL. No, sir.
Mr. DAY. What relations, if any, do you sustain to the Chicago,
Burlington and Quincy Railroad Company?
Mr. HILL. The railroad company we may designate as the old C. B.
and Q. Company. I am not sure that I am a director. Imay be. I do
not recall that. I know I am in the new company. The old company
we consider almost as an inactive company. . e
Mr. DAY. Do you hold any official position other than that of
director in the new company, the new Burlington company?
Mr. HILL. No other.
Mr. DAY. What relation do you sustain to the Northern Securities
Company ?
Mr. HILL, I am president of the company.
Mr. DAY. What is the capital stock, in dollars, of the Great Northern ?
Mr. HILL. One hundred and twenty-five million.
Mr. DAY. And of the Northern Pacific?
Mr. HILL. One hundred and fifty-five, I think. .
Mr. DAY. And of the Chicago, Burlington and Quincy Railway Com-
pany ?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 35
Mr. HILL. The capital stock of the railway company is, I may say,
not determined, except in so far as to complete its legal organization.
That is a matter that is in hand at present.
Mr. DAY. What is the capital stock of the Northern Securities Com-
pany ?
Mr. HILL. The authorized capital is $400,000,000.
Mr. DAY. Who are your fellow-directors on the new Burlington
company ? -
Mr. HILL. I think Mr. Perkins and Mr. Forbes, of Boston. Mr.
Harris is president of the company. Mr. Kennedy is one.
Mr. DAY. Of New York?
Mr. HILL. John S. Kennedy, of New York. There are eleven, I
think, altogether.
Mr. DAY. You are also a director of the Northern Securities Com-
Danv Ž
I Mr. HILL. Yes, sir; I am president of the company.
Mr. DAY. Who are your codirectors in that company ?
Mr. HILL. Mr. Kennedy is one, Mr. Bacon is one—Mr. Perkins and
Mr. Bacon, of Morgan & Co.—Mr. Stillman is one.
Mr. DAY. Of the First National Bank of New York?
Mr. HILL. The City Bank. It is a matter of recollection. It would
be easy for me to refresh my memory. -
Mr. DAY. Are any directors of the Northern Securities Company
directors in the Great Northern ?
Mr. HILL. Yes, sir.
Mr. DAY. Excepting yourself?
Mr. HILL. Yes, sir.
Mr. DAY. Will you name those?
Mr. HILL. Let me see. I believe I am the only one.
Mr. DAY. Are any of the directors of the Northern Securities Com- .
pany also directors in the Northern Pacific'
Mr. HILL. Yes, sir.
Mr. DAY. Who?
Mr. HILL. Mr. Kennedy is one; Mr. Bacon.
Mr. DAY. George F. Bacon 4
Mr. HILL. Yes, sir. Mr. Clough is one. Without a list of the
names it would be difficult for me to give them. Louis James is one,
of New York. .
Mr. DAY. Will you furnish the Commission with a list of the direct-
ors—send it to the Commission, at Washington—the directors of the
Northern Pacific, and Great Northern, and Northern Securities Com-
pany, and the Chicago, Burlington and Quincy Railway Company ?
Mr. HILL. With pleasure. *
Mr. DAY. Who compose the executive committee of the Northern
Securities Company ?
Mr. HILL. The president is ex officio a member. Mr. Kennedy and
Mr. James are members of the executive committee. I think Mr.
Harriman is a member of the executive committee. The others I do
not recall.
Mr. DAY. Will you furnish the Commission a copy of that also?
Mr. HILL. Yes, sir. ;
Mr. DAY. You say the capital stock of the new Burlington com-
pany has not yet been determined upon?
Mr. HILL. It has not yet been determined upon.
|
36 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. Has the maximum amount been determined upon—the
maximum amount that may be—if you have the facilities, will you fur-
nish the Commission also a list of directors of the Chicago, Burlington
and Quincy Railroad Company—the old one?
Mr. HILL. I can do that, and will.
Mr. DAY. Will you please state to the Commission what control of
the operation of the Great Northern road and the Northern Pacific
road has been exercised by the Northern Securities Company or its
executive committee or board of directors?
Mr. HILL. Absolutely none.
Mr. DAY. Has the Northern Securities Company exercised any con-
trol in the way of voting the stock of the Northern Pacific or of the
Great Northern ?
Mr. HILL. Has the Northern Securities Company
Mr. DAY. Yes, sir.
Mr. HILL. I may answer that by saying that the annual election
was held prior to the organization.
Mr. DAY. The annual election of the Northern Pacific was held prior
to the organization of the Northern Securities Company ?
Mr. HILL. Yes, sir; and I can also answer the question directly by
saying that the stockholders have taken no action in reference to the
operation or direction in any way of the railroad.
Mr. DAY. The Great Northern Or Northern Pacific :
Mr. HILL. Or Northern Pacific.
Mr. DAY. What interests in the way of stock or bonds has the
Northern Securities Company in the Great Northern and the Northern
Pacific Company ?
Mr. HILL. The respective amounts?
Mr. DAY. Yes, sir; the respective amounts.
Mr. HILL. I have not the exact amounts.
Mr. DAY. Well, approximately, roughly 4
Mr. HILL. The amount held of the Northern Pacific is a very large
proportion; probably $150,000,000 or more.
Mr. DAY. Of the one hundred and fifty-five?
Mr. HILL. Yes, sir. Of the other company between forty-five and
fifty, I should place it.
Mr. DAY. What interest as a share owner has the Northern Securities
Company in the Chicago, Burlington and Quincy Railway Company
Mr. HILL. It has not any.
Mr. DAY. What interest as a share owner has the Great Northern
Company in the Chicago, Burlington and Quincy Railway Company ?
Mr. HILL. It owns half, or did own half, of the stock.
Mr. DAY. Of the capital stock?
Mr. HILL. Yes, sir. It owns half of the stock of the Burlington
Railroad Company.
Mr. DAY. The old company ?
Mr. HILL. Yes, sir; that is, half of the amount purchased. I think
probably one hundred and eight and a half out of one hundred and
nine millions was purchased.
Mr. DAY. Who owns the other half of the railroad company’s stock–
the old company?
Mr. HILL. The Northern Pacific. -
Mr. DAY. The total capital stock of the old Burlington company you
understand to be what amount? -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 37
Mr. HILL. About $109,000,000, of which $108,000,000 is owned by
the two companies.
Mr. DAY. Share and share alike?
Mr. HILL. Share and share alike.
Mr. DAY. By what title, lease, or otherwise does the new Burling-
ton company, the railway company, operate the Burlington System'
Mr. HILL. By a lease.
Mr. DAY. From whom?
Mr. HILL. From the railroad company. If I may be allowed to
further answer, there were three organizations separate and distinct in
the old Burlington Company, and it was thought, as a matter of econ-
omy and convenience to the company and the public, that one organi-
zation would be better able to handle it. •
Mr. DAY. Did the new company take the old company under any
guarantee of dividends or stock :
Mr. HILL. The new company assumed—I have not the lease; I can
furnish a copy of the lease to the Commission; if the Commission
desires it I will be very glad to.
Mr. DAY. When will you do it? -
Mr. HILL. Immediately; within a day or two or three.
Mr. DAY. When was that lease executed?
Mr. HILL. I think in December.
Mr. DAY. Has any other railroad company or railway company any
proprietary interest in the Great Northern company?
Mr. HILL. No, sir.
Mr. DAY. Has any other railway company or railroad company a
proprietary interest in the Northern Pacific?
Mr. HILL. No, sir; none that I know of. There are probably four
or five millions of Northern Pacific stock, I do not know who owns it,
but it is scattered stock, I think, all in the names of individuals. I do
not know of any railway company owning any share in either the
Northern Pacific or the Great Northern. -
Mr. DAY. Has not another railway company owned a very large
block of the stock of the Northern Pacific within a year?
Mr. HILL. That may be. I do not know.
Mr. DAY. The Oregon Short Line, for instance?
Mr. HILL. I have heard, as you have all heard, and I have heard it
denied—you mean the Union Pacific'
Mr. DAY. I mean the Union Pacific system, through the instrumen-
tality of the Short Line—does it not own, or did it not own, approxi-
mating $78,000,000.
Mr. HILL. I could not testify to whether it owned a share or not.
Mr. DAY. I thought I saw a statement that purported to come from
you to that effect. -
Mr. HILL. I said Union Pacific interests. I do not know that the
Union Pacific owned any stock.
Mr. DAY. Nor that the Short Line owhed any ?
Mr. HILL. No, sir.
Mr. DAY. You do not know that the officers of either of those com-
panies voted that stock or negotiated in reference to its ownership of
that stock?
Mr. HILL. I know that the men that were allied with that interest
represented that stock, but I also know that when they undertook to
represent it with me I asked the question directly whether they rep-
38 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
resented the Union Pacific or represented a personal interest, and I
further asked if it was Union Pacific. I said if they represented the
Union Pacific I could not deal with them. They assured me it was
not Union Pacific.
Mr. DAY. There was $78,000,000, rough figures, thirty-seven com-
mon and forty-one preferred that was outstanding and in other hands.
Mr. HILL. It was owned by interests friendly to the Union Pacific.
Mr. DAY. But how that forty-one and thirty-seven was carried on
the books of the Northern Pacific you do not know--I am speaking
of the Northern Pacific stock—how that seventy-eight millions out-
standing was carried on the stock books of the Northern Pacific
Company &
Mr. HILL. I have seen several stock lists of the Northern Pacific.
I have never seen the Union Pacific as a shareholder. I think the
shares were held by individuals. I am sure they were held by indi-
viduals, and how many I do not recall. I remember Mr. Pierce hold-
ing Northern Pacific stocks.
Mr. DAY. What Pierce?
Mr. HILL. Winslow Pierce; and undoubtedly others. I do not carry
the list of shareholders in my mind.
Mr. DAY. You do not remember that Mr. Harriman was one?
Mr. HILL. I think Mr. Harriman was one of them.
Mr. DAY. Are any of the members of the firm of Kuhn, Loeb & Co. 4
Mr. HILL. I can not testify as to that.
Mr. DAY. How was the stock that was owned by the Great North-
ern in the Chicago, Burlington and Quincy Railroad, the old company,
carried—you say the Great Northern owns one-half of about one
hundred and eight or one hundred and nine millions of the old Bur-
lington stock—how was that carried, in the name of the Great Northern ?
Mr. HILL. In the name of the Great Northern.
Mr. DAY. How was the Northern Pacific’s half carried?
Mr. HILL. I do not speak from actual knowledge, but I think in the
name of the Northern Pacific Company, and feel very confident that it
W8,S.
Mr. DAY. How did the Great Northern Company and the Northern
Pacific Company secure the stock in the Burlington Company—one
hundred and eight millions?
Mr. HILL. They purchased it after conference with the trustees or
directors of the Burlington and Quincy Company.
Mr. DAY. Where did the funds—from what source did the funds
come for the purchase of that Burlington stock, from the treasuries
of those companies? -
Mr. HILL. No, sir.
Mº; DAY. Will you tell the Commission where those funds came
from ?
Mr. HILL. They were paid for—the contract provided that stock
should be paid for by a joint bond, payable in twenty years, or, at the
option of the company or companies, it might be paid at the end of five
years, the bond bearing 4 per cent—a joint bond of the Great North-
ern and Northern Pacific.
Mr. DAY. And the money was secured by the sale of those bonds?
Mr. HIUL. By the exchange. - *
Mr. DAY. Of those bonds for stock?
Mr. HILL. Yes, sir.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 39
Mr. DAY. How much or what amount of those bonds which were
jointly guaranteed by the Great Northern and Northern Pacific were
issued to pay for this Burlington Railroad stock?
Mr. HILL. The stock was bought at 200 and there was $200 paid for
each share of the stock of the Burlington.
Mr. DAY. What was the total amount of the bonds issued 4
Mr. HILL. Twice the amount of the stock.
Mr. DAY. Approximately two hundred and eighteen millions.
Mr. HILL. Two hundred and sixteen, I should say.
Mr. DAY. The Great Northern and Northern Pacific jointly guar-
anteed—was it two hundred and sixteen millions of bonds to purchase
one hundred and eight million of Burlington stock?
Mr. HILL. Well, to purchase the Burlington Railway shares.
The CHAIRMAN. Pardon me, Mr. Day. You asked about a guar-
anty. I understood Mr. Hill to state that those two corporations gave
their joint bond. -
Mr. DAY. It was a joint bond.
Mr. HILL. Yes, sir.
Commissioner PROUTY. From whom was this stock bought?
Mr. DAY. From whom?
Mr. HILL. The negotiations were carried on with the board of
directors, and the board of directors recommended, in a published
circular to the company and in their public advertisement, the
acceptance of a certain offer.
Commissioner PROUTY. At that time was the controlling interest in
the Burlington stock held by any individual or set of individuals?
Mr. HILL. I think there were 19,000 holders of the Burlington
stock at that time, and there was no holder that held more than two or
three million dollars; no set of men controlled the majority of the
Burlington. -
Commissioner FIFER. How many individuals participated in that
agreement as to the Burlington stock?
Mr. HILL. If there were 19,000 shareholders, I should say 18,000
of them. That is a matter of recollection. It is only a good guess.
Commissioner PROUTY. About when was that circular issued?
Mr. HILL. I think it was issued the latter part of March or early
April.
Commissioner PROUTY. Last year?
Mr. HILL. Yes, sir.
Commissioner PROUTY. At that time what was the value of the Bur-
lington stock on the market?
Mr. HILL. I hardly recollect; about 160 or 165 or 168.
Commissioner PROUTY. What had been the value of that stock the
year before? -
Mr. HILL. I do not know.
Commissioner PROUTY. Have you any recollection?
Mr. HILL. I have not. I know that, taking the Burlington Com-
pany, it was a matter that presented itself directly to us, and it came
to me directly. The stock per mile of the Burlington was about
$13,000. Deducting the sinking fund in the hands of the trustees the
bonded debt was $15,800, and the Burlington, paying 200 for the stock,
made the property cost $42,000 a mile, which was much lower than the
roperty of any of the other granger roads at the market price—
§§ or $10,000 a mile less than the market price of the other roads.
40 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
The Burlington happened to have a very small capitalization, a little
over $28,000 a mile, and we were buying the stock to buy the prop-
erty. The question of the value of the stock in the market did not
enter into it, because nobody could go into the market and buy it. An
attempt had been made to buy it in the market, and after getting eight
or nine millions out of one hundred and nine millions the parties found
they could go no further. The stock was held, and had been handed
down from generation to generation in New England, and this could be
bought only by dealing with the representatives of the stockholders.
Commissioner PROUTY. Do you know anything about the history of
the road that enables you to state how it happens that the capitaliza-
tion of the Burlington was so much lower than the other roads?
Mr. HILL. I think it has been largely due to the operation of the
sinking-fund plan; that was greatly in excess of that commonly used
by Western roads, and I think their capitalization was something like
$60,000,000 short of the actual investment in the property. Now, I
am speaking from recollection of an examination of an expert, and I
think his figures were 58.
Commissioner PROUTY. What do you mean by that?
Mr. HILL. There were fifty-eight millions of money put into the
Burlington from time to time, either of contributions direct to the
sinking fund or of earnings that were gone into the property, that
were not represented in the capital.
Commissioner PROUTY. They used the earnings up in sinking funds
and things of that kind?
Mr. HILL. They always kept up their sinking fund whether they
paid dividends or not. I think that is correct, but their officers can
speak as to that better than I can.
The CHAIRMAN. To clear up a point, I understood you to say that
the old Burlington system is made up of three different corporations?
Mr. HILL. Organizations, I said. I did not mean corporate organ-
izations, but operating organizations.
The CHAIRMAN. There was but one corporation which had an issue
of stock?
Mr. HILL. That is all. -
The CHAIRMAN. So that this capitalization of one hundred and nine
millions, or thereabouts, represented all three of the constituent organ-
izations and the entire Burlington system?
Mr. HILL. I think so.
Commissioner PROUTY. Unless you intend to further develop the
matter, I would like to know what the function of the Burlington
Railway is. It seems to be only an operating road, a road that is
intended to operate this property. What is the capital stock of the
Burlington Railway Company ? -
Mr. HILL. The capital stock, as far as it is issued, is simply to give
it legal existence. Its capital stock is not completed.
Commissioner PROUTY. Who elects the directors of that company?
Mr. HILL. The shareholders.
Commissioner PROUTY. Who are the shareholders?
Mr. HILL. There are a certain number of directors elected, or
rather named in the articles of incorporation. I think they are still
shareholders, or they may have been replaced.
Commissioner PROUTY. Have you a self-perpetuating board of
directors that appoint their own successors?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 41
Mr. HILL. I do not understand the honorable Commissioner. Will
you please repeat the question :
Commissioner PROUTY. You say the board of directors is named by
the articles of incorporation that incorporated the Burlington Rail-
road Company. Do those directors hold office for life?
Mr. HILL. I never knew of such an organization as that.
Commissioner PROUTY. How are their successors elected?
Mr. HILL. As all other corporations elect a board of directors—by
the shareholders.
Commissioner PROUTY. And who are the shareholders'
Mr. HILL. I could not give the names, but I have no doubt the pres-
ident of the company can furnish you with that information.
Commissioner PROUTY. You say you are a director?
Mr. HILL. A director.
Commissioner PROUTY. Are you named by the articles of incorpor-
ation 4
Mr. HILL. I think not.
Commissioner PROUTY. Do you know how many shares of stock
there are :
Mr. HILL. I do not. -
Commissioner PROUTY. Do you know what the shareholders paid
for their stock?
Mr. HILL. They would pay par.
Commissioner PROUTY. You do not know anything about the amount
of capital stock?
Mr. HILL. No, sir; as I said on one occasion, the amount is not com-
pleted. The transaction is not completed, and the amount of capital
stock can not be stated until the issue is completed and paid for.
Commissioner PROUTY. Do you remember whether by the terms of
the lease the railway company guarantees any dividends on the stock
of the railroad company
Mr. HILL. I can not give the terms of that lease, but the lease itself
will give it much better than my recollection.
Commissioner FIFER. You spoke of the technical legal existence of
the Burlington. What constitutes its actual existence? I understood
you to say that certain stock was issued by the Burlington system to
give it a technical legal existence. That being true, what is its actual
existence? That is, the controlling influence.
Mr. HILL. You mean the ownership?
Commissioner FIFER. Yes, sir; that directs the property.
Mr. HILL. It would be owned one-half by the Northern Pacific and
one-half by the Great Northern. I thought I answered Mr. Day on
that question. I meant to.
Commissioner PROUTY. That is all right so far as the railroad com-
pany is concerned. Is that true also as to the railway company ?
Mr. HILL. I think the Honorable Commissioner’s question applied
to the railway company. I understood you so and answered so.
Commissioner PROUTY. So in some way or other the Northern
Pacific and Great Northern elect the directors of the Burlington?
Mr. HILL. It is not in some way or other. It is the same as any
other corporation. The new company succeeded to the old company.
The two companies own the shares, and the directors of the new com:
pany are to be elected by the shareholders voting, as all such elections
are held. I know of no other way.
42 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Commissioner PROUTY. You are president of the Great Northern
Company }
Mr. HILL. Yes, sir.
Commissioner PROUTY. The Great Northern owns one-half of the
capital stock of the Burlington Railroad Company
Mr. HILL. Yes, sir.
Commissioner PROUTY. You expect through that ownership to exert
an influence in the election of the directors of the railway company
Mr. HILL. I think it is intended and expected to transfer that stock
to the railway company.
Commissioner PROUTY. You do not know?
Mr. HILL. I think that is the intention, but the lease will cover all
that ground a great deal better than my recollection.
Mr. DAY. The two hundred and sixteen millions of bonds which
were jointly issued by the Great Northern and Northern Pacific, how
were those bonds secured?
Mr. HILL. Secured by the stock purchased by the proceeds, or by
the exchange.
Mr. DAY. The stock of the Burlington Railroad Company is a col-
lateral security to the two hundred and sixteen millions of bonds of
the Great Northern and Northern Pacific 4
Mr. HILL. Yes, sir.
Mr. DAY. The Great Northern and Northern Pacific, then, each have
a liability to-day of $108,000,000 in excess of the liability that they
each carried one year ago, and 4 per cent per annum in addition.
Mr. HILL. The 4 per cent would be on this amount. They have
that liability, and then they have as the offset to that the ownership
of the Burlington property less the small amount we did not exchange.
Mr. DAY. What was the amount of dividends the Burlington had
declared last before you made the purchase of it?
Mr. HILL. I do not recall the amount of the dividends paid. I
think I could recall the earnings.
Mr. DAY. Is it not 6 per cent—you do not remember?
Mr. HILL. I do not remember. My impression is—and it is only
my impression—that it was 6%.
Mr. DAY. It is expected that the earnings by the Burlington road
shall pay the interest on the $216,000,000 of bonds that the Northern
Pacific and Great Northern made?
Mr. HILL. It certainly should.
Mr. DAY. If they do not do that—if the Burlington should fail in
making these earnings equal to this 8 per cent on its capital stock or
more than 8 per cent—then the Great Northern and Northern Pacific
will be required to make up the deficit?
Mr. HILL. Certainly; it is their obligation; they purchased it.
Mr. DAY. If a deficit shall occur, if the Burlington shall be unable
to return to the Northern Pacific and Great Northern this 8 per cent on
$216,000,000, the Northern Pacific and Great Northern will have to
earn that much more in order to pay it?
Mr. HILL. I think you mean 4 per cent—8 per cent on the original
capital or 4 per cent on the bonds.
Mr. DAY. Four per cent on the bonds. If the Burlington does not
make the additional earnings to make that good, it will have to be .
made good out of the treasuries of the Great Northern and Northern
Pacific? - -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 43
Mr. HILL. That is correct.
Mr. DAY. Now, at the time of the formation of the Chicago, Bur-
lington and Quincy Railway Company, who agreed—who was present
and participated in the agreement to form that company'
Mr. HILL. I was not; I could not tell you who was.
Mr. DAY. Was there any contract executed respecting the policy
that should be exercised in regard to the traffic or the earnings of the
new company that is not expressed in the lease?
Mr. HILL. None whatever.
Mr. DAY. Was there any other instrument or agreement independent
of the lease ?
Mr. HILL. None beyond the lease.
Mr. DAY. The lease expresses everything?
Mr. HILL. Everything.
Mr. DAY. Does it express all the obligations or agreements entered
into that were to thereafter subsist between the Burlington and the
Great Northern and Northern Pacific and the Union Pacific'
Mr. HILL. The lease, I think, is silent on that subject. It could
not be otherwise, because there is no such agreement.
Mr. DAY. That is what I am coming to, whether there is any agree-
ment respecting how the Burlington property shall be conducted in
future?
Mr. HILL. No such agreement.
Mr. DAY. Whether it was or was not to be brought into drastic
competition with some other line—nothing said or agreed to in regard
to that :
Mr. HILL. Nothing.
Mr. DAY. When was that company organized—the new Burlington?
Mr. HILL. I should say after midsummer.
Mr. DAY. Where was it organized?
Mr. HILL. In the State of Iowa.
Mr. DAY. Has it by-laws?
Mr. HILL. I think so. I am sure it has.
Mr. DAY. Will you also have the Commission supplied with those .
by-laws?
'y. HILL. I think you can get them directly from the president. I
can send them, but I think you can get them from another witness who
will be before you. - -
Mr. DAY. Has the Northern Securities Company adopted by-laws?
Mr. HILL. I think it has.
Mr. DAY. Will you also send to the Commission a copy of those?
Mr. HILL. It is not a railway company, but we will be very glad to
send anything we have.
Mr. DAY. When was the plan adopted which resulted in the organi-
zation of the Northern Securities Company ?
Mr. HILL. The Northern Securities Company is the result of, or has
been under, discussion among the chief shareholders of the Great
Northern Railway for, at any rate, seven or eight years. It may have
been longer; and it was started and was considered with a view of
holding together not the control of the company but the interests of
Some eight or ten parties who had been most active in promoting or
building up the company.
Mr. DAY. I do not think you understood my question. I will ask
the stenographer to repeat the question.
44 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
The stenographer repeated the question as follows: “When was the
plan adopted which resulted in the organization of the Northern
Securities Company ?”
Mr. DAY. When was the plan adopted that resulted in the organiza-
tion of the Northern Securities Company ?
Mr. HILL. Well, the result would occur as the final—do you mean
when the corporation was made?
Mr. DAY. When was the plan adopted to organize the Northern
Securities Company There was a time that somebody agreed to
incorporate the Northern Securities Company. When was that plan
adopted or agreed upon? When was the agreement made :
Mr. HILL. The plan to adopt, or the agreement or understanding to
adopt, such a plan has been practically made for two or three years.
Mr. DAY. Was there a conference held at which you and Mr. Har-
riman were present, or the representatives of the Union Pacific inter-
ests—to use your own term and in the sense you use it—at which it
was agreed to incorporate the Northern Securities Company
Mr. HILL. No such conference was ever held.
Mr. DAY. Where is the Northern Securities Company incorporated?
Mr. HILL. In New Jersey.
Mr. DAY. Mr. Harriman is a director in that company
Mr. HILL. He is.
Mr. DAY. Was any conference held at which you were present and
at which Mr. Harriman was present, when it was determined upon the
future policy of the Northern Pacific—either the retirement of part of
its stock or the election of a new board of directors?
Mr. HILL. No such conference was ever held.
Mr. DAY. Was there any agreement, tacit or otherwise, respecting
the election of the last board of directors of the Northern Pacific road?
Mr. HILL. I think there was an understanding, and it may have
been reduced to writing.
Mr. DAY. Who was present at that conference, or when that under-
standing was had
Mr. HILL. I might finish my answer.
Mr. DAY. Oh, I beg your pardon. I thought you were through.
Mr. HILL. The understanding referred to was at a time when there
was a great deal of excitement in the market, and so on, and the parties
agreed that they would leave the selection of the board of directors of
the Northern Pacific to Mr. Morgan, who was then absent.
Mr. DAY. Who were the parties who agreed to that?
Mr. HILL. Mr. Morgan’s partner.
Mr. DAY. Mr. Bacon?
Mr. HILL. Mr. Bacon, I think; Mr. Steele was also present.
Mr. DAY. Also of the same firm'
Mr. HILL. Yes, sir; and one or two others besides Mr. Harriman.
Mr. DAY. Some of the members of the firm of Kuhn, Loeb & Co.'
Mr. HILL. I think so. I think Jacob Schiff was one.
Mr. DAY. An agreement was come to, then?
Mr. HILL. I said “an understanding.” An agreement is more
formal, possibly, than the case calls for, but it was substantially agreed
to leave the election of the directors to Mr. Morgan on his return, or
the selection of the board.
Mr. DAY. What other terms were in this agreement?
Mr. HILL. I do not recall.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 45
Mr. DAY. Do you recall any of them?
Mr. HILL. I recall that this substantially covers the agreement—
what I have stated. f
Mr. DAY. Was anything agreed upon at that time respecting the
retirement of the preferred stock of the Northern Pacific'
Mr. HILL. No, sir.
Mr. DAY. You say you think that agreement was in writing?
Mr. HILL. It may have been reduced to a memorandum. I do not
know that it was formally executed, but I think there was a memo-
randum of what was understood.
Mr. DAY. Where is that agreement?
Mr. HILL. I do not know.
Mr. DAY. Who took it at the time?
Mr. HILL. I am only speaking from recollection. I think Mr.
Bacon or Mr. Steele. It may not have taken the form of an agree-
ment—possibly a memorandum by way of keeping alive what was
understood.
Mr. DAY. When did that occur !
Mr. HILL. About the middle of May, I should think, from recol-
lection.
Commissioner FIFER. Has that memorandum been preserved?
Mr. HILL. I do not know.
Commissioner FIFER. Who would be likely to have it, if it is in
existence?
Mr. HILL. I think Mr. Steele may have it. I can try to find out if
the Commission desires me to. -
Mr. DAY. Where did it occur !
Mr. HILL. There might have been more than one meeting. I think
there was one held in Mr. Morgan’s Öffice, and I think one was held
in Mr. Harriman’s office. ^
Mr. DAY. In the city of New York?
Mr. HILL. In the city of New York.
Mr. DAY. Were there any conferences subsequent to those two
between the same parties or parties representing the same interests?
Mr. HILL. On the same subject? .
*Mr. DAY. Yes, sir; was that the final agreement?
Mr. HILL. Well, there is no agreement.
Mr. DAY. Or understanding?
Mr. HILL. An agreement is rather more formal than the case calls
for, except as to the election of the directors, and, I think, that we
carried out, and I know of no further reference to the understanding
or the memorandum.
Mr. DAY. Was the Mr. Morgan at that time you speak of J. Pier
pont Morgan? • ‘
Mr. HILL. Yes, sir.
Mr. DAY. Was he at that time a director in the Northern Pacific
Mr. HILL. I do not think he ever has been. -
Mr. DAY. Was he of the Great Northern ?
Mr. HILL. No, sir. - *
Mr. DAY. These people represented the large majority of the stock
of the Northern Pacific 2
Mr. HILL. Yes, sir; I think a very large majority.
Mr. DAY. And they agreed there, or understood—whatever term is
most pleasing to you—that they would turn over to Mr. Morgan the
46 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
right or function or duty which attached to their holdings respecting
the election of a new board of directors for the Northern Pacific, and
that agreement was subsequently carried out? .
Mr. HILL. I think so.
Mr. DAY. At that time you understood that that was the end of the
question?
Mr. HILL. Yes, sir.
Mr. DAY. Now, as a part of the understanding, then, was it contem-
plated—was the organization of the Northern Securities Company then
contemplated or agreed to ?
Mr. HILL. It was not mentioned or thought of in reference to the
Northern Pacific at that time or for a long time afterwards.
Mr. DAY. When was it afterwards?
Mr. HILL. I should think the latter part of September or early in
October.
Mr. DAY. That is when it was concluded to organize 4
Mr. HILL. No, sir.
Mr. DAY. What was it that occurred in the latter part of September
or October 4 º
Mr. HILL. In reference to the Northern Pacific in connection with it?
Mr. DAY. What occurred then?
Mr. HILL. It was considered whether the Northern Pacific or any
stock of the Northern Pacific should be held by the Northern Securities
Company or otherwise. -
Mr. DAY. What conclusion was reached .
Mr. HILL. It was decided to do it.
Mr. DAY. Was that agreement in writing?
Mr. HILL. It was between the parties that controlled it.
Mr. DAY. Was it in writing then?
Mr. HILL. They put it in writing. I do not mean that they made a
formal agreement, but they went on and carried out the act.
Mr. DAY. By incorporating and putting the stock in the Northern
Securities Company? -
Mr. HILL. Yes, sir.
Mr. DAY. But the understanding or agreement then reached was
not reduced to a written memorandum ? * ,
Mr. HILL. The Securities Company, as I tried to make it plain, was
a matter in the first instance purely with reference to the holding of a
portion—about one-third, I think—of the stock of the Great Northern
Railway Company. Later the question came up of including the stock
of the Northern Pacific, and it was so put in effect. The Northern
Pacific stock, an offer was made for it by the Securities Company and
a large amount of it purchased.
Mr. DAY. When it was concluded to put into this Northern Securi-
ties Company the stock of the Northern Pacific Company, that included
what you call the Union Pacific interests as well as the other interests
in the Northern Pacific 4
Mr. HILL. It took in practically, I should say, one hundred and
fifty out of one hundred and fifty-five millions of stock, and it included
the stock held by those identified with the Union Pacific interests;
whether it was Union Pacific stock or owned by the Union Pacific I
could not say.
Mr. DAY. I am not asking as to the ownership. I am asking as to
these people representing the Union Pacific interests. Their stock
was embraced in this agreement or understanding, was it not?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERs. 47
Mr. HILL. Their stock or most of it was, I think.
Mr. DAY. What was the consideration, what was the moving induce-
ment, for the Union Pacific interest to put their stock in at that time?
What proposal was made to them respecting the operation of the
Northern Pacific or the Great Northern or the Burlington system?
Mr. HILL. There were no proposals made to them at that time or
at any time in regard to the operation of the Great Northern or
Northern Pacific or the Burlington.
Mr. DAY. Or harmony of interest?
Mr. HILL. No, sir; nothing, absolutely.
Mr. DAY. Was there any inducement that induced Mr. Harriman
and the interests he appeared to represent, or Mr. Schiff appeared to
represent—were any inducements proposed to them or any under-
standing respecting the future of the Northern Pacific or the Bur-
lington 4
Mr. HILL. That they would have the right to dictate the policy?
Mr. DAY. No; any inducement related to those properties.
Mr. HILL. That they were to participate in the ownership?
Mr. DAY. I am asking what occurred.
Mr. HILL. I answer you; nothing.
Mr. DAY. You know the popular impression ?
Mr. HILL. I do, and I know it is wrong.
Mr. DAY. It is in reference to that, whether there is anything in
that, whether any inducement was offered for harmony of action
between the Northern Pacific and the Union Pacific or the Burlington
and the Union Pacific, any inducements in respect to proposing future
harmonious action, if that was done?
Mr. HILL. All action between railways is either harmonious or
inharmonious. There was nothing proposed that did not exist. If it
is meant that there was some new inducement offered at that time, I
say that there was not any.
Mr. DAY. Was there anything said respecting the competition of
those lines or of either of them in the future?
Mr. HILL. Competition in rates or competition in building:
Mr. DAY. Both or either.
Mr. HILL. I think the question, where there is no agreement, the
question came up several times that there was great fear that we would
take the Burlington and extend it indefinitely to southern California,
or San Francisco, or other places. I remember saying that we had
already two lines in the north to the Pacific coast and did not need a
third one. That is, as I remember, about all the conversations
that occurred on the subject. I want to be particularly understood
that there was never any inducement for or against, pro or con, to the
Union Pacific people, or those representing interests that might be
called Union Pacific, to put their holdings into the Securities Company
that would give them any advantage through a railway organization
that did not exist before, or anything new or special, directly or indi-
rectly. I want to be clearly understood on that point.
Mr. DAY. Was there anything said respecting the manner or by
whom the control which the Northern Securities Company had, or was
to secure, in the stock of the Northern Pacific—how that was to be
exercised, or by whom it was to be exercised, in the future?
Mr. HILL. Nothing.
Mr. DAY. Anything said as to who should be the directors in the
future of the Northern Securities Company? .
48 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HILL. Nothing of the kind.
Mr. DAY. Or should be members of its executive committee?
Mr. HILL. There has been no agreement directly or implied between
the Northern Securities Company and the Northern Pacific.
Mr. DAY. Or the Northern Securities Company and what are known
as the Union Pacific interests?
Mr. HILL. The Union Pacific interest—in regard to that there is no
agreement directly or implied. The Northern Securities Company is
at liberty at its next annual election to put in an entirely new set of
stockholders and put us all out.
Mr. DAY. The voting property in the one hundred and fifty millions
of stock is now owned and controlled by the Northern Securities Com-
pany and rests in the Northern Securities Company ?
Mr. HILL. Absolutely.
Mr. DAY. The same as any other shareholder?
Mr. HILL. Absolutely, as long as it owns it.
Mr. DAY. How is that stock to be voted by the Northern Securities
Company—by its board of directors?
Mr. HILL. I think its board of directors will probably appoint a
committee or proxy, and I think probably they have in case any occa-
sion came up—I think they have already designated three men to vote
in case it was necessary in any emergency.
Mr. DAY. To vote the stock that the Northern Securities Company
owns in the Northern Pacific and Great Northern ?
Mr. HILL. That the Securities Company holds of the Northern
Pacific and the Great Northern.
Mr. DAY. I understand you to say that the Northern Securities
Company has no interest in the Burlington Railway Company?
Mr. HILL. No, sir. -
Mr. DAY. Or in the stock of that company except as it has indirectly
by its holdings of Great Northern and Northern Pacific?
Mr. HILL. That is correct.
Mr. DAY. Is Mr. Harriman one of the three that vote?
Mr. HILL. I think not.
Mr. DAY. Mr. Schiffº r
Mr. HILL. I think not. There are not three who vote both. I think
each company has its own voting committtee. I think they are dif-
ferent. I am not certain that the appointment was made. I know it
was discussed, and I think it was made. That is my best recollection.
Mr. DAY. How was the stock of the Northern Securities Company
exchanged for the stock of the Northern Pacific Company 4
Mr. HILL. One hundred and fifteen for one hundred of the Northern
Pacific. -
Commissioner PROUTY. How about the Great Northern ?
Mr. HILL. One hundred and eighty of the Securities for one hundred
of the Great Northern.
Commissioner PROUTY. And how much of the Great Northern do
you say has been exchanged on that basis?
M. HILL. Between forty and fifty. Great Northern has been sell-
ing higher all summer than the exchange price.
Mr. DAY. I have forgotten what you said was the capital stock of
the Great Northern. |
Mr. HILL. One hundred and twenty-five. -
Commissioner PROUTY. Is the capital stock of the Great Northern
pretty widely scattered? .
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 49
M. HILL. Before any was surrendered I think there were from eight-
een hundred to two thousand shareholders.
Commissioner PROUTY. At the present time will the holding of the
Northern Securities Company in the Great Northern enable it to
control an election in the Great Northern ?
Mr. HILL. Do I understand the question, that at the present time
would the holding of the Securities Company enable the Securities
Company to control the election in the Great Northern ?
Commissioner PROUTY. Yes, sir.
Mr. HILL. No; it would not.
Commissioner PROUTY. Of course it does not hold a majority of the
stock, but it is not ordinarily necessary in order to control an election.
Now, could one person who held that block of stock, voting it as an
individual, ordinarily control an election?
Mr. HILL. I have never known a meeting of the Great Northern
shareholders when the vote was not unanimous.
Commissioner PROUTY. How many votes have you ever known to
be represented in the Great Northern? º
Mr. HILL. By proxy usually 85 or 90 per cent. At the meetings
absolutely we have had to appoint clerks to act as tellers—not a share-
holder there unless he is qualified.
Mr. DAY. At the time it was determined to appoint Mr. Darius
Miller traffic manager of the Burlington system, who agreed on that?
Mr. HILL. I know who recommended him.
Mr. DAY. Well, that is part of it.
Mr. HILL. I recommended him and did what I could to have the
other gentlemen accept him. I was very sorry to lose him from our
company, but we were largely interested in the Burlington and its
success, and I felt that Mr. Miller would be an excellent man for it.
Mr. DAY. What were your reasons for recommending Mr. Miller
to leave your own road, in which you own such a great interest?
Mr. HILL. We had men that could supply his place, we felt, and he
could be of greater use where we had a very large interest in the
Burlington, an interest of one-half.
h Mr. DAY. Who do you mean by the gentlemen you recommended
im to ?
Mr. HILL. The directors of the company and the officers.
Mr. DAY. Was there any agreement prior to the time you recom-
mended him to the directors of those two companies between you and
any other competing interest—the Union Pacific interests, for exam-
ple—that Mr. Miller should go into the Burlington?
Mr. HILL. That was a matter I could not control at all. I was very
Sorry to lose Mr. Miller, but I felt that Mr. Miller would be an effect-
ive man, and we had a large interest in the property.
Mr. DAY. Any interest aside from your ownership of stock in it?
Mr. HILL. That is all. I say that is all. We had an interest in its
success, and we had an object in buying it. We had a direct object in
buying it. It was part of a well-matured plan, and to carry it out it
was important that the plan should be understood and the work carried
out on the lines for which it was purchased.
Mr. DAY. Was the Burlington a competing road of the Northern
Pacific or the Great Northern ? -
Mr. HILL. No, sir.
Mr. DAY. It was not?
526A–02—4
50 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HILL. No, sir.
Mr. DAY. Where did it intersect the Great Northern ?
Mr. HILL. It connected with the Great Northern at St. Paul.
Mr. DAY. And it intersects the Northern Pacific at more than one
point?
Mr. HILL. At St. Paul and at Billings in Montana.
Mr. DAY. Does the Burlington reach the wheat fields of the North-
west?
Mr. HILL. No, sir.
Mr. DAY. Not at all?
Mr. HILL. No, sir.
Commissioner PROUTY. You testified that the original idea of the
Securities Company was to embrace the ownership of about one-third
of the Great Northern stock. Has that third of the Great Northern
stock gone into the Securities Company'
Mr. HILL. The original idea so stated. There were a number of the
gentlemen who were getting along in years, who had been associated
together for more than twenty years—one of them 86, another 82,
and several of them past 70—and they desired to work together,
as they had. They wanted to put their stock—some of them have
gone out of the country at times, and they left with me a power
of attorney for four or five years to represent them, and felt that we
ought to make a company that would hold our stock, and the idea was
to make it a close corporation, and limit it to a few people, eight or
ten, and when the corporation was decided upon it was the result not
of any meeting, not of any formal gathering of five or six, or any
other number of men. Two of us saw, in their offices or in the offices
of the company, 16 men and the matter was settled. The question
was then as to whether they should make it a close corporation or let
the Great Northern shareholders participate. Some of them said that
it was the first time anything occurred in reference to the Great North-
ern that one shareholder had not the same privileges as any other one
had. They felt like giving them that. When it was decided to follow
that course, the question came up: Why not put in the Northern
Pacific : That is the way it occurred.
Commissioner PROUTY. My question was whether these men who
originally contemplated putting the Great Northern stock into the
Securities Company had actually done so. -
Mr. HILL. Yes, sir; I think all that stock. My recollection is that
it amounted to somewhere in the neighborhood of thirty—between
thirty and thirty-two millions, of the gentlemen who discussed it among
themselves. The rest was left optional, and the others decided for
themselves whether they would sell their stock to the Securities Com-
pany or keep it.
The CHAIRMAN. And those gentlemen have, in point of fact, sold
their stock to the Securities Company, and taken their obligations in
that in the proportions named ! &
Mr. HILL. That is it, exactly.
Commissioner PROUTY. At the time of the exchange of the Northern
Pacific into Securities Company stock, who owned the Northern Pacific
stock?
Mr. HILL. I think the list, which was very much cut down in point
of numbers after the contest—I think the list covered about 400 share-
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 51
holders or names. I know I held about 75,000 shares. I held it
before the contest and held it after. I did not buy any and did not
sell any. - -
Commissioner FIFER. At the time of the organization of the
Northern Securities Company, was it contemplated that these three
roads under consideration should be combined under one control for
the purpose of breaking down competition? *
Mr. HILL. Oh, no, sir; nothing of the kind was contemplated, or
thought of, or done, and it could not be done if it had been. The
Burlington was purchased for a reason. Naturally, when the Great
Northern was the joint owner of the Burlington, and jointly respon-
sible for the Burlington’s purchase money, or purchase bonds, it was
not a matter of indifference to the Great Northern who should be its
partner and whether that partner was interested in developing the
country or in restricting it.
The CHAIRMAN. One moment, Mr. Day. This seems to be just as
good a time as any to clear up that matter. Mr. Hill is understood as
saying that there were reasons which he had not mentioned which in-
duced the Great Northern and the Northern Pacific to buy stock in
the Burlington. This is just as good a time to state those reasons as
he can have. * *
Commissioner PROUTY. I wish Mr. Hill would state first, who at
the time when this arrangement was made with the Burlington com-
pany, was supposed to own a controlling interest in the Northern
Pacific. As I understand it, the Great Northern and the Northern
Pacific made this joint arrangement with the Burlington to buy Bur-
lington stock. Now, at that time who did you suppose owned the
Northern Pacific road?
Mr. HILL. I knew that there was no one interest that controlled it;
I knew that myself and friends, say ten, held the largest single hold-
ings. I was the largest stockholder. Mr. Kennedy, an old associate,
was the next largest, in point of fact.
Commissioner PROUTY. Now, at that time did you suppose that
your holdings, and the holdings of your friends, and the holdings of
people who were friendly to the Great Northern, were sufficient to
control the Northern Pacific'
Mr. HILL. Not to control it by ownership, but the project was so
clearly for their advantage as it was for ouj's that self-interest would
lead them in the direction that we felt we were justified in making the
purchase of the Burlington.
pºisoner PROUTY. That is, the self-interest of the Northern
acific :
b Mr. HILL. Yes, sir; would bind them as our self-interest would
ind us.
Commissioner PROUTY. And any stockholder who owned his stock
as a legitimate investment in the road?
Mr. HILL. That is right, sir.
Mr. DAY. What was the Huntington interest in the Northern Pacific
at that time? -
Mr. HILL. I did not know that the Huntington interest ever owned
a share. I did not know that they did. -
}ommissioner PROUTY. Had you acquired your interest in the Great
Northern and Northern Pacific, and had your friends acquired their
interest in the Northern Pacific, in view of the fact that it was a com-
peting road?
52 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HILL. No, sir; I acquired—myself and two other friends
acquired—considerable interest in it about the time it was reorganized
or being reorganized before the reorganization was made, and we have
held in the company from that date to this sometimes more and some-
times less. I bought from the reorganization committee at the time
$78,000,000 of the Northern Pacific stock.
Commissioner PROUTY. Well, did you do that in view of the fact
that it was a competitor?
Mr. HILL. No, sir. Do you mean for the purpose of restraining
competition?
Commissioner PROUTY. Not necessarily for the purpose of restrain-
ing competition; but both those properties would be much more valu-
able if owned by the same man than if owned by two different people,
wouldn’t they :
Mr. HILL. Their value would depend upon the returns they pay
their shareholders. The Great Northern pays its shareholders its
dividends and earns them without much trouble. During the dark
days in 1893 there was only itself and one other company in the United
States that did not reduce their dividends. We can not pay any more;
we do not expect to. You gentlemen would feel that you had a right
to confiscate a part of it, if not the whole, if we exceeded 7 per cent.
I think that is fair and we would like to maintain the 7 per cent and I
think we can. If I go on and answer Mr. Day’s question I think I will
get in the way of blowing the fog away.
Mr. DAY. In connection with what you are now stating, I would
like to ask if, by this joint bond, you have not increased the liability of
your capital stock almost 4 per cent? -
Mr. HILL. If we have, we feel that we have secured a most excel-
lent asset.
Mr. DAY. Büt was not the Burlington road one of the roads that
cut down its dividend during the dark days you spoke of ?
Mr. HILL. Yes, sir. Its condition, owing to a strike and other
things, was rather unfortunate.
Mr. DAY. Now, you are proposing that it will earn 8 per cent on
its capital stock?
Mr. HILL. We hope it will earn more.
Mr. DAY. If it does not, and only does what you say it did in the
dark days, then your liability is increased 4 per cent?
Mr. HILL. It earned 10.4 per cent last year, and we guarantee 8.
Mr. DAY. But in the dark days it did not earn 4 per cent?
Mr. HILL. I don’t know; I did not go back as far as that. How-
ever, I will say this: That the conditions then and now are somewhat
changed. We hope we will all be able to do something for it.
Mr. DAY. I want to give you the opportunity of answering the
chairman’s question.
Mr. HILL. As to the reasons for buying the Burlington: Our coun-
try from Lake Superior to the Pacific Ocean, along the Great North-
ern—and the same thing applies to the Northern Pacific—it is mainly
an agricultural country. The eastern portion of it is almost entirely
so. It has farther to carry its products to market than almost any
other section of the country, because it is nearest to the center. These
agricultural products can only be carried at low rates; they must be
carried at low rates or they can not be carried at all. And that is the
problem that we have to solve. We are far removed from coal. We
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 53
have to take our fuel from Pennsylvania and from West Virginia, and
we are admonished frequently that it is an uncertain source of supply
to depend upon. Say we can go to the Rocky Mountains and get
coal, and we can go an equal distance to Boston and get coal, or to
Buffalo and get coal; but that would not help us in the treeless portion
of Minnesota and Dakota—in both of the Dakotas and Minnesota and
eastern Montana.
The only way we can be certain of the low rate is by a large volume
of traffic. There is more standing saw timber that will bear transpor-
tation at a low rate from the Pacific coast, in Washington and Oregon,
than there is in all the rest of the States north of the Ohio River and
east of the Rocky Mountains, and I think in point of tonnage and in
point of revenue per ton that that traffic is equal to the entire wheat
crop of the United States for fifty years—what is standing on the
ground now. In order to get that traffic back—and if we can not haul
the timber from the Pacific coast we will have nothing else to haul.
When I went out there I was immensely struck with it. The rate was
90 cents a hundred, or $18 a ton. I called the lumbermen and mer-
chants together, and asked them at what rate they could ship that to
the Eastern markets. They said that if 25 cents was taken off, and the
rate was 65 cents a hundred, they could carry it.
I remember of telling them I knew they could not. It was a ques-
tion in my mind whether they could pay 50 cents. We made them a
rate of 40 cents on fir and 50 cents on cedar, because we could get
more money into a car of fir, owing to its greater weight, than we could
into a car of the same size containing cedar. We found there was an
enormous traffic there awaiting to come east. At first it came slowly.
We could find enough west-bound business to load the cars out. In
1895 or in 1896, I think, we carried about ten or twelve cars a day.
Last fall we carried about eighty cars a day of this traffic east. Now,
the people of Washington and Oregon, if they devoted their energies
to loading our cars west—there are not enough of them to furnish
sufficient material to load the cars west in order to bring this traffic
east, and we could not haul empty cars 2,000 miles to haul lumber
back at 40 cents a hundred. We have got to go beyond these States;
we have got to go out on the sea to get that traffic. We found that
the cotton business, as far as the facilities for transporting it were con-
cerned by water—the cotton business—raw cotton, far in excess this
present year. The cotton offering this year was far in excess of the
means of transporting it by water.
There has been a grouping of railways in the last five years, or in
the last fifty years. It has been the case in Great Britain; it has been
the case in this country. I suppose the New York Central is made up
from New York City to Buffalo of seven or eight roads. I remember
when I first went down there as a boy I had to change cars more than
once. We felt that we must put ourselves in a position where we
would reach the main markets and where we would reach the manu-
factured steel, iron, machinery, the cotton manufactured in the South,
east of the Mississippi River, mainly in the Carolinas and Georgia,
and the raw cotton and the provisions, everything that constituted a
load to the West, and at the same time find a market for our lumber
and our minerals. I think the principal lead deposits in the United
States are in Idaho and Montana. We could send to Denver over the
Montana Central, through Helena, over the Northern Pacific and Bur-
54 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
lington direct to Denver; the Northern Pacific can send through Coeur
d’Alene direct to Denver or direct to Helena, or it can go to Tacoma.
There is also a smelter at Everett—which is a point on Puget Sound—
which the Great Northern reaches. But the main point we had in
view was to put that property, the Northern Pacific for itself and the
Great Northern for itself, in a position where we could both have
equal and joint access to the territory reached by the Burlington and
the large prairie country consuming timber. As Mr. Weyerhaeuser,
my neighbor, and who is one of our directors, said, I would rather
have the State of Iowa as a lumber market than any five States in
the Union. The Burlington reaches a great deal of Iowa, and our
object was to put ourselves in a position where we would not have to
hire somebody else after we got to St. Paul. I am speaking more of
the Great Northern, which had not the connection that the Northern
Pacific had at Billings, although it might, by continuing our Neihart
line 130 or 140 miles, make a connection and put ourselves in a posi-
tion where we would not have to hire our work done to secure what
we knew was necessary.
For instance, a carload of cotton comes from the South containing
70 or 72 or 75 bales. Our large cars—and if we carry at low rates we
must have large cars—our large cars carry 115 or 120 bales. There we
have to break the shipments at once and break the carloads and confuse
the marks; the carload may arrive the same day and it may not arrive
the same week. The car may get out of repair on the way; it is a long
run over the mountains and lots are broken. Shingles and lumber—I
think I am well within it, when I say that more than one-half of the
shingles and lumber that we bring to Minnesota transfer to bring South
have to be put in more than one car; that is, our cars are larger and it
will take sometimes a car and a quarter or a car and a half; and people
can not haul two cars at the same price at which they haul one, and
that is a matter that we undertook and felt we would regulate for our-
selves and have a standard car and reach that great interior country.
Another important matter is fuel. Where can we go to get coal for
our prairies? Now, from St. Paul and Minneapolis to the coal fields
of southern Illinois, I think, is about 575 miles. The Burlington has
a road down the river, except where it runs behind the Rock Island,
up and down, over some valleys 35 or 40 miles, and those grades can
be improved, and the Burlington can with a large engine carry up a
shipload of coal. No matter what happens, the coal for that country
can not continue to come from West Virginia and from Pennsylvania.
It is too far and it costs too much. We can not go East for our
600,000 tons of coal or 700,000 tons of coal that we buy annually on
the eastern end of the road. The Northern Pacific uses 400,000 or
500,000 tons annually. They can not go East and depend on getting
it. We didn’t miss a carload this year from Lake Erie ports and we
are five or six thousand tons short that we could not get moved up.
There has been a coal famine from Harrisburg to Denver; to-day
there is almost a famine, and if it was not for the mild winter there
would be. We were offered for our own coal to go to Winnipeg
$4.25 a ton delivered on the cars at Lake Superior. These are plain
questions that we are confronted with. If people living in that country
haven’t got fuel to keep them warm they will not stay there, and if
they can not buy coal at a cheaper rate it is going to be hard on them.
Our property is not good if they do not live there. They are active
CONSOLIDATIONS AN1) COMBINATIONS OF CARRIERS. 55
ºn cultivating the soil and producing what it will bring forth. In
order to put ourselves in a safe position we had to buy the Burlington
road. It gave us a market for our Western stuff that we had to bring
back, and it afforded us connections in the East with all the producers,
and it complemented the conditions that were necessary; and then
this matter of fuel is of the first necessity. Now, suppose that we had
gone on as we had in the past and said, “Nothing will happen,” and
that the Burlington had turned up somewhere else, what other road or
two roads would have given us what the Burlington gave us?
Mr. DAY. Is it not true that before you purchased the Burlington
you were proposing to buy the St. Paul ?
Mr. HILL. No, sir; an offer was made about selling the St. Paul and
I simply told them that it could not be done for two reasons—one, that
it was against the law, and the other, that the St. Paul gave us nothing
that we practically had not before if we should buy it.
Mr. DAY. Before a fixed price was made on the St. Paul stock, were
you and your colleagues not endeavoring to secure the St. Paul?
Mr. HILL. No, sir. The first I knew about it was when an officer
of the St. Paul made us a price; and I said no.
Mr. DAY. The St. Paul is a line of connection?
Mr. HILL. It is between Chicago and St. Paul. There were six
lines that were open to us to Chicago as connections. I said that we
had six and that we didn’t need it. But the St. Paul didn’t carry us to
any coal fields, and the St. Paul didn’t carry us to all the Southern and
river towns by any means.
Mr. DAY. Have you any superior connections with the Burlington
that you did not have before? .
Mr. HILL. Yes, sir.
Mr. DAY. What? -
Mr. HILL. We command them. Before they were permissive.
Mr. DAY. Do you have any superior connections by the Burlington
that you did not have in the Northwest?
Mr. HILL. The Burlington reaches many points in the Northwest
that the Northern Pacific does not reach. We go to St. Paul and to
St. Louis, and there we connect with all the Southern lines; and at any
moment the Burlington’s doors might have been closed to us.
hº DAY. That might be true of the Southern lines unless you owned
them.
Mr. HILL. It might; but the river is there.
Mr. DAY. The river is also at St. Paul.
* HILL. Yes; but it has been lathed and plastered so many times
it leaks. h
The CHAIRMAN. Have you now stated all you care to say respecting
the reasons for buying the Burlington?
Mr. HILL. Those are the reasons, the moving reasons, for our buy-
ing the Burlington—to put ourselves in a permanent position, where
the future would not be uncertain, in order that we might go on and
build up this business.
The CHAIRMAN. And you have now stated all you care to say
respecting the reasons which induced you to purchase the Burlington?
Mr. HILL. Yes, sir. -
Mr. DAY. Now, Mr. Hill, to return to the inquiry: After the organ-
ization, or the agreement, or understanding to organize the Northern
Securities Company, have you exercised any control, or any direction,
56 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
or given any instructions to the president or to the managing officers
of the Northern Pacific respecting its operation or its business of any
kind or nature. .
Mr. HILL. None whatever.
Mr. DAY. Anything regarding the movement of traffic or the main-
tenance of rates, or any instructions on those lines?
Mr. HILL. No instructions whatever of any kind.
Mr. DAY. Have you taken over any direction, or exercised any
direction over any of the officers of the Northern Pacific'
Mr. HILL. No, sir; none. Understand we are always—every rail-
way must confer with its neighbors in regard to rates and the move-
ment of trains in a general way, but nothing different exists to-day
from what has eiti for the past five, or ten, or twelve years.
Mr. DAY. You have had no conferences with Mr. Mellen respecting
the Northern Pacific property, or its management, or the management
of any part of it? -
Mr. HILL. I think that the matter of a union station at Seattle has
been under consideration for three or four years, and we discussed it
a few minutes within a month, and he asked us if we wanted to join in
the purchase of another piece of property. I told him no, that I was
much obliged to him; that is all.
Mr. DAY. Nothing since the 21st of November to Mr. Mellen to
take any course of procedure regarding the Northern Pacific property?
Mr. HILL. Nothing whatever.
Mr. DAY. Have you given any instructions or exercised any
directions over or control of the Burlington property?
Mr. HILL. Yes, sir; whenever the officers of the Burlington have
asked for advice, and sometimes I have volunteered advice.
Mr. DAY. They would take instructions from you, I presume.
Mr. HILL. Not instructions; but I have volunteered advice, and I
think they would listen to it. *
Mr. DAY. And probably act upon it. Has the executive committee
of the Northern Securities Company held a meeting since its organiza-
tion ?
Mr. HILL. I think it has; one.
Mr. DAY. When was that?
Mr. HILL. I could not give the date. I can, if desired, furnish it.
Mr. DAY. Has that committee, or at that meeting did the committee
take into consideration or propose anything respecting the policy
of the Northern Pacific Company ?
Mr. HILL. Never in any way, directly or indirectly.
Mr. DAY. And the Burlington, you say, it has nothing whatever to
do with ?
Mr. HILL. Nothing whatever.
Mr. DAY. Neither with the new or the old?
Mr. HILL. Neither the new or the old, except as it may be inter-
ested in the ownership of stock in the Northern Pacific and Great
Northern.
Mr. DAY. Was the policy of the Great Northern ever under consid-
eration by the executive committee of the Northern Securities Com-
any ?
p Mr. HILL. No, sir. The Northern Securities Company, so far as
its capital is invested in those companies, is simply a shareholder. It
has nothing whatever to do with the railway company, and does not
intend to have. -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 57
Mr. DAY. At any meeting of the Northern Securities board of
directors, or of the executive committee, has any plan been proposed
or considered respecting the increase of the ownership of the Northern
Securities Company in other railroads or the merger of that company
with any other company
Mr. HILL. Not railroads, but some other property. Some other
properties it has discussed the purchase of, and some other securities.
Mr. DAY. But not railroads?
Mr. HILL. Not railroads. You mean not railroad securities?
Mr. DAY. Railroad stocks by which a railroad might be controlled.
Mr. HILL. I am not certain whether it has purchased any other
stocks. I think not, however.
Mr. DAY. Is it proposed to take over any other railroad through
ownership of its stock?
Mr. HILL. Its business is to deal in stocks. We might buy stocks
the same as any individual.
Mr. DAY. And exercise all the powers of ownership and individual
right?
Mr. HILL. All the powers that go with ownership of stock.
Mr. DAY. I understand you to have said—I will ask you again to be
certain about it—that no agreement has been made, expressed or other-
wise, regarding the division of traffic or earnings which involve the
Northern Pacific, the Great Northern, or the Burlington?
Mr. HILL. No agreement.
Mr. DAY. No understanding?
Mr. HILL. No understanding.
Mr. DAY. Or with the Union Pacific system?
Mr. HILL. None whatever.
Mr. DAY. Who has the power to raise and lower rates on the Great
Northern ? -
Mr. HILL. The head of the traffic department, subject to the board
of directors, and if the board of directors is not in session subject to
the president would have the power of changing rates. Rates are
seldom raised on the Great Northern.
hº DAY. How about the Northern Pacific? Who has the power
there :
Mr. HILL. I do not know. #
Mr. DAY. Who is vested with that power in the Burlington?
Mr. HILL. The board of directors and officers of the company. I
do not recall the provisions of their by-laws.
Mr. DAY. Has the Great Northern during the two years entered
into any arrangement or understanding respecting the division of trans-
Pacific traffic with any other railroad?
Mr. HILL. No, sir; I do not recall that the Great Northern has ever
had any agreement for the division of business anywhere with other
railroads; it has been opposed to our policy.
Mr. DAY. Or for the division of earnings?
Mr. HILL. Neither traffic nor earnings. I do not recall any.
Mr. DAY. The board of directors of the Northern Securities Com-
pany possesses all the powers of the corporation?
Mr. HILL. Yes, sir.
Mr. DAY. There is a provision in your by-laws for an executive
committee of five?
Mr. HILL. Yes, sir.
58 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. And that committee of five is vested with all the powers
of the board of directors; with the power to use the seal?
Mr. HILL. I would be speaking from recollection. The by-laws are
simple
Mr. DAY. I am speaking now of your articles of incorporation.
Mr. HILL. There are by-laws, and I do not remember whether the
by-laws or articles of incorporation provide for that. They were read
at the meeting and adopted. I can furnish a copy, which is better
than my recollection.
Mr. DAY. I have what purports to be a copy of the charter.
Commissioner FIFER. Charter of what?
Mr. DAY. Of the Northern Securities Company.
Mr. HILL. I do not undertake to say that your statement is not right,
but I do not remember whether it is in the articles of incorporation of
in the by-laws.
Mr. DAY. I find a provision in the charter that the right of a share.
holder to inspect the stock books of the company shall be subject to
the will of the board of directors. Do you recall that?
Mr. HILL. I do not. I did not know it was there. I know it is
usual in some States—that the laws governing corporations have that
provision—but I did not know it was in the Securities Company.
Mr. DAY. That is all I wish to ask of Mr. Hill now.
The CHAIRMAN. Mr. Grover, do you desire to ask Mr. Hill any
questions?
Mr. GROVER. No, sir.
The CHAIRMAN. Or Mr. Kellogg’
Mr. KELLOGG. No, sir.
Commissioner CLEMENTs. Mr. Hill, can you tell us what the capital
stock of the Northern Pacific was before these plans were commenced!
Mr. HILL. I think the capital stock of the Northern Pacific—I feel
quite certain—was $155,000,000, divided into $75,000,000 of preferred
and $80,000,000 of common.
Commissioner CLEMENTs. That is the way it appears in the last
report.
Mr. HILL. I think that is correct.
Commissioner CLEMENTs. Now, there is an item of $170,000,000 of
mortgage bonds—$172,000,000 of mortgage bonds. What is that!
Mr. HILL. On the Northern Pacific : * -
Commissioner CLEMENTs. Yes, sir.
Mr. HILL. I have not charged myself with the affairs of the com:
pany. I know about two of their mortgages, but as to the amount of
other mortgages I would have to refer to the records.
Commissioner CLEMENTs. You do not know in a general way
whether that is about correct or not?
Mr. HILL. I am not an officer of the company, and I have not had to
know, except from information
Commissioner CLEMENTS. Whatever there are of those bonds—that
is, the amount that appears by the last annual report—have they been
changed in any way by this arrangement?
Mr. HILL. Not that I know of.
Commissioner CLEMENTs. They have not been taken up or provided
for in any way?
Mr. HILL. Oh, no. This is simply the purchase of the stock.
Commissioner CLEMENTS. I supposed it was, but wanted to be sure
about it. Now, $75,000,000 have been disposed of?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 59
Mr. HILL. Retired and paid for with money.
Commissioner CLEMENTS. Where did the money come from ?
Mr. HILL. They sold 4 per cent debentures that were, prior to the
1st of January, convertible at the option of the holder, and after the 1st
of January convertible into common stock at the option of the com-
pany, and I think it was probably all converted.
Commissioner CLEMENTS. So that stands practically as common
stock?
Mr. HILL. As common stock to-day.
Commissioner CLEMENTs. And does not change the amount of stock?
Mr. HILL. No, sir.
Commissioner CLEMENTs. The Great Northern appears by this report
to have $98,000,000 total stock.
Mr. HILL. Yes, sir.
Commissioner CLEMENTs. Is that a correct statement?
Mr. HILL. It was at the date of the report, but the stock was issued
and was at that time in process of being issued, but the transaction
was not completed until the 1st of November, and the date of the
report was the 30th of June.
Commissioner CLEMENTs. How has that item been changed?
Mr. HILL. By the addition of $25,000,000, most of which was issued.
I think $123,000,000 or $124,000,000 is the amount of outstanding
stock of the Great Northern Railway.
Commissioner CLEMENTs. What was that stock issued for 4
Mr. HILL. For the purpose of new railroad and for the purchase
of bonds of existing ones. We have issued an amount of stock for
taking up bonds, and we have issued no bonds for the purpose of
building or acquiring new railroad for several years.
The CHAIRMAN. To buy up your own bonds?
Mr. HILL. Yes, sir; to buy bonds and retire them. In one issue
we bought in $15,000,000 and canceled them, and turned them into
stock.
Commissioner CLEMENTS. It was the conversion of bonds to that
extent into stock? t
Mr. HILL. Yes, sir; we have as a matter of policy issued stock for
new enterprises rather than bonds.
Commissioner CLEMENTS. I see that the stock of the Burlington
was stated on the 30th of June to be $110,000,000 in round numbers.
Mr. HILL. Yes, sir. -
Commissioner CLEMENTs. And $128,000,000 mortgage stock. That
whole stock has been taken over substantially by the Great Northern
and Northern Pacific? -
Mr. HILL. I am not sure that there was quite $110,000,000 outstand-
ing, but I think something near $108,000,000 has been taken up.
Commissioner CLEMENTs. What has been done with the $128,000,000
mortgage bonds?
Mr. HILL. I know in a general way only. A number of them have
been retired and are constantly being retired through the sinking
fund. Some of them are retired by exchange of a high rate of interest
bond for a low one. Some changes have been made in them. That,
however, would not affect the amount of the principal outstanding; it
is only those that were paid off by the sinking fund.
Commissioner CLEMENTs. As to the plan of purchase of that prop-
erty, I have in my hand here what purports to be a proposition signed
60 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
by Mr. Francis W. Hunnewell, chairman of the board of directors,
dated the 1st of May last, in which it purports to set forth the offer
that has been made and giving an opportunity to stockholders to dis.
pose of their stock and bonds. In it I see that holders of 5 per cent
convertible bonds of the Chicago, Burlington and Quincy Railroad
Company are advised to immediately exchange their bonds for stock
and to deposit such stock on or before May 20, 1901. Does that have
reference to this batch of bonds of $128,000,000?
Mr. HILL. I think there were one or two issues of which there was
a very small amount outstanding—bonds that had a provision that they
might be exchanged for stock, and I think that these bonds were out.
standing, and he was giving them notice—that is my understanding—
so that they could not say their memory had not been
ºmisioner CLEMENTs. To give them all a chance to do the same
thing 4
. HILL. Yes, sir.
Commissioner CLEMENTS. How many were converted?
Mr. HILL. A very small amount compared with the total.
Commissioner CLEMENTs. And they could sell their stock for the
same price as other stockholders?
Mr. HILL. They had a contract giving them the right to exchangº
their stock.
Commissioner CLEMENTs. Two for one?
Mr. HILL. I think—and it is only a matter of general knowledge,
and not specific—I think there might have been from a million to a
million and a half of bonds which could possibly have exercised that
privilege.
Commissioner CLEMENTs. So far as the balance of the $128,000,000
of bonds, then, that remains unchanged and an obligation on the
Burlington road?
Mr. HILL. No; I think that several amounts—I think one entire
mortgage has been paid off by the sinking fund.
Commissioner CLEMENTs. Since the 1st of July
Mr. HILL. October 1, of last year, I think one mortgage of over
$2,000,000 was paid off.
Commissioner CLEMENTs. What I want to get at is whether it is
taken up in any way. : -
Mr. HILL. Not in any way. The transaction was the purchase of
the stock.
Commissioner CLEMENTs. And nothing else?
Mr. HILL. And nothing else. -
Commissioner CLEMENTs. Now, that stock, practically all of it, of
the Burlington which was purchased jointly by the Northern Pacific
and Great Northern has been turned into the Northern Securities Com:
pany, has it? -
Mr. HILL. No, sir; it has not.
Commissioner CLEMENTS. Let me understand about that.
Mr. HILL. The Northern Securities Company does not own any of
the Burlington stock.
Commissioner CLEMENTs. That is still held by the Northern Pacific
and Great Northern as corporations, is it?
Mr. HILL. Yes, sir. The lease—when the railway company is com:
pleted, and it may be now—the lease carries the expectation and the
provision for the railway company taking that stock and ultimately
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 61
paying the bonds. You see these are 5-20 bonds, and that is the gen-
eral plan—that the bond will be paid off and that the railway company
will own, when that bond is paid off, the Chicago, Burlington and
Quincy Railroad Company, because they own practically all of the
stock of the Chicago, Burlington and Quincy Railroad Company, the
old company.
Commissioner CLEMENTS. What stock have the Northern Pacific and
the Great Northern in the Northern Securities Company ?
Mr. HILL. They have not any, sir. The Northern Securities Com-
pany own shares of both of those companies.
Commissioner CLEMENTS. How many shares?
Mr. HILL. Well, I should think of the Northern Pacific in the
neighborhood of $150,000,000 and of the Great Northern somewhere
about $45,000,000–$45,000,000 or $50,000,000. It would be less than
$50,000,000. •
Commissioner CLEMENTs. And none of the Burlington?
Mr. HILL. No, sir; none.
Commissioner CLEMENTs. What do those holders of the Great
Northern Railway stock and Northern Pacific Railway stock who passed
their stock to the Northern Securities Company get in return for it?
Mr. HILL. They get the stock of the Northern Securities Company.
Commissioner CLEMENTs. At what rate?
Mr. HILL. The Northern Pacific gets 115 for its stock and the Great
Northern shareholders receive 180.
The CHAIRMAN. In the stock of the Northern Securities Company at
par? - 4. -
Mr. HILL. Yes, sir.
Commissioner CLEMENTs. And what does your plan contemplate
shall be the stock of the Burlington road, in whatever name it stands,
whether in the name of the railroad company, or railway company, or
Securities company ?
Mr. HILL. That would depend upon its extensions and the amount
of money it needed. It would need to pay off the bonds at the end of
five years—which it has the right to do—$210,000,000 or $220,000,000;
say $220,000,000. Then if it built other lines, and it built them with
the proceeds of stock rather than mortgages, it would be whatever
that amounted to and whatever these properties amounted to.
The CHAIRMAN. If I understand it, in organizing this new Burlington
company—the railway company—whatever its capital stock is is issued
at par for money?
Mr. HILL. That is right, sir.
The CHAIRMAN. It is a new creation?
Mr. HILL. It is a new creation.
f The ºnes. And whatever stock it has issued it has issued at par
Or cash?
Mr. HILL. That is right.
The CHAIRMAN. And the plan is to increase its stock only as occasion
may require and to sell that stock at par for cash? -
Mr. HILL. That is right.
. The CHAIRMAN. The cash to be used either in retiring the bonds or
in extending the system?
Mr. HILL. That is right.
The CHAIRMAN. Or for other legitimate purposes?
Mr. HILL. That is right.
62 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
The CHAIRMAN. But in any event, if I understand you correctly,
whatever the capital stock that the new Burlington company may have
at any time will be the equivalent of just so much money paid into its
treasury &
Mr. HILL. Yes, sir; that is entirely right.
Commissioner FIFER. The stock at par 4
Mr. HILL. Yes, sir.
Commissioner PROUTY. Do you propose to sell that stock at par in
the open market?
Mr. HILL. I hope it will have friends enough to take it. It will be
offered first to its holders. I hope the Securities Company will be able
to take it.
Commissioner CLEMENTs. You say of the Northern Pacific Rail.
way Company, the Northern Securities Company has obtained about
$155,000,000 of the stock?
Mr. HILL. About $150,000,000.
Commissioner CLEMENTs. And have issued about how much
Mr. HILL. Whatever amount it has bought, at the equivalent.
Commissioner CLEMENTs. At 11.5%
Mr. HILL. Yes, sir; in payment for it. I can tell you.
Commissioner CLEMENTs. You need not stop to make the calculation.
Mr. HILL. I can send the Commission the information of the condi-
tion of the company at any time if there is any object in it. There
is nothing to conceal in the matter. -
Commissioner CLEMENTs. Then of the Great Northern some $45,
000,000? te
Mr. HILL. $45,000,000; may be $48,000,000.
Commissioner CLEMENTs. Then the net outcome of all these transac-
tions—if I understand you, and if I do not, correct me—is that there
is an additional mortgage, of bonds, at the rate of 4 per cent of
$200,000,000 on the Great Northern and Northern Pacific :
Mr. HILL. It is a bond or obligation to pay money.
Commissioner CLEMENTs. Not a mortgage; I understood that; it
was a slip of the tongue. That is an increase of the obligation to the
amount of $200,000,000? &
Mr. HILL. Yes, sir; as against that they have the income of the
Burlington. g
Commissioner CLEMENTs. And the obligations of the Burlington
have not been reduced in any way ?
Mr. HILL. Reduced by the operation of the sinking fund, but not
largely.
Commissioner CLEMENTs. Not by this transaction?
Mr. HILL. Not by this transaction.
Commissioner CLEMENTs. Nothing is retired by this transaction?
Mr. HILL. That is right.
Commissioner CLEMENTs. All the stock stands, and all the bonds
that have not been retired under that sinking fund remain. Is it in
contemplation to increase that stock or bond in any way so as to make
the obligations on the Burlington greater than they are now?
Mr. HILL. Not unless it might be to purchase additional property,
Commissioner CLEMENTs. In addition to that increase there is the
stock of the Northern Securities Company issued on the stock of the
Northern Pacific and the Great Northern ?
Mr. HILL. Yes, sir.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERs. 63
Commissioner CLEMENTs. To an amount equal to the 115 in one case
and 180 in the other ?
Mr. HILL. And 180 in the other.
Commissioner CLEMENTs. Whatever profit, whatever interest or
dividends are to be earned or distributed upon these holdings in the
future, so far as we can see, must be earned by these railroads, must
they not?
Mr. HILL. Yes, sir.
Commissioner CLEMENTs. So that the 4 per cent on the additional
$200,000,000 of bonds, as well as whatever dividends the stockholders
may get—whether the stockholders in the railroad company or stock-
holders in the Northern Securities Company—must come out of the
earnings of this road? -
Mr. HILL. The change in the obligations of the Northern Pacific
and the Great Northern is simply due to their increased liability to
pay interest on the purchase price of the Burlington, which is some-
where between—something over $8,000,000. The Burlington earned
$10,400,000 the year it was purchased, and so far this year its earnings
have not fallen behind; so that the obligation to pay additional money
we feel is a very light obligation. We feel that the asset is a very
good one, otherwise we would not have bought it.
Commissioner CLEMENTs. That, of course, depends upon the vol-
ume of business and the rate you can get.
Mr. HILL. And what we can do with it. We hope to be able to
develop the business in a way that will make it a profitable transac-
tion and a firm one. Our main point is to make it a firm one.
Commissioner CLEMENTs. The stock of the Burlington, stock which
was getting 8 per cent before, is still stock that will expect dividends
in the future as in the past.
Mr. HILL. It has the dividend of the Burlington, whatever it has
got in the past. Now, if that company should fail to earn the inter-
est on the purchase price, the Northern Pacific and the Great North-
ern would have to make the deficiency good.
Jommissioner CLEMENTs. But if the property can be made to earn
it there will still be a charge of 8 per cent; that is 4 per cent on the
$200,000,000 of bonds, making what is equivalent to 8 per cent on
$100,000,000, and also the same stock which has heretofore obtained
a dividend of 8 per cent will be a charge on this property
Mr. HILL. The same stock? No, sir.
Commissioner CLEMENTs. What becomes of the stock?
Mr. HILL. The stock is the thing we have brought. It is through
the stock that we can only receive—it is only through the stock we
can receive any income we have on the Burlington bond.
Commissioner CLEMENTs. But you have the Burlington stock?
Mr. HILL. Exactly; and our only income that comes from the Bur-
lington must come to its stockholders by way of a dividend, and that
is the only way that it could come.
Commissioner CLEMENTs. That is true. At the same time some of .
these roads, or all of them, must earn 4 per cent—must earn the money
to pay the 4 per cent on the $200,000,000?
Mr. HILL. They have, sir. The Burlington has earned it, and earned
$2,000,000 more annually.
Commissioner CLEMENTS. That still would not hinder you from
taking a dividend on $100,000,000 of stock in the Burlington?
64 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HILL. We can not get a dollar out of the Burlington with which
to pay interest on these bonds, except by way of a dividend on this
stock. -
Commissioner CLEMENTs. Out of which to pay—you get that divi-
dend out of that stock to pay the 4 per cent interest on these bonds, if
I understand you?
Mr. HILL. We pay the interest on the bonds with the dividend on
the stock.
Commissioner FIFER. That is, the Burlington stock.
Commissioner CLEMENTs. You can pay the interest on the bonds
out of the earnings of the Northern Pacific and Great Northern, can't
ou?
y Mr. HILL. We could, and then could take the Burlington’s to replace
that. We could do that.
Commissioner CLEMENTS. Take any dividend that the Burlington
could earn, whether it was enough to replace it or twice enough?
Mr. HILL. We would have to pay the difference, if it was short.
Commissioner CLEMENTs. That is the way I understand it. If it is
not short, you can take whatever it earns and pay interest on the bonds
out of any money you choose, whether it is money you get from the
Burlington or money the other roads earn?
Mr. HILL. But neither the Northern Pacific or the Great Northern
or any other shareholder can anywhere get any money from the cor-
poration except by way of a dividend. They can not go to the treas.
urer and say, “We want money.” They must get it by way of
dividends.
Commissioner CLEMENTs. But you can pay the interest out of the
earnings of the Great Northern and Northern Pacific and then take
whatever the Burlington earns? -
Mr. HILL. That is, whatever the Burlington divides; whatever divi.
dends it pays. Roads do not usually divide the last cent.
Commissioner CLEMENTs. No, I understand; they have to keep a
surplus. Then, whatever earnings or profits will be paid in the way
of dividends to the holders of Northern Securities stock—how is that
to be derived 2
Mr. HILL. It would have to come from its profit in dealing in stock,
if there was any, or profit in the rent of its money, or its investments,
as dividends on bonds, the interest on bonds, just the same as any
other shareholder.
Commissioner CLEMENTs. It would be entitled to share, of course,
in the dividends on the railroads?
Mr. HILL. Exactly the same as any other shareholder.
Commissioner CLEMENTS. Exactly the same as any other stock
holder?
Mr. HILL. Yes, sir.
Commissioner CLEMENTS. Is there any railroad stock that has been
turned into that company for which its stock has been issued except
the two that you mentioned?
Mr. HILL. I am not sure.
Commissioner CLEMENTs. How much of that stock has been issued
up to date—of the Northern Securities?
Mr. HILL. Just the amount that represents what it has purchased.
Commissioner CLEMENTs. You don’t know how much that is?
Mr. HILL. I do not; but I can furnish the amount accurately from
the books of the company.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 65
Commissioner CLEMENTs. Isn’t the Burlington a competitor in the
sense—has it not been a competitor as a part of a through line from
the East to the West, and a very important one, in the past? It doesn’t
reach the coast, but it connects with roads that do.
Mr. HILL. The Burlington connects with the San Francisco lines,
and as far as it connects there to-day it might be called a competitor
technically, but there is very little as long as rates are maintained.
The business from San Francisco does not usually go as far north as
Puget Sound.
Commissioner CLEMENTs. You say it is not contemplated to put the
Burlington stock into the Northern Securities Company ?
Mr. HILL. It could not do it if it was until it paid off that mort-
gage, because it is the collateral security for the mortgage.
Commissioner CLEMENTs. You mean for the bonds?
Mr. HILL. It is the collateral security for the bonds, for the
obligation.
Commissioner CLEMENTs. Well, is that in contemplation, that it
shall go in there? .
Mr. HILL. That could only be done five years ahead. I could not
say that I think it would be a very wise disposition to make of it to
put it into the Securities Company; and if it was not there it would
remain as the property of the Northern Pacific and Great Northern, of
Fº the Securities Company holds quite largely of the Northern
acific.
Commissioner CLEMENTs. Now, with these holdings in the shape
they are in, is it not entirely feasible for the same source of authority
in Yºng the stock to make a common management of these three
roads?
Mr. HILL. I suppose that as far as there is no legal objection—I
suppose that the Northern Securities Company, if it had a majority of
the stock of all the railroads, might elect its own board of directers as
directors of both companies and might, as far as that is concerned, have
an absolute identity between the directors of all three companies, but
that would not confer an iota of power on the Northern Securities
Company to make a rate or do anything that it—it would not give
them an additional iota of power in anyway, nor limit any power or
restriction in anyway that exists to-day without it.
Commissioner CLEMENTs. Not as a technical act of the corporation,
but as a matter of substantial power, if they can create the man who
does make the rate is that not better than if they made the rate them-
selves and absolutely control it?
Mr. HILL. There is only one control of rates that I know of, and I
am glad to see it occasionally exercised.
Commissioner CLEMENTs. What is that?
Mr. HILL. The railways are compelled to furnish a reasonable
amount and quality of transportation, and to furnish such transporta-
tion at reasonable rates at all times. There is the right to investigate
the reasonableness of the quality or quantity or price charged for the
ransportation, open to everybody at all times, and I feel that when
that authority is exercised occasionally it will have a very wholesome
effect. The Northern Securities Company could not make—it could
not buy a tie any more than I could go out and buy a tie. I could
buy a tie, but would have no use for it unless to put it in a railroad.
Now, the railroad company makes the rate, but the railroad company
526A—02—5
66 CONSOLIDATIONS AND COMBINAT'ſ ONS OF CARRIERS.
is responsible for its rate; and, if I may transgress a little on the time,
I said that we are getting 7 per cent; we can not with a very good face
get any more.
Now, what is the object except to make ourselves stronger and better
able? Because the better able we are to furnish this transportation at
a low rate the greater certainty that the public will receive it, and I
will say to you that the lowest local rates on grain west of the Missis-
sippi River are on the Great Northern, in Dakota, between Manitoba
and Mexico; and they are lower there, where there is no competition,
than they have been anywhere else, and have been for years. We
have had the Commission come to us and ask us if we would not reduce
our grain rates because, they said, the rate was too high. I said,
“What did you compare them with ?” They said, “Take the rates
south.” I said, “Take the rates in Iowa that the United States courts
º enjoined. Our rates are from 18 to 30 per cent under them
to-day.”
Commissioner CLEMENTs. That is probably creditable to the man-
agement of that road.
Mr. HILL. But you can not make a low rate until you can afford to,
and you must be able to do it.
Commissioner CLEMENTs. No. So far as may be consistent with the
fulfillment of the carrier’s obligation in furnishing good facilities and
paying its obligations, keeping itself in order to do the business, so far
as may be consistent with that, is not a low rate good for the country
and for the shippers, for the consumers, and for the country generally,
as low as can be made consistent with those things and a reasonable
return on the investment? - ©
Mr. HILL. There is no other safety, and when that statement your
honor has made is not true, I do not want to own any railroad securi-
ties. When a railroad company’s interest, when its best interest, is
not to develop the business on its own lines, it ought to be put out of
existence. It is no good to the people who have to depend upon it.
A railway is different from the sea or a river, because the railroad
owns the right of way, and nobody else can use it. On the water it is
different; anybody else can come in and use it, but the people on the
railway are dependent on the railway. They have no other means
except the railway, and it is just as important that the railway shall
serve them and enable them to develop and grow. We have followed
that line, and I am glad to say that, while we have followed it from
the beginning and from the 'Red River of the North to, the Pacific
coast, without any aid, we have always been able to pay our dividend,
and we are paying a dividend that I think may be considered fairly the
limit. I do not know how we could add anything more to our share-
holders' income. It makes no difference, as far as that is concerned,
whether the stock, part of it or all of it, is owned by the Northern
Securities Company or a thousand people, that principle will be always
present and always active; and anybody that ignores it must suffer in
the end. I speak, and I speak advisedly.
Take a distance of 320 miles up in the Northwest; our rate on grain
is 14 cents a hundred. Take the same rate in another direction, and it
is 19 cents. There are 4 miles where it is 19, where we have one—
there is absolutely no competition with us. That is a wide difference—
5 cents a hundred. On 700,000,000 bushels of wheat in this country it
would be quite an amount. We do not think we are serving the public
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 67
from any generous motive, but from the hard business fact that it is
our interest to see that they make money. If they are poor, we will be
poor with them. \
Commissioner CLEMENTs. Do you think that the public, which is
entitled, as you say, to a just and reasonable rate—
Mr. HILL. Always.
Commissioner CLEMENTs. Can it rely upon the sense of justice of
the carriers always to get a just and reasonable rate after competition
has been destroyed 4 When there is no public authority it can go to,
do you think that the man who is entitled to ship, under the law, as a
public right, at a reasonable rate can be expected to get it at all times
through the sense of justice of the railroad managers? I am not talk-
ing about one road more than another. w
Mr. HILL. I am glad to give you my views; maybe they are not
unusual. That does not depend upon the sense of right or wrong on
the part of the railway officer. It is a question of absolute proof in
the courts, absolute proof. Now, I undertake to say this: That if all
the rates of the country were maintained. I believe that all the rates
could be reduced; but the rates are one thing and what has been col-
lected is another thing. We have had in the Northwest with the
Northern Pacific twenty years of unbroken peace. We were building
in our early days—there was a great transcontinental land-grant rail-
road to compete with—we were building down through Fargo, and
they would not maintain the rates. I think the rate was $1 on first
class—maybe 80 cents on first class and 40 cents on fifth class—and they
would not pay any attention to the tariff. I called on the manager,
and he refused to listen to me, and I told him I would make him
maintain rates.
I put out a tariff of 5 cents a hundred, regardless of classification,
and that made him maintain rates, and we never had any trouble from
that day to this, and do not expect any. We have a number of
competing points. I will put the rate on all these commodities that
are important in the settlement of a country, against the corresponding
rates anywhere west of the Mississippi River, and I think ours will be
found lower. We have had no one to consult but ourselves. We
have conferred as was necessary and made our tariffs. There have been
no outside agents soliciting to get an opportunity to shrink part of the
rate on their road, and this millennium, almost, in railroad rates has
existed for this long time east of Helena; but once you get out where
the other roads are represented we can not have the same control of it
that we have east, where they are not, not at all, and it does not
depend—the question of the rate or its reasonableness—does not depend
on the will of the railroad. There is a way to compel them in a min-
ute, to compel them to make a reasonable rate; the easiest thing in the
World. These gentlemen are all in great trepidation and fear when
anybody gets after them to compel them to do right, and I am glad to
See that there is an active effort on that line.
Commissioner CLEMENTs. There seems to be no law or any agency
to prescribe your published rates; you make them yourselves under
the law as it is now. Now, if they are not reasonable and just and
the element of competition, which has heretofore exerted a powerful
influence, is to be withdrawn, again I ask you how the public is to be
protected if there is no power to fix the rate, with competition elimi-
nated, and yet according to law they are theoretically entitled to a just
and reasonable rate? How can they get it? e
68 CONSOLIDATIONS AN i) COMBINATIONS OF CARRIERS.
Mr. HILL. To begin with, competition must be active or inactive.
I think the honorable Commission will agree with me that all rates
and tariffs, published rates, are the result of conference between the
parties desiring to make them; otherwise they would be confusing,
But active competition is made when traffic is carried regardless of its
tariffs. Now, that is the only active competition there is, and that is
exactly what the Commission and Congress have been trying to legis-
late against for fifteen years—this irregular, guerrilla rebate discrim-
ination. That is the fruit of competition.
Now, as I read all the laws and of the efforts of the Commission,
you are trying to prevent this unreasonable competition, and I want to
help you; but if you want to question our rate, is it not true that any
man who will take a 2-cent postage stamp and say that such a rate
on any railroad in this country, interstate—and if it is not interstate,
it would be to the State commission—such a rate between A and B is
unreasonable, is it not true that the Commission will inquire into the
reasonableness or unreasonableness of the rate and, if it is found
unreasonable, call attention to it? If the railway fails to make it
reasonable, the railway can be cited into court and it becomes a ques-
tion of proof. If in court the railway maintains its position that the
rate is a reasonable one, has it not then to pay the cost of conducting
the suit against it which it won 4 And is it not true after all that is
done that ten complaints may be made by one person in any day?
And if the man who makes the complaint is brought as a witness, is it
not true that his time would be paid for to testify in his own behalf?
Now, is there any other property on the face of the earth that is subject
to such conditions as that? I do not think so, and I tell you as one who
has spent long years in trying to build up the railway interests in the
Northwest I feel that the safety of railway property is in the law. It
is a creature of the law. If it was not that its safety was in the law
I would not want an investment in it of a dollar; and the question of
the reasonableness of a rate—the only rampart upon which we can
finally stand—the reasonableness of the rate must be tried on the facts,
the same as any other judicial question that is settled, like the ques-
tion of the reasonableness of a piece of property condemned or appro-
priated under eminent domain. That question of a reasonable rate
can never be taken away from the people. It is the law of the land
and it is the common law, although I am no lawyer. It is the com-
mon law, isn’t it?
Commissioner CLEMENTs. As a practical remedy to fix rates that are
reasonable, do you think it will be practicable to have every man who
has been overcharged a small amount, $5 or $10, bring a case in court
against the railroad company ?
Mr. HILL. No, sir. |
Commissioner CLEMENTs. And the place where he would have to
sue might be 500 miles from his home?
Mr. HILL. No, sir.
Commissioner CLEMENTs. Therefore if there is to be anything in
this right of the public to a just and reasonable rate, must there not be
a power somewhere to fix that reasonable rate, or else a freedom of com-
petition to bring the price down to what may be regarded as a reason:
able rate so that he may have that reasonable rate before he ships, and
not be turned over to a court to sue for $1 or $5, with all the expenses
incident to a suit? -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 69
Mr. HILL. To illustrate, I think that every man knows, who has to
do with it, that of the overcharges and claims against a railroad com-
pany that two-thirds of them ought not in any conscience to be paid.
Commissioner CLEMENTS. That may be true. I am speaking of the
just ones.
Mr. HILL. I never knew a railroad company that wanted to put a
man to any more expense than to make his claim. Is a railroad officer
hired to cheat the public?
Commissioner CLEMENTS. Not at all.
Mr. HILL. If he will, he will cheat his employer.
Commissioner CLEMENTs. You have reference now to overcharges
which can be adjusted by the auditing process, where you have col-
lected more than the published rate. I am not speaking of that class.
They are adjusted, as a rule, with great facility and promptness. I am
talking about a just and reasonable published rate that the public is to
have, and to have it when they ship and before they ship, and not
have a lawsuit to get it afterwards.
Mr. HILL. But if the rate, the published tariff, is a reasonable rate,
then the public will always enjoy a reasonable rate of transportation.
Commissioner CLEMENTS. Can the public always rely on its being a
reasonable rate when you eliminate competition? .
Mr. HILL. That question of competition is a very important one.
Competition, as I said before, is active or inactive. During the last
eleven years the business of this country has considerably more than
doubled, and during that time more than half of the railroads in the
midst of plenty failed. That settles very largely that the rates have
not been too high. I am not undertaking to say what the tariffs have
been; maybe the tariffs have been higher than they ought to have
been, but certainly the tariffs have been higher than the amount col-
lected. If the public can have an equal rate, the published rate, which
they are entitled to, depend upon it that the public will always get its
business carried at a fair and a reasonable rate.
Commissioner CLEMENTs. Now, during the time you spoke of, when
So many of the roads went into the hands of the courts, for a long-
continued period of depression, and not a large volume of freight
moving, on the return of general prosperity, when there was a large
movement of freight in all directions, say two years ago, about, one
of the first developments that came from it was that the roads in the
Trunk Line Association got together through their committee on clas-
sification, overhauled the whole classification and changed the rates on
eight hundred or nine hundred commodities, some of which were in
daily use and movement in all directions in all parts of the country,
and in large volume, such as hay and soap and things of that sort, and
perhaps 95 per cent of the changes that were made were increases by
changing from one classification to another, and by taking commodity
articles out of the commodity list and putting them into a class where
the rate was higher.
That was done by the concerted action of the roads in that territory
at a time when the period of depression was gone, and when there was
an actual tax upon their cars and engines and facilities to carry the
freight that was offered; and that is perhaps an instance of what you
would call inactive competition. It was concert instead of competi-
tion, but it was the result at a time when the movement of freight was
the greatest, and when there would have been necessarily a large
70 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
increase in their earnings due to a large increase in the volume of
movement. Still, that was what was done. Now, I have not yet been
Quite able to understand what is to be the guaranty to the shipper for
a just and reasonable rate upon which to ship when they do ship and
not have to recover it in a lawsuit afterwards, when you take compe-
tition away. t
Mr. HILL. If I may, I will approach the question from two points of
view. Now, the public has an interest, the country at large, the
nation has an interest in having its commercial business carried on on
a stable and sound plane that will continue, one that will not be irreg-
ular—good this year and bad next year. And I submit, if I may, that
it would be very unsafe and a very unsound basis upon which to build
up the whole commercial business of this country on the assumption
that two or more railroads were going to destroy themselves for the
benefit of the public any more than that two or more manufacturing
concerns would destroy themselves.
Commissioner CLEMENTS. You mean destroy yourselves by compe-
tition? †
Mr. HILL. By unreasonable, destructive competition; and if there is
no active competition then freight is carried at the tariff. Now, there
is always a struggle to get business, but if it is carried at the tariffs
no one is going to get hurt. If the tariff is too high, make it lower,
All the railroad is entitled to and all it can get under the law is a
reasonable return for the property used by the public.
Commissioner CLEMENTs. If there is any other way to make it lower
except by competition, is it safe to depend upon that?
Mr. HILL. But there is, my dear sir. I assure you that these mild-
mannered men all around here have the greatest respect for authority.
I have not any doubt but they will all be better, and I think—now,
take it on the Great Northern; I should feel that it was a dreadful
insinuation to make to say that I could not prevent the cutting of
rates on the Great Northern, and I think that every railway executive
will say the same; he can prevent it if he will. We have many times
preferred to let business go rather than to demoralize rates, and in
some cases, where there was a matter of principle involved, as, for
instance, a few years ago, when the Canadian Pacific insisted in the
East that they had the best transcontinental line, but when we got
West it was not anything like as good as our lines, and was demand-
ing that it was entitled to a differential of $5 on second-class pas-
sengers.
I told Mr. Newman to put the rate at $5 and then tell them to take
their differential and carry them for nothing, and that will settle it
and that did settle it. I think some of the Commission will remember
that it was settled; but we fought that to a point where it was settled,
We mean to be peaceable, but if we are driven into a hole there is
only one way, and that is to settle it. But the question of competition
as a means of helping the public—aiding or protecting the public—is
the thinnest kind of gauze on the face of the earth. There is abso-
utely nothing in it, and there ought not to be. It ought to stand on
a higher, a better, and a sounder plane than that somebody is going to
eat somebody else’s ear off or bite his nose, or do something to destroy
him, because of the public. They won’t do it for any such reason. It
is not their duty to do it. Make it their duty; then you are right.
d Commissioner PROUTY. How are you going to make it their duty to
O it? - + -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 71
Mr. HILL. I think I could do it. A man who charged too high a
rate or published too high a tariff, I would make him reduce it.
Commissioner PROUTY. You say your tariff on wheat is considerably
lower than the tariff in Iowa on wheat?
Mr. HILL. Yes, sir.
Commissioner PROUTY. I think that is true. The Commission two
or three years ago listened to a complaint that the tariff on wheat from
points in Iowa to the Mississippi River was too high, and it decided that
it was too high, from 2 to 3 cents too high, and ordered the railroad
companies to make the rate lower. They have never done it. Can
you tell me how you can compel them to do it?
Mr. HILL. Did the Commission stop with the order?
Commissioner PROUTY. It could do nothing else. The Supreme
Court say we have no power to make an order. If we had had the
power, if Congress had conferred upon us that power to enforce the
order, then you are clearly right.
Mr. HILL. I was just discussing the principle. I won’t go into the
acts of Congress; I am not responsible for them.
Commissioner CLEMENTS. We are asking these questions as to the
present situation. ---.
Mr. HILL. I am glad to have the opportunity—may be I am wrong,
but I am pretty clear, though, that I am right—I think the business
interests of 80,000,000 people, of this nation—they are not safe to rest
on the idea or assumption that two or more railroads are going to get
into a fight and destroy themselves for the public benefit; for in the
end there is a law higher than statute law—the law of the survival of
the fittest. You know the stronger will prevail, and if you do not
restrain the stronger in the first instance, you will be compelled to do
it in the last.
Commissioner PROUTY. And that is why you bought the Northern
Pacific stock, is it?
Mr. HILL. That is a sore spot with me—the Northern Pacific stock.
I was rather compelled to under some circumstances. Sometimes it is
easier to hold on than it is to let go. -
Commissioner CLEMENTs. Now, to go back to the original question. .
Whatever may have been the humane policy of this road or that road,
and notwithstanding the fact that the Northern Securities Company
can not publish a tariff making a rate for a railroad company; still,
if it can elect the officers, can elect you, for instance, as president of
three companies and the board of directors the same, fix upon some
common management for all three companies, by its voting powers,
is that not going back of the rate and fixing it so that somebody will
fix the rate? Isn’t that a complete and absolute control of the whole
situation in regard to making the rates?
Mr. HILL. It is just the same absolute control that shareholders
hold, whether one shareholder or twenty thousand, no more and no
less, and has nothing whatever to do with the making of a tariff or a
rate. I do not think—take the shareholders, and I am almost inclined
to say, if you take the board of directors of the average railroad of
the United States, and three out of four of the directors of more
than half the roads can not tell you who makes the rates. -
Commissioner CLEMENTs. Undoubtedly that is true of the stock-
holder having very small holdings, but when you put the bulk of the
stock, the majority of the stock, into one common control there is no
72 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
difficulty about that control managing rates and everything else con-
nected with it?
Mr. HILL. But if the control is a wise and intelligent one, it will go
on reducing its rates as rapidly as circumstances will permit.
}ommissioner CLEMENTs. But that condition leaves it to the judg-
ment, wisdom, and conscience of those who control?
Mr. HILL. It is not left to the judgment, wisdom, and conscience,
Mr. Commissioner, because under the law every man, whether he is a
shipper or not, has the right to go in and question the reasonableness
of a rate anywhere in this country, and have a hearing on it. I think
that is absolutely so, and he can do it without any expense to himself.
He can have the State or nation furnish the money to make the inquiry,
So, consequently, it is not on a parity with any other class of business
in the world. In the United States it is a well-established fact that
the rates of transportation are less than one-half the rates in any
country in Europe, and even on the government roads in India or of
Africa less than half, and our rates of wages and everything con-
nected with the roads are higher, but the rates have been forced,
forced, forced gradually down.
Commissioner CLEMENTs. By what influence?
Mr. HILL. Up in our country we feel that we have had something
to do with it ourselves. We felt that the lower we could make the
rates, the greater the bulk of business, the greater the volume of
traffic, and the better it would be for our property and for the country
along our lines of road. -
Commissioner CLEMENTs. Has it not been the active force of com-
petition for the last twenty or twenty-five years that has brought them
down so far as they have been brought down?
Mr. HILL. I will take it right in the particular place that I testified
to before, that for twenty years there was competition between the
Northern Pacific and ourselves from about 4 o’clock one afternoon
until 10 the next day, or 10.30, and for twenty years there has not
been any. I will match that part of the country, all things con-
sidered—its natural conditions, its resources, and everything else in
the matter of progress, material progress, and everything that goes to
make it strong and good and prosperous—against any other part of
the country, and there has not been any destructive or active com-
petition.
Commissioner CLEMENTS. Well, that is an isolated case. I am
speaking of the whole situation.
Mr. HILL. I am speaking of that which has come under my imme-
diate knowledge, and about which I can speak absolutely by the card.
Commissioner CLEMENTs. Well, what is your view' You have not
Quite answered my question. I am talking about the fact: Has not
competion brought the rates down very largely, so far as they have
been reduced in the past?
Mr. HILL. No, sir; I think competition has been fast and loose. If
you mean competition that has brought rates down in a general, public
way
Commissioner CLEMENTS. That is what I mean.
Mr. HILL. No; but competition that has brought rates down for
individuals, and for certain very large shippers—shippers of large
commodities, like coal, and maybe some other favored interests—I
must say yes. The necessities of a poor road have been such that they
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 73
can not resist when these great creators of wealth come to them and
say: “We will give you all our business if you will give us such a
rate;” and I think that sort of thing has been destructive.
Commissioner CLEMENTs. What did you mean when you said a few
minutes ago that rates had been forced down and down within the past
years? What had you reference to as the power that forced them?
What did force them down 2
Mr. HILL. To begin with, the stronger lines can always, I think, be
depended upon to control the rate situation. Take it up in our country.
We have just made a reduction on rates. We can afford to. It is
quite a considerable reduction; we can afford it. As I said before, we
are getting our 7 per cent. We do not want to landscape garden the
railroad. We want to have it in good shape, because to do good work
and cheap work you must have good tools. It is to the interest of the
public to have a low grade on a railroad, as much as it is to have a
depth of water at the mouth of the Mississippi or in any other harbor,
greater than natural conditions or great enough to let large ships
come in. It limits the load and limits the income. We have been
enabled to reduce rates in the United States and live, because there
has been the ability on the part of some of the lines to do it. I do not
know of a tariff rate that has been reduced by competition. In fact,
I think some tariff rates have been advanced to make good the deple-
tion of revenues owing to rebates and discriminations.
Commissioner CLEMENTS. Do you wish to be understood now as
saying in your opinion rates have not been affected in the downward
tendency in the last fifteen years?
Mr. HILL. I said published rates.
Commissioner CLEMENTs. I mean the published rates.
Mr. HILL. I think if the published rates had been maintained and
enforced that the railroads would have been enough better off to reduce
rates faster than they have in cases.
Commissioner CLEMENTs. Has not it often happened that where there
is a deviation that all reduced rates below the published rate, and all
the roads got in the fight, that the published rate afterwards was lower
than when the fight was begun?
Mr. HILL. When a rate in our State has been in effect for sixty days
you can not advance it without the permission of the Commission.
Commissioner CLEMENTs. Do you desire to be understood as saying
º in your judgment the influence of competition has not reduced
the rate? . *
Mr. HILL. The influence of competition in my judgment has not
reduced the published tariffs charged the public. I think, on the con-
trary, it has held them up and advanced them. I think it is suscepti-
ble of absolute proof to-day that it has advanced the tariff rates.
Commissioner CLEMENTs. Then back to the original question; I
Want to know if you desire to be understood as saying that the man-
agement of these three roads, in respect to rates, will be as separate
º independent and as free from common control as they were
efore?
Mr. HILL. Certainly, certainly.
Commissioner CLEMENTs. And you mean to say that notwithstand-
ing the fact that the Northern Securities Company can elect the
president and board of directors and the people who make the rate 4
Mr. HILL. I say it could if it owned a majority of stock in both
Companies. It might do that.
74 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Commissioner CLEMENTs. Don’t it pretty near approach the same
thing when they own pretty near a majority
Mr. HILL. They own a little less than one-third of the Great North-
ern, but the effect would—that might be technically one way or the
other—the effect would be, in my opinion, and will be, in my opinion,
that rates will be lowered because they can afford to be lowered.
Commissioner CLEMENTS. But that will depend upon the manage-
ment to control and determine when that shall take place and how far
it shall take place.
Mr. HILL. I do not look upon the case, sir, in that light; I think
that depends upon the law of this country, and the sooner we get on
that basis the better off we will be.
Commissioner PROUTY. You think that if to-day there is no law that
protects the public against an unreasonable rate, there ought to be
one?
Mr. HILL. I understand there is an absolute one.
Commissioner PROUTY. If there is none, there ought to be?
Mr. HILL. Yes, sir; just as much against that as against public
piracy, or theft, or holding a man up in the street, or on the prairie
in a lonely spot.
Commissioner PROUTY. Does your charter provide that you shall
not earn more than 7 per cent?
Mr. HILL. No, sir.
Commissioner PROUTY. How does it happen, if you do not think
you ought to earn but 7 per cent on the Great Northern, that you
ought to earn 8 per cent on the Burlington?
Mr. HILL. We are not earning 8. There are some $60,000,000
invested in the Burlington not represented in the capital; that is not
counted. If the railroad acquired that money honestly, it could either
invest it in property or pay it over to its shareholders. It had a right
to dispose of it if it didn’t steal it. If it put the money that it earned
into its property and did not give it to its shareholders, and for years
went with a reduced dividend, or no dividend, why should not this
money be treated as in
Commissioner PROUTY. If the same men owned it all the time you
think it should? -
Mr. HILL. I think so.
Commissioner PROUTY. Do you think the published rate in this
country has declined in the last ten years? *-
Mr. HILL. The published rate?
Commissioner PROUTY. Yes, sir.
Mr. HILL. Yes; the published rates have declined very materially
and the rates received by the railways have declined still more.
Commissioner PROUTY. And you do not think that decline is due to
competition?
Mr. HILL. Well, there is direct competition in the matter of rates,
but there is always competition between localities and interests that
are local on one railroad with those of another. For instance, two
coal mines may be each situated on one road or separate roads and yet
seeking the same market.
Commissioner PROUTY. Take the rates in territory east of the Mis-
souri River and a line that runs up to St. Paul and north of the Ohio.
Have the published rates in that territory declined in the last ten
years? .
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 75
Mr. HILL. I am not as familiar with the issuance of tariffs and the
frequency as I am with the actual reports of what has been done. I
watch the earnings and the reports of the railways published by your
honorable Commission and by the State commissions. I watch these
closely—the cost per ton mile to the public and the rate received by
the railways; that has materially declined.
Commissioner PROUTY. Does that show that rates have declined?
Mr. HILL. It shows the amount received by the railroads has
declined. I do not think the published tariffs have declined in the same
proportion, because I think the business has been carried—I think I
know of business carried from here to Buffalo for very much less than
it costs to land it in New York after it has passed Harlem Creek or
River. Is that not correct?
Commissioner PROUTY. I dare say it is. I think it is 3 cents a
hundred lighterage in New York.
Mr. HILL. Yes, sir; 3 cents a hundred lighterage, which would be
1.80 cents a bushel on wheat, which is more than the railroad receives.
I think the ruling rate from here to Buffalo is a cent and a quarter.
Commissioner PROUTY. By water?
Mr. HILL. By water. The transportation must be done at a low rate
if it is done for less than it costs to land it in New York after you get
it there. I think sometimes if you take the grain carried from Buffalo
at 5 cents a hundred and deduct the 3 cents arbitrary and mileage on
the car, it would bother the Commission to find out who pays that bill,
because it costs more than the company got for it. Some other ship-
per had to pay it. -
Commissioner CLEMENTs. You gave up your stock in the Great
Northern for stock in the securities company?
Mr. HILL. Yes, sir. -
Commissioner CLEMENTS. You won’t draw the dividend on that stock
yourself?
Mr. HILL. On the Great Northern stock?
Commissioner CLEMENTS. Yes, sir.
Mr. HILL. I don’t own it any more.
Commissioner CLEMENTs. Then the profit that the Northern Securi-
ties Company is to get for its stockholders must depend on
Mr. HILL. On the dividends.
Commissioner CLEMENTs. That depends on dividends, the earnings?
Mr. HILL. Yes, sir; but that stock has paid for years 7 per cent.
Commissioner CLEMENTs. So instead of drawing on your $100 you
will draw on $180? -
Mr. HILL. That is right; at a lower rate.
Commissioner CLEMENTs. That will depend on the earnings, won’t it?
Mr. HILL. It depends on the dividends of the Great Northern. The
Northern Securites Company can not get any different conditions or
any different dividend from its holding in the Great Northern than
any other shareholder gets.
Commissioner CLEMENTs. But whatever that stock pays they get it
On that stock?
Mr. HILL. Yes, sir. I said we hoped to be able to pay 7 per cent.
Commissioner CLEMENTs. And that was one of the inducements to
give up your railroad stock?
Mr. HILL. Not the slightest; had not a thing to do with it.
Commissioner CLEMENTs. You depend on the stock in the Securities
Company for your dividend instead of stock in the railroad company?
76 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HILL. The formation of the Securities Company was simply a
matter of fortification, a matter of strength, and not of combining
influence—the interests in the property, some of which was owned
by men who were quite advanced in years and wanted to continue the
corporation and the methods that had been so successful to them and
to the country served by the lines in the past.
Commissioner CLEMENTS. But the result is instead of drawing on
$100 of railroad stock, they drew on $180 in the way of dividends from
the Northern Secureties Company, whatever those dividends are.
Mr. HILL. You do not get on $180 Northern Securities Company
unless you deposit or sell to the Securities Company $100 of Great
Northern.
Commissioner CLEMENTs. That is what I mean. One takes the
place of the other. You take the dividends on that instead of the
railroad stock.
Mr. HILL. Yes; you take the dividends, whatever they receive; but
that does not confer on the Northern Securities Company any addi-
tional power to increase the dividends.
Commissioner CLEMENTs. What you receive depends upon the earn-
ings of these roads there, does it not?
Mr. HILL. Yes, sir; but the earnings of the Great Northern—we
are discussing the Great Northern earnings, and the Great Northern
is at the maximum anyway in its dividends. They are 7 per cent, and
have been for years. We can not advance them without taking the
chance that somebody would say we were getting more than we ought.
Commissioner CLEMENTs. Then if you had not put this $200,000,000
of bonds on these roads—you were already getting the maximum—you
would have to reduce the rates when you exceeded that?
Mr. HILL. The $200,000,000 of bonds has nothing to do with the
rates. The dividend on that was earned by the Burlington and
$2,000,000 besides, and I have no doubt it will continue to be.
Commissioner CLEMENTs. After all, are not all of these things a
charge on the earnings of these roads, in whatever shape?
Mr. HILL. Certainly.
Commissioner CLEMENTs. And whoever holds them?
Mr. HILL. Certainly; but they are not increased beyond their value,
or the right that the people owning the various securities, scattered
as they were, had a right to expect or draw.
Commissioner CLEMENTs. That is you judgment. It is increased
in the amount, in the aggregate?
Mr. HILL. No; it is not an increase. The amount guaranteed is
$2,000,000 less than the Burlington earned last year. That can not
be an increase when it is $2,000,000 less.
Commissioner CLEMENTs. I am talking about the principal and not
the interest. There is $2,000,000 more there than there was before?
Mr. HILL. The answer to that—we undertook to buy the Burling-
ton, not as a stock speculation, but as a property, and after looking it
over and all of the Granger roads, it was less per mile, it cost us less
a mile than some of the other roads that you won’t say were reaching
anything like her earnings.
Commissioner CLEMENTs. The assumption that the Burlington will
still earn that amount includes the assumption that their rates are not
too high .
Mr. HILL: Not too high. I think that the Burlington rates and
CONSOLIDATIONS AND COMEINATIONS OF CARRIERS. 77
those of the Great Northern are substantially about iike, notwithstand-
ing we are a younger road and in a newer country. We hope to learn,
though, some time or other, to carry the business along so that—the
greatest guaranty always for safety in an investment is the fact that
you can do your business and are willing to do your business at a rate
that will keep out competition, when the other fellow don’t like the
taste of your tariff.
The CHAIRMAN. Just one word, Mr. Hill. The Northern Securities,
then, is a mere holding company ?
Mr. HILL. It is, purely and simply. We call it a holding company.
It is like any other corporation dealing in high-class investments.
The CHAIRMAN. As matters stand now, its income will be the dividend
on the stocks which it owns?
Mr. HILL. That is right, and any profit it might make on what it
has bought or sold.
The CHAIRMAN. And the net profits it makes it can distribute to its
stockholders?
Mr. HILL. That is right.
The CHAIRMAN. Beyond the issue of its stock for the purchase of the
Northern Pacific and Great Northern to the extent you have described,
has the Northern Securities Company yet acquired to any considerable
extent stocks of other roads? You may have answered that.
Mr. HILL. I have not been asked that question. It has other trans-
actions in process of completion now, and has had.
The CHAIRMAN. Does the Northern Securities Company own any
stock of the Union Pacific?
Mr. HILL. Not a dollar.
The CHAIRMAN. Or of the Southern Pacific?
Mr. HILL. Not a dollar of any other railway than the Northern
Pacific and the Great Northern, or some line that is immediately con-
nected. There may be some pieces of either one of them; I do not
know of any. I am testifying or trying to testify accurately. There
may be some short pieces of line that belonged to either one of them.
that passed with the stock. I do not know that it owns anything out-
side in any railroad company. It owns, or will own, in other companies.
fuel—coal. -
The CHAIRMAN. Mr. Hill, we desire to conclude your examination
at this session, although the hour is getting late. Now, is there any
further statement or explanation that you desire to make?
Mr. HILL. I do not know of any, sir. I am prepared to answer
every question, and am glad to answer every question, and try to give
you every—just all the information I have and the results of my own
observation in matters where it is not one of strict information.
The CHAIRMAN. I desire, Mr. Hill, to inquire whether it will be
convenient for you to be here to-morrow at 10 o’clock in case further
information should be desired?
Mr. HILL. I will make it convenient, your honor. I came here from
New York, and I am particularly anxious that every question con-
nected with this, directly or remote, shall be open to the light of day.
We have nothing to conceal.
The CHAIRMAN. I think the members of the Commission feel in this
way, Mr. Hill, that if you feel that other interests make it real impor-
tant for you to leave Chicago to-night we should be disposed to
accommodate you and consider your examination closed. It has cov-
78 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
ered an extensive field, it has occupied some hours, and we should like
to have an opportunity for a little conference among ourselves during
the evening, and if it is not extremely inconvenient for you to remain
we would like to have you do so, until 10 o’clock to-morrow morning,
in case we would want to pursue the examination further.
Mr. HILL. My time will be at the service of the Commission.
The CHAIRMAN. Other witnesses who have been requested will
return at 10 o’clock to-morrow morning, to which hour adjournment
will now be taken.
The Commission thereupon (at 5.40 p. m.) adjourned.
The CHAIRMAN. Gentlemen, please give us your attention. Mr.
Day, who will you call this morning?
Mr. DAY. Mr. Harriman.
(No response.)
The CHAIRMAN. Mr. Harriman does not appear to be in the room.
A VOICE. I think Mr. Harriman will be here in a few moments,
He intends to be here, and is very anxious to be called.
(Mr. Harriman enters the room.)
EDWARD H. HARRIMAN, being duly sworn, testified as follows:
Mr. DAY. Please give the stenographer your full name.
Mr. HARRIMAN. Edward H. Harriman.
Mr. DAY. And state your official relations to the Union Pacific
Railway.
Mr. HARRIMAN. Chairman of the executive committee.
Mr. DAY. Of the board of directors?
Mr. HARRIMAN. Of the executive committee, and a member of the
board of directors.
Mr. DAY. And your official relations to the Oregon Short Line?
Mr. HARRIMAN. President.
Mr. DAY. And the Oregon Railway and Navigation Company?
Mr. HARRIMAN. I think that is chairman of the executive com-
mittee. \
Mr. DAY. And the Southern Pacificº
Mr. HARRIMAN. President.
Mr. DAY. And member of the board of directors?
Mr. HARRIMAN. Yes, sir. -
Mr. DAY. Have you any relations to the Chicago and Alton Railway
Company?
Mr. HARRIMAN. A director. I am a member of the executive com-
mittee. I think I am chairman of that, too. -
Mr. DAY. Are you officially related to the Chicago and Alton Rail-
road Company ? -
Mr. HARRIMAN. I am a director, I say.
Mr. DAY. Of the old organization?
Mr. HARRIMAN. I think so.
Mr. DAY. Who appointed Mr. Stubbs, the traffic manager of your
System? t
Mr. HARRIMAN. The various companies.
Mr. DAY. What companies?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 79
Mr. HARRIMAN. The ones that he may be director of traffic of. It
is all set out—Union Pacific and Southern Pacific.
Mr. DAY. What part did you take in his appointment, in selecting
him, in naming him as traffic director?
Mr. HARRIMAN. One vote in the board of directors.
Mr. DAY. You simply voted for him in the board of directors?
Mr. HARRIMAN. Yes, sir. *
M. DAY. Was his appointment agreed upon before the vote was
taken 4
Mr. HARRIMAN, I can not say it was agreed upon. There is a differ-
ence between agreeing and understanding.
Mr. DAY. Well, understanding 4
Mr. HARRIMAN. Of course, in all such matters that come before the
board of directors they are not asked to be decided at once. Usually
they are talked over in board meetings and decided at a future meet-
ing. I can not say now how the selection of Mr. Stubbs was brought
about.
Mr. DAY. Now, the understanding which preceded his final appoint-
ment, what was said to be the scope—what was said respecting the
scope of the new office about to be created, called a traffic director?
Mr. HARRIMAN. Well, that is very difficult to remember just what
was said. I think the intention was, if that is what you want, that
Mr. Stubbs was too far away from the center of traffic controlled or
too valuable a man to keep out of the Pacific slope. He could not
come into contact with the other bright minds arranging the traffic of
the different railroads and the methods of conducting it.
Mr. DAY. What were proposed to be the duties of the traffic
director: what was said? -
Mr. HARRIMAN. A general supervision of the traffic in cooperation
with the various presidents of the different systems.
Mr. DAY. Was he given control—direction of traffic?
Mr. HARRIMAN. No, sir.
Mr. DAY. By the routes and lines of your system?
Mr. HARRIMAN. No, sir.
Mr. DAY. What was said in respect to that?
Mr. HARRIMAN. That he should advise with the traffic officers of the
various systems and presidents.
Mr. DAY. You mean the various lines comprising the system?
Mr. HARRIMAN. Yes, sir.
Mr. DAY. Was anything said about an excess of traffic going by one
route over another, or one line or route getting a less share of the
traffic than some might think was its due?
Mr. HARRIMAN. No, sir.
Mr. DAY. Was that subject discussed at all?
Mr. HARRIMAN. No, sir.
Mr. DAY. About a division of the traffic, and apportioning it fairly
and justly between the lines composing your system?
Mr. HARRIMAN. No, sir. -
Mr. DAY. At no time among the members of the board of directors,
So far as you know, was that discussed?
Mr. HARRIMAN. I do not remember that that subject ever came up.
I think the word “director” is perhaps misunderstood. He is not
director of the traffic to go by one line as against the other, but in
the sense of being a director having charge of the traffic departments
80 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
of the several lines, so that he could work in cooperation with the
officers of those lines, just as I am a director of these various lines,
but I can not direct the affairs of those companies.
Mr. DAY. You are one of a number that may direct them :
Mr. HARRIMAN. Decide questions brought before them.
Mr. DAY. Mr. Stubbs is not a director of any of the railroads?
Mr. HARRIMAN. Not at present.
Mr. DAY. Was the power to raise or make rates committed to Mr.
Stubbs?
Mr. HARRIMAN. In cooperation with the officers of the various lines,
Mr. DAY. That was discussed?
Mr. HARRIMAN. In the board of directors?
Mr. DAY. Yes, sir.
Mr. HARRIMAN. I think not.
Mr. DAY. Well, whether sitting as a board or members of the board
together discussing the subject, what are the limits of Mr. Stubbs's
powers as traffic manager? -
Mr. HARRIMAN. Well, I think I have answered that. He can arrange
the matters pertaining to the traffic departments by advising with and
cooperating with the executive officers and traffic officers of the systems.
Mr. DAY. Has he power to direct whether traffic shall go by the route
of the old Southern Pacific, the most southerly route to the Pacific
coast, ºther than what was originally the Union Pacific and Central
Pacific'.
Mr. HARRIMAN. I do not think Mr. Stubbs or any other man could
direct that.
Mr. DAY. Well, there are instances where the shipper does not
direct that?
Mr. HARRIMAN. I do not know of any instance. In any event, Mr.
Stubb has no more control of that now than he had before he was
brought to Chicago. .
Mr. DAY. I remember an instance testified to in this city where
many hundred carloads of traffic were consigned by the shipper over
one of the trunk lines and that trunk line turned it over to a rival
trunk line. The shipper had no voice.
Mr. HARRIMAN. We are not a trunk line. I do not know about
those matters. But I do not know of any instance in the Southern
Pacific.
Mr. DAY. I am asking you whether he has power to do that?
Mr. HARRIMAN. You are giving an illustration, and I do not think
it is a fair one. The affairs of the Southern Pacific have always been
conducted on certain lines and are still conducted that way. -
Mr. DAY. What I am endeavoring to do is to determine what those
lines are on which it is now conducted. What are the powers of Mr.
Stubbs? I can only know from what you say and Mr. Stubbs testifies,
I have no other knowledge. I want to know the limits of his powers,
what he is expected to do and does do under the direction of you!
board or chairman of the executive committee.
Mr. HARRIMAN. I tried to answer that.
Mr. DAY. You have answered fully 4
Mr. HARRIMAN. I think I have. I do not know that there is any
thing more. *
Mr. DAY. Well, we will pass that. Now, the Union Pacific Railway
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 81
Company; what are the relations between the Union Pacific and
Southern Pacific Company ?
Mr. HARRIMAN. Connecting lines.
Mr. Day. Anything else?
Mr. HARRIMAN. No, sir.
Mr. DAY. Has the Union Pacific any stock interest in the Southern
Pacific' -
Mr. HARRIMAN. Yes, sir.
Mr. DAY. What is that?
Mr. HARRIMAN. You mean the amount?
Mr. DAY. Yes, sir; the extent of it.
Mr. HARRIMAN. I think between 35 and 40 per cent.
Mr. DAY. Of the entire capital stock?
Mr. HARRIMAN. Yes, sir.
Mr. DAY. How was that interest acquired?
Mr. HARRIMAN. By purchase. -
Mr. DAY. Any other interest in the Southern Pacific except what
results from that ownership 4 -
Mr. HARRIMAN. No, sir.
Mr. DAY. No lease?
Mr. HARRIMAN. No, sir.
Mr. DAY. No guarantee of dividends?
Mr. HARRIMAN. No, sir. .
Mr. DAY. Or bonds?
Mr. HARRIMAN. Nothing whatever.
Mr. DAY. Approximately, in round numbers what does that at par
Value amount to ? -
Mr. HARRIMAN. About $75,000,000.
Mr. DAY. And the capital stock of the Southern Pacific is what?
º HARRIMAN. Two hundred millions; within a million or two of
that.
Commissioner CLEMENTs. Is that held by the Union Pacific Com-
pany itself, or the people interested in it?
Mr. HARRIMAN. That is held by the Union Pacific.
Commissioner CLEMENTs. The corporation?
Mr. HARRIMAN. The corporation.
Mr. DAY. Is it carried on the books of the Southern Pacific as the
property of the Union Pacific?
Mr. HARRIMAN. I do not remember whether it is or not.
Mr. DAY. Who votes the stock?
Mr. HARRIMAN. I think that stock stands in the name of one or two
directors of the Union Pacific.
Mr. DAY. As trustees? t
Mr. HARRIMAN. In their individual names, I think; I do not re-
'member. - -
Mr. DAY. In your annual report it is carried as the property of the
Union Pacific Railroad Company.
Mr. HARRIMAN. It so states in the report; yes, sir. .
Mr. DAY. Who are those gentlemen that vote that stock?
Mr. HARRIMAN. I think I am one. I know I am one. I think the
other is Mr. Pierce.
Mr. DAY. Winslow :
Mr. HARRIMAN. Winslow Pierce; I think so.
526A—02—6
82 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. You are president of the Oregon Short Line, are you not!
Mr. HARRIMAN. Yes, sir. -
Mr. DAY. What interest has the Union Pacific in the Oregon Short
Line?
Mr. HARRIMAN. It owns its stock.
Mr. DAY. Approximately all of it?
Mr. HARRIMAN. Well, f think approximately all.
Mr. DAY. Has the Union Pacific Company any interest in the Great
Northern Railroad Company
Mr. HARRIMAN. No, sir.
Mr. DAY. Proprietary; share owner, or otherwise?
Mr. HARRIMAN. No, sir.
Mr. DAY. Has it in the Northern Pacific Railway ?
Mr. HARRIMAN. No, sir.
Mr. DAY. Has the Oregon Short Line any interest in the Northern
Pacific Railway Company :
Mr. HARRIMAN. No, sir. -
Mr. DAY. Has the Union Pacific had any interest as a share owner
in the Northern Pacific Railway Company? -
Mr. HARRIMAN. No, sir.
Mr. DAY. Has the Oregon Short Line had : •
Mr. HARRIMAN. Yes, sir; that states in the report that we had about
seventy-eight millions of Northern Pacific stock.
Mr. DAY. When did the Oregon Short Line acquire that?
Mr. HARRIMAN. Last spring. I do not remember exactly.
Mr. DAY. Prior to last spring had the Oregon Short Line any inter-
est as owner in the Northern Pacific Railroad Company ? -
Mr. HARRIMAN. Prior to last spring, not to my knowledge. It may
have some years back. I do not know. .
Mr. DAY. What is the total capital stock of the Oregon Short Line?
Mr. HARRIMAN. I think between twenty-seven and twenty-eight
millions.
Mr. DAY. It purchased how much stock of the Northern Pacific?
Mr. HARRIMAN. Seventy-eight millions.
Mr. DAY. How did it pay for that stock?
Mr. HARRIMAN. Some in cash and some by issuing its own obligations
against that stock.
Mr. DAY. How much cash did it pay approximately .
Mr. HARRIMAN, Fifteen or twenty million dollars.
Mr. DAY. That came out of its own treasury'
Mr. HARRIMAN. Yes, sir.
Mr. DAY. How was the money raised by the Oregon Short Line to
acquire the balance of $60,000,000? -
Mr. HARRIMAN. By issuing its own certificates of indebtedness.
Mr. DAY. Who did it issue the certificates to ? What I want—
Mr. HARRIMAN. What you want is to find out if the Union Pacific
has any interest in that purchase?
Mr. DAY. Yes, sir. -
Mr. HARRIMAN. I want to be frank about it. The Union Pacific
helped the Oregon Short Line to finance it and purchased from the
Oregon Short Line the certificates of indebtedness, the money for
which it used in paying for the Northern Pacific stock.
Mr. DAY. The sixty-one millions of that purchase money came out
of the Union Pacific treasury, practically? . -
" *
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 83
Mr. HARRIMAN. Yes, sir.
Mr. DAY. Directly or indirectly
Mr. HARRIMAN. Yes, sir.
Mr. DAY. Now, the Union Pacific owns $75,000,000 of the Southern
Pacific stock—a controlling interest?
Mr. HARRIMAN. Oh, no.
Mr. DAY. Practically so?
Mr. HARRIMAN. I do not know.
Mr. DAY. The Union Pacific does control it?
Mr. HARRIMAN. There are some of them members of the board of
directors, but there are others also.
Mr. DAY. Speaking to the substance of the thing, rather than the
legal aspects, the Union Pacific now does control it? -
Mr. HARRIMAN. Anybody that had seventy-five millions out of two
hundred millions would have a strong influence in making up the
board.
Mr. DAY. But, as a matter of fact, the Union Pacific does control the
Southern Pacific system, does it not, to-day !
Mr. HARRIMAN. For instance, the Union Pacific might to-morrow
sell its seventy-five millions and then it would not.
Mr. DAY. I am speaking of to-day—your actual possession, irrespec-
tive of the seventy-five millions. Does the Union Pacific interest
to-day control the Southern Pacific Railroad? !
Mr. HARRIMAN. You mean without any other voice; any other
interest? \ - •
Mr. DAY. Does it not operate it to the same extent it operates the
Oregon Railway and Navigation Company
Mr. HARRIMAN. Not quite. Hardly. There are other interests rep-
resented in the Southern Pacific, and it is not always harmonious.
Mr. DAY. But the actual control of the property
Mr. HARRIMAN. Usually the voice of the Union Pacific representa-
tives controls; that is, they impress on the board of directors the mat-
ters they have in hand for the benefit of the Southern Pacific or those
that are best to be done. For instance, I will give an illustration of
that. As you probably all know, the Union Pacific has during the
last two or three years expended a very large amount in repairs, you
might say, and improving its own property. It has done so to the
extent of $25,000,000 or $30,000,000 and has put itself in a position
where it can operate to the best advantage and give the best service
in the territory served by it. In taking the Southern Pacific in hand,
the Union Pacific interests considered that that same method should be
adopted as to the Southern Pacific. Some of the representatives of
the other stockholders thought not, but the voice of the Union Pacific
representatives prevailed. There are some twenty millions to be
expended this year in improving the Southern Pacific on the same
basis as the Union Pacific. ſº
Commissioner PROUTY. What part of it? -
Mr. HARRIMAN. It will be distributed Over the lines from New
Orleans to Los Angeles, and from Los Angeles to San Francisco, and
from San Francisco to Ogden.
Commissioner PROUTY. Not especially between San Francisco and
Ogden : - .
Mr. HARRIMAN. No, sir. A large amount is to be expended there;
I think one-third of it. It has been carefully gone over, and I think
84 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
distributed over the whole line; and there is also motive power to be
distributed over the line. There are, I think, 180 engines—large
locomotives—to be provided.
Commissioner FIFER. What is the character of the improvements?
Mr. HARRIMAN. Reduction of grades, elimination of curvature, and
elimination of the old light equipment.
Commissioner PROUTY. How do you raise the money for that?
Mr. HARRIMAN. We have not raised it all. Perhaps we would like
a little advice on that subject. It is quite a large amount.
Commissioner PROUTY. You do not seem to have had much difficulty
in raising seventy-five or eighty millions when you wanted it? -
Mr. HARRIMAN. There is nothing like having good credit.
Mr. DAY. Speaking of the facility for raising money, the sixteen
millions that the Oregon Short Line did not get from the Union
Pacific did it get that out of its treasury or borrow it?
Mr. HARRIMAN. It had a surplus in its treasury. I think it had
several million surplus and it borrowed the rest.
Mr. DAY. Not on the certificates.
Commissioner PROUTY. Have you increased the mortgage obliga-
tions of the Union Pacific?
Mr. HARRIMAN. In what time?
Commissioner PROUTY. In making your improvements :
Mr. HARRIMAN. Very little. We have not issued any direct obliga-
tions of the Union Pacific to make those improvements. When I speak
of the Union Pacific I refer to the Union Pacific system that includes
the Oregon Short Line as well. But most of the improvements have
been made through the Rocky Mountain districts; in fact, the improve-
ment there was really—the elimination of curvature was possibly 200
per cent and the elimination of grades was substantially 100 per cent.
Commissioner PROUTY. Is that substantially done?
Mr. HARRIMAN. Substantially done; yes, sir.
Mr. DAY. You have increased the bonded indebtedness of the Union
Pacific the last year, or has it not been increased?
Mr. HARRIMAN. I do not understand that question. -
Commissioner PROUTY. I asked as to the mortgage indebtedness, I
think.
Mr. HARRIMAN. No, sir; we have not increased it.
Mr. DAY. How much of an increase in your bonded indebtedness
has been effected in the past year, or to take the last year, the year
preceding? • * * ę
Mr. HARRIMAN. Have you the Union Pacific report there?
Mr. DAY. Yes, sir. -
Mr. HARRIMAN. You have not the one for the year previous have
you? *
Mr. DAY. No.
Mr. HARRIMAN. I can only speak from memory.
Mr. DAY. I will ask you this, then. How was the purchase of
Southern Pacific stock financed? How was the cash acquired for the
purchase of the Southern Pacific? -
Mr. HARRIMAN. I think we borrowed the money in the first
instance. -
Mr. DAY. Then did you not issue some bonds to pay for that?
Mr. HARRIMAN. You refer to convertible bonds?
Mr. DAY. Yes, sir. &
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 85
Mr. HARRIMAN. I am not trying to hide the fact that I issued one
hundred millions of convertible bonds. That is one of the things we
can not hide. There are one hundred millions of convertible bonds used
in the purchase of these various securities that you see in the annual
report of the Southern Pacific. I can not detail them now.
Mr. DAY. You raised one hundred millions on those bonds?
Mr. HARRIMAN. About one hundred million I think it was.
Mr. DAY. Was any of that money used for improvements?
Mr. HARRIMAN. No, sir.
Mr. DAY. That was all used for the acquisition of new lines?
Mr. HARRIMAN. New lines; yes, sir.
Mr. DAY. And among others, the stock of the Southern Pacific?
Mr. HARRIMAN. Some of it. I do not know whether it was alto-
gether that. There may have been some other properties we acquired.
Commissioner PROUTY. Have those bonds been actually sold?
Mr. HARRIMAN. Yes, sir.
Commissioner PROUTY. What interest do they bear?
Mr. HARRIMAN. Four per cent.
Commissioner PROUTY. Did they sell for par?
Mr. HARRIMAN. At par; yes, sir? us’
Mr. DAY. Let me see if I understand you. The Union Pacific Rail-
way Company owns seventy-five millions of the stock of the Southern
Pacific Railroad Company or the Southern Pacific Company. The
Union Pacific Company owns all, or nearly all, of the stock of the
Oregon Short Line. The Oregon Short Line owns all, or nearly all,
of the stock of the Oregon Railroad and Navigation Company.
Mr. HARRIMAN. The Union Pacific'
Mr. DAY. No; the Oregon Short Line.
Mr. HARRIMAN. The Short Line has a considerable interest in the
Navigation Company. I think our report shows that the Union
Pacific owns considerable interest in that company.
Mr. DAY. What the Union Pacific does not hold in the Oregon
Railroad and Navigation Company the Short Line does?
Mr. HARRIMAN. Not all.
Mr. DAY. Practically
Mr. HARRIMAN. Practically.
Mr. DAY. And the Oregon Short Line purchased seventy-eight mil-
lions of the common and preferred stock of the Northern Pacific
Railroad Company last spring?
Mr. HARRIMAN. That is about right.
Mr. DAY. How is that stock held?
Mr. HARRIMAN. In the Oregon Short Line Railroad.
Mr. DAY. In the name of that company?
!. HARRIMAN. It is held for that company.
Mr. DAY. In whose name?
Mr. HARRIMAN. Harriman and Pierce.
Mr. DAY. As trustees?
Mr. HARRIMAN. No; I think in their names. * -
Mr. DAY. But there is a memorandum, I suppose, of the trust under
which you hold it? - -
Mr. HARRIMAN. I think there must be. There would be naturally.
Mr. DAY. Where is that memorandum?
L. HARRIMAN. I suppose it is in the office of the Oregon Short
IIlê, . *
86 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. You are president of that company
Mr. HARRIMAN. Yes, sir.
Mr. DAY. Is that stock still held in your name and that of your
cotrustee, Mr. Pierce?
Mr. HARRIMAN. Now, let us jump again. What you are trying to
get at is whether we sold that stock. I had a talk with Commissioner
Knapp and he said he would try to let me go on the train to-day, so I
want to save time.
Mr. DAY. Well, proceed and tell the whole history of that transaction,
Mr. HARRIMAN. The Northern Pacific stock has been sold.
Mr. DAY. All Of it?
Mr. HARRIMAN. All of it.
Mr. DAY. I thought you wanted to go ahead and tell the whole
story. -
Mr. HARRIMAN. Well, that is all you asked. There is no more
story to tell.
Mr. DAY. To whom was it sold :
Mr. HARRIMAN. To individuals.
Mr. DAY. Who are the individualsº
Mr. HARRIMAN. I do not remember.
Mr. DAY. When was the sale effected?
Mr. HARRIMAN. Some time during the summer, I think, the last of
August or September. It has been sold since July, September, or
October, or August.
Mr. DAY. How long before the meeting of the board of directors of
the Northern Pacific Company was it sold?
Mr. HARRIMAN. Oh, some time—I do not remember—thirty or sixty
days, perhaps. -
Mr. DAY. Who negotiated for the sale of that stock?
Mr. HARRIMAN. I did, principally.
Mr. DAY. Were you authorized to make the sale by a vote of the
board of directors of the Short Line.
Mr. HARRIMAN. No, sir. *.
Mr. DAY. Your action was without consultation with your codi-
rectors?
Mr. HARRIMAN. We had many talks.
Mr. DAY. What were the terms of the sale
respecting the sale? -
Mr. HARRIMAN. I do not mean for you to understand that there was
no action by the board of directors of the Oregon Short Line but the
final transaction; the Oregon Short Line authorized the sale to be made
on the terms that were reported to it. In this instance it took no
action as to authorizing negotiations.
Mr. DAY. What were the terms reported to it?
Mr. HARRIMAN. The sale of the stock.
Mr. DAY. What were the terms of it?
Mr. HARRIMAN. You mean what price we got?
Mr. DAY. No; I do not care about the price, but the terms—the con-
ditions of the sale?
Mr. HARRIMAN. No conditions.
Mr. DAY. A price was named !
Mr. HARRIMAN. Yes, sir. |
Mr. DAY. You did not know who the purchasers were ?
Mr. HARRIMAN. I know to whom the stock was delivered. There
what was the agreement
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 87
were other people. I do not think it was all purchased by one house
or one person. -
Mr. DAY. Do you know who it was purchased for 2
Mr. HARRIMAN. No, sir.
Mr. DAY. Who participated in the conferences with you respecting
the sale of that stock :
Mr. HARRIMAN. Mr. Pierce, a partner of the firm of J. P. Morgan
& Co., and, I think, Mr. Hill, and, possibly, Mr. Schiff.
Mr. DAY. Where did those conferences take place :
Mr. HARRIMAN. Some in the office of Morgan & Co., and some in
my office.
Mr. DAY. There had been a great contest between interests with
which you were personally allied and interests with which Mr. Morgan,
we may say, or Mr. Hili were allied, respecting the control of the
Northern Pacific Railroad last year?
Mr. HARRIMAN. I am very glad of a chance to explain that. I do
not think there had been any contest. The facts are that some of us
allied with the Oregon Short Line or Union Pacific thought it would
be advantageous to the Oregon Short Line to have an interest in the
Northern Pacific, and we went about acquiring that interest and
purchased the stock that was lying loose all over this country and
in Europe. I suppose it was held by 6,000 or 7,000 people, and to
our mind it ought not to make any difference to any other interest
whether we owned the stock or whether it was held by several thou-
sand other people. We made no contest for the purchase of the stock
and no contest for the control of the road, and I may say here that
prior to the supposed contest in the market that stock was acquired,
and no stock was acquired during those days of panic in it, nor were
any orders given by us.
Commissioner PROUTY. You had already bought, and the question
was whether the other fellow could deliver.
Mr. HARRIMAN. Who do you mean by the other fellow %
Commissioner PROUTY. I do not mean Mr. Hill and his crowd, but
the man from whom you bought the Northern Pacific stock. Had not
you and others bought Northern Pacific stock from people that did not
own or deliver it?
Mr. HARRIMAN. I think this: Of course you know there are markets
for American railway securities not only in this country, but in Ger-
many, Holland, and England, and some of the stock that we had pur-
chased had not been delivered, but was on its way from those various
markets. It had been purchased in those markets and agreed to be
delivered in New York, and of course in the meantime they were using
stock of other people to make their deliveries. It was not all coming
by any means to interests; it had been delivered very largely with
interests asssociated with me.
The CHAIRMAN. Does that mean that it was not bought from per-
Sons that did not own it? &
Mr. HARRIMAN. No, sir; it was purchased in New York of agents
who repurchased in these other markets. They tried to deliver in
New York by borrowing from persons that owned it here. Then,
When the contest took place and other parties went into the market and
purchased Northern Pacific at very high prices and demanded deliv-
ery of the stock, naturally those persons that purchased in other mar-
kets to deliver here found it difficult to get that stock to fill contracts
88 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
in New York, and our interests in every instance gave them all the
time they wanted to have the stock brought from the various markets
from which they had purchased to deliver to us.
Commissioner FIFER. Were those the influences that sent Northern
Pacific stock up to nearly a thousand dollars a share last year?
Mr. HARRIMAN. Which ones?
Commissioner FIFER. Northern Pacific went up very high last May
in New York, did it not?
Mr. HARRIMAN. Yes, sir.
Commissioner FIFER. What were the influences !
Mr. HARRIMAN. That is the contest, I think, that you gentlemen
refer to. We were not in that contest and had no hand in it.
Mr. DAY. That was not the contest my question referred to.
Commissioner PROUTY. You say you did not suppose it made any
difference to anybody whether you owned this stock or whether 7,000
persons owned it. If you had secured a few more millions of com-
mon stock of the Northern Pacific it would have made a difference to
somebody, would it not ?
Mr. HARRIMAN. We could have secured it.
Commissioner PROUTY. Do you mean you did not want it?
Mr. HARRIMAN. We did not want it at anything like the price
eventually paid for it.
Commissioner PROUTY. You have sold that stock, the whole of it.
Was that enterprise a profitable one or the reverse? I take it that finally
the public has to pay for it if you lost money there; have to pay it in
freight rates or in some way. Now, as bearing on the question whether
railroad companies ought to have a right to speculate in stocks, I would
like to know whether that enterprise was profitable.
Mr. HARRIMAN. That was not gone into by the railroad company
as a speculation in any way. We thought that a dominating influence,
or a large influence, in the ownership of the Northern Pacific would
secure to the Union Pacific system what was already a valuable con-
nection, and keep open avenues of traffic which we thought our inter-
ests and the interests of the public and our duty to the public demanded.
Commissioner PROUTY. And in that attempt you failed?
Mr. HARRIMAN. Oh, no, we have not failed. We feared that there
might be some change in the relations of the Northern Pacific and the
territory served by it and the territory served by the Union Pacific,
and perhaps the territories which the Union Pacific contemplated
extending into. .
Commissioner PROUTY. Well, I understand that you started out to
obtain a controlling interest in the Northern Pacific-—a dominating
interest in the Northern Pacific'
Mr. HARRIMAN. Which we did do. f
Commissioner PROUTY. You have disposed of that interest?
Mr. HARRIMAN. Yes, sir.
Commissioner PROUTY. Why did you dispose of it—because it was
not sufficiently dominating? .
Mr. HARRIMAN. No, sir; we disposed of it because we were satisfied
that the natural conditions and the strength of the Union Pacific sys-
tem in itself would protect it from any of the restrictions that might
be put on the traffic originating on the lines of the Northern Pacific
and prevent it from going over the natural avenues open to it.
Commissioner PROUTY. In other words, when you looked over the
whole situation you thought better of it?
CONSOLID ATIONS AND COMBINATIONS OF CARRIERS. 89
Mr. HARRIMAN. I hardly think that is fair to put it that way.
Commissoner PROUTY. I would like to know why you changed your
mind between the time you bought Northern Pacific stock and the
time you sold. Did Mr. Hill convince you that he was going to do
the fair thing?
Mr. HARRIMAN. I do not think we rely on any body’s assurance that
there is going to be any fair thing done. Mr. Hill might not be in
control of the properties he is in control of now. Who knows?
He says he has only thirty or forty millions of it.
Commissioner PROUTY. He very likely knows where he can find a
few millions more.
Mr. HARRIMAN. That may be. That is all right; and let me say Mr.
Hill is all right also. t
Commissioner PROUTY. You did not answer my question, and I do
not know that I am disposed to insist on it if you do not want to.
Mr. HARRIMAN. I want to answer every question I can.
Commissioner PROUTY. It seems to me the Union Pacific went into
an attempt to buy the Northern Pacific and afterwards receded from
that attempt, and it seems to me if the Union Pacific lost money—
Mr. HARRIMAN. They had accomplished it. -
Commissioner PROUTY. There were certain difficulties in the way of
bringing that to a permanent fruition ?
Mr. HARRIMAN. No; I think not. -
Commissioner PROUTY. Well, I know very little about the financial
operations. -
Mr. HARRIMAN. But you want to know.
Commissioner PROUTY. Yes, sir. I understood that in an imperfect
way this was the situation: You had gone in to buy Northern Pacific
stock. You had absolutely purchased a majority of that stock, but the
stock of the Northern Pacific was made up of two kinds, common
stock and preferred stock. You had more preferred stock, but less
common stock, than Mr. Hill and his company. The preferred stock
of the Northern Pacific could, under certain circumstances, be retired.
I have been informed that Mr. Hill and his coadjutors threatened to
retire that preferred stock, and therefore retire you out of control of
the Northern Pacific, and it was in consequence of that the arrange-
ment was finally made. *
Mr. HARRIMAN. I think if we go into an argument on that subject
I will not catch my train.
Commissioner PROUTY. You said you wanted to tell.
Mr. HARRIMAN. That is a question, I understand, that has never
been brought to issue; but I think Mr. Hill—I listened to his interest-
ing and very clear statements yesterday—stated to you something
about the agreement after meetings in my office and Mr. Morgan’s
office, to the effect that Mr. Morgan was to select the next board of
directors of the Northern Pacific. In other words, there was a panic
prevailing in the financial markets all over the world for some reason
that they did not understand, and apparently for no reason at all, and
when the matter was brought to our attention we disclaimed any inten-
tion of eliminating the former management of the Northern Pacific
therefrom, and as evidence of that intention we agreed that Mr. Morgan
should vote our stock at the next meeting.
Commissioner PROUTY. Before you came to that conclusion had this
question of the right of the Northern Pacific common stock to retire
the Northern Pacific preferred stock been raised?
90 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HARRIMAN. Not to our minds.
Commissioner PROUTY. Had it to your knowledge?
Mr. HARRIMAN. Only in a general way, as it has with you.
Commissioner Prouty. Had your attorneys expressed an opinion on
that subject?
Mr. HARRIMAN. I do not remember that he had. I think there were
'arious talks on that subject. But we were satisfied that the interest
we had acquired in Northern Pacific would accomplish all we desired
in having secured to us and to the territory of the Northern Pacific
and to our territory a free movement of the traffic on the iimes it
would naturally go.
Commissioner PROUTY. And having secured that stock for that pur-
pose and having got enough of it, you proceeded to perpetuate that
influence by selling every share of stock you had.
Mr. HARRIMAN. No, sir; there were various conferences, and we
had offers for our interests in the Northern Pacific which we thought
it was to the interest of our shareholders to dispose of. What you
want to know is whether there was any understanding or agreement
whereby we were to be secured in any general way by an alliance
with the Northern Pacific 2
Commissioner PROUTY. That is one thing.
Mr. HARRIMAN. Well, there was not any.
Commissioner PROUTY. Then, I would like to ask you what you
gained by your purchase and sale of Northern Pacific stock? What
did the Union Pacific gain?
Mr. HARRIMAN. Well, I do not know. As to that, we developed the
fact in our talks and conferences with these various people and with
our own officers—the fact that we were strong enough to maintain our
position against any other organization.
Commissioner ProUTY. Where did you develop that—in the stock
market? -
Mr. HARRIMAN. No, sir; in our talks and conferences with our own
people and the people affiliated with the Northern Pacific.
Commissioner PROUTY. In other words, you came to a better under-
standing of the traffic situation?
Mr. HARRIMAN. There was no understanding.
Commissioner PROUTY. You came to a better knowledge?
Mr. HARRIMAN. Yes, sir, we all had by conferences.
Commissioner PROUTY. To come back to my original question, When
you sold that stock—you need not answer the question if you do not
want to—when you sold that stock did you make or lose money as a
Union Pacific Company ?
Mr. HARRIMAN. As an Oregon Short Line Company.
Commissioner PROUTY. It is all one as a Union Pacific proposition,
Mr. HARRIMAN. I can answer that we did not lose any. We believe
we did not lose any.
Commissioner FIFER. Did the Hill-Morgan influence control the
board of directors of the Northern Pacific at the time of these
negotiations?
Mr. HARRIMAN. I do not know that Mr. Hill ever had any influence
in the Northern Pacific. There had been a voting trust, as I under-
stand, on the Northern Pacific, and I think that was controlled by the
Morgan interests. - *.
Commissioner FIFER. Did you believe at that time that the Morgan
interests did control the directors of the Northern Pacific?
C()NSOL II) ATH ()NS AND COMBINATIONS OF CARRIERS. 91
Mr. HARRIMAN. It had all along.
Commissioner FIFER. Did that give them the right, or did you
believe it would give them the right, to retire this preferred stock of
the Northern Pacific and retire you from the control of the Northern
Pacific 4
Mr. HARRIMAN. Will you repeat that?
Commissioner FIFER. Did you understand at the time of the nego-
tiations, and was that an inducement to you to sell the interest of the
Oregon Short Line, or the Union Pacific, the interest it held in the
Northern Pacific
Mr. HARRIMAN. You mean did the fact that they might retire the
preferred Northern Pacific stock influence us in disposing of it?
Commissioner FIFER. Yes, sir.
Mr. HARRIMAN. No, sir.
Commissioner FIFER. They controlled the board of directors, how-
ever, or at least claimed to ?
Mr. HARRIMAN. Well, they had not had an election, you know.
They controlled—I suppose they did—I presume they controlled the
board of directors that was then in office.
Commissioner FIFER. Was anything said in those negotiations that
if they did attempt to retire this preferred stock, you would appeal to
the courts and enjoin them? &
Mr. HARRIMAN. In our conferences with them?
Commissioner FIFER. Yes, sir.
Mr. HARRIMAN. No, sir. I do not think that question between the
purchasers and ourselves came up. I do not remember that it did.
Of course, you understand, I do not mean to say that that never came
up between ourselves.
Commissioner PROUTY. When this stock was sold, were the obliga-
tions which the Union Pacific and the Oregon Short Line had assumed
to purchase it paid off?
Mr. HARRIMAN. Some portion of it.
Commissioner PROUTY. Some portion of it still remains?
Mr. HARRIMAN. Well, the obligations—there are some that can not
be paid off until maturity. - -
Commissioner PROUTY. What was the form of certificate which the
Oregon Short Line issued to raise money with which to purchase this
Northern Pacific stock? What were the terms of it? It was the obli-
gation of the Oregon Short Line, I suppose.
Mr. HARRIMAN. An agreement to pay.
Commissioner PROUTY. When was the certificate due?
Mr. HARRIMAN. I do not remember. I think in ten or fifteen years,
the larger part. Some part there was money borrowed for a short
time on collateral, and since has been mostly paid off.
Commissioner PROUTY. But the certificates themselves have not yet
been paid and can not be?
Mr. HARRIMAN. I do not think they can be paid unless by agree-
ment with the holders thereof.
Commissioner CLEMENTs. With what house or person were your
negotiations made for the sale of this Northern Pacific stock?
Mr. HARRIMAN. Mostly with J. P. Morgan & Co.
Commissioner CLEMENTs. And it was delivered to that house?
º HARRIMAN. I think it was. I do not have the supervision of
that.
92 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. Who negotiated the sale of your stock, this stock
directly owned by the Short Line?
Mr. HARRIMAN. The Northern Pacific, you have reference to ?
Mr. DAY. Yes, sir.
Mr. HARRIMAN. I did.
Mr. DAY. With whom did you make the negotiation :
Mr. HARRIMAN. I think I said that.
Mr. DAY. You said with some persons connected
Mr. HARRIMAN. The negotiations were conducted with members of
the firm of Morgan & Co.
Mr. DAY. What particular members did you carry on your negotia.
tions with in which the terms were discussed ?
Mr. HARRIMAN. Well, there are four or five there—nearly all the
members of the firm—Mr. Steele, Mr. Perkins, Mr. Bacon, and, I
think, at one time Mr. Morgan himself, and there may have been one
other member of the firm. At various times they took it up, one by
one and together.
Mr. DAY. Who was the attorney who acted at that time for the
Union Pacific and Short Line in respect to this stock, the holdings of
Northern Pacific' -
Mr. HARRIMAN. I do not quite understand that question.
Mr. DAY. You had some negotiations regarding the contest that
was on 4
Mr. HARRIMAN. We never went into any contest.
Mr. DAY. I used the word “contest” with respect to your effort to
acquire what you say you started out to do, to get control
Mr. HARRIMAN. I think I tried to explain that we purchased the
shares of the Northern Pacific prior to May 8 or 9, when there was a
sudden rise. I do not consider that a contest. It never came to any
contest for control of the Northern Pacific. There never was any
Contest. -
Mr. DAY. Were not you seeking to control the Northern Pacific
Railroad?
Mr. HARRIMAN. To the elimination of the people already in there!
Mr. DAY. No; to get—you sought to get a controlling interest in
the Northern Pacific Railroad, did you not? Did you not say you
accomplished that?
Mr. HARRIMAN. We purchased a majority of the capital stock of the
Northern Pacific Railroad; seventy-eight millions, I think it was, ou
of one hundred and fifty-five. $
Mr. DAY. And you stated that the Union Pacific accomplished its
object in that respect. What was its object?
Mr. HARRIMAN. To preserve to the Union Pacific system the avenue:
that were already open to it for exchange of traffic with the Northern
Pacific system.
Mr. DAY. You told Commissioner Prouty, in reply to a question
propounded by Commissioner Prouty respecting your reasons for the
sale of this seventy-eight millions of stock so shortly after you
purchased it, that the Union Pacific had accomplished its object in the
purchase. What was that object or how did you accomplish that
object? What assurances have you that you have accomplished it, if
that was the only object? What assurances were given you by any.
one respecting the future conduct of the Northern Pacific or those
avenues of communication between it and the Oregon Short Line of
the Union Pacific : -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 93.
Mr. HARRIMAN. I do not presume that it would be possible for any
individual or any combination to give any promise that would be a
security to anybody else in the affairs of the operation of any railroad,
the Northern Pacific or any other. For instance, these people who
purchased the Northern Pacific might sell the stock to-morrow or
before the next election and still whatever assurances there were
would be of no avail.
Mr. DAY. Were there any assurances !
Mr. HARRIMAN. No, sir.
Mr. DAY. None at all 4
Mr. HARRIMAN. No, sir.
Mr. DAY. Directly or indirectly, controlling the operation of the
Northern Pacific :
Mr. HARRIMAN. That covers a great deal of ground: We had
many conferences as to what the movement by various lines would be,
and, considering the whole question, the Union Pacific management
determined that it was no longer necessary, as it was believed that it
would be to the interest of the Northern Pacific to use the avenues
open over the Northern Pacific as it had before, noth withstanding it
had purchased the Burlington.
Mr. DAY. Were any assurances given you regarding the future
relations of the Burlington road with the Union Pacific' -
Mr. HARRIMAN. No, sir. -
Mr. DAY. Nothing said in respect to that, as to how it should be
conducted and used?
Mr. HARRIMAN. No, sir. -
Mr. DAY. The Burlington touches the Union Pacific lines at a great
many points? . sº
Mr. HARRIMAN. I should think it did.
Mr. DAY. You asked no assurances regarding that and received
none?
Mr. HARRIMAN. No, sir. -
Mr. DAY. Was any inducement held out to you to enter the Northern
Securities Company or take any interest in that?
Mr. HARRIMAN. No, sir. s .
Mr. DAY. By any of these gentlemen?
Mr. HARRIMAN. No, sir. r
Mr. DAY. You are a shareholder in that?
Mr. HARRIMAN. I am individually; yes, sir; but it has been pur-
chased since—within the last month, I expect; a small interest—not in
relation to this.
Mr. DAY. Are you a member of the board of directors? |
Mr. HARRIMAN. Yes, sir. .
Mr. DAY. Have you ever sat with the board?
Mr. HARRIMAN. I think I have.
Mr. DAY. When Ž e - -
Mr. HARRIMAN. Once or twice. I think about a month ago.
Mr. DAY. That company has only been organized about two months,
has it not?
Mr. HARRIMAN. I do not remember. I have not had anything to do
With the organization of the Northern Securities Company.
Mr. DAY. You are also a member of the executive committee of the
Northern Securities Company, are you not?
Mr. HARRIMAN. I think I am. -
94 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. DAY. Has that committee had a meeting :
Mr. HARRIMAN. I think it has.
Mr. DAY. Did you attend it?
Mr. HARRIMAN. Well, I do not remember. I believe I attended one
meeting of the executive committee of the Northern Securities Com-
pany—I think I did—either the board of directors or the executive
committee. Af
Mr. DAY. You wish to be understood as stating that no one repre-
senting the other half, or the minority holding of the preferred stock
of the Northern Pacific, made any pledges or promises to you or to your
colleagues in Union Pacific respecting the future operation of the
Great Northern, Northern Pacific, or the Burlington in the dealings
of all or either with the Union Pacific system :
Mr. HARRIMAN. I think that is a question in another form—I thought
I answered that.
Mr. DAY. I thought I would make it broad.
Mr. HARRIMAN. There is a common interest among us all and we
believe that common interest would be served, irrespective of any
holding that we or anybody else might have. The common interest
of the producer and the carrier, or the various carriers, would be
finally adjusted on its own natural basis, irrespective of what anybody
could promise or any agreement that might be made, and it would be
impossible, in view of the power of the large systems that now exist,
for anyone to injure the other without injuring itself. Our interests
are so common that we can not help but consider each other.
Mr. DAY. At any of these meetings or conferences were the terms
of an adjustment of the questions outstanding between the majority
and minority holders of stock of the Northern Pacific Railroad Com-
pany reduced to writing? -
Mr. HARRIMAN. There was nothing, except the one just after the
financial panic, in which it was suggested that we settle that once for
all so as to reestablish confidence, and that was the one. I think there
is a memorandum. I am not sure. I think there is a memorandum
in which we agreed that we would permit Mr. Morgan to vote our
stock. º
Mr. DAY. Was anything else stated .
Mr. HARRIMAN. It was merely a wish on our part to indicate to
everybody that we had confidence in the then existing management of
the Northern Pacific.
Mr. DAY. Did you have any conference with the same gentlemen
subsequent to that respecting the holding of the Northern Pacific
Railroad? -
Mr. HARRIMAN. That conference—of course we had conferences and
negotiations, because there was a desire to purchase our interests. Of
course we could not sell it without negotiations being conducted by
Somebody. *
Mr. DAY. Did you attach to your negotiations for the sale of North-
ern Pacific stock any other conditions than the one of the money price!
Mr. HARRIMAN. No, sir.
Mr. DAY. No other conditions? -
Mr. HARRIMAN. No other conditions that I remember.
Mr. DAY. No other consideration except the one of the money price!
Mr. HARRIMAN. I. do not remember any condition of the Union
Pacific or Oregon Short Line in any way. *
CONSOLI iſ ATIONS AND COMBINATIONS () F CARRIERS. 95
Mr. DAY. Or the gentlemen who held the stock, yourself or your
cotrustee, or your attorneys—Mr. Schiff or any member of the firm
of Kuhn, Loeb & Co. :
Mr. HARRIMAN. None other than I have stated.
Mr. DAY. Of the various interests?
Mr. HARRIMAN. No, sir.
Mr. DAY. Who has that memorandum ? -
Mr. HARRIMAN. I do not know. Of course, when the election took
place the whole thing fell, and that memorandum may be in existence
and may not, I am not sure. I think that memorandum was conveyed
in a published statement—published in a New York paper—to the
effect that we had agreed that Mr. Morgan should vote our stock.
Mr. DAY. When you sold your seventy-eight millions of stock did
you receive cash for it?
Mr. HARRIMAN. Cash and securities.
Mr. DAY. What part cash?
Mr. HARRIMAN. I do not remember; quite a large amount cash.
Mr. DAY. What proportion securities?
Mr. HARRIMAN. The same thing. Of course it covered a very large
amount of money. We received some securities and some cash.
Mr. DAY. What was the character of the securities you received?
Mr. HARRIMAN. Some of the securities of the Northern Securities
stock.
Mr. DAY. And the cash was for your preferred stock?
Mr. HARRIMAN. We made no difference. We sold what we had.
Mr. DAY. Had the Northern Securities Company then been organ-
ized or was it an agreement that you would take its stock when it was
organized? -
Mr. HARRIMAN. I do not remember that.
Mr. DAY. When was the sale made?
Mr. HARRIMAN. In September or October.
Mr. DAY. The Northern Securities Company was not incorporated
until November 12. You could not have had its securities then.
Mr. HARRIMAN. Well, we had then the agreement to deliver us the
Securities of a gompany. - - - -
Mr. DAY. Is that agreement in writing?
Mr. HARRIMAN. Or cash. I think that is the way it was.
Mr. DAY. Is that agreement in writing : •
Mr. HARRIMAN. I think we made a memorandum.
Mr. DAY. Whom do you mean by “we ?”
Mr. HARRIMAN. J. P. Morgan & Co., or in the office of J. P. Morgan
& Co. and myself.
Mr. DAY. You have a copy of the memorandum :
Mr. HARRIMAN. The transaction was completed.
Mr. DAY. When did you get the securities for the balance?
Mr. HARRIMAN. I think we got them in December before the year
was out; I do not know. We may have secured some other securities.
I do not know.
Mr. DAY. Were you aware at the time you made the agreement,
Which you say was in writing, to dispose of your seventy-eight millions
of Northern Pacific stock -
Mr. HARRIMAN. Whether there was to be a securities company
formed? w -
Mr. DAY. Yes, sir.
96 CONSOLIDATIONS AND COMBINATIONS () F C A RRIERS.
Mr. HARRIMAN. I think there was some talk of that.
Mr. DAY. Did youthen know at that time that it was proposed that the
Northern Pacific Company should issue this new bond it did, this new
bond and mortgage to raise the money, this convertible bond to retire
the preferred stock : +.
‘Mr. HARRIMAN. I know nothing about what they were to do or how
they were to do it. -
Mr. DAY. There was nothing said to you about the seventy-five
millions of convertible bonds?
Mr. HARRIMAN. I can not remember that there was. It had nothing
to do with our transaction. We made no difference between common
and preferred stock.
Mr. DAY. I want the extent of your information at that time respect.
ing the future policy, the plan by which the preferred stock was to be
retired and bonds to the amount of seventy-five millions, convertible
bonds, convertible into common stock, was to be issued in payment of
the preferred stock to be retired—were you aware of that?
Mr. HARRIMAN. I think not. -
Mr. DAY. You were given no option to take that for your stock?
Mr. HARRIMAN. We had nothing to do with the securities issued.
Mr. DAY., Will you file with the Commission a copy of that memo-
randum ?
Mr. HARRIMAN. I will try to if I can get it. I will be very glad to
furnish them with any information.
Mr. DAY. Was it before or after you had taken the stock in the
Northern Securities Company—I mean that you had effected the sale,
completed the sale of the seventy-eight millions to Pierpont Morgan
& Co. of the Union Pacific interest in the Northern Pacific road—
that you were elected a member of the board of directors of the
Northern Securities Company? Was it prior or subsequent to the
sale of the seventy-eight millions of stock that you were elected a
member of the board of directors of the Northern Securities Company?
Mr. HARRIMAN. As you say, we sold our seventy-eight millions of
stock. - - -
Mr. DAY. I mean when you completed the transaction, when you
actually delivered the stock and took Northern Securities stock in part
payment.
Mr. HARRIMAN. I do not think we got Northern Securities Company
stock in part payment in the first instance. Our sale was made and
completed, I think, before the Northern Securities Company was
formed. I think there was only an agreement as to that.
Mr. DAY. When were you elected a member of the board of directors
of the Northern Securities Company ?
Mr. HARRIMAN. I do not remember. I guess in November or
December. I know I did not attend the first meetings of that com-
* O8,1]. V.
p Wi. DAY. Who holds that stock in the Northern Securities Com-
any? . -
p Mr. HARRIMAN. I presume the Oregon Short Line.
Mr. DAY. What was the amount of that?
Mr. HARRIMAN. 'I do not remember.
Mr. DAY. Roughly speaking. -
Mr. HARRIMAN. Oh, it was fifty or sixty millions.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 97
Mr. DAY: You think it is in the name of the Oregon Short Line?
Mr. HARRIMAN. No; I think not.
Mr. DAY, Was it prior to the issue of that fifty or sixty million of
stock, in which an equity belongs to the Oregon Short Line, that you
were elected a member of the board of directors?
Mr. HARRIMAN. That I do not remember. These things had no
bearing on each other.
Mr. DAY. They had not?
Mr. HARRIMAN. No, sir.
Mr. DAY. They were entirely independent transactions. Your elec-
tion as a member of the board of directors of the Northern Securities
Company had no bearing whatever, no relation to the ownership of
the $78,000,000 of the Northern Pacific road?
Mr, HARRIMAN. My election to the Northern Pacific board?
Mr. DAY. To the Northern Securities board?
Mr. HARRIMAN. No, sir.
Mr. DAY. I forgot what your answer was to my inquiry as to what
your official relation was to the Chicago and Alton Railway Company?
Mr. HARRIMAN. I am a director; a member of the executive com-
mittee, and, I think, chairman.
Mr. DAY. Are you also a member of the old company, the Chicago
and Alton Railroad Company?
Mr. HARRIMAN. I think I am.
Mr. DAY. What is the capital stock of the Chicago and Alton Rail-
road Company ?
Mr. HARRIMAN. I can not remember those figures.
Mr. DAY. Well, about?
Mr. HARRIMAN. I do not remember, really. I think, whatever it
was, I think we had to pay about $40,000,000.
Mr. DAY. What is the capital stock of the Chicago and Alton Rail-
Way Company?
Mr. HARRIMAN. I think that is $40,000,000. I may be mistaken
about that. It is common and preferred stock—that can be obtained.
Mr. DAY. Both companies are subsisting corporations—the railroad
Company and railway company?
Mr. HARRIMAN. Yes, sir.
Mr. DAY. By what sort of title does the Chicago and Alton Railway
Company hold the property of the Chicago and Alton Railroad Com-
pany, formerly owned and controlled by the Chicago and Alton Rail-
road; lease or how !
Mr. HARRIMAN. I think it is by lease and ownership both. That is
my recollection.
Mr. DAY. The lease was for a term of years?
Mr. HARRIMAN. I think it was.
Mr. DAY. Is there any contract—any contractual relation—between
the old company and the new company except as set out in the lease?
Mr. HARRIMAN. I believe not.
Mr. DAY. How much of the stock of the Chicago and Alton Rail-
road çompany (meaning the old company) is owned by the new com-
pany
Mr. HARRIMAN. All but a few millions; I think there is a million or
two millions—practically all.
Mr. DAY. All but a few millions is an asset of the new company ?
526A—02—7
98 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HARRIMAN. Yes, sir. º
Mr. DAY. Of the stock of the old company all but a few millions
is an asset of the new company
Mr. HARRIMAN. Yes, sir.
Mr. DAY. Do you know whether the railway company
any dividends on the stock of the new company
Mr. HARRIMAN. I do not remember.
Mr. DAY. If it does, is that set out in the lease?
Mr. HARRIMAN. I think it is all set out.
Mr. DAY. Will you furnish a copy of that?
Mr. HARRIMAN. Yes, sir; I will furnish a copy. I think the lease
provides for the net earnings of the company. I am not sure.
Mr. DAY. If the capital stock of the new company is forty millions,
as you suppose or approximate º
Mr. HARRIMAN. It is what the property cost. I do not know what
it is. Whatever the stock cost, I think that is the capital of the rail.
Way company.
Mr. DAY. The capital stock of the new company was all paid up in
cash? -
Mr. HARRIMAN. Yes, sir.
Mr. DAY. Par? -
Mr. HARRIMAN. Yes, sir; cash or its equivalent. It was issued for
cash or for Chicago and Alton Railroad stock or some other property,
Mr. DAY. How was the money raised—by collateral mortgage or
trust, or how did the new company raise the money—by bonds?
Mr. HARRIMAN. Some bonds and some stock.
Mr. DAY. The stock was paid for in cash?
*: HARRIMAN. Or its equivalent—exchanged for securities pur-
chased. -
Mr. DAY. What is the amount of bonds the new company issued!
Mr. HARRIMAN. That I do riot know. I could not say. I think
$15,000,000.
Mr. DAY. What was the stated price of the stock of the old com-
pany that the new company paid?
Mr. HARRIMAN. I do not remember now, but some time ago I think
it was about 200. w
Mr. DAY. The par value of the old stock was 100, and it paid 200?
Mr. HARRIMAN. Two hundred per cent.
Mr. DAY. Is the Union Pacific system or any of its subsidiary lines
Or companies interested as a share owner? -
Mr. HARRIMAN. In the Chicago and Alton'
Mr. DAY. In the Chicago and Alton—any relationship between the
two companies?
Mr. HARRIMAN. No, sir.
Mr. DAY. They are quite independent?
Mr. HARRIMAN. Absolutely independent.
Mr. DAY. No pecuniary interest in the Alton?
Mr. HARRIMAN. No affiliation whatever.
Mr. DAY. In either way?
Mr. HARRIMAN. In either way. . -
Mr. DAY. Pending the negotiations for the sale of the seventy-eight
millions of Northern Pacific stock, which has been referred to, and the
questions which arose respecting it from time to time among your
associates, who acted as your legal counsel?
guarantees
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 99
Mr. HARRIMAN. Mr. Pierce.
Mr. DAY. On what basis was such portion of the seventy-eight mil-
lions as was taken in exchange or exchanged for Northern Securities
stock based or taken? What was the basis of the exchange?
Mr. HARRIMAN. We made no exchange.
Mr. DAY. I thought you said
Mr. HARRIMAN. No; we had no transaction whatever. . I think you
have got a wrong impression. We had no transaction whatever with
the Northern Securities Company.
Mr. DAY. You took some stock of the Northern Securities Company
in part payment?
Mr. HARRIMAN. What you want to know is what price we took
Northern Securities Company stock or agreed to take it at in case it was
delivered to us, or any other security. *
Mr. DAY. Yes, sir.
Mr. HARRIMAN. At par.
Commissioner PROUTY. You do not mean to say that you sold
Northern Pacific stock at par?
Mr. HARRIMAN. No; that question was not asked. I thought the
Question was whether what we took was on the basis of cash or
Northern Securities at par. -
Mr. DAY. I understood you to say that you took some Northern
Securities in part payment.
Mr. HARRIMAN. Yes, sir; in lieu of cash. We did not make any
exchange.
Mr. DAY. You did not subscribe &
Mr. HARRIMAN. No, sir; we had no transactions with them.
Mr. DAY. When you sold this seventy-eight millions of stock, were
you advised or informed by any of the people you negotiated with,
directly or indirectly, that that stock was to be turned over to the
Northern Securities Company when organized?
Mr. HARRIMAN. I do not remember that we were specially advised.
That was generally talked, that there was to be a securities company.
Mr. DAY. You relied on it that that would be done, did you not?
Mr. HARRIMAN. That did not influence
Mr. DAY. I am not asking that. You did rely on that, did you not?
Mr. HARRIMAN. No; we did not rely on it.
Commissioner PROUTY. You mean that you agreed to pay par for
the stock of a company that you did not know anything about?
Mr. HARRIMAN. I thought the question was not on that basis. The
Question was, I think, what influence the sale of this Northern Pacific
stock—that there was to be a securities company formed
Mr. DAY. I will ask the stenographer to read the question.
The stenographer read the question, as follows: “When you sold
this seventy-eight millions of stock, were you advised or informed b
any of the people you negotiated with, directly or indirectly, that that
stock was to be turned over to the Northern Securities Company
when organized?”
Mr. HARRIMAN. That is not as I understood the question. We knew
in a general way, the formation of a securities company was talked
about, and we agreed to take in lieu of cash a certain amount of that
stock, in lieu of cash, at par.
Mr. DAY. Then I asked if you did rely on the statement that a
securities company was to be formed?
100 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HARRIMAN. In making the sale 4
Mr. DAY. Yes, sir.
Mr. HARRIMAN. No.
Mr. DAY. I do not mean that that was the moving consideration.
Would you feel that you had a cause of complaint against the gentle-
men you were negotiating with if that stock had not been put into the
Northern Securities Company
Mr. HARRIMAN. I do not think we would. I do not know any rea-
son why we should.
Commissioner PROUTY. Of course, before you agreed to take fifty
millions of that stock you knew something about what it was going
to be worth. You did not expect that they had a right to put Great
Northern stock in at $300 a share. You must have known in some
way on what basis that company would be operated.
Mr. HARRIMAN. Yes, sir; in the general talk at that time—the gen-
eral talk that there was to be a securities company formed.
Commissioner PROUTY. Do you engage in transactions of fifty or
sixty millions on general talk?
Mr. HARRIMAN. Yes, sir; very often.
Commissioner PROUTY. Perhaps you had better define what you
mean by “general talk.” • •
Mr. HARRIMAN. You mean if there was any specific information
given or agreement that there should be a certain amount of Northern
Pacific or Great Northern stock put in Ž
Commissioner PROUTY. I think what Mr. Day wants and what the
Commission would like to know, if it is material at all, is what agree-
ment was made, what understanding was had, as to the organization of
the securities company, of which you agreed to take the stock at par.
Mr. HARRIMAN. We agreed to take the stock at par if the securities
company was formed, and the Northern Securities Company stock
issued in payment for Northern Pacific stock not to exceed 115, and if
Great Northern stock were put in that that should not exceed 180.
That is the plan.
Mr. DAY. You understood that Northern Pacific stock was to be
taken at 115 of the other, and you took it at par?
Mr. HARRIMAN. No, sir; I did not say that.
Mr. DAY. I mean the Northern Securities; you took that at par?
Mr. HARRIMAN. Yes, sir.
Mr. DAY. Oh, yes; I see I was in error. -
The CHAIRMAN. As I understand Mr. Harriman, he said he nego-
tiated the sale of this Northern Pacific stock when his company
decided that it was best to sellit. He reported the terms to his company
and they ratified the arrangement.
Mr. HARRIMAN. Yes, sir.
The CHAIRMAN. That arrangement fixed a price, and part of it was to
be paid in money and the balance in securities, and included in those secu-
rities was an agreement on your part to take a certain amount of the
securities of the Northern Securities Company, if organized on a cer-
tain basis? *
Mr. HARRIMAN. Yes, sir.
The CHAIRMAN. Subsequently it was organized on that basis.
Mr. HARRIMAN. And the stock was delivered and received.
The CHAIRMAN. And you took the stock of the Northern Securities
Company in payment of the Northern Pacific stock that you sold?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 101
Mr. HARRIMAN. Yes, sir.
Commissioner CLEMENTs. When in the course of these negotiations
did it become certain that the Northern Securities Company would
be a practical organization—would be effected?
Mr. HARRIMAN. In the first place, the talk of forming a securities
company—I do not know whether it was the purpose of forming it
under the name of the Northern Securities Company or under any
other name, but I was generally cognizant of the fact that there had
been a plan for forming a securities company for the holders of the
Great Northern stock, and I think some time before we had any inter-
est in the Northern Pacific. I think in some of my conversations with
Mr. Hill that he had stated to me that he and his associates had a plan
in view for forming a securities company, in which they were to put
their holdings of Great Northern stock, a long time before we had any
interest in the Northern Pacific.
Commissioner CLEMENTs. When did you first seriously consider
taking any stock in that company yourself or for the corporations you
represent?
Mr. HARRIMAN. Only when we sold the Northern Pacific stock.
Commissioner CLEMENTs. That was in September?
Mr. HARRIMAN. Whatever the date was that was the time.
Commissioner CLEMENTs. When did you procure that stock for the
Oregon Short Line or Union Pacific, the seventy-eight millions?
Mr. HARRIMAN. For the Oregon Short Line?
Commissioner CLEMENTs. When did you obtain that?
Mr. HARRIMAN. I think the 7th and 8th of May.
Commissioner CLEMENTS. You obtained it in the spring :
Mr. HARRIMAN. Yes, sir?
Commissioner CLEMENTs. And determined in the fall, about Sep-
tember or whenever it was, to take fifty or sixty millions of the pro-
ceeds of that and put it in the Northern Securities stock, not in
exchange, but you would sell one and buy the other?
Mr. HARRIMAN. We agreed to take securities and stock with the
understanding that it was to be a securities company, if formed.
Commissioner CLEMENTs. At the time you purchased that Northern
Pacific stock you apparently must have had some substantial reason
for apprehending danger to the properties you represented, as you
have already stated, as I understand, that you deemed it necessary for
the full and proper protection of your interests to have a dominating
influence in the Northern Pacific Company. Is that a correct state-
ment? -
Mr. HARRIMAN. Yes, sir; that is what I said.
Jommissioner CLEMENTs. Now, apparently in the fall you turned
that loose so as to lose that dominating influence, so far as you had
obtained it by the purchase of that stock, and there must have been
Some substantial impression
Mr. HARRIMAN. May I explain that?
Commissioner CLEMENTs. Certainly.
Mr. HARRIMAN. I think the subsequent action of the Oregon Short
Line or the people representing it in what they thought, and I think
what was the prevailing influence with them was that the purchase of
the Burlington Company by the Great Northern and perhaps the con-
trol of the Northern Pacific by one party might injure the Union
Pacific or the territory—it might prevent the Union Pacific from
102 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
properly serving, I might say, the territory through which it runs,
and subsequent to the purchase of that stock, I think that our action
in agreeing to give our proxy to Mr. Morgan is evidence enough that
we were satisfied that there were more interests than the Great North-
ern or the people affiliated with the Great Northern in the Northern
Pacific, and the subsequent management of the Northern Pacific is a
further indication that we were right.
Commissioner CLEMENTs. When did you give Mr. Morgan that
proxy 4
Mr. HARRIMAN. The agreement that he should name the board of
directors was given in May, about the time that there was this pre-
vailing financial distrust, in which we had no hand, nor any interest,
nor any purpose to serve, except, as I have stated before, that we
should evidence to the whole financial world that there was no inten-
tion of creating a contest as against the then managers of the North-
ern Pacific.
Commissioner CLEMENTs. Now, has not the formation of the North-
ern Securities Company, with an important holding in it by the
Oregon Short Line, one of the corporations you represent—the inter-
ests under you—a holding in that company of fifty or sixty millions,
and the identification of Mr. Hill and his associates, including the
Great Northern and Northern Pacific and Burlington, with this same
company—all of you associated together—also gone a long way to
assure you that there would be no unfriendly action on the part of
the Northern Pacific in respect to the traffic?
Mr. HARRIMAN. No more than there has been in existence since the
two corporations were organized.
Commissioner CLEMENTs. Which two corporations?
Mr. HARRIMAN. I thought you referred to the Union Pacific or the
Oregon Short Line and the Northern Pacific.
Commissioner CLEMENTs. Well, what I mean is that since you and
the interests you represent and the interests represented by Mr. Hill
and Mr. Morgan, which include the Union Pacific, the Southern Pacific,
and the Oregon Short Line, and now the Great Northern, the North-
ern Pacific, and the Burlington, are all holding stock in the way that
was described yesterday, more or less, in the Northern Securities Com-
pany, and Mr. Hill being president of it and you being a member of
the board of directors, is there not much less likely to be any friction
or contest in the matter of traffic between the Northern Pacific and
the Union Pacific and its affiliated lines?
Mr. HARRIMAN. I think it may in this respect, that it may enable us
where we are frequently brought together, or when we are brought
together, whether frequently or infrequently, it has been very infre-
Quently so far, it may enable us to so get together, that we may be
able to eliminate the prevailing distrust as to the various lines main-
taining their tariff rates. In other words, I do not know that you have
ever had before you a complaint of too high a rate, but it is a com-
plaint as to discriminations, and that is all we are trying to eliminate
from the situation to-day. I believe this, that in our association, if
we will be able to influence the situation to such an extent that we will
prevent, or largely prevent, discriminations as against the general
shipper, and the concessions which are made or said to be made in
favor of one shipper as against another—am I not right, Mr. Chair-
man, that the complaints mostly that come before your body are to
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 103
the effect that there are discriminations, and not that rates are gener-
ally higher than they ought to be?
The CHAIRMAN. I must reserve my answer to that question to
another time and place. -
Commissioner CLEMENTs. Will not the same power of cooperation
and unity of action and financial association enable you also to prevent
the reduction of the published rate? 4.
Mr. HARRIMAN. I do not know that we have power to do that, even
if we wanted to.
Commissioner CLEMENTs. Well, the carriers are given power to
publish the rates, and they publish what they choose to as the rates at
which they will carry. They are also authorized to reduce them from
time to time or increase them from time to time. Of course there is
a general declaration of the law that they shall be reasonable and just,
and free from undue discrimination, but now you say that your prin-
cipal object is to prevent the unjust discrimination.
Mr. HARRIMAN. I did not say we had an object. I said that I
believed being brought together would enable us to consider these
Questions and prevent by our own officials and the officials of other
lines their participating in discriminations and illegal—if you are a
mind to—illegal practices.
Commissioner CLEMENTs. Particularly deviation from the published
rate
Mr. HARRIMAN. Deviation from the published rates.
Commissioner CLEMENTS. Now, what I want to know is this: Inas-
much as under the law you make your own rates and change them from
time to time, and you have now cooperation—community of interest—
financial and organized cooperation in one concern, directing more or
less all these roads, by the election of officers, will it not carry with
it not only the power to prevent deviations from the published rate,
but also the power to hold up the published rate and prevent its reduc-
tion by the separate action of competing roads?
Mr. HARRIMAN. I do not quite understand what you mean by “com-
munity of interest.” I think we all have a common interest, a com-
mon interest to increase the volume of business generally. There can
not be one railroad or one community exist at the expense of the other,
and it seems to me that whether we meet or happen to meet by an
agreement in Chicago or in New York or in San Francisco, or whether
We are brought together in a board of directors of a securities company
or a bank or trust company, it makes no difference. If we wanted to
practice something that was against the law it would not be necessary
for us to form an organization and become directors thereof and adver-
tise it to the world. We could meet anyhow. We have a common
interest to preserve—which I think Mr. Hill explained to you yester-
day—the avenues of traffic which are natural and over which traffic can
be conducted and the products of the producing sections can reach the
markets in some other part of the country. I understand your ques-
tion to be whether it would not give us an opportunity to do something
We have no right to do.
Commissioner CLEMENTs. In restraint of competition; reducing
rates. -
Mr. HARRIMAN. May I ask a question, whether it would be any
different whether we met at a specific place you may name, whether as
a board of directors of a security company or as a board of directors
104 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
of some corporation, or whether it was by arrangement at some other
place other than where the board of directors meet? It would not
give us any more opportunity than we would otherwise have were we
not members of one board.
Commissioner CLEMENTs. Well, the ownership of the stock in the
one company would be something more potential than a mere coming
together as independent representatives of independent roads. There
have been many conferences between traffic managers and presidents
in regard to these matters, but this is something substantially different,
is it not? Here is a corporation the stock of which
Mr. HARRIMAN. You are talking about the Northern Securities
Company?
Commissioner CLEMENTs. Yes, sir; the stock of which is held by
these various interests.
Mr. HARRIMAN. Yes, sir; but it might be changed at any time. It
might be all combined in one holding. -
Commissioner CLEMENTS. That might be. So might any pooling
contract between an association of roads. It might exist to-day and
not to-morrow. So long as it does exist, does it not afford a power
of concentration and unity of action?
Mr. HARRIMAN. You mean by holding the stock?
Commissioner CLEMENTs. The holding of the stock, the joint interest
in the matter, and the cooperation that comes from that.
Mr. HARRIMAN. I think there are other and larger considerations
which move the management of these properties other than the holding
in any security company. As I have tried to explain, the matters
practically control themselves in the end. There are commodities to be
moved. There is productive territory. The products of one territory
have to be shipped to consuming points, which may be thousands of
miles away. We could not control it any more by meeting in that
board of directors and having an interest—whether it was a large or
small interest—in that stock any more than we could if we did not.
Commissioner CLEMENTs. In times past, when these roads have been
separate in ownership and operation, they have reduced rates in
order to get business, one road away from the other. That has been
the operation of competition in the past. Does not this directly tend
to restrain that by the cooperation brought about?
Mr. HARRIMAN. You mean reducing the published rates?
Commissioner CLEMENTS. Yes, sir. •. -
Mr. HARRIMAN. I do not think it will, nor do I know in any case
where it has.
Commissioner CLEMENTs. Do you mean to say that there will be
the same freedom and activity and competition, in your judgment—is
that what you state now—that there would be if these roads were
entirely separate and independent of each other?
Mr. HARRIMAN. They are entirely separate and independent of each
other.
Commissioner CLEMENTs. They are in a technical sense, and at the
same time you are president of the Southern Pacific and also chair-
man of the board of the Union Pacific, as I understood your testimony.
Mr. HARRIMAN. Yes, sir.
Commissioner CLEMENTs. And president of the Oregon Short Line?
Mr. HARRIMAN. President of the Oregon Short Line. They are all
connecting lines and feed to each other.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 105
Commissioner CLEMENTs. Yes, sir; and they have been competing
lines, have they not?
Mr. HARRIMAN. Not to my knowledge any more than now, and more
than the situation of the lines makes it necessary.
Commissioner CLEMENTs. You do not mean to have us understand
that Mr. Stubbs, as traffic director of these lines, would make one com-
pete against another in the reduction of rates?
Mr. HARRIMAN. I do not know of any territory that one or the other
Serves that would make that necessary.
Commissioner CLEMENTs. Well, the traffic from the eastern coast
to the western coast could go by the Southern Pacific or the Union
Pacific, or by the Oregon Short Line in connection with other roads?
Mr. HARRIMAN. On a published tariff?
Commissioner CLEMENTs. Yes, sir.
Mr. HARRIMAN. I do not know any instance where a shipment was
changed in that way. I think we would hear from the shipper if it
was so. Because of the interest that the Union Pacific acquired in the
Southern Pacific I believe it is going to enable the Union Pacific or
the combined interests to give very much better service, and enable
them to improve the lines of the Southern Pacific to such an extent
that it can be operated to better advantage and possibly more econom-
ically. If these matters are not brought about that way I do not see
how the railroads will exist, and they will not be able to take care of an
increased volume of business any cheaper or as cheap as they are
to-day. You may separate all these lines that now make up these dif-
ferent systems. Formerly there may have been ten times more than
to-day. If you want to separate them and put them into small lines I
do not think the business of the country could be conducted. We are
natural connections of the Southern at one point and do not interfere
with it in any way at any other point. We may develop in connection
with the Southern Pacific new avenues, which will reach also the North-
ern Pacific territory. That is a thing I had in mind. We are now
extending a line of the Oregon Short Line from a point in Nevada to
Southern California. &
It will open an entirely new avenue of traffic between the Northwest
and southern California, New Mexico, and those southern points and
the territory served by that portion of the Southern Pacific, and
enable us to interchange commodities with points which are on the
Oregon Short Line, owned by the Union Pacific, points on the
Northern Pacific over the Short Line, and also new avenues of traffic
and new markets for commodities in all the territories served by all
those companies. How could we do that if we did not have a close
affiliation ? Would it be possible to put a middle company in between
the existing Short Line and the Southern Pacific in southern Califoria?
Commissioner CLEMENTS. Those matters are all interesting and
instructive, and no doubt—- -
Mr. HARRIMAN. You are trying to find, apparently, something that
was in our minds in making these affiliations. -
Commissioner CLEMENTs. The change in the conditions and the
opportunities that it afforded—not whether you heard particular com-
plaints or whether or not you have raised the rate here and there, but
What I am trying to get at is your judgment as to whether or not this
Community of interest, as it may be termed, by the holding of stock
Mr. HARRIMAN. May I not change that into a common interest? I
106 CONSOſ, IDATIONS AND COMBINATIONS OF CARRIERS.
think we have a common interest; not only the railroads, but the
producers.
Commissioner CLEMENTs. Put it that way. I mean the common inter-
est as it is concentrated now in the Northern Securities Company. I am
talking now of the interests of carriers separate from producers and
shippers. Has it not placed it in such way that it will be feasible
and practicable in a much greater degree than before for carriers to
prevent deviations from the published rate and also to prevent reduc-
tions in the published rate by the separate action of each of them?
Mr. HARRIMAN. I think not.
Commissioner CLEMENTS. You do not think there is any greater
opportunity for that than before?
Mr. HARRIMAN. I think not.
Commissioner PROUTY. Mr. Harriman, you say it is for the inter-
est of railroads that traffic should move by its natural channels. For
instance, take cotton raised in Texas and the Southern States. Is the
matural channel by which that cotton is moved from this country to
Japan by the Southern Pacific or by the Great Northern?
Mr. HARRIMAN. I think that would be controlled largely by the
prevailing conditions at the time that commodity was to move. -
Commissioner PROUTY. Both of those roads could take it?
Mr. HARRIMAN. Yes, sir.
Commissioner PROUTY. And both would probably be competitive
for it. Don’t you think that out of that competition the cotton grower
would be likely to get a better rate to Japan than if you owned both
roads, or Mr. Hill owned both roads?
Mr. HARRIMAN. I think if Mr. Hill, myself, or any other man
owned all of the railroads that they would get a very much better
rate than they would if they were separate.
Commissioner PROUTY. Why?
Mr. HARRIMAN. For the reason that the conditions prevailing on
each line could be taken advantage of in favor of a particular ship-
ment. We have often had conditions where we could induce the
shipment of cotton or any other commodity where we have a prevail-
ing movement of empty cars one way or the other; and with a freer
hand I believe the railroads could increase the movement of commodi-
ties from one part of the country to the other, to Japan, or any other
foreign country, if we had less restriction and could have more elas-
ticity than is now given them in the matter of giving rates at any
particular time.
Commissioner PROUTY. Just assume, for instance—
Mr. HARRIMAN. One moment, please. I think Mr. Hill explained
that yesterday; that commodities of the Northwest have to be moved
to points on the Chicago, Burlington and Quincy Railroad; they have
to be moved to points on the Union Pacific Railroad, and the prevail-
ing movement of empty cars the other way would influence the rate
at any particular time, which could be given to cotton or to any-
thing else.
Commissioner PROUTY. Take cotton. Suppose you owned all of the
transcontinental roads, so that a man could not get his cotton across
the yountry unless it went by your road; why would you reduce his
rate r -
Mr. HARRIMAN. Because it would be to our interest to make such a
rate as would induce the movement of that commodity.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 107
Commissioner PROUTY. If by reducing the rate you could increase
the movement or volume, it would be to your interest to reduce the
rate and you would reduce it?
Mr. HARRIMAN. Yes, sir.
Commissioner PROUTY. Unless you could increase the volume of
traffic, you would not reduce the rate 4
Mr. HARRIMAN. It would not move. The same principle that would
induce the rate that was made on the first bale of cotton would influ-
ence the rate which was made on a million bales of cotton. You
would have to make a rate in the first instance that would enable the
producer to ship his commodity. tº
Commissioner PROUTY. So you do not think, Mr. Harriman, that
competition between different lines would reduce the rate on cotton—
competition itself?
Mr. HARRIMAN. I think it is only temporary.
Commissioner PROUTY. I will take another illustration that you may
know something about; I guess you do. Take the movement of grain
from the Mississippi River to the Atlantic seaboard. Some years ago
this Commission made an order—before I came on it—that corn should
be transported from the Mississippi River to New York for 17 cents
per hundred pounds, and the railroads of this country said it was con-
fiscatory. Four years ago, in the winter time, when there was no
competition by water, there was a published rate in effect from the
Mississippi River to New York of 13% cents per hundred pounds, and
we had an investigation to determine why that rate was 13% cents, and
every railroad man that testified on that occasion testified that there
were no market conditions abroad that required it—that it was entirely
competition between rail lines.
Mr. HARRIMAN. Who benefited by it?
Commissioner PROUTY. I am not asking who benefited by it.
Mr. HARRIMAN. I can not account for the inequalities or stupidity
in railroad management.
Commissioner PROUTY. I am not asking about stupidity. I am talk-
ing about the rate. What was it that reduced that rate to 13% cents if
it was not railroad competition?
Mr. HARRIMAN. May I ask you another question? Did the rate stay
at that point?
Commissioner PROUTY. The rate stayed a great deal lower than it had
been before.
Mr. HARRIMAN. I confess that there are matters in railroad manage-
ment which I can not understand. I do not pretend to be an expert
traffic man; but I know what the shipper wants and the railroad wants
is stability, and that there are special instances, such as you cite now,
where there are reductions in rates because of the then specially exist-
ing condition. Now, if we could, as I said before, have a little elas-
ticity—there may have been in that instance, I do not know, a movement
of empty cars east bound which enabled them to take the commodity at
that rate you named. I do not know what the conditions were at that
time, but that might have been the influence of one railroad.
Commissioner PROUTY. Those conditions prevailed for two or three
winters. -
Commissioner CLEMENTs. Every year when the lake is frozen up
the rates go up on the railroads, I understand, and when the lake is
open the rates go down. That must be the influence of competition.
108 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HARRIMAN. Is it not a fact that there is a larger volume mov-
ing in any event during the time of navigation than there is after
navigation is closed? That enables them to make a more attractive
rate.
Commissioner PROUTY. You have said, and repeatedly, that the rail-
road was interested and the public was interested in having these sys-
tems developed and put into first-rate shape. That is undoubtedly
true. That is because the public is interested in the rate at which
merchandise finally moves, is it not?
Mr. HARRIMAN. No; not only in the rate, but in the facilities fur-
nished and the regularity of movement as much as in the rate. There
is no advantage to a shipper if he is shipping his goods at a favorable
rate if he is not well assured that that particular commodity will reach
its destination within a reasonable time.
Commissioner PROUTY. If your rate from here to Denver was 5
cents higher than rates by other lines, how much stuff do you think
you would ship?
Mr. HARRIMAN. I think that 5 cents is a little out of proportion,
We might get a little more if we had better facilities, but 5 cents is
out of proportion.
Commissioner PROUTY. You know, Mr. Harriman, that competing
rates have to be practically the same between the same points. You
do not rely on facilities to enable you to secure a better freight rate,
do you, ordinarily?
Mr. HARRIMAN. No; but what I have been trying to illustrate is that
by having better facilities and more economical methods for transport-
ing our business that we would be enabled to make better rates; but
if we have destructive competition and irregular rates we will not be
able—as it has been in the past—we will not be able to give the facili-
ties to continue the increase in the volume of business all over the
country. .
Commissioner PROUTY. Is not the thing in which the public is ulti-
mately interested the rate?
Mr. HARRIMAN. No, sir; not absolutely.
Commissioner PROUTY. Well, pretty near !
Mr. HARRIMAN. Not pretty near. -
Commissioner PROUTY. Do you think you can charge a higher rate
than your competitor, no matter what facilities are :
Mr. HARRIMAN. I think there are certain conditions. One manu-
facturer can give better goods and get a higher price.
Commissioner PROUTY. If the public is interested along with you in
rates and facilities, why should not the public have some voice in
determining and supervising the rates?
Mr. HARRIMAN. They have. They practically make it.
Commissioner PROUTY. What do you mean?
Mr. HARRIMAN. Apparently a shipper in the past has been able to
make the rate.
Commissioner PROUTY. Name some rate.
Mr. HARRIMAN. I do not know. I am not a traffic man.
Commissioner PROUTY. Mr. Stubbs is.
Mr. HARRIMAN. Don’t I understand, as it exists to-day, that if any
unequal condition that exists any shipper can make a complaint and
have his case brought before a court to adjudicate the same at the
expense of the railroad against whom the complaint is made. Am I
not right?
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 109
Commissioner PROUTY. I won’t undertake to answer that question.
But I would like to have you do this: I would like to have you consult
your attorneys and file as a part of your examination here a reference
to some case in which a court has rendered a final judgment correcting
a rate, a discriminating rate. I do not speak of those States in which
there is a commission which has power to fix rates, but I speak of
interstate rates of vital importance to the public, and rates in those
States where there is no commission with power to fix rates. I would
like to have you file a reference to some one case of that sort.
Mr. HARRIMAN. I do not know of any that has been brought. I am
asking you. I am not as familiar with that as you are.
Commissioner PROUTY. I think as you do with reference to a part
of this question, that unless these consolidations and unifications result
in the overcapitalization of our railroads they are good for the country
and a good thing for the carriers. I think that they may result in
imposing on the public, and have resulted in some cases in imposing
upon the public, an unjust rate. *
Mr. HARRIMAN. May I ask you g
Commissioner PROUTY. Just a minute. I think the public ought to
have some means by which a shipper can complain and by which, if
his complaint is found to be reasonable, he could get relief. I do not
think he has any such relief now. -
Mr. HARRIMAN. Do you know of any special case where you fear
that there may be some discrimination or some hardship?
Commissioner PROUTY. I do not think that the discrimination
between shippers is so likely to take place after consolidation as before.
I think the hardship is likely to come from the charging of too high a
Tate. w -
Mr. HARRIMAN. It has not in the past.
Commissioner PROUTY. I am not quite certain about that.
Mr. HARRIMAN. Can you give me an instance?
Commissioner PROUTY. I will give you an instance without saying
whether it is in point or not. The actual rates from Buffalo to New
York for three or four years had been on corn 24 cents a bushel, some-
thing higher on wheat. Two years ago you organized up there, or
the railroads organized up there, what is called the Buffalo Grain Pool,
and the sworn testimony before this Commission is that that pool
absolutely eliminates competition on ex-lake grain from Buffalo to
New York, and that its effect has been to raise rates from one-half to 1
cent a bushel, which amounts on all grain moving though Buffalo in a
year to a million and a half dollars. The rate is that much higher
without competition than it was with competition. I do not say it is
unreasonable.
Mr. HARRIMAN. You do not say it is unreasonable?
Commissioner PROUTY. I do not express any opinion about it.
Mr. HARRIMAN. You do not ask me to?
Commissioner PROUTY. No; I do not ask you to.
The CHAIRMAN. Is there anything further you desire to ask, Mr.
Day?
Mr. DAY. Yes, sir; you said when my examination was broken that
You got part cash and part stock for the sale of the $78,000,000 of
Northern Pacific stock?
Mr. HARRIMAN. Part cash and part securities.
Mr. DAY. What became of the cash?
110 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mſ. HARRIMAN. It was used to pay the obligations of the Oregon
Short Line—money which they had borrowed to pay for the Northern
Pacific.
Mr. DAY. And none of it went back into the treasury Ż
Mr. HARRIMAN. The treasury of the Oregon Short Line and was
used—
Mr. DAY. Used to pay any of the $61,000,000 or the securities, cer.
tificates, or obligations of the Short Line that had been put out to
raise these $78,000,000?
Mr. HARRIMAN. Had that been reduced ; I think not.
Mr. DAY. You said that the subsequent management of the North-
ern Pacific showed that subsequent to the election of the new board of
directors that you were right—that the Union Pacific interests were
right—in turning the property over to the stockholder, Mr. Morgan,
What did you mean by the subsequent management of the Northern
Pacific that justified your action?
Mr. HARRIMAN. Perhaps the subsequent managment might have
been the continuation of the same management.
Mr. DAY. Is that what you meant?
Mr. HARRIMAN. That is what it was.
Mr. DAY. Has any agreement been made, or any understanding
been entered into, regarding a division of trans-Pacific traffic between
the Southern Pacific and the Union Pacific :
Mr. HARRIMAN. No, sir.
Mr. DAY. Or between the Southern Pacific and the Union Pacific
and the Atchison?
Mr. HARRIMAN. No, sir.
Mr. DAY. Or with the Northern Pacific or Great Northern or the
Canadian Pacific?
Mr. HARRIMAN. Not that I know of. .
Mr. DAY. You are not a party to it and have no knowledge of it?
Mr. HARRIMAN. I have no cognizance of it.
Mr. DAY. Has there been any change in the routing of traffic or
regarding rates, division of traffic, or pooling of traffic, since you
assumed the management of the Union Pacific system :
Mr. HARRIMAN. Not to my knowledge.
Mr. DAY. The Union Pacific is just as independent and is operated
just as independently of the Southern Pacific as before the union of
interests?
Mr. HARRIMAN. I do not know of any instance where there has been
any change.
Mr. DAY. And the same is true of the Union Pacific and competing
lines to the northward? They are just as independent of each other
as they were prior to this union of interests?
Mr. HARRIMAN. There has not been any union of interests.
Mr. DAY. Whatever results from the interlacing of stock.
Mr. HARRIMAN. So far as I know, the relations of the companies are
on the same basis as before.
Mr. DAY. Does the Union Pacific stand in a better position to get
traffic that formerly went by the Southern Pacific? Does it now?
Mr. HARRIMAN. I do not think so.
Mr. DAY. The Southern Pacific is not used to—or the traffic is not
diverted from the Southern Pacific to the Union Pacific proper?
Mr. HARRIMAN. No, sir.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERs. 111
Mr. DAY. Nor vice versa?
Mr. HARRIMAN. No, sir.
Mr. DAY. That is all I wish to ask.
The CHAIRMAN. Mr. Harriman, about when did your connection with
the Union Pacific system begin?
Mr. HARRIMAN. Just after the reorganization, I think, in 1898.
The CHAIRMAN. You at that time acquired a large interest and became
the chief executive officer?
Mr. HARRIMAN. No; I became a member of the board of directors
and a member of the executive committee. I was made chairman of
the executive committee and preside at meetings of the committee.
The CHAIRMAN. And that is the relation which you have since sus-
tained to that system :
Mr. HARRIMAN. Yes, sir.
The CHAIRMAN. And that relation has been practically the same from
the time of the reorganization down to the present?
Mr. HARRIMAN. Down to the present time.
The CHAIRMAN. And that was, of course, before the acquisition of
any of the Southern Pacific stock by the Union Pacific'
Mr. HARRIMAN. Yes, sir. .
The CHAIRMAN. At the time the Union Pacific began to acquire stock
of the Southern Pacific had you individually any interestin the Southern
Pacific &
Mr. HARRIMAN. No, sir.
The CHAIRMAN. You had not been connected as a stockholder or
otherwise with the Southern Pacific system?
Mr. HARRIMAN. Not as an officer in any way. I might have had an
interest in Southern Pacific stock at some time, but I do not remember
that I had. If so, it was so small as not to have had any influence
at all. -
The CHAIRMAN. You have had to do with deciding upon the policy of
the Southern Pacific after acquiring that large interest in the Southern
Pacific which was acquired?
Mr. HARRIMAN. Yes, sir.
The CHAIRMAN. Your testimony may have covered the point I have
in mind in a general way, but I desire to ask you what was the direct
purpose in acquiring that interest in Southern Pacific stock?
Mr. HARRIMAN. To prevent its control by some other line that might
have diverted the business into other channels against the Union Pa-
cific system.
The CHAIRMAN. Had you reason to apprehend that the Southern
Pacific might fall into such unfriendly hands?
Mr. HARRISON. It might have. We had no reason to suppose that
any other company were acquiring it, but it was not advisable for us
to wait until somebody else moved.
The CHAIRMAN. You were not moved by immediate apprehension or
by knowledge of efforts being made on the part of others?
Mr. HARRIMAN. As you remember, the principal holder of Southern
Pacific stock had recently died, and there was a chance always of that
stock being disposed of to some interest that might have been adverse
to and prevented the free interchange which had formerly existed
between the two companies.
The CHAIRMAN. It was on general grounds and for the future pros-
perity of the Union Pacific road? -
112 CONSO}_IDATIONS AND COMBINATIONS OF CARRIERS.
Mr. HARRISON. Yes, sir; and we believed for the future prosperity
of the Southern Pacific. *
The CHAIRMAN. And that was the sole inducement on the part of
the Union Pacific to acquire this large interest in the Southern Pacific?
Mr. HARRIMAN. Yes, sir; to preserve the then existing conditions,
The CHAIRMAN. The Southern Pacific at that time owned the line
from San Francisco to Ogden &
Mr. HARRIMAN. Yes, sir.
The CHAIRMAN. The Union Pacific and its connections could not
reach the Pacific coast over its own rails except at Portland?
Mr. HARRIMAN. Well, it does not now. It could by building a
railroad.
The CHAIRMAN. Except as it controls the Southern Pacific.
Mr. HARRIMAN. That is all.
The CHAIRMAN. Before you acquired control in the management of
the Southern Pacific you could not reach by your own rails the Pacific
coast at any point south of Portland?
Mr. HARRIMAN. No more than we do now.
The CHAIRMAN. So that all transcontinental traffic which reached
the Pacific coast at points south of Portland, passing over the Union
Pacific, had to go from Ogden on the Southern Pacific rails?
Mr. HARRIMAN. There was no other way provided for it then; natur-
ally it must, no matter who owned it.
The CHAIRMAN. Did that give the Southern Pacific the position which
enabled it to control transcontinental rates upon the Union Pacific
route? O
Mr. HARRIMAN. I think not. -
The CHAIRMAN. Then, is the present control of the Union Pacific
system over transcontinental rates by the Union Pacific route no greater
than it was before the Union Pacific acquired this interest in the South-
ern Pacific” - -
Mr. HARRIMAN. I think not. Understand me; I have already ex-
plained that in these matters the traffic officers and executive officers
of the various companies have to be communicated with and
The CHAIRMAN. I understand that.
Mr. HARRIMAN. All has to be done by conference with the managers
of those various lines, the same as it had to be before, to arrange the
divisions.
The CHAIRMAN. In point of fact, Mr. Harriman, has there been any
change in transcontinental rates since this acquisition by the Union
Pacific of Southern Pacific stock.
Mr. HARRIMAN. I understand that Mr. Stubbs was on the stand yester-
day. I did not hear his testimony and I have not had any conference
with him, and he would be the proper one to answer that.
The CHAIRMAN. You do not know?
Mr. HARRIMAN. No, sir.
The CHAIRMAN. You do not know of any change?
Mr. HARRIMAN. No, sir; I do not.
The CHAIRMAN. Either by increase or reduction?
Mr. HARRIMAN. In any way whatever.
The CHAIRMAN. Is it your understanding that your rates and basis
of rates to-day are the same as they were before the Union Pacific
acquired the interest in Southern Pacific stock?
Mr. HARRIMAN. I do not know of any change whatever.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 113
Commissioner PROUTY. How about the maintenance of rates? Are
rates better maintained or not so well maintained as they were 4
Mr. HARRIMAN. As between the transcontinental routes, do you
mean •
Commissioner PROUTY. Transcontinental rates.
Mr. HARRIMAN. I do not know of any change whatever.
Commissioner PROUTY. I did not understand exactly what Mr.
Stubbs’s duties were. He is the traffic director of these two com-
panies. Has he power to do anything except to tell somebody what
he thinks had better be done?
Mr. HARRIMAN. He has the power, as far as possible, to unify the
management of the different officers by conference with the officers of
these various companies.
Commissioner PROUTY. Suppose Mr. Stubbs thinks some rate ought
to be changed on the Southern Pacific system, has he any power to
change it !
Mr. HARRIMAN. I think Mr. Stubbs’s influence on the Southern
Pacific could enable him to change it. He has no power, as I under-
stand it, to issue a tariff. There is a traffic manager of the Southern
Pacific.
Commissioner PROUTY. You think, then, if Mr. Stubbs’s reasons
were sufficiently cogent, he could influence the traffic manager to
change the rate?
Mr. HARRIMAN. Yes, sir. e -
Commissioner PROUTY. On the Union Pacific is that the same?
Mr. HARRIMAN. Yes, sir.
Commissioner PROUTY. Practically Mr. Stubbs can make the rates
on the Southern Pacific and the Union Pacific :
Mr. HARRIMAN. I should think he could.
Commissioner CLEMENTs. Mr. Stubbs told us yesterday that these
roads, and probably all the transcontinental roads, had a joint agency
at San Francisco, or that there was an understanding in practice
whereby no one would reduce a rate except through this joint agency
after notice to competing lines. Don’t you think that tends to hold
up rates?
Mr. HARRIMAN. To keep rates stable.
Commissioner CLEMENTs. Don’t it tend to prevent reduction of the
published rate?
Mr. HARRIMAN. I do not think it does. I do not know what Mr.
Stubbs testified to, but whatever his testimony was, I think he ought .
to be questioned on it. I am not familiar with those details of traffic
matters, but Mr. Stubbs’s general powers are that he shall have the
general supervision, in cooperation with the managers, of the various
lines. -
Commissioner CLEMENTS. You have asked us some questions, one
of which was whether we believe there were any unreasonable rates
and also in respect to the effect of association in regard to the raising
of rates and keeping rates up. Now, it is a pretty well-known fact,
I suppose, in New York and throughout the country, that about two
years ago, when the volume of traffic began to grow immensely,
after the depression, that the carriers, particularly in trunk-line terri-
tory, got together and through their classification committee raised
hundreds of articles from one class to another. They took articles
of great importance out of the commodity list and put them at a
526A–02 -8
114 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
higher rate in the class list. It effected something like eight or ten
hundred changes by one paper that was issued, ninety per cent of
which, or more, perhaps, were increases, and some of which were
fincreases in the rates over what they had been for fifteen year's pre-
vious to that—an average increase on the whole of the articles
changed was about 33 per cent. That was done by a representative
committee of some sixty-odd roads which adopted the classification.
I call that to your attention as an illustration of what can be done by
cooperation, community of interest, or joint interest, or common
interest of the carriers, when they get together to prevent competition
and get a better rate.
Now, laying aside for the time being the question of whether the rate
was too low before or not, the shipper under the law is declared to
have the right to a reasonable rate. Must he look always to the
judgment or discretion or generosity or conscience of the railroad
manager in order to get his just rate? If in the present state of the
law competition is to be eliminated in this way, will he not be left
entirely to that tribunal to get his rate : r
Mr. HARRIMAN. I do not understand that he is at presant left to that
tribunal, if there is such a tribunal. But it seems to me that if that
rearrangement of the various commodities was made and there has been
no evidence of any dissatisfaction, that in itself is evidence that it was
reasonable.
Commissioner CLEMENTs. There was a multitude of complaints
brought before the Commission, five or six hundred, by wire and
letter and by all known means of communication, and several formal
complaints have grown out of it since.
Mr. HARRIMAN. Are they still in process of being adjudicated?
Commissioner CLEMENTs. They are in process of adjudication.
Mr. HARRIMAN. Are they going to be adjudicated?
Commissioner CLEMENTs. The Commission will report upon them
when they are finally argued. These cases are tedious, and voluminous
testimony has been taken and at various times. All of this suggests
that if there is to be any remedy for the public against the exaction
of unreasonably high rates the shipper must have the rate before he
ships, because the merchant and business man—I think you will agree
with me—can not very well conduct his business on rates which he must
pay and then take his chances of getting a part of it back by some proc-
ess in court, which would require perhaps a suit on each transaction,
and the amount involved would not pay for the suit; it is cheaper for
him to lose it than to try to get it back.
Mr. HARRIMAN. As I understand, the railroad in that case has to
bear the expense of the suit.
Commissioner CLEMENTs. If he gets judgment, the company would.
Mr. HARRIMAN. I understand, whether or no, the expense of that
suit has to be provided by the railroad complained against.
Commissioner CLEMENTS. That is not the law, that I know of.
Commissioner PROUTY. Where will that suit be brought?
Mr. HARRIMAN. Now you are getting me into a tangle of things that
I do not know about. I am attending to the everyday matters of
these corporations that come before me.
Commissioner PROUTY. You are looking after the railroad interest
and letting somebody else look after the public interest?
Mr. HARRIMAN. No; I am looking after the public interest too,
because they are both common.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 115
Commissioner CLEMENTs. There is a difference between the rate
that traffic will bear and the rate that is reasonable. In answer to a
question this morning you said it would not do to make a rate too high;
that the traffic would not move: that you would not get the business.
It will move at a high rate sometimes, perhaps, because it is of no value
unless it does move, provided there is something left the shipper after
he pays the rate; but that would not be the measure of the reasonable-
ness of the rate. It was said by Mr. Hill at sometime—I do not know
whether in this investigation or not—that the increase of 1 mill per
ton per mile—it seems very little—would aggregate to the roads of
the country $165,000,000 and take from the public $165,000,000, at a
mill a ton. |
Mr. DAY. Per mile? sº
Commissioner CLEMENTs. Per mile. *
Mr. HARRIMAN. Or 1 cent for moving 1 ton 10 miles. It is a little
plainer to understand.
Commissioner CLEMENTS. $165,000,000 is a great deal of money,
and yet that would not seem like a very great increase in the rate per
ton per mile. It illustrates the extent to which a little stiffening up
of the rates by diminution of competition may bring about a very great
result in dollars and cents.
Mr. HARRIMAN. Would not the reverse of that be a fact if the rate
were reduced a mill or 1 cent for moving a ton 10 miles?
Commissioner CLEMENTS. Undoubtedly. -
Mr. HARRIMAN. It only shows, it seems to me, how the management
of these railroads has become refined down to such a fine point, and
that they have got to a point where they have got to have some method
of preserving their existence. In other words, the manufacturer
to-day is dependent upon the railroads as his principal customer. I
undertake to say that the increase in volume of business this year is
largely because of the improvement and additions to the railroad prop-
erties as they exist to-day, and the rates that are made are made some-
times as against themselves.
The CHAIRMAN. Have you any further questions, Mr. Day ?
Mr. DAY. I have nothing more.
The CHAIRMAN. Mr. Harriman, do you wish to make any further
Statement?
Mr. HARRIMAN. No, sir; except to thank the Commission for excus-
ing me in time to catch my train.
Witness excused.
GEORGE B. HARRIs, having been duly sworn, testified as follows:
Mr. DAY. Mr. Harris, you are the president of the new Burlington
road? -
Mr. HARRIs. And of the old one, both. I have been present at the
hearing, it is proper for me to say, and I have heard the general ques-
tions of the Commission and their attorney. I suppose I could proceed
With a brief general statement giving the information that I suppose
you desire and that I could make it in a very few moments. After-
Wards, if you want anything else, you can ask me for it.
Mr. DAY. Very well. State your relations between the two com-
panies, the old and the new Burlington Company, and the relation of
the new concern now to the Norther n Securities Company, if it has
any, to the Union Pacific, or the Great Northern or the Northern
Pacific, if it has any, and what led up to the change.
116 CONSOLIDATIONS AND COMBINATIONS () F CARRIERS.
Mr. HARRIs. In the first place, I will start with the Chicago, Bur-
lington and Quincy Railroad. It had for a great many years an aver-
age of about 14,000 stockholders. I do not know the exact number
of stockholders at the time the sale was made. The control of the
road, however, was owned by people who had less than 70 shares
each. There were at times on the books a thousand or more share-
holders who had five shares or less. It was scattered all around over
the country. There were a good many shareholders in the West and
a good many in the East, and many especially in New England. The
day came when, in the opinion of the directors—many of whom had
been in the service of the company for many years and some of whom,
the older ones, have passed away—in their opinion it was necessary
for the interest of the company either to combine with an existing
company by purchase or by construction incur very large additional
obligations in that way, and when the desire to purchase the property
was made known the directors felt, as they informed me, or some of
them informed me, it was the general understanding that it would be
neccessary for them to determine at that time whether they would
undertake large purchases or whether they would sell; if they should
sell they wanted, of course, to give their shareholders some paper that
they thought would be good, or money, and after consideration occupy-
ing some time and the presentation of a formal proposition, the direc-
tors concluded to sell at the price which was stated, $200 a share in
bonds.
The stock had always been very closely held. It could not be pur-
chased in any enormous quantity, or not enough for control, and the
only way to buy it was to get the directors to assent to a sale. After
the proposition was made to the directors, they presented it to the
stockholders in the form of a circular, which was issued on April 29,
1901, and one of which was sent to each stockholder of the company.
It recited in a general way all of the material considerations up to that
time and the conclusion of the directors, which was unanimous except
that there was a note saying that “Mr. Edward W. Hooper has not
been consulted on account of illness, and Mr. Nathaniel Thayer is in
Europe. Mr. James H. Smith voted against the acceptance of the
proposition.” -
Mr. DAY. You may file that circular as an exhibit to your testimony.
(The same is hereto attached and marked “Exhibit A.” See Appen-
dix, page 130.)
Mr. DAY. The directors, while not having a controlling interest,
controlled it because of the confidence of the small shareholders in the
directors? .
Mr. HARRIs. The directors had been for a long time, or they felt
themselves to be, in the relation of trustees to the small holders.
They said, in fact, “We must decide whether we will put these thou-
sands of small owners into active business while they take the risks
of commerce and investment or whether we will give them a piece of
paper which will be practically a savings-bank paper.” The conclusion
was, and several of them so stated definitely, that if the property
were all theirs they would keep it, but acting for thousands of people
in that way they believed that it was their duty to act for these people
in a way that they would take no great risk. They did not want to
acquire a very large property and with it acquire very large additional
obligations, but would prefer to sell to somebody else who was in busi-
ness and take the purchase price.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 117
Mr. DAY. So they advised the sale and that was accepted? .
Mr. HARRIs. They advised the sale and that advice was accepted by,
I presume, 99 per cent.
The CHAIRMAN. Did the stockholders have the option of cash :
Mr. HARRIs. That circular states that. “The proposition includes
an offer to pay cash, instead of bonds, to an amount not exceeding in
the aggregate $50,000,000, to those shareholders who shall prefer to
receive payment partly in cash; and Messrs. J. P. Morgan & Co., as
managers of a syndicate, have undertaken to provide such cash, and
to take therefor such bonds at par and accrued interest.” The
Chicago, Burlington and Quincy Railway was organized shortly after.
that, and, while I do not know that I express the opinion or ideas of
those who were principally responsible for it—I was simply an execu-
tor or administrator—it has simply marked a change; it began a new
epoch, and it is now in process of formation, as Mr. Hill has stated.
The directors of the railway are J. J. Hill, W. P. Clough, E. H.
Harriman, Mortimer L. Smith, James Stillman, George B. Harris,
J. S. Kennedy, J. W. Perkins, William H. McIntyre, C. E. Perkins,
and C. J. Payne. The directors of the railroad are C. E. Perkins,
F. W. Hunnewell, J. Malcomb Forbes, J. J. Hill, J. N. Hill, Norman
B. Read, Robert Bacon, W. W. Wavvyway, Jacob Sºč, Geovge \\,
Gould, H. McK. Twombly. No change W.Wavewey \\as taken place \\\
the management of the company or in the policy of the company, in
the direction, division, exchange, or anything else in regard to its
traffic or general policy. º
Mr. Miller is the vice-president of the company. I was the vice-
president until a comparatively short time ago, and as vice-president
had general charge of traffic in the same way that he now has general
charge of traffic; but, having comparatively recently been elected
president of the company, it was necessary to have somebody to per-
form the duties of that office, and Mr. Miller was suggested and elected,
and he has no relation to any other company whatever. His services
are entirely devoted to the Chicago, Burlington and Quincy Railway.
The management is independent, and nothing has been suggested
beyond the necessity of increasing the facilities, as to spending con-
siderable money to promote efficiency, and as to affairs of a physical
nature or character. There has been no change in commercial or
traffic matters or anything of that kind. I believe that concludes and
makes a complete general statement. If there is anything in addition
to that which I state, I will be glad to do so.
Mr. DAY. Did you bring a copy of the lease?
Mr. HARRIS. I did not. I did not have a copy of the lease. I was
present at the hearing when Mr. Hill said he would be glad to file
one, and therefore I merely brought a list of the directors, because
you did not have them.
Mr. DAY. I believe the lease is under your control?
Mr. HARRIs. The execution of it as president of the company is.
Mr. DAY. Will you file a copy of the lease?
Mr. HARRIs. I would be very glad to do so.
Mr. DAY. And you will do so?
Mr. HARRIs. Yes, sir; I suppose one copy of the lease is all you
require?
Mr. DAY. Yes, sir.
Mr. HARRIs. There is nothing in the lease that refers to the traffic
118 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
of the company, its commercial affairs, its policy, or anything else of
the kind. It is simply a lease of the property.
The CHAIRMAN. There is no objection to filing it?
Mr. HARRIs. I do not see any objection to filing it, but I would say
that it was not germane to the subject, but if the Commission thinks
it is, it might be made use of. If not, it might be proper for the
Commission to return it.
Commissioner FIFER. For what term does that lease run ?
Mr. HARRIs. Ninety-nine years.
Mr. DAY. Is the consideration stated 4
Mr. HARRIs. I would prefer not to attempt to give the details of a
long paper which we propose to file. I might make a mistake about
it. I have not prepared myself on it. -
Mr. DAY. Did you receive any advice from the board of directors
respecting the future policy or operation of the road?
Mr. HARRIs. The only direction—I suppose that 99 per cent—I
don’t know but what I had better make it 100 per cent—of the confer-
ences I have had with Mr. Hill about the future policy or direction of
the Burlington road and with the other directors has been about the
necessity of preparing the road and its equipment for efficient, safe,
and economical service. There has been absolutely no suggestion as
to traffic controlled or diversion -
Mr. DAY. Or interchange of traffic?
Mr. HARRIs. No; it is all left; there are no instructions on the sub-
ject either from anyone else to me or from me to anybody else, and
there is no change in the relations of the company so far as I am aware.
I do not know of a single thing in which there is a change in respect
to any of those matters since this lease that I understand you to be
inquiring into, in connection with what is called the “community of
interest,” although I confess that I do not know what that is.
Mr. DAY. Will this change result in any change in the running
expenses of the road—in economical running expenses?
Mr. HARRIs. We hope to be able to live and learn. We are, as I
say, endeavoring, by seeing where we can cut our grades and increase
our capacity, to reduce our cost in that way. The question of cost,
by the way, to the general public is something that I was thinking of
a few days ago, especially in connection with some of the questions
that were raised here. I commenced work on the railroad in '66. I
found that there were some old records in the office of the Chicago,
Burlington and Quincy Railroad as to the cost or price paid by the
public—not the cost, but the price paid by the public—for transporta
tion; and I was curious to see what it was in 1866. It was then, if my
memory serves me correctly, 3.69 cents per ton per mile.
The CHAIRMAN. That was the average?
Mr. HARRIs. That was the average paid by the public. It was last
year. 78 of a cent per ton per mile. That was on the old Chicago,
Burlington and Quincy Railroad. That does not include the whole
system, because that was not created that long ago.
Commissioner PROUTY. What effect will it have upon the whole
traffic handled by the company?
Mr. HARRIs. I believe by offering the merchants and manufacturers
of the Mississippi and Missouri Valley and other districts reached by
the Burlington road the opportunity and assurance of continuous service
to districts reached by the Northern Pacific and Great Northern that
it will greatly stimulate business.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 119
Commissioner PROUTY. Has the Northern Pacific Or Great Northern
traffic which they can now give the Burlington which formerly went
to other lines, and would it be for the interest of those roads to give that
traffic to the Buriington 4 g
Mr. HARRIs. Well, I am not so very familiar with the Northern
Pacific and Great Northern affairs as to enable me to reply to that
intelligently.
Commissioner PROUTY. You spoke about the reduction of rates in
the last half century, almost. Take the last ten years; have rates on
your line declined in the last ten years?
Mr. HARRIs. I think there has been some little diminution in the
price paid by the public. The public has received a very great benefit
in another way. *
Commissioner PROUTY. Confine yourself to that for the present.
You say that you think the rates have declined. Do you mean that
per ton per mile rate has declined 4
Mr. HARRIs. Yes, sir.
Commissioner PROUTY. Does that show that rates have declined?
Mr. HARRIs. Yes, sir.
Commissioner PROUTY. Dóes that show that rates have declined?
Suppose you carry on your road from Chicago to some point 100
miles away 2 carloads of freight to-day, and that you receive for carry-
ing 1 carload, which is high-class freight, $100, and for carrying the
other carload, which is very low-class freight, $10. You get $110 for
the whole service. That is an average of $55 a car. Now, suppose
to-morrow you carry 1 car of high-class freight and you get $100, and
2 carloads of low-class merchandise at $10 a car; you get then $120
for the entire service. -
Mr. HARRIs. For four cars?
Commissioner PROUTY. For three carloads—$120 for three carloads,
or an average of $40 a car. That is to say, the amount of traffic has
increased faster than your income has increased. The rate per ton
has decreased—the rate per ton per mile has decreased, but have your
rates decreased?
Mr. HARRIs. I do not know that I exactly understand your question.
The CHAIRMAN. You know what the published rates of the Burling-
ton road have been for ten years. Are they any lower?
Commissioner PROUTY. Just a minute, Mr. Chairman. I want to
make plain the proposition. The statement is often made that the rate
per ton per mile has decreased, and the inference is drawn that rates
have decreased, if not the published rate then the actual rate charged
the public. Take the illustration that I gave and
Mr. HARRIs. I think I understand it now.
Commissioner PROUTY. You move two carloads to-day and you get
$55 a car. You move three carloads to-morrow and you get $40 a car.
Now, the rate per ton per mile has decreased on the average.
Mr. HARRIs. Yes, sir. -
Commissioner PROUTY. Have the rates decreased ?
Mr. HARRIs. I do not think that on your proposition—I do not
know that it would, but I do not think the illustration is valuable, and
I will explain why.
Commissioner PROUTY. Let me ask you another question. So, in
point of fact, if in this country the tonnage of low-priced freight has
increased more rapidly than the tonnage of high-priced freight, decrease
120 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
in the rate per ton per mile does not necessarily mean a decrease in
freight rates? &
Mr. HARRIS. I think it does. I do not think there is any value
whatever in the illustration you made, because there was never two
years when there was the same annount of freight transported of the
various classes. It varies all the time, and I think the general decrease
in the rate per ton per mile certainly shows a less price paid by the
public, and it also shows it in the articles most important to extension
of commerce. The silk, and wine, and cigars, and Turkish rugs, and
all that sort of thing—the luxuries of life, do not cut very much figure
in the consideration.
Commissioner FIFER. But has not the bulk of the low-class freights
increased out of proportion to the higher-class freights in the past ten
years?
Mr. HARRIs. No man’s opinion on that would be of very much value.
Commissioner FIFER. Have you any statistics on it?
Mr. HARRIs. No; I do not think we have. I know we have not.
Any man sees so little of the whole field that his opinion would not be
of very much value.
Commissioner PROUTY. Take your road; take your line and answer,
as the chairman suggested, the general question, have rates declined?
Mr. HARRIs. Yes, sir; I think they have.
Commissioner PROUTY. Tell us what rates.
Mr. HARRIs. The rates paid by the general public—as shown by the
decreased rates paid by the public.
Commissioner PROUTY. You know what rates are charged on your
road. Confine your attention to your published rates. Take your
published rates. We will talk about them first. From January 1,
1891, to January 1, 1901, have those published rates declined; and if
so, on what commodities? -
Mr. HARRIS. The rates are so numerous that I could not answer
that question specifically and definitely; not without making a com-
parison of rates, and I do not believe anyone else can. I can only
make the general answer that I have already made.
Commissioner PROUTY. Can you name one rate?
Mr. HARRIS. I can not do it.
Commissioner PROUTY. Can’t you name a single rate?
Mr. HARRIs. No, sir; there may be and probably are a number of
them, but I do not carry them in my head.
Commissioner PROUTY. Do you know whether the class rates from
Chicago to the Missouri River have declined or advanced in that time?
Mr. HARRIs. A few years ago, when I was familiar with all those
rates, I could have answered all those questions, but I have not been
familiar recently with rates in cents per hundred pounds.
Commissioner PROUTY. So your only reason for saying that rates
have declined is found in the fact that the rate per ton per mile has
declined? *
Mr. HARRIs. Yes, sir; but in addition to that I think the public
has received a very great benefit in improvement of service, better and
larger cars, in Safety, and everything else.
Commissioner PROUTY. You are referring to freight traffic now?
Mr. HARRIs. To all kinds of traffic. This service has cost a great
deal more to the railroads. There is a continual demand, which I
think the transportation companies have fairly met, for speed, safety,
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 121
comfort, and everything of that kind, and then in the last ten years
in Safety appliances and otherwise.
The CHAIRMAN. Terminals? .
Mr. HARRIs. In terminals and in all respects. All the physical con-
ditions I think have been improved. -
Commissioner PROUTY. Do you mean by that that you can take
freight in Chicago and deliver it out in Iowa quicker to-day than you
could ten years ago .. "
Mr. HARRIs. I think it is delivered much more quickly by all lines.
I think the public has better service, more expensive service. The
cars are larger and better. A good many of the frieght cars will ride
as easily to-day as passenger cars would twenty years ago.
Commissioner PROUTY. And you think that is a money benefit to
the public?
Mr. HARRIs. I think it is a benefit to the public. The public has
got the benefit of it. It costs the transportation companies a great
deal more; there has been a continual increase in cost that way.
Commissioner PROUTY. Do you mean to say that it costs more to
move freight to-day !
Mr. HARRIs. No; I do not. In many of those items they have saved
money by spending money.
Commissioner PROUTY. Is not the tendency to decrease the cost of
transportation? - -
Mr. HARRIs. Yes, sir; it is decreasing all the time. If our cost
to-day was what it was twenty years ago, we could not do business.
Commissioner PROUTY. You don’t know that the published rate is
universally maintained, even on the Burlington?
Mr. HARRIs. No, sir; I do not think it is on any road in the United
States.
Commissioner PROUTY. Do you think departures from the pub-
lished rate amount to more than they did ten years ago?
Mr. HARRIs. Well, those things go in waves, I believe, and just
what the conditions are at present I can not say. I think there is a
greater disposition on the part of transportation companies to observe
their published rates than there has been at times past. I hope to
See it increased. I hope to see all the business of the country done on
open rates. The business is coming more and more under the search-
light of scrutiny, and I do not object to it. I am glad to tell you all
I know, and hope everyone else is.
Commissioner PROUTY. Will you take care to tell all you know or
take care not to know too much
Mr. HARRIs. I will do the best I can. Railroads are at a great dis-
advantage in one way. There is one man on one side of the counter
and he represents the railroad, and the entire millions of the public,
except a comparatively small number, who are represented as stock-
holders—they never have any influence, and we do not know that they
have any influence at all—the entire public are pressing for a good
many things. They are pressing for superior service, for low rates,
and no power on earth can resist them. Neither of these gentlemen,
who are supposed to have great power, nor the Commission or any-
body else, can prevent the steady and irresistible march of trade in
that respect. It is the increase of trade and commerce that the rail-
roads have to look after for their business, for their profit, and it has
all got to be more and more put under the searchlight of publicity,
and that is what I believe in.
122 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Commissioner CLEMENTs. You say that rates thirty five years ago
were about 3 cents per ton per mile, or a little over?
Mr. HARRIs. I said they were on a part of the Burlington road
—that part which was the old road and which has been in existence
that length of time.
Commissioner CLEMENTs. And now it is what-–the average'
Mr. HARRIs. The rate, if I remember rightly, in 1866 was 3.6 cents—
something over 3.6 cents—and on that rate a hundred million of tons
of freight were transported. In 1901, if I remember correctly, there
were two thousand million of tons transported on the same line and
the rate paid by the public was .78 of a cent per ton per mile.
Commissioner CLEMENTs. Within what period was the principal part
of that reduction? The rates now are about the same as they have
been for the past ten years, are they not?
Mr. HARRIs. There has not been much reduction in the past ten
years. It was pretty rapid, if I remember correctly, ten or twelve
years after the war, and for twenty years it went down pretty rap-
idly, and in the last ten years there has been only a gradual reduc-
tion.
Commissioner CLEMENTs. A very slight reduction ? -
Mr. HARRIs. A very slight reduction in the last ten years, but the
slight reduction in the past ten years has been about as hard to attain,
because they were pretty close to the quick already.
Commissioner CLEMENTs. Is not competition the chief factor that
brought the rate down from 3 cents per ton per mile to less than 1%
Mr. HARRIS. I do not think so.
Commissioner CLEMENTs. What do you think was .
Mr. HARRIs. I think that competition is one of the factors, undoubt-
edly. It would take a smarter man than I to tell you just how much
influence it has had—just how much that had to do with bringing it
down. It has had something to do with it.
Commissioner CLEMENTs. Has it not had more than anything else?
Mr. HARRIS. I do not think so.
Commissioner CLEMENTs. Do you reduce rates except to get busi-
ness by it?
Mr. HARRIs. We reduce rates because of the necessity that can not
be resisted. .
Commissioner CLEMENTS. That is, you mean you reduce rates in
order to get the business?
Mr. HARRIs. To develop latent resources; to influence business by
means of those rates that can not be done without them; to increase
traffic. I do not think anybody’s opinion as to how much influence to
assign to these various factors is of much value, because one man says
a certain thing is the chief cause and another man thinks another
thing. But my opinion is that the self-interest on the part of the
railroads to reduce rates for the purpose of promoting and increasing
traffic, developing resources, creating business that was not there
before, has been the chief cause in bringing rates down, and that is
what will bring them down in the future to just the extent that it is
possible for the transportation companies to bring them down, with or
without competition. Of course rates are made sometimes—you spoke
of a rate that appeared to be ridiculously low from Buffalo to New
York. It probably did not pay the cost. I do not believe it did.
Commissioner PROUTY. They call it the best business they have up
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 123
there—I do not not say the best, but they call it good business. It is
such good business that they do not want hay at the rates you people
are getting out here.
Mr. HARRIs. That may be. Rates with violent fluctuations and
rates that are notoriously too low, or notoriously too high are not good
for business. There ought to be some margin for the play of judg-
ment as to whether a rate was within reason. That is what reason
means. If it is so high that everybody says it is an exorbitant rate
or an extortionate rate, the people who have to pay it have more
redress than any other class of people in the country.
The CHAIRMAN. Was the mileage in which you moved the one hun-
dred millions tons of freight in 1866 and on which you moved two
thousand millions in 1901 the same?
Mr. HARRIs. I do not think that is absolutely correct, because there
must have been some add tions to the mileage in Illinois during that
period, but that was the only road where we had records for that
period. The great bulk of the tonnage was all over the same line,
however. -
The CHAIRMAN. The average rate per ton per mile diminished dur-
ing that time from
Mr. HARRIs. From 3.6 cents to .78 of a cent.
The CHAIRMAN. I suppose you can not tell how much of that reduc-
tion came about from competition, though you can tell what the direct
result was?
Mr. HARRIs. No, sir.
Commissioner CLEMENTs. It is a historical fact that most of these
lines during that period have been in association to stem the current
of competition and try to stop it and hold up rates. That has been the
object of them, has it not?
Mr. HARRIs. I do not think it has been the object where rates were
shown to be too high. It has been to the interest of the railroad com-
panies—and I think the effect of it is plain—to make rates that would
stimulate business. We can not afford to repress business. We can
not afford to make an extortionate price if we know it. There is a dif-
ference between a tariff that prohibits to one that is simply permissive,
so you can do business and live. The merchant to do business must
have a heart in it; he must have an object in life, and if the transpor-
tation companies should destroy the object of the merchant and manu-
facturer he would destroy his own life. He might just as well sell his
road for scrap.
Commissioner CLEMENTS. There is a difference between a rate that
will move traffic and the doctrine of live and let live?
Mr. HARRIs. I never heard that it is the present doctrine more so
than it ever was before in transportation business. -
Commissioner CLEMENTS. I am trying to get at the fact whether
competition did not have the effect of bringing down these rates.
Mr. HARRIS. I have said that it has had some influence. It is self-
interest to induce merchants and manufacturers to ship to the very
largest extent, to make production profitable and manufacturing profit-
able, so long as the carriers can do it.
Commissioner CLEMENTS. So long as they could under the law they
always had in them a provision to make no reduction of rates without
the consent of the others? *
Mr. HARRIS. I do not know about that. I think some of them did,
but I would not undertake to speak for all of them.
124 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
The CHAIRMAN. Can you tell approximately what percentage of the
total traffic of the Burlington system can be fairly classed as com-
petitive?
Mr. HARRIs. I can not.
The CHAIRMAN. Is it large or small?
Mr. HARRIs. Well, I should suppose—I know—there is a good deal
of business that is competitive, highly competitive, and a great deal
of business that begins and ends on our own rails that is practically
noncompetitive.
The CHAIRMAN. How that would be divided, you can not tell?
Mr. HARRIS. I can not tell.
The CHAIRMAN. Have you any further questions, Mr. Day ?
Mr. DAY. No, sir.
The CHAIRMAN. Is there any further statement that you desire to
make, Mr. Harris? *
Mr. HARRIs. No, sir; I do not think of anything else.
The CHAIRMAN. Then you are excused.
Mr. KELLOGG. Will it be convenient for the Commission to examine
Mr. Mellen now? -
The CHAIRMAN. We were about to do so. Mr. Day, are you ready
to taken up Mr. Mellen's examination?
Mr. DAY. Yes, sir.
CHARLEs S. MELLEN, having been duly sworn, testified as follows:
Mr. DAY. Mr. Mellen, will you give the stenographer your full
name, please. .
Mr. MELLEN. Charles S. Mellén.
Mr. DAY. And your relation to the Northern Pacific Railroad.
Mr. MELLEN. President.
Mr. DAY. How long have you been president?
Mr. MELLEN. Four years and a half.
Mr. DAY. What are the relations, the traffic relations, between the
Northern Pacific and the Great Northern ?
Mr. MELLEN. Only those of any two competing lines.
Mr. DAY. Are they competing lines?
Mr. MELLEN. They are.
Mr. DAY. Has any change occurred since the controlling interest in
the Burlington stock was acquired by the Northern Pacific and Great
Northern in the relation of the Northern Pacific to the Great Northern?
Mr. MELLEN. None to my knowledge.
Mr. DAY. Any change in the traffic relations, as to interchange of
traffic, or respecting competitive traffic'
Mr. MELLEN. Between the Northern Pacific and the Great North-
ern ?
Mr. DAY. The Northern Pacific and the Great Northern.
Mr. MELLEN. The relations are exactly the same as before.
Mr. DAY. Has any change occurred as to interchange of traffic that
formerly existed between the Great Northern and its other connec-
tions, by reason of this interlacing of interests to each other?
Mr. MELLEN. I know nothing about the Great Northern road.
Mr. DAY. I am speaking now of the Northern Pacific. Has any
change occurred in respect to the interchange of traffic between the
Northern Pacific and its connecting lines?
Mr. MELLEN. None.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERs. 125
Mr. DAY. Since the Northern Pacific and the Great Northern
acquired the Burlington system :
Mr. MELLEN. None.
Mr. DAY. Has any change occurred in the relations of the Northern
Pacific and the Burlington since that event? -
Mr. MELLEN. None.
Mr. DAY. Has any change occurred since December 1 or since Novem-
ber 12, 1901, in the relations of the Northern Pacific and the Union
Pacific :
Mr. MELLEN. None, so far as I know.
Mr. DAY. Or in respect to traffic for which they were both com-
petitors?
Mr. MELLEN. No. -
Mr. DAY. Or any agreement respecting division of future traffic?
Mr. MELLEN. No, sir; I know of no agreement.
Mr. DAY. Or understanding :
Mr. MELLEN. None whatever.
Mr. DAY. Since November 12 have you had any conferences with Mr.
Hill or Mr. Harriman respecting the administration of the Northern
Pacific road in any respect whatever?
Mr. MELLEN. None, except as I have asked Mr. Hill's advice at
Various times. -
Mr. DAY. Asked advice regarding what?
Mr. MELLEN. In the matter of railroad policy that I wanted to act
upon.
Mr. DAY. Can you recall any change? gº
Mr. MELLEN. Nothing in particular. There has been no change
since November 12 from what existed during my whole administration.
Mr. DAY. You have always taken advice from Mr. Hill?
Mr. MELLEN. Yes, sir; but no more of Mr. Hill than of others.
'Mr. DAY. Has Mr. Hill taken an active interest in the management
of the Northern Pacific :
Mr. MELLEN. Not particularly.
Mr. DAY. Has he taken any interest since November 12%
Mr. MELLEN. No more than before.
Mr. DAY. Has he advised you regarding traffic?
Mr. MELLEN. No; I do not think so. I do not recall that he has.
Mr. DAY. Or regarding rates? -
Mr. MELLEN. No.
Mr. DAY. Or the maintenance of rates?
Mr. MELLEN. No.
Mr. DAY. Or your policy, or the policy of the road with its connec-
tions?
Mr. MELLEN. Not at all.
Mr. DAY. Not at all?
Mr. MELLEN. Not at all. My conferences with Mr. Hill have been
largely those of a neighbor and a large stockholder of our company
who was perhaps more conveniently accessible than anybody else; and
it has been very largely in regard to improvements and expense affairs.
I do not know that I have ever discussed a traffic proposition with him.
Mr. DAY. How large a stockholder is Mr. Hill in your company?
MR. MELLEN. I do not know that he is a stockholder at the present
time. -
Mr. DAY. Prior to recently :
126 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. MELLEN. I never knew, until I heard him testify that he was
the owner of 75,000 shares. I only knew him as a large stockholder.
Mr. DAY. The transfer books or stock books you had not inspected
in reference to that :
Mr. MELLEN. They were kept by the
Mr. DAY. I mean they were open to your inspection :
Mr. MELLEN. Oh, certainly.
Mr. DAY. Have you had any relation to the Northern Securities
Company
MR. MELLEN. Absolutely none.
Mr. DAY. Have you had any advice from Mr. Harriman or other
members of the board of directors of that company
Mr. MELLEN. Not at all.
Mr. DAY. Or its administration ?
Mr. MELLEN. I do not know anything about the Northern Securities
Company except what I have seen in the papers.
Mr. DAY. Have you had any advices from Mr. Hill since November
12 respecting the administration of your land department?
Mr. MELLEN. Land?
Mr. DAY. Yes, sir.
Mr. MELLEN. Ifrequently asked Mr. Hill if he thought we had better
sell—if I had a proposition I was in doubt about, I would ask if he
thought I should sell at
Mr. DAY. I am speaking of subsequent to November 12.
Mr. MELLEN. I do not recall anything since then, but it is possible
I may have casually spoken to him.
Mr. DAY. Since that date have you had conferences respecting the
general policy of the road?
Mr. MELLEN. I only recall one thing I conferred with Mr. Hill
about recently, and that was the question of whether we should erect
a union station in Helena, Mont. That has been referred to our gen-
eral manager and some officer on the part of the Great Northern to
look into the subject and report.
Mr. DAY. There has always been harmony between the Great
Northern and Northern Pacific since you have been on the road?
Mr. MELLEN. I do not think there has been more friction than there
ordinarily is between two railroads—between the Northern Pacific and
the Soo, for instance, or the Northern Pacific and the Oregon Rail-
road and Navigation. With any railroad that has competitive rela-
tions there is more or less friction.
Mr. DAY. The Oregon Railroad and Navigation was a stockholder
for some time, was it not? -
Mr. MELLEN. They had some interest.
Mr. DAY. Has there been as much harmony between the Northern
Pacific and the Great Northern as between the Northern Pacific and
Canadian Pacific' -
Mr. MELLEN. I think there is practically no difference. There is
occasion for irritation at times between both.
Mr. DAY. When there were questions of that kind you advised with
Mr. Hill & -
Mr. MELLEN. Sometimes I did and sometimes a subordinate officer—
whoever was most accessible.
Mr. DAY. Mr. Hill always took an active interest in the Northern
Pacific affairs, did he not? -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 127
Mr. MELLEN. Not particularly with myself.
Mr. DAY. Well, did he not generally 4
Mr. MELLEN. I think my conferences with Mr. Hill have been,
perhaps, as few as those with the president of any other railroad in
that section. I think my conferences with Mr. Hughitt, Mr. Lowry,
Mr. Earling, and Mr. Shaughnessy have been as frequent as those
with Mr. #n.
Mr. DAY. Were advices from those gentlemen you named as potent
and controlling with you respecting Northern Pacific affairs as the
advice of Mr. Hii! Z
Mr. MELLEN. I think they were.
Mr. DAY. The fact that he was a large stockholder—
Mr. MELLEN. You must remember that our road has been handled
by voting trustees until very recently. Those voting trustees were
practically represented by J. P. Morgan & Co., and the potent advices
of which you speak came from that source more particularly than
any other.
Mr. DAY. Yes, sir; I should assume that was true, but I also assume
that Mr. Hill was a factor in that voting trust.
Mr. MELLEN. Mr. Hill has very seldom advised with me, and I do
not believe a half dozen times in my administration has he introduced
the subject of his own volition. I do not think I have had a half dozen
letters from him in my whole administration. r
Commissioner FIFER. How long have you been president?
Mr. MELLEN. Since the 1st of September, 1897.
Mr. DAY. Were there any traffic agreements or understandings
between the Northern Pacific and Great Northern regarding the allot-
ment or division of traffic?
Mr. MELLEN. No: I think not.
Mr. DAY. Or territory?
Mr. MELLEN. No.
Mr. DAY. Or regarding the maintenance of rates?
Mr. MELLEN. No. -
Mr. DAY. Or between the Northern Pacific and Union Pacific'
Mr. MELLEN. No.
Mr. DAY. Or with the Canadian Pacific'
Mr. MELLEN. No.
Mr. DAY. Any agreement with the Canadian Pacific respecting dif-
ferentials?
Mr. MELLEN. No.
Mr. DAY. Differentials are all abolished, are they?
Mr. MELLEN. I think so.
Mr. DAY. How long since the differentials obtained between them?
Mr. MELLEN. I think there were differentials in effect at the time I
was connected with the property, but I think they have been abolished
since. The date exactly I would not undertake to give.
Mr. DAY. You wish to be understood as stating that so far as your
information goes and your administration of the road is concerned the
Northern Pacific is as independent of the Great Northern control
by the Great Northern interests as it was prior to January 1, 1901?
Mr. MELLEN. Yes, sir; so far as I know.
Mr. DAY. And since the organization of the Northern Securities
Company no advices in the way of directing the policy have been
received by you from the Northern Securities Company or any of its
officers' . :
128 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Mr. MELLEN. None whatever. -
Mr. DAY. Did you have any traffic agreements with the Southern
Pacific :
Mr. MELLEN. Well, I presume there are joint tariffs in effect and
divisions of joint tariffs. It is a connection of ours at Portland, Oreg.
Mr. DAY. Other than that?
Mr. MELLEN. None.
Mr. DAY. Anything regarding the routing of traffic.’
Mr. MELLEN. None.
Mr. DAY. Or division of traffic :
Mr. MELLEN. None.
Mr. DAY. Or division of territory !
Mr. MELLEN. None.
Mr. DAY. No agreement respecting competing traffic at Portland?
Mr. MELLEN. None; I am very sure.
Mr. DAY. Anything agreeing to maintain rates or consideration for
agreeing to maintain rates?
Mr. MELLEN. Only the general agreement we have with everybody
that if we change our rates we notify people.
Mr. DAY. No agreement that the Southern Pacific will keep out of
Atlantic coast traffic at Portland?
Mr. MELLEN. They are not out of the traffic.
Mr. DAY. Are they competing?
Mr. MELLEN. Certainly.
Mr. DAY. Strongly competitive?
Mr. MELLEN. As strong as they know how, I think.
Mr. DAY. By way of Sacramento ? -
Mr. MELLEN. Yes, sir.
Mr. DAY. I think that is all I wish to ask Mr. Mellen.
The CHAIRMAN. Mr. Mellen, to what extent, if at all, is the Bur-
lington road or any part of it a competitor of the Northern Pacific or
any part of it?
Mr. MELLEN. Comparatively none, if you except the local business
of the little town of Billings, which is the point of intersection.
The CHAIRMAN. That is the only point of connection?
Mr. MELLEN. Except St. Paul and Minneapolis.
The CHAIRMAN. You have heard the testimony in this case, or most
of it? º
Mr. MELLEN. Yes, sir; all of it, practically.
The CHAIRMAN. And understand the nature of the inquiry the Com-
mission is conducting? -
Mr. MELLEN. Yes, sir.
The CHAIRMAN. Is there any further information you can give, or
any further statement you desire to make?
Mr. MELLEN. I desire simply to make the statement generally that
so far as my knowledge of the situation goes the Northern Pacific
Railway has been, since my connection with it, and is at the present
time, as absolutely free and independent from any dictation whatever
as it is possible to imagine a railroad to be. It is operating its own
road and is competing as severely with its neighbors as it ever was,
and I have received no instructions from any source, or advice or
suggestion from any source, that any change is desired. If I can
make that any more emphatic I would like to do so. •
The CHAIRMAN. That seems very comprehensive. Are you aware
that any change of policy is contemplated? -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 129
Mr. MELLEN. I have every reason to believe that there is no change
of policy contemplated.
The CHAIRMAN. You are excused from further attendance. The
Commission may, perhaps, state that the inquiry into the matter of
grain rates, which was taken up at Kansas City on the 9th instant and
postponed for further hearing here, has been continued, to be taken up
again at Washington on Wednesday of next week. The inquiry which
has been conducted yesterday and to-day will be continued at such
time and place as the Commission may hereafter determine. We will
now adjourn.
At 1.25 p.m. the Commission adjourned.
526A—02 9
APPENDIX.
GEORGE B. HARRIs—ExHIBIT A.
CHICAGO, BURLINGTON AND QUINCY RAILROAD CoMPANY.,
Sears Building, Boston, April 29, 1901.
To the stockholders:
At a meeting of the board of directors held on April 25, 1901, a
formal proposition, addressed to the undersigned as representing the
stockholders, was laid before your directors, in which the Great
Northern Railway Company and the Northern Pacific Railway Com-
pany jointly offered to purchase all or any part, not less than two-
thirds, of the shares of the capital stock of this company on terms more
particularly described below. A copy of such proposition has been
lodged with each of the depositaries hereinafter named. After careful
consideration it was voted to lay the proposition before you and to
recommend its acceptance. *
The offer is to purchase such stock as of July 1, 1901, and to pay
therefor at the rate of $200 per share in bonds, which are to be the
joint obligation of the Northern Pacific Railway Company and of the
Great Northern Railway Company, but the proposition includes an
offer to provide cash instead of bonds for part of the purchase price.
The bonds are to bear interest at the rate of four per cent (4 per cent)
per annum from July 1, 1901, and are to mature July 1, 1921, but to
be redeemable at the option of the two Northern companies at 105 per
cent and accrued interest on July 1, 1906, or on any coupon day there-
after. The two Northern companies reserve the right to pay off any
part without paying off the whole of the bonds, and in such event the
numbers of the bonds to be paid will be designated by lot; the coupon
bonds will be paid first. The bonds are to be coupon bonds of the
denomination of $1,000, and registered certificates of the denomination
of $1,000, or of $5,000, or of some multiple of $5,000; the interest on
the coupon bonds to be payable semi-annually on the first day of Janu-
ary and of July, and that on the registered certificates to be payable
quarterly on the first day of January, April, July, and October, by
checks mailed to certificate holders if so requested; the coupon bonds
to be exchangeable for registered certificates in proper amounts, and
the registered certificates for coupon bonds, at the will of the holders,
upon terms to be stated in the trust deed.
The bonds are to be secured by pledge of all the stock acquired, with
a trust company as trustee, under a deed of trust defining the rights
and remedies of the bondholders in case any default should be made in
the payment of the interest or principal of the bonds. The total author:
ized issue of such bonds shall be limited to an aggregate amount equal
to twice the par value of the total amount of stock that shall be depos-
ited under such trust deed. Proper provision will be made in the trust
130
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 131
deed for the maintenance of the condition of the company’s railroad,
equipment, and other property; and, in order that the security shall
not be impaired by any new issue of Chicago, Burlington and Quincy
Railroad Company’s stock, that a proportionate part of such new issue,
if any, must be deposited with the trustee, and the trust deed will also
contain such provision as shall be approved by your committee and the
counsel of Messrs. J. P. Morgan & Co. against any impairment of the
collateral security by issue of Chicago, Burlington and Quincy Railroad
Company bonds.
The proposition includes an offer to pay cash, instead of bonds, to
an amount not exceeding in the aggregate $50,000,000, to those share-
holders who shall prefer to receive payment partly in cash; and Messrs.
J. P. Morgan & Co., as managers of a syndicate, have undertaken to
provide such cash, and to take therefor such bonds at par and accrued
interest.
You are accordingly offered the privilege of selling your stock at $200
per share, payable wholly in the four per cent (4 per cent) bonds described
above, or in bonds to the amount of $160 and cash to the amount of
$40. As no bonds are to be issued of a denomination smaller than
$1,000, scrip for fractional amounts will be issued by the respective
depositaries, who shall receive and hold the bonds required for the
redemption thereof, and such scrip will be exchangeable for bonds
when presented in amounts of $1,000 or some multiple thereof.
Your directors, except as stated in the footnote, personally have
agreed to accept, for the shares held by them, the proposition above
referred to. This proposition is conditioned upon the deposit of at least
two-thirds of the capital stock on or before May 20, 1901. The deposit
of such two-thirds of said capital stock shall constitute a final accept-
ance of the offer of the Northern companies. . . . .
Stockholders are invited to deposit the certificates for their stock,
accompanied by duly evecuted transfers in blank, either with the Met-
ropolitan Trust Company, No. 37 Wall street, New York, or with the
Old Colony Trust Company, Ames Building, Boston, Mass. United
States internal-revenue stamps required by law will be attached by the
respective depositaries. - -
The certificates for the stock so deposited will be held subject to the
order of Messrs. Francis W. Hunne well, Charles J. Paine, and J.
Malcom Forbes, who will act as a committee in your interest, or to the
order of any two of them. In case the aggregate amount of stock so
deposited on or before May 20, 1901, shall be less than two-thirds of
the total outstanding capital stock, the certificates so deposited may be
returned to their owners by order of said committee. Transferable
certificates of deposit will be issued in exchange for the deposited
stock certificates. The latter should be transferred to the names of
the owners before being deposited, as a dividend of two dollars per
share, covering the period of four months ending June 30, 1901, will
be payable June 15, 1901, to stockholders of record at the close of
business on May 21, 1901. -
Stockholders who at the time of depositing their stock shall notify
the depositary that they elect to receive payment partly in bonds and
partly in cash, as above stated, will receive transferable certificates of
deposit entitling them thereto upon consummation of the transaction;
but all stockholders who shall not so elect will receive transferable
certificates of deposit entitling them only to bonds. A third form of
132 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
transferable certificate of deposit will be issued to such stockholders
as shall elect to receive payment wholly in cash, which certificate will
entitle the holders thereof to receive payment wholly in cash, if the
residue of the fifty million dollars to be provided, as above stated,
shall be sufficient therefor. Or if such residue shall not be sufficient,
then to receive a ratable part of such residue in cash and the remain-
der in bonds.
The transaction is to be completed by the two Northern companies
on or before Sept. 2, 1901, by delivery to the respective depositaries
of the bonds and cash on the terms of said proposition; and there-
upon such bonds and such cash will be delivered and paid by the
respective depositaries to the holders of transferable certificates of
deposit upon surrender thereof. All cash so payable will bear inter-
est at the rate of four per cent (4 per cent) per annum from July 1,
1901, until Sept. 2, 1901, or until such earlier day as shall be desig-
nated by the depositaries by public notice for the payment of such
cash to the depositors.
Holders of convertible five per cent bonds of the Chicago, Burling-
ton and Quincy Railroad Company are advised to immediately exchange
their bonds for stock, and to deposit such stock on or before May 20,
1901.
Stockholders who desire to avail themselves of this offer are requested
to deposit their shares as soon as possible.
Correspondence relating to the subject-matter of this circular should
be addressed to Arthur G. Stanwood, assistant treasurer, 704 Sears
Building, Boston, Mass. -
All stock certificates must bear or be accompanied by a du/y erecuted
transfer in blank. -
By order of the board of directors.
FRANCIs W. Hu NNEWELL, Chairman.
NoTE.—Mr. Edward W. Hooper has not been consulted on account
of illness, and Mr. Nathaniel Thayer is in Europe. Mr. James H.
Smith voted against the acceptance of the proposition.
CERTIFICATE OF INCORPORATION OF NORTHERN
SECURITIES COMPANY.
STATE OF NEw JERSEY, ss:
We, the Undersigned, in order to form a corporation for the pur-
poses hereinafter stated, under and pursuant to the provisions of the
act of the legislature of the State of New Jersey, entitled “An act
concerning corporations (revision of 1896),” and the acts amendatory
thereof and supplemental thereto, do hereby certify as follows:
First. The name of the corporation is “ Northern Securities Com-
any.”
Second. (Here follows the name of the principal office and agent in
New Jersey.)
Third. The objects for which the corporation is formed are:
(1) To acquire by purchase, subscription, or otherwise, and to hold
as investment any bonds or other securities or evidences of indebted-
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 133
ness, or any shares of capital stock created or issued by any other cor-
poration or corporations, association or associations, of the State of
New Jersey, or of any other State, Territory, or country.
(2) To purchase, hold, sell, assign, transfer, mortgage, pledge, or
otherwise dispose of, any bonds or other securities, or evidences of
indebtedness created or issued by any other corporation or corpora-
tions, association or associations, of the State of New Jersey, or of any
other State, Territory, or country, and while owner thereof to exer-
cise all the rights, powers, and privileges of ownership.
(3) To purchase, hold, sell, assign, transfer, mortgage, pledge, or
otherwise to dispose of shares of the capital stock of any other corpo-
ration or corporations, association or associations, of the State of New
Jersey, or of any other State, Territory, or country, and while owner
of such stock, to exercise all the rights, powers, and privileges of
ownership, including the right to vote thereon.
(4) To aid in any manner any corporation or association of which
any bonds or other securities or evidences of indebtedness or stock
are held by the corporation, and to do any acts or things designed
to protect, preserve, improve, or enhance the value of any such bonds
or other securities or evidences of indebtedness or stock.
(5) To acquire, own, and hold such real and personal property as
may be necessary or convenient for the transaction of its business.
The business or purpose of the corporation is from time to time to
do any one or more of the acts and things herein set forth.
The corporation shall have power to conduct its business in other
States and in foreign countries, and to have one or more offices out of
this State, and to hold, purchase, mortgage, and convey real and per-
sonal property out of this State.
Fourth. The total authorized capital stock of the corporation is four
hundred million dollars ($400,000,000), divided into four million
(4,000,000) shares of the par value of one hundred dollars ($100) each.
The amount of the capital stock with which the corporation will com-
mence business is thirty thousand dollars.
Fifth. The names and post-office addresses of the incorporators, and
the number of shares of stock subscribed for by each (the aggregate
of such subscriptions being the amount of capital stock with which this
company will commence business) are as follows:
(Here follow the names and residences of the subscribers to the stock
to the extent of $30,000.)
Sixth. The duration of the corporation shall be perpetual.
Seventh. The number of directors of the corporation shall be fixed
from time to time by the by-laws; but the number, if fixed at more
than three, shall be some multiple of three. The directors shall be
classified with respect to the time for which they shall severally hold
office by dividing them into three classes, each consisting of one-third
of the whole number of the board of directors. The directors of the
first class shall be elected for a term of one year; the directors of the
second class for a term of two years; and the directors of the third
class for a term of three years; and at each annual election the suc-
cessors to the class of directors whose terms shall expire in that year
shall be elected to hold office for the term of three years, so that term
of office of one class of directors shall expire in each year.
In case of any increase of the number of the directors, the additional
directors shall be elected as may be provided in the by-laws, by the
134 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
directors or by the stockholders at an annual or special meeting, and
one-third of their number shall be elected for the then unexpired por.
tion of the term of the directors of the first class, one-third of their
number for the unexpired portion of the term of the directors of the
second class, and one-third of their number for the unexpired portion
of the term of the directors of the third class, so that each class of
directors shall be increased equally. -
In case of any vacancy in any class of directors through death, resig-
nation, disqualification, or other cause, the remaining directors, by
affirmative vote of a majority of the board of directors, may elect a
successor to hold office for the unexpired portion of the term of the
director whose place shall be vacant, and until the election of a
SU1CCGSSOI’.
The board of directors shall have power to hold their meetings out-
side the State of New Jersey at such places as from time to time may be
designated by the by-laws, or by resolution of the board. The by-
laws may prescribe the number of directors necessary to constitute a
quorum of the board of directors, which number may be less than a
majority of the whole number of the directors.
As authorized by the act of the legislature of the State of New Jer-
sey, passed March 22, 1901, amending the seventeenth section of the
act concerning corporations (revision of 1896), any action which there-
tofore required the consent of the holders of two-thirds of the stock
at any meeting after notice to them given, or required their consent
in writing to be filed, may be taken upon the consent of, and the con-
sent given and filed by, the holders of two-thirds of the stock of each
class represented at such meeting in person or by proxy.
Any officer elected or appointed by the board of directors may be
removed at any time by the affirmative vote of a majority of the whole
board of directors. Any other officer or employee of the corporation
may be removed at any time by vote of the board of directors, or by
any committee or superior officer upon whom such power of removal
may be conferred by the by-laws, or by vote of the board of directors.
The board of directors, by the affirmative vote of a majority of the
whole board, may appoint from the directors an executive committee,
of which a majority shall constitute a quorum; and to such extent as
shall be provided in the by-laws, such committee shall have and may
exercise all or any of the powers of board of directors, including power
to cause the seal of the corporation to be affixed to all papers that may
require it.
The board of directors may appoint one or more vice-presidents,
one or more assistant treasurers, and one or more assistant secretaries;
and, to the extent provided in the by-laws, the persons so appointed
respectively shall have and may exercise all the powers of the presi-
dent, of the treasurer, and of the secretary, respectively. * -
The board of directors shall have power from time to time to fix
and to determine and to vary the amount of the working capital of
the corporation; to determine whether any, and, if any, what part of
any, accumulated profits shall be declared in dividends and paid to the
stockholders; to determine the time or times for the declaration and
the payment of dividends; and to direct and to determine the use and
disposition of any surplus or net profits over and above the capital
stock paid in; and in its discretion the board of directors may use and
apply any such surplus or accumulated profits in purchasing or acquir-
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 135
ing its bonds or other obligations, or shares of the capital stock of the
corporation, to such extent and in such manner and upon such terms
as the board of directors shall deem expedient; but shares of such
capital stock so purchased or acquired may be resold, unless such
shares shall have been retired for the purpose of decreasing the capital
stock of the corporation to the extent authorized by law.
The board of directors from time to time shall determine whether,
and to what extent and at what times and places, and under what con-
ditions and regulations, the accounts and books of the corporation, or
any of them, shall be open to the inspection of the stockholders, and
no stockholder shall have any right to inspect any account or book or
document of the corporation, except as conferred by statute of the
State of New Jersey or authorized by the board of directors or by a
resolution of the stockholders.
The board of directors may make by-laws, and from time to time
may alter, amend, or repeal any by-laws; but any by-laws made by the
board of directors may be altered or repealed by the stockholders at
any annual meeting or at any special meeting, provided notice of such
proposed alteration or repeal be included in the notice of the meeting.
In witness whereof we have hereunto set our hands and seals the
12th day of November, 1901.
(Here follow the signatures of the three incorporators and
acknowledgments.) -
Indorsed—Filed Nov. 13, 1901.
GEORGE WURTs,
Secretary of State.
LISTS OF DIRECTORS AND OFFICERS.
Mort/ern Pacific Railway Company, board of directors.
George F. Baker, 2 Wall street, New York.
W. P. Clough, 27 Pine street, New York. -
Edward H. Harriman, 120 Broadway, New York.
Brayton Ives, 37 Wall street, New York.
D. Willis James, 99 John street, New York.
John S. Kennedy, 31 Nassau street, New York.
Daniel S. Lamont, 49 Wall street, New York.
Charles S. Mellen, Saint Paul, Minn.
Samuel Rea, Philadelphia, Pa.
William Rockefeller, 26 Broadway, New York.
Samuel Spencer, 80 Broadway, New York.
Charles Steele, 23 Wall street, New York.
James Stillman, 52 Wall street, New York.
Eben B. Thomas, 21 Cortlandt street, New York.
Hamilton McK. Twombly, 35 Wall street, New York.
Morthern /?acific Railway Company, officers.
President, Charles S. Mellen, St. Paul.
Vice-president, Daniel S. Lamont, New York.
Comptroller, Henry A. Gray, St. Paul.
Treasurer, Charles A. Clark, St. Paul.
Secretary and assistant treasurer, George H. Earl, New York.
Assistant secretary, Richard H. Relf, St. Paul.
General counsel in New York, Francis Lynde Stetson.
General counsel in St. Paul, Charles W. Bunn.
List of directors of Great Morţhern /ēailway Company.
g e 3/ '? {/
James J. Hill, St. Paul.
James N. Hill, St. Paul.
Edward Sawyer, St. Paul.
M. D. Grover, St. Paul.
Samuel Hill, St. Paul.
Frederick Weyerhaeuser, St. Paul.
William B. Dean, St. Paul.
R. I. Farrington, St. Paul.
Henry W. Cannon, New York.
136
CONSOLIDATIONS AND COMRINATIONS OF CARRIERS. 137
List of officers of Great Morthern Railway Company.
James J. Hill, president.
James N. Hill, vice-president.
R. I. Farrington, second vice-president.
E. T. Nichols, third vice-president.
Joseph W. Balbon, fourth vice-president.
E. T. Nichols, secretary.
E. Sawyer, treasurer.
sºmºmºsºmsºmº
List of directors of Chicago, Burlington and Quincy Railroad
Company.
F. W. Hunnewell, Boston.
J. Malcolm Forbes, Boston.
James J. Hill, St. Paul.
James N. Hill, St. Paul.
Robert Bacon, New York.
Jacob H. Schiff, New York.
E. H. Harriman, New York.
George J. Gould, New York.
H. McK. Twombly, New York.
Norman B. Ream, New York.
Charles E. Perkins, Burlington.
Dist of officers of Chicago, Burlington and Quincy Railroad
Company.
F. W. Hunnewell, chairman of the board.
George B. Harris, president.
J. C. Peasley, vice-president, treasurer.
Thomas S. Howland, secretary and clerk of board.
J. W. Blythe, general counsel.
General offices, Chicago, Illinois.
*=ºmºmº
Dist of directors of Chicago, Burlington and Quincy Railway
Company.
Charles E. Perkins, Burlington.
George B. Harris, Chicago.
Charles J. Paine, Boston.
James J. Hill, St. Paul.
George W. Perkins, New York.
John S. Kennedy, New York.
E. H. Harriman, New York.
Mortimer L. Schiff, New York.
W. H. McIntyre, New York.
W. P. Clough, New York.
James Stillman, New York.
138 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
List of officers of Chicago, Burlington and Quincy Railway Company.
George B. Harris, president.
Darius Miller, vice-president, in charge of traffic.
J. C. Peasley, treasurer.
T. S. Howland, secretary.
J. W. Blythe, general counsel.
General offices, Chicago, Illinois.
Dist of directors of Worthern Securities Company.
James J. Hill.
Daniel S. Lamont.
George C. Clark.
Samuel Thorne.
D. Willis James.
John S. Kennedy.
Edward T. Nichols.
Eacecutive committee of board of
Jacob H. Schiff.
George W. Perkins.
E. H. Harriman.
James Stillman.
George F. Baker.
W. P. Clough.
N. Terhune.
directors of Northern Securities
Company.
The President, ex officio.
George F. Baker.
E. H. Harriman.
John S. Kennedy.
D. Willis James.
W. P. Clough.
List of officers of the Worthern Securities Company.
James J. Hill, president.
John S. Kennedy, vice-president.
George F. Baker, second vice-president.
D. Willis James, third vice-president.
W. P. Clough, fourth vice-president and general counsel.
E. T. Nichols, secretary and treasurer.
BY-LAWS OF COMPANIES.
By-laws of the Northern Pacific Railway Company, as
amended October 1, 1907.
ARTICLE I.—OF STOCKHOLDERs.
SECTION 1.-ANNUAL MEETING.
A meeting of the stockholders of this company shall be stockholders
held annually, on the first Tuesday of October (and, if that annual meeting.
be a legal holiday, then on the next business day), for the
purpose of electing directors, and for the transaction of
such other business as may properly be brought before the
meeting.
SECTION 2.—SPECIAL MEETINGs.
Special meetings of the stockholders may be held when- stockholders
ever and as often as a majority of the board of directors special meetings.
or the president may deem expedient; and such majority
or said president shall call such meetings upon the written
request of the owners or holders of one-quarter in amount
of the capital stock of the company.
&
SECTION 3.−NOTICE OF MEETINGS.
Written or printed notice of every meeting of stockhold-ºiceo meet
ers shall be advertised at least once in each week for four
weeks immediately preceding such meeting in one or more
daily or weekly newspapers published in the cities of St.
Paul, Milwaukee, New York, London, and Berlin, which
notice shall, in general terms, state the object of the meet-
ing. At least three weeks before such meeting a copy of
such notice shall be mailed from one of the offices of the
company to each stockholder of record who shall have
furnished to the company’s stock-tranfer agents in the city
where the certificates of such stockholder shall have been
issued an address to which such notice may be sent; but
failure to mail any such notice shall not invalidate any
action taken at such meeting or at any adjournment thereof.
SECTION 4.—QUORUM.
To constitute a meeting of stockholders for any purpose Quorum.
there must be present, in person or by proxy, those who
can give one-third of all the votes which could be given
by all stockholders entitled to vote at such meeting.
If the holders of the requisite amount of stock shall fail
139
140 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
in person or by proxy to attend at the time and place of
the meeting, pursuant to a notice duly given, those who
do attend may adjourn from time to time, without further
notice than by announcement to be given at the meeting,
until holders of the requisite amount of stock shall attend.
These provisions, however, are subject to the rights of
the holders of the preferred stock.
SECTION 5.-VOTING AND INSPECTORS.
Voting. At all meetings of stockholders every registered owner
of shares may vote in person or by proxy, and shall have
one vote for every share standing in his or her name on
the books of the company. At all elections of directors
the voting shall be by ballot, and a majority of the votes
cast thereat either in person or by proxy shall elect.
ºtors of . The stockholders at each annual meeting shall elect two
inspectors of election to serve at the next annual meeting.
In case of failure so to elect, or in case of failure of any
inspector so elected to act, the president or the vice-presi-
dent presiding at the meeting shall fill the vacancies, but
no candidate for the office of director shall be appointed
to serve as such inspector. Each inspector of election,
immediately before entering on the execution of his duties,
shall subscribe an oath or affirmation faithfully to execute
the duties of inspector at such meeting with strict impar-
tiality and according to the best of his ability; but no
failure to take or subscribe such oath or affirmation shall
affect the result of any such election. The inspectors shall
take charge of the polls, and after the balloting shall make
a certificate of the result of the vote taken.
Any holder of proxies at any time prior to any meeting,
but subsequent to the date of the closing of the transfer
books, may submit his proxies for examination to the
secretary or to such other officer as from time to time may
be designated by the board of directors or by the execu-
tive committee; and the certificate of the secretary or other
officer so designated as to the number of votes represented
by such proxies, and as to the regularity thereof, shall be
received as presumptive evidence thereof.
ARTICLE II.-BOARD OF DIRECTORs.
SECTION I.-NUMBER, AND TIME OF HOLDING OFFICE.
lºtºmum. The business, property, and affairs of this company shall
be managed and controlled by a board of nine directors
until the annual meeting to be held in October, 1896, and
from and after such meeting by a board of fifteen directors.
Directors must Every director shall be, at the time of his election, or be-
*** fore accepting and qualifying as such director, a holder
of record of at least one share of the capital stock of the
company, and when he shall cease to be such holder of
record he shall thereupon cease to be a director.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 141
Until the annual meeting in October, 1902, the several "“”
directors shall be elected each to hold office for one year
and until the election and qualification of his successor,
and the term of office of each director heretofore chosen
shall expire at the close of the annual meeting in October,
1897. The directors to be elected at the annual meeting ºrms of each
o & e wº * gº C18.S.S.
in October, 1902, shall be divided, in respect of the time
for which they shall severally hold office, into three classes,
to serve respectively for one, two, and three years, and at
each annual election thereafter there shall be elected for
three years a number of directors equal to the number
whose full term of office shall then expire. *
Each class shall be composed of five directors. ºr "
Each director shall serve for the term for which his
class has been elected, or until such time as his successor
shall have been duly chosen.
The stockholders may at any meeting increase or dimin; ºr
ish the number of directors to be elected at the next annual ºdorajmin.
meeting of the stockholders, and the number to be elected”
shall be specified in the notice of meeting, but shall never
be less than five nor more than seventeen. -
At all elections of directors the polls shall remain open nº.'" " "
at least one hour.
If for any cause any election of directors shall not be had ... Directors ºn:
º/ • * o * tinue in Office
on the day as prescribed in the by-laws, such election may untii successors
be had on any other day after due notice as in the by-laws”
provided; and the directors then in office shall continue in
office until their successors are duly elected and qualified.
The provisions of this section are and shall be in all
respects subject to the rights of the holders of preferred
stock and common stock expressed in the certificates of
such stock as follows, to wit:
. Whenever the full and regular quarterly dividends for two success-
ive quarterly periods after July 1, 1897, upon the preferred stock at
the rate of four per cent per annum, shall not have been paid in cash,
then and in that event, at the next annual meeting, such number, and
only such number, of directors as will constitute a majority of the whole
board, shall be elected by a separate ballot by the holders of the pre-
ferred stock present or represented at such meeting, and the remainder
of the board shall be elected by a separate ballot by the holders of the
common stock present or represented at such meeting, in every case
each share to be entitled to one vote.
And in every case upon the acceptance of office by a
majority of the directors so chosen in the exercise of
such special right the terms of office of the directors then
in office shall cease and determine; but whenever, and as
often as the right above specified shall terminate, then, at
the next election and at each successive election (except
in case of the revival of such right and during its con-
tinuance), classification of directors shall again become
operative.
SECTION 2.—Pow ERS AND DUTIES.
* •r - te - e 4] CŞ w *6. i- Board shall an-
In each year, at a meeting to be held as soon as practiºn;''...".
cable after the election of directors, the board shall elect cers, etc.
142 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
the executive committee specified in section 10 of this
article, and the officers specified in section 1 of Article III
hereof, and may elect or appoint such other officers and
agents as they may deem necessary for the proper conduct
of the company’s business. All officers, agents, and
employees shall be removable at the will of the board, but
any member present at a meeting may require such removal
to be by a majority vote of the entire board.
The board shall determine the compensation to be paid
to all officers and agents of the company, and the amount
of the bonds to be given by them.
SECTION 3.—VACANCIES.
an.” Whenever any vacancy shall have occurred in the board
or in any office, by death, resignation, or otherwise, it
shall be filled by the board for the remainder of the current
corporate year and until the next annual election, or until
a qualified successor be elected; and, in the case of a
vacancy in the board, a successor shall be elected, at the
next annual meeting for the election of directors, to fill
such vacancy for the unexpired term of the class in which
it has occurred.
ºf . If any person who shall have been elected as a director
ance within' 30 shall not, within thirty days after the date of the notice of
days. his election, in writing, signify his acceptance of the
office, the board of directors may declare a vacancy to
exist in respect thereof.
SECTION 4.—PLACE OF MEETING.
Directºrs, may The directors may hold their meetings and have an
meet without the - - e
Šišić "wicºn office or offices and keep the books of the company, with-
SII] . out as well as within the State of Wisconsin, at such place
or places as the board may from time to time determine. .
SECTION 5.-REGULAR MEETINGs.
uº.g. * Regular meetings of the board shall be held at such
times and on such notice as the directors may from time
to time determine. ,’
SECTION 6.—SPECIAL MEETINGs.
dº.” Special meetings of the board may be held at any time
upon the call of the president or of a majority of the direc-
tors, by oral or telegraphic or written notice to each
director, not less than three days before such meeting.
SECTION 7.—WAIVER OF NOTICE OF MEETING.
W.iver of Any meeting of the board of directors may be held
In Otice. º tºle * gº © on
without notice if the directors not present at such meet-
ing waive all objection thereto. - -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 143
SECTION 8.—QUORUM.
A majority of the board shall constitute a quorum for *
the transaction of business; but if less than a quorum be
present at any duly called meeting a majority of those
º may adjourn the meeting from time to time or
S27) & (176.
SECTION 9.—ORDER OF BUSINESS.
At meetings of the board of directors business shall be order of busi-
gº e IlešS.
transacted in such order as the board may by resolution"
from time to time determine.
SECTION 10.—ExECUTIVE COMMITTEE.
The executive committee shall consist of six directors, ºutive.com.
of whom the president shall be one, ex officio. It shall *
possess and exercise all the powers of the board of direct-gºersandau-
ors, except when the latter is in session, but it may act gº
only by the concurrent vote of all the members present,
being not less than four in number. It shall keep a record
of all its proceedings, and the same shall be submitted to
the board of directors. The executive committee shall
have power to fill any vacancy in its own number; but the
director so chosen shall serve as a member of the commit-
tee only until the next regular meeting of the board or
until a successor be elected by the board: Provided, That
no director who receives a salary as one of the officers
designated in Article III of these by-laws (other than the
president, or in his absence the vice-president) shall be
eligible to serve as a member of the executive committee.
The secretary or any other official of the company may
perform the duties of secretary to the committee. A
majority of said committee shall constitute a quorum for
the transaction of business.
SECTION 11.—OTHER COMMITTEES.
The board of directors, in its discretion, may appoint tºº.” “”
other or additional committees for the proper transaction
of the business of the company, with such duties and
powers as it shall deem proper.
ARTICLE III.-OFFICERS.
SECTION 1.-EXECUTIVE OFFICERs.
The executive officers of this company shall be a presi-cºº" " ".
dent (who shall also be a director), one or more vice-
presidents (as the board from time to time may determine),
a comptroller, a treasurer, an assistant treasurer, a secre-
tary, an assistant Secretary, and two general counsel, one
resident in New York and one resident in St. Paul.
144 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
SECTION 2.—GENERAL PROVISIONS.
ºw. Every executive officer shall perform such duties and
&- exercise such powers as the board may from time to time
direct.
cº". No officer elected or appointed by the board shall hold
in other compa executive office in any other business corporation if the
In 162S. board or the executive committee shall by resolution object
thereto.
SECTION 3. —POWERS AND DUTIES OF PRESIDENT.
President. It shall be the duty of the president to preside at all
the meetings of the stockholders and of the board of direct-
ors; he may sign and execute all duly authorized instru-
ments in the name of the company; he shall have general
control and direction of the business of the company, and
he shall do and perform all acts and things incident to the
position of president, and such other duties as may be
assigned to him from time to time by the board of directors
or by the executive committee.
The president shall be ex officio a member of all com-
mittees of the board, including the executive committee.
All executive officers shall report to the president.
SECTION 4.—Powers AND JOUTIES OF WICE-PRESIDENT AND PRESIDENT
PRO TEMPORE.
º; . In the absence or inability to act of the president the
tempore. vice-president shall perform all the duties and may exer-
cise any of the powers of the president, subject to the
control of the board of directors and of the executive
committee. The vice-president shall perform such other
duties as may be assigned to him from time to time by
the board of directors, by the executive committee, or by
the president.
In the absence of the president the vice-president may
act in the place and stead of the president at any meeting
of the executive committee, and for all the purposes of
such meeting he shall, while so acting, be ex officio a
member of such committee.
In the absence or inability to, act of both the president
and the vice-president, a president pro tempore may be
appointed by the board of directors, who shall perform all
the duties and may exercise any of the powers of the
president, subject to the control of the board of directors
and of the executive committee.
The second and any additional vice-presidents shall per-
form such duties as may be assigned to him or them by
the president.
SECTION 5.-Powers AND DUTIES OF COMPTROLLER.
Comptroller. The comptroller shall have direct charge of the general
books and accounts of the company. It shall be his duty
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 145
to examine the accounts of all officers and employees, and
to see that the proper returns are made of all receipts from
traffic and other sources, and that correct vouchers are
turned over to him for all disbursements for any purpose.
The comptroller shall also be the custodian of all bonds of
officials and agents of the company handling funds.
SECTION 6.—POWERS AND DUTIES OF TREASURER.
It shall be the duty of the treasurer to have the care Treasurer.
and custody of all the funds of the company which may
come into his hands, and to deposit the same, as such
treasurer, in such bank or banks or depository as the board
may designate; he shall sign, with such other officer as
may be designated for the purpose by the board, all bills
of exchange, cheques, and promissory notes made by the
company, and he shall pay out and dispose of the same
under the direction of the board; he shall render a state-
ment of his cash account to the board of directors as often
as they shall require the same; he shall enter regularly, in
books to be kept by him for that purpose, full and accu-
rate account of all moneys received and paid by him on
account of this company; he shall, at all reasonable times,
exhibit his books and accounts to any director of the com-
pany, upon application at the office of the company, during
business hours; he shall perform all acts incident to the
position of treasurer, and he shall give a bond for the
faithful discharge of his duties in such sum as the board
of directors may require.
SECTION 7.—POWERS AND DUTIES OF SECRETARY.
It shall be the duty of the secretary to keep the minutes Secretary.
of all meetings of the board of directors, in a proper book
provided for that purpose, and also the minutes of all meet-
ings of the stockholders; he shall attend to the giving and º
serving of all notices of the company; he shall be the cus-
todian of the seal of the company; he shall have charge of
the stock record books and the blank stock certificate books
(subject to the provisions of Article IV, section 1), and of
such other books and papers as the board may direct, all
of which shall, at all reasonable times, be open to the
examination of any director during business hours; and he
shall in general perform all the duties incident to the office
of secretary.
SECTION 8.—POWERS AND DUTIES OF ASSISTANT TREASURER.
in the absence or inability to act of the treasurer, the mºntº
assistant treasurer shall perform all the duties and may
exercise any of the powers of the treasurer, and he shall
perform such other duties as may be assigned to him, from
time to time, by the board of directors or by the executive
committee. w
526A–02—10
146 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
SECTION 9.—POWERS AND DUTIES OF AssISTANT SECRETARY.
ºn “ In the absence or inability to act of the secretary, the
assistant secretary shall perform all the duties and may
exercise any of the powers of the secretary, and he shall
perform such other duties as may be assigned to him, from
time to time, by the board of directors or by the executive
committee.
SECTION 10.-DUTIES OF GENERAL COUNSEL.
...general coun. The general counsel resident in St. Paul shall have gen-
eral charge of the legal business of the company, includ-
ing the designation and direction of the division, land, and
local counsel; and the general counsel in New York may
exercise general power of supervision and advice over
and through the general counsel in St. Paul, and also
shall act in matters referred to him by the board of direct-
ors or the executive committee.
ARTICLE IV.-CORPORATE STOCK–CORPORATE SEAL.
SECTION 1.-STOCK CERTIFICATES AND TRANSFERS.
a;”.e.; (a) The stock record books and the blank stock certificate
books. books shall be in charge of the transfer agents or officers
rººm designated by the board of directors for that purpose.
caº. The stock certificates of the company shalf be in such
** form as the board of directors from time to time may pre-
scribe. Each stock certificate shall be signed by transfer
agents appointed by the board of directors and by some
officer designated by the board of directors or by the ex-
ecutive committee for that purpose, and shall be counter-
signed by registrars of transfers appointed by the board.
No new certificate shall be issued to a transferee except
upon surrender and cancellation of the old certificate.
ai"; (b) The board of directors shall provide for the issue,
Of stock. transfer, and registration of the capital stock of the com-
pany in the cities of New York and Berlin, and in such
manner that, at the option of the holder, certificates issued
in either city may be exchanged for certificates issued in
the other, under regulations to be prescribed by the board
of directors. The board may also make arrangements for
the transfer and registration of the capital stock of the
company in any other cities, and may appoint the neces-
sary officers, transfer agents, and registrars of transfer
for that purpose. Transfers may be made on all business
days between such hours as the board of directors or exec-
utive committee may designate, except on the days when
the transfer books shall be closed by order of the board of
directors or executive committee, as hereinafter author-
ized.
The board of directors or executive committee may
make all necessary arrangements authorizing and regu-
lating the issue and registration of stock certificates, and
CONSOLIDATIONS AND COMBINATIONS OF CARRIERs. 147
may provide for the issue of stock certificates in any one
of the cities in which the company’s stock shall be trans-
ferable, upon cancellation of certificates issued for a like
number of shares in any other of the cities in which the
company’s stock is transferable.
(6) The agents in charge of the transfer books shall keep ºn 8 e
such books subject to the direction of the board of direct-" "
ors or of the executive committee, and shall prepare for º,
presentation to the annual meeting and to all special meet-, Lists of stock-
ings certified lists of the stockholders of record on such"
books, and shall make such reports with reference to the
matters in their charge as the board of directors or the
executive committee may direct.
(d) Shares of the capital stock of the company shall be Transfers, how
transferred only upon the proper transfer books by the *
holder of such shares, in person or by his attorney, upon
surrender and cancellation of similar certificates for a like
number of shares of the same kind, having indorsed thereon
or attached thereto a duly executed assignment thereof
and power to transfer the same.
(e) The stock transfer books shall be closed, as may be tº...?"
directed by the board of directors or by the executive com- $Jº s
mittee, for a prescribed period preceding the day appointed
for any annual meeting or any special meeting of the stock-
holders, or for the payment of a dividend; and no transfer
of stock shall be made during any period so prescribed.
(f) No certificate of shares in the capital stock of the a.º.º.º.
company shall be issued in place of any certificate alleged tificates.
to have been lost or stolen or destroyed, except upon
delivery to the company of a bond of indemnity to be
approved by the board of directors or by the executive
committee, and except also upon furnishing such evidence
of such loss, theft, or destruction as shall be satisfactory
to the board of directors or to the executive committee.
SECTION 2. —DIVIDENDs.
The board of directors may declare dividends from sur- Dividends.
plus met earnings of the company whenever they shall deem
it expedient in the exercise of a sound discretion and in con-
formity with the respective rights of the different classes
of stock.
SECTION 3.—Corporate SEAL.
The board of directors shall adopt a suitable seal, con- "P" *
taining the name of the company. The secretary shall
procure duplicate stamps suitable to make impressions of
such seal, one of which shall be in the custody of the sec-
retary in New York and the other in the custody of the
assistant secretary in St. Paul; and when and as directed
by special or general resolution of the board of directors,
or of the executive committee, the president, any vice-
president, the secretary, or any assistant secretary, may
and shall use one or the other of such duplicate stamps in
impressing such corporate seal upon documents, inden-
tures, and obligations of the company.
148 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
ARTICLE V.—A MENDMENTs.
º, how The by-laws of the company, with the exception of
amended, etc. S • le e • e -
the provisions of section 1 of Article II, may be altered,
amended, or repealed by the vote of a majority of all the
directors of the company, at any regular or special meet-
ing of the board, provided that notice of the proposed
gº alteration, amendment, or repeal shall have been given at
a previous meeting of the board.
By-laws of the Great Worthern Railway Company, adopted by the
hoard of directors, July 24, 1896.
ARTICLE I.—DIRECTORS AND OFFICERS.
SECTION 1. The stockholders of the company, at their annual meet-
ing in each year, shall elect by ballot, and from their own number,
three directors, each share of stock at such election being entitled to
one vote, to be cast by the holder thereof in person, or by written
proxy; and the persons so elected shall, together with those previously
elected, whose terms of office have not yet expired, constitute the
board of directors of the company.
The directors so elected shall, at their first meeting, elect by ballot,
and from their own number, a president and a vice-president; and the
board thus organized shall, at the same meeting, elect a secretary and
a treasurer, and may, in its discretion, at the same or any other meet-
ing duly convened, appoint an assistant secretary or an assistant
treasurer, or both.
The board may also designate three of its members, of whom the
president shall be one, to constitute an executive committee, and may
at any meeting duly convened appoint a general solicitor, general
manager, land commissioner, comptroller, chief engineer, and such
superintendents or agents as it may deem necessary.
The president, vice-president, secretary, and treasurer, and the
directors shall hold their respective offices for one year, and until their
successors shall have been duly elected and qualified. The assistant
secretary, the assistant treasurer, general solicitor, general superin-
tendent, chief engineer, land commissioner, comptroller, and such
superintendents or agents so appointed may be removed at the pleas-
ure of the board of directors. Any vacancy or vacancies occurring
among the officers elected by the board, from death, resignation, or
other cause, may be filled for the unexpired term by the board, at any
meeting thereof, and any vacancy or vacancies so occurring in the
board may be filled for the unexpired term by the board at the first
meeting following such vacancy, or by the president, if no meeting
is held within ten days after such vacancy.
SEC. 2. All the business and affairs of the company shall be man-
aged and conducted by or under the direction of the board of directors,
and a majority of the members of the board shall constitute a quorum
for the transaction of business; but any smaller number shall be com-
petent to adjourn sine die, or from day to day. -
CONSOLIDATIONS AN ID COMBINATIONS OF CARRIERS. 149
ARTICLE II.-MEETINGs.
SECTION 1. The annual meeting of the stockholders shall be held at
the general office of the company in St. Paul, Minn., on the second
Thursday of October in each year, upon notice thereof, given by the
secretary, stating the time and place of such meeting, printed in some
newspaper published in said St. Paul for ten days prior to the date of
such meeting. The election of directors shall be proceeded with on
said day, or such other day as such annual meeting shall or may
adjourn to. The polls shall be open on the day of election from twelve
(12) o'clock m. to three (3) o’clock p. m.
The secretary and two disinterested persons, appointed by the presi-
dent or chairman of the meeting, shall be the inspectors of election,
and shall canvass the votes and make and sign a record of the results
upon the minutes of the meeting. Those stockholders, equal to the
number to be elected, having the greatest number of votes shall be
deemed and declared duly elected, and the secretary shall immediately
notify the persons elected of their election; provided, that in the elec-
tion of directors, and at all other elections or meetings of the com-
pany, a majority of votes shall govern.
At such election, and in all cases in which stockholders shall vote,
the votes shall be delivered in person, or by proxy duly authorized,
and each share of full-paid stock shall entitle the holder thereof to one
vote.
SEC. 2. Special meetings of the stockholders shall be held at the gen-
eral office of the company in St. Paul, and may be called by order of
the board of directors, or by stockholders holding one-fourth in
amount of the capital stock of the company, or by the president, on
like notice as that required for annual meetings, and upon written or
printed notice to each and every stockholder, to be mailed to his last
known address at least ten days before the date of such special meet-
ing, specifying the object of the meeting; and no business shall be
transacted at such special meetings except such as shall be particu-
larly set forth in such notice, nor any vote taken unless a majority
of all the stock of the company shall be then and there represented,
either in person or by proxy.
SEC. 3. The first meeting of the newly constituted board shall be
held at the general office of the company in St. Paul immediately after
the adjournment of the stockholders’ meeting on the day of their elec-
tion, or at the general office of the company in the city of New York,
upon eight days’ notice of the time and place of meeting given to each
of the directors-elect by the president or secretary of the company.
Other meetings of the board may be held upon call, or by adjournment,
as hereinafter provided, at the office of the company in St. Paul, or at
the office of the company in the city of New York, or at any other gen-
eral office of the company that may hereafter be duly established.
Such meetings may be called by the president or vice-president, on
the request of two directors in writing; and without such request, may
be called by the president, whenever in his judgment a meeting of the
directors shall be necessary or desirable. Eight days’ notice of such
special meeting shall be given to each director, by depositing notice of
the time and place of the holding of the same, in the post-office,
addressed to him at his place of residence.
150 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
Provided, however, that any other or shorter notice of any such
meeting given to any director shall be deemed regular and sufficient,
if accepted as such by said director.
ARTICLE III.--THE PRESIDENT AND WICE-PRESIDENT.
SECTION 1. The president will, when present, preside at all meetings
either of the board of directors or of the stockholders. In the absence
of the president, the vice-president will discharge the duties of the
president. In case of the absence of both the president and the vice-
president, the directors or stockholders, as the case may be, may
appoint a president pro tempore.
SEC. 2. The president will have and exercise general supervision
and control over the entire property, business, and affairs of the com-
pany. All the officers and agents of the corporation will be responsible
to him for the proper and faithful discharge of their several duties,
and will obey such orders and make such reports to him touching
the business of the company under their respective charge as he may
from time to time direct; and any superintendent, engineer, agent, or
employee of the company may be suspended or discharged by him, if
in his judgment there be cause for such suspension or discharge, at any
time when the board of directors shall not be in session.
All leases, conveyances, and instruments affecting the right of way,
or other real property of the company, and all contracts with other
railways relating to the use of the same, shall be signed by the presi-
dent, and shall not be valid without.
All contracts requiring the corporate seal, and all certificates of
stock will be signed by him or the vice-president, and he will have
such other powers as are incident to the office, or may from time to
time be prescribed or conferred by the board.
The vice-president, in the absence, or in case of the disability, of the
president, will preside at the meetings of the board of directors and
of the stockholders; may sign all bonds, contracts, and other instru-
ments requiring the corporate seal, and may countersign all contracts
and leases originating in the land department. -
ARTICLE IV.--THE SECRETARY.
The secretary will keep a record of all meetings of the stockholders
and of the board of directors, and attest the same by his signature.
He will have charge of all books, papers, and documents which prop-
erly belong to his office. He will sign all certificates of stock and have
charge of the corporate seal, and keep the books appertaining to his
office. He will keep proper stock transfer and register books, and
generally perform such duties and make such reports as the board
may direct. In case of his absence or disability, the assistant secre-
tary, if any, will perform his duties, or a secretary pro tempore may
be elected in case of the absence of both.
ARTICLE V.—THE TREASURER.
The treasurer will safely keep and account for all moneys, funds, or
other property which may come into his hands, keeping full and true
statements of all financial transactions of the company in his books.
C() NSOLIDATIONS AND COMBINATIONS OF CARRIERS. 1 5 I
He will give bonds, under the direction of the board, for the faithful
performance of his duties. He will keep his accounts as treasurer in
such banks or places of deposit as the president or the board of direct-
ors may direct, and generally will render all such accounts and perform
such duties as the board may direct. In case of his absence or disa-
bility the assistant treasurer, if any, shall perform his duties.
ARTICLE VI.-Ex ECUTIVE COMMITTEE.
The duty of the executive committee will be to superintend the trans-
action of the current administrative business of the company during
the intervals between the meetings of the board of directors, and to
conduct such other matters of business as may from time to time be
committed to it by the board. Three members of the committee shall
constitute a quorum for the transaction of business; and without such
quorum the committee will not do or attempt any business whatever.
They will record their proceedings in full in a book to be kept for
that purpose; and the record of each proceeding will be signed by all
the members of the committee participating therein. Such records
will be open at all times to the inspection of any member of the board
of directors. They will be subject to the control of the board, and
they will be produced to the board for its action thereon at any meet-
ing thereof, upon the request of any director. Any member of the
board may be present at the meetings of the executive committee.
ARTICLE VII.-STOCK CERTIFICATES AND TRANSFERs.
All certificates for shares of the capital stock will be signed by the
president or vice-president and the secretary. They will be numbered
in progression, beginning with number one; and each certificate will
show upon its face the number of shares for which it is issued, and
that the stock therein mentioned is transferable only on the books of
the company and upon the surrender of such certificate.
Upon the issuance of each certificate an entry thereof will be made
in a book called the “Register of Stockholders,” stating the number
of such certificate, the name of the stockholder, and the number of
shares to which he is entitled. The transfer of any share or shares of
stock may be made by the surrender of the certificate issued therefor,
and a written assignment thereof, signed by the owner or his duly
authorized attorney in fact, upon a book to be called the “Register of
Transfers.” Upon such surrender and assignment a new certificate or
certificates will be issued to the assignee as he may be entitled; but
without such surrender and assignment no transfer of stock will be
recognized by the company.
The “Register of Transfers” will be closed at least ten days before
each annual meeting of the stockholders, and at such other times and
for such other purposes as may be ordered by the board of directors
or by the executive committee; and no assignee of shares will be entitled
to vote, as such assignee, at any meeting, unless such surrender and
assignment shall have been made or tendered before the time specified
for the closing of said “Register of Transfers.”
ARTICLE VIII.-SECOND VICE-PRESIDENT AND THIRD VICE-PRESIDENT.
In addition to the officers prescribed and required by the charter of
this company, there may be a second vice-president and a third vice-
152 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
president, who shall be elected by the board of directors in the same
manner as is provided in Article I of these by-laws for the election of
secretary and treasurer, and who shall hold his office at the pleasure
of the board. -
The board of directors may invest the respective officers provided
for in this article with such powers and authority, and charge them
respectively with such duties, not inconsistent with the charter of the
company nor with the laws of this State, as it shall deem proper and
necessary in the due and orderly conduct and management of the busi-
ness and affairs of the company; and it will, by resolution, establish
and clearly prescribe and define such powers, authority, and duties,
and said officers will have, possess, and exercise all the authority and
powers, and be charged with all the duties thus established, defined,
and prescribed.
ARTICLE IX. —CHANGE OF BY-LAws.
These by-laws, or any of them, may be added to, altered, amended,
or repealed by the board of directors at any meeting thereof; and any
addition, alteration, amendment, or repeal so made shall be valid and
operative until the next annual meeting of the company thereafter,
and if not disapproved at such annual meeting, will be valid and
effectual to all intents and purposes as if adopted by the stockholders
at such annual meeting, as well as by the board. .
By-laws of the Chicago, Burlington and Quincy Railway Company, a
corporation of Iowa, to be adopted December 2, 1901.
1. The annual meeting of the stockholders for the election of
directors and the transaction of any other lawful business shall be
held at the office of the company, in Burlington, Iowa, at eleven
o'clock a. m., on the first Wednesday of November, 1901, and on the
same day in each year thereafter.
Special meetings of the stockholders may be held at any time upon
call of the president or of any two of the directors, one week’s notice
of such meeting being published in a newspaper at Burlington, Iowa,
or one week’s written notice, signed by the secretary, being sent to
each stockholder of record.
At all stockholders’ meetings each share of stock shall be entitled to
one vote, and the stockholders may vote either in person or by proxy
duly authorized in writing.
The directors may close the transfer books of the company for any
meeting of the stockholders, and fix the time during which they shall
remain closed.
2. The stockholders, at the annual meeting, shall elect from their
number a board of eleven (11) directors, who shall hold office until the
next annual election, and until their successors are chosen.
The directors shall have power to fill vacancies, in their own number
occasioned by death, resignation, or other cause.'
Any six of the directors shall constitute a quorum for the transaction
of business.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 153
The directors shall, at their first meeting after the annual meeting
of the stockholders, proceed to organize by the election of a president,
one or more vice-presidents, a treasurer, an assistant treasurer, a sec-
retary, and one or more assistant secretaries; and they may appoint
such other officers and agents as the business of the company may
require, all officers to hold office only during the pleasure of the
directors.
3. Meetings of the directors may be held at Burlington, Iowa; Chi-
cago, Illinois, or New York City, New York, and may be held at any
time upon call of the president or any two of the directors on such
day and at such hour as the directors may determine, allowing, for due
notification of the members, not less than three days. All notices of
meetings may be by telegraph.
4. These by-laws may be amended and altered by the directors at
any meeting.
By-laws of the Chicago, Burlington and Quincy Railroad Company,
as amended at the annual meeeting of the stockholders held Movember
6, 1901. -
1.
The annual meeting of the stockholders shall be held in the city of
Chicago, Illinois, on the first Wednesday in November in each year,
and the annual report of the directors shall be printed and distributed
prior to said meeting.
A special meeting of the stockholders may be called by the board of
directors whenever in their judgment circumstances require it, and
it shall be their duty to call such special meeting whenever requested
so to do by not less than ten stockholders, owning at least ten per cent
of the capital stock.
At all stockholders’ meetings absent members may vote by proxy
duly authorized in writing.
The directors may close the transfer books of the company for any
meeting of the stockholders and fix the time during which they shall
remain closed.
2.
The stockholders at the annual meeting shall elect from their num-
ber a board of eleven directors, who shall hold office until the next
annual election, and until their successors are appointed and qualified,
and who shall have the power to fill vacancies in their own number
occasioned by death or resignation.
The directors shall at their first meeting thereafter, or as soon as a
quorum can be convened, proceed to organize by the election of a
chairman and a clerk of the board, a president, one or more vice-
presidents, a treasurer, and a secretary, all to hold office only during
the pleasure of the board. -
154 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
3.
The directors shall have the control, management, and direction of
the company, shall appoint its officers, determine their duties and
responsibilities, and fix their compensation.
4.
Any six of the directors shall constitute a quorum for the transaction
of business.
5.
All contracts for extensions of this company’s roads, or leases or
purchases of other roads or parts of roads, involving more than one
hundred and fifty thousand dollars ($150,000) of annual interest or
rental, shall first have the approval of the stockholders or the approval
of the board, with the written assent of at least nine of its members.
6.
The meetings of the board of directors may be held at the office of
the company in New York City, New York, or Chicago, Illinois, on
such days and at such times as the directors may determine. Special
meetings shall be called by the clerk whenever requested by the chair-
man, president, or any three members of the board, allowing for due
notification of the members not less than three days, and at such place
as the board may direct. All notices of meetings may be by telegraph.
7.
The clerk shall keep a complete journal of the doings of the board
and furnish a copy of the same to the secretary of the company for
record with the proceedings of the stockholders.
8.
The secretary, who may be the same person as the treasurer, shall
keep a full record of the proceedings of the stockholders and of all acts
of the board of directors.
9.
Transfers of shares shall not be valid, except as between the parties
thereto, until regularly entered on the books of the company, with a
surrender of a certificate or certificates for a corresponding amount.
10.
These by-laws may be amended and altered at any meeting of the
stockholders where a majority of the stock is represented and votes
on the question. -
O
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 155
By-laws of the Northern Securities Company, adopted Movember 13,
1901, amended Wovember 14, 1901; ratified Wovember 29, 1901.
ARTICLE I.—STOCKHOLDERs.
SECTION I.-ANNUAL MEETING.
A meeting of the stockholders of the company shall be held annually
at the principal office of the company in the State of New Jersey, at
12 o'clock noon on the second Monday in November in each year, if
not a legal holiday, and if a legal holiday then on the next succeeding
Monday not a legal holiday, for the purpose of electing directors, and
for the transaction of such other business as may be brought before
the meeting.
It shall be the duty of the secretary to cause notice of each annual
meeting to be published once in each of the four calendar weeks next
preceding the meeting in a least one newspaper in each of the follow-
ing places: Jersey City, N. J., and New York, N. Y. Nevertheless,
a failure to publish such notice, or any irregularity in such notice, or
in the publication thereof, shall not affect the validity of any annual
meeting, or of any proceedings at any such meeting.
SECTION 2.—SPECIAL MEETINGs.
Specia' meetings of the stockholders may be held at the principal
office of the company in the State of New Jersey whenever called in
writing or by vote by a majority of the board of directors.
Notice of the time and place of each special meeting shall by the
secretary be published once in each of the two calendar weeks next
preceding the meeting in at least one newspaper in each of the follow-
ing places: Jersey City, N. J., and New York, N. Y. Nevertheless if
all the stockholders shall waive notice of a special meeting, no notice
of such meeting shall be required; and whenever all the stockholders
shall meet in person or by proxy, such meeting shall be valid for all
purposes without call or notice, and at such meeting any corporate
action may be taken.
SECTION 3.−QUORUM.
At any meeting of the stockholders the holders of a majority of all
the shares of capital stock of the company, present in person or repre-
sented by proxy, shall constitute a quorum of the stockholders for all
purposes, unless the representation of a larger number shall be re-
Quired by law, and in that case the representation of the number so
required shall constitute a quorum.
If the holders of the amount of stock necessary to constitute a quo-
rum shall fail to attend in person or by proxy at the time and place
fixed by these by-laws for an annual meeting, or fixed by notice as
above provided for a special meeting called by the directors, a major-
ity in interest of the stockholders present in person or by proxy may
adjourn from time to time without notice other than by announce-
ment at the meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting at
which a quorum shall be present any business may be transacted which
might have been transacted at the meeting as originally notified.
156 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
SECTION 4.—ORGANIZATION.
The president, and in his absence one of the vice-presidents, in order
of their numbers, beginning with the first, shall call meetings of the
stockholders to order, and shall act as chairman of such meetings.
The board of directors may appoint any stockholder to act as chair-
man of any meeting in the absence of the president and all the vice-
presidents.
The secretary of the company shall act as secretary at all meetings
of the stockholders, but in the absence of the secretary at any meeting
of the stockholders the presiding officer may appoint any person to act
as secretary of the meeting.
SECTION 5.-VOTING.
At each meeting of the stockholders every stockholder shall be
entitled to vote in person, or by proxy appointed by instrument in
writing, subscribed by such stockholder or by his duly authorized
attorney and delivered to the inspectors at the meeting; and he shall
have one vote for each share of stock standing registered in his name
at the time of the closing of the transfer books for said meeting. The
votes for directors, and, upon demand of any stockholder, the votes
upon any question before the meeting shall be by ballot.
At each meeting of the stockholders a full, true, and complete list,
in alphabetical order, of all of the stockholders entitled to vote at such
meeting, and indicating the number of shares held by each, certified
by the secretary or by the treasurer, shall be furnished. Only the
persons in whose names shares of stock stand on the books of the
company at the time of the closing of the transfer books for such
meeting, as evidenced by the list of stockholders so furnished, shall be
entitled to vote in person or by proxy on the shares so standing in
their names.
Prior to any meeting, but subsequent to the time of closing the
transfer books for such meeting, any proxy may submit his powers
of attorney to the secretary or to the treasurer for examination.
The certificate of the secretary or of the treasurer as to the regularity
of such powers of attorney and as to the number of shares held by the
persons who severally and respectively executed such powers of attor-
ney shall be received as prima facie evidence of the number of shares
represented by the holder of such powers of attorney for the purpose
of establishing the presence of a quorum at such meeting, and of organ-
izing the same and for all other purposes.
SECTION 6.—INSPECTORs.
At each meeting of the stockholders the polls shall be opened and
closed; the proxies and ballots shall be received and taken in charge,
and all questions touching the qualification of voters and the validity
of proxies and the acceptance or rejection of votes shall be decided
by two inspectors. Such inspectors shall be appointed by the board
of directors before or at the meeting, or, if no such appointment shall
have been made, then by the presiding officer at the meeting. If for
any reason any of the inspectors previously appointed shall fail to
attend or refuse or be unable to serve inspectors in place of any so
failing to attend or refusing or unable to attend, shall be appointed in
like manner.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 157
ARTICLE II.-BOARD OF DIRECTORs.
SECTION 1.-NUMBER, CLASSIFICATION, AND TERM OF OFFICE.
The business and the property of the company shall be managed and
controlled by the board of directors.
As provided in the certificate of incorporation, the directors shall
be classified in respect of the time for which they shall severally hold
office, by dividing them into three classes, each class consisting of one-
third of the whole number of the board of directors. The directors
of the first class shall be elected for a term of one year; the directors
of the second class shall be elected for a term of two years, and the
directors of the third class shall be elected for a term of three years.
At each annual election the successors to the directors of the class
whose terms shall expire in that year shall be elected to hold office for
the term of three years, so that the term of office of one class of
directors shall expire in each year.
The number of the first board of directors shall be three, but the
number of directors may be altered from time to time, and so soon as
deemed advisable by the first board of directors, shall be increased to
fifteen by the alteration of these by-laws.
[At a meeting of the board, held 10 a. m. November 14, 1901, these
by-laws were amended by striking out this paragraph and inserting in
place thereof the words: “The number of the board of directors shall
be fifteen, but the number of directors may be altered from time to
time by the alteration of these by-laws.”] -
In case of any increase in the number of directors, the additional
directors shall be elected by the directors then in office; one-third of
such additional directors for the unexpired portion of the term of one
year; one-third for the unexpired portion of the term of two years;
and one-third for the unexpired portion of the term of three years,
so that each class of directors shall be increased equally.
Every director shall be a holder of at least one share of the capital
stock of the company. Each director shall serve for the term for
which he shall have been elected and until his successor shall have
been duly chosen.
At all elections of the directors, the polls shall remain open for at
least one hour, unless every registered owner of shares has sooner
voted in person or by proxy, or in writing has waived the statutory
provision. -
SECTION 2.—VACANCIES.
In case of any vacancy in the directors of any class through death,
resignation, disqualification, or other cause, the remaining directors,
by affirmative vote of a majority thereof, may elect a successor to hold
office for the unexpired portion of the term of the director whose
place shall be vacant and until the election of his successor.
Such vacancy shall be filled upon and after nominations therefor
shall have been made by the executive committee.
SECTION 3.—PLACE OF MEETING, ETC.
The directors may hold their meetings, and may have an office and
keep the books of the company (except as otherwise may be provided
for by law) in such place or places in the State of New Jersey or out-
side of the State of New Jersey as the board from time to time may
determine.
158 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
SECTION 4.—SPECIAL MEETINGs.
Special meetings of the board of directors shall be held whenever
called by the president, or by one-third of the directors for the time
being in office.
The secretary shall give notice of each special meeting by mailing
the same at least five days before the meeting, or by telegraphing the
same at least three days before the meeting, to each director; but such
notice may be waived by any director. At any meeting at which every
director shall be present, even though without any notice, any busi-
ness may be transacted.
SECTION 5.—QUORUM.
A majority of the board of directors shall constitute a quorum for
the transaction of business; but if at any meeting of the board there
be less than a quorum present, a majority of those present may adjourn
the meeting from time to time.
SECTION 6.—ORDER OF BUSINESS.
At meetings of the board of directors business shall be transacted
in such order as from time to time the board may determine by res-
olution.
At all meetings of the board of directors the president, or in his
absence one of the vice-presidents, in order of their numbers, begin-
ning with the first, shall preside.
ARTICLE III.-ExECUTIVE COMMITTEE.
SECTION 1.
The board of directors may elect from the directors an executive
committee. The president shall ex officio be chairman, and in his
absence one of the members, in the order of their election, shall act as
chairman.
The board of directors shall fill vacancies in the executive committee
by election from the directors.
All action by the executive committee shall be reported to the board
of directors at its meeting next succeeding such action, and shall be
subject to revision or alteration by the board of directors: Provided,
That no rights or acts of third parties shall be affected by any such
revision or alteration.
The executive committee shall fix its own rules of proceeding, which
rules shall be subject to approval by the board, and shall meet where
and as provided by such rules or by resolution of the board of directors;
but in every case the presence of a majority shall be necessary to con-
stitute a quorum.
In every case the affirmative vote of a majority of all of the members
of the committee shall be necessary to its adoption of any resolution.
During the intervals between the meetings of the board of directors
the executive committee shall possess, and may exercise, all the powers
of the board of directors in the management and direction of the busi-
ness and affairs of the company in such manner as the executive com-
mittee shall deem best for the interests of the company in all cases in
. specific directions shall not have been given by the board of
irectors. -
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 159
ARTICLE IV.-OFFICERs.
SECTION 1.-OFFICERs.
The executive officers of the company shall be a president, a vice-
president, or more than one vice-president, a treasurer, and a secretary,
all of whom shall be elected by the board of directors.
The board of directors may appoint such other officers as they shall
deem necessary, who shall have such authority and shall perform such
duties as from time to time may be prescribed by the board of directors.
The powers and duties of the treasurer and secretary may be exer-
cised and performed by the same person.
In its discretion the board of directors, by the vote of a majority
thereof, may leave unfilled, for any such period as it may fix by reso-
lution, any office, except those of president, treasurer, and secretary.
All officers and agents shall be subject to removal at any time by the
affirmative vote of a majority of the whole board of directors. All
officers, agents, and employees, other than officers appointed by the
board of directors, shall hold office at the discretion of the committee
or of the officer appointing them. a
SECTION 2.—POWERS AND DUTIES OF THE PRESIDENT.
The president shall preside at all meetings of the stockholders and
of the board of directors, and by virtue of his office he shall be a mem-
ber of the executive committee. Subject to the board of directors, or
to the executive committee, if any be elected, he shall have general
charge of the business of the company, may sign and execute all author-
ized bonds, contracts, or other obligations in the name of the company,
and, with the treasurer or an assistant treasurer, may sign all certifi-
cates of the shares in the capital stock of the company. He shall do
and perform such other duties as from time to time may be assigned
to him by the board of directors.
SECTION 3.−VICE-PRESIDENTS.
Each vice-president shall have such powers, and shall perform such
duties, in addition to those mentioned in the by-laws, as may be
assigned to him by the board of directors or the executive committee.
SECTION 4.—Powers AND DUTIES OF TREASURER.
The treasurer shall have custody of all the funds and securities of
the company which may have come into his hands; when necessary or
proper he shall indorse on behalf of the company for collection, checks,
notes, and other obligations and shall deposit the same to the credit of
the company in such bank or banks or depository as the board of direct-
ors or the executive committee may designate; he shall sign all receipts
and vouchers for payments made to the company; jointly with the
president, or a vice-president, or such other officer as may be desig-
nated by the board or executive committee, he shall sign all checks
made by the company, and shall pay out and dispose of the same under
the direction of the board or of the executive committee; he shall sign,
with the president, or a vice-president, or such other person or persons
as may be designated for the purpose by the board of directors or the
160 CONSOLIDATIONS AND COMBINATIONS OF CARRIERs.
executive committee, all bills of exchange and promissory notes of the
company; he may sign, with the president or a vice-president, all certifi-
cates of shares in the capital stock; whenever required by the board
of directors or by the executive committee he shall render a statement
of his cash account; he shall enter regularly, in books of the company
to be kept by him for the purpose, full and accurate account of all
moneys received and paid by him on account of the company; he shall,
at all reasonable times, exhibit his books and accounts to any director
of the company upon application at the office of the company during
business hours; and he shall perform all acts incident to the position
of treasurer, subject to the control of the board of directors or of the
executive committee.
He shall give security for the faithful discharge of his duties in such
sum as the board of directors or the executive committee may require.
SECTION 6.—Assista NT TREASURERs.
The board of directors or the executive committee may appoint an
assistant treasurer or more than one assistant treasurer. Each assist-
ant treasurer shall have such powers and shall perform such duties as
may be assigned to him by the board of directors or by the executive
committee.
SECTION 7.—Powers AND DUTIES OF SECRETARY.
The secretary shall keep the minutes of all meetings of the board of
directors, and the minutes of all meetings of the stockholders, and also
the minutes of all committees in books provided for that purpose; he
shall attend to the giving and serving of all notices of the company;
he may sign, with the president or a vice-president, in the name of the
company, all contracts authorized by the board of directors or by the
executive committee, and, when so ordered by the board of directors
or executive committee, he shall affix the seal of the company thereto;
he shall have charge of the certificate books, transfer books, and stock
ledgers, and such other books and papers as the board of directors or
the executive committee may direct, all of which shall, at all reasonable
times, be open to the examination of any director, upon application at
the office of the company during business hours; and he shall in gen-
eral perform all the duties incident to the office of secretary, subject
to the control of the board of directors and of the executive committee.
SECTION 8.—ASSISTANT SECRETARIES.
The board of directors or the executive committee may appoint one
or more assistant secretaries. Each assistant secretary shall have such
powers and shall perform such duties as may be assigned to him by
the board of directors or by the executive committee.
SECTION 9.—AUDITOR.
The auditor shall be the principal officer in charge of the accounts
of the company, and shall perform such duties as from time to time
may be assigned to him by the board of directors or the executive
committee.
CONSOLIDATIONS AND COMBINATIONS OF CARRIERS. 161
ARTICLE V.—CAPITAL STOCK--SEAL.
SECTION 1.-CERTIFICATEs of SHAREs.
Certificates for shares of the capital stock of the company shall be
in such form, not inconsistent with the certificate of incorporation, as
shall be prepared or be approved by the board of directors. The cer-
tificates shall be signed by the president or a vice-president, and also
by the treasurer or an assistant treasurer.
All certificates shall be consecutively numbered. The name of the
person owning the shares represented thereby, with the number of
i. shares and the date of issue, shall be entered on the company’s
ooks.
No certificate shall be valid unless it be signed by the president or
a vice-president, and by the treasurer or an assistant treasurer.
All certificates surrendered to the company shall be canceled, and no
new certificate shall be issued until the former certificate for the same
number of shares of the same class shall have been surrendered and
canceled.
SECTION 2.—TRANSFER OF SHARES.
Shares in the capital stock of the company shall be transferred only
on the books of the company by the holder thereof in person, or by
his attorney, upon surrender and cancellation of certificates for a like
number of shares.
* SECTION 3.—REGULATIONS.
The board of directors, and the executive committee also, shall have
power and authority to make all such rules and regulations as respect-
ively they may deem expedient concerning the issue, transfer, and
registration of certificates for shares of the capital stock of the
COmpany.
The board of directors or the executive committee may appoint one
or more transfer agents and a registrar of transfers, and may require
all stock certificates to bear the signature of one of such transfer
agents and of such registrar of transfers.
SECTION 4.—CLOSING OF TRANSFER Books.
The stock transfer books shall be closed for the meetings of the
stockholders and for the payment of dividends during such periods as
from time to time may be fixed by the board of directors or by the
ºve committee, and during such periods no stock shall be trans-
erable.
SECTION 5.—DIVIDENDs.
The board of directors may declare dividends from the surplus or
net profits of the company, over and above the amount which from
time to time may be fixed by the board as the amount to be reserved
as working capital.
SECTION 6.—WORKING CAPITAL.
The directors shall not be required in January in each year, after
reserving over and above its capital stock paid in, as a working capital
for said corporation, such sum, if any, as shall have been fixed by the
162 CONSOLIDATIONS AND COMBINATIONS OF CARRIERS.
stockholders, to declare a dividend among its stockholders of the whole
of its accumulated profits exceeding the amount so reserved, and pay
the same to such stockholders on demand; but the board of directors
may fix a sum which may be set aside or reserved, over and above the
company’s capital paid in, as a working capital for the company, and
from time to time they may increase, diminish, and vary the same in
their absolute judgment and discretion.
SECTION 7.—CORPORATE SEAL.
The board of directors shall provide a suitable seal, containing the
name of the company, which seal shall be in charge of the secretary,
if and when so directed by the board of directors or by the executive
committee. A duplicate of the seal may be kept and used by the
treasurer or by any assistant secretary or assistant treasurer.
ARTICLE VI.-AMENDMENTs.
SECTION 1.
The board of directors shall have power to make, amend, and repeal
the by-laws of the company, by vote of a majority of all the directors,
at any regular or special meeting of the board: Provided, That notice
of intention to make, amend, or repeal the by-laws in whole or in part
shall have been given at the next preceding meeting; or without any
such notice, by a vote of two-thirds of all of the directors.
O
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SAFETY APPLIANCES
... . . . . ºxº
GENEF"
AND JUL 10 lº -
ACCIDENT REPORTS.
EXTRACT FROM THE FIFTEENTH ANNUAL REPORT
INTERSTATE COMMERCE COMMISSION.
- WASHINGTON:
GovKRNMENT PRINTING OFFICE.
1902.
62 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
SAFETY APPLIANCES.
The act of 1893, with its amendments, known as the safety-appliance
law, became of full effect on the 1st of August, 1900, and the benefi-
cent results of its operation are now being realized. The greatly
increased security of life and limb with which the men on freight trains
and in freight yards now perform their work is apparent on every
hand. Evidence of the improved conditions that have resulted from
the practically universal use of automatic couplers on freight cars
appears in the accident records of the Commission, of the railroad
companies and of the railroad employees’ insurance organizations, and
also in the testimony of railroad officers and employees and the heads
of the engineers’, conductors’, firemen’s, and trainmen’s brotherhoods.
Further proof, from the financial standpoint, is found in the records
of the claim departments of the railroads, as well as those of the several
trainmen’s organizations. -
This gratifying state of affairs is due to the Federal statute, to the
railroad companies’ united action, and, we believe we may fairly say, to
the efficient performance of their duties by the inspectors in the Service
of the Commission; in other words, to the energy and perseverance
of the men, in and out of Congress, who brought about the passage of
the law, to the persistent work of the managers and mechanical officers
of the railroads, who, in their technical associations, carried through
the various measures necessary to accomplish uniformity, and to the
intelligent and careful inspection by which the Commission has been
able to promote the efficient and methodical maintenance of couplers,
brakes, and handholds on freight cars, and to facilitate the adoption of
good practice in regard thereto. - -
In the expansion of traffic incident to unprecedented activity in
manufacturing and commerce, many railroad companies found them-
selves hard pressed to keep pace with the demands for increased loco-
motive power, cars of greater carrying capacity and other costly
facilities, and thus, almost of necessity, gave inadequate attention to
some matters of detail. In this emergency the usefulness of the Com-
mission’s inspectors, in supervising the methods of dealing with defect-
ive cars or with doubtful questions about the requirements of the
statute, has not only been evident in resulting improvements but has
been cordially recognized by railroad officers of all grades. These
inspectors, who are competent men of long experience in car and train
work, have not confined their observations exclusively to those details
of construction and operation which are specifically covered by the
statute, but have taken notice of all features of operation, maintenance
and repairs which seem to be germane to the work in which they are
engaged. In their interviews with railroad presidents and managers
SAFETY APPLIANCES. 63
they have frequently made suggestions, based on their observations,
which have elicited much commendation from those officials.
The inspectors have also been successful in establishing amicable
relations with conductors, brakemen, repairmen and others with
whom they come in contact, their former service in train and car
repair work being of great advantage to them in this respect.
In crediting to the railroad technical associations the important
share they have borne in bringing about this great reform in equip-
ment, it is proper to say that the various local clubs and associations,
which have become so prominent in the railroad world during the
past few years, have been active and useful, though the national
associations were the pioneers and leaders in the movement. These
associations have done a work which is unique—unique in the sense of
influence exerted and results accomplished. The Master Car Builders’
Association, composed of technical officers, has carried on the cam-
paign for uniformity for many years, and the American Railway Asso-
ciation, more strictly official in its character yet still voluntary in its
organization, has put the seal of approval on the acts of the former
body. This approval—that is, the adoption of standards of construc-
tion and of practice—has had a marked effect in promoting a whole-
some respect for the law, notwithstanding the fact that the decisions
and recommendations of the association have no legal or compulsory
effect on any railroad company.
Prominent members of these associations have recently given their
views on the results of the law in letters and extracts which appear in
Appendix D hereto.
The number of conductors, brakemen, switchmen, flagmen and
watchmen, killed in coupling accidents in the year ending June 30,
1901, expressed by the ratio of the number killed to the total number
employed, appears to have been less than in the year immediately pre-
ceding by about 35 per cent, and the number injured by about 52 per
cent. This appears in the following table, which covers 70 per cent
of the operated mileage of the country.

TABLE No. 1.-Accidents incurred in coupling and wncoupling cars.
Number of train-
Emplº on 87 || “. employed
Year ending June 30– & to 1—a
Killed. | Injured. Killed. Injured.
1898--------------------------------------------------------------- 209 5,433 555 21
1899 --------------------------------------------------------------- 196 5,281 592 22
1900 : - - - - -, * = • * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * = 228 3,970 546 31
1901 --------------------------------------------------------------- 161 2,082 837 65
a Ratio based on trainmen other than enginemen and firemen, and including switchmen, flagmen,
and watchmen.
64 |REPORT OF THE INTERSTATE COMMERCE COMMISSION.
One in 546 equals 183 in 100,000; 1 in 837 equals approximately
119 in 100,000. This shows a decrease of 64 fatal casualties per 100,000
employees for the year ending June 30, 1901, as compared with the
previous year, a decrease equal to 35 per cent. That this decrease in
the number of fatal casualties to employees engaged in coupling and
uncoupling cars is in very large measure the result of the operation of
the safety appliance act of 1893 (which went into full effect in August,
1900) is not open to serious question. There is no evidence that the
casualties sustained during the year ending June 30, 1900, were unusu-
ally severe; the comparison is not materially affected by the fact that
for the later year the total does not include every road, nor can
the impression made by these figures be removed by the fact that new
rules defining casualties were promulgated for the reports of the year
ending June 30, 1901. Formerly each road followed its own rule in
making returns of accident statistics, but beginning with July 1, 1900,
the reports of carriers are affected by the precise definitions of the
words “killed ” and “injured” adopted by the Commission. Accord-
ing to these definitions an employee who sustains an accident resulting in
immediate death, or in death within twenty-four hours from the time
the accident occurred, is reported as “killed,” and an employee who
sustains an accident which prevents him from performing his accus-
tomed service for more than three days in the aggregate, during the
ten days immediately following the accident, is reported as “injured.”
We can not accurately measure the effect which these definitions will
have upon the number of casualties reported, but it is safe to say that
this change in the rules can not account for the marked decrease in
the number of employees “killed” and “injured” while coupling and
uncoupling cars, as indicated in the above table. This decrease is due
primarily, if not entirely, to the safety appliance act.
The impression left from a study of Table 1 is strongly corroborated
by the reports of accidents for the month of July, 1901, these being
the first monthly returns sent to the Commission under the law of
March, 1901. According to these returns only 4 employees were
killed during that month while coupling and uncoupling cars. It
would not, of course, be safe to assume that the month of July is a
typical month so far as accidents are concerned, but making due allow-
ance on this account, the reports for July and subsequent months warrant
the expectation that casualties due to coupling and uncoupling cars
will be less for 1902 than for 1901; that the great improvement in
conditions which was experienced under the first year’s operation of
the law will be still more marked in the second year. For the last
year which has been fully reported (year ending June 30, 1900) the
number of killed in coupling accidents averaged 23# a month.
SAFETY APPLIANCES. 65
The complete statistics for the years ending June 30, 1893, 1897,
1898, 1899 and 1900 are shown in the following table:
TABLE No. 2.-Accidents incurred in coupling and uncoupling cars.
Number of train-
Tºro men employed
Year ending June 30– to One—a
Killed. Injured. | Killed. | Injured.
1898--------------------------------------------------------------- 433 11,277 349 13
1897 --------------------------------------------------------------- 214 6, 283 647 22
1898--------------------------------------------------------------- 279 y 518 21
1899 --------------------------------------------------------------- 260 6,765 563 22
1900 --------------------------------------------------------------- 282 5,229 550 30
• Ratio based on trainmen other than enginemen and firemen, and including switchmen, flagmen,
and watchmen.
The smaller ratios for the later years, as compared with 1893, indi-
cate the increased security to life and limb effected by the partial'
introduction of automatic couplers and power brakes, the use of hand
holds and compliance with the law fixing a standard height for draw-
bars. All of these improvements were introduced gradually and
produced good results in proportion to the number of cars properly
equipped, except that in the transition period, when some cars had
automatic couplers and some had not, the dangers encountered by the
men were greatly increased by the increased diversity.
Deaths and injuries caused by falling from trains and engines have
long been a marked feature of railroad-accident records, and the
deplorably large totals under this head have been the subject of com-
ment in the reports of the Commission for former years. The follow-
ing table shows the totals under this head, in the same form as in our
last annual report: -
TABLE No. 3.-Accidents caused by falling from trains and engines.

Numbér of train-
mena employed
to One—
- Total º: Of
OWeèS-
Year ending June 30– employ
Killed. Injured. Killed. Injured.
1893 --------------------------------------------------------------- 644 3,780 354 60
1897 --------------------------------------------------------------- 408 3,627 497 59
1898--------------------------------------------------------------- 473 3,859 480 57
1899 --------------------------------------------------------------- 459 3,970 390 45
1900 --------------------------------------------------------------- 529 4,425 361 43
*Number of trainmen includes enginemen, firemen, conductors, and other trainmen.
It will be observed that there is a material increase in the ratio of
killed in 1900 over the three years next preceding. The various causes
of this increase can only be conjectured, but among them are obviously
the increase in the number of inexperienced men employed, and the
increased amount of work done by the men when the volume of
traffic is constantly increasing, as was the case on many on the railroads
1881—02—5
66 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
during the year under consideration. The use of air brakes on freight
trains is confidently expected to lessen the deaths and injuries under
this head; but air brakes were not nearly so generally used in 1899–1900
as they are now. On the other hand, it is well known that, with the
more powerful locomotives, heavier cars and longer freight trains
which have come into general use during the past few years, the use
of air brakes on these trains has been the occasion if not the cause
in some circumstances of an increased number of violent shocks,
which of course tend to increase the danger to men on the cars. The
increase in the dangers due to the practice of running longer trains
is not to be measured alone by the increased proportion of powerful
locomotives in use, for two engines on the same train, on level lines
as well as on steep grades, is now very common.
Table No. 5, which appears in the appendix, shows certain compari-
'sons between the conditions of 1893 and those of 1900 in regard to
the amount of work done by trainmen. The increase in the efficiency
of the men, resulting from larger locomotives and improved methods,
which was marked a year ago, is still more marked now. In 1893 the
number of ton-miles to each trainman employed was 638,635; in 1899
it was 844,638; in 1900 it was 913,425.
A suit for damages for personal injury has recently been decided
by the State court of Illinois in which the safety-appliance act was a
factor in determining the liability of a railroad company. The case
is known as Hood v. T. H. & I. R. R. Co. The facts showed that the
plaintiff, a freight brakeman, while coupling cars on a dark night,
slipped and fell under one of the cars and received serious injuries.
He established to the satisfaction of the jury that the car which
crushed his hand was not equipped with grab irons, as required by the
act of Congress. Without the benefit of that act he could not have
recovered, as the injury would have been held to be one of the risks
incident to his employment. The appellate court of Illinois held,
first, that to bring such a case within the operation of the act of Con-
gress it was not necessary to show that the car contained goods con-
stituting an interstate shipment. It was sufficient in that respect to
show that the car in question was a part of a train engaged in inter-
state commerce, and that the car was attached to the train at East St.
Louis, Ill., and billed through to Indianapolis, Ind., and that it was
not provided with hand holds as required by the law. Second, the
court held that it made no difference whether the employee did or did
not know that the car was not provided with hand holds, as section 8 of
the act of Congress expressly relieved him from the common-law rule
concerning the assumption of knowledge of the risks of employment.
In this case the appellate court affirmed the judgment of the trial
court, which held the company liable. The State court upheld and
SAFETY APPLIANCES. 67
enforced the Federal statute and gave it that liberal interpretation
which prevails in the interpretation of remedial statutes.
As this is perhaps the first case in which sections 4 and 8 of the act
have come before an appellate court, the decision as a precedent is
important to all concerned; and it is gratifying to those who are
interested in the protection of life and limb in the railway service that
the validity of the act of Congress has been sustained on all the points
raised, and by a unanimous court. -
Another case which, if sustained, will have an important bearing
upon the value of the safety-appliance law to railroad employees is
that of White v. The Chicago Great Western Railway Company,
recently decided by the United States circuit court for the southern
district of Iowa, which reached that court on a removal from the State
Court.
The case involved the application and construction of a statute of
Iowa, one section of which is quite similar to the second section of the
Federal statute under discussion. Each statute prohibits the use of
any car not equipped with automatic couplers so they may be coupled
or uncoupled without the necessity of a trainman going between the
cars. The plaintiff, White, was injured while attempting to make a
coupling between a car that was properly equipped, in accordance
with the provisions of both the State and Federal law, and the tender
of an engine that was not provided with automatic appliances, which
necessitated the use of the old link and pin. The United States circuit
court instructed the jury to return a verdict for the railroad company,
on the ground that a locomotive tender was not a car within the mean-
ing of the act.
As the State and Federal acts are substantially similar, that court
would undoubtedly construe the Federal statute as not broad enough
to require the locomotive and tender to be equipped with safety coup-
lers. If that construction shall be upheld by the Supreme Court, the
safety appliance act will be considerably impaired in its practical
value. It is therefore recommended that section 2 of the act be
amended so as to specifically include locomotives and tenders. Such
an amendment is necessary to put the statute in accord with the
approved practice of all the prominent railroads. The reports from
the roads to this Commission show that railroad officials, recognizing
the need of uniformity in couplers throughout the whole length of a
train, or a series of trains, have made good progress in equipping their
locomotives and tenders with automatic couplers, and have so far
equipped more than 75 per cent of them with such couplers. While
this action is highly commendable, it is still desirable to add this reason-
able and useful amendment to the law, if for no other reason than to
insure uniformity among all of the roads.
68 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
It seems desirable also that the statute concerning hand holds should
be made applicable to locomotives, tenders and snowplows. Both of
these provisions of law, as also the requirement of a standard height
for couplers, might reasonably be made to cover all vehicles, passen-
ger, freight and miscellaneous, which are ordinarily hauled or pro-
pelled by standard locomotives. The hand holds on the ends of freight
and switching engines and their tenders should extend entirely across
from one end to the other of the end sills.
But while we recommend the perfecting of the law in this respect,
we desire to give recognition to the fact that as a rule the railroad
companies of the country now need no compulsion to induce them to
use automatic couplers. It is only in details of a minor character that
any road has taken a critical or reluctant attitude. Both the auto-
matic coupler and the continuous power brake are now absolute neces-
sities in the operation of railroads which have long trains, or use the
powerful locomotives and heavy cars which are now common. As
freight cars are freely interchanged through the country, and as pow-
erful locomotives are everywhere demanded in the interest of economy,
this statement is really of universal application. Competent observers,
both among railroad officers and persons who are wholly disinterested,
are substantially agreed that without the close coupler the movement
of the very long and heavy trains now hauled would be out of the
question; that without the power brake it would be not only highly
unsafe to move these trains, at the greatly increased speed now in
vogue, but practically impossible, in the great majority of cases, by
reason of the difficulty of regulating the movements of the trains at
stations, yards and meeting points; and that without the automatic
coupler the work of switching and making up trains in yards would
require from a fourth to a third more time than it now does. Thus
the policy of the Congress in enacting the safety-appliance law is
amply vindicated on what may be called “business considerations”
and without any regard to the question of safety of life and limb. In
short, the use of power brakes and improved couplers of uniform type,
constituting as they do radical improvements in the construction of
cars and locomotives, must be regarded as a most important element in
the marvelous progress by which the railroads of the country have
continued to cheapen the cost of transportation, and at the same time
conserve the safety of their employees and passengers.
One of the greatest obstacles in the way of safety in freight-train
operations at the present time is the presence, in nearly all trains, of
old and weak cars. In the unavoidable shocks incident to the movement
of heavy (new) cars at the increased speed now found necessary, these
weak cars are often damaged and sometimes completely crushed, thus
endangering the lives of the trainmen. The use of automatic power
brakes on freight cars, being still to a considerable extent a device
SAFETY APPLIANCES. 69
about which enginemen, repairmen and others have yet something to
learn, is naturally the frequent cause of severe shocks in trains. No
one better understands the dangers connected with cars of inadequate
strength and stiffness, or more sincerely regrets the present conditions,
than do the managers of the railroads; yet the only remedy which
appears to be feasible—the abandonment and destruction of the old
cars—is one which must be applied gradually. The use of cars of
greater tonnage capacity is now universally deemed essential in order
to carry freight economically. Practically all of the thousands of new
cars built during the past year have been designed to carry from 30 to
55 tons, the great majority of these being 40 tons or larger, and thou-
sands of them 50 tons (marked 100,000 pounds, but regularly loaded
with 110,000 pounds). These cars weigh empty from 15 to 19 tons
each, whereas the older cars weigh from a fourth to a third less. The
increased economy secured by the use of the heavy cars is so marked
in some kinds of traffic that prudence dictates the abandonment of
smaller cars long before they are worn out, and to some extent this has
been done. Yet the lighter cars are still sufficient in many kinds of
traffic; while to provide for the expansion of business on most of the
roads during the past two years any available car, economical or uneco-
nomical, has been pressed into service. Under these circumstances the
use of strong and weak cars in the same train has been looked upon as
a necessity. It seems reasonable to expect that every well-managed
railroad will do away with this element of danger as fast as is practi.
cable, and therefore no recommendation is made on the subject at this
time.
In this connection should be mentioned the action of the American
Railway Association at its last meeting (October, 1901), in adopting a
standard size for box freight cars. The primary reason for this action
was the desire to discourage the use of cars of abnormal width, height
and length. In practice such cars are usually uneconomical, except
for a few kinds of very bulky merchandise, but the adoption of a
standard car will be useful in promoting safety, because it will dis-
courage the building of cars which by reason of their excessive length
are of inadequate strength. Uniformity of width, height and length
must also tend to promote the safety of trainmen by lessening the
uncertainties and risks of train and yard work at night.
The Commission employs six inspectors. These men visit the freight
yards, examining all cars with a view of discovering any defects which
may constitute a violation of the Federal statute. As before stated,
these inspectors are men who have had long experience in matters of
railway equipment. An inspector always, when possible, introduces
himself to the officials in charge of a yard or station which he visits.
A copy of the rules under which the inspectors act is given in the
appendix. .
70 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
These rules were compiled after extended conferences with master
car builders, chief car inspectors and other railroad officers, and with
the beads of the brotherhoods of railroad employees. Before final
adoption (on April 1, 1901), they were sent out for criticism and
approval to a large number of railroad officers of the classes named.
In their final form the rules have proved suitable and satisfactory.
They have enabled the inspectors to inform the Commission concern-
ing the actual state of affairs as regards observance of the law, while
at the same time they have not caused friction with the railroad men
or dissatisfaction on their part. At the request of the Master Car
Builders’ Association about 30,000 copies in pamphlet form have been
sent by the Commission to railroad officials. While these rules embrace
many points which are not specifically dealt with in the statute, the
inspection which they call for covers details which are essential to the
safety of those for whose benefit the law was enacted, and, as noted
above, the rules have met with general approval.
In addition to the matters which are specified in the statute, the rules
require the inspectors to examine the ladders on the sides and ends of
cars, the steps at the sides and ends and the running boards which
extend along the roof. The suggestions which the inspectors have
been able to make concerning these details have been received by rail-
road officers in good spirit, and it is believed that they are generally
in such satisfactory condition that no statutory regulation concerning
them is necessary.
The safety appliance act went into full operation on August 1, 1900.
For the ten months prior to that date one or two inspectors were
employed. Since that date six have been employed. During the
twelve months from July 1, 1900, to June 30, 1901, these men examined
about 98,600 cars. A table summarizing the results of these inspec-
tions is given in the appendix. From this it will be seen that the
inspections for these twelve months, when compared on as fair a basis
as is possible with the inspections of the preceding nine months, show
a general improvement in the matter of defective cars of about 13 per
cent. At the same time it is to be noted that in the number of defects in
Class A (couplers and parts of same) there is an increase of about 3%
per cent. This, it is believed, does not indicate increased neglect, but
rather is to be explained by the fact that the inspection has gradually
been made more comprehensive and thorough. Again, it is known
that, during the three months immediately preceding August 1, 1900,
the work of equipping cars to conform to the law was at many places
carried on under unusual pressure, which no doubt led to some imper-
fect construction. At the present time the railroads generally make
'very thorough inspections of the couplers which they buy.
In defects of uncoupling mechanism, which class constitutes nearly
two-thirds of all the defects found in connection with couplers, the
SAFETY APPLIANCES. 71
improvement from the preceding period is 25 per cent. This is a
substantial gain, and the accuracy of the figures is confirmed by obser-
Vation at many places.
It is a well-known fact that uncoupling attachments have been one
of the most troublesome questions in connection with the introduc-
tion of vertical plane couplers. A large percentage of the minor
accidents to trainmen since the introduction of automatic couplers has
occurred while using or trying to use these appliances. The hori-
zontal rod, bent at the end to form a handle, is frequently knocked
out of position by some slight accident, or is out of order for some
cause or other, and the brakeman attempting to use it finds difficulty in
moving it. This often or usually happens while the car is in motion,
so that the man has to run alongside of the train; and any unexpected
delay or difficulty naturally draws his attention away from the ground
and his footing and thus leads him almost unconsciously to neglect his
own safety. Many uncoupling rods or hooks are found defective by
reason of too short a chain. This defect is liable to cause uncoupling
of the cars when they are in motion, and this, on an ascending grade,
and particularly in passing over a summit, has many times been fol-
lowed by a collision. This danger being realized, the inspector or
shopman who sets out to remedy the defect of a short chain is liable
to put on a chain which is too long, thereby introducing a difficulty of
another kind; for too long a chain may make it impossible for the
brakeman or switchman to lift the coupling pin without going between
the cars. As we have already intimated, this and other difficulties
with uncoupling apparatus are, it is believed, in a fair way to receive
early attention and correction.
When preparing the rules for our inspectors a clause was inserted
requiring a report to be made of any car of which the brake cylinder
or triple valve had not been cleaned within the six months next pre-
ceding. This length of time was decided upon after conference with
members of the Master Car Builders’ Association, and in the expecta-
tion that that association would adopt a similar rule. But the
expected action was not taken at the annual convention of the associa-
tion, and the rule was not adopted; whereupon the inspectors were
notified to examine these parts with the understanding that marks
showing they had been cleaned within one year should be accepted
as satisfactory.
With a view to introducing a useful additional feature in the reports
of the inspectors, it is proposed to have them separate the “home”
cars from the “foreign” cars; that is, the cars belonging to the com-
pany in whose yard the inspection is made from those cars found there
which belong to other companies. The regulations under which the
owner of a car bears a portion but not all of the expense of repairs
which have to be made upon it while it is in possession of another
72 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
company are quite complicated, and as a result of this and for other
reasons a repair officer looks upon his own cars in a light quite differ-
ent from that with which he regards those of another road. In some
things he is likely to favor his own cars, while in others he may pos-
sibly take the opposite attitude. The proposed change will, it is
expected, throw some light on this feature of the work.
A common defect in couplers, and one which is the cause of much
trouble and expense to the railroads, is breakage of the knuckle.
And, as is well known, these breakages are often due to shocks or
strains which, if the knuckle had been solid, would not have been
serious enough to produce injury. In other words, if it were not for
the slot and holes which are left in the knuckles for the purpose of
making it possible to couple to another car with the old-fashioned link
and pin, the strength and security of the knuckle, and therefore of the
coupler as a whole, would be much greater than it is. These weak-
ening features of the coupler were, in the transition period incident to
the gradual change from the link-and-pin to vertical-plane couplers, a
necessity; but as the transition period is now passed, the necessity no
longer exists, and there is no good reason why solid knuckles should
not be generally introduced.
Various other details of interest in connection with the work of the
inspectors are described in the reports which are given in the appendix.
From these reports it will be seen that the needs of the future, in
respect to couplers, may be described under the heads of strength,
simplicity, and finish. Since the present standard coupler was adopted,
the weight of freight cars has been greatly increased, while their car-
rying capacity has been increased in even greater proportion, so that,
with loaded cars, the increase in the strains on the couplers and their
attachments has been even greater than would be indicated by the
mere weight or size of the car alone. The additional demands thus
put upon the coupler have led to many changes in the design of the
different parts and in the kind of material of which they are made.
The shape and size of the framing of the cars, and the principles on which
the couplers are designed, impose limits on the size of the couplers
themselves, and therefore the only way by which they can be increased
in strength to meet these added demands is by using better and
stronger metal. The efforts which have been made by the various
manufacturers and railroad companies to accomplish these ends have
resulted in progress already, and have been accompanied by improve-
ments in the direction of simplicity. *
In speaking of finish we refer to the need of greater care in the
establishment of the outer contour lines and of greater smoothness, to
make the couplers work well with one another. In all these particulars
much advance has already been made. At the same time it is necessary to
say that there are still many roads which have still much to do to bring
their equipment up to the best practicable standard.
SAFETY APPLIANCES. 73
Railroad officers have complained a good deal of rough handling of
cars in yards. With the general use of automatic couplers, relieving
the men of the necessity of going between cars which are about to
come together, it has become possible to quicken the work of switching
by moving the cars much faster than formerly and taking less care to
properly graduate the speed of one car or a draft of cars as it approaches
another. This complaint is, no doubt, well founded. The condition
is regrettable, not only because of the damage inflicted on cars and their
contents by this rough handling, but also because it introduces a posi-
tive element of danger. The injuries which may be done to a car in
such case may or may not be discovered at the time. If the breakage
of a timber or loosening of a bolt or other fastening occurs in a yard
and is not noticed and remedied at the time, it constitutes a serious
element of danger throughout every mile which that car may run until
the defect is discovered, and it may be discovered only when it causes a
derailment while running on the road at high speed, causing thousands
of dollars damage. It is needless to say that the remedy for this fault
is in the hands of the railroad superintendents themselves and lies chiefly
or wholly in the discipline of the men handling the cars.
It is undeniable that the time saved in yard work by reason of mov-
ing the cars faster, due to the use of automatic couplers, and stopping
them more quickly by the aid of air brakes, amounts in many
cases to an important advantage. Railroad officers have testified to
a large saving in the cost of doing work in yards because of this
economy in time; and some of this testimony appears in the letters
which are given in the appendix. In the nature of things the cost of
yard work can not be measured with much accuracy; but where one
of a number of switching engines (the operation of which costs,
roughly, $25 a day) can be taken out of service by reason of the faster
work done, as has been the case at some yards, the saving is definite
and substantial. The increased economy is also seen in the case of
yards which were taxed to their utmost capacity by the work required
four or five years ago, but which have been able to accommodate the
large increase of traffic in the last few years without additional tracks
or switches. - -
The inspectors of the Commission did not begin to devote particular
attention to air brakes until August 1, 1900, as before that time the
requirements of the law were not applicable to brakes, although air
brakes were used on a large percentage of all freight trains. While,
however, the percentage of trains air braked was large, the number
of cars on which the brakes were used in each train was not large;
and up to about April last, when the rules of the Commission were
first promulgated, the attention given by the roads to the maintenance,
inspection and repair of air brakes had not been adequate. This was
realized by railway officials, and action looking to more efficient care
was very generally taken about that time. At the annual convention
74 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
of the Master Car Builders’ Association in June there was an extended
and instructive discussion of the air-brake question, which has con-
tributed to improvement in this feature of railway equipment.
It is not too much to say that the air-brake practice on the freight
trains of the country has long been in need of a decided improvement.
Trains have often been run with only a few cars air braked, when,
out for insufficient inspection, a very much larger number could have
been made available. Cars have been often “cut out” when with a
little care the brakes might have been put in order and used. At the
June meeting, before spoken of, the Master Car Builders’ Association
changed the rules respecting the repair and inspection of triple valves
of freight cars, when on roads other than those of the company own-
ing the car, which have already produced a marked improvement in
the condition of these parts and consequently in the efficiency of the
brakes.
The inspectors have noted a harmful practice in connection with air-
brake hose, which, unfortunately, seems to be on the increase—the
practice of pulling one car away from another without disconnecting
the hose couplings, thus leaving these couplings to separate auto-
matically. This separation is theoretically provided for in the design
of the couplings, and is intended to take place without damage to the
couplings or the hose; but practically the hose is strained and fre-
quently loosened at its fastenings, so that defects are produced which
are allowed, perhaps in some cases unavoidably, to go a shorter or
longer time without repairing. This of course introduces an element
of constant danger while trains are running, for the accidental rupture
or parting of a hose or its connections while a train is in motion is
sure to result in a sudden stoppage of the train; and a sudden stop-
page, with the car couplings in their present condition, is quite liable
to cause such shocks as to derail, damage, and crush one or more cars.
In trains of which only a part of the cars are equipped with air brakes
in use it often happens that a stoppage of this kind will result in
hundreds of dollars’ damage to the unbraked cars in the rear of the
train, and consequent danger to the trainmen. Injuries to trainmen
from this cause have been somewhat common, and some of the injuries
have been fatal.
The practice of thus allowing hose to be pulled apart by the loco-
motive is perhaps partly due to the feeling of the men that they ought,
when possible, to avoid going under cars to uncouple the hose. This
is a reason which should not escape consideration, yet it must be borne
in mind that in thus avoiding one danger a worse one may be caused.
Therefore, in the freight service, as in the passenger, it is the duty of
'officers, trainmen, and all concerned to support and promote such
regulations and discipline as will make it safe for men at all proper
times to perform the necessary duties under and between the cars.
SAFETY APPLIANCEs. 75
It will be observed that one of the prominent matters which has
engaged the attention of the inspectors is the condition of retaining
valves. The retaining valve partially controls air pressure in the
brake cylinder, and is opened or shut by a handle at the roof of the car,
where it is within convenient reach of the trainmen; it is a device for
more efficiently and safely controlling the speed of trains on steep
descending grades. While, under favorable conditions, the air brake
is efficient without this auxiliary, its use is a valuable additional safe-
guard, and on very steep grades it is a necessity. It appears, how-
ever, that but few railroads have as yet made regular, intelligent and
systematic use of retaining valves, and as a result the valves have
been very generally neglected. Trainmen do not use them in all
cases where they should, and often they are unable to use them if they
would, because they are not in working order.
A prolific cause of unsatisfactory air-brake service is found in
deficient arrangements at yards for testing the brakes. The approved
practice is to have air-supply pipes laid along the tracks in the yards
where trains are made up, from which to fill the cylinders with air
and test the brakes some time before a train is ready to start, so that
there shall be time for the correction of any defects which may be
discovered by the test, or for setting out cars in which there are
found defects that can not at the time be corrected. But, for lack of
proper facilities, testing is often left to be attended to after the engine
is attached to the train and the time for starting is almost at hand. A
test at such a time is made hurriedly, and imperfect work or neglect
is not uncommon. It is gratifying to note that the principal railroads
are rapidly equipping their yards with the necessary appliances to do
away with this cause of poor service.
The systematic maintenance of air brakes on freight cars requires
the intelligent cooperation of all the men who have to do with the
making up, movement and distribution of trains. Every conductor
should promptly advise the repair men of all defects found in service,
to the end that these shall be repaired in the shortest possible time.
The brakemen (who, it is gratifying to observe, are being carefully
instructed by many of the roads in the theory and operation of the
air brake) should keep their conductor fully advised of the conditions
throughout the train. Brakemen can easily detect many irregularities
which the inspectors at the yards can discover only by great care and
the expenditure of much time. Whenever the air brakes on a car are
cut out, the reason for so doing should be recorded on a card to be
attached to the car. These cards are now very generally provided,
but are not always systematically used. Improved maintenance of
air brakes, making it possible to use a larger proportion of the air-
brake cars in each train, would, it is believed, diminish the annoyance,
expense and danger due to the breakage of wheels under the very
76 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
heavy loads now carried. This danger has been the subject of serious
inquiry of late, and there is little doubt that some of the trouble is to
be found in the practice of cutting out too many cars, thus putting too
severe a braking duty on those which are left in service; heating the
wheels and increasing their liability to fracture.
The running of trains partially air braked is a practice which is still
tolerated everywhere. To an extent this impairs the value of the air
brake as a safety appliance, for an automatic application of the brakes
on a moving train, in consequence of the accidental rupture of a hose
or breakage of a pipe—and the provision for automatic application in
these circumstances is an essential element in any train brake—checks
the speed of the air braked cars so very quickly that the unbraked cars,
behind those braked, are by their momentum crowded against those in
front with such force as often to crush and sometimes to derail one or
more cars. The balance of economy is, probably, in favor of the run-
ning of trains partly air braked, rather than with no air brakes, in spite
of the losses due to this cause; but the duty of doing away with such
a dangerous condition must, nevertheless, be obvious to every railroad
manager. Trainmen have a duty in this matter; not only a duty to
themselves to avoid unnecessary personal danger, but also to their
employer to best preserve his property and most effectively use it.
Whether to use air brakes on one-third or two-thirds or nine-tenths
or the whole of the cars of a train often depends on the energy, care
and good judgment of the men who make up and manage the train;
and of course these men should work harmoniously together and
with an intelligent appreciation of the possible consequences of neglect
or indifference on their part. .
As a result of the present condition of the air brakes on the freight
cars of the country, of the lack of thorough training and discipline of
the men in charge of trains, and the insufficiency of the forces assigned
to inspection and repair, some companies, more particularly in the
East, are still controlling trains on steep descending grades by the use
of hand brakes. This is in disregard of the lessons of the experience of
those railroads which have used air brakes on freight trains for many
years in the West and is contrary to the advice of expert air-brake
engineers. As the educational period, as regards the air brake, is
still, on most railroads, far from finished, and as railroad officers, gener-
ally speaking, manifest a laudable purpose to improve their practice as
rapidly as they can determine the right course to pursue, the Commis-
sion is not disposed at this time to offer further criticism of this fea-
ture of railroad practice. But as there is no question that one of the
main purposes of the safety-appliance act was to provide for the uni-
versal use of continuous power brakes on all trains, it is plainly the
duty and will be the purpose of the Commission to pay particular
attention to this feature of the subject. According to the best expert
SAFETY APPLIANCES. 77
opinion the use of airbrakes on all of the vehicles of every train is neces-
sary for both economy and safety; and the efforts of the Commission
will be directed to that end.
Many interesting details of the questions touched upon in the fore-
going paragraphs are more particularly treated in the appendix. We
have deemed it proper and necessary to refer at Some length to the
features in which the efforts of the railroads to establish the practice
required by the safety-appliance law appear, as yet, to fall short of
complete success, for the reason that the magnitude of the undertak-
ing, the difficulties which beset it, and the need of much time for car-
rying it out could not otherwise be clearly set forth; but the very
hopeful condition of affairs now existing is, nevertheless, fully rec-
ognized. Facts showing this condition will be found in the inspect-
ors’ reports. Others are obvious to the intelligent reader. Above
all, the records given at the beginning of this chapter, showing the
remarkable amelioration of the condition of trainmen and yardmen
which has already taken place, afford indubitable evidence that much
of the good which was expected to result from the enactment of this
law has already been realized. -
The benefits accomplished by the establishment of a standard height
for drawbars are already realized practically everywhere, for the rail-
roads had made good progress in that direction before the passage of
the law. The saving in money and lives by this reform is in the
nature of things not susceptible of measurement, unless we go back to
the detailed records, years ago, of accidents, deaths, injuries and
losses due to diversity in height of drawbars which were then so pain-
fully common, but the advance is just as certain as though it could be
more accurately measured.
The automatic coupler has, of course, produced a more immediate
effect on the casualty records than has the power brake; for the coupler
stands by itself, whereas the usefulness of the power brake, both as a
life-saver and as an economizer, depends in part upon improvement in
other things. -
In making it unnecessary for men to be on the tops of high cars the
power brake has thus far had only a moderate effect, partly because
trains are still run with only a moderate proportion of the cars air
braked, and partly because railroad superintendents, always conserva-
tive in matters of this kind, are slow to modify their former regulations.
In making it possible to stop trains more quickly its value has been
to a considerable degree neutralized by the increase in speed which
has everywhere accompanied the introduction of the power brake. It
is easier to avoid danger, but the increase in speed increases the dan-
ger. It is gratifying to be able to state that many railroads are intro-
ducing or extending the use of the block system and otherwise
improving their signaling appliances, all of which decrease the dangers
78 REPORT OF THE INTERSTATE COMMERCE COMMISSION. .
of train movement and make the duties of the men simpler and easier.
The American Railway Association has been an important factor in
promoting good signaling, as it has in the other features of good prac-
tice already mentioned.
Although we have already referred to the very satisfactory testi-
mony given by officers of the railroad companies and of the train-
men’s brotherhoods concerning the good results of the law, it will not
be out of place, in closing our review of this subject, to again mention
this testimony; and therefore we bespeak particular attention to the
letters from these gentlemen which are printed in the appendix. The
railroad officers whose names are signed to these letters will be rec-
ognized as leaders in their respective fields—men whose opinions are
most highly respected in the American Railway Association and the
Master Car Builders’ Association—and the brotherhood leaders are
known as conservative men, accustomed to weigh their words. When
men of such character speak of the “inestimable value of" and the
“incalculable benefit from?” the safety-appliance law, the words have
an unusually significant meaning. Railroad managers are not likely
to speak of large percentages saved in accident expenses in this con-
nection unless the saving is plainly seen. A marked increase in the
reserve fund of an insurance organization is an argument which the
most superficial or indifferent observer will appreciate. These letters
also contain some hints about the best manner of dealing with those
problems which are yet to be met in the administration of the law
and in remedying the evils which we have spoken of.
ACCIDENT REPORTS.
By the act of Congress entitled “An act requiring common carriers
engaged in interstate commerce to make full reports of all accidents,”
approved March 3, 1901, the Commission is required to gather sta-
tistics of all collisions and derailments on railroads doing interstate
business, and of accidents to passengers and to employees on duty;
the railroad companies are required to report the accidents, stating
nature and cause, in reports of such form as the Commission shall
prescribe.
The full text of the law will be found in Appendix E.
The railroad companies were notified on June 12 to make the reports
required by the law, beginning with the month of July, 1901, the first
month of the current fiscal year. It was deemed unwise to put the
law in operation at an earlier date than this, for the reason that some
time was required to prepare and send to the railroad companies the
form of report to be used, embracing the definition and classification
of the accidents and casualties to be reported, and to receive and con-
sider the criticisms and suggestions which the Commission invited. A
AOCIDENT REPORTS. 79
provisional form of report was prepared and sent out to the railroad
companies, to the officers of the several railroad employees’ organiza-
tions, and to all persons who, it was thought. would be interested, and
public notice was given also.
A public hearing was held at the office of the Commission in Wash-
ington on April 30, and then and afterwards the criticisms and sugges-
tions were considered. The Commission also examined the forms of
accident reports which are used in Massachusetts, Ohio, Illinois and
other States, and those of the British Government, which, through
the board of trade, has kept records of railroad accidents for many
years. . .
Although ample notice was given, and though there has been no
complaint that the requirements of the law were not fully understood,
a number of companies failed to file their reports within the time
specified in the statute, in fact, have not yet filed their reports as required
by the act, and for that reason the statistics for the first month (July)
are not now fully tabulated. It does not appear, however, that unwill-
ingness to comply with the law has in any case been the cause of this
dilatory action, but rather the fact that the companies in question had
not before kept their accident statistics in a form readily adaptable to
the Commission’s form. The difficulties have been corrected, or are
susceptible of correction, by correspondence.
The Commission intends to tabulate and collate the information con-
tained in the reports, and to issue bulletins showing the principal
facts.
By the terms of the act the scope of the reports is strictly limited;
yet it is evident that the purpose of Congress was to secure the fullest
possible information concerning the cause or causes of every accident
reported; and in view of the existence of Federal statutes dealing
particularly with couplers, power brakes and grab irons or hand-holds,
accidents in which these details figure, either as main causes or other-
wise, may be said to merit especial attention. The primary object of
the statute is, obviously, to promote the safety of passengers and of
railroad employees; and this object is to be accomplished, so far as
these records can accomplish it, by making the most instructive exhibit
possible of those accidents which are preventable. Experience has
shown that some classes of accidents, including many personal casual-
ties in which the person injured is himself chiefly at fault, occur in
such uniform percentages, year after year, in proportion to the total
number of persons employed (or, in the case of passengers, to the
total number transported), that they may be looked upon as unavoid-
able. These, under the act, are now reported to the Commission in
large numbers; yet it is not apparent that any useful purpose would
be subserved by publishing the details of cases of this kind, as is
attempted by some public authorities.
80 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
Yet it is not to be forgotten that many of the injuries, fatal and non-
fatal, which happen to railroad employees, and which, when looked at
in a mass, as presented statistically in an annual report, appear
unavoidable, are nevertheless in some degree preventable by care; and
the Commission will present such lessons as may appear to be dedu-
cible from the reports which it receives. The purpose of the law, as
directed to the prevention of loss of life or limb, or to saving property,
can not be said to contemplate only the railroad manager and the
inventor of safety appliances; the result should also afford useful les-
sons for the trainmen and other workers. Employees should be aided,
both to better care for their own bodily safety and to more intelli-
gently care for their employers’ property, which latter duly includes
care for the safety of passengers.
The purpose of the act being general, and purely remedial, it seems
proper that the statistics which it furnishes should be considered
wholly without regard to the name of the company on whose premises
any particular accident occurs, or on whose agents or employees the
responsibility for an accident may rest; and the Commission will pur-
sue that course. In furtherance of this idea the Commission has
taken ample precautions to insure that the reports received from the
several carriers shall not be used for the benefit of private interests.
There was at first some apprehension on the part of railroad officers
that the facts to be gathered under this law, and which might be pub-
lished by the Commission, would afford a means, for which unprin-
cipled persons are constantly on the lookout, by which unjustifiable
suits for damages could be begun against railroad companies. This
apprehension was not unnatural; and, moreover, accounts of particu-
lar accidents might, if published, be used by designing persons, in the
public prints, to the unjust detriment of the company on whose line
the accident occurred. These two grounds of apprehension—lawsuits
and newspaper misstatements—might well make a railroad manager
reluctant to furnish the Government with a sworn. statement of the
accidents occurring on his road. Hence, as just stated, the Commis-
sion has taken-effective measures to insure that none of the informa-
tion on file in its office shall be divulged, except through the formal
reports of the Commission. -
Unless the Commission were to employ inspectors to make per-
sonal investigations of accidents, as is done in England, which force
of inspectors would have to be composed of peculiarly well-qualified
men, and, to properly cover the whole country, would have to be
numerous, the method contemplated by this law is doubtless the best
that could be devised. The only record of railroad accidents hitherto
made which makes any pretense of covering the whole of the United
States is one kept by the Railroad Gazette and published monthly.
This is, of course, entirely unofficial, and is avowedly very incomplete,
NATIONAL ASSOCIATION OF RAILWAY COMMISSIONERS. 81
the facts being based mostly on reports which are found in the daily
newspapers. Accounts in the telegraphic dispatches of the public
press are not only very often inaccurate, but also are frequently mis-
leading where not actually untruthful. The method adopted by Con-
gress and embodied in the law secures the desired information from
the men who best know the facts of each case. The regulations which
have been prescribed by the Commission include questions adapted to
the various kinds of accidents, so framed as to provide for a brief but
clear account of each case. These questions ask of the railroads only
such information as railroad managers usually, if not universally,
gather for the records of their own offices; so that the clerical labor
of filling up the blanks is the principal burden imposed on carriers by
the statute.
This law is deemed defective because the monthly reports required
under it are limited to accidents to employees and passengers, and do
not include the large number of casualties to other persons resulting
from railway accidents. The latter are covered, or intended to be, by
the annual reports to the Commission under the twentieth section of the
act to regulate commerce. It is believed that reports under the recent
law should embrace all railway accidents resulting in death or personal
injury, so that this subject can be omitted from the annual reports, and
we recommend an amendment to accomplish that purpose.
AIPPIENDIX ID.
SAFETY APPLIANCES,
261
SAFETY APPLIANCES.
REPORTS OF INSPECTORS EMPLOYED BY THE COMMISSION.
REPORT OF INSPECTOR GROOBEY.
In connection with the tabular statement of the work of the car inspectors of the
Interstate Commerce Commission for the year ending August 1, 1901, which is pre-
sented herewith," attention is called to some of the more important features of this
work, with a view to setting forth the scope and purpose of the policy which has
been laid down by the Commission for the guidance of the inspectors, the results of
the carrying out of that policy, and some of the principal elements in the present con-
dition of the freight cars of the country, which seem to demand the attention of the
Commission in the ensuing year.
The large table shows the condition of safety appliances on 98,600 cars inspected
during the first year of the safety-appliance act. On the whole, the figures show an
improvement of about 13 per cent in the total number of defective cars. Noting the
defects by classes, as classified in the book of rules, an analysis of Clas A (“Couplers
and parts of same”) shows an increase of approximately 3% per cent of defects. This,
at first glance, might seem to indicate neglect, but there are two causes which I think
explain this increase in defects. The first is that our inspection has gradually been
made more comprehensive and rigid, and is now made to cover a wider range of
defects. Also it is known that during the three months previous to the laws going
into effect there was a great rush on the part of some roads not fully equipped with
couplers to get their equipment in proper form to meet the requirements of the act.
So many of the roads were making this effort at the same time that it overburdened
the manufacturers of couplers. Again, couplers were applied to cars that under
Ordinary circumstances would not have been equipped. From this time forward it
may be expected that conditions in this respect will improve, as the railroads now
give a very thorough inspection to couplers as they come from the manufacturers.
It will be seen that the defects are quite evenly distributed as to parts of couplers,
with the exception of split keys missing from locking pins. This frequent defect
could be largely remedied by a more careful application of the split key.
It will be noted that about 62% per cent of all defects are in Class B, “Uncoupling
mechanism.” This is an improvement of 25 per cent over the conditions found in the
nine months previous to the law’s going into effect, and indicates that a thorough
and systematic effort has been made to execute the provisions of the law. Among
the most common classes of defects are those included in “Uncoupling lever incor-
rectly applied.” Great care has been taken in reporting this defect to note only
those cases in which the improper application interferes with safe and convenient
operation. It is well known that most of the manipulations of couplers required in
Switching operations are performed while the cars are in motion; hence the neces-
sity is apparent of having these uncoupling rods work freely. In cases where they
do not work freely, it is necessary for the man operating the rods to run along at the
side with the cars, and the liability to accident is thereby greatly increased.
The defects classified as “Broken chains” still give considerable trouble. Chains
too long and chains too short are a source of frequent trouble. A short chain is
especially dangerous, as with it there is a greatly increased liablity of the train part-
ing. This fact appears to be generally recognized, and the defect of “Long chains”
increases in frequency on this account.
Castings working loose continue to appear frequently in the reports. It would
seem that many of these defects are the result of other kinds of defects, such as bent
and incorrectly applied rods. -
Class C embraces defects in air-brake mechanism. Our inspectors, previous to
the law’s going into effect, did not give particular attention to inspection of air
brakes, and therefore the facts now given in this line of inspection have no value
* Given in the appendix.
. 263
264 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
for purposes of comparison. They show, however, that air brakes are very often cut
out without the cause being shown. This introduces an element of uncertainty
which could be obviated by the use of the air-brake defect card, which, it is hoped,
will be used more systematically in the future.
In Class D (“Defects to handholds”) the inspection has been more searching than
in the period previous to the law’s going into effect. The defects, “Handholdsmissing
and bent,” appear to largely predominate.
Class E (“Cars too high and cars too low”) shows almost ideal conditions. Only
79 cars out of the 98,600 inspected were noted as defective in this respect.
The frequency of defects in Class F (“Side sill steps”) shows that more attention
could with advantage be given to this class of defects.
These brief notes on the showing made by the table have been given for the benefit
of any reader of the table who may be unfamiliar with the subject of which it treats.
Taking, now, a more general view of the work of the inspectors, a variety of interest-
ing facts concerning the operation of the law will be brought to notice.
Perhaps the most important question in connection with this work is that of the
selection of the men. It is of the highest importance to employ as inspectors only
those who have had practical experience as railroad men, and who have a good
knowledge of the various appliances which have from time to time been adopted by the
railroads. They should have well-balanced judgment, for an overzealous inspector
can do an immeasurable amount of harm to the work of governmental inspection in
this initiatory period. To illustrate this point, consider a hypothetical case of a
Government inspector who enters a yard where space is limited and the tonnage to
be moved is great. Not taking these conditions into consideration, he commences a
rigid inspection, which, it can readily be seen, is likely to call for an increased num-
ber of switching operations, to place the cars he condemns in a suitable place for
making repairs. These additional movements are likely to set in motion a wave of
delay and confusion, which may be felt over an entire division. This will surely
result in further damage to cars and a multiplication of defects. A practical and
well-balanced inspector approaches such a situation with caution. He reports all
positive defects, and at the same time avoids irritating local officials by appearing to
be too exacting. The value of men of intelligence and discretion is particularly
important now, and as the volume of business increases, as it promises to do, the
requirements will be no less urgent.
The M. C. B. coupler.—It is now established beyond question that the use of the
automatic coupler has reduced the number of accidents. This alone should be suffi-
cient reason for its application and continued use. But, besides this, it has made
possible the movement of a volume of traffic which would have been impossible
with the use of the link and pin drawbar. Many objections have been raised to its
use, and some men have asserted that it was an absolute failure, but the results
attained demolish these objections. While developments have brought to light
certain defects, there is no reason to doubt that improvements will be effected in
the near future which will make this device as nearly perfect a thing of that nature,
doing such a work, as can be made. It is rather remarkable that the solid knuckle
has not come into use. To-day, when practically every car engaged in interstate
traffic is equipped with this type of coupler, there is no reasonable cause for not
using the solid knuckle. Its use would at once reduce the breakage of knuckle lugs
and also diminish the wear on the faces of the lugs.
The opinions of many railroad mechanical men as to the standing of the Master
Car Builders' coupler have been well epitomized by Mr. C. A. Schroyer, superin-
tendent of rolling stock of the Chicago and Northwestern Railway, in some remarks
made by him at a recent meeting of the Western Railway Club. He said:
“A radical departure in any mechanical device, as a rule, has to be perfected.
There may be some weak points in the present coupler, but it is more in the detail
than in the principle. A great many of the couplers to-day can be strengthened
without change in the general lines. The coupler shank can be more heavily ribbed,
and, under the present improved methods of molding, larger and heavier filiets
can be used. In remodeling many new features suggested by experience can be
embodied. * t
“The knuckle lug might be shortened up and increased in section, the automatic
lock set could be considered, and the link slot dispensed with, all of which are
improvements. The railroad clubs might well agitate the subject of a universal
coupler of one design, the elements of strength, as found from experience, all to be
embodied in one universal coupler. This would save thousands of dollars in the
way of material in stock, it would avoid serious delays to freight, and I believe
that nearly all of the coupler makers would be willing to waive their patent rights
and agree on one universal coupler.” -
SAFETY APPLIANCES. 265
At the same time and place Mr. R. P. C. Sanderson, general purchasing agent of
the Seaboard Air Line Railway, reviewed the defects of the draft gear as well as of
the coupler, which led to a discussion. The sentiment of the discussion was that,
while defects existed, the M. C. B. coupler was a great improvement over the link
and pin, and that too severe criticism was not justified. Heavier engines, together
* larger car and train loads, were responsible in a great measure for broken
couplers.
Mr. George Hannauer, general yard master of the Terminal Railroad Association
of St. Louis, at a meeting of the St. Louis Railway Club in September last said:
“Our greatest trouble with couplers is from defects that we find in them. It looks
to the switchmen as if the couplers were not getting the attention they ought to have.
If a train breaks in two because of the couplers you generally find a defect there;
either the knuckle is worn or partly broken, or there is some other defect in the
coupler. The chain on the uncoupling rod often breaks or there is too much slack
in it, making it impossible to uncouple by the lever, causing a great deal of trouble
in cutting off cars, resulting in loss of time and personal injuries. The switchman
who encounters a defect ought to stop the train, but in their diligence they do not like
to do this, so they go between the moving cars or stand on the break beam and lift
the pin with their fingers. I have known several serious injuries to occur in that
way. We find that about 20 per cent of the cars will not cut by the lever. We ought
to have in general use a simple arrangement which is used on many cars, an uncoup-
ling rod on each side of each end of the car. The chances of getting two bad ends
together would be slight; it would cost but a trifle, the switchman would take no
chance of injury, and he would save much time in doing his work.” - -
The situation with regard to couplers appears to be slowly but surely improving.
The poorer kinds of couplers are becoming known and will in time be weeded out.
The most essential requisites in the coupler of the future will be adequate strength
and knuckle-opening mechanism of the simplest kind, which means, mainly, one of
the fewest parts. When the necessary amount of metal is employed to give the
required strength very little space remains in the coupler head for a multiplicity of
small parts. There are some couplers now in use which possess these essentials. There
are others now in process of development which are expected to give still better
results. A feature which is now receiving considerable attention is that the coupler
castings should be made true to contour lines with no warts or swellings on the outer
lines of the castings. It has now become generally understood that the outside of
the casting of one coupler must fit the inside lines of its neighbor coupler. When
this is not the case distortions and strains are introduced which materially affect the
operation and the life of the couplers. -
Regarding the utility of the coupler as an aid to the quick performance of switch-
ing movements, there can be no question. A doubter has only to go back a few
years in memory and recall the slow and laborious methods involved in the making
up of trains, and to compare those methods with the promptness that is universal
to-day; and one can readily imagine the congested condition of every freight ter-
minal of the country if the older conditions still existed.
The importance of keeping-couplers in the best possible condition has already been
spoken of. If it were necessary to adduce further arguments on this point I might
mention some of the disastrous wrecks that have been caused by trains breaking in
two on steep grades. Some of these disasters have cost many thousands of dollars
and the loss of the lives of some of the trainmen. It is sufficient to say, however,
that the only practical remedy for failures of couplers under such circumstances is
the constant maintenance by the railroad companies of the best possible inspection
of all couplers at all places and all times and the prompt repair of all defects. The
cause of a break in two may be obscure, but the penalty in the way of damages is
enormous. The logical lesson is that obscure defects must be sought for even if the
cost be great.
Air-brake appliances.—Since the adoption of the present rules governing our inspec-
tions on April 1, 1901, considerable attention has been given to the condition of air
brakes, and I regret to report that inspection disclosed that very little attention had
been given to that most important factor in the Safe operation of trains. About the
same time that our inspection began to disclose these conditions there was evidence
that the railroads also began to realize their shortcomings in this respect, and at the
meeting of the Master Car Builders' Association held in the following June action
was taken which has resulted in greatly improved conditions, and has also been
beneficial in creating an interest in all matters pertaining to the efficiency of air
brakes. This question is to-day creating more interest and discussion with a view
to bettering conditions than any other affected by the safety-appliance act. The inter-
est which has been aroused by the various technical railroad associations has brought
266 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
# ºrian specific defects and practices which our inspection had previously
ISCIOSeOl.
The neglect to clean triple valves and cylinders within a reasonable period had
become very common. In the rules adopted by the Commission six months is the
period set as a “reasonable time.” This period was selected on the advice of many
practical air-brake men and in the expectation that the Master Car Builders' Asso-
ciation would also adopt the same regulation. The association, however, failed to
make a recommendation as expected, and instructions were at once issued to our
inspectors to regulate their reports to conform with the rules of the Master Car Build-
ers’ Association. Notwithstanding the failure to adopt the shorter period, much good
has resulted from the agitation so happily started, and interest before alluded to
indicates that a healthy rivalry now exists among the railroads to have their air-
brake equipment in superior condition.
In connection with the question of a suitable period for cleaning triples and cylin-
ders Mr. E. M. Herr, at a meeting of the Western Railway Club, said:
“While this time limit as fixed by the Master Car Builders' rules is “after twelve
months,” many well-informed and competent air-brake men have advocated six
months as the proper interval for cleaning and oiling, and in the recommendation of
the Interstate Commerce Commission six months is the period stated.”
Air-brake hose.—During the last few years a most destructive practice has become
common, to wit, the neglect to disconnect the hose connecting the train pipes by
hand. It is now admitted on all sides that, particularly in the yards, the men raise
the lever which allows the car couplers to part and leave the hose to be parted by
the engine drawing the cars from each other. This practice can not be too severely
condemned. It is the prolific cause of many smaller defects which materially
affect the efficiency of brake operation, such as strained and distorted condition of
the hose, which is likely to encourage failures of the same at critical times and loose
and leaky train pipes. While these defects appear to be trifling and trains are oper-
ated daily with the defects existing, a close analysis of many train wrecks would
show that these trifling defects were the primary cause of disaster. A committee
appointed by the Car Foremen’s Association, at Chicago, recently reported as follows:
“It is quite a common practice in terminal yards to switch cars without uncoup-
ling by hand. This is one of the most destructive practices with which we have to
contend. The hose is strained at the nipple. No air hose is manufactured that will
stand this treatment. The failure to uncouple hose couplings by hand results in
stretching the fiber of the hose, cutting hose at the nipple end, further disrupting
the hose if it has been previously cut by the hose clamp being put on too tight. It
also has an unwinding tendency, particularly if the hose has not been applied to the
car with the face of hose couplings in proper position. The hose may receive inter-
nal injury which can not be observed by the inspector, causing a liability to burst in
trains. The strain is so great that when they let go, hose fly back with great force,
striking the brake beams or other parts of the car, causing the hose and coupling
heads to be more or less damaged. Your committee desires to call attention to the
fact that the introduction of heavy power has brought about a condition where it is
absolutely necessary to know that the air hose and its connections are in both proper
position and condition. The 22-inch hose now in common use will perform its work
if it is not subjected to the abuses above enumerated.”
The casting on the outer end of the hose was designed so that the hose would part
in emergencies. This knowledge has been taken advantage of, and the practice
described has grown to destructive proportions. It may be said, and with some jus-
tice, that it is a dangerous practice to stoop between the cars to uncouple the hose
by hand. This, however, does not excuse a practice which introduces so many other
dangerous elements.
Retaining valves.—It has been the experience of the inspectors that the retaining
valve gets very little attention, both in regard to its condition and its permanent
application to the car. A large number of retaining valve pipes are broken at the
triple. This is caused in many instances by the short piece that is connected to the
triple being held by only one or two threads. The remedy for this is readily appar-
ent. In some cases the “retainers” are fastened to the ends of the cars with ordi-
nary screws, instead of with lag screws. The screws very often work out and
temporary repairs are made with wire nails which are too small for the holes in the
castings. The inevitable consequence is that the retaining valve works loose and
vibrates until the couplings and various unions begin to leak. The retaining pipe is
also usually fastened only at the ends, so that there is possibly 10 feet or more loose
which vibrates with the jarring of the car, thus contributing in no slight degree to
the noneffectiveness of the retaining valve. As an illustration of what may happen
when these parts are neglected, I quote from a description of a runaway of a freight
SAFETY APPLIANCES. 267
train, which in all probability would not have occurred had attention been paid to
these parts:
“A runaway of a freight train on a 3 per cent grade some 5 miles long led to an
investigation of the facts and cause. It developed that the train first got beyond
control soon after tipping over the summit, and the efforts of three trainmen and the
two enginemen, after all was done with the air brakes and sand lever that could be,
failed to stop the train till a comparatively level flat was reached.
“There were ten cars in the train besides the caboose; eight equipped with airbrakes.
So far as the inspection showed, the hand and air brakes were in good condition, the
piston travel varying from 5 inches to 7 inches, the travel having been adjusted just
before reaching the summit of the hill. The ‘usual inspection,’ however, does not
include an examination of the retaining valves.
“The investigation included an inspection of the retaining valves, which disclosed
the fact that three of them leaked off inside of half a minute. In all probability had
the retainers been in good condition the runaway would not have occurred, as the
train attained such speed just after the air brakes were released the first time after
tipping over the summit and were being recharged that it got beyond the capacity of
the hand and air brakes to control it. Had the retainers been in good working con-
dition it is more than probable that the speed would have been kept down so that
the coefficient of friction of the shoes on the wheels would have been sufficient to
have enabled the crew to hold the train.”
Inspection of air brakes.—Another feature of air-brake practice to which attention
should be called is the practice of doing nothing with the air brakes on a train until
after it has been coupled up, the engine attached, and the train ready to proceed.
Then, when everything is in a hurry and departure is being urged by the dispatcher
and yardmaster, the testing of the air brakes has to be done. If any defect develops,
the delay required in which to put the defective part in good condition is charged to
the air brake. Recently, however, as the necessity for good maintenance has become
better appreciated, much of this work is done previous to the making up of the train.
A large number of the principal railroads have installed the requisite plants in vari-
ous terminal yards, and are thus able to have their brakes in good condition before
they are made up into a train ready for departure.
Management of trains.—Another important feature of air-brake practice is that each
wheel of the train should do its proportionate share of retardation. If one car is
underbraked and another is braked up to the limit, the latter is doing its own work
and a portion of the work of the former. This is liable to slide and flatten its
wheels. This will give the impression that the fault lies with the high-braked car,
when such is not the case. If all cars are are made to do their own proportion of
the braking, less brake power will be required to do the work.
The practice of indiscriminately cutting out cars is one that should be condemned.
It introduces an element of uncertainty. The use of the air-brake-defect card should
be systematized. When it is found necessary, for any cause whatever, to cut out the
brakes, trainmen should immediately apply an air-brake-defect card, which should
show why the car was cut out. If the nature of the defect is unknown to the train-
men, they could nevertheless often give some information as to the location of the
trouble. If the trouble is insufficiency of air, they should so state on the card. If
cards were thus used, the cars specially needing attention would immediately be
repaired on arrival at terminals, and in many cases loaded cars might safely go
through to their destination with the assurance that the defect would be remedied,
when otherwise they would have to be stopped and so delayed. Trainmen have
opportunities for finding defects on the road, especially on foreign cars, which
inspectors at intermediate and division terminals can not well locate without delay-
ing the trains more than is desirable. Where trainmen fail to use the defect card,
their negligence can easily be checked by requiring inspectors to report all cases of
cut out triples when there is no defect card on the car.
The agitation now going on must bring about important results. It is not unlikely
that it will do away with a large part of the trouble, lately so much talked about,
from the breaking of chilled wheels under 50-ton cars—that is, it seems quite pos-
sible that such failures are mostly from ineffective control of trains by air brakes.
The want of confidence in the performance of the air brake on freight cars in
some quarters is still such that, in the East at least, it is not uncommon (perhaps it
is quite common) to regulate freight trains while going down steep grades by hand
brakes. That must mean that the work is done by the brakes on a comparatively
Small number of wheels in a train; hence overheating, resulting in wheels shelling
out, and in Some cases the wheels are broken.
Rough handling in yards.-There is considerable complaint that men do not use
Sufficient care in handling cars, owing to the fact that with the use of the automatic
268 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
coupler they do not have to go between the cars, as was necessary when the old link-
and-pin drawbar was used. The correction of this is principally a matter of disci-
pline; but it is possible that improved discipline should include improved hand
º A letter recently published in the Railway Age illustrated this point as
ollows:
“A few days ago I was watching a crew make up their train at a junction point.
They were all in a rush. They backed in.on a track with six air cars and four non-
air cars to pick up 10 empties. When within four or five car lengths of the empties,
the engine not moving fast enough to suit him, the head “shack’ proceeded to give
a violent back-up signal; the engineer increased his speed, and when within about
a half car length of the empties the brakeman gave a violent stop signal; the engi-
neer applied the air full force, the cars came together with a boom, and while the
force was not enough to break anything, the air being set tight on the engine and six
cars, the recoil of the empties jerked a knuckle pin in two. * * * Finally, by a
trip to the car repairer’s shanty, they proceeded with their switching with a loss of
eight minutes and a lot of needless steps. And why? It was because the brake-
man failed to give a signal to reduce speed and was wholly inexcusable.” -
Excessively long trains.—The use of two engines on one train, and the use of very
powerful engines, which practices have lately been introduced for the purpose of
increasing the number of cars that can be taken by one crew up steep grades, have
been extended to level lines to such an extent that very long trains are sometimes
run, and it is a question whether the excessive damage to couplers and coupler
attachments has not proved the long trains to be uneconomical. Defects develop
but are not discovered until sometime afterwards, and then the trouble is charged to
Some other cause. In some cases double heading is done when a single engine with
a pusher at one or two points where sharp steep grades exist would avoid double
heading and make more engines available for general use on the road. The test of
the question with regard to economy is the efficiency of the service. If a double
header will get a given number of cars safely over the road quicker as well as with
less ultimate expense, double heading is good practice. But it is extremely doubtful
whether that result has been reached. The claim of economy in saving one train
crew by double heading is urged, but the offsets to that economy, such as overtime,
damage to equipment, danger to operation, and general confusion due to mishaps,
seem to more than offset this. In the course of a discussion on the Master Car
Builders' coupler, Mr. Manchester, superintendent of motive power of the Chicago,
Milwaukee and St. Paul Railway, made the statement that the damage to draft rig-
; had increased fourfold in six years. Rough switching in yards is responsible
or a share of this damage, but it is quite possible that a much larger part than is
i. supposed occurs in consequence of the shocks which the cars receive on
the road. * -
Delays involved in repairs.—There is one feature, which has developed under modern
conditions, which introduces a new danger. Owing to the consolidation of railroads
which has been brought about within recent years, there has been concentration of
repair plants, so that it is now becoming common to find cars disabled when many
miles from a point where repairs can be made. When this disablement is serious,
as is often the case in this day of long trains, a dangerous element is introduced in
the hauling of cars coupled together with chains or in some other makeshift man-
ner. A remedy for this difficulty might be found in a car fitted up with the neces-
sary tools and which could be dispatched quickly to the station at which the damaged
car is (or should be) left. Such a car should be equipped with a forge and a carpen-
ter’s bench, and should have a crew of not less than two men, one who can do
blacksmith work with the assistance of the other man, who should in turn be able to
do rough carpenter work. Where a car is loaded other men could be taken along to
assist in moving the load. A car of this character would be in constant requisition
in large yards and points, near by and could be maintained as an adjunct to the usual
wrecking outfit.
Men falling from trains.—I believe there is an increased number of accidents due to
men falling from trains. In view of the fact that the presence of trainmen on the
tops of cars should not be so frequently required as formerly owing to the use of
power brakes, it would naturally be expected that this class of accidents would
decrease in number. The use of trains only partially equipped with air, which results
in violent shocks, is a probable cause. Also, it may be that some of the trainmen
with less experience than formerly have become less expert in the performance of
what was formerly a dangerous but familiar duty and which calls for extreme agility
and trained alertness. It is hoped that an investigation of the accident reports now
being made to the Commission will throw Some light on this important question.
SAFETY APPLIANCES. 269
Another transition period.—This title refers to the use of the 50-ton car in connec-
tion with the 20 and 30 ton cars in the same train. The result of using these two
widely different classes of equipment together can readily be appreciated. The
appliances that were designed for use on the lighter cars, such as couplers, in
many instances, have not been increased in strength to meet the demands made
upon them when placed in trains of heavier cars. Some attention is now being
given to this feature and improved conditions are expected to result.
Standard height of couplers.-As the work of inspection of safety appliances pro-
ceeds, the relation between safety and economy in operation is illustrated among
other ways by the results of the Government inspection in regard to the standard
height of cars. Previous to that law’s going into effect it is well known that cars
were operated varying in height at the couplings anywhere from 2 to 10 inches.
During switching operations and during rough handling in road service the shocks
generated were not suitably distributed, and the breakages were common; and the
life of the equipment was materially shortened. Following the adoption of that law
and its observance it is readily seen that the shocks are now distributed to the parts
of the cars designed to receive them, and in this one feature alone the railroads
must have saved large sums.
Expressions from many railway officials regarding car breakages in yards suggest
a study of the causes. * * * It is established beyond doubt that some couplers
require cars to be thrown together with a great deal of violence to enable the coupling
to be made. This is very pronounced in two or three kinds of couplers, and is very
often spoken of by switchmen as being a prolific cause of damage. The fact that men
do not now have to go between cars has encouraged some carelessness, without doubt;
and sufficient care is not exercised when giving signals to the engineer.
Rear-end attachments or ‘‘draft rigging” has not, in all cases, been strengthened so
as to keep pace with car construction and strength of couplers. In some yards where
it is impossible to make extensions the volume of business has been growing until it
has almost reached the limit. In cases of this kind men become overzealous, and in
their anxiety make extraordinary efforts to keep traffic moving. In doing this they
lose sight of all ordinary precautions which should be taken in handling cars, and
many failures are the result.
There are many defects of which the foundations are laid in shocks received in
trains partially equipped with air; also in long trains hauled by two or more engines.
When all conditions are taken into consideration, we may say that the safety appli-
ances which have been adopted are proving to be satisfactory, and, when the differ-
ent improvements are made which have been suggested by the use and development
of these appliances, there is no doubt that a gratifying reduction in the number of
accidents will result. e
It is felt that the commendable features which I have mentioned and other prac-
tices which are in use on the most progressive roads should be carefully noted by
the inspectors, with a view to disseminating the best practice among all roads, with
the ultimate view of standardizing practices and appliances, which is admitted by
all practical men to be so essential to the safe and economical operation of trains.
Respectfully submitted.
REPORT OF INSPECTOR. J. W. WATSON.
I find foreign cars more defective than home cars. A car coming from a great
distance is pretty sure to be defective. This shows that foreign cars are not receiv-
ing the attention and repairs they should receive. Many roads have arrangements
to receive cars with certain defects, including defective safety appliances, from con-
necting roads, the delivering road agreeing to receive them back again provided no
other defects appear. Such cars have defect cards, but they may run over a portion
of the road in improper condition. -
Some small roads’ equipment consists only of locomotives. Their trafficis handled
in foreign cars. They have no inspectors, and make no repairs; and cars with
defective safety appliances are handled by train crews and yard crews. Employees
in the train and yard service, handling or making up trains, heartily approve of the
law and its results; but they find a great deal of fault because the safety appliances
are not kept in better condition. Many employees in the car department claim that
our inspection is too rigid; that it is an impossibility to keep all cars up to the
requirements. While there may be some little truth in that statement, there is, as
yet, unlimited room to make great improvement over present conditions.
270 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
From information gathered from different persons in charge of yard work, it is
apparent that it would, under former conditions, have been utterly impossible to do
the vast amount of work now performed in various yards without additional loco-
motive power and men.
The conditions could be improved by more fully fitting the cars with air brakes
and keeping those that are equipped in a more perfect condition. Many locomotives
have too small pumps and not sufficient reservoir capacity. -
Conditions are greatly improved where cars are equipped with uncoupling levers
extending entirely across the end of the car. The automatically opening knuckle
does away with the necessity of the operator going between the cars to open the
knuckle by hand. The long levers require more care to keep them in order, extending,
as they do, across the entire end of the car, and they are more liable to become bent
so as to bind in their fastenings. -
Most of the car men are doing the best they can to keep their equipment in good
condition. At many points, I think, more labor and material should be furnished,
but the great number of different makes of couplers, and the many different ways of
operating them, requiring different kinds of material, render it almost impossible to
keep on hand everywhere all the kinds of material required to make repairs. Con-
sequently, wrong material is sometimes used.
Regarding air brakes I find that some railroads are in the habit of connecting up
the hand brakes so that they work directly opposite to the air brakes. That is, if a
man were setting a hand brake and he happened to be caught with the dog out of
the ratchet wheel when the air was applied, the brake wheel would be turned back
possibly, and so suddenly that it would be liable to injure the man. A number of
men have been thrown from cars in this manner. In other cases, where brake staffs
are on both ends of the car, one end works with the air and the other does not. In
that case, some roads are doing away with the hand-brake connections on the end
that works opposite to the air. Other roads are contemplating a leverage connection
so as to work in the same direction as the air, on both ends of the car. I am con-
vinced that this is an important matter and should be inquired into. . I have inter-
ested a number of master mechanics and master car builders in it, and they are taking
steps to do away with the present dangerous practice.
REPORT OF INSPECTOR GEORGE MARTIN.
Little more than a year has elapsed since the safety-appliance act became fully
effective, and, considering the increased duties imposed on the car inspectors, we can
hardly impute willful neglect as a cause of the many defects still found upon the
coupler and brake; on the contrary, great interest has been manifested by the rail-
way managements throughout the United States. Managers have issued orders
reenforcing and indorsing the Government’s notices and instructing their men as to
complying with legal requirements.
Owing to the immense volume of business handled by the railroads during the
past year and for other obvious reasons there are at present probably more disabled
cars waiting to be repaired than ever before. This state of affairs requires the
increasing of the shop forces, and, as competent labor is hard to get, some of the
recruits must be drawn from the ranks of young and inexperienced men.
Many defects are permitted to pass without repair, owing to the fact that not all
roads maintain a full and complete assortment of the various parts required by the .
many different makes of Master Car Builders' couplers now in use. Nearly every
style of coupler requires its own special parts.
A practice in vogue in many prominent railroad centers which has a bad influence
on the proper care of the uncoupling mechanism is local freight agents' agree-
ments, in substance as follows: A road offers a connecting line a car of freight. On
the interchange the inspector discovers some defect warranting refusal of the car,
but under the freight agents' agreement he is compelled to receive it. If the car is
unsafe to run, the receiving road transfers the freight at its own expense and returns
the car to the delivering road. It can readily be seen that the receiving road, unless
compelled to, will not repair defects that originate on the delivering road, and, if the
car is otherwise safe to run, it goes forth with, perhaps, a lever missing, or, possibly,
the end of the car upon which the ladder is located is jammed in, making the use of
the ladder unsafe. Then, after the car is unloaded, it is returned to the delivering
road again for proper repairs, after an absence perhaps of two or three weeks, nearly
all of which time it has been daily handled by yard or train crews. 2
Another practice on many roads, and to which can be traced a great many defects
to the uncoupling chain, is the use of the split link and S-hook; these, when applied,
are often left far enough open to permit the chain to come apart, or they are closed
in such a manner as to make the chain too short. Most uncoupling chains that are
SAFETY APPLIANCES. 271
made up of split links and S-hooks are, after being in service a short time, in bad con-
dition. The use of the split link and S-hook should be permitted only in emergencies.
Greater attention ought to be given to draft rigging. Frequently couplers are ap-
plied to cars that require the use of a tailpin, and often, especially in replacements,
this pin is too long and the slack in the pin is not taken up. The cargoes off from the
repair track with uncoupling chain apparently the right length, but after the car is
loaded and placed in a heavy train the tremendous strain pulls the coupler out to
the extreme limit, with the result that the uncoupling chain either breaks or releases
the lock pin and allows the car to uncouple. When the trainmen discover that the
chain is too short they disconnect it. On arrival at a terminal the car repairer sim-
ply connects the chain up again, without ascertaining if there were any causes behind
the disconnection of the uncoupling chain to make it necessary for trainmen to dis-
connect it. -
Very few couplers now in use adhere strictly in construction to the Master Car Build-
ers’ contour lines. Nearly every coupler manufacturer apparently has contour lines of
his own, with the result that when two different makes of couplers come together they
donotunite easily by impact, and after being coupled together they do not have the same
center line of draft. This causes abnormal strains, and the weaker coupler often suf-
fers in sheared knuckle pins or twisted shanks. Once in that condition they will
always be hard to couple, and as a result the trainmen and engineers have got into
the habit of striking all cars hard blows to make them couple. This is where the
rough handling of cars, which causes so much discussion, arises.
Some purchasing agents, when instructed to buy certain knuckles, make a point
to buy knuckles that are made by persons who do not manufacture the coupler.
These knuckles being “cored” out and much lighter than the regular knuckle,
can be bought more cheaply; but they will not stand the strain, and are constantly
breaking and spreading. This is a source of much annoyance. A cored-out knuckle
will not stand the strains of the service. -
There are several couplers now in use that have automatic lock sets attached to
the coupler itself. With this style a lock bracket is unnecessary and is not applied;
but when for any cause one of these couplers is replaced on a foreign road by a
coupler that does require a lock bracket, the lock bracket is rarely applied. So long
as this practice exists the trainmen will have to endanger themselves. This practice
is not as common as it was a year ago, for railroads have added to their usual car
forces in prominent terminals one or more men whose special duty it is to care for
the safety appliances. At nearly every point where I find these additional car
repairers employed I have been informed by those in authority that the need of the
men was disclosed by the inspections of the Government inspectors.
The intermingling of standard and narrow gauge cars together in one train and
coupling them together by the use of the three-link coupling is a bad practice. It
can only be remedied when the railroads confine narrow-gauge cars to narrow-gauge
tracks and not run them over third-rail tracks, as is now the custom. Very few
narrow-gauge cars are equipped with Master Car Builders' couplers, the narrow-
gauge cars being constructed of such light material that they would hardly be able
to hold heavy couplers in place.
The practice of men running in front of approaching cars to open knuckles is
still very common, and a great many accidents result from it. For instance, the
knuckle on the standing car, for some reason, can not be opened, or the man may
think that certain couplers will not unite unless both kunckles are open. He there-
fore steps in front of the approaching car and opens the knuckle. It may be diffi-
cult to open, and he walks along backward, still endeavoring to open the knuckle,
and neglects to watch how close he may be to the standing car, when suddenly he is
caught between the couplers. While in a measure the accident is due to his own
carelessness, yet his whole mind was centered in his work with the object of
accomplishing his duty with thoroughness and dispatch.
The introduction of a knuckle-kicking device that is practical and not operated by
a spring or by gravitation is looked forward to by all train and yard men as being an
absolute necessity to make the coupler automatic in every sense of the word.
The use of goose necks on rear of locomotives should be discontinued. In freight
service the goose neck strikes the uncoupling lever and bends it, and frequently dis-
places the inner keeper. w
. On many cars the unlocking levers are set so close to the end sill that as soon as
the wood gets wet and swells it binds the lever so tightly that it is impossible to oper-
ate it. Many levers are applied behind brake staffs, and in such a manner that they
bind between the brake staff and the retaining-valve pipe, and can not be shifted to
lock position. They could be just as well applied with an offset about the brake
staff. On cars equipped with double-end levers that have an inner keeper I find
many bent levers. This, in a measure, is due to the inner keeper. The slightest
3
272 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
bend in a double lever will cause it to bind in the inner keeper, thereby making it
inoperative, whereas if there were no inner keeper the lever might stand even a
greater bend and still be workable. Some cars still have levers and ladders applied
on the wrong side of the car. This is very dangerous to the employees.
On some few roads there yet remain a number of passenger coaches equipped with
the Miller hook, but, as a rule, where these cars are run in connection with coaches
equipped with the Master Car Builders' couplers there is used the National Miller
hook attachment, so that the cars couple without the use of pin and link. Some
passenger engines yet remain unequipped with Master Car Builders' couplers, and of
course are coupled to their trains by the use of pins and links. However, as fast as
these engines and coaches go through the shops for general repairs, they usually come
out equipped with the Master Car Builders' couplers, so that it will only be a matter
of a short time till all Miller hooks and link-and-pin drawbars shall have disap-
peared, at least on all standard-gauge roads.
The railroads ought to select a few of the best couplers now in use, adopt them as
a standard, and use no others. The necessity of this is becoming more apparent
every day, for it is a well-known fact that some couplers are very much inferior to
Some others. A car equipped with an inferior coupler in one of the heavy trains now
being run on all roads is a menace to the safety of that train. t
Car repairers frequently repair broken uncoupling chains by using wire to tie the
broken ends together. * * * Loose brackets or keepers are frequently found
fastened by nails driven into the wood around the outside of the bracket and bent
over to hold it. The brackets of uncoupling levers should be secured by bolts, not
lag screws.
Many cabooses are turned out of the shops without uncoupling levers, having, instead
of the lever, a long chain attached to the lock pin, which is extended up and fastened
to the guard rail on the caboose platform. This is done at the request of the freight
train brakemen, who find it more convenient to use a chain so arranged. This prac-
tice is unfavorable to the switchmen, who, as a rule, handle the cabooses oftener than
the road men do; the switchmen will not go up on the platform of a caboose to cut
it off, but will step in between the cars and raise the lock pin by hand. The auxiliary
chain could be applied to cabooses while still retaining the lever. Levers should be
applied by all means.
On all roads using pivotal or swing-head couplers on road or switch engines, that
type of coupler is giving entire satisfaction and is coming into more general use.
The swing-head coupler is especially well adapted for yard use where sharp curves
are frequent. .
The problem of sharp curves, where automatic couplers will not unite and a link
and pin or a short bar must be used, is a serious one. In many places it is the cause
of strenuous objections from the men whose duties require them to make these
couplings. The majority of these tracks are the property of private corporations and
in some instances can not be changed without the enactment of special city ordinances.
Numerous devices have been constructed to avoid the use of shackle bars, but I
believe that as yet nothing has been found that could be used with general satis-
faction. *-*.
It is very seldom now that grab irons are found defective. Occasionally one is
found loose or bent, but it seldom leaves the yard without being repaired.
The custom of handling long freight trains with from only 30 to 40 per cent air
brakes coupled up and in connection with the engine is still prevalent. Some trains
have been encountered containing 40 cars and only 10 cars of air on the head end.
Then one nonair car, and behind that all the rest were air-brake cars.
Much trouble has been experienced with the air brake principally because it has
been neglected, but also because the trainmen, and particularly enginemen, have
been allowed too much license with the brake. For example, an engine starts out
on a long freight train with an 8-inch pump; the engine is in a “pool” and repairs
are not properly cared for; the air pump gets dirty and gummed up, and runs hot;
then the engineman jumps down and applies a dose of valve oil through the air-inlet
i. But this is only a partial remedy, and the engineman sends the brakeman
ack to cut out every other car in the train. This he does. The cars are not
defective, but the next man who handles them will not cut them in because he does
not know what they were cut out for. I am frequently told by officials where I have
found that freight trains are being controlled down small grades by hand brakes
that the air brake will not hold the trains. This is more or less true; but why?
On inspection I usually find that pressure retainers are not used and that many are
broken and could not be used; that piston travel is not adjusted, and that in many
instances no test of air brakes is made. Again, I find that tests are not thorough; a
common practice on many roads is to have trainmen do the testing after hose is all
coupled up and ready to start. The trainman gives the engineer signal to apply air
SAFETY APPLIANCES. 273
brake and then gives signal to release, without as much as ascertaining if it even
applied on the rear car, where he usually stands. Many inspectors do this same
thing. - -
ºnmen should not be allowed to make the test at terminals; it should be the
duty of an air-brake inspector employed for that purpose, and he should make the
test prescribed by the Air-Brake Association rules. I am glad to say that the rail-
roads are gradually coming to this. I find more air-brake inspectors now than
formerly. -
There is considerable ignorance among those to whom the care of the air brake is
entrusted. I found one man whose duty it was to clean triple valves on coaches
putting small sponges into the strainer. He thought it would keep the dirt out of
the triple valve much better than the strainer alone. At another place I found the
inspector breaking off pressure-retaining pipes from passenger coaches; he thought
they were a bad thing, because they might get stopped up. Some men will simply
stencil an auxiliary reservoir and not clean the triple or brake cylinder. Sometimes
the triple slide piston has been removed and wiped off with a piece of waste and put
back in, and the amount of black oil that was applied to the triple was limited only
by the amount it would hold. Oil plugs are frequently removed from the brake
cylinder and as much as two quarts of black oil poured in.
On roads where there is an air-brake instruction car the main effort seems to be
to educate the engine and train men. This, as far as it goes, is good, but the car
repairer and inspector should not be neglected.
Neglect of the triple valve has been promoted by the low price allowed for clean-
ing triple valves on cars away from home. However, at the last meeting of the
Master Car Builders' Association the price was raised, and many roads have taken
up the question of establishing cleaning and testing plants. With these air plants
the proper education of the men will follow, so that in the near future the air brake
will take its proper place among the modern railway mechanical appliances. Not
until it does will it be fully realized what a valuable factor in the movement of trains
the air brake really is. This stir in air-brake circles is general throughout the
country. Since the 1st day of last September on nearly every repair track that I
have visited I have found triple valves of foreign cars being cleaned. This, I am
told by foremen, can now be done at a small margin of profit. On most roads it is
only being done where a car goes to the repair track for repairs and when the
marked dates show that the valve has not been cleaned within one year. On some
roads if a car, either home or foreign, appears with the time limit of cleaning expired,
a new, clean triple valve is immediately applied.
Not all roads are yet using the air-brake defect card nor are they using white lead
stencil marks to show the date of cleaning of triple valves, but they are rapidly
coming to it.
In summing up I can safely say that Government inspection has been very benefi-
cial to the railroads, for everywhere I go I find evidence of a general improvement
in the condition of safety appliances. Railway managers with whom I have talked
invariably tell me of the good results such inspection has brought about on their
respective roads, and car foremen have said, after a trip through their yards with
me, º they have learned valuable lessons and have seen things they did not know
existed.
Railway managers in general receive me kindly and render all assistance possible
to a thorough inspection and, in fact, invite a thorough inspection, even going so far
as to ask for suggestions as to the remedy for any evils found. In answering these
requests, which I feel are prompted through a sincere desire to improve the condition
of equipment, I have refrained from making any suggestions other than to tell them
to follow closely the M. C. B. recommended practices.
I have noticed that the ranks of train and yard men are now attracting a much
better class of workmen than formerly. This, I believe, is in a measure due to the
adoption of safety devices which eliminate the dangers that formerly surrounded
this calling.
REPORT OF INSPECTOR. R. R. CULLINANE.
Conditions are vastly better than before the safety appliance act went into effect,
yet there is still room for improvement. The employees interested express satis-
faction generally with present conditions and prospects; but there is a great deal of
grumbling wherever appliances are neglected. One thing complained of is that a
certain Western road has all its ladders on the end of the cars instead of on the side.
There is a handhold on the side of the car and a side sill step; but one has to swing
around the corner of the car to ascend the ladder. This, however, is a feature not
covered by the statute. * * * .
1881—02—18
274 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
Without the automatic coupler nearly every yard in the country would be blocked,
as with link and pin it would require one-third more room to do the work. With
the great volume of business of the country, I do not know of a single large road
; could do its business if set back to the days of link and pin couplers and hand
rakes.
If I were to compare the safety appliances one with another, I should say that on
the road the power brake ranks first. All hands feel so much safer when they
know they are able to stop when and where they want to. In the yards the auto-
matic coupler ranks first. Electric headlights are an additional factor conducing to
safety.
Most of the safety appliances on freight equipment are neglected. The efficiency
of the air brake is crippled by the practice in many places of switching cars or
uncoupling cars without separating the hose. This strains joints in train pipe and
cross-over pipes, and injures the coupling gaskets.
The efficiency of triple valves in train pipes which are leaky, and, above all, uni-
formity of the piston travel, should have better attention in yards. More men are
needed, so as to clean triples regularly and oil cylinders. All large yards should be
piped. Men should always part the hose before cutting cars apart. Leaks in train
pipes can be cured in many cases with a Stilson wrench.
The length of lift chains is neglected a good deal. It frequently occurs that a car
equipped with a certain kind of draw bar is damaged—the coupler is pulled out or
broken—and they put in a different kind and try to continue the use of the lever
lock and castings which are not adapted to the new. Men who make repairs should
be called to account for such neglect. -
A good many roads have complained that they were not able to handle trains with-
out the assistance of hand brakes. The only reason for this is that they do not take
care of the brakes. It is not unusual to see on the cylinders stencil marks of very
old date. However, since the change in the M. C. B. rules allowing a reasonable
price for doing this work, the conditions have greatly improved.
REPORT OF INSPECTOR A. EI. HAWLEY.
Notwithstanding the opposition displayed by some officials to the law, now that
the requirements of the same are being fulfilled, there appears to be a realization
that the cost of complying with the act has been more than offset by the general good
condition of cars and methods of working that now prevail.
Employees generally seem to think that a decided improvement has taken place
for their benefit, though at times I hear some complaint among switchmen about
some of the couplers which do not work well. However, they seem to approve of the
conditions as a whole, and would not like to see a retrograde movement toward the
old link and pin. Trainmen speak very highly of the improved conditions, though
they complain of the lack of interest taken by some roads in air-brake equipment.
I think that in another six months there will be less complaint on this point.
The application of couplers has made terminal work much more economical. It
is not an unusual thing to see a switch engine doing work with from 25 to 35 cars,
taking one-half of a train, and switching the cars to the several tracks, with almost
uniform movements. This could not be done with the old link and pin coupler.
The knuckles are left open; a car is given a little kick to one track or another and,
coming in contact with another car is coupled and ready to move at any time.
With the link and pin it would require some one to be there to couple them, and
it would require some one to ride the car so that it would not hit too hard. *
The most neglected appliance in the territory I have been over is the air-brake
equipment. * * * Some companies allow their equipment to run a long time
without being cleaned and brake levers adjusted. Not enough inspectors are
employed at points where there are a large number of cars. There should be an air
compressor at all points where there is a steam boiler, with an air pipe along the
repair track, at least, in order that when a cylinder and triple valve has been cleaned
or a train or cross-over pipe repaired it can be tested. At points where there is no
steam boiler a hand pump should be used to test triples, cylinders, and train pipes.
There is only partial benefit from cleaning a triple and cylinder where there is no
way to try it to see if it is in good working order.
To increase the efficiency of the air brake there should be a rigid rule requiring
all conductors and trainmen to place a card on any cartnat is not in working order.
This is a rule on Some roads, but it is not always enforced.
SAFETY APPLIANCES. 275
REPORT OF INSPECTOR. F. C. SMITH.
*
The application of automatic couplers has greatly reduced the cost of terminal
work. I have been informed by railroad officials that in many yards the cost of
switching has been reduced to three and one-half cents a car, and whenever there is
much snow on the ground switchmen will do four times as much work in the same
time as they did under the old conditions. And since this work has become so much
less hazardous a more steady and better class of men are gradually coming into it.
The use of automatic couplers and power brakes has made the running of freight
trains almost as safe as running passenger trains; and where the entire train is equipped
with air brakes break-in-twos have been reduced to almost nothing. Almost the only
cause of any now is broken couplers or defective draft timbers, and if the whole train
is equipped with air brakes no further damage is done, for the whole of the cars are
at once stopped. Under former conditions, and especially at night, a wreck was
almost inevitable. -
Of the automatic couplers that one is best which in switching does not have to be
touched in order to be ready to couple again. All couplers having lock brackets have
this disadvantage, that when a lever is locked in an uncoupled position the lever must
be released before a coupling can again be made. Since the advent of the air brake
the speed of freight trains has been increased from 15 miles an hour to 30, and in
some cases to 35 miles. -
There is a good deal to be done in the way of educating car inspectors, for a great
i. of them are at present in the habit of skipping defects pertaining to safety
eVICeS.
The use of the emergency conductor's brake valve in passenger cars ought to
receive more attention. This valve is located in the toilet room of the car and on
some roads there is a cord extending the whole length of the car and attached to the
operating lever; while others simply have a lever on the outside of the toilet room
with which to apply the brake. In some cases the operating lever also is inside the
toilet room, and it is necessrary to go inside to apply the brake; should this room be
occupied and locked at a time when a trainman wanted to use the brake he would
have to go to another car. Every coach should have a cord attached to the lever of
this valve, and running the entire length of car, so that if occasion required the con-
ductor could apply the brakes without having to go the length of a long coach.
LETTER FROM MR. LUCIUS TUTTLE, PRESIDENT OF THE BOSTON AND MAINE RAILROAD.
BosTON, December 23, 1901.
Mr. EDWARD A. MosBLEY, Secretary.
DEAR SIR: * * * * It is too early in our experience in the use of the automatic
coupler and other modern safety freight-train appliances to give anything more than
a general opinion. It is my opinion, based upon such information as is procurable
by our claims department, that the number of accidents to employees in the freight-
train service has materially decreased since the railroads of the country have equipped
all of their cars with the automatic coupler; and I can unhesitatingly say that the
results in this particular have been wholly satisfactory.
The use of the air brake upon freight cars has introduced new conditions, and to a
certain extent a new class of dangers. The abrupt application of the power brake,
possibly due in most cases to the inexperience of engineers, has resulted in many
breakages of equipment and of injury to the contents of cars, and in some cases to
personal injury to trainmen by their being thrown upon the tops of cars and from
them to the ground. I believe, however, that when all of the cars of the country are
equipped with the automatic brake, so that the application of the power will be made
with uniformity throughout each freight train, and when all engineers become more
fully trained in the use of the power brake, these accidents to persons and property
will be much minimized, and will undoubtedly in the end practically cease.
In a word, I should say that the results thus far accomplished strongly corroborate
the view that the introduction of freight-train safety appliances has brought about a
material decrease in the number of accidents to railroad employees.
Yours, truly,
- LUCIUS TUTTLE.
276 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
LETTER FROM MR. G. W. RHODES, A PROMINENT MEMBER OF THE MASTER CAR BUILDERS’
ASSOCIATION.
[BURLINGTON AND MISSOURI RIVER RAILROAD IN NEBRASKA. Office of Assistant General Superin-
tendent.]
º LINCOLN, NEBR., December 6, 1901.
Mr. EDw. A. Moseſ. EY,
Secretary Interstate Commerce Commission, Washington, D. C.
DEAR SIR: Replying to your inquiry of the 2d, in my judgment the introduction of
automatic couplers and power brakes has been of inestimable value to railroads, and
has resulted in greater safety and greater economy in the operation of trains. We
have not compiled any figures or data to verify this statement, but I express the
opinion with confidence, having been closely associated with the conditions that
prevail under the new method as well as under the old methods.
These appliances have enabled us to handle our business much more expeditiously,
not only while the trains are in transit, but while they are being distributed or
made up in the yards. I doubt, however, if any figures would make a fair compari-
son, because the conditions are not the same. Under the old conditions it was not
safe to run trains as fast as we now do, nor was it safe to switch or handle them in
the yard as rapidly and as roughly as we now do.
There has been quite a little talk about the increased damage to cars, and prob-
ably, without stopping to think, we sometimes attribute it to the brakes and couplers.
I think this is doing both these devices a great injustice. We ought to realize that
under the same condition of speed and rough handling the damage under the old
condition of things would be many times more severe. In our Black Hills territory,
where the grades are steep, we have such confidence in the brakes that we do not
allow cars to be hauled in freight trains unless every car is equipped with air brakes.
Of course they all have the close-fitting automatic coupler.
I feel that our railroads, through their Master Car Builders' Association and Ameri-
can Railway Association, and the Government, through its Interstate Commerce
Commission, have every reason to feel proud of the work they have jointly produced
in the way of introducing uniformity in the matter of automatic couplers and power
brakes for the trains of this country.
Yours, truly,
G. W. RHODEs,
Assistant General Superintendent.
LETTER FROM MR. GEORGE W. STEVENS, FIRST VICE-PRESIDENT OF THE AMERICAN RAIL-
WAY ASSOCIATION.
CHESAPEAKE AND OHIO RAILWAY COMPANY.,
PRESIDENT's OFFICE,
RICHMOND, VA., December 3, 1901.
Mr. EDw. A. MosBLEY,
Secretary Interstate Commerce Commission, Washington, D. C.
DEAR SIR: I have yours of the 30th ultimo. Experience on our line has been favor-
able to the safety appliances; certainly no one can say that the air brake is not a
distinct step in advance in the matter of handling freight trains more economically,
and with greater safety. The general design of the automatic coupler is, in our opin-
ion, all right, and the weak points are gradually being discovered and remedied. I
have not seen a car-coupling appliance so far that could be compared with the mas-
ter car builders’ type. All that is necessary, in my opinion, is to improve this type
until the couplers that are put in service are of sufficient strength to perform what is
expected of them. I can not say that there has been any economy at terminals by
reason of these improved appliances. There has been a greater number of bad-order
cars accumulated at terminals than before the automatic coupler was universally in
use, owing to the men in charge of switching not being as careful as they were when
one of their number was expected to go between the cars to make the coupling.
However, this is a matter of discipline, and can be corrected in due time. I have no
data at hand showing the decrease in claims, but I am sure that there has been a
very marked decrease in coupling accidents. One desiring to make a comparison on
this road would have to take two years, at least six or eight years apart, as we have
#. a good many automatic couplers in use since 1890, when we began applying
them.
Yours, truly,
GEO. W. STEVENS.
SAFETY APPLIANCES. - 277
LETTER FROM MR. F. A. DELANO, GENERAL MANAGER OF THE CHICAGO, BURLINGTON AND
4: QUINCY RAILROAD.
CHICAGO, ILL., December 18, 1901.
Mr. EDWARD A. MosBLEY, -
Secretary, Washington, D. C.
DEAR SIR: Answering your letter of December 3, received December 9, to which
you ask all early response. To get data on this subject for you, I have reierred your
query to a number of our master mechanics and superintendents, and I will give
you the summary of their replies. &
Our master mechanic at Chicago terminals says as follows: I believe that even the
most conservative railroad man will admit that it would be extremely difficult, if
not impossible, to transport the present business of our large terminals if the link and
pin drawbar were still in use, without greatly increasing the number of engines
and thereby increasing the congested state of the yards. The number of trains
broken in two is less at the present time than it was when the link and pin coupler
was in service, and further improvement will probably be noticed when the use of
the “worn coupler” gauge becomes more common. The cost of maintenance is
lower with the automatic coupler.
The master car builders' coupler was designed for cars having about 50 per cent of
the capacity of those now being built, and consequently some weak points have
been disclosed when they have been used on heavier cars, longer trains, and with
larger engines.
Another cause for the severe service to which the automatic coupler has been sub-
jected is the comparative safety of the switchmen. The element of danger being
largely removed, the cars are not handled as carefully as they were formerly. This
also manifests itself in the number of claims for damages to freight injured by rough
handling of the cars. Much of the damage, however, for which the coupler is held
accountable is caused by light-draft timbers and weak attachments which have not
been properly strengthened to withstand the increased strain.
Considering the subject of power brakes, I believe that it is the general sentiment
that it would be extremely dangerous and practically impossible to operate the pres-
ent trains at the prevailing speeds without the use of power brakes. The switching
in terminal yards is also greatly expedited by the power brakes on the engines, and
the ability to stop quickly when necessity arises undoubtedly averts many accidents.
When only a few cars were equipped with air brakes it was not very difficult to
maintain the brakes in good condition, but with the recent large increase in the
number of air-brake cars many have failed to receive the proper attention. The
Question of defective and inoperative air brakes has been discussed recently before
the various railway clubs, and evidently many of the railroads are beginning to see
the necessity of taking care of the air-brake equipment. The old method of cleaning
triple valves under the cars in the yards is not satisfactory, as such work should be
done in the shop equipped with suitable tools, and handled in a systematical manner.
Our superintendent of motive power concurs in the opinions above expressed, but
suggests that even though the automatic couplers and power brakes have resulted in
greater safety and economy, they have, by introducing new conditions, brought
about new difficulties.
There is a question in the minds of many of our men whether the automatic
coupler, made on the lines of the original design of some fifteen or twenty years ago,
is sufficiently strong for the present day requirements, but this difficulty has been in
part overcome by the use of much better material than formerly; for example, a
very tough and strong grade of cast steel in preference to malleable iron.
At Chicago terminals we keep a careful record of all employees and others injured.
In the year 1895 we had 28 employees injured in coupling and uncoupling cars,
whereas in 1901 (not quite closed) there have been only 3 such injuries. Of course,
in the year 1895 we were in the middle of the transition period; but our super-
intendent at Chicago terminals calls attention to the fact that the form of the coupler
and its greater strength has led to the rougher handling of cars, which results in
damage to cars and contents, which proves expensive. This, of course, has been
brought about in part by more powerful engines and cars of larger capacity.
The superintendent of our lines in Iowa says there is no doubt in his mind that
the introduction of master car builders' couplers has decreased personal injuries to
brakemen and switchmen in coupling cars; that it has also decreased the number of
break-in-twos in transit, which are a fruitful cause of accident. At the same time
the results from break-in-twos seem to be a little more serious with the master Car
builders' coupler than they used to be with the link and pin. The railroads are
beginning to realize that in complying with the law about putting on couplers a
good many poor couplers were put into service, also that a great many of the good

a'
278 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
couplers have become worn beyond the danger limit. This matter is under discus-
sion pretty generally in railway mechanical associations.
In regard to air brakes, our superintendents think that the present speed of freight
trains could not be maintained without them; at the same time, the railroads have
not all learned the importance and necessity of maintaining air brakes. The air brake
is in many respects a somewhat complicated and very delicate piece of mechanism.
Our general superintendent thinks that while the use of the automatic coupler has
resulted in prevention of injury to employees in the yard and train service, and in
a saving in time of switching cars and making up trains, it has increased the damage
done to cars and contents on account of more rough handling, already alluded to.
He calls attention to the fact that in the year 1890, as near as we can estimate it, 16
men were killed and 36 injured in coupling and uncoupling cars; during the year
1900, with a large number of employees, there were 3 killed and 11 injured. Han-
dling trains with air brakes, he says, has become a necessity. At the same time, this
has brought out a group of accidents which are peculiar to the air-brake mechanism;
for example, the air brakes going on suddenly in an emergency, causing the train to
break into two or more parts; brakes stuck on cars, causing wheels to be flattened,
heated, and even burst; rough stops made on account of mishandling of brakes, or
because brakes are in bad condition, resulting in damage to cars and contents.
On our northern division the records show that during the year 1891 there were
20 men injured coupling cars; in the year 1901, only 6. These views, which I have
given you in some detail, all go to show that it is difficult ever to make a long step for-
ward without encountering some disadvantages which partly counteract the good. It
is like making progress by taking two steps forward and one step back. * * *
Faithfully, yours,
F. A. DELANO.
LETTER FROM J. T. HARAHAN, SECOND VICE-PRESIDENT OF THE ILLINOIS CENTRAL
RAILROAD.
- CHICAGO, Jamuary 14, 1902.
EDW. A. MosBLEY, Esq.,
Secretary Interstate Commerce Commission,
Washington, D. C.
DEAR SIR: Reply to your letter of December 4, asking for a statement as to the
benefits resulting from the application of safety appliances on Illinois Central lines,
has been delayed getting necessary data to answer your questions.
The results show conclusively that the application of air brakes and automatic
couplers have greatly lessened the number of injuries to trainmen, as the following
figures will show: - :
The percentage of trainmen and switchmen injured while coupling and uncoupling
cars in 1898 and 1899 was 72.8 per cent of the total number of such employees injured
from all causes. This proportion in the year 1900 and 1901 was only 12.3 per cent.
The percentage of trainmen and switchmen injured by falling off trains in 1898 and
1899 was 68 per cent of the total number of employees injured from all causes;
whereas in 1900 and 1901 it was only 23 per cent (this due to the fact that trainmen
were not obliged to run along the tops of trains to set brakes, as formerly).
As regards the economy in operation of trains, I am of the opinion that the intro-
duction of automatic couplers has increased the expense of the application and main-
tenance of this part of the equipment. The ordinary life of a drawbar knuckle is
but nine months, and it must be replaced entire at or about the expiration of that
time. There is a decided tendency to handle cars more roughly since the question
of personal safety has been eliminated. It is also true that there is some difficulty
in making the automatic couplings at times, necessitating striking the cars harder
than was required with the old link-and-pin couplers. In road service some of these
drawbars bind a great deal on curves, adding to the resistance of a train, and to a
certain extent reducing the possible loading. These things make the use of the auto-
matic coupler more expensive than the old type of drawbar. On the other hand,
this is partly offset by the greater speed, with increased safety, rendered possible by
the application of air brakes.
As to increased economy at terminals, the above remarks apply with equal force.
While there is doubtless a considerable saving of time in the handling of cars, there
is a noticeable increase in the damage to equipment. )
The railroads of the country are of course anxious to throw every possible safe-
guard around their employees, but it is apparent from the large increase in expenses
of renewal and maintenance that the men have not been equally zealous in protect-
ing the companies’ interests by careful handling of equipment.
Yours, truly,
J. T. HARAHAN,
Second Vice-President.
SAFETY APPLIANCES. 279
LETTER FROM MR. GEORGE R. PECK, GENERAL COUNSEL OF THE CHICAGO, MILWAUKEE
AND ST. PAUL RAILWAY.
CHICAGO, December 26, 1901.
Mr. EDw. A. MosFLEY, Secretary.
DEAR SIR: Your letter requesting information as to the operation of the law in
regard to safety appliances has been referred to Mr. C. A. Goodnow, general super-
intendent, who has carefully considered the subject and gives me the following infor-
mation:
First. It is his opinion that the application of automatic couplers has resulted in
greater safety, but not in greater economy in the operation of trains, and that there
has been no specially increased economy in terminals. The couplers undoubtedly
tend to diminish accidents in the coupling of cars, because the trainmen do not have
to go between the cars and encounter the dangers incident to such a position. Unfor-
tunately, no automatic coupler has yet been devised which is not subject to frequent
breakage. Both cast iron and wrought iron have been tried, and also malleable
iron and steel, but none of these has as yet sufficed to prevent breaking. The
expense of repairs to equipment has increased enormously. The reason of this is
that the men do not now go between the cars, and it has been found impossible to
prevent rough handling of trains, both in road and switching service. But, in spite
of these objections, Mr. Goodnow considers the use of these safety appliances a step
in the right direction, and after the companies have had more experience in their use
their efficiency and their economy will be increased. This opinion is, of course,
largely based upon the belief that there will be improvements made in these appli-
2DCéS.
Second. As to the decrease in the number of claims for damages for injuries and
deaths, the claim department advise that there has been a large decrease in the num-
ber of personal injuries to trainmen, because they are not required to go between cars
for the purpose of coupling and uncoupling. The claim department is not prepared
at present to submit exact statistics. * * * It would require, of course, a com-
parison between the accidents that have occurred to trainmen in coupling and un-
coupling cars since the appliances were put on and the number that occurred before
that time. Some accidents occur even now, generally growing out of some defect in
the lever chain connected with the coupler.
Third. Mr. Goodnow considers the results have been very encouraging and as
satisfactory as could have been expected. As I have already stated, much is yet to
be done in the way of perfecting the appliances, but having begun their use it is
almost certain to follow that they will be improved and perfected.
Yours, very truly, ---
GEO. R. PECK.
LETTER FROM MR. ROBERT MATHER, SECOND VICE-PRESIDENT AND GENERAL ATTORNEY
OF THE CHICAGO, ROCK ISLAND AND PACIFIC RAILWAY. - -
CHICAGO, December 18, 1901.
EDWARD A. Moseley, Esq.,
Secretary Interstate Commerce Commission,
Washington, D. C.
DEAR SIR: The use of automatic couplers has resulted both in greater safety and
in greater economy in the operation of trains. There is an appreciable saving in
the coupling and uncoupling of trains at points where switching is to be done. This
is especially noticeable in the work of local trains. There is also a distinct saving
at terminals. In the Chicago terminal district of our company the use of the auto-
matic couplers enables us to perform our work with at least one engine less than
formerly.
I am not able to furnish figures showing the decrease in the number of claims for
injuries and deaths, but our claim department concludes that there probably has
been no material decrease in the number of accidents reported, though there has
been a marked decrease in the severity of such accidents. A large number of slight
injuries result from the pin-lifter chains being broken or disconnected, or from other
minor defects of that kind, and also while men are engaged in opening knuckles.
There are not, however, nearly so many crushing injuries and loss of hands and arms
as during the use of the old-style coupler. ^
The results following the adoption of the power brake are distinctly beneficial,
both from the standpoint of economy in the operation of trains and also from that of
the safety of employees. The power brake admits of the running of trains at a
higher rate of speed than would be safe without such a brake, thus resulting in
economy of time. This is to some extent, but not entirely, offset by increased dam-
age to equipment. The power brake also makes it less necessary for men to be on
280 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
the top of cars to set brakes. The injuries resulting from such employment, espe-
cially dangerous at night and in stormy weather, are largely avoided. Many other
injuries are doubtless avoided by the quick stop made possible by the use of these
brakes.
In general, I conclude that the use of these safety appliances conduces both to econ-
omy in the operation of the railway and to increased safety or railway employees.
Yours, truly,
RoBERT MATHER.
LETTER FROM MR. W. C. BROWN, VICE-PRESIDENT AND GENERAL MANAGER OF THE LAKE
SHORE AND MICHIGAN SOUTHERN RAILWAY.
CLEVELAND, OHIO, January 4, 1902.
Mr. EDw. A. MosBLEY, Secretary.
DEAR SIR: Replying to your inquiry as to the law in regard to the air brake and
automatic coupler, I would say that there is no question but what the adoption of
these appliances has resulted in decreasing casualties to employees. It is too early to
compile statistics that would be of value.
In my opinion, the application of the automatic coupler has not resulted in any
economy in operation at terminals. The device costs considerably more than the
old drawbar, and the expense of replacement is correspondingly heavy. I think
the fact that it is not necessary to go between cars to make couplings leads to some-
what rougher switching, which not only breaks drawbars, but results in a good deal
of damage to freight in transit, which has to be paid for. There is also a considera-
ble loss of time in switching, on account of the automatic coupling of cars where the
coupling is not desired, and the men have to go some distances to uncouple them.
Notwithstanding the disadvantages, I am satisfied that the adoption of these safety
appliances has been of great value to the railroads.
Very respectfully, yours,
W. F. BROWN.
LETTER FROM MR. W. F. POTTER, GENERAL SUPERINTENDENT OF THE LONG ISLAND
RAILROAD.
Long Island CITY, N. Y., December 17, 1901.
Mr. EDWARD A. MosFLEY,
Secretary Interstate Commerce Commission, Washington, D. C.
DEAR SIR: We have no useful statistics in reference to claims for damages or for
injuries in connection with automatic couplers. We wish to express ourselves as
wholly satisfied with the improved conditions growing out of the use of the auto-
matic coupler and the power brake. -
Yours, truly, W. C. POTTER.
LETTER FROM MR. A. M. WAITT, SUPERINTENDENT OF MOTIVE POWER AND ROLLING STOCK
OF THE NEW YORK CENTRAL AND EIUDSON RIVER BAILROAD.
NEW YORK, December 12, 1901.
Mr. EDWARD A. MosBLEY, Secretary.
DEAR SIR: Although I have not comparative figures at hand, I am satisfied from
my general knowledge and from conversations on the subject had with those directly
in charge of train operation that the number of personal injuries resulting from coup-
ling cars has been greatly reduced by the introduction of automatic couplers. I am
strongly of the opinion that on many roads the number of trains breaking in two has
increased rather than diminished by the introduction of automatic couplers, as some
makes of couplers seem to be prone to uncouple while moving on the road. It is also
true that the lack of inspection and maintenance of the couplers is often productive
of breaking in two, owing to the condition of the lock on couplers preventing its
dropping fully into its locking position. g
With our heavier locomotive equipment, permitting the hauling of much longer
trains, there has been a quite considerable increase in coupler breakage, and it has
become somewhat problematical as to whether the present dimensions of automatic
couplers are productive of economy in connection with the cost of maintenance as
compared with well-constructed link-and-pin couplers. I would not for a moment
advocate the return to the link-and-pin coupler, but I believe the time has come for
an advance step in the way of quite considerably strengthening the present automatic
couplers. It seems at the present time somewhat unfortunate that the rather restricted
dimensions of the couplers were originally adopted, as they prevent an adequate
strengthening of the couplers on the present lines as seems desirable in the line of
\
SAFETY APPLIANCES. 281
economy with our heavier capacity cars and heavier locomotives. Unfortunately,
we shall derive little benefit at present from strengthening the couplers on heavy cars,
for the coupling equipment on trains is like a chain, being limited in strength to the
strength of its weakest link, hence the cars with the weak couplers would suffer, and
it would be a long time before a marked benefit would result from an increased size
of shank of coupler. \
The manufacture of cast steel has arrived at a point of perfection that enables
couplers to be cast in steel which, with the same weight of metal, can be made of
greater strength than it is possible with malleable iron. For that reason I have
reached the conclusion that it is desirable to recommend and require, in the line of
better service and economy, couplers to be made of good cast steel, and I am almost
converted to the advisability of increasing the size of the shank of couplers on all
new equipment, and as far as possible in connection with renewals on old equip-
ment. The application to the latter class of cars is more difficult than to the former.
Referring to power brakes, I think that there is no question but what the adoption
of power brakes on locomotives and cars has been and will continue to be a source
of greatly added safety and economy in service. Complaints are often made that
the introduction of air brakes on cars has increased the number of cases of trains
parting. I think, however, that a little consideration will show that this ought not
to charged to the power brakes, but rather to the lack of them on too many cars.
Possibly the New York Central road is running freight trains entirely equipped with
air brakes to as great an extent or greater, than most other roads in the East, and we
find very little trouble from trains parting, or other objectionable features, in con-
nection with such fully equipped trains. The large number of cars still running in
the country, on our own road as well as others, that do not have the brakes in the
best of working condition is one of the contributing elements to unsatisfactory serv-
ice. This, however, can not be laid to the change of brake system, but to the lack
of full appreciation of the necessity of maintaining the brake equipment on freight
cars at nearer the same standard at which we expect to maintain the brakes on
passenger equipment.
Railroad officials at the present time are rapidly being aroused to the importance
of greater care in the inspection, repairs, and maintenance of air-brake equipment on
freight cars, so they may be kept nearer in first-class condition. Any agitation that
can be brought to bear in this direction will be beneficial to the railroads and to the
public at large. &
Yours, very truly, A. M. WAITT,
LETTER FROM MR. JoHN MACKENZIE, SUPERINTENDENT OF MOTIVE Power of THE NEW
YORK, CHICAGO AND ST. LOUIS RAILWAY.
|
CLEVELAND, OHIo, December 24, 1901.
Mr. EDWARD A. MosFIEY, Secretary.
DEAR SIR: I inclose herewith statistics furnished by the general superintendent
answering your question as to the value of the Master Car Builders' coupler. There
is no question in my mind as to the value of the adoption of power brakes. We are
able to make better time, and in my opinion if all cars were equipped with air and
the proper care were exercised in the handling and repair of same, economical results
would naturally follow. The cost of repairs of cars handled in yards has materially
increased. The men are not so careful in switching and coupling, as they are not
required to go between the cars.
Yours, truly, -- JoFIN MACKENZIE.
STATEMENT OF MR. A. W. JoHNSON, GENERAL SUPERINTENDENT.
Statistics of the number of accidents to employees arising out of coupling trains in
yards and on the road in the last several years indicate quite a diminution in the
proportion of such injuries, as shown by the following figures per 100,000 freight
train miles: . *
Trainmen | Trainmen
On road. in yards.
First quarter of year of 1895 --------------------------------------------------. 0.749 . 4. 580
First quarter of year of 1896 --------------------------------------------------- . 581 6. 400
For the year 1898 -------------------------------------------------------------- .425 2. 300
First quarter of year 1899.----------------------------------------------------- . 266 3, 600
First quarter of year 1900..... - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . 213 ... 107
Six months in year 1901-------------------------------------------------------- .057 . 057
282 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
These figures evidently tend to show that the introduction of automatic couplers,
avoiding the necessity for trainmen and switchmen going between the cars to couple
or uncouple, has had a very marked effect upon the number of injuries arising out of
such practice. The expression “trainmen” means both trainmen and switchmen.
LETTER FROM MR. W. E. SYMONs, suPERINTENDENT OF MOTIVE POWER OF THE PLANT
* SYSTEM. 3.
SAVANNAH, GA., December 9, 1901.
Mr. EDwARD A. MosFLEY,
Secretary Interstate Commerce Commission, Washington, D. C.
DEAR SIR: The introduction and application of automatic coupler has, in my
opinion, resulted in greater safety to trainmen, particularly switchmen in yards at
terminal points, and it has tended to increase the facilities of terminals. A greater
amount of work can be done on the same tracks than formerly. In the year 1895
there were fully 59 persons injured on the Plant System of Railways in the perform-
ance of their duties, either as train or engine men, while in the year 1901 there were
only 43; showing a decrease of 16, or about 27 per cent.
This in itself is a very good indorsement of the automatic coupler. I have no
statistical data in reference to the results obtained from the application of power
brakes, but my experience as a locomotive engineer and as an officer in charge of
motive power and equipment fully convinces me that they are useful in a degree
that could hardly be measured in dollars and cents. * * *
Since the application of automatic couplers to freight cars, claims for damaged
freight are said to have increased to a remarkable degree. This is particularly true
on lines that handle much furniture, stoves, pianos and other fragile merchandise.
A switchman will direct the movement of a train of cars very carefully when he is
about to couple them by hand onto other cars that are standing on a siding, for his
own life is somewhat endangered if they are allowed to come together at high speed;
but since the introduction of automatic couplers the question of personal injury has
been practically eliminated and the men have gotten careless. A “cut” of freight
cars is frequently kicked down a track to collide with a number of cars standing still,
at a rate of speed that is actually dangerous. The contents of a car is then likely to
be shifted and in many instances the ends of cars are entirely knocked out. The
switchman who is responsible for this damage stands off at a good safe distance.
This of course is not caused by automatic couplers, but is a result of their application.
Yours, respectfully,
W. E. SYMONS.
LETTER FROM MR. Joseph RAMSEY, JR., PRESIDENT OF THE WABASH RAILROAD.
St. Louis, Mo., December 7, 1901.
Hon. EDW. A. MosFLEY,
Secretary, Interstate Commerce Commission, Washington, D. C.
DEAR SIR: I dislike to express a decided opinion on questions which are not suscep-
tible of either absolute proof or close analysis. * * * A comparison of economy
must be separate and distinct from the question of safety. There is no doubt that the
use of the automatic coupler has added to the safety of switching at terminals, but at
the same time it has added largely to the cost of such operation. The train men,
in switching, do not handle the cars with the care and delicacy that they used when
they knew that there was one of their number in between the cars making the
couplings, and as a result there is more damage from the breaking of the various
parts than there was before. - &
Yours, very truly, J. RAMSEY, J.R.
LETTER FROM MR. T. B. PURVES, J.R., SUPERINTENDENT OF MOTIVE POWER AND ROLLING
STOCK OF THE BOSTON AND ALBANY RAILROAD.
SPRINGFIELD, MAss., December 26, 1901.
Mr. EDWARD A. MosFLEY, Secretary.
DEAR SIR: The Master Car Builders' automatic coupler has undoubtedly resulted
in greater safety to trainmen, but my opinion is based entirely on my general knowl-
edge of accidents of this nature, and not on any official data on the subject.
As to economy I am free to say that the cost of maintenance is considerably in
excess of the link-and-pin coupler. At yard terminals the Master Car Builders'
coupler should show an economy, so far as speed in making up trains is concerned.
The adoption of the power brake on freight equipment was a long stride in the right
direction, both as to better Service and economy of operation.
Yours, truly, T. B. PURWEs, JR.
SAFETY APPLIANCES. 283
LETTER FROM MR. E. C. FIELD, GENERAL SOLICITOR OF THE CHICAGO, INDIANAPOLIS
AND LOUISVILLE FAILW. A.Y.
CHICAGO, December 14, 1901.
Mr. EDwARD A. MosFLEY, Secretary.
DEAR SIR: I have made inquiry in the departments having knowledge of what
has been accomplished on our road with trains equipped with automatic couplers
and air brakes. There can be no question but what these appliances have insured
far greater safety in the operation of trains. Certainly this has been the case with
this company. On the other hand, the expense of operation on account of these
appliances has more than doubled; and I find some roads assert that the cost of
maintenance of this new draft rigging is more than fourfold. The reason for this is
apparent. The switchmen do not have to go between the cars to couple them, and
they throw them together often at the rate of ten miles an hour and upward, break-
ing drawbars and draft rigging and knocking in ends of cars. -
I can not give you figures, but from my general knowledge I know that on account
of these appliances accidents have been greatly reduced.
Yours, very truly, E. C. FIELD.
LETTER FROM MR. P. H. MORRISSEY OF THE GRAND LODGE OF THE BROTHERHOOD OF
RAILROAD TEAINMEN.
CLEVELAND, OHIO, December 11, 1901.
Hon. EDWARD A. MosBLEY,
Secretary, Interstate Commerce Commission, Washington, D. C.
DEAR SIR: I hand you a comparative statement of deaths and total disabilities from
railway accidents among members of the Brotherhood of Railroad Trainmen for the
years 1899, 1900, and 1901. For the year 1901 we can only give exact information
for the first eight months, and we have taken the same proportion for the last four
months, which we think is a reasonable basis for an estimate. The total disabilities
referred to are those for which we pay insurance or indemnity. The figures fairly
show the rapidly decreasing death and disability rate in these occupations, which
can be accounted for by the operation of the law. The number of employees killed
and injured in coupling and uncoupling cars is markedly low as compared with the
deaths and disabilities from these causes prior to the adoption of the law. While the
number killed and injured falling from trains and engines is less than in past years,
the proportion is still comparatively high, and it will probably continue so as long as
trainmen are required to ride out on top of the cars in the performance of their
duties. The rules of the railway companies generally, in the operation of freight
trains, require trainmen to be out on top almost constantly, and in some instances
under circumstances when it is seemingly unnecessary from any practical standpoint.
Since January 1, 1899, the balance in our insurance fund has increased about
$145,000. During this period the amount of the assessments paid by each member
yearly has remained the same, and the laws of the organization pertaining to the
payment of death and disability claims have not been essentially changed. This
gradually appreciating surplus is due to the decreasing death and disability rate from
accidental causes, for in the same period the death and total disability rate from
natural causes has shown some increase.
The value and practicability of the inspection of safety appliances by inspectors
appointed by the Commission has been noticed by our members and is generally
appreciated. They view with satisfaction any action on the part of the Government
which contemplates the enforcement of a law primarily designed to guarantee them
greater safety in their hazardous employment. .
Our members everywhere have been instructed to cooperate with the inspectors in
giving them information regarding the state of the equipment with which they are
required to work. While the railroads generally have met the requirements of the
law so far as equipping their cars with automatic couplers and power brakes is con-
cerned, some of them are not paying proper attention to maintaining them in proper
repair, and when these devices are nonworkable, the danger which they are intended
to eliminate still confronts the employee. Statistics will no doubt show that a large
percentage of the injuries incurred coupling and uncoupling cars since the law went
into full effect is due to some defect in the coupler or its attachment, which makes it
nonautomatic. We believe it would be desirable to have the law amended so that
when a Government inspector discovers a car with a defective appliance he would
have the authority, after notifying the proper officer of the company of that fact, to
condemn it for service until put in good working order, the same as would be done if
a defective boiler or other appliance were found by an inspector of the Treasury
Department on a steam vessel.
Yours, truly P. H. MoRRISSEY
284 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
STATEMENT ACCOMPANYING LETTER OF MP. P. H. MORRISSEY.
Deaths and total disabilities from railway accidents among members of the Brotherhood of
of Railroad Trainmen for the years 1899, 1900, and 1901.
Average e ;.…, | Proportion
Year. member- || Deaths. . ºº of total dis-
ship. g ” abilities.
1899--------------------------------------------- 34,700 301 166 1 in 115 1 in 209
1900--------------------------------------------- 40,892 327 169 1 in 125 1 in 242
1901--------------------------------------------- 45,900 247 93 1 in 186 1 in 493
-
Balance in insurance fund January 1, 1899 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $262,281.56
Balance in insurance fund January 1, 1902 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a 408,000.00
LETTER FROM MR. E. E. CLARK, GRAND CHIEF CONDUCTOR OF THE ORDER OF RAILWAY
CONDUCTORS OF AMERICA. -
CEDAR RAPIDs, Iowa, November 30, 1901.
E. A. MosFLEY, Esq.,
Secretary, Interstate Commerce Commission, Washington, D. C.
DEAR SIR: Our insurance department does not do an accident insurance except that
we pay for total disability resulting from the loss of a hand at or above the wrist
joint, loss of a foot at or above the ankle joint, the loss of eyesight or the sense of
hearing. It does not need any argument to support the statement that the number
of personal injuries received while coupling and uncoupling cars is greatly reduced
by the adoption of automatic couplers. ‘.
In view of the fact that safety appliances have not been kept up to the highest
standard of efficiency by making needed repairs promptly, we may reasonably con-
clude that some accidents are due to defective appliances. I believe that the policy
adopted by the Interstate Commerce Commission of having inspectors of these
devices in the field reporting direct to the Commission is a good one; that its con-
tinuance should be made possible by needed appropriations at the hands of Con-
gress. These inspectors are practical men; their reports are made in a specific and
practical way, and we hope that this plan will be continued. We do not expect to
see every detail of this great work accomplished at one time, but we do want to see
a steady progress in the direction of the highest possible degree of perfection.
Yours, truly, E. E. C.
fü. E. ULARK.
LETTER FROM MR. F. P. SARGENT, GRAND MASTER OF THE GRAND LODGE OF THE
BROTHERHOOD OF LOCOMOTIVE FIREMEN.
PEORIA, IL.L., December 2, 1901.
Mr. E. A. MosFLEY, e
. Secretary Interstate Commerce Commission,
Washington, D. C.
DEAR SIR: In reply to yours of the 25th ultimo, I beg to say that from the obser-
vations made by us the enactment of the new accident law, together with the thor-
ough inspection introduced by your honorable Commission, has been of incalculable
benefit to the railway men of this country. We are sure it has largely decreased the
number of accidents. It is noted from the reports on file in this office that the num-
ber of members of this organization who have been killed or maimed is less than
before the enactment of these laws. We are firmly convinced that a more efficient
equipment is now maintained by the railway companies since the provision was
made for Government inspectors. These men are thorough in their work and we
are sure they often prevent serious accidents.
During the past several years our membership has greatly increased. At the pres-
ent time we have a membership in round numbers of 40,000. On January 1, 1899,
we had a membership of 28,000. During that year we had 119 members killed by
railway accidents and 18 totally and permanently disabled. On January 1, 1900,
with a membership of 33,000, we had 119 deaths from railway accidents and 28 total
disabilities, while with a membership at the present time of 40,000 the deaths from
railway accidents during the year 1901 were 112, with 20 totally disabled. With the
increase in membership from 28,000 in 1899 to 40,000 or over in 1901, we find the
death and disability list greatly reduced. The death rate, as well as disability per
* Estimated.
SAFETY APPLIANCES. 285
membership, during 1899 was one-half of 1 per cent. In 1900 it was further reduced
to three-eights of 1 per cent, while in 1901 it was one-third of 1 per cent.
We are satisfied beyond question that this law is a valuable protection to the rail-
way men, and that your Commission in providing for inspectors and the proper
enforcement of the law has greatly decreased the number of deaths and disabilities
from railway accidents.
Very truly, yours, F. P. SARGENT.
LETTER FROM MR. F. W. ARNOLD, GRAND SECRETARY AND TREASURER OF THE GRAND LODGE
f OF THE BROTHERHOOD OF LOCOMOTIVE FIREMEN.
PEORIA, ILL., December 9, 1901.
Mr. EDwARD A. MosFLEY,
Secretary Interstate Commerce Commission,
Washington, D. C.
MY DEAR SIR: * * * Except in relation to “air” as a part of the safety appli-
ances to a train of cars, the locomotive fireman never has been in great hazard, for he
does not have much to do in coupling cars. There can be no manner of doubt as to
the application of air being a splendid safeguard to the locomotive firemen, and there
is no doubt as to its use having been the direct means of Saving the lives of many
firemen. It is as great a boon to the firemen as the safety coupling is to the switch-
men and brakemen.
The system of inspection which the Commission has instituted is, in my opinion, a
splendid measure. I have heard our members on many occasions speak highly of
the system and have never yet heard one of them say aught against it.
The Interstate Commerce Commission is one of the best and most important insti-
tutions connected with the Government. It has done and is capable of doing much
good, not alone for the public, but for railway employees, and should be given more
power in the line of its affairs, even to sitting as arbiters in disputes between
employers and employees of railways. This was my idea when the so-called “arbi-
tration measure” was adopted, and I have not seen or heard a single argument that
would lead me to change my opinion.
Very truly, yours,
F. W. ARNOLD.
INTERVIEWS WITH RAILROAD MANAGERS AND LEADERS OF EMPLOYEES' ORGANIZATIONS.
W. S. Carter, editor Locomotive Firemen’s Magazine: The adoption of the safety
appliances is the grandest thing ever done for railway operatives. There was a day
when a call for brakes often meant a call to death for brakemen and other trainmen.
That day has passed. The danger of fatalities and injuries to trainmen and passen-
gers and damage to property has been reduced in a marvelous degree, while, at the
same time, the tonnage capacity of the roads and the ability to make high speed has
been increased.
A. B. Atwater, assistant general superintendent Michigan Central Railroad, Detroit,
Mich.: The installment of the safety appliances has proved highly successful. During
the stage of instalment of the automatic coupler, there was a great deal of trouble
and many accidents from the fact that so many kinds of couplers were in use that
were not adapted for use with each other, but that time is past. With the air brake
and automatic coupler it is much easier to handle trains—so much easier that the
improvement is beyond calculation. We can run faster than before and with greater
safety to equipment and passengers. It has been our rule to haul cars with non-
automatic couplers or with defective couplers except under extraordinary circum-
stances. The use of Safety appliances has enabled railroads to meet, successfully,
the greatly increased demands upon them and at the same time insure greater safety.
Frank E. Woodruff, secretary to General Manager Brown, of Lake Shore and
Michigan Southern Railway, Cleveland, Ohio: The railway people are thoroughly
pleased with the operation of the air brake and the automatic coupler, and with the
law that has had so much to do with their universal adoption. If there were no such
law now in force the carriers would, no doubt, continue to use them universally. In
fact, it is safe to say that the railways could not be operated without them, under the
present conditions of greatly increased traffic and with the heavy engines and cars
and the great trains of the present day. The railways find that safety appliances pay
in greater confidence on the part of the public, in decreased lists of casualties, and in
economy of operation. The advantages of the air brake and automatic coupler will
be felt more decidedly as soon as engineers become educated up to the conditions of
long and heavy trains.
&
286 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
P. M. Arthur, Locomotive Engineers: The adoption of the air brake and automatic
coupler has revolutionized railway operation. Speaking as an engineman, I may say
that the air brake, in placing the control of the train under the hand of the engineer,
has given to him a feeling of confidence that is of inestimable value in his work. It
has done more to add to the safety of railway men and passengers than can be
expressed, and also to prevent the destruction of property. Of course the adoption
of the coupler has done a great deal also, but I can not speak so definitely as to that.
The operation of the safety-appliance law is giving general satisfaction to the mem-
bers of our organization.
LETTER FROM MR. W. A. GARDNER, GENERAL MANAGER OF THE CHICAGO AND NORTEI-
WESTERN RAILWAY.
CHICAGo, December 11, 1901.
Mr. Edward A. MoselFY, Secretary.
SIR: The automatic coupler has reduced personal injuries at least 75 per cent. In
regard to power brakes, block signaling, etc., it is a difficult matter to express numer-
ically just what the results are from a standpoint of safety to the public or pecun-
iary gain to railways. I believe it is conservative to say, however, that there are 50
per cent less of serious accidents now than there would be under the old practices;
that i. with hand brakes, no interlocking plants, and no automatic or manual block
Signals.
The introduction of the automatic coupler has, however, largely increased rough
handling of freight cars and the consequent damage to cars and destruction of their
contents. Switchmen and trainmen formerly handled the cars in such a manner
that they might be coupled with comparative safety by hand. This necessity does
not now exist, and the result is that we are now paying out very large sums of money
for damage because of the indifference or negligence of employees. Of course, this is
of small consequence as compared with the saving of deaths and injuries to our men.
Again, the introduction of mechanical device affords an opportunity for some men
to disregard the rules, to become careless about flagging, etc. While the public is
better protected and safeguarded, and the necessity for strenuous exertion, mental as
well as physical, on the part of the employee is reduced, yet the railway official
finds that his tasks are largely increased. The introduction of modern methods
requires extraordinary effort to impress employees with the importance of rules,
which they formerly accepted and obeyed naturally and as a part of the business. I
do not criticise or complain of this, because we are very much in favor of anything
which does the greatest good to the greatest number of people, but knowing the
influence you have with those who, I believe, are equally solicitous with ourselves
about these matters, take this occasion to express myself. -
Very truly, : -
W. A. GARDNER.
LETTER FROM J. N. BARR, MECHANICAL SUPERINTENDENT OF THE ERIE RAILROAD.
ERIE RAILROAD CoMPANY.,
OFFICE MECHANICAL SUPERINTENDENT,
SUSQUEHANNA, PA.
Mr. E. A. MosFLEY,
Secretary Interstate Commerce Commission, Washington, D. C.
DEAR SIR: Answering your favor of November 29, delay in reply being due to
obtaining definite information, I send you a statement showing the number of per-
Sonal-injury cases resulting from coupling and uncoupling of cars for the first six
months in 1895 and 1901. The statement speaks for itself.
As to the results following the adoption of power brakes. Without going into
detail, I can say that I have never yet found, seen, or come personally in contact
with any practical railroad man who does not consider the adoption of power brakes
as a great advance in railroading. I was under the impression that any question on
this point had died a natural death years ago. In all appliances, of course, there is
a gradual evolution and development, but the general fact remains as above. I will
not undertake to give you my views in detail on various points connected with these
devices, as the subject is too voluminous, and believe that my statements as above
fully cover the ground so far as my knowledge goes.
Yours truly, * J. N. BARR.
SAFETY APPLIANCES. - 287
Comparative statement showing number of personal-injury accidents resulting from coupling
and uncoupling of cars for first Sia, months of 1895 and 1901.
1895. 1901.
Division.
Rilled. Injured. | Killed. Injured.
New York--------------------------------------------------------- 1 38 2 6
Greenwood Lake ------------------------------------------------. 0 0 0 1
New Jersey and New York . . . . . . . . ..........................----- 0 0 0 0
Northern Railroad of New Jersey . . . . . . . . . . . . . . . . . . ...........--- 0 0 0 0
Delaware --------------------------------------------------------- 0 13 0 0
Jefferson.----------------------------------. * * * * * * * g º e º sº º ſº e s = º e s tº ſº tº 0 4 0 0
Susquehanna ----------------------------------------------------- 0 16 0 1
Rochester--------------------------------------------------------- 0 1 0 0
Tioga ------------------------------------------------------------- 0 0 0 0
Allegheny -------------------------------------------------------- 0 16 0 2
Bradford---------------------------------------------------------- 0 4 0 0.
Buffalo------------------------------------------------------------ 0 25 0 2
Meadville.-------------------------------------------------------- 0 12 0 2
Cincinnati -------------------------------------------------------- 1. 19 0 4
Mahoning--------------------------------------------------------- 0 12 0 1
Cincinnati and Erie ---------------------------------------------- 0 7 0 1.
Total.-------------------------------------------------------- 2 167 2 20

DECISION OF THE APPELLATE COURT, THIRD DISTRICT OF 'ILLINOIS.
Docket No. 6.—May term, 1901.-Agenda No. 4.
V. T. Malott, receiver,
T. H. and I. R. R. Co.
Q).
J. B. Hood.
OPINION BY HARKER, P. J.;
The defendant in error, while in the employ of the plaintiff in error as a freight-
train brakeman, had his hand mashed in attempting to couple cars, and had it so
injured that its amputation became necessary. In a suit for damages he recovered a
judgment of $3,500 against the plaintiff in error.
Two charges of negligence were made and relied upon as grounds of liability. One
was the use of cars in interstate commerce not provided with grab irons or hand
holds in the ends and sides, as required by the fourth section of the interstate-
commerce act. The other was that the place provided by the plaintiff in error for
the defendant in error was not a reasonably safe one for coupling cars, in that the side
track where he attempted to make the coupling was slanting and dangerous.
The first contention urged upon our consideration is that the proof did not bring
the case within the operation of section 4 of the interstate-commerce act, which makes
it “unlawful for any railroad company to use any car in interstate commerce that is
not provided with secure grab irons or hand holds in the ends and sides of each car
for greater security to men in coupling and uncoupling cars.” The train on which
Hood was working was a freight train running between East St. Louis, Ill., and
Indianapolis, Ind. The car which he testified caused the injury and that did not
have the hand holds was put in the train at East St. Louis, destined for Indianapo-
lis. There was no evidence showing that it contained freight consigned from one
State to another, nor do we think, as is contended by the plaintiff in error, that the
duty rested upon the defendant in error to specifically make such proofs. The train
of which the car in question was a part was engaged in interstate commerce, carry-
ing stock and merchandise from one State to another; and the car itself was attached
where the train was made up, at East St. Louis, and billed through to Indianapolis.
The construction which the plaintiff in error seeks for the provision quoted is too
, narrow. If adopted, it would in many instances defeat the wholesome purpose for
which it was enacted. The plaintiff in error was engaged in interstate traffic—oper-
ating a railroad across one entire State and for a considerable distance through
another. As the train in question was a through train and was at the time engaged.
in transporting freight from one end of the road to the other, every through car was,
within the meaning of the Federal statute, a car used in interstate commerce.
In opposition to the testimony of Hood, that the car did not have hand holds, was
the testimony of two car inspectors to the effect that they inspected the entire train
on its arrival at Terre Haute a few hours after the accident and that every car was
equipped with these appliances. In the conflict it was the peculiar province of the
jury to say where the truth was. We are not prepared to say that they erred in find-
ing as they did on that question. +.
4 -
Error to Coles.
288 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
There is no room for the contention that the defendant in error did not exercise
roper care for his own safety at the time he was injured. It was in the nighttime,
in the latter part of December. No other person was immediately present. From
his testimony it appears that while stooping over to make coupling one foot, by
reason of the uneven condition of the ground, slipped, and, as there was no grab iron
for him to hold to, he was pitched forward and had his hand mashed. He was
using his lamp, and appears to have been giving the ordinary attention required for
such service.
We can not agree with counsel that the injury was an assumed risk incident to the
employment and service in which Hood was engaged. We give full recognition to
the well-established rule of law by which railroad employees assume all hazards
ordinarily incident to that kind of service, and readily acquiesce in the application
of the rule to dangerous conditions arising from the formation of ice about switch
tracks. As applied to the charge of negligence relating to the slanting and dangerous
condition of the side tracks where Hood attempted to make the coupling, there is
some room for the contention made by the counsel for the plaintiff in error; but as
we look on it, the absence of the hand holds from the car was the efficient cause of
the injury. No doubt the slippery condition of the ground contributed to it. The
rule is well settled, however, that where the injury to the servant is the result of
the master's negligence combined with some ulterior cause, and one which may
properly fall within the class of assumed risks, the master is liable if his negligence
was the efficient cause of the injury. It is not necessary to recovery that the mas-
ter's negligence be the sole proximate cause of the injury. (Village of Carterville
v. Cook, 129 Ill., 152; Pullman Palace Car Co. v. Laack, 143 Ill., 242; 2 Thompson on
Negligence, 1085; Cooley on Torts, 684.) *
It is provided by the eighth section of the act of Congress which makes it mandatory
on all railroads engaged in interstate commerce to provide cars with hand holds,
“that any employee of such common carrier who may be injured by any locomo-
tive, car, or train in use contrary to the provisions of this act shall not be deemed
thereby to have assumed the risk thereby occasioned, although continuing in the
employment of such common carrier after the unlawful use of such locomotive, car,
or train had been brought to his knowledge.” In view of that provision it mattered
not whether Hood was ignorant of or had knowledge of the absence of the required
appliance before he was injured.
Complaint is made of the fourth and seventh instructions given for the plaintiff.
The greatest objection that can be urged to them is that they are vague and uncer-
tain. The seventh one is the more objectionable of the two. It reads:
“7th. The court instructs the jury that an employee on a railroad does not
assume all the risks incident to his employment, but only such risks as are ordinary
and remain so ordinary, usual, and incident to his employment, after defendant has
used ordinary care to remove them.” :
It is difficult to understand what is meant by the last clause. It could not pos-
sibly aid the jury. But as neither of these instructions relate to the charge of negli-
gence about failing to supply cars with hand holds, and as the defendant assumed no
risk which covered such failure, and as we think that was the efficient cause of the
injury, no harm resulted to the plaintiff in error by giving them.
Judgment affirmed. -
STATEMENT OF CONDITIONS IN 1893 AND 1900.
In the following table (mentioned as Table No. 5 in the foregoing report) condi-
tions in 1893 and 1900 are compared:
Item. 1893. 1900.
Number of cars in freight Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,013, 307 1,365,531
Number of locomotives in freight Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 599 1, 596
Number of tons carried------------------------------------------------ 745,119,482 1, 101,680, 238
Number of tons carried 1 mile-----------------------------------------
Average number of tons in train ..... --------------------------------.
Number of trainmen employed (other than enginemen and fire-
93,588, 111,833
184
141,599,157,270
270
men), including switchmen, flagmen, and Watchmen . . . . . . . . . . . . . . 146, 544 155,020
Number of tons carried for each trainman employed, etc . . . . . . . . . . . . . 5,085 7,107
Number of tons carried 1 mile for each trainman employed, etc. . . . . . 638,635 913,425
Number of freight cars for each trainman employed, etc . . . . . . . . . . . . . 7 9
Number of train miles run for each train man employed, etc. . . . . . . . . . 5, 764 5,720
Number of enginemen and firemen employed . . . . . . . . . . . . . . . . . . . . - - - - 79, 140 86,967
Number of switchmen, flagmen, and watchmen employed . . . . . . . . . . . 46,048 50,789
Number of trainmen employed in coupling and uncoupling cars for
each one killed (other than enginemen and firemen), including
SWitchmen, flagmen, and Watchmen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 550
Number of trainmen employed in coupling and uncoupling cars for
each one injured (other than enginemen and firemen), including
Switchmen, flagmen, and Watchmen................................ 13 30
RULES FOR INSPECTION OF SAFETY APPLIANCES, WITH CLASSI-
IFICATION OF DEFECTS TO BE FEPORTED.
ADOPTED APRIL 1, 1901, BY THE INTERSTATE COMMERCE COMMISSION.
RULE 1.
A.
. Previous to examining equipment, inspectors shall make themselves known to the
foreman or other official of the mechanical department, or, in the absence of that
officer, to the agent or other employee next in authority. In all cases have name
and title of such officer or employee included in report of defective cars. Whenever
practicable, the official found in charge should be invited to accompany or send a
representative with the inspector, and the person so accompanying the inspector
should have his attention drawn to all defects likely to endanger life or limb.
RULE 2.
B.
Report location of all curves in yards and sidings where M. C. B. coupler will not
couple or remain coupled, the practice generally followed where such curves exist,
and whether any special device is employed.
RULE 3.
C.
SECTION 1. Secure information when practicable in reference to practice of han-
dling brakes on descending grades. Ascertain whether hand brakes are used, and to
what extent.
SEC. 2. Ascertain what inspection is given to air-brake cars leaving terminals, and
lººr engineers are informed of exact number of air-brake cars with effective
Iſa,K62S.
SEC. 3. Observe closely whether air-brake defect cards are attached or not. These
cards are of two kinds: One designates that the car can not be placed between air-
brake cars at all, on account of certain defects; the other signifies that the car may
be used with air-brake cars as a means of continuing the connection, but that the
brake on that particular car is inoperative.
d These cards indicate defects which should be repaired promptly; report if this is
OIO 63. *
SEC. 4. Pay special attention to the making up of trains with reference to the
placing of air-brake cars in forward end of train.
SEC. 5. Inspect heavily loaded cars sagging in the middle for leaky air pipes.
RULE 4.
D.
SECTION 1. Special attention should be given to grab irons on roofs of cars, and
when reporting loose grab irons, state whether secured with lag screws or bolts and
to a substantial part of car frame.
SEc. 2. As loose hand holds and grab irons may originate in car shops, observe
closely new cars and those a few months out of shop. Report all defects found in
running boards and ladders, whether constructed of iron or wood.
SEC. 3. Report as to the results of the use of pivotal couplers on locomotives
assigned to switching. -
SEC. 4. Note to what extent men have to go between cars to couple them during
the making up of trains. Also to what extent men step in to open or close knuckles
by hand. This should be ascertained by careful observation.
SEC. 5. State whether locomotives are equipped with M. C. B. type of coupler,
noting if on end of tender only or on tender and front end.
: \ 289
1881—02—19°
290 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
SEC. 6. State fully all particulars of any other than the M. C. B. type of coupler
found on coaches or cars of all kinds. .
SEC. 7. Note on report of defective cars whether your inspection was made prior
to
inspection by railway company’s inspector, and, if possible, show disposition of
cars found defective.
DEFECTS OF COUPLERS AND PARTS.
Broken coupler body.
. Broken knuckle.
Broken knuckle pin.
Broken locking pin or block.
. Bent locking pin or block.
Wrong locking pin or block.
Wrong knuckle pin.
. Worn locking pin or block.
. Worn couplers or knuckles, as per M. C. B. limit gauge.
. Short guard arm.
. All missing parts of coupler, except cotter pins in knuckle pins.
. Inoperative locking pin or block.
- - - - - * * * * * * * - - - - *-* * * * * * * * * * * * * * * * * * * * * *
Nos. 5, 6, and 7 are defective only when interfering with safe operation.
Nos. 8 and 9 are defective only when worn sufficiently to destroy contour line by
allowing lost motion to approach the danger point as shown by M. C. B. limit gauge.
DEFECTS TO UNCOUPLING MECHANISM.
. Broken uncoupling lever.
. Broken chain.
. Broken end lock or end casting.
24. Broken inner casting or keeper.
to
. Bent uncoupling lever.
. Chain too short.
. Chain too long.
. Loose end lock or end casting.
. Loose inner casting or keeper.
. Wrong end lock or end casting.
. Wrong inner casting or keeper. -
. Uncoupling lever improperly applied or of wrong dimensions. -
. Missing uncoupling levers and locks or end castings, inner castings or keepers,
chains, clevis, or clevis pins.
. Chains kinked, making them too short.
No. 25 is defective when interfering with its proper operation or making it difficult
operate.
Nos. 28 and 29 are defective when the proper operation of the uncoupling mechan-
ism is interfered with.
Nos. 30 and 31 are defective when interfering with proper operation of uncoupling
lever to the coupler for which it was designed.
No. 32. Under this head report all uncoupling levers which are too long, too short,
too close to cars or other parts; give details to each.
Judgment should be used in connection with the defects under No. 32.
SAFETY APPLIANCES. 29}
DEFECTS OF VISIBLE PARTS OF AIR BRAKES.
41. Defective triple-valve casting.
42. Defective reservoir casting.
43. Defective cylinder casting.
44. Defective cut-out cock.
45. Defective release cock and broken release rods.
46. Defective angle cock.
47. Defective train pipe (broken or loose).
48. Defective cross-over pipe.
49. Defective hose.
50. Defective hose gasket. -
51. Defective brake rigging, beams, or brake shoes.
52. Defective retaining valve.
53. Defective retaining-valve pipe.
54. All missing parts.
55. Air brakes cut out; when possible give reason why.
56. Whether cylinder or triple valve has been cleaned in six months preceding.
57. Whether locomotives moving interstate traffic are equipped with driver brakes
and appliances for operating the train brakes.
| NOTE.
Defects Nos. 41, 42, 43, and 48 are such as ordinarily only exist after cars have been
wrecked, but are mentioned here to define the defects of visible parts.
DEFECTS TO BIANDHOLDS.
81. Handholds missing.
82. Handholds improperly applied.
83. Handholds bent.
84. Handholds broken.
85. Handholds loose.
NOTE.
Application of handholds and grab irons should be governed by recommended
practice of the M. C. B. Association. *
A standard location for these parts is essential for safe operation at all times, and
especially at night. -
l
292 REPORT OF THE INTERSTATE COMMERCE COMMISSION.
DEFECTS IN HEIGHT OF DRAWBARS.
91. Empty cars too high.
92. Empty cars too low.
93. Loaded cars too low.
94. Loaded cars too high.
95. Loose carrier iron or stirrup.
DEFECTS TO STEPS.
96. Bent side sill step.
97. Loose side sill step.
98. Broken side sill step.
NOTE.
On standard-gauge roads the maximum height is 34% inches, measured from level
of tops of rails to the center of the drawbar (coupler body) or corresponding line in
coupler head. Greatest variations allowed from such standard height between draw-
bars of empty and loaded cars is 3 inches.
On narrow-gauge roads the maximum height is 26 inches; extreme variation
allowed between drawbars of empty and loaded cars is 3 inches.
Inspectors must exercise judgment in determining defects of this class. See that
car is standing on an approximately level track before measurements are taken.
Minimum height for loaded or empty cars, standard gauge, is 31% inches. An
empty car having a drawbar 31% inches high is defective, because when loaded it
must fall below the minimum of 31% inches.
TABLE SHOwing DEFECTs of PARTs of RAIPWAY EQUIPMENT As
REpoRTED BY THE INSPECTORS OF THE
MonTHS ENDING JUNE 30, 1901.
a Cars that have been reported defective on account of split ke
binoperative for cause unknºwn.
c Hoth inner castings and end locks included. . .
aíncludes only those where proper operation is interfered with.
eIncludes ungoupling-rod handles too clºse to gar º
staff, or on retaining-valve pipe, and uncoupling rod not adj
usted to lockingpin.
y missing from knuckle pin are omitted from this table.
to end sill, or to truss-rod nut, and uncoupling rod binding on brake
the twelve months preceding
preceding inspection are omitt
TOTAL SUMMARY.
YEAR ENDING JUNE 30, 1901.
ITEM.
September. October. November. December. January. Feb
Total cars inspected --------- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7, 57.1 8, 219 10, 186 11, 566 10, 695
Cars defective --------------------------------------------------------......... 1,795 2,109 1,284 1,864 1,993
Per cent of total cars inspected ------------------------------............... 23.71 25. 66 12. 60 16. 12 18.64
Number of defects reported --------------------------------------...............! 2, 125 2,605 1,859 2,223 2,499
Percent of total cars inspected -------------------------------..............] 28. 07 31.70 1S. 25 19. 22 23. 37
Cars inspected having link and pin drawbars" 47 160 619 140 365
Per cent of total cars inspected. ---------------------------------............ .62 1.95 6.08 1.22 3.41
*Cars having link and pin drawbars are included in “total cars inspected,” but they are not classed as “defe
1881–02 (Face page 293.)
fincluded in No. 47, “Defec
# Cars cut out with no card atºhed showing cause.
*Includes only cars having nºtºncil marks show
Rules for - NUMBER of DE-
inspec- NuMEER of DEFEcts REPORTED For THE YEAR ENDING JUNE 30, 1901. jº REPORTED
tion
tº: Per cent Per gent Per cent | Per cent
§. KIND OF DEFECT. - * | *|† ºf * º! ºf
º July. August. sº october. " º Pº January. Fº March. April. §§§ |.
ber.) 1900.
COUPLERS AND PARTS.
1 Broken coupler body..................................... 7 1. 9 16 S 5 1. 60 0.25 2.53 13 1 14 0.20 3.12
2 Broken knuckle.......................................... 6 3 9 10 3 14 6 60 .25 2.53 3 .......... 3 .04 .67
3 Broken knuckle pin...................................... 3 5 9 48 31 54 30 203 .84 S. 55 1. 3 4 .06 . 89
4. Broken locking pin or block............................. 4 10 5 7 12 9 17 90 . 37 3. 79 19 |.......... 19 . 27 4. 23.
5 | Bent locking pin or block................................ 2 3 1 ---------- 2 |----------|----------|---------. 27 . 11 1.14 83 2 85 1.18 18.93
6 Wrong locking pin or block..............................| 2 || 1 ||---------- 2 ---------- 2 |....... ---|----------|----------| 1 || || 3 |.......... 11 . 05 .46 4 2 6 .08 1. 34
7 | Wrong knuckle pin ......................................]. - 1 25 33 22 39 28 73 45 295 1.22 12.43 1 2 3 . 04 .67
8 worn locking pin or block............................................................. |---------- 1 ----------|---------- 1 ||---------........... 5 .02 .21 1 ---------- l .01 .22
9 Worn couplers or knuckles:
1 Couplers............ . . . . . . . . . . . . . . . . . . . . . . . . ..................--|----------|----------|----------|----------|----------|----------|----------|----------| 1 |...-------|---------- 1 ---------- .04 --------------------|----------|----------|----------
2 Knuckles............................................. 1 ---------- 1 1 4 ---------- 1 |---------. 6 || 2 |... . . . . . . 18 . 07 . 76 6 ---------- 6 . 08 1.34
10 Short guard arm ........................ . . . . . . . . . . . . . . . . . [........--|----------|----------|----------|----------|----------|----------|----------|----------|-----------...------|----------|----------|----------|----------|----------|----------|-- " " ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' '.
11 Missing parts of coupler: a
1. Coupler body..........................................------- t-ſ----------|---------- 2 ---------. 2 ---------. 2 ----------|----------|-........l.......... 6 .02 .25 4 ---------- 4 .06 . 89
2 Knuckle - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 3. 4. 2 5 6 7 ----------| 1 |... --------|- - - - - - - - - - 28 . 12 1.18 2 ---------- 2 .03 .44
3 Locking pin or block. . . . . . ---------------------------|----------|---------- 1. 6 S S 2 7 6 1. 1 1.......... 40 .17 1.69 10 ---------- 10 . 14 2.23
4 Knuckle pin -----------------------------------------|-------....... ------|---------- 3 ---------- 4 |-----..... 4 ||------................--------|---------- 11 .05 .46 2 ---------- 2 . 03 . 44
5 Split key from locking pin --------------------------- 73 76 184 143 216 197 97 53 62 79 101 79 1, 360 5. 61 57. 29 161 92 253 3. 52 56.35
6 Trigger-----------------------------------------------|------........ ------|----------|----------|---------- 3 |----------|----------|---------. 1 |... --------|---------- 4 .01 17 -----...............!----------|----------|----------
12 Inoperative lock b. -------........... --------------------. 23 10 23 20 11 7 11 5 3 18 15 6 147 . 61 6.19 |... . . . . . . . 36 36 . 50 8.02
13 Bent knuckle pin ---------------------------------------- 8 ... -------|---------- 1 4 ----------|----------|--------------------|--------...---------|-------... 8 . 03 .33 .......... 1 1 .01 .22
Total ---...----------------------------------------- | Til. Tº 259 238 300 349 201 233 177 147 144 119 2,374 9.80 100 310 139 449 6.25 100
==
UNCOUPLING MECHANISM.
21 Broken uncoupling lever -------------------------------- 4. 1 3 6 11 S 8 3 6|........ 8 61 0.25 0.38 19 2 21 0.29 0.32
22 Broken chain ..... --------------------------------------. 223 41 485 406 259 350 332 415 327 334 127 300 3,599 14.85 22.37 1, 774 238 2,012 27. 99 30.57
23 Broken end lock ----------------------------------------- 6 1 13 19 14 12 27 18 16 7 7 7 147 . 61 .91 c 53 5 58 ... 81 . 88
24 Broken inner casting------------------------------------- 3 |... -------|---------- 3 6 6 8 15 10 2 19 12 84 . 35 . 52 ---------. 3 3 .04 . 05
25 Bent uncoupling lever "---------------------------------- 67 28 105 112 92 180 72 42 46 57 61 101 913 3. 77 5, 68 368 111 479 6.66 7.28
26 Chain too short------------------------------------------- 16 5 12 10 12 26 21 14 15 17 14 16 178 . 73 1. 11 44 24 68 .95 1.03
27 Chain too long ------------------------------------------- 159 40 204 161 164 199 107 112 90 239 84 188 1,747 7.21 10.86 763 270 1,033 14.37 15. 69
28 Loose end lock ... ---------------------------------------- 34 28 127 147 118 180 240 354 209 212 104 145 1,898 7.83 11.80 c 1, 110 118 1,228 17. OS 18.66
29 Loose inner casting -------------------------------------- 178 46 354 316 229 276 297 309 235 204 106 137 2,687 11.08 16.70 |... . . . . . . . 108 108 1.50 1. 64
30 Wrong end lock ------------------------------------------ 23. 8 49 246 80 107 118 101 152 83 25 40 || 1,032 4.26 6.42 c 21 68 89 1.23 1. 35
31 Wrong inner casting -------------------------------------|--------------------|----------|----------|----------|--------------------|---------- 1 ---------. 5 6 12 .05 .07 |..........!..........!------------------------------
32 Uncoupling lever incorrectly applied"------------------- 139 97 287 524 290 229 203 83 332 188 166 177 2,715 11.20 16. 87 781 303 1,084 15.08 16.46
32 a | Uncoupling lever wrong dimensions:
1. Long ------------------------------------------------- 4. 1 11 5 6 5 7 2 2 12 10 4 69 . 28 .43 8 7 15 .21 . 23
2 Short ..... -------------------------------------------- 2 1 3 |---------. 6 1. 5 - - - - - - - - - - 1 4 4 4 31 , 13 . 19 20 1. 21 . 29 . 32
3 Large------------------------------------------------- 2 2 4 3 |.......... 1 ----------|----------|----------|----------|----------|---------- 12 . 05 .07 |.......... 4 4 .06 - 06
4 Small-...--------------------------------------------- 1 ... ------- 2 ----------|-----.....l.......... 1 ----------|----------|---------- - - - - - - - - - - ----------- 4 .01 .02 26 3 29 . 40 .44
33 Missing parts of uncoupling mechanism:
1 Rods. ------------------------------------------------- 9 1 22 26 67 98 90 34 34 58 19 52 505 2.08 3.14 77 3 S0 1. 11 1.22
2 Chains. ------...-------------------------------------- 8 ... ----------------- 1 7 3 11 3 6 6 1 6 47 . 19 . 29 23 |.......... 23 . 32 . 35
3 End locks. -------------------------------------------|----------|---------- 2 3 1 7 7 16 8 9 7 15 75 . 31 .47 c 206 14 220 3.06 3.34
4. Inner castings.----------------------------------------|----------|----------|---------- 7 3 10 3 12 6 2 4 5 52 . 22 .32 ---------------...... ---------|----------|------....
5 Clevis ------------------------------------------------|---------- !--------------------|-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - --|--------------------|----------|----------|----------|----------|--------------------|- - - - - - - - - - -----------------------------
6 Clevis pin --------------------------------------------|----------|----------|----------|----------|---------- 6 2 9 - - - - - - - - - - 5 |.................... 22 . 09 . 14 ..................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 Clevis pin split key-----------------------------------|--------------------|----------|-------------------- 7 31 44 26 22 |..........l.......... 130 . 54 .81 |......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8 Clip :------------------------------------------------- 3 .01 .02 -----------------...--------------------|----------
34 Chains kinked ......... ---------------------------------- 32 . 13 . 20 1 2 3 . 04 .05
35 Bent end lock -------------------------------------------- 19 .08 . 12 . . . . . . . . . . 4 4 . 06 . 06
36 Loose clip ------------------------------------------------ 7 . 03 .04 |.......... |----------- ---------- ---------------------
37 Broken clevispin 8 . 03 .05 |.......... ---------- |.......... ---------------------
Total ------------------------------------------------ 1,29 16,089 66.37 100 5,294 | 1,288 6,582 91.55 100
VISIBLE PARTS OF AIR BRAKES. -
41 Defective triple-valve casting. ----...-----...-------------|----------|----------|---------- 1 .... . . . . . . 1 ---------- 1 9 1. ... .. - - - - - - - - - - 13 0.05 0.39 ----------|------...-----------|--------------------
42 Defective reservoir casting---------------------------------------------------|----------|----------|----------------------------------------|----------|----------|--|-- ............ ----------------------------------------------------------------------------------------------
43 Defective cylinder casting -------------------------------|----------|----------|----------|----------|----------|----------|----------|----------|----------|----------|---------. --------------------------------------------------------------------------------------------------
44 Defective cut-out cock........................ -------------------------------|----------|----------|------...---------------------|----------|---------- 1 -------------------- 1 |---------- .03 --------------------|------------------------------
45 Defective release cock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...l.. -------. |----------|----------|------------------------------|----------|- - - - - - - - - - - - - - - - - - - - 32 45 77 . 32 2.28 ----------|--------------------|-------------------.
1. Broken release rod -...-------------------------------|----------|---------. ------------------------------------------------------------------------------------------ ------|----------|- - - - - - - - - - - - - - - - - - - - - ---------|----------|----------|----------|- - - - - - - - - - - - - - - - - - - -
46 Defective angle cock-------------------------------------|----------|---------- |.................... 1 S 2 ---------- 2 4 7 9 33 . 14 .98 |.---------|----------|-------------------. |..........
47 Defective train pipe -------------------------------------- 1 1 2 4 3 12 9 4 13 28 36 28 141 .58 4, 18 9 2 11 0.15 42. 31
1 Loose f----------------------------------------------------------------------------------------------------------------------------------------------------|--- - ------------------------------------------------------------------------------------------------------
2 Broken f........... ------......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -------------------------------------------------------------------------------------- - -------- --------------------------------------------------------------------------------------------
48 Defective cross-over pipe---------------------------------|----------|...... ---------------------------------------------------------------------------------------- 2 1 3 .01 .09 ----------|----------|------------------------------
49 Defective hose .....................................................i.................... 1 .......... 1. 5 |..........' *2 2 || || 1 4 16 . 07 .47 l....................... -------|---------- ..........
50 Defective hose gasket ------------------------------------|----------...-------|---------. |-------------------------------------------------- 9 7 ... -- 3 19 .08 . 56 |----------|----------|-------------------- ----------
51 Defective brake rigging ----------------------------------|--------------------|---------. 2 .......... 1 1. ---------|---------. 2 . --------- 4 4 13 .05 , 39 2 .......... 2 . 03 7. 69
52 | Defective retaining Valve --------------------------------|----------|--------- ------------------------------------------- 1. 1. 10 19 4 7 42 . 18 1.25 ----------|--------------------|--------------------
53 | Defective retaining-Valve pipe--------------------------- 1 |.......... 2 3 1. --------. 1. 7 6 14 19 14 41 107 .44 3.17 12 |.......... 12 . 17 46.15
54 Missing parts: -
1. Hose -------------------------------------------------|----------|-- - - - - - - - - 2 10 7 3. 10 44 11 º -4 3 100 - 41 2.96 1 ---------- 1. .01 3. 85
| 2 Angle cock -------------------------------------------|----------|----------|---------- 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 - - - - - - - - - - ------------------ 5 02 .15 ---------........ ................................
3 Retaining valve. -------------------------------------|----------|----------|--------------------|-------------------- 1 ----------|----------|---------- ---------- 4. 5 .02 15 ---------|-----.....l..........l....................
4 Pipe clamp ----------------------------------------------------- |----------- | `--------|----------|----------|----------|----------|--------------------|---------- - - - - - - - 2 2 .01 . 06
5 Release rod.............-----------------------------------------|---------- |--------------------|----------|----------|----------|--------------------|---------- .......... 2 2 .01 .06
6 No brakes of any kind ----------------------------------------|---------- - - - - - 2 --------------------------------------------------|---------- - - - - - - - - - - - - - - - - - - - - 2 .01 .06
55 Airbrakes cut Out? ----------------------------------------------------------- ----------------- 1. 25 434 92 280 259 138 354 1,583 6. 53 46.93
56 Cylinder and triple valve not cleaned in prior 12 months" . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -------------------------------------------------- 67 85 142 660 954 3.94 28. 28
1. Date of cleaning cylinder and triple Valve not shown-----------|.......................-------|........................................ 13 53 85 104 255 1.05 7, 56
Total ......... --------------------------------------- 2 1 6 24 12 52 469 14S 4:36 483 469 1,271 3,373 13.92 || 100
HAND HOLDS. -
81 Hand holds missing -------------------------------------- 41 55 5 9 16 254 37 | 6 44 473 1.95 21. 74 4 ---------- 4 0.06 3. S1
82 Hand holds improperly applied-------------------------- 7 3 |.......... 3 4 80 37 | 49 34 217 . 90 9.97 ----------|-----...................................
83 Hand holds bent ----------------------------------------- 215 69 107 164 71 155 92 | 74 51 1, 194 4.93 54.87 71 18 S9 1.23 84. 76
84 Hand holds broken--------------------------------------- 7 4 5 3. 3 - - - - - - - - - - 1 || 1 3 27 . 11 1.24 |---------------...................................
85 Hand holds loose........ --------------------------------- 36 13 15 32 13 35 64 17 20 265 1.09 12.18 12 - ......... 12 . 17 11.43
Total . . . . . . . . . . . . . . . -------------------------------- 306 144 132 211 107 524 231 147 152 2, 176 8.98 100 87 1S 105 1.46 100
HEIGHT OF DRAWBARS.
91 Empty cars too high.------------------------------------- 2 1 -------------------- 3 ..........l....... --- 1 ---------- 7 0.03 S. Sö 2 - - - - - - - - - - 2 0.03 8.33
92 Empty cars too low--------------------------------------- 3 2 3 5 13 4 2 | 2 1 36 .15 45. 57 12 2 14 . 20 58.34
93 Loaded cars too low-------------------------------------- 5 1. 6 6 |.......... 1 1 | 1 3 30 . 12 37. 97 6 . . . . . . . . . . 6 . OS 25.00
94 Loaded cars too high.------------------------------------|--...................................... 1. 1. 2 1 . . . . . . . . . . 1 ... ------|-----. . . . . 6 .03 7.60 2 . . . . . . . . . . 2 . 03 8.33
Total ........ --------------------------------------- 10 5 10 13 17 5 4 4 4 79 .33 100 22 2 24 . 34 100
CARRIER IRON.
95 Loose carrier iron ...------------------------------------- 13 - . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |................... 2 9 24 0.10 ! . . . . . . . . . . 2 .......... 2 0.03 |... . . . . . . .
Total ----------------------------------------------- 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 9 24 ... 10 100 2 - - - - - - - - - - 2 .03 . . . . . . . . . .
SIDE STEPS.
96 Bent side sin step ---------------------------------------- 4. 14 6 5 5 6 |-------- 5 50 0.20 40.99 |- - - - - - - - - - 1. 1 0.01 . . . . . . . . . . .
97 Loose side sill step --------------------------------------- 6 11 4. 4 2 8 23 ... . . . . . . 2 65 . 27 53.27 ----------|-----.....l..........
98 || || Broken side sill step--------------------------------------| 1 ||................... . . . . . . . . . . 2 1 |.......... 1. 2 - - - - - - - - -...--------|------.... 7 .08 5.74 || | | | | |
Total . . . . . . . . . -------------------------------------. 10 27 11 9 S 16 24 || || ------ 7 122 .50 | 100 |.......... 1 1. .01 . . . . . . . . . .
Grand total. . . . . . . . . . . . ... -----------------------... 2,605 1,859 2,223 2,499 2, 104 2,679 2,356 1,536 2,791 24, 237 100 . . . . . . . . . . 5,739 1,450 7, 189 100 ..........
train pipe.”
ing date of gleaning, or having marks showing that they were not cleaned in
*On, Cars originally reported on account of not being stenciled as cleaned in the six months
05
77
1S
04
97
53
16
PERIOD.
TOTAL. . TOTAL.
March. April. months
pril May. June. ending * June, 1900.
9,070 9,639 6,028 8,977 98,624 14,000 3, 669 17,669
1,795 1,929 1, 375 2, 341 19,462 4,618 1, 167 5,785
19.79 20.01 22. 81 36.08 19.73 32, 98 31. 81 32.74
2, 679 2,356 1,536 2,791 24, 237 5,739 1,450 7, 189
29. 53 24.45 25. 48 31.09 24.58 40.99 39, 52 40.68
555 200 35 65 2,489 |..............!--------------------------
6. 12 2.08 . 58 . 72 2.47 .............. [...------...--------------
* x
**ccount of having these drawbars.










AIPPIENDIX E.
LAW RELATING TO ACCIDENT REPORTS,
293
[PUBLIC–No. 171.]
AN ACT Requiring common carriers engaged in interstate commerce to make full reports of all
accidents to the Interstate Commerce Commission.
Be it enacted by the Senate and House of Representatives of the United States of America
in Congress assembled, It shall be the duty of the general manager, superintendent, or
other proper officer of every common carrier engaged in interstate commerce by
railroad to make to the Interstate Commerce Commission, at its office in Washington,
District of Columbia, a monthly report, under oath, of all collisions of trains or
where any train or part of a train accidentally leaves the track, and of all accidents
which may occur to its passengers or employees while in the service of such common
carrier and actually on duty, which report shall state the nature and causes thereof,
and the circumstances connected therewith.
SEC. 2. That any common carrier failing to make such report within thirty days
after the end of any month shall be deemed guilty of a misdeameanor and, upon con-
viction thereof by a court of competent jurisdiction, shall be punished by a fine of
not more than one hundred dollars for each and every offense and for every day
during which it shall fail to make such report after the time herein specified for
making the same.
SEC. 3. That neither said report nor any part thereof shall be admitted as evidence
or used for any purpose against such railroad so making such report in any suit or
action for damages growing out of any matter mentioned in said report.
SEc. 4. That the Interstate Commerce Commission is authorized to prescribe for
such common carriers a method and form for making the reports in the foregoing
section provided.
Approved, March 3, 1901.
295
- * , i.” *
NTOs. 21, 22, 23, 24-.
In The United States Commerce Court.
APRIL TERM, 1911.
GooDRICH TRANSIT CoMPANY, PETITIONER,
w Q). -
INTERSTATE COMMERCE COMMISSION, RESPONDENT.
GOODRICH TRANSIT COMPANY, PETITIONER,
Q). f
INTERSTATE COMMERCE COMMISSION, RESPONDENT.
WHITE STAR LINE, A CORPORATION, PETITIONER,
Q).
THE UNITED STATEs, RESPONDENT.
WHITE STAR LINE, A CoRPORATION, PETITIONER,
7). -
THE UNITED STATES, RESPONDENT.
HEARING ow DEMURRERs To BILLS AND MOTIows To DISMIss
PETITIONS.
BRIEF ON BEHALF OF THE INTERSTATE COMMERCE
s COMMISSION. t
By CHARLEs W. NEEDHAM,
Attorney for the Commission.
3.
In The United States Commerce Court.
APRIL TERM, 1911.
GOODRICH TRANSIT Co., PETITIONER,
Q). No. 21.
INTERSTATE COMMERCE COMMISSION.
GooDRICH TRANSIT Co., PETITIONER,
Q). No. 22.
INTERSTATE COMMERCE COMMISSION.
WHITE STAR LINE, PETITIONER,
Q). No. 23.
THE UNITED STATES. -
WHITE STAR LINE, PETITIONER,
Q). No. 24.
THE UNITED STATES.
HEARINGS ON DEMURRERS TO BILLS AND MOTIONS TO
DISMISS PETITIONS.
BRIEF ON BEHALF OF THE INTERSTATE COMMERCE .
COMMISSION.
PLEADINGS.
The motions to dismiss the petitions, in Nos. 23 and
24, were made under the provision contained in sec-
tion 1 of the act to create a Commerce Court, which
reads:
No replication need be filed to the answer,
and objections to the sufficiency of the peti-
90627—11—1
2
tion or answer as not setting forth a cause of
action or defense must be taken at the final
hearing or by motion to dismiss the petition based
on Said grounds, which motion may be made at
any time before answer is filed. In case no
answer shall be filed as provided herein the peti-
tioner may apply to the court on notice for
such relief as may be proper upon the facts
alleged in the petition.
The provisions in the act in reference to pleadings
and procedure in the Commerce Court are quite
complete and change in some particulars the regular
equity pleading and practice. Under common equity
pleading the sufficiency of the bill would be raised
by demurrer. In the event the demurrer is overruled
and the defendant stands by his demurrer, the court
may proceed to hear and grant relief upon the bill
without answer. In this section of the Commerce
Court act the first pleading is called a “petition,”
and to test its sufficiency before answer the defendant
may file a motion to dismiss. If the motion is over-
ruled, the defendant may stand by his motion, in
which event, “no answer being filed,” the court may
proceed to grant “such relief as may be proper upon
the facts alleged in the petition.”
The motions to dismiss, therefore, raise the same
issues, and have the same effect, as a demurrer in
ordinary equity pleading; they are not the same, nor
analogous to, motions to dismiss in equity, and are
therefore treated in this brief as having the same
standing and effect as the demurrers to the bills in
Nos. 21 and 22.
3
The bills and petitions set out in full the “orders”
of the Interstate Commerce Commission that are
complained of, and the “circulars” calling for re-
ports and classifying accounts to be kept by “carriers
by water” are attached as exhibits. The bills
and petitions contain allegations giving the com-
plainants inferences, conclusions of law, and argu-
ments as to the powers of Congress, the powers of
the commission, and the purposes and effects of each
order and circular. These allegations are not ad-
mitted by the demurrers or motions. This ruling
was stated in an action upon an indenture of mort-
gage; the indenture being set out as an exhibit to the
bill, the Supreme Court of the United States said:
The averments of the bill as to the purport
and meaning of the provisions of the indenture,
the object of their insertion in the instrument,
and the obligations they imposed upon the
corporation and the trustees, and the rights
they conferred upon the plaintiff when his con-
tract was approved, are not admitted by the
demurrer. These are matters of legal inference,
conclusions of law upon the construction of the
indenture, and are open to contention, a copy
of the instrument itself being annexed to the
bill and, therefore, before the court for inspec-
tion. A demurrer only admits facts well
pleaded; it does not admit matters of inference
and argument however clearly stated; it does
not admit, for example, the accuracy of an
alleged construction of an instrument, when
the instrument itself is set forth in the bill or
a copy is annexed, against a construction re-
4
quired by its terms; nor the correctness of
the ascription of a purpose to the parties when
not justified by the language used. The sev-
eral averments of the plaintiff in the bill as to
his understanding of his rights and of the
liabilities and duties of others under the con-
tract can, therefore, exert no influence upon
the mind of the court in the disposition of the
demurrer. (Dillon v. Barnard, 21 Wall., 430.)
STATEMENT OF FACTS.
The facts alleged, which are admitted by the de-
murrers, briefly stated, are: $ -
That the complainants are corporations organized
under the laws of the States named; that they are
engaged in the transportation by water of passengers
and freight for hire upon the Great Lakes and the
rivers and tributaries thereto; that they own and op-
erate steamers, own, lease, and occupy certain docks
in various States bordering on the lakes and rivers
and tributaries; that their business consists in carry-
ing passengers and freight as follows: (a) Originating
at ports in one State destined to ports in another
State, the transportation being entirely by water
unconnected with any land transportation, commonly
known as “port-to-port interstate business;” (b) pas- &
sengers and freight originating at, and, destined to,
ports in the same State, not passing out of said State
en route, commonly known as “port-to-port intrastate
business;” (c) they have “voluntarily agreed with
some of the interstate railroad carriers of the United
States to establish certain through routes over which
5
passengers and freight are carried under joint tariffs;
that for the purpose of establishing such through
routes,” they have “voluntarily filed with the Inter-
state Commerce Commission joint tariffs or concur-
rence in tariffs filed by said railroad carriers.” This
transportation is commonly known as interstate busi-
ness partly by railroad and partly by water under a
common arrangement for a continuous carriage or
shipment.
In cases 23 and 24 the White Star Line also car-
ries passengers and freight entirely by water, un-
connected with any land transportation, from points
in the United States to Canada, “an adjacent foreign
country.”
The White Star Line owns and operates two
amusement parks in the State of Michigan, and in
connection therewith “owns, operates, and derives
revenue from lunch stands, merry-go-arounds, bowl-
ing alleys, bathhouses, souvenir stands, photograph
galleries, boat liveries, and launch ferries,” and
collects admission fees from people entering said
amusement parks. -
The other minor allegations of fact are: The per-
centage of revenue derived from interstate and intra-
state business; that they have no power to condemn
property for their uses; no monopoly of docking and
terminal facilities; that other persons or corpora-
tions are free to carry on the same business over
waters of the United States in competition with com-
plainants; the issuance of the orders by the commis-
sion; that they have received copies of such orders
6
and circulars; and that in order to comply with the
order and circulars requiring a classification of oper-
ating revenues and expenses they will have to open
new books and change their present method of ac-
counting, which involves expense.
They allege that the orders and circulars are void
for the following reasons:
As to the reports:
(a) Because Congress was without power to make
such inquiries or investigations itself, or to require
answers to the interrogatories propounded in said
Circular No. 10.
(b) Because Congress was without power to dele-
gate such authority to the Interstate Commerce Com-
mission. .
(c) Because Congress did not delegate such power
to the Interstate Commerce Commission.
(d) Because the inquiries are not limited to inter-
state business or joint rail and water business.
(e) Because the exercise of such power by Con-
gress or by the commission is in violation of the
fourth amendment of the Constitution of the United
States, prohibiting unreasonable search or seizure.
(f) Because the information sought is a property
right of complainant and is a taking without com-
pensation and without due process of law.
As to classification of accounts:
(a) Because the order and circulars requiring a .
classification of revenue and expenses are not the
regulation of interstate commerce, but are a regula-
7
tion of the internal affairs of the corporation of the
State of Michigan.
(b) Because Congress was without power to estab-
lish such rules and regulations itself.
(c) Because Congress was without power to dele-
gate such authority to the Interstate Commerce
Commission.
(d) Because Congress did not have power to dele-
gate its legislative power.
(e) Because Congress did not delegate such power
or authority to the Interstate Commerce Commission.
(f) Because said bookkeeping methods are not
reasonably adapted to the performance of any lawful
duty imposed by the act to regulate commerce on
the Interstate Commerce Commission, and because
there is no legitimate relation between said orders
and commerce between States, or facilities and in-
strumentalities for carrying on same.
(g) Because the right to keep books in such manner
and in accordance with such rules as seem to the com-
plainant appropriate is a property right, and the
order and circulars are a taking of this property
right without compensation and without due process
of law in violation of the fifteenth amendment to the
Constitution of the United States.
These objections, stated by the complainants in the
bills and petitions, will be considered and discussed
under general heads.
8
BRIEF AND AIR.G.UMENT.
I.
What are the primary objects of the commerce clause
of the Federal Constitution and the act to regulate
COmmerce?
The Supreme Court of the United States, speaking
through Mr. Chief Justice Marshall, said:
It describes the commercial intercourse be-
tween nations, and parts of nations, in all its
branches, and is regulated by prescribing rules
for carrying on that intercourse.
In the same case Mr. Justice Johnson said:
The great and paramount purpose, [of the
Constitution] was to unite this mass of wealth
and power, for the protection of the humblest
individual; his rights, civil and political, his
interests and prosperity, are the sole end; the
rest are nothing but the means. * * *
Commerce in its simplest signification, means
an exchange of goods; * * * the subject,
the vehicle, the agent, and their various opera-
tions, become the objects of Commercial regula-
tion. (Gibbon v. Ogden, 9 Wheat., 1.)
Speaking through Mr. Justice Brown, in reference
to the act to regulate commerce, the Supreme Court
said:
The principal objects of the Interstate Com-
merce Act were to secure just and reasonable
charges for transportation; to prohibit unjust
discriminations in the rendition of like serv-
ices under similar circumstances and condi-
tions; to prevent undue or unreasonable prefer-
9
ences to persons, corporations, or localities; to
inhibit greater compensation for a shorter. than
for a longer distance over the same line; and
to abolish combinations for the pooling of
freights.
Interstate Commerce Commission v. Balti-
more & O. R. R. Co., 145 U. S., at page 276.)
Again referring to the powers of the commission the
Supreme Court, speaking through Mr. Justice Brewer,
said:
* * * It is charged with the general duty of
inquiring as to the management of the business
of railroad companies, and to keep itself informed
as to the manner in which the same is conducted,
and has the right to compel complete and full in-
formation as to the manner in which such carriers
are transacting their business. And with this
knowledge it is charged with the duty of seeing
that there is no violation of the long and short
haul clause; that there is no discrimination be-
tween individual shippers, and that nothing is
done by rebate or any other device to give prefer-
ence to one as against another; that no undue
preferences are given to one place or places or
individual or class of individuals, but that in
all things that equality of right, which is the
great purpose of the Interstate Commerce
Act, shall be secured to all shippers.
(Interstate Commerce Commission v. Cin-
cinnati, N. O. & T. P. R. Co., 167 U. S., a
page 506.) -
The primary purposes of the constitutional pro-
visions and the act are, to secure the uninterrupted
90627—11—2 -
10
flow of commerce throughout the United States,
and with foreign nations, upon equal terms, at
reasonable rates to all citizens and to prevent unjust
discrimination between places and shippers.
To secure these ends, Congress may regulate the
various operations and conduct of the agent and
adopt any means to secure the primary objects, the
only condition being that there shall be a substantial
connection between the objects sought and the means
proposed.
The Supreme Court, speaking through Mr. Justice
Harlan, said:
Of course, as has been often said, Congress has
a large discretion in the selection or choice of
the means to be employed in the regulation of
interstate commerce, and such discretion is not
to be interfered with except where that which
is done is in plain violation of the Constitu-
tion. Northern Securities Co. v. United States,
193 U. S. 197, and authorities there cited.
In this connection we may refer to Johnson v.
Railroad, 196 U. S. 1, relied on in argument,
which case arose under the act of Congress of
March 2, 1893, 27 Stat. 531, c. 196. That act
required carriers engaged in interstate com—
merce to equip their cars used in such com-
merce with automatic couplers and continu-
ous brakes, and their locomotives with driving
wheel brakes. But the act upon its face
showed that its object was to promote the
safety of employés and travelers upon rail-
roads; and this court sustained its validity
upon the ground that it manifestly had refer-
ence to interstate commerce and was calcu-
11
lated to subserve the interests of such com-
merce by affording protection to employés and
travelers. It was held that there was a sub-
stantial connection between the object sought
to be attained by the act and the means pro-
provided to accomplish that object. * * *
* * * Manifestly, any rule prescribed for
the conduct of interstate commerce, in order
to be within the competency of Congress
under its power to regulate commerce among
the States, must have some real or substantial
relation to or connection with the commerce
regulated.
(Adair v. United States, 208 U. S., at pages
177 and 178 and cases cited.)
II.
There is a substantial connection between the primary
objects to be attained and the provisions of section
20 of the act to regulate commerce and the orders
entered thereunder.
Consider the matter of determining what are rea-
sonable rates and the facts that must be taken into
consideration in the determination of the question.
The Supreme Court of the United States, speaking
through Mr. Justice Harlan, said:
We hold, however, that the basis of all
calculations as to the reasonableness of rates
to be charged by a corporation maintaining
a highway under legislative sanction must be
the fair value of the property being used by
it for the convenience of the public. And, in
order to ascertain that value, the original
12
cost of construction, the amount expended in
permanent improvements, the amount in mar-
ket value of its bonds and stock, the present
as compared with original cost of construc-
tion, the probable earning capacity of the
property under particular rates prescribed by
statute, and the sum required to meet oper-
ating expenses, are all matters for considera-
tion, and are to be given such weight as may
be just and right in each case. We do not
say that there may not be other matters to be
regarded in estimating the value of the prop-
erty. (Smythe v. Ames, 169 U. S., at page
546—547.)
This requires a knowledge of the organization of
the company, the original cost of its equipment, and
the items that are yearly going into permanent
improvements, adding to its value. These facts are
to be found in the carriers records and accounts.
It was held that in fixing rates the earnings of the
entire line of a company must be taken into consid-
eration as against all its legitimate expenses. (St. L.
& S. F. R. R. Co. v. Gill, 156 U. S., 649; M. & St. L.
R. R. Co. v. Minnesota, 186 U. S., 257.)
The knowledge of the equipment owned by a carrier
and its use are material facts to be ascertained and
considered. (I. C. C. v. Ill. Cent. R. R. Co., 215
U. S., 452.)
Turning now to section 20, it will be observed that
Congress has specified the facts which shall appear in
the annual reports. These facts may be grouped
under two heads: First, those that relate to the organ-
13
ization, capitalization, and indebtedness of the cor-
poration; second, the amounts expended for improve-
ments, how expended, and the character of such
improvements, the earnings and receipts from each
branch of its business and from all sources, the
operating and other expenses, the balance of profit
and loss, and a complete exhibit of the financial
operations of the carrier each year, including an
annual balance sheet.
These facts are all substantially related to the pri-
mary objects sought to be attained by the act to regu-
late commerce and are necessary to conduct such
regulation in accordance with the law as stated in
the cases cited.
In a very able paper read before the Annual Con-
vention of Railroad Commissioners (1893), a paper
that received hearty approval from the convention,
Mr. Henry C. Adams said:
In order that the law against discrimina-
tion in rates may be self-enforced there must
be a uniformly organized and uniformly ad-
ministered railway system. Managers can
not be allowed the liberty of adopting unusual
methods of business, nor attorneys the right of
urging before the commission peculiar policies
of management, as defense for unusual meth-
ods. All orders pertaining to transportation
must be clear, simple and easily understood.
* * * Now, the easiest way, indeed the only
way, or at least the first step toward the way,
by which uniformity of management may be
secured is to establish uniformity in accounts
14
and to take from railway officials the right of
adjusting their accounts in an arbitrary man-
ner. Accounts, if they be honest, are true
records of administration, and he who controls
accounts can, in a large measure, control the
policy of management. * * * And what
is more important, they [the commissioners]
would be in a position to secure evidence
against a carrier guilty of discrimination more
easily than at the present time. And more
than this, uniformity in accounts and strict
supervision over them provides a new way
of testing the compliance of the carriers with
the rules of the commissioners. Statistics
properly used and adequately guided are the
surest means of detecting any general depar-
ture from established rules of management.
>}: >k >k >k >k
It is, however, absurd to speak of deter-
mining a just price with regard to any com-
modity whatever without having first deter-
mined the conditions of production. * * *
Determine, in the first place, the income
which a railway corporation actually needs.
Determine, in the second place, the business
which rightly belongs to the corporation by
virtue of its relation to the source and destina-
tion of freight. In the third place, classify all
freight according to a uniform classification.
>k >k >k
We can not evade the conclusion that the
public has no guaranty that rates will be just
and reasonable, whether made by commis-
sioners or by the managers of railways, except
they be made after a full investigation into the
15
conditions under which the service is ren-
dered. * * *
It seems, then, whether we consider the
question of railway discrimination, of just
and reasonable rates, or of stability in rates,
that a bureau designated especially for inves-
tigation and for imposing upon the railways
uniform methods of management is essential
to the realization of the commission idea.
(Fifth Annual Convention of Railroad Com-
missioners, pp. 44, 48, 49.)
These words of Mr. Adams are presented in connec-
tion with the admitted facts and the authorities cited
as reasoning which leads to the conclusion that there
is a very substantial relation between the provisions
of section 20, and the orders issued thereunder, with
the primary objects sought to be attained by the act
to regulate commerce. Indeed, it is impossible to
conceive how the Interstate Commerce Commission
could perform the plain duties devolved upon it
without having this information. The possession
of this knowledge is fundamental to an intelligent
and orderly administration of the law.
III.
The designation of carriers subject to the act, with
special reference to section 20.
Section 20 provides “That the commission is
hereby authorized to require annual reports from
all common carriers subject to the provisions of this act.”
This is mandatory, and to ascertain the carriers to
which the section applies we must examine section 1.
16
Section 1, in so far as it affects the question now under
discussion, provides that the provisions of this act
shall apply “to any common carrier or carriers en-
gaged in the transportation of passengers or prop-
erty wholly by railroad (or partly by railroad and
partly by water, when both are used under a common
control, management, or arrangement for a continuous
carriage or shipment) from one State or Territory
of the United States or the District of Columbia to
any other State or Territory of the United States or
the District of Columbia, or from one place in a
Territory to another place in the same Territory,
or from any place in the United States to an adja-
cent foreign country; * * * That the provisions
of this act shall not apply to the transportation of
passengers or property, or to the receiving, delivering,
storage, or handling of property wholly within one
State and not shipped to or from a foreign country
from or to any State or Territory as aforesaid.”
Speaking in reference to the power of Congress in
a case where ocean transportation was involved, the
Supreme Court, speaking through Mr. Justice Shiras,
said:
It would be difficult to use language more
unmistakably signifying that Congress had in
view the whole field of commerce (excepting
commerce wholly within a State) as well that
between the States and Territories as that
going to or coming from foreign countries.
In a later part of the section it is declared
that “the term “transportation’ shall include
all instrumentalities of shipment or carriage.”
17
Having thus included in its scope the entire
commerce of the United States, foreign and
interstate, and subjected to its regulations all
carriers engaged in the transportation of pas-
sengers or property, by whatever instrumen-
talities of shipment or carriage, the section
proceeds to declare, etc. (T. & P. Ry. Co. v.
I. C. C., 162 U. S., at page 212.)
Defining the meaning of the phrase “an arrange-
ment for a continuous carriage,” etc., the Supreme
Court, speaking through Mr. Justice Shiras, said:
It may be true that the “Georgia Railroad
Company,” as a corporation of the State of
Georgia, and whose entire road is within that
State, may not be legally compelled to submit
itself to the provisions of the act of Congress,
even when carrying, between points in Geor-
gia, freight that has been brought from another
State. It may be that if, in the present case,
the goods of the James & Mayer Buggy Co.
had reached Atlanta, and there and then, for
the first time and independently of any exist-
ing arrangement with the railroad companies
that had transported them thither, the Georgia.
Railroad Co. was asked to transport them,
whether to Augusta or to Social Circle, that
company could undertake such transporta-
tion free from the control of any supervision
except that of the State of Georgia. But
when the Georgia Railroad Co. enters into the
carriage of foreign freight, by agreeing to
receive the goods by virtue of foreign through
bills of lading, and to participate in through
rates and charges, it thereby becomes a part
90627—11—3 y
18
of a continuous line, not made by a consoli-
dation with the foreign companies, but made
by an arrangement for the continuous car-
riage or shipment from one State to another,
and thus becomes amenable to the Federal
act in respect to such interstate com-
merce. * * * *
All we wish to be understood to hold is
that when goods are shipped under a through
bill of lading, from a point in one State to a
point in another, and when such goods are
received in transit by a State common carrier,
under a conventional division of the charges,
such carrier must be deemed to have subjected
its road to an arrangement for a continuous
carriage or shipment within the meaning of
the act, to regulate commerce. When we speak
of a through bill of lading we are referring
to the usual method in use by connecting
companies, and must not be understood to
imply that a common control, management,
or arrangement might not be otherwise mani-
fested. (C. N. O. & T. P. Ry. Co. v. I. C. C.,
162 U. S., pp. 192–193.) -
It is admitted by this defendant that the intra-
state port-to-port business and the interstate port-
to-port business of the complainants are not directly
subject to the act of Congress. But this defendant
contends that the interstate business of the com-
plainants carried on in connection with rail carriers
“under a common control, management, or arrange-
ment for a continuous carriage or shipment,” partly
by water and partly by railroad, is subject to the
provisions of the act, and that the business of the
19
White Star Line in carrying passengers and freight
from ports in the United States to Canada, “an
adjacent foreign country,” is also subject to the provi-
sions of the act; that by reason of these facts the
complainants as agents of interstate commerce are
brought within the designation, occurring at the
beginning of nearly every section of the act, “common
carriers subject to the provisions of this act;” that
this not only subjects the business named to the
regulating power of Congress and the Commission,
but also brings these agents within the provisions of
section 20. -
It should be observed that to subject any of a car-
rier's business to the substantive law in a particular
section of the act, two facts must be established,
namely, (a) the carrier must be included within the
designation above quoted (carriers subject to the pro-
visions of this act), and (b) the substantive regulation
provided for in the section must be applicable to the
business of the carrier. To illustrate, suppose that a
complaint is filed with the Interstate Commerce Com-
mission alleging that the Pennsylvania Railroad Co.
has charged an unreasonable rate for the transporta-
tion over its line of a commodity named between sta-
tions A and B. The first inquiry is, Does this carrier
come within the designation of section 1, “Carriers
subject to the provisions of this act”? That question
answered in the affirmative, the next inquiry is,
Does this shipment come within the jurisdiction
of the Interstate Commerce Commission? If it ap-
pears that the shipment was purely an intrastate ship-
20
ment, then the substantive provisions of section 1
can not be applied, although the carrier is subject to
the provisions of the act. Thus we see that to make
any section in the act apply to any particular business
of a carrier, two facts must be found affirmatively:
(1) The carrier must be designated as coming within
the act, and (2) the substantive law of the section
must apply to the traffic. It thus appears that the
words designating the carrier are of equal force and
meaning in each section.
In the case at bar the inquiry made by one of the
members of the court to the effect, Is there any dif-
ference between regulating the accounts of a carrier
and regulating the rates to be charged? is the perti-
nent issue in determining whether the provisions of
section 20, requiring reports, etc., can be made to
cover receipts and disbursements in the intrastate
and port-to-port business of the complainants. If
there is no difference between regulating the financial
accounts of the agent and regulating the rates the
agent may charge for intrastate traffic, then section
20 does not apply to the accounts of intrastate and
port-to-port business. We contend that there is a
material difference between the substantive regula-
tion provided for in section 20 and the regulations
provided for in sections 1, 2, 3, and 4. The provi-
sions of section 20 have reference solely to acquiring
information and knowledge of the agent's business
upon which the commission may act in administer-
ing the substantive law contained in sections 1, 2,
3, and 4. A knowledge of all the financial accounts
21
of the carrier, as stated by Mr. Justice Brewer, is
necessary in order to regulate the business of the
carrier which is subject to the act. The complain-
ants clearly come within the designation of “carriers
subject to the provisions of this act.”
IV.
The power of Congress to require reports from and the
classification of accounts by, the complainants.
1. The power of Congress is determined by two
clauses in the Federal Constitution, which read as
follows:
(1) The Congress shall have power * * *
to regulate commerce with foreign nations,
among the several States, and with the
Indian tribes. (Art. I, sec. 8, par. 3.)
(2) The Congress shall have power to make
all laws which shall be necessary and proper
for carrying into effect the foregoing powers,
and all other powers vested by this Constitu-
tion in the Government of the United States,
or in any department, or any officer thereof.
(Art. I, Sec. 8, par. 18.)
‘. The nature and extent of the power of Congress
to regulate commerce was stated by Mr. Chief Justice
Marshall in Gibbons v. Ogden (9 Wheat. 1, 196),
where he said:
We are now arrived at the inquiry, What
is this power? It is the power to regulate;
that is, to prescribe the rule by which com-
merce is to be governed. This power, like
all others vested in Congress, is complete in
itself, may be exercised to its utmost extent,
22
and acknowledges no limitations, other than
are prescribed in the Constitution. * * *
If, as has always been understood, the sover-
eignty of Congress, though limited to specified
objects, is plenary as to those objects, the
power over commerce with foreign nations,
and among the several States, is vested in
Congress as absolutely as it would be in a
single government having in its constitution
the same restrictions on the exercise of the
power as are found in the Constitution of the
United States.
This clear and forceful definition has been adhered
to by that court, and the sentence above quoted
received approval by the court in the Employers'
Liability case (207 U. S., p. 493), where the court
quoted the above statement, following it with the
words, “Accepting, as we do and as has always been
done, this comprehensive statement of the power of
Congress.”
In the Lottery case, after reviewing all opinions in
that court bearing upon the question, the court said:
* * * They also show that the power to
regulate commerce among the several States
is vested in Congress as absolutely as it would
be in a single government, having in its consti-
tution the same restrictions on the exercise of
the power as are found in the Constitution of
the United States; that such power is plenary,
complete in itself, and may be exerted by Con-
gress to its utmost extent, subject only to such
limitations as the Constitution imposes upon
the exercise of the powers granted by it; and.
that in determining the character of the regula-
23
tions to be adopted Congress has a large discre-
tion which is not to be controlled by the courts,
simply because, in their opinion, such regula-
tions may not be the best or most effective
that could be employed. (188 U. S., p. 353.)
In the case of the Oyster Police Steamers of Mary-
land (31 Fed. Rep., 763) it was held that three
steam vessels belonging to the State of Maryland
not engaged in carrying freight or passengers, but
used to enforce the State fishery laws in the Chesa-
peake Bay, were liable to the penalties prescribed
by section 4499 of the Revised Statutes of the
United States, for failing to have their hulls and
boilers inspected by the United States inspectors,
under sections 4417 and 4418 of the Revised Stat-
utes. The court held that the “supreme and ex-
clusive control” of Congress of the navigable waters
of the United States— *
might be defeated, or rendered less effective
for its objects, if there were to be recognized
a class of vessels privileged to use them, with-
out being subject to those provisions which
Congress determines are required for the safety
of all. I am therefore unable to assent to
the contention that the fact that the vessels
in the present case are not used in commerce,
but solely for the police purposes of the fishery
force, prevents Congress from having the con-
stitutional power to legislate with regard to
them. It is not their use, but the fact that
they navigate the highways of commerce,
which brings them within the constitutional
grant of power, and within the language of
24
section 4400 of the act of Congress. (See also
the City of Salem, 37 Fed., 846.)
In the Katie (40 Fed. Rep., 480), the Circuit Court
for the Southern District of Georgia held that if inter-
nal commerce is affected, it is incidentally, merely;
and the purpose of Congress being legitimate, and
warranted by the Constitution, it is wholly immaterial
to the consideration of its validity that somewhere
it has a casual or contingent effect upon the domain
of State legislation.
In United States v. Colorado & N. W. R. Co. (157
Fed. Rep., 321), it was held that Congress may law-
fully affect intrastate commerce so far as necessary to
regulate effectually and completely interstate com-
merce, the Constitution reserving to Congress plenary
powers to regulate interstate commerce, and the Con-
stitution and acts of Congress in pursuance thereof
are the supreme law of the land.
In the recent Eichenberg case, which went to the
Supreme Court of the United States, it was decided
that where the commodity shipped to Galveston
originated at points outside as well as inside Texas it
was competent for the commission to forbid a prefer-
ence as to all the traffic; or, rather, stated negatively,
the fact that some of the traffic was intrastate did not
preclude the commission from ordering the preference
to cease to the individual doing both State and inter-
state traffic. (So. Pac. Term. Co. v. I. C. C., 219
U. S., 498.)
By an act of Congress it was declared that—
it shall not be lawful for the owner, master,
or captain of any vessel propelled in whole or
25
in part by steam to transport any merchan-
dise or passengers upon the bays, lakes, rivers,
or other navigable waters of the United States
after the first of October of that year, with-
out first having obtained from the proper
officer a license under existing laws; and pro-
viding a penalty, etc.
In March, 1868, the Daniel Ball, a vessel pro-
pelled by steam, was engaged in navigating Grand
River, in the State of Michigan, between the cities
of Grand Rapids and Grand Haven, in Lake Mich-
igan. It failed to take out the required license and
libel was filed against it. The river was wholly
within the State of Michigan and was not navigable
for lake steamers of large draft nor did the smaller
river steamers go upon the lake. It carried freight
“marked” for places outside the State and received
freight from outside the State to points within the
State. It does not appear, however, that there was
any through billing. It was contended that the
Daniel Ball was engaged wholly in internal com-
merce within the State of Michigan and was not,
therefore, required to be inspected or licensed under
the act of Congress “even if it be conceded that
Grand River is a navigable water of the United
States.” In discussion, the question of the naviga-
bility of the river the court said:
* * * And by its junction with the lake
it forms a continued highway for commerce,
both with other States and with foreign coun-
tries, and is thus brought under the direct control
of Congress in the exercise of its commercial
power. -
26
That power authorizes all appropriate legis-
lation for the protection or advancement of
either interstate or foreign commerce, and for
that purpose such legislation as will insure the
convenient and safe navigation of all the navi-
gable waters of the United States, whether
that legislation consists in requiring theremoval
of obstructions to their use, in prescribing the
form and size of the vessels employed upon
them, or in subjecting the vessels to inspec-
tion and license, in order to insure their
proper construction and equipment.
Discussing the power over the agent of interstate
commerce, the court said:
There is, undoubtedly, an internal com-
merce which is subject to the control of the
States. The power delegated to Congress is
limited to commerce “among the several
States,” with foreign nations, and with the
Indian tribes. This limitation necessarily ex-
cludes from Federal control all commerce not
thus designated, and of course that com-
merce which is carried on entirely within the
limits of a State, and does not extend to or
affect other States. (Gibbons v. Ogden, 9
Wheat., 194.) In this case it is admitted that
the steamer was engaged in shipping and
transporting down Grand River goods des—
tined and marked for other States than
Michigan, and in receiving and transporting up
the river goods brought within the State
from without its limits; but inasmuch as her
agency in the transportation was entirely
within the limits of the State, and she did not
run in connection with, or in continuation of,
27
any line of vessel or railway leading to other
States, it is contended that she was engaged
entirely in domestic commerce. But this con-
clusion does not follow. So far as she was
employed in transporting goods destined for
other States, or goods brought from without
the limits of Michigan and destined to places
within that State, she was engaged in com—
merce between the States, and however
limited that commerce may have been, she
was, so far as it went, subject to the legisla-
tion of Congress. She was employed as an
instrument of that commerce; for whenever
a commodity has begun to move as an article
of trade from one State to another, com-
merce in that commodity between the States
has commenced. The fact that several dif-
ferent and independent agencies are employed
in transporting the commodity, some acting
entirely in one State, and some acting through
two or more States, does in no respect affect
the character of the transaction. To the
extent in which each agency acts in that
transportation, it is subject to the regulation
of Congress.
In reply to the assertion that under this ruling
“Congress may take the entire control of the com-
merce of the country,” etc., the court said:
We answer that the present case relates to
transportation on the navigable waters of the
United States, and we are not called upon to
express an opinion upon the power of Congress
over interstate commerce when carried on by
land transportation. And we answer further,
28
that we are unable to draw any clear and dis-
tinct line between the authority of Congress
to regulate an agency employed in commerce
between the States when that agency extends
through two or more States, and when it is
confined in its action entirely within the limits
of a single State. If its authority does not
extend to an agency in such commerce, when
that agency is confined within the limits of a
State, its entire authority over interstate com—
merce may be defeated. (77 U. S., 557–566.)
A petition for mandamus was filed in the Circuit
Court of the United States for the Northern District
of Ohio by the Interstate Commerce Commission
against the Lake Shore & Michigan Southern Railway
Co. to compel it to make a report of the matters and
things specified in section 20 of the act to regulate
commerce. The case was appealed to the Supreme
Court and the discussion is wholly upon the question
of the jurisdiction of the Circuit Court to issue the
writ.
Speaking upon the general subject, however, the
court said:
Under section 12 the Commission is given
authority to inquire into the management of
the business of common carriers subject to the
act, and have the right to obtain from the car-
riers full and complete information to enable
it to perform its duties. It is also authorized
to enforce the provisions of the act.
By section 20 the Commission may require
annual reports and fix the time and prescribe
the manner in which such reports shall be
29
made. And it is made the duty of any district
attorney of the United States, to whom the
commission may apply, to institute in the
proper court and to prosecute under the direc-
tion of the Attorney General all necessary pro-
ceedings for the enforcement of the provisions
of this act. (Knapp v. Lake Shore Railway
Co., 197 U. S., p. 542.)
Construing the first section of the act in the Em-
ployers' Liability Cases, the Supreme Court, speaking
through Mr. Justice White, said:
t From the first section it is certain that
the act extends to every individual or corpora-
tion who may engage in interstate commerce
as a common carrier. Its all-embracing words
leave no room for any other conclusion. It
may include, for example, steam railroads,
telegraph lines, telephone lines, the express
business, vessels of every kind, whether steam
or sail, ferries, bridges, wagon lines, carriages,
trolley lines, etc. Now, the rule which the
statute establishes for the purpose of de-
termining whether all the subjects to which
it relates are to be controlled by its pro-
visions is that any one who conducts such
business be a “common carrier engaged in
trade or commerce in the District of Columbia,
or in any Territory of the United States,
or between the several States,” etc. That
is, the subjects stated all come within the
statute when the individual or corporation
is a common carrier who engages in trade
or commerce between the States, etc. From
this it follows that the statute deals with
all the concerns of the individuals or cor-
30
porations to which it relates if they engage
as common carriers in trade or commerce
between the States, etc., and does not confine
itself to the interstate-commerce business which
may be done by such persons. Stated in
another form, the statute is addressed to
the individuals or corporations who are en-
gaged in interstate commerce and is not con-
fined solely to regulating the interstate-com-
merce business which such persons may do—
that is, it regulates the persons because they
engage in interstate commerce and does not
alone regulate the business of interstate com-
merce. (The Employers' Liability cases; 207
U. S., p. 497.)
These cases not only recognize the power of Con-
gress to legislate generally with reference to the sub-
jects of interstate commerce, but also establish the
doctrine that the agents of interstate commerce come
wholly within its regulating power in the conduct of
their business.
2. It is claimed in the case at bar that Congress
exceeded its powers in that it includes in the reports
to be made all revenues from every source and all
expenditures of the carrier, or, to state the objection
more specifically, that it requires reports, not only
with reference to their interstate business and the
foreign business, but also with reference to their intra-
state business, their port-to-port interstate business
and, in the case of the White Star Line, its pleasure
grounds.
It is conceded at once, that so far as regulating the
traffic, that is, the movement of things or the charges
31
made therefor, Congress has no power over the intra-
state business or over the business of the pleasure
grounds. But as before noted, this is not a regula-
tion of the traffic; it is securing information regard-
ing the agent's business. The whole purpose of such
inquiry is to secure reliable information regarding all
of the business operations of the carriers affected.
It is impossible to segregate the intrastate accounts
from the interstate accounts and secure the ends in
view by this legislation, for the following reasons:
(1) The financial status and operation of a car-
rier is a unit and can not be divided. In order to
prevent discrimination and rebates the Commission
must know the extent of all revenues received by
the carrier and the purposes to which the revenues
have been applied. If it were possible to exclude the
intrastate business from the reports and accounts,
the accounts of the intrastate business could be used
to cover up discriminations between interstate ship-
pers. Careful consideration will make this apparent.
A large shipper, doing both intrastate and interstate
business, may be charged the lawful rates for interstate
business and rebates be allowed on the intrastate rates
to this particular shipper, even to a sum below the
cost of doing the intrastate business. Such low rates
may even be legalized by a State commisssion author-
izing or directing rates that are below the actual
cost of doing the business. Cases are pending in the
courts to-day to determine whether or not rates
fixed by State railroad commissions are too low, and
thereby throw the burden of the administration and
profits to capital upon the interstate traffic.
32
(2) It is impossible to segregate these accounts.
While it is true that the revenues from intrastate busi-
ness may be segregated, it is impossible, except upon
an arbitrary basis, to so segregate the operating ex-
penses. Every train, every boat, carries interstate
and intrastate passengers and freight. The fuel for
the engine, the employees operating the train or boat,
handling the freight and maintaining the equip-
ment are all performing services to both interstate
and intrastate traffic. There is no possible way of
determining how much of these expenses shall be
charged to the one class or the other except by some
arbitrary rule. As was said at a convention of rail-
road commissioners by the committee upon the
assignment of expenses to freight and passenger
traffic:
We may observe, first, that the rule referring
to mixed trains appears, so far as we can learn,
to rest upon nothing more definite or valuable
than some one's conjecture, and the identity
of the conjecturer seems to be unknown. That
it is based upon any experience or upon any
theory that finds a basis in the facts of the rail-
way business of the country has never been
made apparent.
In cases pending in the courts for the purpose of
determining whether the intrastate rates are so low
as to create a burden upon interstate commerce, it
becomes necessary to take the testimony of experts
and arrive at some arbitrary rule by which the oper-
ating expenses, as to past transactions, are divided
for the purposes of such an investigation. As to
33
future transaction, no arbitrary rule even can be
stated, as the relation between the two classes of
business may change. It will be conceded at once
that it is not within the province of a bookkeeper,
entering current items of debit and credit in the
carrier's books, to make a division. When a book-
keeper enters in the records of the company
items of money invested in property and equipment,
he can not say so much of this is for interstate
and so much for intrastate business. He has no
rule by which to make a division; and this is true
in reference to nearly every item of expense that
can be mentioned. Bookkeeping is for the purpose
of showing revenues and expenses and giving an
annual balance sheet as a unit and must include
receipts and expenditures from all sources; therefore
a legislative body dealing with the question must
treat it as a unit. If it should say to the carrier,
you shall give us the operating expenses of inter-
state business only, the carrier would promptly
reply, this is impossible. It can not be done ex-
cept by some arbitrary basis of division, and there
is no tribunal vested with authority to determine
what division shall be made between these two
classes of business. If Congress undertook to deter-
mine it, that action would not be binding upon
the States; if the States undertook to decide, it
would not be binding upon Congress. The con-
clusion is inevitable, and requires no proof, that if
reports are to be made regarding the financial con-
ditions of a carrier the report must cover all the
34
receipts and expenditures from every source. It
must treat the subject as a unit.
The States have not complained that these intra-
state accounts are called for, nor has the Federal
Government complained that the States call for
statistics covering interstate business. There is no
attempt to regulate the intrastate traffic; the purpose
is only to secure information regarding the business
transactions of the carrier.
3. But admitting that Congress has power to call
for reports which include the receipts and expenses
from every source, can Congress enforce a uniform sys-
tem or classification of accounts and records which
shall include all receipts and disbursements from
every source?
Bookkeeping is the foundation upon which reports
are based, and determines, in a degree, as stated by
Mr. Adams, how the business management of the
carrier is conducted. If the reports are to be uni-
form, and of value for comparative purposes, it is
essential that the accounts and record kept by the
carriers be uniform. It would be very difficult to
make the uniform report called for, and for the
commission to make the examinations of the ac-
counts from time to time, without having these
accounts and records constructed on the same frame-
work as are the reports. If they differ in the distri-
bution of receipts and disbursements, that is to say,
if the receipts from different sources and the dis-
bursements are entered in different accounts than
those specified in the reports, it would necessarily
35
involve a large amount of labor and great difficulty
to segregate the accounts that should go to the gen-
eral divisions and subdivisions called for by the
reports.
An examination of Exhibits A and B attached to
the petitions will show a carefully worked out system,
prepared by the best experts in the country, which,
when properly filled out, give at a glance the disposi-
tion which has been made of the revenues of the
carrier.
This classification of accounts and records is the
same as is applied to railroads in so far as the trans-
actions of carriers by water are the same as carriers
by land. -
The attention of the court is called to the exhibits
attached to the petitions for the purpose of showing
how impossible it would be not to have a classification
of accounts and records as a basis for uniform reports,
for the purposes of investigation, and to attain the main
objects in view in the regulation of common carriers.
These accounts are so constructed and systemized as
to enable the examiners of the commission to discover
at once what use has been made of the revenues of a
company, whether more of its net operating revenues
have been used in what may be termed “capital in-
vestment” than is warranted, whether there has been
discrimination, and whether there have been improper
uses made of its revenues.
As stated, the regulation of reports and accounts
and the classification of accounts is not a primary
36
object of regulation, but it is necessary and substan-
tially related to the primary objects.
The opinion in the Employers' Liability cases
(supra) is relied upon by the complainants as holding
that an act of Congress is unconstitutional, which is
not confined in all of its operation to interstate busi-
ness. Some language used in that opinion, taken
literally, would seem to go to this extreme. There
is, however, a very important difference between that
case and the case at bar.
In that case the act undertook to fix, in certain
cases, the liability of carriers to their employees for
injuries received. It did not exclude employees
engaged solely in intrastate business. In that re-
spect it regulated the domestic relation between the
intrastate employee and the carrier, and for that
reason it was held that the act exceeded the power
of Congress. In the case at bar there is no attempt
to regulate the intrastate business. The action, sofar
as section 20 is concerned, simply seeks information
regarding the interstate business. A suit brought
by an injured employee to recover damages is an
isolated fact having no relation whatever with other
cases, nor is it the basis of any action on the part of
Congress or the Commission regarding the enforce-
ment of the substantive law, or the attainment of
the primary objects of regulation. In short, there
is no unity between the different accidents and ac-
tions brought thereon; they are separate, independent
incidents. This is not true of a system of accounts;
each item forms a part of a whole; there could be
37
no true balance sheet without each item, however
small. The question was propounded by one member
of the court as to whether there was any difference
between the claim of a man working in the loco-
motive shops and receiving an injury and the pay
of a man who was painting cars in the same shop.
There is a wide difference in principle between the
two as affecting the jurisdiction of Congress and the
Interstate Commerce Commission. In the case of
the accident, it has no bearing whatever upon any
future action of Congress or the Commission except
as it may form, with other accidents, a reason for
some action regarding the protection of employees.
In the case of the payment of the day wage to
the painter, that item of expense, though small, is
just as important in the accounting system to make
it complete as would be an item of a hundred
thousand dollars paid out for any other purpose.
That item with thousands of others forms the system
of accounts and completes the information with
which, as Mr. Justice Brewer stated, the Commission
is to perform its duties in enforcing the substantive
law of the act.
What is said with reference to the Employers'
Liability cases applies with equal force to the case of
the Illinois Central R. R. Co. v. McKendry (203
U. S., 514). The object of the law in that case was
to create a quarantine service for the protection of
live stock. We have no contention with the law as
announced in that case and in the Employers' Liability
cases, but do insist that there is a wide difference
38
between the facts in those cases and the facts upon
which the reports and accounting are required in the
case at bar.
4. But is said that Congress has granted to the
Commission its legislative powers, without any gen-
eral rule for the exercise of such powers, in author-
izing the Commission to provide the forms of the re-
ports and the classification of the accounts. In a
case involving the constitutionality of a statute,
known as the “tea inspection act,” approved March
2, 1897 (29 Stat., 604), the court, speaking through
Mr. Justice White, said:
The claim that the statute commits to the
arbitrary discretion of the Secretary of the
Treasury the determination of what teas may
be imported, and therefore in effect vests
that official with legislative power, is without
merit. We are of opinion that the statute,
when properly construed, as said by the Cir-
cuit Court of Appeals, but expresses the pur-
pose to exclude the lowest grades of tea,
whether demonstrably of inferior purity, or
unfit for consumption, or presumably so be-
cause of their inferior quality. This, in
effect, was the fixing of a primary standard,
and devolved upon the Secretary of the Treas-
ury the mere executive duty to effectuate the
legislative policy declared in the statute. The
case is within the principle of Field v. Clark
143 U. S., 649, where it was decided that
the third section of the tariff act of October
1, 1890, was not repugnant to the Constitution
as conferring legislative and treaty-making
39
power on the President, because it authorized
him to suspend the provisions of the act re-
lating to the free introduction of sugar, mo-
lasses, coffee, tea, and hides.
Section 3 of the inspection act provides:–
That the Secretary of the Treasury, upon
the recommendation of the said board, shall
fix and establish uniform standards of purity,
Quality, and fitness for consumption of all kinds
of teas imported into the United States, etc.
Commenting upon this, the court further said:
Whether or not the Secretary of the Treas-
ury failed to carry into effect the expressed
purpose of Congress and established standards
which operated to exclude teas which would
have been entitled to admission had proper
standards been adopted, is a question we are
not called upon to consider. The sufficiency
of the standards adopted by the Secretary of
the Treasury was committed to his judgment,
to be honestly exercised, and if that were im-
portant there is no assertion here of bad faith
or malice on the part of that officer in fixing
the standards, or on the part of the defendant
in the performance of the duties resting on
him. (Butterfield v. Stranahan, 192 U. S., pp.
496–497.) •
The Supreme Court approved this statement of the
law, made by Judge Ranny of the Supreme Court of
Ohio:
. The true distinction is between the dele—
gation of power to make the law, which neces-
sarily involves a discretion as to what it shall
be, and conferring authority or discretion as to
40
its execution, to be exercised under and in
pursuance of the law. The first can not be
done; to the latter no valid objection can be
made. (Field v. Clark, 143 U. S., p. 693.)
See also Union Bridge Co. v. United States (204
U. S., p. 377 et seq.), Monongahela Bridge v. United
States (216 U. S., 177).
The national-bank act provides for at least five
reports to the Comptroller of the Currency, “accord-
ing to the form which may be prescribed by him,
verified by oath,” etc. These reports call for detailed
statement of all business transacted by the bank.
The corporation tax law, passed by the Sixty-first
Congress and which has just received judicial inter-
pretation in a decision by the Supreme Court of the
United States filed March 13, 1911, calls for very
specific reports, from every corporation, giving all
receipts and disbursements. In this decision the
court, speaking through Mr. Justice Day, said:
The contention is that the above section
as originally framed and as now amended
could have no legitimate connection with the
collection of the tax, and in substance amounts
to no more than an unlawful attempt to
exhibit the private affairs of corporations to
public or private inspection, without any
substantial connection with or legitimate pur-
pose to be subserved in the collection of
the tax under the act now under consideration.
But we can not agree to this contention. The
taxation being, as we have held, within the
legitimate powers of Congress, it is for that
body to determine what means are appro-
41
priate and adapted to the purposes of making
the law effectual. In this connection the
often-quoted declaration of Chief Justice Mar-
shall in McCulloch v. Maryland (4 Wheat.,
316, 421; 4 L. ed., 579, 605) is appropriate:
“Let the end be legitimate, let it be within
the scope of the Constitution, and all means
which are appropriate, which are plainly
adapted to that end, which are not prohibited,
but consist with the letter and spirit of the
Constitution, are constitutional.”
Congress may have deemed the public in-
spection of such returns a means of more
properly securing the fullness and accuracy
thereof. In many of the States laws are to
be found making tax returns public documents,
and open to inspection.
We can not say that this feature of the law
does violence to the constitutional protection
of the fourth amendment, and this is equally
true of the fifth amendment, protecting persons
against compulsory self-incriminating testi-
mony.
This case seems to dispose of the objection made by
the complainants that the reports called for by section
20 are in violation of the fourth amendment to the
Constitution.
Congress, therefore, having plenary power over
interstate commerce, may exercise that power to its
fullest extent over the agents engaged in that com-
merce; it may call for full and complete reports of
the agents' business, including receipts from all
Sources and disbursements for every purpose; it may
regulate and prescribe the form in which that agent
42
shall keep its accounts of all revenues and expenses,
and prohibit the agent from keeping accounts in any
other form.
V.
The powers of the Interstate Commerce Commission
to enter the orders complained of.
If the act is constitutional, the next subject of
inquiry is whether the commission has acted within
the powers conferred. An examination of the orders
and the circulars attached as exhibits to the petitions
will show that they come strictly within the powers
conferred by section 20. In fact, nothing has been
pointed out by the complainants to show that these
orders are at variance in any particular with the pro-
visions of the section.
The commission is given discretion as to the forms
of the reports and also as to the forms of the uniform
system of accounts. This is not exercising a discre-
tion as to what the law shall be, but a discretion “as
to its execution, under and in pursuance of the law.”
Turning to Circular No. 10, attached as an exhibit
to the petition calling for reports, it is stated upon the
COVer .
The purpose of these inquiries is to procure
for the use of the Interstate Commerce Com-
mission such full information of the scope and
character of the business of carriers by water
within its jurisdiction and of the extent of
their operations as will enable the Commission
to determine the form for annual report that
will best give information required by it and
43
at the same time conform as nearly as may
be to the present accounting practices of the
carriers by water. To that end you are
requested to include with your response to
these inquiries all such additional information
in regard to the organization of your company,
the manner in which it conducts its business,
and the character and extent of the opera-
tions as may, in your judgment, be likely to
be of service to the Commission in carrying
out the purpose above stated.
Attention is also called to a provision in the orders
of the Commission set forth in the exhibits to the
petitions entitled “Classification of operating reve-
nues” and “Classification of operating expenses.”
At the bottom of page 6, after specifying how the
accounts shall be kept and that the general divi-
sions shall be subdivided into primary accounts, it
states that the carrier “may make assignment of
the amount credited (or charged) to any such pri-
mary account to operating divisions, to its individual
lines, or to States.” While the orders require that
the items of revenue and the items of expenses shall
be classified under the particular heads named, they
give latitude to the carrier to divide the items in
reference to the operating divisions of its line or to
States. Thus, taking the items of revenue, the
account could show the amount received from
intrastate business in each particular State through
which the line runs, and in addition its revenues
from interstate business. Wherever any revenue
or operating expense can be divided between inter-
44
state and intrastate business it can be so entered in
these accounts if the carrier desires or the States
require it. The Commission in formulating these
orders, therefore, has gone to the fullest extent
possible to allow a separation of these accounts con-
sistent with their unity and securing the information
necessary to the administration of the law.
In Gibbons v. Ogden (supra) Chief Justice Marshall
said:
In our complex system, presenting the rare
and difficult scheme of one general govern-
ment, whose action extends over the whole,
but which possesses only certain enumerated
powers, and of numerous State governments,
which retain and exercise all powers not dele-
gated to the Union, contests respecting power
must arise. Were it even otherwise, the meas-
ures taken by the respective governments to
execute their acknowledged powers would
often be of the same description, and might
sometimes interfere. This, however, does not
prove that the one is exercising, or has a right
to exercise, the powers of the other.
In conclusion, the oft-quoted declaration of Chief
Justice Marshall in McCulloch v. Maryland (4 Wheat.,
316,421) is appropriate:
We admit, as all must admit, that the powers
of the Government are limited, and that its
limits are not to be transcended. But we
think the sound construction of the Constitu-
tion must allow to the national legislature
that discretion, with respect to the means by
which the powers it confers are to be carried
45
into execution, which will enable that body to
perform the high duties assigned to it in the
manner most beneficial to the people. Let
the end be legitimate, let it be within the scope
of the constitution, and all means which are
appropriate, which are plainly adapted to that
end, which are not prohibited, but consist with
the letter and spirit of the constitution, are
constitutional.
If these complainants can not be required to give
full reports of their entire business, interstate and
intrastate, then every railroad company in this
country is exempt from the law. All carrying com-
panies transport both classes of traffic, and if one
carrier subject to the act is not required to make
reports and keep its accounts in accordance with the
requirements of section 20, because it transacts
intrastate business, then all carriers may refuse to
make such reports. The splendid system of public
accounts concerning quasi-public corporations which
the Commission maintains, upon which the whole
country depends for information, upon which Con-
gress legislates and the Interstate Commerce Com-
mission acts, must go down, for it will be of no value
unless it is complete in every particular. When
these accounts lose the integrity which comes as a
result of completeness and unity, they will be of no
value.
Respectfully submitted.
CHARLEs W. NEEDHAM,
Attorney for the
Interstate Commerce Commission.
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In the Matter
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Rules for the Inspection and Testing of º
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tenances, in Accordance With the Act |
of February 17th, 1911, as Amended
March 4th, 1915.
Brief and Argument of the Representative of
the Medium Power Light Advocates
BRIEF—Pages No. 1 to 6.
ARGUMENT-Pages No. 7 to 25.
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Brief of
Medium Power Light Advocates
Elizabeth, N. J., November 23, 1916.
To the Interstate Commerce Commission,
Washington, D. C.
Gentlemen:
In compliance with the order of your body the representa-
tive of the medium power light advocates respectfully sub-
mits the following brief in the matter of determining what
is a proper headlight for a locomotive.
First. The Order of June 6th, 1916, requiring a locomotive
t headlight that will enable a person to see a dark
object the size of a man for a distance of 1,000 feet
ahead of a locomotive, interferes with the contrac-
toral relations of a company holding a license to use
dissolved acetylene for railroad purposes in the
United States and its Territories, for the reason that
the company in question, many months previous to
the promulgation of the order, entered into a written
contract to deliver to a railroad system in the United .
States a large quantity of apparatus fitted up espe-
cially for acetylene lights, which lights can meet all
the requirements of said order of June 6th, 1916,
except that portion which relates to the dark object
being seen 1,000 feet, this requirement being about
350 feet in excess of the penetrating properties of
the acetylene light on a dark object.
Second. The order makes no provision for the payment of
Third.
damages caused either the railroad system under con-
tract to purchase acetylene apparatus as referred to
in paragraph No. 1 above, or to the company which
is to deliver the apparatus to the railroad, although
the company in question has a large quantity of man-
ufactured material on hand which is now useless
under the Order of June 6th, 1916.
.The policy adopted of having the investigation of
what constitutes a proper headlight conducted by the
Locomotive Boiler Inspection Division of the Inter-
state Commerce Commission and by officials of that
Division who are or were at the time of the investiga-
tions members of an organization in which they had
previously taken an obligation not to interfere with
any rules or legislation asked for by such organiza-
tion, is productive of biased opinions, provocative of
unnecessary and unwise partisanship and contrary to
public policy.
Fourth. The policy of adopting the recommendations of the
Inspectors referred to in paragraph No. 3 above, and
at the same time empowering them to enforce their
own recommendations regardless of the lack of clarity
Fifth.
and distinctness of such recommendations, is con-
trary to public practices and is now, has been, and
will be, to say the least, productive of severe and
perhaps unjust criticism. &”
The order in question is indistinct and not clear in
that it fails to specify what constitutes a “dark ob-
ject,” a “normal vision,” and a “normal weather con-
dition,” and by establishing such indefinite limita-
tions places the interpretation of the order for pur-
2
poses of enforcement almost entirely in the hands of
Sixth.
the Inspectors referred to in paragraphs Nos. 3 and
4 above, which power, so placed, may prove a source
of constant official irritation if not outright injustice.
Headlights being in the nature of safety devices,
matters pertaining to the character of the device and
its properties should be thoroughly investigated by
the Safety Device Bureau and all reports submitted
to the Commission for the purpose of having an order
drawn that would cover the relative difference in
operating conditions among the railroads of the
country.
The inspection of such devices under definite rules
is admittedly the duty of the Division of Locomotive
Boiler Inspection.
Seventh. At the time the Order of June 6th, 1916, was
being formulated it would appear that insufficient
evidence had been furnished the Commission by its
designated representatives or by its hearings, in that
the following important facts, vitally affecting the
efficacy of the order, had not been sufficiently devel-
oped: *
The percentage of curved track and also straight
track under use by railroads of the country.
The percentage of humid, moonlight, rainy, cloudy,
misty, foggy, and Snowy nights in various parts of
the country as compared to dark nights with clear
weather, no humidity and no moon.
Comparative tests from the files of various railroad
companies of the country, showing the differences
in the power of vision among their employees.
Testimony from optical experts on railroad lights
3
and their demonstrated effect on the eyesight under
strain.
E. Test of various kinds of light (electric, oil, and
acetylene) showing their penetrating qualities in
various degrees of fog, mist, and falling snow or
rain.
F. Gºfficial statements from the Lighthouse Bureau of
the United States Government showing the service-
ability of acetylene lights as aids for navigation,
the economy, reliability and visibility thereof
(under foggy weather conditions) as compared
with oil and electric lights of equal class.
G. The per cent. of wrecks and crossing accidents in
which life has been lost which occurred under
foggy or misty weather conditions.
H. Comparative statement showing the percentage of
traffic and frequency of train service of the various
railroads of the country.
I. Information as to emergency stops on various rail-
roads and tests of same made with a view to deter-
mining the relative value of a fixed distance of
light projection along the track.
J. Tests made under varied weather conditions solely
for the purpose of ascertaining the character of
light that will best enable a locomotive engineer to
pick up land marks.
K. The total number of each kind of headlights (oil,
electric, and acetylene) and their distribution
throughout the country. &
Eighth. We ask that the order of June 6th, 1916, be so
4
modified as to eliminate not only the possibility of
official oppression but the possibility of controversy
between the Government Inspectors and the users of
headlights as to what constitutes a violation thereof,
by establishing fixed standards of measurements
under definite classifications, taking into considera-
tion the idea:
That all railroads with a per cent. of double track
between a fixed minimum and maximum, running a
number of trains between a fixed minimum and
maximum between the hours of 5 o'clock P. M. and
6 o'clock A. M., be required to equip their locomo-
tives with a light that will furnish a given pro-
jected beam candle power.
That railroads with relatively larger percentages
of double track and with a relatively greater num-
ber of train movements be required to furnish a
light of a beam candle power of between a given
minimum and maximum.
That in all such classifications which the Commis-
sion in its wisdom may by order establish, the
measurements of the projected beam candle power
shall be made by a standard photometer approved
by the Bureau of Standards of the United States
Government and operated by agents or inspectors
of the Government whose eye sight shall have first
been tested under optical rules laid down by the
Division of Safety Devices with the approval of
the Commission and that all such persons desig-
nated as inspectors making such light measure-
ments shall have eye-sight qualifications between
5
a fixed minimum and maximum standard under
such optical rules.
Respectfully submitted,
R. S. SHARP,
For Medium Power Light Advocates.
ORAL ARGUMENT.
Made Before the Interstate Commerce Commission on Nov.
27, 1916, at Washington, D. C.
Mr. R. S. Sharp:—
Mr. Chairman and Gentlemen of the Commission:—
I ask that the Order of June 6th, 1916, be so modified as
to permit the use of a medium powered lighting material
generally designated as “dissolved acetylene.” As the order
now stands, with the use of acetylene, an object in white or
gray can usually be seen under the Chief Locomotive Boiler
Inspector's definition of “normal weather conditions,” for a
distance of 1,000 feet, but this can not be accomplished with
a “dark” object, if by the use of the word “dark” it is in-
tended to mean an object in red, navy blue, deep lavender,
olive green and similar merging shades.
The lay members of the Brotherhoods are not opposed to
the use of acetylene nor do they specifically endorse the high
powered electric light or any other high powered light, as
evidenced by the resolution passed by them at their general
convention in May, 1908, as follows:
“Resolved, That it is the sense of this Convention that our
Legislative Boards be instructed to use their best
endeavors in the future to have laws passed in their
respective States requiring railroad companies to
equip all road engines with the best power head-
lights.” .
It will be noted that they want the best power headlights
and not necessarily a high power headlight.
The developments in the hearing have been such as to
7
create an undercurrent impression that there is strong oppo-
sition among the members of the Brotherhood to any light
other than an electric arc light manufactured by a certain
firm under practically monopolistic conditions. Whether
this impression is due to the bitter opposition of the officials
charged with the management and operation of certain rail-
roads, or to the manifest partiality for an electric arc light of
a specific type, exhibited in certain quarters by those oppos-
ing the views of the railway officials, I am unable to say, but,
that the locomotive engineers of the country, the men at the
throttles, are not wedded to any particular brand of power
light is an assured fact; and further, they are not committed
officially by any action of the organization or Brotherhood
to a headlight that will throw a beam of light 1,000 feet and
pick up a “dark” object. No distance is specified by them in
their resolution passed in open convention. As a matter of
fact they differ in various parts of the country, and differ
seriously, as to just what the distance of light projection on
the railroad track should be, as evidenced by the various
kinds of State legislation now in existence which was en-
acted at the suggestion of their subordinate lodges or chap-
ters in different States.
This very difference of opinions as expressed in laws, and
the resultant confusion caused common carriers engaged in
interstate commerce, is one of the prime reasons for wiping
out all inequalities of State laws by superseding such laws
with a national regulation. While attempts, with more or
less success, by interested parties and their partisans, may
be made to create the impression that the arc light is the
only one that is desired by or that fills the requirements
of the locomotive engineers, the cold fact remains, as shown
by the evidence in all of these hearings, that what locomo-
tive engineers really do desire is a headlight of sufficient
power or intensity to do three things: -
8
First. To enable them in practically all kinds of weather
to easily and readily pick up all land marks, such as
crossing signs, mile posts, and other known and
marked positions.
Second. And at the same time project a light (one that
does not dazzle the eyes when meeting an opposing
locomotive) a moderate distance along the track to
act as a marker or safety device for vehicles and
cattle crossing the rails, and enable the picking up
of an object like a box car or a land slide in time to
materially reduce speed with emergeacy brakes.
Third. To furnish such light in the cab as will be in the
nature of company for the engineer and fireman, and
also lights in the headlight that will require no ad-
justing, but will burn steadily with the least amount
of care and attention.
Every locomotive engineer, if he expresses his true senti-
ments without being influenced, will admit that the three
statements just made about cover his real wants and desires
in the order of their relative importance. To secure the
three features set forth, some enginemen prefer, and some
are bitterly opposed to, arc lights; thousands of others
operating on heavily travelled double track roads, with few
or no land marks and with a well protected right of way,
prefer a low-powered oil light; but there are thousands of
others who prefer a medium powered light that will have
greater penetrating qualities in bad weather. Almost in-
numerable testimonials from locomotive engineers, approv-
ing the use of a medium powered or acetylene light that will
penetrate fog and thick weather, could be placed in the
record, and specific requests without number could be ob-
tained appealing to the Commission to modify their order
with reference to the distance at which a “dark” object
9
must be picked up, in order to permit the use of a superior
light in bad weather—their position being that in good clear
weather they have the least fears and can maintain their
schedules with considerable ease on their runs. Without so
burdening the record it will suffice, for present purposes, to
quote the following, on account of the official character of
the expressions: The Travelling Engineers’ Association at
their Convention, through a committee on locomotive lights,
in a report, made the following statement:
“Requirements of candle power do not properly
express "the light-giving possibilities of acetylene.
Owing to its penetrating and diffusing quality it
throws a more intense and accurate light than an
equivalent measured candle power of any other
known illuminant. Yard and switch men, as well as
crews on trains which meet the acetylene headlights,
state that it does not have the dazzling and blinding
effect which is sometimes made a basis of complaint
against other high power headlights. The light is
sufficiently strong so that with average condition of
track and atmosphere to see a freight train in time
to pinch down one of the fastest mail trains to such
extent that in collision the engine does not leave
the rails.”
The Secretary of the Legislative Board of the Brother-
hood of Locomotive Engineers of Massachusetts makes the
following statement in writing: -
“With a decent reflector, a 34 ft. burner will fur-
nish ample light. The quality of the light (acety-
lene) is far superior to any other. It penetrates fog
more than an electric light of ten times the power;
the latter seems to be reflected right back from the
fog. Signals are not distorted the least by acetylene
10
light, and colors are not changed a bit. The light
we use has enough power for every purpose and is
not too powerful so as to blind engineers riding
opposite. We always want a good reflector because
you can’t hope to do much with any light without
that. Our men are universally pleased with this
light. By a vote of our Board we are not in favor
of a high power electric headlight.”
As to the importance and intense desire, and even neces-
sity, of every engineman being able to pick up “land
marks,” we might strengthen our argument by quoting
certain admissions from railroad officials themselves. It
must be considered in connection with these quotations
that it is admitted by all parties to this controversy that
it takes sixteen times as much light in candle power to see
an object a distance twice as far. I now quote from the
language of an official who is considered to be the greatest
authority in America on locomotive headlights—Mr. Craw-
ford of the Pennsylvania Railroad. In his testimony be-
fore the sub-committee of the Committee on Interstate and
Foreign Commerce of the House of Representatives, 63rd
Congress, Second Session, he makes the following state-
ment:
“There is an important thing about a headlight,
and I think really more important than the distance
at which the light shows down the track, and that
is the illumination along side of the track. You will
find that every engineman has reference points along
the line by which he judges the time for application
of brakes, for station stops, and things of that
kind.”
At the same hearing, Mr. Cook, Assistant Engineer of
Motive Power of one of the largest railroads in the world,
made this statement:
“As we anticipated and as it proved out from our
tests, the illumination at the side of the track is
of great importance to the enginemen.”
It is at this point that the penetrating power of light
under bad weather conditions becomes a matter of vital
importance to engineers not only in locating his “land
marks” and in covering dangerous dirt-road crossings, but
also as to the distance at which the headlight may be seen
by pedestrians, drivers of vehicles, automobilists and by
cattle and horses. .
I make the positive assertion that if the locomotive
engineers of the country have to decide the question of
curtailing the distance mentioned in the Order of June 6,
1916 (to the extent of 350 feet or even more), at which a
“dark” object can be picked up, in order that they may
secure the use of a light that is known to possess great
fog or mist penetrating qualities, they will favor the cur-
tailment so strongly that they will force even their own
representatives at this hearing to join me in requesting the
Commission to modify the “dark” object clause in the Order,
which clause, as it now stands, shuts out absolutely the
use of the greatest fog, falling snow, or falling rain pene-
trating light now in existence. It is unfortunate that the
Chief of the Bureau of Locomotive Boiler Inspection, dur-
ing his investigations, did not secure reasonably full and
complete statistics regarding nocturnal weather conditions
in different parts of the country.
When the Commission shall have secured such informa-
tion it will be the cause of amazement, in that the propor-
tion of bad weather nights, to what the Chief of the Loco-
motive Boiler Inspection Division calls “normal weather
condition” nights, is so great as to within itself be a prime
motive for modifying the order. Kindly bear in mind the
12
statement of witnesses on all sides of the controversy to
the effect that high-power electric arc lights will not reflect
a greater distance ahead on a track than a common oil
light when a fog is prevailing, and then consider all of this
testimony in connection with the following undisputed facts
taken from the records. I quote from one of America’s
most reputable publications, the “Scientific American,” as
follows: e
“Experiments recently made by engineers on
German railroads as to which light has the most
penetrating power during a fog show that acetylene
proved itself to be the best. As a test was made in
a dense fog, three locomotives being stationed in
the railroad yards, the headlights of which were sup-
plied; one with an electric arc, one with the usual
oil lamp, and one with acetylene of 34 ft. flame. At
a distance of 75 ft. the electric arc light was entirely
obscured; at a distance of 100 ft. the oil light was
lost from sight; while at this distance the acetylene
light showed hardly perceptible diminution, and at
200, 300, 400, and finally at 500 feet from the loco-
motive, at which distance the acetylene light was
still in sight, although faint. These tests and meas-
urements were made by careful men and can be con-
sidered trustworthy.”
I now quote from the proceedings of the meeting of
the Travelling Engineers’ Association, a part of the report
submitted by their Committee on Locomotive Headlights,
as follows:
“Measurements of candle power do not properly
express the light-giving possibilities of acetylene.
Owing to its penetrating and diffusing quality it
throws a more intense and accurate light than an
13
equivalent measured candle power of any other
known illuminant.”
The record in this case shows that Mr. Crawford, the
General Superintendent of Motive Power of the Pennsyl-
vania Lines West of Pittsburg, made the following state-
ment:
“* * * the human eye does not appreciate, does
not register the white light or really the blue light
of the arc lamp the way it does the yellow light of
the incandescent, oil or gas lamp. They are all
better penetrating lights; the acetylene is a better
penetrating light than the arc light for that reason.
There are so many blue rays in the light from an arc
lamp that the eye does not take cognizance of in the
same degree that it does of the yellow light. In a
fog you often see an arc light which looks like a little
round speck, and opposite it an incandescent light—
a 16 candle power—looking three or four times as
big. It has more penetration simply because the eye
appreciates the yellow and does not appreciate the
blue rays.”
Mr. C. H. Ray, Superintendent of Machinery of the
Louisville and Nashville R. R. Co., a gentleman who perhaps
has had more experience in headlight tests than any other
railroad official in the United States, makes the following
statement, which I quote from the record: -
“With the use of high-powered headlights his
statement in regard to the strong reflection of light
blinding him is also the case in snow storms, in fogs,
as well as during heavy rains. The light of high-
powered headlights will not penetrate the fog, rain,
or the snow as does the light of low intensity.”
14
The Legislative Board of the Brotherhood of Locomo-
tive Engineers, State of Massachusetts, through its Secre-
tary, in writing, makes the following statement, which I
quote from the record:
“The quality of the light (acetylene) is far supe-
rior to any other. It penetrates fog more than elec-
tric light by 10 times the power; the latter seems to
be reflected right back from the fog.”
I am pleased to quote now the following extract from
a report made by the Chief of the Division of Safety, Inter-
state Commerce Commission, covering numerous wrecks
which occurred on the New York, New Haven and Hartford
Railroad:
“After investigation and tests nothing was dis-
closed to indicate that at the time of the accident
signals were not working properly. Possibility for
signal displaying false clear indication exceedingly
remote. * * * Evidence that fog existed in the
vicinity.”
The report sets forth a tabulation of nine accidents
occurring on one road alone since 1911 wherein employees
have failed to observe fixed signal indications. In these
nine accidents 66 persons were killed and 475 injured. The
report closes with this statement:
“It is to be noted that in each instance these acci-
dents were due to the same fundamental cause.
Attention called to Commission’s report covering
investigation of accident occurring at West Port,
Conn., as follows: “Wreck prevention is the highest
duty of railroads. This obligation is not satisfied by
merely making rules which prove insufficient in
operation. Safety requires that the highest degree
15
of mechanical skill be applied at the particular point
of danger.’”
In reading the detailed reports on the wrecks men-
tioned by the Chief of the Division of Safety, one is par-
ticularly struck with the number of times which the wit-
nesses are quoted as saying that “the weather was thick”
and that there was “fog in the vicinity at times which pre-
vented them from clearly seeing the signals.”
The specific statement in the report to the Interstate
Commerce Commission that fog was prevailing at the time
of these accidents clearly exemplifies the fact that these
signal lights so vital to safety were of a character that
failed to arrest the attention of thoroughly trusted engine
drivers of proven experience and ability, when operating
under hazy or foggy weather conditions.
This evidence from the Commission’s records is pro-
duced at this time, not for the purpose of bringing up the
matter of inefficient signal lights, but to show conclusively
that the penetrating power of acetylene is a matter which
should be carefully taken into consideration by this Com-
mission in the preparation of orders relating to headlights
upon locomotives when they are operating under weather
conditions that cannot be classed as “clear night, no humid-
ity, and no moon.”
It is unfortunate that the Chief Locomotive Boiler
Inspector did not submit to the Commission accurate tests
of the penetrating properties of all lights when used under
weather conditions that prevail more often than those which
he is pleased to call “normal” under the Commission’s
order; that is, “a dark clear night, no humidity, no moon.”
Had he followed such a suggestion it is believed that the
Commission, notwithstanding his recommendations, would
have exercised special care to see that the distance of light
| 6
projection on a “dark” object was not fixed at a figure that
would eliminate the use of a lighting material that is now
being used by the United States Government Lighthouse
Service on its lighthouses and buoys at sea on account of
its wonderful penetrating qualities in unfavorable weather.
Indeed, the record does not show that the Chief of the
Locomotive Boiler Inspection Division ever obtained any
statements from the Government Lighthouse Service as
to the manner in which they use this gas compressed into
non-explosive containers filled with porous mass. On the
contrary, the Chief Inspector, in his exhibition of a lack of
information and in his evident desire to eliminate acetylene,
went so far as to make a voluntary statement regarding
certain explosions on railroads of acetylene tanks, which
tanks, by the way, he could easily have ascertained were
not legally qualified under a decision of the Supreme Court
of the United States to be used for railroad purposes, but
were of that character which the people who are legally
qualified to use dissolved acetylene for railroad purposes
would not use either for that service or for the Lighthouse
Service of the United States Government. It is apparent
that the Chief Inspector's purpose in making the voluntary
statement I refer to cannot be classed as an attempted
justification for his having recommended to the Commis-
sion the promulgation of the rule containing the “dark
object” clause at 1,000 feet.
It is fair to assume that if the Commission had accu-
rate knowledge of the enormous number of collisions and
grade-crossing accidents, in which life had been lost, that
occur at night under weather conditions entirely different
from those described as “normal” by its Chief of Locomo-
tive Boiler Inspection, or, had it had accurate knowledge of
the percentage of curved track as compared to straight track
(it being admitted by all that a headlight is of little value
17
on a curve), it would favorably consider a modification of
the order of June 6, 1916, as to the “dark object,” to the
extent at least of eliminating no lighting substance or
material that will do in bad weather what the uncontra-
dicted testimony in this record shows that the light now
used by the United States Government Lighthouse Ser-
vice will do.
And yet at the time of the framing of the order of
June 6, 1916, so far as the record shows the information
and statistics furnished by the Chief of Locomotive Boiler
Inspection Division on the two points covered, namely,
“curved track,” and “per cent. of wrecks in bad weather,”
was exceedingly meagre notwithstanding the fact that the
cardinal idea, as admitted by the Chief Inspector, in having
a proper headlight, is to reduce the number of serious acci-
dents and thus save life and property.
Does the Commission at this hour possess the proper
information regarding the capacity or efficiency of emerg-
ency brakes used by various railroad systems or companies
throughout the country?
Has the Chief Inspector of the Locomotive Boiler
Inspection Division submitted to the Commission a state-
ment compiled from tests showing the per cent. of railways
that possess emergency brakes which at certain well known
danger speeds will not protect a locomotive engineer in his
cab at a danger range of 1,000 feet?
Has a list of these railways that possess emergency
brakes that will do this been submitted 2 If so it should
be published for the information of the members of the
Brotherhoods, who ride the engines, and when it is so pub-
lished one may be almost able to guarantee that the rank
and file of the Brotherhood will begin to study and analyze
the headlight question and the motives involved from a
| 8
standpoint that will interest them behind the closed doors
of their lodges.
The record is full of the evidence of locomotive engi-
neers who make oath that electric arc headlights cause
them to see phantom lights, which in turn cause misread-
ings of signals, with possible collisions and loss of life. On
the contrary, about an equal number of engineers testify
that they have been running behind high-powered electric
lights and have never seen a phantom light.
The record also shows that at the first hearing held by
the Commission, and at a previous hearing before a Con-
gressional Committee, the Chief of the Locomotive Boiler
Inspection Division knew of engineers who claimed to have
seen phantom or false signal lights when operating behind
high-powered electric headlights. Obviously, if the Chief
Inspector had not heard of such a thing as a phantom
light he has been derelict in his duty in that he has failed
to read the records in the case before recommending a rule
for the Commission to adopt. At the Congressional Com-
mittee’s hearing the following direct allegations were made
by leading railway officials—men of wide experience, occu-
pying positions of great responsibility, and who are pos-
sessed of scientific attainments:
Mr. Crawford of the Pennsylvania R. R., in his state-
ment regarding phantom lights, uses this language:
“* * * that any headlight that gives over 3,000
equivalent beam candle power is a dangerous head-
light. * * * I am convinced that it will do the
traveling public a great injustice if we insist on any
lamp stronger than 3,000 equivalent candle power.
* * * they will be taken off after the accidents
occur which will result from their use.”
The Assistant Engineer of Motive Power of the Penn-
| 9
sylvania R. R. Swears that he participated in a test to cover
this disputed feature of phantom lights, and he found,-
to use his own language from the record:
“* * * that with respect to semaphore signals
we began to get severe misreadings of colored lights
at about 90,000 apparent beam candle power * * *
we got phantom lights, that is, a reflection from
a roundel with the signal light not burning, in the
neighborhood of 20,000 apparent beam candle power.
At 10,000 apparent beam candle power there was a
12% failure; at 30,000 apparent beam candle power
there was a 20% failure; at 60,000 apparent beam
candle power there was a 28% failure; at 120,000
apparent beam candle power there was a 32% fail-
ure; and at 1,000,000 apparent beam candle power
there was a 38 7-10% failure.”
I desire to emphasize the idea that testimony of that
character, coming from high and responsible railway
authorities under oath, showing such a remarkably high
percentage of failures to read signals correctly under differ-
ent powered beams of reflected light should either have been
controverted beyond the question of a doubt by a thorough
and exhaustive examination and investigation by the Chief
of the Locomotive Boiler Inspection Division, or it should
be accepted by him, as well as the Commission, as an uncon-
troverted fact.
What action about this extremely important matter
did the Chief take?
Did he cause to be brought before the Commission at
its open hearings or elsewhere any of the scientific men
whose duty it is to test and record the eye-sights of all
engineers and firemen on various railroads?
20
If so, where is the testimony and where are the statis-
tics?
I make the assertion that the records alone of the
Optical Departments of the various railroads in the country
will show some remarkable statistics covering not only the
difference in power of vision among railroad employees, but
the actual proven effect of strong lights on the eyes of
employees when working under the usual strain of service
conditions.
At the recent hearing held by the Commission a num-
ber of engineers from the Southern Railway System gave
testimony regarding their failure to see phantom lights
from behind a high-powered headlight, and yet the Chief
Surgeon of that System (in charge of the optical depart-
ment), with headquarters in Washington, D. C., within a
stone's throw of where the Commission's hearings were
taking place—an official easily available with his valuable
records of eye-sight tests and practical working results—
was not even consulted by the Chief of the Locomotive
Boiler Inspection Division, much less asked to testify.
Did the Chief Inspector consult the great optical
experts of the country, the men best qualified to give scien-
tific testimony—on such a momentous proposition, involv-
ing the safe running of railroad trains and the lives of
passengers on heavily trafficked roads?
Did he consult Dr. Charles H. Williams of Boston, one
of the great experts on railway lights?
Did he consult any of the well-known ophthalmic sur-
geons?—such men as Dr. Chamberlain of St. Paul or Dr.
Black of Milwaukee, who have given almost 'a life-time to
a study of the subject?
No, he controverts the tremendously important state-
21
ment regarding the tests in the matter of phantom lights
made by the Pennsylvania Railroad official to whom I have
just referred (and who, by the way, was corroborated by a
number of locomotive engineers of other roads)—by pro-
ducing a few locomotive engineers who testified that they
had never seen a phantom light from behind a high-powered
headlight. No evidence of the power of vision of the Chief
Inspector's witnesses referred to, compared to the vision of
other employees, was even attempted to be obtained by the
Chief from the records of the Southern Railway or any
other railway on which the respective witnesses operated.
Waiving the numerous and very apparent and seri-
ous official derelictions of the Chief of the Locomotive
Boiler Inspection Division in the matters referred to, I
submit to the Commission the cold fact that the scientific
test conducted by the Pennsylvania Railroad official refer-
red to by me, made in the matter of ascertaining the pres-
ence of phantom or false signals showing under various
powers of light, stands uncontradicted. I am advised by
opticians that the remarkable percentages stated by that
official as a result of the test are approximately correct, and
I believe that what he submitted to the Commission as a
fact is a fact. That test stands now on the record as uncon-
tradicted proof. If that is so, and there is any measure of
truth in the test, I claim that the Commission is not only
justified in modifying its rulings to the extent of materially
lessening the distance at which a “dark” object may be
seen on the right of way, but that it should do so as a
matter of necessity for the protection of lives and property
O]] railways, more especially on those roads that are heavily
trafficked.
" " It is a fact that the beam candle power of an acetylene
or medium-powered light ranges between 3,000 and 14,500
candle power, measured with the aid of a reflector. This
22
fact, considered by the Commission in connection with
phantom lights and the uncontradicted statement of the
expert railway official heretofore referred to, to the effect
that: -
“We got phantom lights in the neighborhood of
20,000 apparent beam candle power,”
shows that by using acetylene practically no phantom
lights will be seen. Is not this fact worthy of the Commis-
Sion’s consideration ? -
In making a modification of the order of June 6, 1916,
if the use of the words “dark object at 1,000 feet” in that
order eliminates' from use entirely a stronger light than
oil and a weaker light than electricity, I ask consideration
of the items set forth in my brief as to the conditions under
which the Order was originally framed. '.
The major portion of the record of the last hearings is
made up of testimony of a conflicting character regarding
the ability of locomotive engineers, running in the face
of the beams of an approaching high-power electric arc
light, to read accurately all signals along the right of way
which are located beyond the locomotive facing the high-
powered light. About one-half of the witnesses (including
all of the wonderfully-visioned inspectors connected with
and operating under the Chief Locomotive Boiler Inspector)
swear that such an opposing beam of light gave them no
trouble whatever in reading such signals. The other half
swear positively that the opposing light blinded them to
such an extent as to interfere with the picking up of any
signals of any character. If the Chief of the Locomotive
Boiler Inspection Division had been as active as we think he
should have been, and had been as zealous to present impar-
tially to the Commission all facts as he has been zealous in
his efforts to prove that his recommendations as to “dark
23
object,” “normal vision” and “normal weather,” were justi-
fied, he could easily have ascertained the fact that the only
known signal light in use today by railroads that can be
seen under the conditions mentioned, by all persons not
actually suffering from defective eye-sight, is an acetylene
flame of light in a standard signal lamp flashing at inter-
vals of between 40 to 80 flashes per minute. An inexpen-
sive and impartially conducted test on his part would have
materially increased his information.
The interests which I represent have no favors to ask
and we have no one we desire to punish, be he an official of
the Government, a brethren of the Brotherhood, or a lay-
man. What I have stated is not in a spirit of petty criti-
cism, but in the belief that the environments in this case
are such that even the present Chief of the Locomotive
Boiler Inspection Division, who is only human after all,
would have to be a partisan. In the ugly rumor and gossip
which has beclouded this headlight question and which
seems to be common knowledge throughout the railroad
world (as admitted by certain parties in interest at the
hearing by the very nature of their questions to witnesses),
I take no stock and have given no cognizance. Whether
the rumors are true or untrue does not interest me or mine,
for all we want is a fair, square chance to do business
without prejudiced annoyance from interested individuals
whether in or out of the Government service. We can only
get that chance at the hands of this Commission by a modi-
fication of their rule of June 6, 1916. We ask nothing
from the Commission’s subordinates. We have come to
the fountain head. If you will give us this chance we will
take our lot in the fight for business and protect ourselves
in the Courts of the land from any injurious practices
whether they originate from official, personal or corporate
SOUIFCeS. :
24
If the Commission at this time does not feel that it
can grant the request which we make for a modification
of the order due to a lack of testimony or information
which it should be possessed of, then we desire to submit
an amendment to the motion, which the attorneys or repre-
sentatives of the high-powered headlights advocate made
for an investigation or test to be conducted by the Inter-
state Commerce Commission, to the effect that such investi-
gation or tests shall cover all kinds of headlights now in
use by railways. And we further ask that such tests and
investigations be conducted by the Bureau of Safety Devices
and not by the Bureau of Locomotive Boiler Inspection.
And further, that such tests shall be made under varied
weather conditions, in different parts of the country, and
in an impartial manner, free from the influence of all inter-
ested parties.
25
(SHRIVER EXHIBIT No. 3.)
- BEFORE THE
INTERSTATE COMMERCE COMMISSION.
FURTHER HEARING OCTOBER 19, 1914.
THE FIVE PER CENT. CASE.
DOCKET No. 5860.
REVENUES OF RAIL CARRIERS IN OFFICIAL
CLASSIFICATION TERRITORY.
- DOCKET No. 333. .
INVESTIGATION AND SUSPENSION OF RATE
INCREASES IN OFFICIAL CLASSIFI-
CATION TERRITORY.
PRESENTATION by
GEORGE M. SHRIVER
. OF THE -
FINANCIAL AND OPERATING STATEMENTS FOR THE YEAR ENDED
JUNE 30, 1914, IN RELATION TO 1913, AND TO THE YEARS 1900
TO 1913, INCLUSIVE, FOR THE THIRTY-EIGHT ROADS AND
SYSTEMS COMBINED : THE PENNSYLVANIA SYSTEM, THE
NEW YORK CENTRAL SYSTEM AND THE BALTIMORE
AND OHIO SYSTEM COMBINED, AND FOR THE
THIRTY-EIGHT INDIVIDUAL ROADS AND i
SYSTEMS. - .
(SHRIVER EXHIBIT No. 3)
s*,
\\s
i
BEFORE THE
INTERSTATE COMMERCE COMMISSION.
FURTHER HEARING OCTOBER 19, 1914.
THE FIVE PER CENT. CASE.
- ----------------------------------,
Docket No. 5860.
REVENUES OF RAIL CARRIERS IN OFFICIAL CLASSI-
CATION TERRITORY.
Docket No. 333.
INVESTIGATION AND SUSPENSION OF RATE
INCREASES IN OFFICIAL CLASSIFI-
CATION TERRITORY.
PRESENTATION BY
GEORGE M. SHRIVER
OF THE
FINANCIAL AND OPERATING STATEMENTS FOR THE YEAR
ENDED JUNE 30, 1914, IN RELATION TO 1913, AND TO THE
YEARS 1900 TO 1913, INCLUSIVE, FOR THE THIRTY-
EIGHT ROADS AND SYSTEMS COMBINED; THE
PENNSYLVANIA SYSTEM, THE NEW YORK CEN-
TRAL SYSTEM AND THE BALTIMORE AND
OHIO SYSTEM COMBINED, AND FOR THE
THIRTY-EIGHT INDIVIDUAL ROADS
- AND SYSTEMS.
In the previous hearing in this case, statements were filed on
behalf of the thirty-five roads and systems involved in this pro-
ceeding, summarizing the results of their operations in relation
to capital obligations and property investment, for the years 1898
to 1913 inclusive.
The figures for the year 1914 are now available and statements
for these companies, in the same detailed form as heretofore
submitted, are now filed, marked Shriver Exhibit No. 2. For
the purpose of comparison the figures for 1914 are shown in re-
2
lation to those for the preceding year. This exhibit contains:
First—A statement of all the roads combined; Second—A state-
ment of the New York Central, Pennsylvania and Baltimore &
Ohio Systems combined; Third–Separate statements of the
thirty-eight roads and systems.
The Commission in its report confined its consideration to the
result of operations for the years 1900 to 1913 inclusive, and the
first eleven months of 1914. For the purposes of comparison
the figures now had for the twelve months of 1914 are, with refer-
ence to some of the more important features, shown in relation
to the years 1900 to 1913 inclusive. An exhibit marked Shriver
Exhibit No. 1 is filed herewith entitled “Summary of Financial
Exhibits Thirty-Eight Eastern Railroads and Systems for the
years ended June 30, 1900 to 1914, inclusive.” This exhibit em-
bodies, first, a statement (Page 1) covering all the roads and sys-
tems combined, except the Coal & Coke Rºy, the Detroit, Toledo
& Ironton Rºy and the Lehigh & New England R. R., figures for
which are not available for the entire period; second (Page 2), a
statement in which the figures for the Pennsylvania, New York
Central and Baltimore & Ohio Systems are shown in combination;
and third, separate statements for each of the thirty-eight roads
and systems (except the Coal & Coke Rºy and the Lehigh & New
England R. R.).
COMBINED STATEMENTs—ALL ROADS.
Referring to the combined statement of all systems, attention
is called briefly to the following points: -
Total capital obligations in 1914 were, in round figures,
$6,548,000,000, an increase over 1913 of $159,000,000, and were
the largest in any of the fifteen years.
Total property investment in 1914 was $6,529,000,000, an in-
crease over 1913 of $249,000,000, and was the largest in any of
the fifteen years.
Operating revenue in 1914 was $1,375,000,000, being $48,000,000
or 3.4% less than in 1913, but with exception of 1913 the largest
in fifteen years.
3
Operating expenses in 1914 were $1,044,000,000, an increase of
$22,000,000 over 1913 (notwithstanding the smaller amount of
business handled) and the largest in fifteen years. .
The ratio of operating expenses to operating revenue in 1914
was 75.90, being 4.13 over 1913, and much the highest ratio shown
in fifteen years. -
YEAR. - RATIO. YEAR. RATIO.
1900 64, 62 1907 68.45
1901 64.82 1908 70.97
1902 65. 49 1909 67.97
1903 67.15 1910 67.27
1904 68.87 1911 70.71
1905 67. 88 1912 70.75
1906 66.83 1913 71.77
1914 75.90
The net operating revenue was $331,000,000, a decrease of
$70,500,000 as compared with 1913, and was the smallest shown
in nine years, with the exception of 1908, when the effects of the
panic were felt.
It will be noted that a decrease of less than four per cent. in
operating revenue in 1914, as compared with 1913, coincident
with an increased expense, due in a large measure to higher basis
of operating costs in the industry, resulted in an increase of 4.13
in the operating ratio, and a decrease of 17.53% in the net
operating revenue. -
, Taxes in 1914 were $57,000,000, an increase of $3,000,000 over
1913. This item, which in 1900 was $22,000,000, shows an in-
crease in each succeeding year.
Net operating income in 1914 was $260,000,000, a decrease of
$76,000,000 compared with 1913, and was the smallest in ten
years.
Gross corporate income was $308,000,000, a decrease of
$82,000,000 from 1913, and was the smallest in nine years.
Deductions for interest and miscellaneous charges were
$197,000,000, an increase of $14,000,000 over 1913, and were
the largest in fifteen years. t
4
Net corporate income was $110,000,000, which shows a de-
crease of $96,000,000 compared with 1913, and was the smallest
since 1900.
Dividends paid were $118,000,000, a decrease of $12,000,000
from 1913, and were the smallest in five years. The average rate
on capital stock was 4.58%, the lowest average rate in nine years.
RETURN ON CAPITAL OBLIGATIONS.
In 1914 the sum available for interest, dividends and surplus
amounted to but 4.06% on total capital obligations, a ratio much
the lowest of any shown in the preceding fourteen years. Pre-
vious to 1914 the ratio did not fall below 5.08. -
YEAR. RATIO. YEAR. RATIO.
| -
1900 5. 13 1907 5.83
1901 5.41 1908 5.08
1902 5.61 1909 - 5,47
1903 5.87 1910 6, 27
1904 5.35 1911 5, 33
1905 5.56 1912 5. 39
1906 5.95 1913 5.62
1914 4.06
RETURN ON PROPERTY INVESTMENT.
In 1914 the ratio of net operating income to property invest-
ment was only 3.99 against 5.36 in 1913—this ratio also being
the lowest in any of the fifteen years, the lowest recorded pre-
viously being 5.19 for the year 1912. *
YEAR. RATIO. YEAR. RATIO.
1900 5. 28 1907 6.25
1901 5.50 1908 5.26
1902 5. 70 1909 5. 55
1903 5.85 1910 6.28
1904 5. 52 1911 5.23
1905 . 5.79 1912 5.19
1906 6.31 1913 5.36
- r 1914 ‘. . 3.99
It will be noted that both the foregoing ratios were much lower
in 1914 than they were in the years which, as pointed out by
the Commission, were years of “dullness and inactivity,” namely
1904, 1908 and 1911. . .
5
SURPLUS OR MARGIN.
A striking feature of the 1914 returns is the complete dis-
appearance of surplus or margin. This surplus had averaged
1.28% on total capital obligations for the fourteen years ended
with 1913. In 1914, notwithstanding the fact that total divi-
dends were $12,000,000 less than in 1913 and that dividends were
at an average rate of only 4.58%, the lowest rate in ten years,
there was a deficit of $8,200,000.
YEAR. AMoUNT. YEAR. AMoUNT.
|
1900 $49,759,125 1907 $81,984,904
1901 58,986,751 1908 47,440,851
1902 62,111,118 1909 69,523,977
1903 78,518,371 1910 92,804,415
1904 59,187,023 - 1911 58,714,052
1905 63,380,616 1912 39,182,308
1906 92,943,565 1913 75,905,256
1914 Def. 8,203,287
THREE SYSTEMS STATEMENTS.
Attention is also directed to the combined statements for the
year 1914 for the three systems: Pennsylvania, New York Cen-
tral and Baltimore & Ohio, in which the same general conditions
as referred to with respect to the thirty-eight roads and systems
are even more clearly shown. -
Total capital obligations in 1914 were, in round figures, $3,229,-
000,000, an increase over 1913 of $112,800,000, and were the largest
in any of the fifteen years.
Total property investment in 1914 was $3,388,000,000, an in-
crease over 1913 of $135,200,000, and was the largest in any of the
fifteen years. \
Operating revenue in 1914 was $766,151,000, being $31,200,000
or 3.9% less than in 1913, but with exception of 1913 the largest
in fifteen years. .
Operating expenses in 1914 were $594,000,000, an increase of
$4,800,000 over 1913 (notwithstanding the smaller amount of
business handled), and the largest in fifteen years.
The ratio of operating expenses to operating revenue in 1914
was 77.54, being 3.64 points over 1913, and much the highest ratio
shown in fifteen years.
YEAR. RATIO. YEAR. RATIO.
1900 65. 13 1907 71.27
1901 65.31 - 1908 72.51
1902 65.79 1909 69.87
1903 68.67 1910 69. 64
1904 71.49 1911 73.32
1905 70. 42 1912 72. 39
1906 68.95 1913 73.90
1914 77.54
The net operating revenue was $172,000,000, a decrease of
$36,000,000 compared with 1913, and was the smallest shown
in nine years with the exception of 1908, when the effects of the
panic, as previously referred to, were felt.
It will be noted that a decrease of less than four per cent. in
operating revenue in 1914, as compared with 1913, coincident with
an increased expense, resulted in an increase of 3.64 in the oper-
ating ratio, and a decrease of 17.3% in the net operating
I’éVéI) U16. .
Taxes in 1914 were $33,400,000, an increase of $2,180,000 over
1913. This item in 1900 was $12,200,000, the increase being equal
to 173%. -
Net operating income in 1914 was $131,600,000, a decrease of
$41,476,000 compared with 1913, and was the smallest in ten years.
Gross corporate income was $156,562,000, a decrease of $40,-
179,000 from 1913, and was the smallest in nine years.
Deductions for interest and miscellaneous charges— an item of
continuous growth—were $89,958,000, an increase of $6,520,000
Over 1913.
Net corporate income was $66,603,000, which shows a decrease
of $46,699,000 compared with 1913, and was the smallest since
1900.
Dividends paid were $66,142,000, a decrease of $77,000 from
1913, and were the smallest in five years. The average rate on
capital stock was 5.53%, the lowest average rate in ten years.
RETURN ON CAPITAL OBLIGATIONs.
In 1914 the sum available for interest, dividends and surplus
amounted to but 4.54% on total capital obligations, a ratio much
the lowest of any shown in the preceding fourteen years. Previous
to 1914 the ratio did not fall below 5.67.
YEAR. RATIO. YEAR. RATIO
1900 6.05 1907 6.54
1901 6. 56 1908 5.92
1902 6.85 1909 6.14
1903 6.76 1910 6.88
1904 5.67 1911 5.72
1905 6.13 1912 6.01
1906 6, 71 1913 6.15
1914 | 4.54
RETURN ON PROPERTY INVESTMENT.
In 1914 the ratio of net operating income to property invest-
ment was only 3.88 against 5.32 in 1913, this ratio also being
the lowest in any of the fifteen years, the lowest recorded pre-
viously being 5.03 for the year 1911. -
YEAR. RATIO. YEAR. RATIO.
| N :
1900 5, 68 1907 6. 37
1901 5.97 1908 5.53
1902 6.30 1909 5.71
1903 6.21 1910 6.41
1904 5.46 1911 5.03
1905 5.88 1912 5.25
1906 6. 58 1913 5. 32
1914 3.88
It will be noted that both the foregoing ratios were much lower
in 1914 than they were in the years which have been noted as
years of “dullness and inactivity,” namely, 1904, 1908 and 1911.
SURPLUS OR MARGIN.
The surplus or margin after dividends, which in 1913 was
$47,083,000, and for fifteen years had averaged $38,733,000, was,
after the payment of an average dividend of 5.53%, but $461,235
in 1914, or fourteen thousandths of one per cent. on total capital
obligations of $3,229,361,000.
YEAR. AMoUNT. YEAR. AMoUNT.
1900 $30,470,886 1907 $45,502,844
1901 38,033,112 1908 35,033,620
1902 42,999,409 1909 42,306,982
1903 44,830,337 1910 59,531,049
1904 26,776,366 1911 32,626,913
1905 35,773,043 1912 40,522,374
1906 59,050,534 lº 47,083,181
1914
461,235
- BEFORE THE - .
INTERSTATE COMMERCE COMMISSION.
FURTHER HEARING october 19, 1914.
pocker No. 5860.
REVENUES OF RAIL CARRIERS IN OFFICIAL
CLASSIFICATION TERRITORY. .
pocket No. º.
INVESTIGATION AND SUSPENSION OF RATE
INCREASES IN OFFICIAL CLASSIFI-
CATION TERRITORY.
STATEMENT ON BEHALF OF THE RAILROADS.
. . . . . . BY DANIEL WILLARD. ‘. .
BEFORE THE
INTERSTATE COMMERCE COMMISSION.
FURTHER HEARING OCTOBER 19, 1914.
THE FIVE PER CENT. CASE.
Docket No. 5 S60.
REVENUES OF RAIL CARRIERS IN OFFICIAL CLASSI-
FICATION TERRITORY.
IDocket No. 3:33.
INVESTIGATION AND SUSPENSION OF RATE
INCREASES IN OFFICIAL CLASSIFI-
CATION TERRITORY.
STATEMENT ON BEHALF OF THE RAILROADS.
By DANIEL WILLARD.
The railroads operating in Official Classification Territory, and
parties to the so-called “Five Per Cent. Case,” now appear before
this Commission as petitioners and respectfully request that such
modification be made of the Report and Order of July 29th, 1914,
as will enable the carriers to put into effect the rates which were
therein directed to be cancelled.
Subsequent to the filing of the Report and entry of the Order
of the Commission in the cases known as Docket No. 5860 and
I. & S. Docket No. 333, facts and circumstances have arisen which
could not possibly have been foreseen upon the date when the
Order was entered. A war of unprecedented proportions has
broken out, and this, taken in connection with the facts already
in the record, with such additional information as the carriers are
now able to furnish, clearly indicates such a situation as your
petitioners believe fully justifies the relief now prayed for.
The tariffs above referred to were originally filed by the rail-
roads in October, 1913, and are intended to provide for a general
advance, with some exceptions, of approximately five per cent. in
all freight rates in Official Classification Territory. In support of
2
the advanced tariffs the carriers pleaded, among other things,
inadequacy of revenues and the Commission in its report on July
29th used these words:
“In view of a tendency towards a diminishing net operating
income as shown by the facts described, we are of opinion
that the net operating income of the railroads in official
classification territory, taken as a whole, is smaller than is
demanded in the interest of both the general public and the
railroads, and it is our duty and our purpose to aid, so far as
we legally may, in the solution of the problem as to the
course that the carriers may pursue to meet the situation.”
It should be kept in mind that the words just quoted were
written previous to the 29th of July, 1914, and before it was pos-
sible to foresee or weigh the great events which have transpired
since that date. However, with such facts before it as were de-
veloped in the original record, and in furtherance of its announced
purpose to aid so far as it legally might in the solution of the prob-
lem then confronting the railroads, the Commission approved of
certain rate advances in Central Freight Association Territory, and
suggested the propriety of other advances and changes of practices
which, if found practicable, would enure in varying degree to the
advantage of all of the roads involved in this proceeding.
The carriers are not unmindful of the great significance of the
words just quoted from the Commission's report in this case, and
they do not doubt that, with the assistance of the Commission,
additional net revenue may eventually be obtained along the lines
suggested, and definite action has already been taken concerning
many of the subjects referred to, and all are receiving earnest con-
sideration, but the needs of the carriers are pressing and imme-
diate, and the measures of relief proposed by the Commission will
not in our opinion adequately meet the existing situation.
In order that the Commission may intelligently consider the
whole subject as affected by present conditions, it would seem
necessary to supplement the original record with such additional
facts and figures as are now available, showing operating results
of these carriers since the case was submitted on May 29th. The
railroads, in support of their claim of inadequate revenue, filed
statements showing the result of their operations for a term of
years to June 30th, 1913, and in its report the Qommission con-
sidered also the monthly statements of the railroads up to and
3
including the first eleven months of the year ended June 30th,
1914. The carriers are now able to furnish complete reports for
the entire fiscal year of 1914 and we desire to offer this additional
and supplementary evidence, believing it to be essential to a proper
determination of the case.
The combined statements of all the railroads involved in
this proceeding for the fiscal year ended June 30, 1914, show
roundly that the total operating revenues during that year were
approximately $48,000,000 less than during the previous year,
while the operating expenses during the same period were ap-
proximately $22,000,000 greater. The net operating income of
these companies for the same period amounted to $260,000,000,
or approximately $76,000,000 less than was earned during the
previous year, and equal to but 3.98 per cent. upon the property
investment, a lower return than was shown at any time in the
preceding fifteen years. The income, applicable to interest, divi-
dends and surplus during the fiscal year just closed, was
$265,700,000, or 4,06 per cent. upon the total capital obligations,
this return also being lower than any in fifteen years. The
operating figures for July and August have been tabulated and
will be presented to the Commission, and they also serve to
emphasize the tendency towards diminishing net income, which
the Commission found in the facts in the record as originally
submitted. r
The carriers by documentary evidence and witnesses, if desired,
are prepared to support the general statements just made.
While the additional figures now submitted clearly establish
a continuation of the recognized tendencies toward a diminishing
net income, the actual situation which confronts the railroads
today, as revealed by the information now available, and because
of the unforeseen and unprecedented events which have taken
place since July 29th, has become extremely critical. The problem
is no longer one of tendencies, but has become instead one of
actual reality. -
A war such as that now raging causes great and immediate
disturbance to industry, commerce and finance. It causes con-
traction of credit and great restriction, if not the actual stoppage
of international trade as well as serious disturbance to domestic
commerce, and as we have seen, it has thrown the security markets
of the world, first into panic and then into suspension of operations.
4.
These have in fact been the immediate, direct and clearly apparent
consequences of the war which began less than three months ago;
but the ultimate and more lasting consequences are almost as
plainly to be seen and will certainly follow, if they do not accom-
pany, the conditions mentioned. These are: enormous destruc-
tion of wealth, with great diversion of labor and capital to unpro-
ductive employment, thus causing a check to the world's accumula-
tion of new capital, and a serious and prolonged rise in the rate of
interest, and the effect of such higher interest rates will continue
long after the present emergency has passed, because they will
be reflected in the basis upon which the new securities will be
issued from time to time as required for refunding and other
purposes; and in so far as the war and its consequences tend, as
I have just shown, to change the conditions surrounding the
enlistment of new capital, they tend to change the fundamental
relation between railroad and shipper.
The cost of capital is one of the important elements of the cost
of transportation.
It is known that the railroads of the United States have over
$520,000,000 of outstanding obligations which will mature and must
be met within the next twelve months alone, and it was shown in the
original record in this case that the railroads in Official Classifica-
tion Territory only, had spent approximately $200,000,000 per
annum upon their properties for improvements and extensions
during the last ten-year period, and it will be necessary to con-
tinue such expenditures if the roads are to maintain their standard
of service and provide for the growing needs of the future.
Further, as nearly as can be ascertained, there are more than
$3,000,000,000 par value of American railroad securities held
abroad as investments. The demands for cash in Europe, growing
out of the present situation, will doubtless result in large selling
of such securities when the markets or exchanges are again
opened, and the possible effect of such selling upon railroad credit
and related subjects is causing much concern.
With all this in mind it will readily be seen that the available
supply of and probable demand for new capital, as well as the
interest rates thereon, are matters of great importance, not only
to the railroads, but also to those who depend upon them for trans-
portation and in our opinion a proper determination of this case
5
cannot be made unless these matters as affected by existing con-
ditions be given full consideration. I shall not dwell further
upon this important phase of the question, however, because
others who are deeply interested in the subject have asked
to be heard in that connection.
The case of the railroads, as so frequently pointed out, is quite
unlike that of a private undertaking. The railroad, because of
its public character and the terms of the charter under which it is
permitted to operate at all, is subject to governmental regulation,
not only as to the charges which it shall impose, but also as regards
many of the details of operation, and on that account is unable,
like the private enterprise, to readjust its rates and practices to
meet such a situation as now exists unless and until the necessary
approval is obtained.
Finally, it is respectfully submitted that whatever the outcome
as concerns these railroads might have been, had there been no
war, as a matter of fact there is a war and a grave emergency now
exists. It is hardly necessary to suggest that if the Commission,
in view of the present situation, should now conclude, after con-
sideration of all the facts, to approve the tariffs as requested, and
should it at any time later on appear that the situation had changed
and the emergency had passed, and should it further appear that
the carriers involved in this proceeding were then, taken as a
whole, in such condition as to earnings, maintenance charges
and return on capital obligations as to justify a reconsideration
of the action now prayed for, this Commission would have ample
power to order at any time such reductions as might be fair and
reasonable, and I am of opinion that the carriers would not
oppose such action by the Commission when conditions such as I
have enumerated shall have been established.
GENERA ºr ºf
Nov.12 lºw
—-
(MAXWELL EXIIIBIT No. 9.)
BEFORE THE
Interstate Commerce Commission.
FURTHER HEARING OCTOBER 19, 1914.
THE FIVE PER CENT. CASE.
DoCKET No. 5860.
REVENUES OF RAIL CARRIERS IN OF-
FICIAL CLASSIFICATION TERRITORY.
DoCKET No. 888.
INVESTIGATION AND suspension of
. . . . Jupp & DETweiler (INC.), PRINTERs, WASHINGTON, D. C. . . . .
RATE INCREASES IN OFFICIAL CLAS-
sIFICATION TERRITORY. .
- PRESENTATION By
W. C. MAXWELL
of THE
FINANCIAL AND opBRATING STATEMENTS FOR THE YEAR
ENDED JUNE 30, 1914, IN RELATION TO 1913, AND To
THE YEARs 1900 To 1913, INCLUSIVE, FOR THE
CENTRAL FREIGHT Association LINEs.
-- . --------- -
(MAXWELL EXHIBIT NO. 9.)
BEFORE THE
Interstate Commerce Commission.
FURTHER HEARING OCTOBER 19, 1914.
THE FIVE PER CENT. CASE.
DOCKET NO. 5860,
REVENUES OF RAIL CARRIERS IN OF-
FICIAL CLASSIFICATION TERRITORY.
DOCKET No. 333.
INVESTIGATION AND SUSPENSION OF
RATE INCREASES IN OFFICIAL CLAS-
SIFICATION TERRITORY.
PRESENTATION BY
W. C. MAXWELL
OF TELE
IFINANCIAL AND OPERATING STATEMENTS FOR THE YEAR
ENDED JUNE 30, 1914, IN RELATION TO 1913, AND TO
THE YEARS 1900 TO 1913, INCLUSIVE, FOR THE
CENTRAL FIREIGHT ASSOCIATION IIINES.
In the previous hearing in this case, statements
were filed on behalf of the Central Freight Asso-
ciation Lines, summarizing the results of their op-
2
erations in relation to capital obligations and prop-
erty investment for the years 1898 to 1913, inclu-
sive.
The figures for the year 1914 are now available,
and statements for these companies, in the same
detailed form as heretofore submitted, are now
filed, marked Maxwell Exhibit No. 9. For the pur-
pose of comparison, the figures for 1914 are shown
in relation to those for the preceding year. This
exhibit contains first: A statement covering the
thirty-eight companies comprising Group I of the
Central Freight Association Lines (as shown in
31 I. C. C., 396); second, a statement covering the
twenty-eight roads comprising Central Freight As-
sociation Lines, Group III, which have been held
by the Commission in Opinion 2741 as “representa-
tive of local conditions in that territory;” third,
the statement of the individual roads. - -
Taking up first Group III, the typical group
attention is called briefly to the following points:
Total property investment in 1914 was $1,499,-
888,944, the largest in the history of these com-
panies, and an increase of $18,190,993 over 1913.
Operating revenue in 1914 was $270,770,264, or
1.86 per cent less than in 1913, but otherwise the
largest in the history of the group. -
Operating expenses in 1914 were $228,758,261, an
increase of $10,698,654 over 1913 (notwithstand-
ing the smaller amount of business handled), and
are the largest in their history.
The ratio of operating expenses to operating rev-
3
enue in 1914 was 84.48, being 5.45 over 1913, and
much the highest ratio yet experienced.
Year. Ratio. Year. Ratio.
1903 68. 57 1909 72. 57
1904 71.35 1910 72.61
1905 71.88 1911 75.47
1906 70.38 1912 78. 80
1907 70. 70 1913 79,03
1908 74.36 1914 84.48
The net operating revenue was $42,012,003, a
decrease of $15,838,365, as compared with 1913,
and was the smallest shown in the past 12 years.
It will be noted that a decrease of less than 2
per cent in Operating revenue in 1914 as compared
with 1913, coincident with an increased expense,
due in a large measure to higher basis of operating
costs in the industry, resulted in an increase of
5.45 in the operating ratio, and a decrease of 27.38
per cent in the net operating revenue.
Taxes in 1914 were $11,826,898, an increase of
$1,197,892 over 1913. This item was $6,746,000 in
1903, showing an increase in each succeeding year.
Net operating income in 1914 was $19,391,324,
a decrease of $19,299,824 compared with 1913, and
was by far the smallest in ten years.
Net corporate income was a deficit of $16,-
007,093, which shows a decrease of $19,690,536 com-
pared with 1913, and was the smallest in the history
of the group.
Dividends paid were $7,711,156, a decrease of
25.44 per cent from 1913, and were the smallest
4
in the period 1903 to 1914. The average rate on
capital stock was 1.36 per cent, also the lowest rate.
Return on Property Investment.
In 1914 the ratio of net operating income to
property investment was only 1.29 against 2.61 in
1913—this ratio also being the lowest in any of the
twelve years.
Year. Ratio. Year. Ratio.
1903 4. 23 1909 3.17
1904 3.84 1910 3.64
1905 3.63 1911 3.14
1906. 3.85 1912 2.45
1907 4.24 1913 2.61
1908 3.16 1914 1.29
It will be noted that this ratio was much lower in
1914 than in the years which, as pointed out by the
Commission, were years of “Dullness and inac-
tivity,” namely 1904, 1908, and 1911, when it was
respectively 3.84 per cent, 3.16 per cent, and 3.14
per cent. *
Surplus or Margin.
Since 1910 Group III has had no unappropri-
ated surplus, but a deficit now amounting to $72,-
080,529. The figures for the past few years are:
1910. . . . . . . . . . . . . . . . . $2,094,034 Surplus
1911. . . . . . . . . . . . . . . . . 18,574,927 Deficit
1912. . . . . . . . . . . . . . . . . 28,180,578 Deficit
1913. . . . . . . . . . . . . . . . . 49,741,649 Deficit
1914. . . . . . . . . . . . . . . . . 72,080,529 Deficit
Group I.
The foregoing figures cover Group III, held by
the Commission to be typical of local conditions in
Central Freight Association Territory. The show-
ing for Group I is, however, relatively the same.
Total property investment for Group I increased
in 1914 over 1913 $45,964,000 to $2,336,000,000.
Operating Revenues in 1914 were $513,409,000,
being $23,768,000 or 4.44 per cent less than in 1913,
but with exception of 1913 the largest.
Operating expenses in 1914 were $411,884,000,
an increase of $11,019,000 over 1913 (notwithstand-
ing the smaller amount of business handled), and
the largest in fifteen years.
The ratio of operating expenses to operating
revenues in 1914 was 80.23, being 5.62 points over
1913, and much the highest ratio shown in fifteen
years.
Year. Ratio. Year. Ratio.
1903 69. 40 1909 69. 38
1904 72. 11 1910 68.82
1905 71.65 1911 72.64
1906 69.23 1912 73.38
1907 70. 06 1913 74. 61
1908 71.45 1914 80.23
The net operating revenue was $101,500,000, a
decrease of $35,000,000 compared with 1913, and
was the Smallest shown since 1905.
It will be noted that a decrease of less than five
6
per cent in operating revenue in 1914, as compared
with 1913, coincident with an increased expense,
resulted in an increase of 5.62 in the operating
ratio, and a decrease of 25.57 per cent in the net
Operating revenue.
Taxes in 1914 were $23,200,000, an increase of
$2,760,000 over 1913. -
Net operating income in 1914 was $65,211,000, a
decrease of 38.78 per cent compared with 1913, and
was the smallest since 1902.
Net corporate income was $12,072,821, against
$57,095,387 in 1913, which shows a decrease of 78.85
per cent compared with 1913, and was by far the
smallest since 1900.
Dividends paid were $34,321,000, a decrease of
15 per cent from 1913. The average rate on capital
stock was 3.65 per cent.
Return on Property Investment.
In 1914 the ratio of net operating income to
property investment was only 2.79 against 4.65 in
1913, this ratio also being the low mark.
Year. Ratio. Year. Ratio.
1903 4.90 1909 4.63
1904 4.38 1910 5.48
1905 4.44 1911 4.47
1906 5.18 1912 4. 30
1907 5. 49 1913 4.65
1908 4.59 1914 2.79
7
It will be noted that the ratio was much lower
in 1914 than in the years which have been noted
as years of “dullness and inactivity,” namely,
1904, 1908, and 1911, when it was respectively 4.38
per cent, 4.59 per cent, and 4.47 per cent.
[26694]
BEFORE THE
Interstate Commerce Commission.
I e s booker waſ
COMMUTATION FAREs To AND FROM
WASHINGTON, D. C.
ARGUMENT For PROTESTANT, THE METRopot.ITAN
BRANCH CoMMUTERs' Association.
. . JoHN B. DAISH,
J. RAYMoND Hoover,
- Attorneys for Metropolitan Branch
Commuters’ Association. -
February 10, 1915.
*2-
JUDD & DETwºrDBE (INC.), PRINTERs, was HINGTon, D. C.
BEFORE THE
Interstate Commerce Commission.
I. & S. DOCKET 567.
COMMUTATION FARES TO AND FROM
WASHINGTON, D. C.
ARGUMENT FOR PROTESTANT, THE METROPOLITAN
BRANCH COMIMIUTERS’ ASSOCIATION.
I.
The argument on behalf of The Metropolitan
Branch Commuters’ Association will be confined
to the proposed commutation fares, charges, and
services to and from Washington from and to
Metropolitan Branch points. The Metropolitan
Branch, so-called, extends from Washington to
Washington Junction, Maryland, a distance of 43
miles.
II.
The question in this proceeding is whether Or
not the respondent, The Baltimore & Ohio Rail-
lj
2
road, has sustained the burden cast on it by Sec-
tion 15 of the statute, in respect to certain pro-
posed advances in commutation fares to Washing-
ton.
The burden in this case is of greater weight than
were the facts and circumstances different. Many
of the commuters were induced by the respondent
using various means to build homes and take up
their permanent residences along the Metropolitan
Branch. Further, the present fares have been
long in existence, probably 25 years. Again, the
proposed fares were prepared after full confer-
ence and agreement (Rec., 99, 100).
The first fact argues that having been induced to
become a regular patron, fares should not be raised
but for exceptionally good reasons.
“Where a plant has been established and
money has been invested on the faith of cer-
tain transportation rates and conditions, the
carrier may not increase those rates and
charges to the serious disadvantage of such
investment without good cause or reason.”
Douglas & Co. vs. C., R. I. & P. Ry. Co., 16
I. C. C., 232, 237; followed in Corporation
Commission of N. C. vs. N. & W. Ry. Co.,
19 I. C. C., 303; Washington Lumber Mfgrs.
Assoc. vs. S. P. Co., 21 I. C. C., 389. -
“It will not be necessary to dwell here
upon the importance of the question not
only to the particular suburban communi-
ties involved on the record before us, but to
many other such communities throughout
the country, the prosperity and growth of
which largely depend upon an efficient and
3
reasonable commutation service. Many
such communities have not only been en-
couraged by the carriers, but were, in fact,
originally established largely on their initia-
tive. Suburban property has been bought,
homes have been established, business rela-
tions made, and the entire course of life of
many families adjusted to the conditions
created by a commutation service. This
may not have been done on the theory that
the fares in effect at any particular time
would always be maintained as maximum
fares, but countless homes have been estab-
lished in suburban communities in the be-
lief that there would be a reasonable con-
tinuity in the fares, and that the carriers
in any event would perform the service at
all times for a reasonable compensation.”
Commutation Rate Case, 21 T. C. C.,
428,437.
The second fact has always created a presump-
tion of the reasonableness of the rate.
The long and voluntary maintenance of a rate
is a strong admission that a higher rate would be
unreasonable unless satisfactorily explained.
Arlington Heights Fruit Exchange vs. S. P. Co.,
22 I. C. C., 149, 151; Acme Cement Plaster Co. vs.
L. S. & M. S. Ry. Co., 17 I. C. C., 30.
“Where a rate is voluntarily established
and maintained for a considerable period,
this fact, although not conclusive, is strong
evidence of the reasonableness of the rate.
The force of this presumption is greatly
weakened, and might be altogether de-
stroyed by the circumstances under which
4
the rate was established and maintained;
but if no particular reason is shown for the
putting in of the rate, if no commercial or
competitive condition prevents the main-
tenance of a higher rate, if, in other words,
the maintenance of this rate has been vol-
untary upon the part of the carrier, the
force of the admission becomes exceedingly
strong.” Burgess vs. Transcontinental
Freight Bureau, 13 I. C. C., 668, 677; fol-
lowed in Traugott Schmidt & Sons vs. M. C.
R. R. Co., 23 I. C. C., 684; Albee vs. B. & M.
R. R. Co., 22 I. C. C., 303, 315.
The third fact, coupled with the proposed large
increases, “requires a definite explanation on the
part of the carrier.” Commutation Rate Case, 21
I. C. C., 428, 449.
III.
(a) Commutation service, as practiced today, is
relatively one of the most recent of the different
services performed by common carriers.
“As applied to passenger traffic, com-
mutation seems to signify the payment in a
single sum of the cost to the traveler for
transportation, limited in point of time or
in the number of trips, between two desig-
nated points; apparently it implies also a
fare per trip that is less than the normal
fare for a one-way journey” (21 T. C. C.,
438).
“A commuter train [is] a train which is
run for the commuter” (Lowes, 288).
5
“A commuter is one who uses a recog-
nized commuter ticket;” “we call the com-
muter a man who uses a commutation ticket
of any class” (Lowes, 237).
The commuters here protesting are alleged to be
“Works, Clerks, and Shirks” (Lowes, 241).
(b) Commutation service varies with the differ-
ent localities, with respect to character, frequency,
and speed of trains and volume of traffic. Local
demands have caused varying kinds of equipment
and local circumstances have caused varying fares.
Even to a common center, there are by different
lines different fares for the same distance, differ-
ent equipment, different train schedules; to New
York, there is so-called “commutation service” by
numerous lines, but so varying is the service that
one can hardly make an intelligent comparison be-
tween the several lines. Even considering New
York commutation as a whole, one hesitates to
compare it with Chicago, Cleveland, Philadelphia,
or Buffalo. And, if he have the temerity to make
the comparison, he is not sure of his result, cer-
tainly, if he considers the value of the service to
the patron.
As commutation service is unique, “a special and
distinct kind of service,” when compared with
other railway service, so is it conspicuously local
(21 I. C. C., 445).
(c) Commutation service has been said to be a
“by-product;” Commutation Rate Case, 21 I.
6
C. C., 428, 441; “an incident to through traffic,”
ibid., 438.
This is certainly true when, as here, distance
trains make stops at residence stations near large
centers. *
Commutation service is more: It is a stimulator
of traffic; by the number of population a nearby
place is increased, is measured the increase in
freight, and express tonnage thereto.
IV.
The Standard Commutation Service must have
such frequency of trains, such speed, such stops,
such character of equipment as has been or may
be reassónably asked by the patrons.
If a place furnishes therefrom a trainload at a
particular time, the demand for a train practically
for the special use of those citizens has usually
been accorded. If a sufficient number of patrons
ask a club car or a parlor car (insuring a seat and
the same seat), it has been furnished. All of the
necessities and demands, nay even the whims, of
patrons have generally been acquiesced in.
This catering to the public has made the cost of
performing the Standard Commutation Service
greater than if all the demands had not been met.
The furnishing of up-to-date equipment and club
cars, the frequent train service at great speed has
made the value of Standard Commutation Service
greater than if the converse were furnished and
7
practiced. Just as it is worth something additional
to have the comfort of a Pullman berth, so it is
worth something additional to have commutation
service first class in every respect.
W.
It is proposed to advance the commutation fares
to Washington from Metropolitan Branch points
substantially 50 per cent; individual places show
as low an increase as 36 per cent, others as high as
100 per cent.
The proposed increases for the several Metro-
politan Branch stations are as follows:
Distance Present
-> from quarterly Proposed quar- In- Per cent
Station. Washing- rate. terly rate. of in-
ton, D. C. (180 (Mo. rate X 3) CreaSé. CreaSe.
Miles. trips).
Autrey Park. . . . . . . . . . . . . . . . . . . . . . . . . . . 15.9 $16.05 $23.25 $7.20 45
Barnesville . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33.8 28.35 39.45 11.10 39
Boyd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29. 5 25.65 35.40 9.75 38
Brown . . . . . . . . . . . . . . . . . . . . . . • . . . . . . . . . 23.4 20.35 30.00 9.65 47
Buck Lodge. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.8 26.65 36.75 10. 10 38
Capitol View. . . . . . . . . . . . . . . . . . . . . . . . . . . 10.8 12.85 18.75 5.90 46
Cloppºr . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 21.45 31. 35 9.90 46
Derwood . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . 19.4 18.25 26.40 8.15 45
Dickerson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.0 30.20 41.25 11.05 36
Fenwick . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4 11.05 16.35 5.30 48
Forest Glen. . . . . . . . . . . . . . . . . . . . . e e º O e ... 10.1 12.00 18.30 6.30 52
Gaithersburg . . . . . . . . . . . . . . . . . . . . . . . . . . 22.0 19.05 28.65 9.60 50
Garrett Park. . . . . . . . . . . . . . . . . . . . . . . . . . . 12.8 14.50 20. 55 6.05 42
Germantown . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.8 23. 20 33.15 9.95 43
Halpine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.1 15. 55 22.80 7.25 45
Kensington . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.4 , 13.30 19.20 5.90 44
Lamond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 10.15 14. 70 4. 55 45
Linden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 11. 50 17.85 6.35 55
North Takoma. . . . . . . . . . . . . . . . . . . . . . . . . 7.2 10.45 15. 60 5.15 49
39
42
51
76
49
78
38
100
49
43
48
37
42
43
48
45%
SP
Randolph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Rockville . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Silver Spring. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Stott . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Takoma Park. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Terra Cotta . . . . . . . . . . . ..... . . . . . . . . . . . . . 4
Tuscarora . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
University . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Waring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Washington Grove. . . . . . . . . . . . . . . . . . . . . . 21.
Washington Junction. . . . . . - * * * * e º e º e s e º e e 43.
Westmore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Windham . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Woodside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
15.40
17.00
10.65
7.85
10.15
7. 50
32.40
6.00
19.50
22.35
18, 75
34.95
17.90
15.00
11.45
$587. 40
21.45
24.15
16.05
13.80
15.15
13.35
44.85
12.00
29.10
31.80
27.75
48. 00
25.50
21.45
16.95
$851. 10
6.05
7. 15
5.40
5.95
5.00
5.85
12.45
6.00
9. 60
9.45
9. ()0
13.05
7.60
6.45
5. 50
$263. 70
10
Summarizing the foregoing table, it appears that
the average increase is 45 per cent. The percent-
ages of increase for the 34 stations may be grouped
thus: - -
Between 36 per cent (the lowest proposed in-
crease) and 40 per cent for 7 stations.
Between 41 per cent and 50 per cent 20 stations.
Between 61 per cent and 70 per cent 4 stations.
Between 70 per cent and 80 per cent 2 stations.
100 per cent 1 station.
The direct burden upon the public is to be made
by the proposed abolition of the 180-trip ticket;
this is the most popular form of commutation (41,
290, 352, 370, 128).
Prior to the filing of the tariff under suspension
(B. & O. L. C. C. A-3466) the commutation fares be-
tween the city of Washington and points on the Met-
ropolitan Branch had for many years been quarterly
(180-trip) tickets. This form of ticket it is pro-
posed to supersede by 60-trip tickets. As a basis
for comparison of the present and long-existing
commutation rates with the proposed 60-trip ticket,
the cost of the latter must be multiplied by thre
as above. -
The same tariff proposes to abolish the present
50-trip and 24-trip family tickets and in lieu
thereof provide for a 10-trip ticket good for three
months. This 10-trip ticket costs approximately
20 per cent more per trip than the present 50-trip
and 24-trip family ticket.
11
VI.
To meet the burden cast on it the respondent has
attempted to show: -
(a) That the increased fares would but bring
the Metropolitan Branch commuters up to the same
level as is charged other commuters in other sec-
tions, and
(b) That the cost of operating and maintaining
the service is such that it is not now profitable.
VII.
(a) With respect to the first showing, it may be
properly said:
1. That the present service has none of the ear-
marks of the Standard Commutation Service.
Neither the frequency nor speed of trains is com-
parable with even the poorest service near New
York, Chicago, Cincinnati, Cleveland, or Buf-
falo. As to equipment—“our commuter-service
coaches” (294)—it is far worse than the poor-
est around New York, the Erie. The Metro-
politan branch commuters have no half-hour or
hourly service, no after-theatre service, no mid-
forenoon service, no club or parlor cars. The
trains are either distance trains serving points be-
yond Washington Junction or run primarily as
12
milk trains; such trains as by a stretch of imagina-
tion may be termed commutation trains are but
eight each way per day. The train service is the
same as it was 17 years ago (Lowes, 36).
2. It is unfair to attempt to place on a parity
the fares for Standard Commutation Service with
the inferior commutation service (McCarty, 39,
113). It might be as reasonably argued that one
should pay for a parlor-car seat, although not oc-
cupying it, because there exists somewhere else
such accommodation.
3. That because the carriers serving Washing-
ton with alleged commutation service have agreed
to raise the fares—and such is of record herein
(82, 96, 98, 99, 100)—such fact gives no test of
reasonableness, but, on the contrary, calls for closer
scrutiny and more definite proof.
4. That the fares for Standard Commutation
Service have, as a whole, never received the ap-
proval of this and other commissions charged with
the duty of passing on the reasonableness thereof.
It is a fact within the knowledge of the well-in-
formed that the fares for Standard Commutation
Service, particularly when applied to certain lo-
calities (Philadelphia, Baltimore, Washington,
and Jersey City), are either now the subject of
controversy before courts and commissions, or
proceedings in respect thereto are in contempla-
tion.
13
5. The proposed fares are in amount substan-
tially those condemned as unreasonable and unjust
in the Commutation Rate case, 21 I. C. C., 428, at
page 448.
(b) With respect to the second showing—alleged
unprofitableness of the service—certain figures
have been submitted by the respondent.
1. Before considering these computations, it
may properly be said that they are subject to most
serious adverse criticism. The figures are made up
on averages for the Baltimore division (197); the
figures are incomplete (186); an engine is an en-
gine, irrespective of its rating, of the train it pulls
and of the amount of coal and other supplies which
it actually uses. The engine used in the particular
Service is financially made to be the average en-
gine. Nothing was allowed for the express re-
ceipts (278). Each train is charged $2.48 per unit
(engine or car) per movement as Washington
terminal costs; this charge aggregates sub-
stantially one-half of the total alleged direct ex-
penses for operation. The right to charge against
these trains making short runs such terminal ex-
pense must be seriously doubted; it does not ap-
pear that at Baltimore and elsewhere any such
terminal expense is included in operating costs.
If the “averages” have been properly arrived at,
they already include terminal expense; as a result
there would be a duplication of the charge. The
14
figures submitted are applied in certain cases to a
greater number of trains than are now being oper-
ated in commutation service; no deduction has
been made for trains which have been discon-
tinued. All commuters were not included (522).
The figures are admittedly incomplete (186).
2. Taking the figures at their face value and
omitting for the moment to give any weight to the
Criticisms which may properly be urged against
them, it appears from the tables introduced by the
respondents (Exhibit 6); that the annual earn-
ings (passenger, milk, and mail) on the Metropoli-
tan Branch was $336,571.82; to this should be
added, say, $12,000 for express earnings (278).
The annual operating expenses for the same
period aggregate $140,467.81. The ratio of operat-
ing expenses to operating revenue (express
revenue included) is 40 per cent.
The figures of the respondent show that the
revenue per passenger per mile for one train is
2.384 cents (Skilling, 167). The average of all
trains is 1.969 cents. This amount approximates
the much criticised and abused rates prescribed by
certain State legislatures, 2 cents per mile. It ex-
ceeds the average passenger receipts per mile of the
respondent herein for a series of years (1914,
1.923 cents); it far exceeds the average passenger
receipts per mile of the following-named roads:
Philadelphia & Reading (1914, 1.724 cents); Lack-
awanna (1914, 1.562); Central Railroad of New
15
Jersey (1914, 1747 cents); New York Central
(1914, 1.639 cents).
3. Cost is but one element in the reasonableness
of fares. The reasonableness of commutation
fares “must depend somewhat upon the character
of the service” (21 I. C. C., 442).
It is well settled that rates must be reasonable
to the public irrespective of financial returns to
the utility; the Constitution does not guarantee
dividends.
A reasonable rate is one which must be reason-
able, both to the public and to the utility; these two
criteria are not of equal weight; no rate can in
its final analysis be reasonable unless it is clearly
not in excess of the value of the service.
It is well established that the rates charged the
public must not be unfair to the person served.
Union Pacific R. Co. vs. U. S., 99 U. S., 402; C. &
G. T. R. vs. Wellman, 143 U. S., 399; Union Pa-
cific R. Co. vs. Goodrich, 149 U. S., 680; Coving-
ton, etc., T. P. Co. vs. Sanford, 164 U. S., 596;
Smyth vs. Ames, 169 U. S., 466; Minneapolis & St.
L. R. Co. vs. Minnesota, 186 U. S., 257; San Diego
& T. Co. vs. Jasper, 189 U.S., 439.
In fact, if a utility cannot on a rate which is
reasonable to the public make a profit, it is its mis-
fortune, and the public cannot be amerced in order
that profit shall be made and dividends paid.
In Covington, etc., Turnpike Co. vs. Sanford,
164 U. S., 578, 596, the Supreme Court said:
16
“If a corporation cannot maintain such
a highway [public highway] and earn divi-
dends for Stockholders, it is a misfortune
for it and them, which the Constitution does
not require to be remedied by imposing un-
just burdens on the public.”
And in Smyth vs. Ames, 169 U. S., 466, 547, the
Same court said:
“What the company is entitled to ask is a
fair return upon the value of that which it
employs for the public convenience. On the
other hand, what the public is entitled to
demand is that no more be exacted from it
for the use of a public highway than the
services rendered by it are reasonably
Worth.”
4. The respondent, apparently having a pre-
monition, made certain tests; these were made on
December 2, 10, and 12, 1914, after the filing of
the tariff now under suspension and before the
suspending order was made public. The purpose
of making these tests is said to have been that the
carrier wanted the information (381). The value
of these tests as here made must indeed be negligi-
ble; this for the reason that, while record was kept
of the various kinds of commutation tickets pre-
sented, no record was kept of the other forms of
passenger transportation on the same trains. The
record herein reveals that distance trains are much
used by those presenting commutation tickets. The
tests taken with the other figures conclusively show
that the burden of the cost of moving these trains
17
is attempted to be saddled solely upon the com-
muters, although the trains carry passengers
presenting other forms of transportation.
5. While this Commission is not concerned with
the basis on which rates or fares are made, con-
sideration may properly be given thereto when, as
here, it is alleged to be the criterion on which rea-
sonableness is to be determined. The basis of the
proposed fares was described by General Passen-
ger Agent McCarty at pages 11 and 40 of the rec-
ord: - -
“In constructing the new fares, we have
used a basis which is common to a number
of railroads and districts [italics ours], mak-
ing the first Zone, 2 miles or less, $3.00.
That is for the 60-trip monthly tićket. That
is 5 cents per ride, the same as on a street
car [italics ours]. It was thought that a
railroad ought not to carry a passenger at a
less rate per trip than 5 cents. For the next
Zone, 2.1 miles to 2.5 miles, in fixing the rate
it was fixed at $3.60. For the next Zone,
2.6 to 3 miles, inclusive, it was fixed at $3.85.
For the distance in excess of 3 miles, $3.85
plus 15 cents for each half-mile or one-half
a cent per mile per trip” (page 11).
The same basis applies to Philadelphia and Bal-
timore (116).
This basis is most arbitrary; although the first
zone charge is 5 cents per trip—the same as a street
car (McCarty, page 11)—it nowhere appears that
street cars have a first zone of 2 miles or other
3j
18
Zones at half-mile breaks. In fact, for 5 cents
(4 1/6 cents in the District) one may ride at least
15 miles. If any comparison with street-car
charges is to be made, as the General Passenger
Agent of the respondent would seem to imply, the
first Zone should be, say, 12 and not 2 miles. It has
been heretofore found (Silvester et al. vs. C. & S.
Ry. et al., 22 T. C. C., 201, 203) that “a comparison
of the charges of the steam and electric lines dis-
closes * * * [that] the monthly commutation
tickets of the electric line, for the stations named,
are cheaper in each instance than the commutation
tickets issued by the steam line monthly.” The
relation of fares there disclosed is that for the
same distance electric line fares are about 80 per
cent of the steam fares. On this basis the first
Zone on a steam line should be substantially 80 per
cent of the distance one may travel for a nickel on
an electric line.
As the first zone is arbitrary, so are the advances
above it until the three-mile limit is reached.
Equally arbitrary is the advance by half-mile
jumps from the three-mile Zone; the advance is 15
cents for each half mile. There is no reason it
should not have been made 5 cents or 50 cents.
These would no doubt have been “fair and equi-
table bases” (133), particularly if the same
bases had been agreed upon by the several car-
riers for Philadelphia and Baltimore as was the
one here proposed (116).
19
6. The record shows that there are several mat-
ters usually considered in making passenger fares
to which no attention was given by respondent in
fixing the proposed rates. There was no considera-
tion of the past rates (McCarty, 120), nor of what
other roads might charge (McCarty, 123), nor of
competition at certain points (McCarty, 126), nor
of the commuters’ belief that there would be a con-
tinuity of fares (McCarty, 135). Equally impor-
tant, certainly to the respondent, was the probable
effect on its revenues of the proposed fares; to this
no consideration was given (McCarty, 60).
7. With respect to much important information
concerning respondent’s business germane to the
issue herein, the record is unfortunately very defi-
cient. Questions to elicit valuable information,
asked by respondent’s and protestants’ counsel,
and by the presiding Commissioner, remain unan-
swered. As examples: The present compared with
the past volume of traffic (49); whether the com-
muter uses 180 rides on 180-trip ticket (51);
revenue per passenger per mile (167); the effect
of the alleged drop in revenue on commuter traffic
(258); relative number of commuters riding on
distance trains (270); figures of present operating
costs (318); knowledge of weighted average of
commuter travel (353). Many other important
matters, necessary to the case, were not adduced
by respondent; a few taken at random will be
found at pages 77, 80, 103, 283, 287, 294, 295, 318,
347, 356, 372, 384, 387, 393, 394.
20
All of these material facts, as well as accurate
statistical information, are in the possession of the
respondent. Aside from the burden of proof cast
on it by the statute, the onus was on the carrier to
justify the proposed fares (McMorran Bros. vs.
G. T., 3 I. C. C., 252, 261).
8. The record is replete with categorical an-
swers, unsupported by reasons. Cf. T. C. C. vs.
U. P. R. R., 222 U. S., 541, 549:
“The reasonableness of rates cannot be
proved by categorical answers, like those
given, where a witness may, in terms, testify
that the goods were worth so much per
pound, or the services worth so much a day.
Too many elements are involved in fixing a
rate on a particular article over a particular
road, to warrant reliance on such method of
proof. The matter has to be determined by
a consideration of many facts.”
9. The pending case, as a whole, is strikingly
like one recently before this Commission in which
it was said:
“In this case not all of the facts, circumstances,
and conditions which are required to determine the
reasonableness and justice of an interstate rate are
before us.”
Trier vs. C., St. P., M. & O. Ry. Co.,
30 I. C. C., 352, 356. -
21
VIII.
Attention should be called to the fact that the
respondent has failed to show that increases vary-
ing from $2–$4 are needed or reasonable. The
respondent asserts the present fares unremunera-
tive. It proposes to install new fares. Its duty
then is to show the increase to be reasonable. There
was no evidence offered by the carrier that the
proposed rates would be reasonable. Respondent
offered no estimate as to what the result would be.
The Commission has not one line of testimony be-
fore it, to guide it in determining whether the
fares proposed will abnormally increase respond-
ents’ earnings. Opposed to the dearth of testi-
mony how the increase will affect the carrier,
there is abundant testimony to show the result will
be seriously harmful to the commuters. In the
Commutation Rate case, supra, the Commission in
considering proposed increases of forty cents to
three dollars said (p. 449):
“Such increases per month as these cer-
tainly require a definite explanation on the
part of the carrier.”
It would seem that an increase in rates for an
incidental service—a by-product—which makes
the rates charged for such service higher than the
rates charged for conducting transportation in
connection with “an independent and specialized
service” should be the subject of the most care-
22
fully scrutiny before they are permitted to be
changed. The proposed fares exceed those on the
Central of New Jersey (31).
The carrier has attempted to justify the in-
crease as reasonable and just because of its need
for more revenue; it has already raised its fares
for mileage and long-distance hauls. The reason
is apparent for witness McCarty’s dislike for and
aversions to comparisons by percentages (46), when
it be remembered that the rates for mileage tickets
were increased only 12% per cent as against the
proposed increase in commutation rates of 36 to
100 per cent.
Granting for the moment that the present rates
for commutation are unreasonably low, and that
the carrier is entitled to some increase, the burden
still rests with the carrier to justify the abnormal
proposed increases. Stated in percentage the ma-
jority of increases is from 41-50 per cent. Stated
in currency the increase per month is as follows:
Miles . . . . 10 15 20 25 30 35 40
$2.10 $2.42 $2.72 $3.15 $3.25 $3.68 $4.15
Mr. McCarty testified that the New York rates
were higher (24). Later he was asked how he
justified the proposed advances, when he consid-
ered that the increases would in some instances re-
sult in the commuter paying from $1.65 to $4.40
more per month than was charged on the Central
Railroad of New Jersey for similar distances (31).
His justification was volume of traffic. Giving due
23
consideration to that feature of rate making, it
is manifest that the factor, volume of traffic, is an
insufficient justification for such an abnormal in-
crease when the Standard Commutation Service,
carrying with it quick, clean, and efficient service,
is compared with the indifferent, if not inferior,
service afforded patrons of the Metropolitan
Branch. It would seem from the service furnished
that the commutation rates here in question should
not be made with the idea that the service is of
special nature, but rather one fully partaking of
the nature of the “by-product” of the through
service. Taking such a view of the situation, it
certainly is apparent that the carrier has not justi-
fied its proposed abnormal increases.
IX.
In addition to “bringing the commuter to work
in the morning and taking him home at night” and
charging a rate commensurate with the service
performed, the respondent formerly accorded the
residents special inducements to settle on the line
of its road with a view to stimulating traffic. One-
half of the freight charges for building material
were returned to the resident; gratuitous return
of household goods was made summer residents of
Washington Grove; the checking of baggage on
commutation tickets was permitted; school tickets
were issued; passes for officers of the Washington
Grove Association were given; special Chautauqua
rates prevailed, and a rebate of 15 cents a ticket
24
on passenger tickets sold to certain points was
paid (Rec., pp. 565, 627, 598, 608, 612, 616).
At the present time the commuter receives for
the same amount as formerly paid, transportation
only to and from Washington. There is no testi-
mony that the service has been improved. Wit-
nesses for the respondent were asked as to any
changes in character of equipment of trains, run-
ning schedule, etc., and were unable to state that
there was a difference. Despite the fact that there
has been nothing by increase or betterment of
service, despite the fact that so far as the record
shows the actual transportation service is the same
as thirty years ago, witness McCarty is of the
opinion that by reason of the Commission’s ex-
pressions in the Five Per Cent Case respondent is
entitled to increase these commutation fares.
Asked to point out the language of the Commis-
sion in support of that conclusion, the witness
could not do so. In truth and fact, the Commission
said at page 407 of the first opinion in the Five
Ber Cent Case:
“The traveling public is giving expression
to its demands for better service, better ac-
commodations, and for the adoption by car-
riers of all the devices that make for safety.
A public that demands such a service can-
not reasonably object to the payment of a
reasonable compensation therefor.”
This language can hardly be distorted to mean
that the Commission implied that the carrier is
justified in increasing its commutation fares from
25
36 to 100 per cent for a service not shown to be more
costly, but, on the contrary, giving to the public
less for its money now than thirty years ago.
X.
The jurisdictional question was early raised by
the counsel for respondent (4). In view of the de-
cision of this Commission in the Commutation Rate
case (21 I. C. C., 428, 443), it can but be thought
that the point was stated only out of abundant
caution.
In conclusion, it is respectfully submitted that
the respondent has wholly failed to sustain the
burden of proof cast upon it by the statute con-
cerning the reasonableness of the proposed ad-
vanced commutation fares between points on the
Metropolitan Branch and the city of Washington;
that the present commutation fares are fully ade-
quate to furnish respondent a profit for perform-
ing the service; that the said commutation fares
are both reasonable and just, and that the tariff
now under suspension (B. & O. I. C. C. A-3466)
should by order be canceled.
Respectfully submitted,
JOHN B. DAISH,
J. RAYMOND HOOVER,
Attorneys for Metropolitan Branch
Commuters’ Association.
February 10, 1915.
(27719)
4.j
2T OS3
, I dº?
c. INTERSTATE COMMERCE COMMISSION
- WASHINGTON, D. C.
Supplement No. 1
TO
REGULATIONS
TRANSPORTATION OF EXPLOSIVES
AND OTHER DANGEROUS ARTICLES
BY FREIGHT AND EXPRESS
AND
SPECIFICATIONS FOR SHIPPING CONTAINERS
PRESCRIBED UNDER THE ACT OF MARCH 4, 1909
AND SECTION 15 OF THE ACT TO REGULATE COMMERCE
AS AMENDED
EFFECTIVE AS NOTED HEREIN
Paragraphs are numbered to correspond to the rules and regulations
of the American Railroad Association
WASHINGTON
GOVERNMENT PRINTING OFFICE

1919
REGULATIONS FOR THE TRANSPORTATION
OF EXPLOSIVES BY FREIGHT
SUPPLEMENT NO. I*TO REGULATION S FOR THE TRANSPORTA-
TION OF EXPLOSIWES AND OTHER DANGEROUS ARTICLES
BY FREIGHT AND EXPRESS.
Effective December 1, 1919.
[Note to paragraph 1425 (b) of the Regulations for the Transpor-
tation of Explosives by Freight eliminated] and paragraph 1509 of
said regulations amended to read as follows:
1509. Blasting caps contain from 5 to 50 grains of dry fulminate
of mercury or other substance similar to or in combination with ful-
minate of mercury, packed in a thin copper shell and fired by a slow-
burning safety [fuse]. When a small “bridge" of fine wire is em-
bedded in a suitable priming material and arranged to fire the fulmi-
nate by heating the bridge by means of an electric current, the cap
is called an “electric blasting cap.” They cause explosions of a high
order, or “detonations.” This means the instantaneous conversion
of the entire explosive into gas instead of the gradual conversion
known as “combustion.” Dynamite “detonates” and smokeless
powder for cannon “burns.”
* Changes or additions made by this supplement are inclosed in black brackets.
5
REGULATIONS FOR THE TRANSPORTATION OF
DANGEROUS ARTICLES OTHER THAN
EXPLOSIVES BY FREIGHT
7
REGULATIONS FOR THE TRANSPORTATION OF DANGEROUS
ARTICLES BY FREIGHT.
Paragraphs 1806 and 1807 (c), list of dangerous articles immedi-
ately following said paragraph, and paragraphs 1822 (e), 1857 (d),
1861 (a), 1861 (h), 1862, 1895 (b), and 1905 (b) of the Regulations
for the Transportation of Dangerous Articles by Freight amended to
read as follows, effective October 1, 1919, except as otherwise pro-
vided:
Paragraph 1806 amended to read as follows, effective July 12,
1919 :
1806. This group includes poisonous gases under any pressure, and
all inflammable or noninflammable gases assembled for shipment
under pressure exceeding 25 pounds per square inch, except when
such gases are in cylinders or tubes not exceeding seven-eighths inch
outside diameter and of not more than 4 fluid ounces water capacity.
NOTE 1.-Hand fire extinguishers containing nonliquefied gas for the purpose
of expelling fire-extinguishing contents are excepted.
[NotE 2].—The shipment of poisonous gases is prohibited unless specifically
authorized herein. Phosgene gas may be Shipped in Steel cylinders Complying
with I. C. C. Shipping container specification No. 33, provided that to each such
cylinder of phosgene gas, in addition to the standard green gas label, there is
affixed a rectangular white label measuring 5 by 8 inches bearing thereon in
red letters “POISON.—DANGEROUS.” Shipping order and bill of lading de-
scriptions for shipments of phosgene gas must show the word “POISONOUS ’’
in addition to regular label and Certificate requirements. For example,
“PEIOSGENE GAS–POISONOUS—GREEN LABEL.”
1807. (c) Inflammable liquids, as defined by paragraph 1802, in
securely closed glass, earthenware, or metal containers of not exceed-
ing 1 pint capacity each (ether [1] pound), when flash point is
20° F., or lower, and of not exceeding 1 quart capacity when flash
point is above 20° F., packed and cushioned in fiber board or corru-
gated strawboard containers, wooden boxes, kegs, or barrels, comply-
ing with shipping container specifications that apply, may be shipped
without labels when certified and marked “No label required.”
128579–19—2 9'
5
LIST OF PRINCIPAL DANGEROUS ARTICLES.
Maximum quantity
Kind of label
; - * * e *
Group names and flash points— #.cºe º *** is:
Names of dangerous articles i #g-ºº: *...*. § *::::: References for packing requirements, paragraph numbers, remarks
g ſº Oxi. M.–Oxidizing material. When marked prescrib- for information, and rules for exceptions of similar articles.
Cor. L.-Corrosive liquid. and Certified ed for “No -
Comp. G.-Compressed gas. “No label re- lab el - re-
quired.” quired.”
1 3 4 5
I*ICharcoal, wood, ground, crushed, 100 pounds (in one Yellow........ Par. 1833. Charcoal “in bottles,” “in boxes,” “in barrels,” or “in
granulated or pulverized. shipment). tablets,” “case-hardening charcoal,” “animal charcoal,” or
“bone charcoal” is exempt from label and certificate require-
ments, when so described. •
*Charcoal, Wood, lump.................. 2,000 pounds (in |- - - - -do. . . . . . . . Lump charcoal made by old kiln or pit method which provides
one shipment). - long air exposure before shipment is exempt from label and
placard requirements when certified and marked “No label
required” or “No placard required.”
Cobalt resinate precipitated No exemption.... - - - - - -do-------- Par. 1840 (b).
- 1 gallon----------- Red----------- IEliminate.I.
Collodion-------------------------------- * * * * * * * * * * * * * * * * * * = . . . . º. ºf a gº º e º ºs º ºs e º ºs do------------|----- do. . . . . ... Pars. 1807 (c), 1822, 1824 to 1827.
*

\
's TRANSPORTATION OF EXPLOSIVES. 11
1822. (e) The tanks and their fittings must be examined by the
shipper to see that they are in proper condition for loading. Tanks
must be examined for evidence of previous leaks; safety and outlet
valves, dome covers, and outlet-valve caps must be in proper condi-
tion before loading; tanks must be loaded with outlet-valve caps
off; after loading, tanks must not show any dropping of liquid con-
tents at the seams or rivets, and should such dropping appear cars
must be properly repaired by calking; outlet valves must not permit
more than a dropping of the liquid with valve caps off, otherwise
valve must be reground and repaired. Dome covers[,] and valve
caps provided with suitable gaskets[,] must be properly Screwed in
place before cars are tendered to the carrier.
[1838. (d).] Zinc dust, zinc flue dust, zinc powder or powdered
zinc must not be offered for shipment except when packed in strong
and tight boxes or barrels.
[1838. (e).] Arsenic, arsenical flue dusts, Paris green, arsenate of
lead, calcium arsenate, and all other strongly poisonous materials,
must not be offered for shipment in bulk, but must be packed in
strong and tight containers, which will prevent the escape of the
contents in transit.
1857. (d) A glass, earthenware, or clay carboy (4) containing
acid of gravity exceeding 1.43 and not exceeding 1.49 must be well
cushioned by incombustible packing material in a tight cylindrical
iron case of not less than 20 gauge, United States standard, that
covers the bottom and sides of the carboy and fits tightly in the
outside wooden box. Effective October 1, 1918.
1861. (a) All compressed gases must be shipped in metal cylin-
ders, provided that chlorine and sulphur dioxide may also be shipped
in special tank cars complying with Master Car Builders’ Specifica-
tions for tank cars for these commodities. Effective February 15,
1919.
That part of paragraph 1861 (a) relating to Specification No. 7
amended to read as follows, effective July 12, 1919:
No. 7 for ARGON, COAL GAS, HYDROGEN, NITROGEN,
OXYGEN, HYDROCARBON, PINTSCH, and any low pressure
gas, not liquefied, and not in solution, when charging pressure at 70°
F. does not exceed 300 pounds per square inch.
1861. (h) Cylinders containing acetylene gas must not be shipped
unless they were charged by a person, firm, or company having pos-
session of complete information as to the nature of the porous filling,
the kind and quantity of solvent in the cylinders, and the meaning
of such markings on the cylinder as are prescribed by the Commis-
sion's regulations and specifications applying to containers for the
transportation of acetylene gas. Effective September 1, 1919.
f
12 INTERSTATE COMMERCE COMMISSION.
1862. Each cylinder exceeding 12 inches in length containing
liquefied gases, or gases in Solution, or other gases under a pressure
of more than 300 pounds per square inch at 70° F. (except anhy-
drous ammonia [and phosgenel) must be equipped with a safety
device approved by the Bureau of Explosives and found to prevent
explosion of the normally charged cylinder when it is placed in a fire.
1895. (b) Empty carboys in less than carload lots and in carload
lots, when presented to carriers, must be equipped with stoppers well
secured. Whenever practicable they should not be loaded in cars
containing valuable or perishable freight. Less than carload lots
loaded by railroad employees must be loaded with their necks up,
but carload shipments loaded by shipper, to be unloaded by con-
signee, may be loaded on their sides. -
1905. (b) The carrier must see that its representative in charge of
a train and a yard or terminal from which a freight train starts
makes a thorough check and record of the cars bearing “INFLAM-
MABLE *[,] “ACID " and “EXPLOSIVE * placards with the bill-
ing to see that all placards required are attached; that those not re-
quired are removed; and that placarded cars are properly placed in
trains, as required by these regulations.
REGULATIONS FOR THE TRANSPORTATION OF
EXPLOSIVES AND OTHER DANGEROUS
ARTICLES BY EXPRESS
13
REGULATIONS FOR THE TRANSPORTATION OF EXPLOSIWES
AND OTHERDANGEROUS ARTICLES BY EXPRESS.
Effective December 1, 1919, except as noted.
Note to Paragraph 26 of the Regulations for the Transportation
of Explosives and other Dangerous Articles by Express amended to
provide that the size of cartons for cap torpedoes must be not less
than [4] cubic inches for each grain of explosives. -
List of principle dangerous articles other than explosives, follow-
ing paragraph 34 of the Regulations for the Transportation of Ex-
plosives and other Dangerous Articles by Express amended to read
as follows:
LIST OF PRINCIPAL DANGEROUS ARTICLES OTHER THAN EXPLOSIVES.
Group names and flash points: Mºº º: ‘. §
Inf. L.-Inflammable liquid; in One išić. . e
* Inf. S.—Inflammable solid; Kind of label º p ge,
Names of dangerous articles. & * -- tº º * - ? . g subject to require-
Oxi. M.–Oxidizing material; required. ments as to packin
Cor. L.—Corrosive liquid; (see pars. 35 t; 59 #
Comp. G.-Compressed gas. clusive). * 3.
(1) (2) (3) (4)
Acetic anhydride----------------. Cor. L---------|-------------- White.......| 1 gon (See parS. 51, 52,
Acetone-------------------------- Inf. L.-------- 35 | Red......... 6 ºns (see pars. 36 to
Cement, leather------------------|----. do--------- f 0 |..... do-------| 1 §on (see pars. 36 to
'. 9).
*Cement, liquid, n. O. S.1. . . . . . . . . . . . . . do--------- 0–80 |- - - - - do------- DO.
*Cement, roofing, liquid 1. ............ do--------- 0–80 - - - - - do------- Do.
Cement, rubber... ------.............. do--------- f 0 |..... do------- DO.
Ethyl chloride-------------------|----- do--------. - f 0 |..... do------- I. pºds (see pars.
• 6 to 39).
Potassium sulphide (fused, Inf. S. . . . . . . . . . . . . . . . . . . . . . . Yellow. . . . . . 25 pounds (see par. 42
chipped, or concentrated). d)),
Pyroxylin plastics, (in sheets, ..... do---------|------------------- do.......| 200 pounds (see par. 43
rolls, or tubes). T(g)].
+ Liquid cements with flash points below 80° F. and above 20° F. may be shipped with
total quantity not exceeding 5 gallons in one outside package. Effective July 10, 1919.
Paragraphs 39 and 43 of the Regulations for the Transportation of
Explosives and other Dangerous Articles by Express amended to
read as follows:
39. (d) In well-stoppered glass, earthenware, or metal vessels of
not exceeding 1 pint capacity I (ether 1 pound)] when flash point is
20° F., or lower, and 1 quart capacity when flash point is above 20°
* 15
16 INTERSTATE COMMERCE COMMISSION.
T., cushioned in fiberboard or corrugated strawboard containers com-
plying with Specification No. 24, and not exceeding 8 quarts in one
package.
43. (a) Motion-picture films must be packed in spark-proof metal
boxes or cans complying with Specification No. 32.” Not more than
eight reels (approximately 1,000 feet each) may be packed in one
such outside container.
43. (c) Unexposed motion picture film in tight rolls must be packed
in interior metal cans not to exceed [six] rolls (approximately [2,400]
feet) in one inside can; the cover of each inside can must fit tightly
and be held in place by a strip of adhesive tape or paper; the interior
cans must be securely packed in outside wooden boxes complying
with Specification No. 19. The gross weight of one outside container
must not exceed 200 pounds. •
[43. (h)] Manufactured articles made from or containing pyroxy-
lin plastics are not subject to label, marking or packing requirements.
57. (h) Cylinders containing acetylene gas must not be shipped
unless they were charged by a person, firm, or company having pos-
session of complete information as to the nature of the porous filling,
the kind and quantity of solvent in the cylinders, and the meaning
of such markings on the cylinder as are prescribed by the Commis-
sion's regulations and specifications applying to containers for the
transportation of acetylene gas. Effective September 1, 1919.
1 Shipping containers complying with rule 43 (a) effective October 1, 1914, and
purchased prior to May 15, 1918, may be used for the shipment of motion-picture film
until October 1, 1919, provided they are Securely closed and in good condition, and
provided further, that if fitted with telescopic covers, the covers fit tightly against the
shoulder of the box body.
Leather or web straps, if used, must be in good condition and tightly fastened.
String or rope must not be used.
SHIPPING CONTAINER SPECIFICATIONS
17
SHIPPING CONTAINER SPECIFICATIONS.
Shipping container specifications Nos. 1, 5, 7, 8, 24, and 33
amended as follows, effective October 1, 1919, except as noted.
[Paragraph 14 of shipping container specification No. 1] amended
by elimination of last clause thereof reading: “If the neck of the
carboy projects, it must be protected by a suitable hood or cap.”
Paragraph 21(b) of shipping container specification No. 1 amended
to provide that the vertical component of the swing test shall be 12
inches.
Heading of shipping container specification No. 5 amended to
read as follows, effective July 12, 1919:
Iron or Steel Barrels or Drums for Inflammable Liquids as Prescribed by
I. C. C. Regulations.
NOTE.—Specification No. 5A covers these packages for the transportation of
acids. Iron or steel barrels or drums manufactured before September 1, 1918,
may be used, however, if they were made in accordance with Specification No. 5,
effective March 31, 1912, or October 1, 1914. -
Paragraph 1 of shipping container specification No. 5 amended
to read as follows, effective July 12, 1919:
Iron or steel barrels or drums purchased hereafter and used for the
shipment of inflammable liquids as prescribed by I. C. C. regula-
tions must comply with the following specifications. Such barrels
or drums purchased between March 31, 1912, and the effective date
of these specifications must comply with the specifications effective
March 31, 1912, or with subsequent specifications. -
Heading of shipping container specification No. 7 amended to
read as follows, effective July 12, 1919:
Cylinders for the shipment of any gas, not liquefied, and not in solution,
whose charging pressure does not exceed 300 pounds per square inch at
70° F.
Paragraph 1 of shipping container specification No. 7 amended to
read as follows, effective July 12, 1919:
Cylinders purchased hereafter and used for the shipment of any
gas, not liquefied and not in solution, whose charging pressure does
not exceed 300 pounds per square inch, at 70° F., must comply with
the following specifications. Such cylinders purchased between
April 1, 1912, and the effective date of these specifications must com-
- - - 19
20 t INTERSTATE COMMERCE COMMISSION.
ply with the specifications approved by the Bureau of Explosives,
effective April 1, 1912, or with subsequent specifications.
[Paragraph 14 of shipping container specification No. 7] amended
by elimination of reference to paragraph 1861 (e) and substitution
therefor of reference to paragraph 1861 (7).
[Paragraph 14 of shipping container specification No. 8] amended
by elimination of reference to paragraph 1861 (?) and substitution
therefor of reference to paragraph 1861 (u). -
[Paragraph 15 of shipping container specification No. 8] amended
by elimination of reference to paragraph 1861 (e) and substitution
therefor of reference to paragraph 1861 (p).
Paragraph 54 of shipping container specification No. 24 amended
to read as follows: - -
54. Cases in which the combined capacity of all inside containers
in the case is not over 8 quarts must be made of fiber board not less
than [275] pounds to the square inch, Mullen test, and must have
an inner mantel of glued ply fiber board or pulp board arranged and
constructed to fit closely inside the case, this mantel having a re-
sistance of not less than 175 pounds to the square inch, Mullen test.
The following shipping container specification is prescribed for
poisonous gases and liquids (order of June 6, 1919):
SHIPPING CONTAINER SPECIFICATION NO. 33. (See Par, 1822 (a).)
For Cylinders for the shipment of Phosgene Gas, 1 and such other Poisonous
Gases and Liquids as may be authorized for shipment. Maximum
authorized capacity, 150 pounds of Gas.
Effective July 12, 1919.
1. All containers used hereafter for the shipment of poisonous
gases and liquids must be of not more than 150 pounds gas capacity,
must be manufactured complete with valves and must comply with
the following specifications.
a. *- ---- --
1 In shipping Phosgene Gas some of the most important precautions to be taken are
as follows : -
The gas must be described by its name followed by the word “Poisonous ” in addition
to regular label and certificate requirements. For example, “Phosgene Gas—Poisonous—
Green Label.”
The gas must be in steel cylinders complying with I. C. C. Specification No. 33.
Each filled cylinder must be tested for pressure before shipment and must not show
excessive pressure ; this test must be made at least 24 hours after filling.
Each filled cylinder must be tested for leakage before shipment and must show abso-
lutely no leakage ; this test must consist in immersing the cylinder and valve, without
the protection cap attached, in a bath of water at a temperature of approximately
180° F. for at least 30 minutes, during which time frequent examination must be made to.
note any escape of gas. The valve of the cylinder must not be loosened after this test
and before shipment.
The gaskets used between the protection cap and the neck of the cylinder must be
replaced for each shipment, even though they may appear to be in good condition.
Each cylinder must bear a white label (in addition to the regular gas label) 5 by 8.
inches in size and bearing the words, “Poison—Dangerous in case of fire '' printed in red
letters. Es
TRANSPORTATION OF EXPLOSIVES. 21
GENERAL CONSTRUCTION.
(a) Cylinders must be seamless and must be constructed to a stand-
ard nominal inside diameter of 10 inches. The maximum size cylin-
der must be limited to 120 pounds water capacity with tolerance of
plus 5 per cent; smaller cylinders must have at least 0.8 pound water
capacity for each pound of gas which they are designed to contain.
(b) Cylinders must be made of steel of uniform quality with
chemical analysis of
Per cent.
Carbon, not more than (). 30
Phosphorus, not more than--------------------------------- . 04
Sulphur, not more than . ().5
(c) All billets, plates, tubes, and shells from which cylinders are
to be made must be free from seams, cracks, laminations, or any
defects which might be injurious to the finished cylinder.
(d) The manufacture of the cylinders must be completed with the
best appliances and according to the best modern methods. All fin-
ished cylinders must show reasonably smooth and uniform surface
finish, inspection of inside surface to be made before closing the ends;
the threading of the cylinder neck must be even and without checks,
and the cylinders must show no defects of workmanship or material
likely to result in any appreciable weakness of the finished cylinder.
A close inspection of each completed cylinder must be made before
acceptance to discover any defect.
(e) Cylinders must be fitted with an extension for valve protection
in the form of a section of seamless tubing having a shrink fit and
not welded of not less than 6 inches in length below the shoulder
of the cylinder, and extending not less than 4 inches above the
end of the neck of the cylinder. The thickness of the tubing must
be at least 0.25 inch with tolerance of minus ºg of an inch. This
tubing must be provided with drainage holes to thoroughly drain
the shoulder of the cylinder. -
THREADS.
3. (a) The cylinder neck must be tapped for valve with a 14-inch
pipe thread, Briggs modified form, tapered # inch to the foot, with
at least 14 threads full and perfect throughout. The tapping must
be to gauge, with a permissible tolerance of plus or minus one turn.
(b) The cylinder neck must be threaded on the outside with a U. S.
Standard form thread 2% inches outside diameter, 10 threads per inch.
The length of this thread must be 1.125 inches +0.125 inch. The
threading must be to gauge. The end of the neck must be faced off
perpendicular to this thread to afford a proper seat for the protec-
tion cap.
22 INTERSTATE COMMERCE COMMISSION.
VALVE AND PROTECTION CAP.
4. (a) Drawings and samples of valve equipment must be submit-
ted to the Bureau of Explosives, 30 Vesey Street, New York City,
for approval prior to use on cylinders made under this specification.
(b) The valve must be constructed of metal substantially non-
corrosive and free from any exposure of the gas to all threaded and
friction parts; it must be of a length not to exceed 2+, inches beyond
the end of the neck of the cylinder and with no projections to in-
terfere with the protection cap; it must be provided with a locking
device and satisfactory leak-proof devices. e ſº
(c) The body and all other essential parts of the valve subject to
gas pressure must be made from forged metal. Rolled monel metal
is permitted for valve stem where it seats.
(d) The valve must be threaded with a 14-inch pipe thread,
Briggs modified form, tapered 3-inch to the foot, with at least 13
threads full and perfect throughout. The threading must be to
gauge with a permissible tolerance of plus or minus one turn.
(e) The protection cap will be a part of the valve equipment. It
must be gas-tight, must be made of metal substantially noncor-
rosive, and must not extend in excess of 3 inches beyond the end
of the neck of the cylinder. It must be threaded with a United
States standard form thread, 10 threads per inch, to give a close
fit on the threading of the cylinder neck. It must be provided with
a faced shoulder to make a tight joint, in combination with a non-
corrosive gasket, with the end of the cylinder. The thickness of
any part of the protection cap must be not less than #-inch and the
shoulder for gasket seat must afford a bearing surface for the
gasket of not less than #4-inch.
ASSEMBLY OF WALVE TO CYLINDER.
5. (a) The cylinder must be made absolutely anhydrous before
insertion of the valve. (A Satisfactory means of securing this con-
dition consists in inserting a tube through the neck to the bottom of
the cylinder and blowing a blast of hot, dry air through it; a cold
mirror held in the current of air coming out of the cylinder will
cloud up with condensed moisture as long as there is moisture in
the cylinder.) * *
(b) The valves must be assembled to the cylinders by a selective
method so that the valve used in any cylinder will enter the cylinder
not less than 5 threads and not more than 7 threads under hand
pressure. - ;
INSPECTION OF MATERIAL.
6. The purchaser must provide for inspection of all material and
all tests by a competent and disinterested inspector.
\
TRANSPORTATION OF EXPLOSIVEs. 23
7. The inspector must keep complete records of the various melts
from which the steel is taken for the manufacturer of the cylinders.
Certified chemical analyses of these melts must be supplied to him
by the manufacturer. Provided, that when cylinders are to be
made from drawn seamless tubing under conditions such that the
various melts of steel cannot be properly traced through to the
finished cylinders, a certificate from the manufacturer of the tubing
(see note at end of report, paragraph 24, for form of certificate),
together with check analyses of samples taken from one out of each
lot of 200 or less cylinders, shall be accepted.
8. The inspector must carefully inspect all plates or other material
from which cylinders are to be made and those which do not comply
with Paragraph No. 2 (c) shall be rejected. The heat number must
be stamped on the plates and billets at the steel mill and the in-
spector must also stamp his initials or personal sign on each plate
or billet accepted by him, and no plate or billet must be used by the
manufacturer of the cylinder unless so marked.
9. The inspector shall make such inspection as may be necessary
to see that the requirements of this specification are complied with ;
shall see that the finished cylinders are properly annealed, and shall
witness all hydrostatic, air, physical, and flattening tests.
10. The hydrostatic, air, physical, and flattening tests must be
made by the manufacturer, but under the direction and supervision
of the inspector or other representative of the purchaser.
11. The inspector shall stamp his initials or his personal sign im-
mediately beneath the serial number on each cylinder which he
passes as accepted, and shall make a certified report (see par. 24) to
the maker, to the purchaser, and to the Chief Inspector, Bureau of
Explosives, 30 Vesey Street, New York City, showing the serial
numbers of all cylinders which are accepted, together with a copy of
all data relating to the material and the tests.
WALL THICENESS.
12. Thickness of walls must not be less than 0.25 inch in any case.
AN NIEALING.
13. Each cylinder must be uniformly and properly annealed in
such manner as to give as fine-grained and soft a metal as possible
consistent with other requirements of this specification. The tem-
perature to which the cylinders are heated, the length of time they
are exposed to the heat, and the cooling, must be uniform, as far as
possible, for all cylinders in each lot represented by a flattening test.
Heat treatment is not authorized.
|
24 INTERSTATE COMMERGE COMMISSION.
DRYING.
14. Each cylinder must be made anhydrous. If necessary they
must be oven dried. -
CLEANING.
2.
15. All dirt and loose scale must be removed from both inside and
outside of the cylinders. -
PHYSICAL TEST.
16. From each lot of 200 or less cylinders after annealing a repre-
sentative finished cylinder must be taken at random and tests made
on at least two test specimens cut longitudinally therefrom to deter-
mine the elastic limit, the tensile strength, and elongation of the
material. These test specimens must be taken from opposite sides
of the cylinder and should, when practicable, be taken from the
same cylinder which is used for the flattening test.
The elongation must be not less than 20 per cent on an 8-inch test
specimen. , -
. FIYDROSTATIC TEST.
17. Each finished cylinder must be subjected to a hydrostatic test
pressure of not less than 1,000 pounds per square inch in a water
jacket, or other apparatus of suitable form, to furnish reliable data.
The permanent volumetric expansion must not exceed 10 per cent of
the whole volumetric expansion at this pressure. - -
This test must be made without subjecting the cylinder to any
previous hydrostatic pressure subsequent to annealing; provided,
however, that a preliminary pressure of not more than 80 per cent
of the prescribed test pressure may be applied once only, previous
to the official test, for the purpose of rounding out the cylinder.
18. In the hydrostatic test the water gauge indicating the ex-
pansion must be of such interior diameter that the total expansion
will cause the water to rise at least 45 centimeters in the gauge,
except when this will make the interior diameter less than 4 milli-
meters; the pressure must be applied for not less than 30 seconds
and as much longer as may be necessary to insure complete expan-
sion of the cylinder. The expansion must be recorded in terms of
cubic centimeters. - - . . . .
- - FLATTENING TEST.
19. From each lot of 200 or less a representative finished cylinder,
after annealing and after having passed the hydrostatic test, must be
taken at random and must withstand, without cracking, flattening
TRANSPORTATION OF EXPLOSIVES. 25
between rounded knife-edges to a thickness of four times the thick-
ness of the wall of the cylinder, this measurement to be made between
the knife-edges. .
Provided, That when, on account of the small number of cylinders
in any lot or order, it is impracticable to make the regular crushing
test herein prescribed, the physical and crushing test may, in cases
of lots not to exceed thirty cylinders each, be made on a ring not less
than four inches long, cut from each cylinder, and subjected to the
same annealing as the finished cylinder. -
The knife-edges must be of wedge shape, converging at an angle
of 60°, the point being rounded off with a radius of $ inch. If any
one cylinder from any lot fails to pass this test, two others from the
same lot must be selected, and these must pass it in order to have the
lot accepted.
If it should appear that failure in the test is due to improper
annealing, the manufacturer has the privilege of reannealing the
lot and repeating the test.
AIR TEST.
20. Each completely finished cylinder made by the spinning proc-
ess must be tested by applying an interior air pressure of at least
200 pounds per square inch, and completely covering spun end of
the cylinder with a suitable clear liquid. The results must show ab-
solutely no leakage.
MARKING.
21. Each cylinder must be plainly and permanently marked on
the shoulder with the name or initials of the owner or owning com-
pany and a serial number. This same marking must also be placed
on the extension (see par. 2e) of the cylinder.
22. Each cylinder must also be plainly and permanently marked
on the extension (see par. 2e) with the words “COMPLIES WITH
I. C. C. SPEC’N NO. 33,” or, if desired by the purchaser, this may
be abbreviated to “I. C. C. 33.” This marking must be placed im-
mediately above the serial number and in letters not less than 4-inch
high. Each cylinder must also be plainly and permanently marked
on the extension with its volume in cubic centimeters. (For ex-
ample, W–3353 cc.) - -
23. The date of the hydrostatic test must also be plainly stamped
on the extension of the cylinder. (For example, 7–18 for July, 1918.)
26 INTERSTATE COMMERCE COMMISSION.
REPORTS.
24. The report required by paragraph 11 must be submitted in the
following form:
(Place) —-
(Date).---
Report of inspection of ------ Cylinders numbered –––––– to –––––– inclusive.
Manufactured by the ------ COmpany. Inspected for the --____ COmpany.
* The steel from which these cylinders were manufactured was made by the
*-* * * * = &ºme company. Chemical analyses were made from samples representing each
melt of steel, as will be Observed from the report Of Chemical test hereto at-
tached. .
The *(plates) (tubes) from which these cylinders were manufactured were
inspected by ------ , and those which were accepted were found free from
seams, Cracks, laminations, or any defects which might prove injurious to the
Strength Of the Cylinder. .
Each and every cylinder before *(necking down) (closing) was inspected
inside and Outside for Surface defectS. The thickness Of WallS was measured
at points not more than 8 inches from the open end of the cylinder with a pair
of Calipers, and the minimum thickness Of wall noted was ------.
Each and every cylinder was (necked down) (closed) and was uniformly
and properly annealed, and then the cylinders were again inspected in Order
to discover any defects which might have been caused by this process.
One out of each lot of 200 or less finished cylinders was selected by the
inspector and subjected in his presence to a flattening test as required by the
Interstate Commerce Commission Specifications. All Of the Cylinders passed
this test satisfactorily. - -
Two longitudinal test pieces were cut from opposite sides of each crushed
cylinder and pulled. .
The record of the physical and flattening tests is attached hereto.
Each and every cylinder was subjected to a hydrostatic test Of______ pOunds
in the presence of the inspector. The record Of the hydrostatic tests is attached
heretO. g - * -
Each and every Cylinder was stamped on the shoulder with the initials------
of the purchasing company and with a serial number. 3.
Each and every cylinder was stamped on the cylinder extension with the
initials------of the purchasing company and with a serial number and with
the date of test. - . . . . W
If the cylinders are made from drawn seamless tubing under such conditions that it
is impossible to trace the various heats of steel through to the finished cyliader (see
par. 7); this paragraph should be replaced by the following : -
The tubing from which these cylinders were manufactured was made by the ------
company under orders No. ---- and their certificate stating that its chemical composition
complies with the requirements is attached hereto. Check analyses were made from
samples representing each lot of 200 or less cylinders, as will be observed from the
report of chemical tests attached hereto.
Also, the report must be accompanied by a certificate from the manufacturer of the
steel, as follows:
(Place)
(Date) &
This is to certify that the tubing furnished to the ------ company on orders No. ----
does not contain more than —--- per cent of carbon, nor more than ---- per cent of
phosphorus, nor more than ------ per cent of sulphur.
[Signature of manufacturer of steel.]
* Draw a line through word not required. -
TRANSPORTATION OF EXPLOSIVES. 27
Each and every cylinder was stamped with the personal sign------ Of the
inspector immediately beneath the serial number on the extension.
* Each and every cylinder was plainly stamped------ just above the Serial
number. - -
Each and every cylinder was provided with a valve and protection cap manu-
factured by------ CO. On their drawing No.______ and approved by the Bureau
Of Explosives On date Of------.
The threads on cylinders and valves were gauged and found Satisfactory.
The assembly of valves into cylinders was carried out according to the require-
ments of paragraph 5. - - - - -
Each cylinder 2 (was) (was not) subject to the specified air test and showed
no leakage. -
I hereby certify that all of these cylinders proved satisfactory in every way,
and comply with the requirements of Interstate Commerce Commission Specifi-
cation No. 33.
9
Inspector.
(Place) ------ -------
(Date) -------------
Record of chemical analysis of melts from which steel was taken for the manu-
facture of ------ cylinders by the ------ Company for the ------ COmpany.
* Chemical analysis.
Test || Melt Test piece - - - . Accepted or
No. No. represents— rejected. Remarks.
C. P. S. |
|
(Signed) –––––– ––––––
(Place) –––––– ––––––
(Date) –––––– ––––––
Record of physical and flattening tests made On ----__ cylinders manufactured
by the ------ Company for the –––––– COmpany.
Numbers of Elastic Tensile Elongation
Test cylinders limit per Strength er ; in Reduction of | Flattening | Accepted or
No. represented Square per Square P; inches. |area per cent. teSt. rejected.



y test. inch. inch.
—y
- (Signed) ------------ *
1 Insert marking used. See paragraph 22. '
* Draw a line through word not required.
28 INTERSTATE COMIMERCE COMIMISSION.
(Place) ------------.
(Date) ------------.
Record Of hydı'OStatic tests made On ------, Cylinders, –––––– inches O. D. by
* - - º º º inches long, manufactured by the ------ Company for the ------
Company. º
--------- - ---------- - ------- 2
Number of e - Total expansion Permanent -
cylinder. - Test pressure, Weight. expansion (c. C.). Per cent.
Signed ------------ e

ADDITIONAL COPIES
of THIS PUBLICATION MAY BE PROCURED FROM
THE SUPERINTENDENT OF DOCUMENTS
GOVERNMENT PRINTING OFFICE
WASHINGTON, D. C.
AT
5 CENTS PER coPY
A
- - - -
At
2-102
Ian
" . -
º Lºy. Cºº Mº.
* NOW! 18, 1917
INTERSTATE COMMERCE GCMISSION IBRARIA* ºrity
Washington, D.C.,
November 8, 1917.
*-***----------------
+
The Inter state Gognifierce Commission takes this means of
answering numerous inquiries as to the application and operation
of the amendment tº the 15th gection of the act, vinich ºr Ohibitº
filing increased rates, fares or charges until the Goºnission's
: --
approval ther e of has been secured.
l. Section 33 of the agit, authorizes the carriers to Carry,
store or handle property free or at red-aged rates for the United
States, state or ſºunicipal governments, or for charitable pur-
poses, or to or from fairs and expositions for exhibition thereaf.
If a carrier hag established and filed a tariff of such reduced
rates, it must secure a jºroval before increages in or cancella-
tion of those rates can be filed.
3. In the Fifteen Per Cent Case the Commission authorized
increases in joint rail-and-water rates to the level of the all-
rail pates between the game point 3, In some instances such rail-
and-water rates were increased and thereafter the all-rail rates
Were increased. The rail-and-water rates may not again be in-
creased by virtue of the authority of the Fifteen Per Gent Gase -
without first securing approval under the amended 15th section-
3. If after formal hearing the Commission finds that ungºle
preference or prejudice exists and must be removed and also finds
that the higher charge is not unreasonable or prescribes a reason-
able maximum sharge, H+ will not be necessary to secure addition-
ai a proval under the 15th section for the filing of charges
Which conform to such findings. But, if the Commission finds
that undue preference or prejudice must be removed and does not
make a finding as to the reasonableness of the existing charges
or What would be a reasonable maximum charge, approval under the
15th section must be secured for the filing of increased charges
intended to remove the undue preference or prejudice.
4. If a fourth section aºlication to continue lower chargeſ:
for the longer haul is denied and the Commission makes no finding
as to the reasonableness of the higher charges to the intermedi-
at e points, or as to what would be a reasonable maximum charge
at the more distant lower-rated point, approval under the 15th
section must be secured as to increased charges proposed by the
carrier in order to bring the charges into conformity with the
rule of the fourth section. --
The Commission's jurisdiction over joint rates or fares
ng from points in Canada to points in the United States
has been announced in several of its reports. Black Horse
o Co. v. T. C. R. R. Co., 17 I.C.C., 588; International
º Co. v. D.T.& H. Co., T33 I, C.C., 370; Carey ºf g. Co. v. G.
T. W. Ry. Co., 36 T.G.C., 303. The Commission has and Căn.
āşşūme no extraterritorial jurisdiction. It cannot abdicate . .
its jurisdiction over chargés of carriers for service rendered by
them. Within the United States. Through or joint rates or fa, ſº es
from a point in Canada to a point in the United States are neces-
sarily filed with the Board of Railway Commissioners of Canada,
Which has jurisdiction of the roads in Canada. Through or joint
rates and fares between points in the United States and point S iſ:
Canada are a great convenience to the public and their use should
o” be a bandoned or discouraged unless that is absolutely neges-
- Through or joint rates and fares from points in the Unit 2:
--.
to points in Canada are subject to the requirements of tº c





** -- - tº º is
-----
-- . . .
15th section as amended. Reaffirming the views as to its ju-
risdiction as announced in tº gºes above cited, the Commission
holds that it will nºt be negesgary to secure approval of this
Commission under the amended 15th section to the filing of
through or joint rates or fares applying from points in Canada.
to points in the United States. It follows that the same rul-
ing applies to through or joint rates or fares between points in
Mexico and points in the United States. -
6. In preparation, presentation and handling of applica-
tions for approval of increased rates, fares or charges the fol-
lowing rules will, until otherwise ordered by the Commission,
be observed: - -
One copy of each application, together with one copy of
each exhibit at tº ched ther et, o or referred to ther ein, will, as
Soon as received and recorded by the Fifteenth Section Board,
be deposited for public inspection in the Commission's public
tariff file room.
A daily list of the applications presented, showing in Con-
cise form and in a general way their purport, and excluding ºp-
plications for permission to correct palpable errors in tariffs
and applications of relatively minor importance which manifestly
should be promptly granted, will be laid upon the press table Li'l
the Secretary's office, deposited in the Commission's publig tar-
iff file room, and one copy thereof mailed to each state rail-
road commission and to accredited representatives of organizº-
tions of shippers, chambers of commerce, boards of trade, and
commercial clubs. Such organizations and commercial bodies ºº
hereby requested to designate to the Secretary of the Commission
the names and addresses ºf their respeative representatives to
whom they desire such statement s mailed.
When an application has been assigned for hearing, either
formal or informal, a notice of such hearing, together with a
concise general statement of the matters to be considered there-
at , will be placed upon the press table and copies thereof -
mailed to shipper s or their representatives who have requested
Such hearing.
Informal hearings may at the discretion of the Fifteenth
Section Board be stenographically reported. The Commission,
will take only one copy of the record, which will be filed with
the application. -
In instances of a somewhat general territorial increase in
rates on commodities or between localities, interested parties
at an informal hearing may, at the discretion of the Board, be
accorded 10 days within which to file with the Board and serve
upon each other such briefs as they desire to file.
It is not necessary for carriers to secure additional ap-
proval prior to filing of - -
- (a) All-rail or rail-and-water rates approved in the re-
port in the Fifteen Per Cent Case and rates approved in the
(; , ", A., Class Rate Case. .
- (b) Any rate, fare or classification rating prescribed or
maximum rate or fare authorized in a report or order of the
Commission after formal hearing.
Approval must be secured before tariffs are tendered for
filing in the following instances:
i. When the elimination of a route designated in the tar-
iffs will result in increased rates, fares or charges via that
route.


º
3. When an increase in the minimum car load weight effects
an increased charge on the shipſgºñº.
3. When a diminution in the argount of sw
absorbed by the carrier results in increased
the shipper . * -
4. When the restriction or elimination of a transit service
results in increased charges. - -
5. When the substitution of combination rates for joint
rates results in increased charges. -
6. When a freight tariff specifies a date of expiration
and the charges that will be applicable after that date are
increased charges. -
7. When changes in rules or regulations effect increased
charges, - -
8. When increased charges result from changes in numbers
assigned to stations or express offices, from additions of new
Stations or express offices on old lines, from changes in dig-
tances, from the withdrawal or cancellation of stations, land-
ings or express offices, from correction of capacities or di-
men Sions Of Gaî. s.
- -, T. " ºr r -
t; Ching Giºrgºg
* : * ºr ºr
13 ge
i
C} s against

It is not necessary for a carrier to secure a nor oval be-
for e filing of tariffs which effect the following changes:
(a) When because, a railroad or water line ceases operation.
Cancellation of rates becomes necessary,
(b) When a team track is eliminated or a siding at a way
Station has been removed so that delivery of ear load ship;ments
Gän no longer be effected ther eat.
If the Commission has approved an increase in rates or fares
from a given point to a gateway, traffic moving beyond that gate-
way on a combination rate or fare bears the increased charges,
but the carriers may not increase joint through rates or fares
Which may have been made on the combination without first secur-
ing the Gommission's approval.

If the Commission has approved an increase in the rate or
fare from a given point to a given point, that approval does not
include other points grouped with and taking the same rate or
fare, unless they are specified in the application and the
Order of a proval. -
The law recognizes the carriers' right to establish excur-
Sion fares. Where such fares are lower than the ordinary or what
may be termed standard fares and are effective for a limited
period or between specified limited dates, their expiration does
not require the carrier to secure sºecial permission under sec-
tion l8 for the application of the standard fares, which have re-
mained in effect all the time and which a pºly under different
circumstances and conditions. Authority must , of course, be sº-
Gured for any increase in the established or standard fares.
Rule 53 of tariff circular 13–A permits changes on short
notice in round-trip excursion fares for certain sºecified rea,3-
ons. Special permission is not necessary for those changes.
Approval is necessary for the elimination of stopover privi-
leges or side trips, but is not necessary as to rules providing
for extension of time on limited tickets or for honoring of
tickets that have not been properly validated .
If a Switching line has on file a tariff naming a switching
Charge and the line-haul carriers have on file tariff's providing
that they will absorb the charges of the GWitching line, the
switching line may not increase its tariff charge without secur-
ing approval.
GEORGE B, McGINTY,
Secretary.
INTERSTATE COMMERCE COMMISSION.
IN THE MATTER OF RATES DEPENDENT UPON THE
DECLARED OR RELEASED VALUE OF PROPERTY.
The only purpose in publishing rates dependent upon the declared
or released value of the property transported is to limit the carrier's
liability in case of loss of or damage to the property. By amend-
ment to section 20 of the act to regulate commerce, approved March
4, 1915, “any such limitation without respect to the manner or form
in which it is sought to be made " was declared to be unlawful and
void. It was provided, however, that under certain conditions the
Commission might establish and maintain rates dependent upon the
value of the property as stated in writing by the shipper.
In The Cummins Amendment, 33 I. C. C., 682, decided May 7,
1915, the Commission said: “Neither the bills of lading or other
contracts for carriage or classifications or rate schedules of the car-
riers should contain any provisions which are so declared to be
unlawful and void.” º
Effective August 9, 1916, that part of section 20 of the act which
authorized the Commission to establish and maintain rates based
upon declared value was amended and the provision that any attempt
to limit the carrier's liability should be unlawful and void was
modified so it should not apply to baggage or to property other than
ordinary live stock, “concerning which the carrier shall have been or
shall hereafter be expressly authorized or required by order of the
Interstate Commerce Commission to establish and maintain rates
dependent upon the value declared in writing by the shipper or
agreed upon in writing as the released value of the property.”
In Eapress Rates, Practices, Accounts, and Revenues, 43 I. C. C.,
510, decided April 2, 1917, the Commission said: “We can not,
in view of the provisions of the law, authorize or sanction such
rates upon ordinary live stock; neither can they lawfully be main-
tained upon any other character of traffic except under authoriza-
tion duly granted by the Commission.”
This decision was followed in Live Stock Classification, 47 I. C. C.,
335, and again in Williams Co. v. Hartford dº New York Transporta-
tion Co., 48 I. C. C., 269, in which the Commission held that the rates
complained of which were dependent upon the value of the property,
56013°–1.8% : . . . . . . .
2
and which the carriers had not been authorized by order of the Com-
mission to maintain, were unlawful.
Some carriers have neglected to secure from the Commission au-
thority to maintain such rates or to cancel them from their tariffs.
Unnecessary controversies arise as to the charges on property trans-
ported thereunder. It is clearly the duty of every carrier to secure
from the Commission authority for the maintenance of such rates
or to eliminate them from its classification and rate schedules. The
Commission expects that each carrier will give this matter prompt
and careful attention.
By the Commission:
GEORGE B. McGINTY, Secretary.
WASHINGTON, D.C., April 26, 1918.
WASHINGTON. : GOVERNMENT PRINTING OFFICE . 1918
:
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3|uterstate (ſummerre (ſummigginn
illaghingtun
Supplement to Rules Governing the Classification of Steam Railway
Employees and Their Compensation. -
At a General Session of the INTERSTATE COMMERCE
COMMISSION, held at its office in Washington, D.C.,
on the 13th day of July, A. D. 1917.
It is ordered, That, effective as of July 1, 1917, and continuing
- until further order, carriers by steam railway and owners of steam
ſº railways within the scope of section 20 of the act to regulate com-
merce as amended be relieved from the requirement of recording and
reporting the number of hours on duty of the below-named classes
of employees, viz:
9. M. W. & S. foremen,
10. Section foremen,
12. Gang and other foremen—M. E. department,
20. Electricians,
31. Employees in outside agencies,
32. Other traffic employees,
62. Crossing flagmen and gatemen,
63. Drawbridge operators,
67. Other transportation employees,
68. All other employees,
as defined in the Commission's Rules Governing the Classification
of Steam Railway Employees and Their Compensation, effective on
July 1, 1915, and that in lieu thereof they record and report the
number of days served by the said classes of employees.
By the Commission.
[SEAL.] - * GEORGE B. McGINTY,
Secretary.
3532–17
WASHINGTON : GOVERNMENT PRINTING OFFICE. : 1917

}T \ ... . - . . ; 9 () Q? C.
ºll () g J Ü N S- \ ." 19 | `
... Teiº SUPPLEMENTAL ACTS
TO THE
ACT TO REGULATE COMMERCE
Involving Operation of Railroads
SAFETY APPLIANCES
MONTHLY REPORTS OF ACCIDENTS
MEDALS OF HONOR
HOURS OF SERVICE
ASH PAN
TRANSPORTATION OF EXPLOSIVES
BOILER INSPECTION
BLOCK SIGNALS
PUBLISHED BY THE INTERSTATE COMMERCE COMMISSION
REVISED TO JANUARY 1, 1918 .
---.
| &M ERCS
|
**
WASHINGTON
GOVERNMENT PRINTING OFFICE"
1919 - .




C O N T E N T S.
(Showing citations.)
An act to promote the safety of employees and travelers upon railroads by
compelling common carriers engaged in interstate commerce to equip their
cars with automatic couplers and continuous brakes, and their locomotives
with driving-wheel brakes, and for other purposes, approved March 2, 1893
(27 Statutes at Large, 531), as amended by an act approved April 1, 1896
(29 Statutes at Large, 85). . . . . . . . . . . . -----------------------------------
An act to amend an act entitled an act to promote the safety of employees and
travelers, and so forth, approved March 2, 1893, and amended April 1, 1896;
approved March 2, 1903 (32 Statutes at Large, 943). . . . . . . . . . . . . . . . . . . . . . . . -
An act to supplement an act to promote the safety of employees and travelers
upon railroads by compelling common carriers engaged in interstate com-
merce to equip their cars with automatic couplers and continuous brakes,
and their locomotives with driving-wheel brakes, and for other purposes,
and other safety-appliance acts, and for other purposes approved April 14,
1910 (36 Statutes at Large, 298); also amendment of March 4, 1911 (36 Statutes
at Large, 1397). . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
An act authorizing the Commission to employ safety-appliance inspectors,
approved June 28, 1902 (32 Statutes at Large, 444). . . . . . . . . . . . . . . . . . . . . . . .
An act requiring common carriers engaged in interstate and foreign commerce
to make full reports of all accidents to the Interstate Commerce Commission
and authorizing investigations thereof by said Commission, approved May 6,
1910 (36 Statutes at Large, 350). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
An act to promote the security of travel upon railroads engaged in interstate
commerce, and to encourage the saving of life, approved February 23, 1905
(33 Statutes at Large, 743), and regulations prescribed thereunder. . . . . . . . . .
An act to promote the safety of employees and travelers upon railroads by
limiting the hours of service of employees thereon, approved March 4, 1907
(34 Statutes at Large, 1415), (39 Statutes at Large, 61). . . . . . . . . . . . . . . . . . . . . .
An act to promote the safety of employees on railroads, approved May 30, 1908
(35 Statutes at Large, 476). . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
An act to promote the safe transportation in interstate commerce of explosives
and other dangerous articles, and to provide penalties for its violation, ap-
proved March 4, 1909 (35 Statutes at Large, 1134).........................
An act to promote the safety of employees and travelers upon railroads by
compelling common carriers engaged in interstate commerce to equip their
locomotives with safe and suitable boilers and appurtenances thereto, ap-
proved February 17, 1911 (36 Statutes at Large, 913), (38 Statutes at Large,
1192). -----------------------------------------------------------------
Joint resolution directing Interstate Commerce Commission to investigate and
report on block-signal systems and appliances for the automatic control of
railway trains, etc. -----------------------------------------------------
Page.
12
12
14
16
18
20
22
28
31
SAFETY APPLIANCE ACTS (As AMENDED).
AN ACT To promote the safety of employees and travelers upon
railroads by compelling common carriers engaged in interstate
commerce to equip their cars with automatic couplers and Con-
tinuous brakes and their locomotives with driving-wheel brakes,
and for Other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assem-
bled, That from and after the first day of January, wº *i.
eighteen hundred and ninety-eight, it shall be unlawful brakes.
for any common carrier engaged in interstate commerce 27 Stat. L., 531.
by railroad to use on its line any locomotive engine in
moving interstate traffic not equipped with a power driv-
ing-wheel brake and appliances for operating the train-
brake system, or to run any train in such traffic after said
date that has not a sufficient number of cars in it so
equipped with power or train brakes that the engineer on
the locomotive drawing such train can control its speed
without requiring brakemen to use the common hand
brake for that purpose. -
SEC. 2. That on and after the first day of January, cº"
eighteen hundred and ninety-eight, it shall be unlawful
for any such common carrier to haul or permit to be
hauled or used on its line any car used in moving inter-
state traffic not equipped with couplers coupling auto-
matically by impact, and which can be uncoupled without
the necessity of men going between the ends of the cars.
SEC. 3. That when any person, firm, company, or cor- ...When car-
riers may law-
poration engaged in interstate commerce by railroad shall fully refuse to
Iº e C e 1 V e CarS
have equipped a sufficient number of its cars so as to com- flºº,
ply with the provisions of section one of this Act, it may shippers.
lawfully refuse to receive from connecting lines of road
or shippers any cars not equipped sufficiently, in accord-
ance with the first section of this Act, with such power or
train brakes as will work and readily interchange with
the brakes in use on its own cars, as required by this Act.
Sec. 4. That from and after the first day of July, nº
eighteen hundred and ninety-five, until otherwise ordered
by the Interstate Commerce Commission, it shall be un-
5
6 SAFETY APPLIANCE ACTs.
lawful for any railroad company to use any car in inter-
state commerce that is not provided with secure grab
irons or handholds in the ends and sides of each car for
greater security to men in coupling and uncoupling cars.
hiº SEC. 5. That within ninety days from the passage of
bars for freight this Act the American Railway Association is authorized
C81 I’S. hereby to designaté to the Interstate Commerce Commis-
sion the standard height of drawbars for freight cars,
measured perpendicular from the level of the tops of the
rails to the centers of the drawbars, for each of the sev-
eral gauges of railroads in use in the United States, and
shall fix a maximum variation from such standard height
to be allowed between the drawbars of empty and loaded
cars. Upon their determination being certified to the
Interstate Commerce Commission, said Commission shall
at once give notice of the standard fixed upon to all com-
mon carriers, owners, or lessees engaged in interstate
commerce in the United States by such means as the
Commission may deem proper. But should said associa-
tion fail to determine a standard as above provided, it
shall be the duty of the Interstate Commerce Commission
to do so, before July first, eighteen hundred and ninety-
four, and immediately to give notice thereof as aforesaid.
And after July first, eighteen hundred and ninety-five, no
cars, either loaded or unloaded, shall be used in inter-
state traffic which do not comply with the standard above
- provided for. g -
fº.s. SEC. 6. (As amended April 1, 1896.) That any such
. common carrier using any locomotive engine, running
any train, or hauling or permitting to be hauled or used
on its line any car in violation of any of the provisions of
this Act, shall be liable to a penalty of one hundred dol-
lars for each and every such violation, to be recovered in
a suit or suits to be brought by the United States district
attorney in the district court of the United States having
jurisdiction in the locality where such violation shall
have been committed; and it shall be the duty of such
district attorney to bring such suits upon duly verified
information being lodged with him of such violation
having occurred; and it shall also be the duty of the
Interstate Commerce Commission to lodge with the
proper district attorneys information of any such viola-
ºptions tº tions as may come to its knowledge: Provided, That noth-
ing in this Act contained shall apply to trains composed
of four-wheel cars or to trains composed of eight-wheel
SAFETY APPLIANCE ACTS. 7
standard logging cars where the height of such car from
top of rail to center of coupling does not exceed twenty-
five inches, or to locomotives used in hauling such trains
when such cars or locomotives are exclusively used for the
transportation of logs.
SEC. 7. That the Interstate Commerce Commission may Power of In-
e g ſº terstate Com-
from time to time upon full hearing and for good cause inºcomº.
e te e tº tº & t t d
extend the period within which any common carrier shall # ºr “...
{º ſe te £º t I
comply with the provisions of this Act. #h'ºhiš'
SEC. 8. That any employee of any such common carrier Employees
J2Ot deemed to
who may be injured by any locomotive, car, or train in assume risk of
employment.
use contrary to the provisions of this Act shall not be "ºsſa. L.,531.
deemed thereby to have assumed the risk thereby occa-
sioned, although continuing in the employment of such
carrier after the unlawful use of such locomotive, car, or
train had been brought to his knowledge. .
Public, No. 113, approved March 2, 1893, amended
April 1, 1896.
NOTE.-Prescribed Standard height of drawbars: Standard-gauge
railroads: maximum 34%, minimum 313, inches; narrow-gauge
railroads: maximum 26, minimum 23, inches; 2-foot-gauge rail-
roads: maximum 173, minimum 14%, inches.
AN ACT To amend an Act entitled “An Act to promote the Safety
of employees and travelers upon railroads by compelling Com-
mon carriers engaged in interstate Commerce to equip their Cars
With automatic couplers and continuous brakes and their IOCO-
motives with driving-wheel brakes, and for other purposes,” ap-
proved March Second, eighteen hundred and ninety-three, and
amended April first, eighteen hundred and ninety-six.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress as- 32 Stat. L. 943
sembled, That the provisions and requirements of the Act sº .#PP;
entitled “An Act to promote the safety of employees and º żºis;
as amended by
travelers upon railroads by compelling common carriers *ść"ºfaş.
, Sna II ap-
© & gº º © 1
engaged in interstate commerce to equip their cars with É. in ###:
OI’16S 8.In IS-
e ſº g t
automatic couplers and continuous brakes, and their loco-trict of Coſum.
tº tº o e - 18.
motives with driving-wheel brakes, and for other pur- Fºlº. #
S a fety appli-
poses,” approved March second, eighteen hundred and ance acts as to
couplers shahl
ninety-three, and amended April first, eighteen hundred a pºiſy in *
e S Wine
and ninety-six, shall be held to apply to common carriers § d º ºg
by railroads in the Territories and the District of Co-º: 0-
lumbia and shall apply in all cases, whether or not the
couplers brought together are of the same kind, make, or
8 SAIFETY APPLIANCE ACTS.
type; and the provisions and requirements hereof and of
Šatº aſſi said Acts relating to train brakes, automatic couplers,
ance acts Sha
apply to all grab irons, and the height of drawbars shall be held to
equipment of
a.º. railroad apply to all trains, locomotives, tenders, cars, and similar
engaged in in- o o e ſº
terstate com - vehicles used on any railroad engaged in interstate com-
In eICC. merce, and in the Territories and the District of Colum-
bia, and to all other locomotives, tenders, cars, and similar
Exceptions, vehicles used in connection therewith, excepting those
trains, cars, and locomotives exempted by the provisions
of section six of said Act of March second, eighteen hun-
dred and ninety-three, as amended by the Act of April
first, eighteen hundred and ninety-six, or which are used
upon street railways.
Power brakes. SEC. 2. That whenever, as provided in said Act, any
train is operated with power or train brakes, not less than
fifty per centum of the cars in such train shall have their
brakes used and operated by the engineer of the locomo-
tive drawing such train; and all power-braked cars in
such train which are associated together with said fifty
per centum shall have their brakes so used and operated;
and, to more fully carry into effect the objects of said Act,
Commission tº º e
may"#éº the Interstate Commerce Commission may, from time to
minimum per- 1. g ge tº º
*...*.*, e” of time, after full hearing, increase the minimum percent-
power or train e e tº * 4.Y.
§ age cars “to age of cars in any train required to be operated with
be used. power or train brakes which must have their brakes used
and operated as aforesaid; and failure to comply with
any such requirement of the said Interstate Commerce
Penalty. Commission shall be subject to the like penalty as failure
to comply with any requirement of this section. -
SEC. 3. That the provisions of this Act shall not take
effect until September first, nineteen hundred and three.
Nothing in this Act shall be held or construed to relieve
Provisions, e &
pº’iº, any common carrier, the Interstate Commerce Commis-
à";sion, or any United States district attorney from any of
specified in act ... º º tº t e - tº a tº gº *
&M.2 isº, the provisions, powers, duties, liabilities, or requirements
**ść”.; of said Act of March second, eighteen hundred and
*** ninety-three, as amended by the Act of April first,
eighteen hundred and ninety-six; and all of the provi-
sions, powers, duties, requirements, and liabilities of said
Act of March second, eighteen hundred and ninety-three,
as amended by the Act of April first, eighteen hundred
and ninety-six, shall, except as specifically amended by
this Act, apply to this Act.
Public, No. 133, approved March 2, 1903.
SAFETY APPLIANCE ACTS. 9
AN ACT TO Supplement “An Act to promote the Safety of em-
ployees and travelers upon railroads by compelling common car-
riers engaged in interstate commerce to equip their cars with
automatic couplers and continuous brakes and their locomotives
with driving wheel brakes and for other purposes,” and other
Safety appliance Acts, and for Other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assem- as a Lºs
bled, That the provisions of this Act shall apply to every tº *:::::::::
common carrier and every vehicle subject to the Act of ble. -
March second, eighteen hundred and ninety-three, as
amended April first, eighteen hundred and ninety-six,
and March second, nineteen hundred and three, commonly
known as the “Safety Appliance Acts.”
SEC. 2. That on and after July first, nineteen hundred
and eleven, it shall be unlawful for any common carrier
subject to the provisions of this Act to haul, or permit to
be hauled or used on its line any car subject to the pro-
visions of this Act not equipped with appliances provided
for in this Act, to wit: All cars must be equipped with ...a... tº
equipped with
secure sill steps and efficient hand brakes; all cars re-º
brakes, ladders,
quiring secure ladders and secure running boards shall.....' ...;
be equipped with such ladders and running boards, and grab irons.
all cars having ladders shall also be equipped with Secure -
hand holds or grab irons on their roofs at the tops of such
ladders: Provided, That in the loading and hauling of
long commodities, requiring more than one car, the hand
brakes may be omitted on all save one of the cars while
they are thus combined for such purpose.
Sec. 3. That within six months from the passage of this, cºnſº
de S ig nate
Act the Interstate Commerce Commission, after hearing, number, dimen.
2 ?sions, location,
shall designate the number, dimensions, location, and ºr ºf
manner of application of the appliances provided for by appliances.
section two of this Act and section four of the Act of
March second, eighteen hundred and ninety-three, and
shall give notice of such designation to all common car-
riers subject to the provisions of this Act by such means
as the Commission may deem proper, and thereafter said
number, location, dimensions, and manner of application
as designated by said Commission shall remain as the
standards of equipment to be used on all cars subject to
the provisions of this Act, unless changed by an order of
said Interstate Commerce Commission, to be made after
full hearing and for good cause shown; and failure to
comply with any such requirement of the Interstate Com-
113159°.—19—2
1() SAFETY APPLIANCE ACTS.
merce Commission shall be subject to a like penalty as
period of failure to comply with any requirement of this Act: Pro-
ãº","ä": vided, That the Interstate Commerce Commission may,
tended. upon full hearing and for good cause, extend the period
within which any common carrier shall comply with the
provisions of this section with respect to the equipment
of cars actually in service upon the date of the passage
commission of this Act. Said Commission is hereby given authority,
§tº after hearing, to modify or change, and to prescribe the
wn. standard height of drawbars and to fix the time within
which such modification or change shall become effective
and obligatory, and prior to the time so fixed it shall be
p : , , , a unlawful to use any car or vehicle in interstate or foreign
i.º.º.º. traffic which does not comply with the standard now fixed
bars legal or the standard so prescribed, and after the time so fixed
it shall be unlawful to use any car or vehicle in interstate
or foreign traffic which does not comply with the standard
- so prescribed by the Commission. -
yº.nº, SEC. 4. That any common carrier subject to this Act
pºons of using, hauling, or permitting to be used or hauled on its
line any car subject to the requirements of this Act not
equipped as provided in this Act shall be liable to a
penalty of one hundred dollars for each and every such
violation, to be recovered as provided in section six of the
Act of March second, eighteen hundred and ninety-three,
as amended April first, eighteen hundred and ninety-six:
Provided, That where any car shall have been properly
equipped, as provided in this Act and the other Acts
mentioned herein, and such equipment shall have be-
Defective ºr come defective or insecure while such car was being used
may be hauled g tº e e -
to...he a...est by such carrier upon its line of railroad, such car
** * may be hauled from the place where such equipment was
first discovered to be defective or insecure to the nearest
available point where such car can be repaired, without
liability for the penalties imposed by section four of this
Act or section six of the Act of March second, eighteen
hundred and ninety-three, as amended by the Act of April
first, eighteen hundred and ninety-six, if such movement is
necessary to make such repairs and such repairs can not
- be made except at such repair point; and such movement .
reñº or hauling of such car shall be at the sole risk of the car-
######rier, and nothing in this section shall be construed to re-
lieve such carrier from liability in any remedial action
for the death or injury of any railroad employee caused
to such employee by reason of or in connection with tho
SAFETY APPLIANCE ACTS. t 11
movement or hauling of such car with equipment which
is defective or insecure or which is not maintained in ac-
cordance with the requirements of this Act and the other
Acts herein referred to; and nothing in this proviso shall cººling by
be construed to permit the hauling of defective cars by
means of chains instead of drawbars, in revenue trains or
in association with other cars that are commercially used,
unless such defective cars contain live stock or “per-
ishable” freight. - -
SEC. 5. That except that, within the limits specified in .º.º.
º tº e lieved from
the preceding section of this Act, the movement of a car penalty, except
with defective or insecure equipment may be made with- above iº"
out incurring the penalty provided by the statutes, but
shall in all other respects be unlawful, nothing in this Act
shall be held or construed to relieve any common carrier,
the Interstate Commerce Commission, or any United
States attorney from any of the provisions, powers, duties,
liabilities, or requirements of said Act of March second,
eighteen hundred and ninety-three, as amended by the
Acts of April first, eighteen hundred and ninety-six, and
March second, nineteen hundred and three; and, except -
as aforesaid, all of the provisions, powers, duties, require-
ments, and liabilities of said Act of March second, eight-
een hundred and ninety-three, as amended by the Acts of
April first, eighteen hundred and ninety-six, and March
second, nineteen hundred, and three, shall apply to this
Act. -
SEC. 6. That it shall be the duty of the Interstate Com- Enforcement.
merce Commission to enforce the provisions of this Act,
and all powers heretofore granted to said Commission are
hereby extended to it for the purpose of the enforcement
of this Act.
That the jurisdiction of the Interstate Commerce Com- commission
e G e tº e - tº * may extend ef-
mission to extend the period within which any common fective date of
carrier shall comply with the provisions of section three Applementary
of the Act entitled “An Act to supplement “An Act to
promote the safety of employees and travelers upon rail-
roads by compelling common carriers engaged in inter-
state commerce to equip their cars with automatic cou-
plers and continuous brakes and their locomotives with , Act of March
driving-wheel brakes, and for other purposes,’ and other *:::::: L., 1897.
safety-appliance acts, and for other purposes,” approved
April fourteenth, nineteen hundred and ten, shall apply
to cars actually placed in service between the date of the
passage of said Act and the first day of July, nineteen
Q
12 - ACCIDENT REPORTS ACT.
hundred and eleven, in the same manner and to the same
extent that it applies to cars actually in service upon the
date of the passage of said Act.
Public, No. 133, approved April 14, 1910; Public, No.
525, approved March 4, 1911. &
ºnt Sundry civil act (appropriations) of June 28, 1902,
32 stat.I.,444. authorizes Commission to employ “inspectors to execute
and enforce the requirements of the safety-appliance act.”
**** Section 4 of an act of September 6, 1916, amending the
Judicial Code, makes judgments and decrees of the cir-
cuit courts of appeals in all proceedings and causes aris-
ing under the safety appliance acts final, but excepts writs
of certiorari of the Supreme Court. (39 Stat. L., 726.)
ACCIDENT REPORTS ACT.
AN ACT Requiring common carriers engaged in interstate and
foreign commerce to make full reports of all accidents to the
Interstate Commerce Commission, and authorizing investiga-
tions thereof by Said COmmission. -
36 Stat. L, 330. Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assem-
bled, That it shall be the duty of the general manager,
superintendent, or other proper officer of every common
carrier engaged in interstate or foreign commerce by rail-
mºntºyº road to make to the Interstate Commerce Commission, at
way accidents, its office in Washington, District of Columbia, a monthly
report, under oath, of all collisions, derailments, or other
accidents resulting in injury to persons, equipment, or
roadbed arising from the operation of such railroad un-
der such rules and regulations as may be prescribed by
the said Commission, which report shall state the nature
and causes thereof and the circumstances connected there-
with: Provided, That hereafter all said carriers shall be
relieved from the duty of reporting accidents in their an-
nual financial and operating reports made to the Com-
mission.
mº"º Sec. 2. That any common carrier failing to make such
#"rid"; report within thirty days after the end of any month
Aniºmº shall be deemed guilty of a misdemeanor, and upon con-
viction thereof by a court of competent jurisdiction shall
ACCIDENT REPORTS ACT. - 13
be punished by a fine of not more than one hundred dol- Penalty.
lars for each and every offense and for every day during
which it shall fail to make such report after the time
herein specified for making the same.
SEC. 3. That the Interstate Commerce Commission c...”.
shall have authority to investigate all collisions, derail-jºº" *
ments, or other accidents resulting in serious injury to
person or to the property of a railroad occurring on the
line of any common carrier engaged in interstate or
foreign commerce by railroad. The Commission, or any
impartial investigator thereunto authorized by said Com-
•mission, shall have authority to investigate such col-
lisions, derailments, or other accidents aforesaid, and all
the attending facts, conditions, and circumstances, and
for that purpose may subpoena witnesses, administer
oaths, take testimony, and require the production of Testimony.
books, papers, orders, memoranda, exhibits, and other
evidence, and shall be provided by said carriers with all
reasonable facilities: Provided, That when such accident .99§Pºlº
is investigated by a commission of the State in which it &mmission.'"
occurred, the Interstate Commerce Commission shall, if
convenient, make any investigation it may have previ-
ously determined upon, at the same time as, and in con-
nection with, the state commission investigation. Said v.;"
Commission shall, when it deems it to the public interest,
make reports of such investigations, stating the cause of
accident, together with such recommendations as it deems
proper. Such reports shall be made public in such man-
ner as the Commission deems proper.
SEC. 4. That neither said report nor any report of said toº"...a";
investigation nor any part thereof shall be admitted as damage suits.
evidence or used for any purpose in any suit or action for
damages growing out of any matter mentioned in said
report or investigation.
SEC. 5. That the Interstate Commerce Commission is pºº" " "
authorized to prescribe for such common carriers a
method and form for making the reports hereinbefore
provided. -
Sec. 6. That the Act entitled “An Act requiring com-pº' "
mon carriers engaged in interstate commerce to make full
reports of all accidents to the Interstate Commerce Com-
mission,” approved March third, nineteen hundred and
one, is hereby repealed.
14 MEDALS OF HONOR ACT.
* Interstatº SEC. 7. That the term “interstate commerce,” as used
commerce’’ and
...ſº, cº, in this Act, shall include transportation from any State
fined. or Territory or the District of Columbia to any other
State or Territory or the District of Columbia, and the
term “foreign commerce,” as used in this Act, shall in-
clude transportation from any State or Territory or the
District of Columbia to any foreign country and from
any foreign country to any State or Territory or the Dis-
* trict of Columbia.
tº Aeter SEC. 8. That this Act shall take effect sixty days after
its passage. . -
Public, No. 165, approved May 6, 1910. •
MEDALS OF HONOR ACT.
AN ACT To promote the security of travel upon railroads engaged
in interstate COmmerce, and to encourage the Saving of life.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assem-
Life...saying bled, That the President of the United States, be, and he
on railroads. . . © -
Medals of is hereby, authorized to cause to be prepared bronze
"ºi, a medals of honor, with suitable emblematic devices, which
shall be bestowed upon any persons who shall hereafter,
by extreme daring, endanger their own lives in saving, or
endeavoring to save, lives from any wreck, disaster, or
grave accident, or in preventing or endeavoring to pre-
vent such wreck, disaster, or grave accident, upon any
railroad within the United States engaged in interstate
#.:* commerce: Provided, That no award of said medal shall
be made to any person until sufficient evidence of his de-
serving shall have been furnished and placed on file,
under such regulations as may be prescribed by the
President of the United States.
SEC. 2. That the President of the United States be, and
he is hereby, authorized to issue to any person to whom a
medal of honor may be awarded under the provisions of
ºtes and this Act a rosette or knot, to be worn in lieu of the medal,
and a ribbon to be worn with the medal; said rosette or
- knot and ribbon to be each of a pattern to be prescribed
łº, new by the President of the United States: Provided, That
ribbons. whenever a ribbon issued under the provisions of this Act
shall have been lost, destroyed, or rendered unfit for use
without fault or neglect on the part of the person to whom
it was issued, a new ribbon shall be issued to such person
without charge therefor.
MEDALS OF HONOR ACT.
15
SEC. 3. That the appropriations for the enforcement
and execution of the provisions of the Acts to promote
the safety of employees and travelers upon railroads are
hereby made available for carrying out the provisions of
this Act.
Public, No. 98, approved February 23, 1905.
REGULATIONS Governing the award of life-saving medals under
the foregoing Act. Made by the President of the United States
on March 29, 1905, and amended April 22, 1913.
Payment of
expenses.
Application S
1. Applications for medals under this Act should be foºj
addressed to and filed with the Interstate Commerce
Commission, at the city of Washington, D. C. Satisfac-
tory evidence of the facts upon which the application is
based must be filed in each case. This evidence should
be in the form of affidavits made by eyewitnesses, of
good repute and standing, testifying of their own knowl-
edge. The opinion of witnesses that the person for whom
an award is sought acted with extreme daring and en-
dangered his life is not sufficient, but the affidavits must
set forth the facts in detail, and show clearly in what
manner and to what extent life was endangered and
extreme daring exhibited. The railroad upon which the
incident occurred, the date, time of day, condition of the
weather, the names of all persons present when practi.
cable, and other pertinent circumstances should be stated.
The affidavits should be made before an officer duly au-
thorized to administer oaths and be accompanied by the
certificate of some United States official of the district
in which the affiants reside, such as a judge or clerk of
United States court, district attorney, or postmaster, to
the effect that the affiants are reputable and creditable
persons. If the affidavits are taken before an officer with-
out an official seal, his official character must be certified
by the proper officer of a court of record under the seal
thereof. - -
2. Applications for medals, together with all affidavits
and other evidence received in connection therewith, shall
be referred to a committee of three persons, consisting of
the secretary of the Commission, the chief inspector of
safety appliances, and the assistant chief inspector of
safety appliances. This committee shall carefully con-
sider each application presented, and after thoroughly
weighing the evidence, shall prepare an abstract or brief
made. -
Contents of
affidavits.
Committee to
consider appli-
cations.
16 IHOURS OF SERVICE ACT.
covering the case, and file the same, together with the
º committee's recommendation, with the Commission, which
m; * * brief and recommendation shall be transmitted by the
Commission to the President for his approval. The com-
mittee may, with the approval of the Commission, direct
any inspector in the employ of the Commission to pro-
Personal, in ceed to the locality where the service was performed for
VestigationS. • tº tº e tº
which a medal is claimed, and, make a personal investi-
gation and report upon the facts of the case, which report
shall be filed and made a part of the evidence considered
by the committee.
alºn. 3. Upon final approval of the committee's recommenda-
jømmendation by the President the Commission shall take such
g measures to carry the recommendation into effect as the
President may direct. .
mºns for 4. The Commission shall cause designs to be prepared
- for the medal, rosette, and ribbon provided for by the
Act, which designs shall be submitted to the President for
his approval. -
HOURS OF SERVICE ACT (AS AMENDED).
AN ACT To promote the safety of employees and travelers upon
railroads by limiting the hours of service of employees thereon.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assem-
tº . bled, That the provisions of this Act shall apply to any
£º subje" common carrier or carriers, their officers, agents, and em-
34 Stat. L., 1415, ployees, engaged in the transportation of passengers or
property by railroad in the District of Columbia or any
Territory of the United States, or from one State or
Territory of the United States or the District of Colum-
bia to any other State or Territory of the United States
or the District of Columbia, or from any place in the
United States to an adjacent foreign country, or from
any place in the United States through a foreign country
, Mºniº to any other place in the United States. The term “rail-
road.” road” as used in this Act shall include all bridges and
ferries used or operated in connection with any railroad,
and also all the road in use by any common carrier op-
erating a railroad, whether owned or operated under a
tº contract, agreement, or lease; and the term “employees”
eeS.” as used in this Act shall be held to mean persons actually
engaged in or connected with the movement of any train.
IHOUTS OF SERVICE ACT.
17
SEC. 2. That it shall be unlawful for any common car-
rier, its officers or agents, subject to this Act to require or
permit any employee subject to this Act to be or remain
on duty for a longer period than sixteen consecutive
hours, and whenever any such employee of such common
carrier shall have been continuously on duty for sixteen
hours he shall be relieved and not required or permitted
again to go on duty until he has had at least ten consecu-
tive hours off duty; and no such employee who has been
on duty sixteen hours in the aggregate in any twenty-
four-hour period shall be required or permitted to con-
tinue or again go on duty without having had at least
eight consecutive hours off duty: Provided, That no op-
erator, train dispatcher, or other employee who by the
use of the telegraph or telephone dispatches, reports,
transmits, receives, or delivers orders pertaining to or
affecting train movements shall be required or permitted
to be or remain on duty for a longer period than nine
hours in any twenty-four-hour period in all towers,
offices, places, and stations continuously operated night
and day, nor for a longer period than thirteen hours in
all towers, offices, places, and stations operated only dur-
ing the daytime, except in case of emergency, when the
employees named in this proviso may be permitted to be
and remain on duty for four additional hours in a twenty-
four-hour period or not exceeding three days in any
week: Provided further, The Interstate Commerce Com-
mission may after full hearing in a particular case and
for good cause shown extend the period within which a
common carrier shall comply with the provisions of this
proviso as to such case.
SEC. 3 (as amended May 4, 1916). That any such com-
mon carrier, or any officer or agent thereof, requiring or
permitting any employee to go, be, or remain on duty in
violation of the second section hereof shall be liable to a
penalty of not less than $100 nor more than $500 for each
and every violation, to be recovered in a suit or suits to be
brought by the United States district attorney in the dis-
trict court of the United States having jurisdiction in the
locality where such violations shall have been committed;
and it shall be the duty of such district attorney to bring
such suit upon satisfactory information being lodged with
him; but no such suit shall be brought after the expiration
of one year from the date of such violation; and it shall
also be the duty of the Interstate Commerce Commission
113159°–19—3
Sixteen hours
the maximum
C On tin u o us
S e T W i C e Of
trainmen.
Ten consecu-
tive hours off
duty.
Service hours
of to le graph
and telephone
OperatorS.
C O m mission
may extend pe-
riod.
Penalty for
Violation.
39 Stat. L., 61.
Prosecutions.
18 ASHI-PAN ACT.
to lodge with the proper district attorney information of
any such violations as may come to its knowledge. In all
prosecutions under this act the common carrier shall be
deemed to have knowledge of all acts of all its officers and
..ºldable agents: Provided, That the provisions of this act shall
not apply in any case of casualty or unavoidable accident
or the act of God; nor where the delay was the result of a
cause not known to the carrier or its officer or agent in
charge of such employee at the time said employee left a
... ek in a terminal, and which could not have been foreseen: Pro-
vided further, That the provisions of this act shall not
tºº.” apply to the crews of wrecking or relief trains. That
nothing in this act shall affect, or be held to affect, any
suit that may be instituted for recovery of penalty for
violation of the act hereby amended occurring prior to the
approval of this act, or any suit for such penalty or grow-
ing out of alleged violation of the act hereby amended
which may be pending in any court at the time of the
approval of this act.
jº. Sec. 4. It shall be the duty of the Interstate Commerce
Commission to execute and enforce the provisions of this
act, and all powers granted to the Interstate Commerce
Commission are hereby extended to it in the execution of
this act.
Effective. SEC. 5. That this act shall take effect and be in force
one year after its passage. -
Public, No. 274, approved March 4, 1907, 11.50 a.m.;
39 Stat. L., 726 and Public, No. 68, approved May 4, 1916.
Section 4 of an act of September 6, 1916, amending the
Judicial Code, makes judgments and decrees of the cir-
cuit courts of appeals in all proceedings and causes aris-
ing under the hours of service Act final, but excepts writs
of certiorari of the Supreme Court. (39 Stat. L., 726.)
ASH-PAN ACT.
AN ACT To promote the safety of employees On railroads.
Be it enacted by the Senate and House of Representa-
ºpºtives of the United States of America in Congress assem-
... a tº bled, That on and after the first day of January, nineteen
35 Stat. L.,476. hundred and ten, it shall be unlawful for any common
- d - *
ASEI-PAN ACT. 19
carrier engaged in interstate or foreign commerce by rail-
road to use any locomotive in moving interstate or foreign
traffic, not equipped with an ash pan, which can be
dumped or emptied and cleaned without the necessity of
any employee going under such locomotive.
SEC. 2. That on and after the first day of January, A s h = p a n
nineteen hundred and ten, it shall be unlawful for any #; ahá
& e tº wº District of Co-
common carrier by railroad in any Territory of the iumbia.
United States or the District of Columbia to use any
locomotive not equipped with an ash pan, which can be
dumped or emptied and cleaned without the necessity
of any employee going under such locomotive.
SEC. 3. That any such common carrier using any loco- Penalties.
motive in violation of any of the provisions of this Act
shall be liable to a penalty of two hundred dollars for
each and every such violation, to be recovered in a suit or
suits to be brought by the United States district attorney
in the district court of the United States having jurisdic-
tion in the locality where such violation shall have been
committed; and it shall be the duty of such district Enforcement.
attorney to bring such suits upon duly verified informa-
tion being lodged with him of such violation having
occurred; and it shall also be the duty of the Interstate
Commerce Commission to lodge with the proper district commission
attorneys information of any such violations as may ºf “
come to its knowledge.
SEC. 4. That it shall be the duty of the Interstate Com- powers grant.
merce Commission to enforce the provisions of this Act, tº “"
and all powers heretofore granted to said Commission are
hereby extended to it for the purpose of the enforcement
of this Act.
SEC. 5. That the term “common carrier” as used in Receivers in-
this Act shall include the receiver or receivers or other “
persons or corporations charged with the duty of the
management and operation of the business of a common
carrier.
SEC. 6. That nothing in this Act contained shall apply when, a sh
to any locomotive upon which, by reason of the use of ºº “
oil, electricity, or other such agency, an ash pan is not
necessary.
Public, No. 165, approved May 30, 1908.
20
TRANSPORTATION OF EXPLOSIVES ACT.
Dynamite,
etc., not to be
Carried On pas-
senger vehicles
for hire.
35 Stat. L., 1134.
TRANSPORTATION OF EXPLOSIVES ACT.
AN ACT To promote the safe transportation in interstate Com-
merce of explosives and other dangerous articles, and to provide
penalties for its violation.
By an Act entitled “An Act to codify, revise, and
amend the penal laws of the United States,” approved
March 4, 1909, to take effect and be in force on and after
the first day of January, 1910, the Act entitled “An Act
to promote the safe transportation in interstate commerce
of explosives and other dangerous articles, and to provide
penalties for its violation,” approved May 30, 1908, is
repealed, and the following sections of said Act to codify,
revise, and amend the penal laws of the United States are
substituted therefor: \
SEC. 232. It shall be unlawful to transport, carry, or
convey, any dynamite, gunpowder, or other explosives,
between a place in a foreign country and a place within or
subject to the jurisdiction of the United States, or be-
tween a place in any State, Territory, or District of the
United States, or place noncontiguous to but subject to
the jurisdiction thereof, and a place in any other State,
Territory, or District of the United States, or place non-
contiguous to but subject to the jurisdiction thereof, on
any vessel or vehicle of any description operated by a
common carrier, which vessel or vehicle is carrying pas-
sengers for hire: Provided, That it shall be lawful to
transport on any such vessel or vehicle Small arms ammu-
nition in any quantity, and such fuses, torpedoes, rockets,
I n ter St a te
C O m me r C e
Commission to
m a ke regula-
tions for trans-
portation of ex-
plosives.
or other signal devices, as may be essential to promote
safety in operation, and properly packed and marked
samples of explosives for laboratory examination, not
exceeding a net weight of one-half pound each, and not
exceeding twenty samples at one time in a single vessel
or vehicle; but such samples shall not be carried in that
part of a vessel or vehicle which is intended for the trans-
portation of passengers for hire: Provided further, That
nothing in this section shall be construed to prevent the
transportation of military or naval forces with their
accompanying munitions of war on passenger equipment
vessels or vehicles.
SEC. 233. The Interstate Commerce Commission shall
formulate regulations for the safe transportation of ex-
plosives, which shall be binding upon all common carriers
engaged in interstate or foreign commerce which trans-
TRANSPORTATION OF EXPLOSIVES ACT.
21
port explosives by land. Said Commission, of its own
motion, or upon application made by any interested
party, may make changes or modifications in such regula-
tions, made desirable by new information or altered con-
ditions. Such regulations shall be in accord with the
best known practicable means for securing safety in
transit, covering the packing, marking, loading, handling
while in transit, and the precautions necessary to deter-
mine whether the material when offered is in proper
condition to transport. Such regulations, as well as all
changes or modifications thereof, shall take effect ninety
... days after their formulation and publication by said Com-
mission and shall be in effect until reversed, set aside, or
modified.
SEC. 234. It shall be unlawful to transport, carry, or ... Liquid nitro-
gº º e & e te ſº - glycerin, etc.,
convey, liquid nitroglycerin, fulminate in bulk in dry not to be car.
foreign country and a place within or subject to the
jurisdiction of the United States, or between a place in
one State, Territory, or District of the United States, or
a place noncontiguous to but subject to the jurisdiction
thereof, and a place in any other State, Territory, or Dis-
trict of the United States, or place noncontiguous to but
subject to the jurisdiction thereof, on any vessel or ve-
hicle of any description operated by a common carrier in
the transportation of passengers or articles of commerce
by land or water. .
SEC. 235. Every package containing explosives or other
thereof the contents thereof; and it shall be unlawful for
any person to deliver, or cause to be delivered, to any
common carrier engaged in interstate or foreign com-
merce by land or water, for interstate or foreign trans-
portation, or to carry upon any vessel or vehicle engaged
in interstate or foreign transportation, any explosive, or
other dangerous article, under any false or deceptive
marking, description, invoice, shipping order, or other
declaration, or without informing the agent of such car-
rier of the true character thereof, at or before the time
such delivery or carriage is made. Whoever shall know-
ingly violate, or cause to be violated, any provision of this
section, or of the three sections last preceding, or any
regulation made by the Interstate Commerce Commis-
sion in pursuance thereof, shall be fined not more than
tº a tº tº e o lied on certain
condition, or other like explosive, between a place in a vehicles.
Marking of
- e tº packages of ex-
dangerous articles when presented to a common carrier º:
for shipment shall have plainly marked on the outside ing.
de -
22
BOILER INSPECTION ACT.
*.
Death or bod-
i l y in j u r y
caused by Such
transportation.
two thousand dollars, or imprisoned not more than
eighteen months, or both.
SEC. 236. When the death or bodily injury of any per-
Son is caused by the explosion of any article named in
the four sections last preceding, while the same is being
placed upon any vessel or vehicle to be transported in
violation thereof, or while the same is being so trans-
Locom O ti V e
boilers.
Common Car
ported, or while the same is being removed from such
vessel or vehicle, the person knowingly placing, or aiding
or permitting the placing, of such articles upon any such
vessel or vehicle, to be so transported, shall be imprisoned
not more than ten years.
Public, No. 350, approved March 4, 1909.
BOILER INSPECTION ACT (AS AMENDED).
AN ACT To promote the safety of employees and travelers upon.
railroads by compelling common carriers engaged in interstate
commerce to equip their locomotives with Safe and Suitable
boilers and appurtenances thereto. -
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assem-
bled, That the provisions of this Act shall apply to any
a r- © tº Q
riºtected common carrier or carriers, their officers, agents, and em-
by act.
36 Stat. L.,913.
terms.
“ Railroad.”
“Employees.”
Locomotives.
US e, unless
With Safe boil-
ers, unlawful.
ployees, engaged in the transportation of passengers or
property by railroad in the District of Columbia, or in
any Territory of the United States, or from one State or
Territory of the United States or the District of Colum-
bia to any other State or Territory of the United States
or the District of Columbia, or from any place in the
United States to an adjacent foreign country, or from
any place in the United States through a foreign country
Meaning of to any other place in the United States. The term “rail-
road" as used in this Act shall include all the roads in
use by any common carrier operating a railroad, whether
owned or operated under a contract, agreement, or lease,
and the term “employees” as used in this Act shall be
held to mean persons actually engaged in or connected
with the movement of any train. .
SEC. 2. That from and after the first day of July, nine-
teen hundred and eleven, it shall be unlawful for any
common carrier, its officers or agents, subject to this Act
to use any locomotive engine propelled by steam power
in moving interstate or foreign traffic unless the boiler
BOILER INSPECTION ACT. 23
of said locomotive and appurtenances thereof are in
proper condition and safe to operate in the service to
which the same is put, that the same may be employed in
the active service of such carrier in moving traffic with-
out unnecessary peril to life or limb, and all boilers shall
be inspected from time to time in accordance with the
provisions of this Act, and be able to withstand such test
or tests as may be prescribed in the rules and regulations
hereinafter provided for.
SEC. 3. That there shall be appointed by the President, a Sºnd twº
* {e .*.*, assistant chief
by and with the advice and consent of the Senate, a chief "Pºº
inspector and two assistant chief inspectors of locomotive mãº.”
boilers, who shall have general superintendence of the
inspectors hereinafter provided for, direct them in the
duties hereby imposed upon them, and see that the re-
quirements of this Act and the rules, regulations, and
instructions made or given hereunder are observed by
common carriers subject hereto. The said chief inspec-
tor and his two assistants shall be selected with reference selection.
to their practical knowledge of the construction and re-
pairing of boilers, and to their fitness and ability to sys-
tematize and carry into effect the provisions hereof relat-
ing to the inspection and maintenance of locomotive
boilers. The chief inspector shall receive a salary of four salaries, etc.
thousand dollars per year and the assistant chief inspec-
tors shall each receive a salary of three thousand dollars
per year; and each of the three shall be paid his travel-
ing expenses incurred in the performance of his duties.
The office of the chief inspector shall be in Washington, Office, etc.
District of Columbia, and the Interstate Commerce Com-
mission shall provide such stenographic and clerical help
as the business of the offices of the chief inspector and his
said assistants may require.
SEC. 4. That immediately after his appointment and allººetion
qualification the chief inspector shall divide the terri-
tory comprising the several States, the Territories of
New Mexico and Arizona, and the District of Columbia.
into fifty locomotive boiler-inspection districts, so ar-
ranged that the service of the inspector appointed for
each district shall be most effective, and so that the work
required of each inspector shall be substantially the same.
Thereupon there shall be appointed by the Interstate
Commerce Commission fifty inspectors of locomotive District in .
boilers. Said inspectors shall be in the classified service *isºned
and shall be appointed after competitive examination ac- civil Service.
Inspection.
24 BOILER INSPECTION ACT.
cording to the law and the rules of the Civil Service Com-
mission governing the classified service. The chief in-
spector shall assign one inspector so appointed to each of
salaries, etc. the districts hereinbefore named. Each inspector shall
receive a salary of one thousand eight hundred dollars
per year and his traveling expenses while engaged in the
performance of his duty. He shall receive in addition
thereto an annual allowance for office rent, stationery,
and clerical assistance, to be fixed by the Interstate Com-
merce Commission, but not to exceed in the case of any
district inspector six hundred dollars per year. In order
Examinations to obtain the most competent inspectors possible, it shall
* * be the duty of the chief inspector to prepare a list of
questions to be propounded to applicants with respect to ,
construction, repair, operation, testing, and inspection of
locomotive boilers, and their practical experience in such
work, which list, being approved by the Interstate Com-
merce Commission, shall be used by the Civil Service
Disqualifica - Commission as a part of its examination. No person in-
tions. tº tº e & ge
terested, either directly or indirectly, in any patented
article required to be used on any locomotive under
supervision or who is intemperate in his habits shall be
eligible to hold the office of either chief inspector or
assistant or district inspector.
Inspection by SEC. 5. That each carrier subject to this Act shall file
CarrierS. its rules and instructions for the inspection of locomotive
boilers with the chief inspector within three months after
Approval, the approval of this Act, and after hearing and approval
# * * by the Interstate Commerce Commission, such rules and
instructions, with such modifications as the Commission
#.”, be requires, shall become obligatory upon such carrier: Pro-
obºve; if vided, however, That if any carrier subject to this Act
#;". * “shall fail to file its rules and instructions the chief in-
spector shall prepare rules and instructions not incon-
sistent herewith for the inspection of locomotive boilers,
to be observed by such carrier; which rules and instruc-
tions, being approved by the Interstate Commerce Com-
mission, and a copy thereof being served upon the presi-
dent, general manager, or general Superintendent of such
carrier, shall be obligatory, and a violation thereof pun-
Changes. ished as hereinafter provided: Provided also, That such
common carrier may from time to time change the rules
and regulations herein provided for, but such change
shall not take effect and the new rules and regulations be
in force until the same shall have been filed with and ap-
BOILER INSPECTION ACT. 25
proved by the Interstate Commerce Commission. The 9mee rules,
chief inspector shall also make all needful rules, regula-
tions, and instructions not inconsistent herewith for the
conduct of his office and for the government of the dis-
trict inspectors: Provided, however, That all such rules Approval of
and instructions shall be approved by the Interstate Com- rules.
merce Commission before they take effect. .
Sec. 6. That it shall be the duty of each inspector to mºst in-
become familiar, so far as practicable, with the condition
of each locomotive boiler ordinarily housed or repaired in
his district, and if any locomotive is ordinarily housed or
repaired in two or more districts, then the chief inspector "
or an assistant shall make such division between inspec-
tors as will avoid the necessity for duplication of work.
Each inspector shall make such personal inspection of sº, ºf
the locomotive boilers under his care from time to time boilers.
as may be necessary to fully carry out the provisions of
this Act, and as may be consistent with his other duties,
but he shall not be required to make such inspections at
stated times or at regular intervals. His first duty shall Inspection by
be to see that the carriers make inspections in accordance carriers.
with the rules and regulations established or approved by
the Interstate Commerce Commission, and that carriers
repair the defects which such inspections disclose before
the boiler or boilers or appurtenances pertaining thereto
are again put in service. To this end each carrier sub-
ject to this Act shall file with the inspector in charge,
under the oath of the proper officer or employee, a dupli-e Mºri, º,
g O be
cate of the report of each inspection required by such filed.
rules and regulations, and shall also file with such in-
spector, under the oath of the proper officer or employee,
a report showing the repair of the defects disclosed by the ºpairing de-
inspection. The rules and regulations hereinbefore pro- "
vided for shall prescribe the time at which such reports
shall be made. Whenever any district inspector shall, in rºñº.
the performance of his duty, find any locomotive boiler etc. y
or apparatus pertaining thereto not conforming to the
requirements of the law or the rules and regulations es-
tablished and approved as hereinbefore stated, he shall
notify the carrier in writing that the locomotive is not in
Serviceable condition, and thereafter such boiler shall not
be used until in serviceable condition: Provided, That a Kººl,
carrier, when notified by an inspector in writing that a fººpector
locomotive boiler is not in serviceable condition because of
defects set out and described in said notice, may, within
26 BOILER INSPECTION ACT.
five days after receiving said notice, appeal to the chief
dºexamina inspector by telegraph or by letter to have said boiler re-
examined, and upon receipt of the appeal from the in-
spector's decision the chief inspector shall assign one of
the assistant chief inspectors or any district inspector
other than the one from whose decision the appeal is
taken to reexamine and inspect said boiler within fifteen
Effect. days from date of notice. If upon such reexamination
the boiler is found in serviceable condition, the chief in-
spector shall immediately notify the carrier in writing,
whereupon such boiler may be put into service without
further delay; but if the reexamination of said boiler sus-
tains the decision of the district inspector, the chief in-
spector shall at once notify the carrier owning or operat-
ing such locomotive that the appeal from the decision of
the inspector is dismissed, and upon the receipt of such
Irºał? notice the carrier may, within thirty days, appeal to the
Sº... “Interstate Commerce Commission, and upon such appeal,
and after hearing, said Commission shall have power to
Final action, revise, modify, or set aside such action of the chief in-
spector and declare that said locomotive is in serviceable
tº condition and authorize the same to be operated: Pro-
ºn” ovided further, That pending either appeal the require-
... ... ments of the inspector shall be effective.
Fººt. “ SEC. 7. That the chief inspector shall make an annual
report to the Interstate Commerce Commission of the
work done during the year, and shall make such recom-
mendations for the betterment of the service as he may
desire. *
tº SEC. 8. That in the case of accident resulting from fail-
rom failure of . . ſº & e
boilers. ure from any cause of a locomotive boiler or its appurte-
nances, resulting in serious injury or death to one or more
persons, a statement forthwith must be made in writing
of the fact of such accident, by the carrier owning or op-
Investigation. erating Said locomotive, to the chief inspector; where-
upon the facts concerning such accident shall be investi-
gated by the chief inspector or one of his assistants, or
D is a b l ed such inspector as the chief inspector may designate for
parts to be pre: that purpose. And where the locomotive is disabled to
Served. the extent that it can not be run by its own steam, the
part or parts affected by the said accident shall be pre-
served by said carrier intact, so far as possible, without
- hindrance or interference to traffic until after said in-
Detailed re-spection. The chief inspector or an assistant or the desig-
pOrtS. tº tº * • , , - tº
- nated inspector making the investigation shall examine
BOILER INSPECTION ACT. 27
or cause to be examined thoroughly the boiler or part
affected, making full and detailed report of the cause of
the accident to the chief inspector. . -
The Interstate Commerce Commission may at any time Reports by In-
call upon the chief inspector for a report of any accident #º:
embraced in this section, and upon the receipt of said re- sºn of cause,
port, if it deems it to the public interest, make reports of
such investigations, stating the cause of accident, together
with such recommendations as it deems proper. Such re-
ports shall be made public in such manner as the Commis- .
sion deems proper. Neither said report nor any report of nºi...ºf
said investigation nor any part thereof shall be admitted damage suits.
as evidence or used for any purpose in any suit or action
for damages growing out of any matter mentioned in
said report or investigation. -
Sec. 9. That any common carrier violating this Act or º 'º';
any rule or regulation made under its provisions or any “”.
lawful order of any inspector shall be liable to a penalty
of one hundred dollars for each and every such violation,
to be recovered in a suit, or suits to be brought by the
United States attorney in the district court of the United
States having jurisdiction in the locality where such vio- Duty of dis-
lation shall have been committed; and it shall be the duty tº
of such attorneys, subject to the direction of the Attorney *
General, to bring such suits upon duly verified informa-
tion being lodged with them, respectively, of such vio-
lations having occurred; and it shall be the duty of the tº
chief inspector of locomotive boilers to give information spector.
to the proper United States attorney of all violations of
this act coming to his knowledge.
SEC. 10. That the total amounts directly appropriated prºß.”
to carry out the provisions of this Act shall not exceed
for any one fiscal year the sum of three hundred thousand
dollars.
(Amendment of March 4, 1915.) (SEC. 1.) That section 38stat. L., 1192.
two of the act entitled “An act to promote the safety of
employees and travelers upon railroads by compelling
common carriers engaged in interstate commerce to equip
their locomotives with safe and suitable boilers and ap-
purtenances thereto,” approved February seventeenth,
nineteen hundred and eleven, shall apply to and include nº loº.
the entire locomotive and tender and all parts and ap-cluded.
purtenances thereof. -
(SEC. 2.) That the chief inspector and the two assistant
chief inspectors, together with all the district inspectors,
28 BLOCK SIGNAL RESOLUTION.
Inspection ex-appointed under the act of February Seventeenth, nine-
tended. teen hundred and eleven, shall inspect and shall have the
same powers and duties with respect to all the parts and
appurtenances of the locomotive and tender that they
now have with respect to the boiler of a locomotive and
the appurtenances thereof, and the said act of February
seventeenth, nineteen hundred and eleven, shall apply to
and include the entire locomotive and tender and all their
parts with the same force and effect as it now applies to
of"; "locomotive boilers and their appurtenances. That upon
the passage of this act all inspectors and applicants for
the position of inspector shall be examined touching their
qualifications and fitness with respect to the additional
duties imposed by this act. &
an.º.º. (SEC. 3.) That nothing in this act shall be held to alter,
altered. amend, change, repeal, or modify any other act of Con-
gress than the said act of February seventeenth, nineteen
hundred and eleven, to which reference is herein specifi-
cally made, or any order of the Interstate Commerce
Commission promulgated under the safety appliance act
of March second, eighteen hundred and ninety-three, and
Supplemental acts. z
Public, No. 383, approved February 17, 1911; and Pub-
lic, No. 318, approved March 4, 1915. -
BLOOK SIGNAL RESOLUTION.
JOINT RESOLUTION Directing the Interstate Commerce Com-
mission to investigate and report On block-signal Systems and
appliances for the automatic control of railway trains.
Resolved by the Senate and House of Representatives
of the United States of America in Congress assembled,
Cºmmissiºn That the Interstate Commerce Commission be, and it is
directed to in
Yºgātea ºd hereby, directed to investigate and report on the use of
report on ne- -
c e s sity for tº -si - e
block signals. and necessity for block-signal systems and appliances for
34 stat. L.,838, the automatic control of railway trains in the United
States. For this purpose the Commission is authorized
to employ persons who are familiar with the subject, and
may use such of its own employees as are necessary to
make a thorough examination into the matter.
Cºmmissiºn. In transmitting its report to the Congress the Commis-
to take testi-
mony and mºkesion shall recommend such legislation as to the Commis-
recom m end a -
tions. sion seems advisable.
BLOCR SIGNAL RESOLUTION.
29
To carry out and give effect to the provisions of this
resolution the Commission shall have power to issue sub-
poenas, administer oaths, examine witnesses, require the
production of books and papers, and receive depositions
taken before any proper officer in any State or Territory
of the United States.
Public Resolution, No. 46, approved June 30, 1906.
The sundry civil act approved May 27, 1908, provides
as follows: -
Hereafter the Interstate Commerce Commission shall
be, and is hereby, authorized, at its discretion, to investi-
gate, test experimentally, and report on the use and need
of any appliances or systems intended to promote the
safety of railway operation which may be furnished in
completed shape to such Commission for such investiga-
tion and test entirely free of cost to the Government.
For this purpose the Commission is authorized to employ
persons familiar with the subject to be investigated and
tested, and may also make use of its regular employees
for such purposes.
Urgent deficiency act (appropriations) of October te;
twenty-second, nineteen hundred and thirteen, provides
that the Interstate Commerce Commission, at its dis-
cretion, may investigate and report in regard to the use
and necessity for block-signal systems and appliances for
the automatic control of railway trains and any appli-
ances or systems intended to promote the safety of railway
operation, including experimental tests of such systems
and appliances as shall be furnished in completed shape,
to such Commission for such investigation and test, free
of cost to the Government, in accordance with the pro-
visions of the joint resolution approved June thirtieth,
nineteen hundred and six.
sk * :: * &
35 Stat. L.,325.
Block signal
38 Stat. L.,219.
Page.
Accidents report act-----------------------------------------------........ 12–14
damage Suits, reports not to be used in................ - - - - - - - - - - - - - - - - - - - 13
failure to report-----------------------------------------------... ----- I2
foreign commerce defined.--------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
form of report----------------------------------------------------.- - - - - 13
interstate commerce defined---------.............. . . . . . . . . . . . . . . . . . . . . . 14
monthly reports of accidents.--------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
penalty for failure to report.---------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12–13
power of Commission to investigate accidents...... . . . . . . . . . . . . . . . . . . . . . . 13
repeal of prior act------------------------------------------------------ 13
report of investigations............. . . . . . . . . . . . . . . . . . . . . . . . . ............ 13
state commissions, cooperation with......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
testimony. --------------------------------------------------......... 13
Accidents excepted, hours of service act..................................... 18
Accidents from defective boilers..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Act of God excepted, hours of Service act. . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 18
Affidavits, medals of honor act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Agents, carriers deemed to know acts of..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
American Railway Association to designate height of drawbars. . . . . . . . . . . . . . . 6
Ammunition under explosives act... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Annual report, chief inspector of locomotives boilers........... . . . . . . . . . . . . . . . 26
Appeal: , -
- from district inspector's decision to chief inspector......... . . . . . . . . . . . . . . 25–26
from district inspector's decision to Commission... . . . . . . . . . . . . . . . . . . . . . . 26
inspectors' requirements effective pending... . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Appliances, Commission to designate. ---------. . . . . . . . . . . . . . . . . . .---------- 9
Application for medals. ------------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Appointments by President, boiler-inspection act............................. 23
Appropriation: -
boiler inspection act.............. . . . . . . . . . . . . . . . . . . . . . . . . • * * * * * * * * * * * * * 27
medals of honor act...... . . . . . . . . . . . . * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * = 15
Ash-pan act.--------------------- _* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 18–19
duty of Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .* * * * * * * * * 19
enforcement----------------------. . . . . . . . . . * * * * * * * * * * * * * * * * * * * * * * * * * * 19
equipment necessary........... . . . . . . . . . . . . . . . . . . . . . . . . . --------------- 18–19
penalty for violation...... - - - - - - - - - - - - - - - - - - - * - e º sº º ºs º ºs e = * * * * * * * * * * * g º ºs e tº 19
locomotives excepted.------------------------------------. . . . . . . . . . . . . . 19
receivers included.---------------------------------------------------- 19
Assumption of risk..................................................... - - - 7
Attorney General to direct suits, boiler-inspection act......................... tº 27
Automatic couplers, cars to be equipped with... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Block-signal resolution. --------------------------. . . . . . . . . . . . . . . . . . . . . . . . . 28–29
Block-signal tests. -------------------------------------------------------. 29
Boiler inspection act------------------------------------------------------. 22–28
accidents reported to chief inspector. . . . . . . . . • - - - - - - - - - - - - - - - - - - - - - - - - - - 26
annual report of chief inspector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
31
32 *. INDEX.
Boiler inspection act—Continued. Page.
appeal to chief inspector and Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . .... 25–26
appropriation----------------------------- . . . . . . . * * * * * * * * * * * * * * * * = e s gº sº gº 27
carriers affected.--------------------------- . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
chief inspector----------------------. . . . . . . . . . . . . . . . . . . . . . . . . 23, 24, 25, 26, 27
civil service-----------. . . . . . . . . . . . . . ---------------------------------- 24
damage suits, reports not to be used in............... . . . . . . . . . . . . . . . . . . . . 27
defective boilers, notice of... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
employees defined. -----------. . . . . . . . . . . . . . . . . . . . . . . . . . * * * * * * * * * * * * * ge 22
enforcement of act. . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 27
entire locomotive included. . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - 27
examinations for inspectors---------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23–24, 28
inspection— -
boilers subject to...... . . . . . . . . ------------------------------------ 23
by carriers----.. • * * * * * * - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - . . . . . 24, 25
districts, United States divided into. . . . . . . . . . . . - - - - - - - - - . . . . . . . . . . . . 23
inspectors, salary, etc.------------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 24
investigation of accidents. . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -… 26
locomotive boilers must be safe. . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - 22
offices of chief inspector and district inspectors........ . . . . . . . . . . . . . . . . . . . 23
penalty for violation-----------------------. . . . . . . . . . . . . . . . . . . . . . . . - - - - 27
railroads defined----------------------------. . . . . . . . . . . . . . . . . . . . . . . . . . 22
report of accidents. ------------------------------. . . . . . . . . . . . . . . . . . . . . 26, 27
rules for inspection, Commission to approve. . . . . . . . . . . - - - - - - - - - - - - - - - - - - 25
Safety-appliance laws not altered.---------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Briefs to President, medals of honor act... . . . . . . . . . . . . . . . . ------------------ 15, 16
Carriers: •
deemed to have knowledge of acts of agents, etc..... . . . . . . . . . . . . . . . . . . . . . 18
shall file rules and instructions---------------. . . . . . . . . . . . . . . . . . . . . . . . . . 24, 25
subject to— - -
accidents report act.---------------------------------------.... . . . . 12, 13
ash-pan act.-------------------.----------------------------------- 18, 19
boiler inspection act-----------------------------------------------. 22–28
explosives act--------------------------------------- * - - - - - - - - - - - - - - 20–22
hours of Service act-----------------. . . . . . . . . . . . . . ----------------- 16–18
Safety appliances acts---------------------------------------------- 5–12
Cars: -
defective, may be hauled to nearest repair point.-------. . . . . . . . . . . . . . . . . 10, 11
equipped with train brakes, automatic couplers, etc. . . . . . . . . . . . . . . . . . . . . 5
not equipped, not to be handled.-----------------. . . . . . . . . . . . . . . . . . . . . . 5
Subject to Safety appliance act--------. . . . . . . . . . . . . . . . . . . . . . * * * * * * * * * e º ge- ll
certiorari---------------------------------------------------------. ... 12, 18
Chains, hauling by, not permitted unless cars contain live stock or perishable
freight------------------------------------------------------------------ 11
Chief inspector: -
annual report to Commission-------. . . . . . . . . . . . . . . . . . . . . Ye - - - - - - - - - - - - - - 26
appointed by President----------------. . . . . . . . . . . . . . . ------------------ 23
carriers may appeal to--------------------------------------------------- 26
notify district attorneys of violations of act...... . . . . . . . . . . . . . . . . . . - - - - - - 27
report of accidents. ----------------------. -------------- - - - - - - - - - - - - - - 27
Civil service: -
district inspectors chosen by---------------------. . . . . . . . . . . . . . . . . . . . . . . 23, 24
shall use questions approved by Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Classified service, district inspectors under..................... * = • * * * * * * * * * , is ºn
INDEx. 33
Page
Clerical assistance, boiler inspection act....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Collisions must be reported and investigated . . . . . . -------------------- - - - - - - I2
Committee, medals of honor act------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Common carrier includes receivers, ash-pan act... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Compliance, time for:
hours of service act.-------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - 17
Safety appliance acts----------------. . . . . . . . . - - - - - ------------------- 7, 10, 11
Connecting lines, refusal of cars from......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Continuous Service, hours of Service act. . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - 17
Couplers: -
act applies where brought together---------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
cars must be equipped with automatic.... . . . . . . . . . . . . . . . . . . . . . ."… 5
Courts. See District courts.
Criminal provision, explosives act......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22
Damage suits:
accident reports not evidence in........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
boiler inspection reports not evidence in............. . . . . . . . . . . . . . . . . . . . . 27
Defective: l -
boilers shall not be used.----------. . . . . . . . . . . . . . . . . . . . . . . . . . ... * * * * * * * * * * * 25
cars may be hauled to nearest repair point. . . . . . . . . . . . . . . . . . . ----------- 10, 11
Definitions: - *. -
employees------------------------------------------------------------ 16, 22
foreign commerce------------------------------------------------. . . . . . 14
interstate commerce. . . . . . . . ...--------------------------------------- 14
railroads----------- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 16, 22
Derailments must be reported..... . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - 12
Designs for medals---------------------------. . . . . . . . . . . . . . . . . . - - - - - - - - - - - - 16
District attorney, duty under:
ash-pan act. - - - - - - - - .- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - • 19
boiler inspection act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
hours of service act.--------------------------------------------------- 17
safety appliance acts---------------------------------------------- . . . . 6, 8, 11
District courts have jurisdiction: X-
ash-pan act------------------------------------------------------------ 19
boiler inspection act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . '• * * * * * * * * * * 27
hours of service act---------------------------------------------------- 17
safety appliance acts---------------------------------------------- ----- 6
District inspectors: -
appointed, civil service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 24
duties of. ------------------------------------------------------------ 25
governed by chief inspector-------------------------------------------- 26
office. --------------------------------------------------------- - - - - - - 23
one for each district---------------------------------------------------- 23
Salary---------------------------------------------------------------- 23, 24
District of Columbia included in: - -
ash-pan act----------- ------------------------------------------------- 19
boiler inspection act....................... - - - - - - - - - - - - - - - - - - - - - - - - - - - 22
Safety appliance acts......... ------------------------------------------ 7, 8
Districts, United States, divided into, boiler inspection act. . . . . . . . . . . . . . . . . . 23
Drawbars: -
Commission may modify height of . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - 10
standard height of..... . . . . . . . . . --------------------------------------- 6
standard height of (note).---------------------------------------------- 7
34 INDEX.
Page
Driving-wheel brakes, engines must be equipped with... . . . . - - - - - - - - - - - - - - - - 5
Duty, period of, hours of service act... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Dynamite under explosives act...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Emergency cases, hours of Service act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Employees defined:
boiler inspection act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
hours of service act...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Employees, period of duty, hours of Service act.... . . . . . . . . . . . . . . . . . . . . . . . . . - 17
Employment of inspectors:
Safety appliance acts.......... * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * g e 12
boiler inspection act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 24
Enforcement: -
ash-pan act-----------------------------------------------------------. 19
boiler inspection act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
hours of service act.---------------------------.... . . . . . . . . . . . . . . . . . . . . 18
Safety appliance acts--------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II
Equipment, Safety appliance acts........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 9
Evidence, not to be used as:
accident reports---------------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
boiler inspection reports----------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Examinations, chief inspector to prepare questions........ . . . . . . . . . . . . . . . . . . . 24
Exceptions: -
ash-pan act-------------------------------------------. . . . . . . . . . . . . . . . . 19
explosives act. ----------------------------------------. . . . . . . . . . . . . . . 20
hours of service act-------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18
permitting use of chains, Safety appliance acts...... . . . . . . . . . . . . . . . . . . . . . 11
Safety appliance acts---------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 8
Explosives act. See Transportation of explosives act. -
Explosives: -
Commission to regulate packing, etc. . . . . . . - - - - - - - - - - - - ----------------- 20
not to be carried on passenger vehicles.--------..... . . . . . . . . . . . . . . . . . . . . . 20, 21
Financial reports, accidents not reported in.................................. 12
Foreign commerce defined... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Fulminate in bulk under explosives act...... . . . . . . . . . . . . . . . . --------------- 21
Fuses under explosives act. . . . . . . . . . . . . . . . . . ------------------------------ 20
Grab irons must be provided: .
on all cars------------------------------------------------------------ 6
on top of ladders.------------------------------------------------------ 9
Gunpowder under explosives act.---------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Hand brakes, cars must be equipped with.................................. 9
Handholds: .
cars must be equipped with. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 9
must be provided with, or unlawful to use car... . . . . . . . . . . . . . . . . . . . . . . . . 6
Handling explosives in transit, Commission to regulate...... . . . . . . . . . . . . . . . . - 20
Hours of service act------------------------------------------------------- 16–18
common carriers subject........... . . . . . . . . . . . . . ------------------------ 16
compliance with act.-------------------------------------------------- 17
continuous service---------------------------------------------------- 17
employees defined. --------------------------------------------------- 16
enforcement.-------------------..................... ----------------- 18
exceptions to act. - - - - - - - - - - - - - - - - - - - - - - - .e. e. e. e. e. e. e s = < * * * * * * * * * * * * * * * * * * * 17, 18
off duty-------------------------------------------------------------- 17
INDEX.
35
Hours of service act—Continued.
penalty for violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
prosecutions--------------------------------------............
railroad defined... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
service hours.------------------------------------------------.
telephone and telegraph operators. . . . . . . . . . . . . . . . . . . . . . * * * * * * * * *
Inspection:
by carriers------------------------------------------. - - - - - - - - -
must be made, boiler inspection act. . . . . . - - - - - - - - - - - - - - - - - - - - - -
Inspectors:
chief. See Chief inspector.
district. See District inspector.
enforce Safety appliance acts----------. . . . . . . . . . . . . . . . . . . . . . . . .
one for each district, boiler inspection act. . . . . . . . . . . . . . . . . . . . . . .
Safety appliance, on medals of honor committee. . . . . . . . . . . . . . . . . . .
shall not be interested in patented appliances. . . . . . . . . . . . . . . . . . .
Intemperate persons shall not be inspectors... . . . . . . . . . . . . . . . . . . . . . . . . .
Interstate Commerce Commission:
approve— -
examinations for district inspectors. . . . . . . . . . . . . . . . . . . . . . . . .
rules for boiler inspection......... . . . . . . . . . . . . . . . . . . . . . . . . . .
chief inspector shall make annual report to. . . . . . . . . . . . . . . . . . . . . . .
designate appliances-------------------------------------------
district inspectors appointed by........... . . . . . . . . . . . . . . . . . . . . . . .
duty of—
accident report act.......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ash-pan act------------------------------------------------
hours of service act.-----------------------------------------
Safety appliance act....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
final appeal to, boiler inspection act... . . . . . . . . . . . . . . . . . . . . . . . . .
information as to violations of ash-pan act... . . . . . . . . . . . . . . . . . . . .
investigate accidents........................................ • - - - - -
jurisdiction as to safety appliance acts. ... . . . . . . . . . . . . . . . . . . . . . .
may extend time for compliance —
hours of service act.... . . . . . . . . . . . . . . . . . . . . . . . . * * * * * * * * * * * * *
Safety appliance acts........... - - - - - - - - - - - - - - - - - - - - - - - - - - - -
prescribe form of accident reports................ . . . . . . . . . . . . . . . .
regulations for transportation of explosives. . . . . . . . . . . . . . . . . . . . . .
violations of hours of service act.... . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interstate commerce defined. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investigations:
accident------------------------------------------------------
medals of honor committee may conduct. . . . . . . . . . . . . . . . . . . . . . . . . .
Laboratory Samples under explosives act... . . . . . . . . . . . . . . . . . . . . . . . . .
Ladders, cars must be equipped with............ . . . . . . . . . . . . . . . . . . . .
Liability, carrier not relieved from.................. . . . . . . . . . . . . . . . . .
Life-saving on railroads--------------------------------------------.
Live stock, hauling defective cars by chains permitted. . . . . . . . . . . . . . .
Loading explosives, Commission to regulate.........................
Locomotive ash-pan act. See Ash-pan act.
Locomotive boiler inspection act. See Boiler inspection act.
Page.
17
17
I6
17
I7
24
23
11
23
15
24
24
24
24
26
23
13
19
18
11
26
19
13
11
17
10
13
18
14
13
26
I6
20
10
14
11
20
36 INDEX.
Locomotives: Page.
excepted from ash-pan act........... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
must be provided with ash pans.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I9
power driving wheel brakes------------------------. . . . . . . . . . . . . . . . . . . . . 5
Long commodities, brakes on cars used in hauling. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.
Marking explosives, Commission to regulate...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21
Medals of honor act................................................... . . . . . 14–16
applications for medals, with affidavits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
approval of President.................... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
committee to consider affidavits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
design of medal.----------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - 16
expenses provided for.-------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
investigation by inspectors...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
life-saving, medals for.................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
President to grant-----------------------------------. . . . . . . . . . . . . . . . . . . 14
proof must be offered--------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
regulations governing awards.------------........ . . . . . . . . . . . . . . . . . . . . . . . . 15
rosettes and ribbons. . . . . . . . . . . *- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 14
Monthly reports of accidents act. See Accidents report act.
Munitions of war for military and naval forces, explosives act. . . . . . . . . . . . . . . . . 20
Nitroglycerin under explosives act................ . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Oath, accident investigations................................................ 13
Offices of chief and district inspectors....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Oil locomotives excepted from ash-pan act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Operating reports, accidents not reported in...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Operator, period of duty, hours of Service act....... . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Packages containing explosives shall be marked. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Packing explosives, Commission to regulate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Passenger vehicles, explosives act. ------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Patents, no inspector shall be interested in........ . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Penalty: - -
accidents report act.------------------------------------------- = * * * * * * * 13
ash-pan act---------------------------------- - - - - - - - - - - - - - - - - - - - - - - - - - - 19
boiler inspection act.------------------------------------------------. ... 27
explosives act.-------------------------------------------. ------------- 21, 22
hours of service act------------------------------------------------------ I7
Safety appliance acts.---------------------------------------- * * * * * * * * 6, 8, 10, 11
Percentage of power brakes. --------------- --------- - - - - - - - - - - - - - - - - - - - - - - - - - 8
Perishable freight, chains may be used in hauling. . . . . . . . - - - - - - - - - - - - - - - - - - - - - 11
Personal inspection of boilers.............. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 25
Power brakes must be provided.-------------------------------------------- 8
Proof of deserving must be shown, medals of honor act.......... . . . . . . . . . . . . . . 14
President:
appoint chief inspector and two assistants................................ 23
approve medals of honor committee report................................ 16
authorized to issue medals of honor.------------------................... 14
Railroad defined: - - -
. boiler inspection act......... ------------------------------------------- 22
hours of service act------------------------------------------------------ 16
Receivers included in ash-pan act............ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Reexamination of defective boilers.......... '- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 26
Regulations:
Commission to prescribe for transporting explosives............... . . . . . . . . 20
governing award of medals.---------------------------------------------* 15
INDEX. • 37
- Page
Relief trains excepted, hours of Service act...................... . . . . . . . . . . . . . . 18
Repair, defective cars may be hauled for........................ . . . . . . . . . . . . . . 10
Reports:
accident, form of.------------------------------------------------------ 13
chief inspector to make-------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
not evidence----------------------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 27
of carriers under boiler inspection act.... . . . . . . . . . . . . . . . . . . . • & e º e º ºs º ºs ºs º º q > 25
Risk:
employees shall not assume---------. . . . . . . . . . ------- - - - - - - - - - - - - - - - - - - - 7
must be assumed by carriers using defective appliances... . . . . . . . . . . . . . . . 10
Rockets under explosive act. -------------------------------------. . . . . . . . . 20
Rules and instructions: - -
carriers shall file---------------. . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - 24
chief inspector to file if carriers fail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
for district inspectors-------------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
may be changed.----------------------------------------------------. 24
shall be approved by Commission........ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Running boards, cars must be equipped with. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Safety appliance acts. . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 5–12
assumption of risk----------------------------. . . . . . . . . . . . . . . . . . . . . . . . . 7
automatic couplers.---------------..................................... 5
carriers subject to act......................................... -------- 5, 7, 9
cars of connecting lines refused. . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - 5
chains, hauling by........|- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11
Commission to designate appliances. . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - 9
compliance with act, time for........... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 10, 11
defective cars may be hauled to nearest repair point. . . . . . . . . . . . . . . . . . . . . 10
drawbars.----------------------------------------------. --------- - - - - - 6, 10
driving-wheel and train brakes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
enforcement by Commission . . . . . . . . . - - - - - - - - - - -----------------------. II
exceptions------------------------------------------------------------ 6, 8
grab irons and handholds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 6, 9
inspectors provided for......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ladders.......... e = * * * * * * * - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9
liability of carriers............ . . . . . . . . . . . . . . . . . . . . . . . . . . ... * * * * * * * * * * is a dº sº as 10
penalty for violation.------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ----------- 6, 8, 10, 11
percentage of train-braked cars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
power brakes.--------------------------------.................... - - - - 8
running boards, cars to be equipped with........ * * * * * * * * * * * * * * * * * * * * * * * * 9
sill steps, cars to be equipped with.......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Samples of explosives for laboratory examination... . . . . . . . . . . . . . . . . . . . . . . . . . 20
Secretary of Commission on medals of honor committee. . . . . . . . . . . . . . . . . . . . . . 15
Service hours of operators.................................................. 17
Shippers, when cars may be refused from... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Signal devices under explosives act....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Sill steps, cars must be equipped with..................... - - - - - - - - - - - - - - - - 9
Standard height of drawbars.--------...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 10
State commissions, cooperation with . . . . . . . ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 13
Street railways excepted, Safety appliance acts... . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Telegraph and telephone operators, hours of service act. . . . . . . . . . . . . . . . . . . . . . 17
Territories included in:
ash-pan act------------------------------------------------------------ 19
boiler inspection act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 23
Safety appliance acts--------------...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8
38 - INDEX.
Testimony, accident investigations..........................................
Torpedoes under explosives act. -------------------------------------------
Train brakes:
cars must be equipped with . . . . . . . . . . , a. s. s. sº sº e º ºs º ºs ºs e º sº e s is s tº s is as tº * * * * * * * * * *
percentage of cars in train. . . . . . . . . . . . . . . . . . . . . . . . --------------------.
Transportation of explosives act. . . . . . . . . . . . . . . . . . . . ------------------------
exceptions to provisions-----------. . . . . . . . . . . . . . . . . . . . . . . . . ------------
explosives not to be carried. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
marking packages.----------------. . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - -
passenger vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ----------------------.
penalty for violation.-----. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
regulations by Commission.-----. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Traveling expenses, boiler inspection act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Witnesses may be subpoenaed in accident investigations........ . . . . . . . . . . . . . .
Wrecking trains excepted, hours of Service act...............................
ADDITIONAL COPIES
OF THIS PUBLICATION MAY BE PROCURED FROM
THE SUPERINTENDENT OF DOCUMENTS
GOVERNMENT PRINTING OFFICE
WASHINGTON, D. C.
AT
5 CENTS PER COPY
V
HE
*Tog 24, 1918
lºº JUN
INTERSTATE compact COL.IIISSION
June 20, 1918,
Announcement.
The Act for the Federal Control of railroads and certà in re-
ent orders of the Director General have raised questions regard-
ing the status of some of the cases before the Commission attack-
ing rates not initiated by the United States Railroad Administra-
tion. Inquiry has arisen how far the existence of rates initiated
under section lo of the Federal Control Act will limit or preclude
the Commission from ºaking lawfully effective orders in proceedings
brought prior to such initiation of rates.
The Coºlission has always lent its active assistance to the
Settleſ, ent of complaints and difficulties between carriers and
Shipper S through informal adjustment . Thousands of complaint S and
difficulties have been thus disposed of . There seems every reason
Why under Federal Control this policy should be continued * it h
reference to complaints involving rates initiated by the United
States Pailroad Administration. Such action on our part would seem
to be mandatory under section 3 of the Federal Control Act, and
We intend to accord our advice, assistance and cooperation to that
end wherever possible, We understand that the Director General is
in accord With this plan of composing difficulties as regards
rates initiated by the United States Railroad Administration,
Failing such efforts to compose difficulties or settle causes
ºf Corºple.int informally, the Commission is required under section
10 of the Federal Contrôl Act upon complaint to enter upon a hear-
ing eene'erning the just aess and reasonableness of so much of any
order made thereunder as establishes or changes any rate, fare, º
ºharge, glassification, regulation, or practice of any carrier under
Federal Control. Save for the applicable provisions of this statute
the jurisdiction of the Commission remains what it has been in the
past . The Commission has not made and can not make any commitment
Which Will preclude its full exercise of the jurisdiction vested
in it, .
A rate initiated by the United States Railroad Administration
Can not be lawfully altered by the Commission, except on complaint
after hearing at which the United States Railroad Administration
is entitled to be heard. It follows that inasmuch as a new freight
rate structure becomes effective June 25th, next, some of these
rates might conflict with orders which the Commission might enter
prescribing rates for the future, even though the orders Were
entered on the basis of the records in complaints now pending be-
fore us. It seems, however, that in certain cases the Commission,
* Can Iſake lawfully effective orders in proceedings brought prior
–to–eueh Federal initiation of rates. Thus any pending complaint,
where the complainant desires to use the finding of the Commission
as a possible basis for a suit at law for reparation, Will be dis-
posed of on the present record so far as that matter is concerned.
The same is true of cases pending in so far as they seek reparation
for damage from rates unlawfully exacted. Allegations of dis–
crimination may, in certain cases, be disposed of on the records
now before us. We do not pre judge the question which has been
raised Whether by amendment to pleadings in pending cases the
United States Railroad Administration may be made a party against
Which a lawfully effective order may be entered,


The Commission Will, as of course, continue consideration
and reach conclusions as above indicated in pending cases; Where
it is possible to make a lawfully effective order without amend-
ment of the pleadings that Will be done; and, so far as is pos-
sible, the records heretofore built up will be made available
for the determination of the issues. The dockets in pending
cases will be analyzed, and where it appears that doubt exists
whether, without armendment or supplemental hearing, the Commission
can enter a lawfully effective order, the parties will be so
notified. -
Such appropriate changes as the Federal Control Act ſay
- *- - - - -- _r
render necessary Will be made in the Commission' s Rules of
Practice,
GEORGE B. McGINTY,
Secretary .

* -
2. loº - -
Tººl . . . . ." . - º 3 * 13 *
- --
At a General Session of the INTERSTATE COMMERCE COMMISSION,
- held at its office in Washington, D. C., on the lst
day of June, A. D. J.918, . . . .
- SITPI ITMENTAT, Oºtºº
---
IN THE MATTER OF MODIFICATION OF OUTSTANDING ORDERs.
It appearing, That on May 25, 1918, the President, thrºugh
- ºr Gºal of Railroads, ordered the initiation of cer–
- is nº - –- - tº . . .'; ..." - --> iſ o -
fºres ºrd charge 5 as sº cºified in ral ºdº º
28, and
- It further appearing, That certain of the present freight
rates, passenger fºres and baggage charges of the carriers, ºº
fixed for the future by outstanding orders of this Commissiº
which were made for the most part under normal conditions of
traffic and without consideration of the present War emergency.
It is ordered, That all orders upon the special docket ºr
tofore entered and unexpired, in so far as they require the ºº
tenance of maximum freight rates, passenger fares and pagº
charges for the future, be, and they are hereby, modified to
the extent of permitting the defendants in said cases to mº
effective passenger fares and baggage charges on June 10, 1913,
and freight rates on June 25, 1913, not in excess of those pre-
scribed in said General Order No. 33. - --
- It is further ordered, That all out standing orders of this.
Geraiaissiºn hereºfore sºred in cases on the special docket and
. . º ****** --- – c -- ~~~~~~ + i = T -- T.-- 3 * *
unexpired which crescribe a fixed diffeº ential, cºpiº, º -
- . 3 * > . -- - _ _ _ _ _ _ _ _ _ . . . ; ; ; – be and trey- -
other difference as between points arid localities, be, ºr rºy
are hereby, modified so as to permit ºne ºries ºf
said cases to make effective passenger ſº º ºgº.º.
Sº jáne is, is is and freight rates on June 25, 1913, º.º.º.
º
º:
*-
- - -- - - ~ +rr- | --
cess of those specified in said Generºl Order ºf fº.º.º.º.
under standing that the relationship ſº escº locº in sº º
Will be promptly restored. - - -
By the Commission:
(SEAL) GEORGE B. McGINTY,
Secretary.













He JUN 15 1918
º
- - -
- - º
º - º º º ſº º
- .
--
F.I.F.H.ENTH SEcºle ORDER No. 750.
(Cancels Fifteenth Section Order No. 600)
At a Session of Divisiº 2 of the ºtºsſ NTE COMMERCE COMMIS-
SION, held at its office in Washington, D. C. , . On the
10th day of June, A. D., 1913. . ' ' ' '. ... ".
EDGAR. E. CLARK, )
WINTERCP M. DANIELS, ) COmmissioners.
RCBERT W., WOO LLEY, -
Application under Section 15 of the Act to Regulate Commerce,
as amended August 9, 1917, for approval for filing of an increased
I ate, fare, Charge Or Classification. " . .
RAIL-AND-WATER, WATER-AND-RAIL, RAIL-WATER-AND-
RAIL RATES, AND ALL WATER RATES :
-
The United States Railroad Administration having requested the
bºmºsº Filmºgº toº
jurisdiction, schedules establishing joint rail-and-Water, "Water –
and-rail, rail-water-and-rail, and ali-water rates on the same level
as the all-rail rates between the same points, the said rates to
include manife insurance. - -
It is ordered, That carriers be, and they are hereby, authoriº
Without formal hearing, to file schedules, increasing the joint rail-
and-water, water-and-rail, rail-water-and-rail rates, and all-Water
rates for the transportation of freight, on a level. In Ot, higher than
the existing all-fail rates between the same points, said 1:3 ties GO
include marine insurance; Provided, That the rail-and-water rates
and water-and-rail rates to and from Duluth and points grouped
there with shall not be higher than the rail-and-water rºtes ºr
water-and-rail rates to and from Chicago, except that the foºt * *
lationship between Duluth and Chicago in the lake and rail rates
eastbound on flour, grain products and copper may be main ººlºº
from Duluth, Minn., and further that the rail-water-and-ºil rates to
and from Times2alis and Pºints sº # * *** shall ºeº-
relationship to the rail-and-water or water-and-r
-
- -l
j i pºes to and
- -- - - -- - - - - - - - - - - - - -- . . . - -- * † - F. : J- º - º ºn -
from Duluth and points grouped therº with as prescribed by *...*
tº ssion in Second Duluth Case, 46 I, C, C, 585; Which approval Sha-
not affed any subsequent proceeding relative thereto;
- - - - * - - - - - - r-ra- - - - -- - - - rºº," - a
It is further ordered, That said rates may 99 egº.”.
or befºre jºš jºiâ, ºom not less than, one (1), days; ºº
Suðsequent there to upon not less than five (5) days' º
Commission and to the general public by filing and postº...”
manner prescribed in section 6 of the act to regulate commerce. -
And it is further ordered, That schedules filed under authº
of this order snail Seer on title pages there of the following. In CT *
tion: -- - - - -
Increased rates contained in this schedule are º -
on . . days' notice under authority of the Interstºº.º. -
merge Gºissiºn is ſº teenth section Order No. 759 of Jūrī 3
- - ...t. - " -, 1- --- al. shall not
h ºn 1 on o ºr 4 a.º. a. º. f a-yar I hear in ºr, which appl OV ºld tº













*
}
At *
-
- -
a 10%
Tº DEC 19, 1918
* *-
FIFTEENTH SECTION ORDER NO. 500,
SUPPLEMENT NO. l.
-
º/Sº
At & General Session of the Inter state Commerce Commission,
held at its office in Washington, D. C. on the 9th
day of December, A. D. 1913.
It is ordered, That Fifteenth Section Order No.
-
900 of March il, 1913, be, and it is hereby, amended by
ºr
eliminating there from the next to last paragraºh on
|
page number 3 of the printed copy of said order, read-
-
ing as follows:
-
"An approval order issued responsive
to an application may not be used by appli–
Cânt carrier to substitute any lower or
different rate for the rate approved by
the order . " - -
- º By the Commission:
(SEAL) GEORGE B. McGINTY,
Secretary.











- º -
Supplemental Fourth - Supplemental
Section Order No. 76O1 General Order No. 19.
INTTRSTATT COMMTRCT COMMISSION
WASHINGTON
ORDFT,
** * **ssion of the INTERSTATE COMMERGE COMMISSION, Division-e-
- held at it's Office in Washington, D. C., on the 35th day of
May, A. D. º 1930,
-------
It is ordered, That Fourth Section Order No. 760 l en-
tered March 1, 1930, be, and the same is hereby amended by
adding ther eto the following paragraph immediately preceding
the last paragraph of page l thereof:
..It is ordered, That in those instances where rates
fares, charges, and/or classifications in contravention
of the provisions of the fourth section are continued
under the authorit
-
shall be made in the
the said rates, fares, charges, and/or classifications
in the manner required by Rule 77 of Tariff Circular
No. 18–A, to the order or orders of the Commission by
authority of which the said rates, fares, charges, and/or
classifications were maintained immediately prior to the
effective date of General Order No. 28 of the Director
General, and reference shall also be made in the Saº
ma. Ilſler to this order .
By the Commission, Division 3: - -
(SEAL) GEORGE B. McGINTY,
Secretary .










of -
Yaº - - MAN 28 1920
INTERSTATE commºncº coºlission
WASHINGTON
Conference Ruling No. 30?, which reads & S follows:
"PAYMENT FOR TRANSPORTATION, - Nothing but
Honey can be lawfully received or accepted in payment
for transportation subject to the act , whether of
P****** * * Prºperty, º fee ºy service in earnestiºn
there with, it being the opinion of the Commission that
the prohibition against charging or collecting a -
greater or less or different compensation than the es–
tablished rates or fares in effect at the time, pre-
cludes the acceptance of services, property, or other
payment in lieu of the amount of money specified in
the published schedules, "
* -
amended by adding at the end there of the following :
The exist ing difference in exchange value between the monies
of the United States and the Dominion of Canada, While continuing
to bear the same denomination, has been productive of confusion
&nd uncertainty as to the construction to be placed upon tariff
Schedules, division sheets, and account s in respect of traffic
Crossing the international boundary. We are of opinion that
Where transportation of per sons or property or transmission of
intelligence by wire or wireless takes place partly within the
United States and partly within the Dominion of Canada, the
- - --- - - -- -- ... → ſº F - c, ºrrº
--- 1. ºn
ld, i Cº i-s
- B place within the payable only in lawful
Hºney of the United States, irrespective of the money in which
tariff charges or divisions there of accruing for the part which
takes place in the Dominion of Canada. may be payable under the
laws there in force.
Adjustment should be made in accordance here with by car-
fiers subject to the act in settling their accounts with con-
flecting carriers. Appropriate rules or regulations to give
effect to this ruling may also be included by such carriers in
their tariff schedules, if they so desire.
The practice, which has grown up since development of
said difference in exchange values, of requiring prepayment of
charges in cases where not customarily required theret of ore,
tends to embarra ss shipper s and impede foreign commerce. Car-
Pier S subject to the act will be expected to refrain from such
unusual requireſ.ent s in cases where they are not justified by
Ot, her considerations, -
By the Comº, is si or :
Ç
º
Ol
RC;
H.
B
. McCINTY,
Secretary,
-, * ~ *
-----------
---






















ºr 3 1918 . - -
ºngº Jut m, alsº
Laº tº -
FIRTEENTH SECTION ORDáR No. 666.
- - - | -
At a General Session of the INTERTATE COMMERGE COMMISSION,
held at its office in fashington, D. C., on the 37th -
day of May, A. D. , 1213,
Application under Cection 15 of the Act to Regulate Commer
as a ſpended August 9, 1917, for approval fo
rate, fare, charge or classification ,
2
C e
r filing of an increased
--------
JOINT, RATTS, FATES, CHAndrºs AND CLASSIFICATIONS APPLICABLE
TO JOINT STEIGHT AND PAGS II. C.E.A TTAFFIC .
whereas, The president o: the inited states through the Direct
or General, inited States Railroad Administration, has initiated ºn
prescribed rates, fares, charges and classifications to be applied
on all traffic carried by railroad and steamship lines under f ediejº &
control, except traffic carried entirely by water to and from for-
eign countries, as set forth in General Order No. 38, dated May 25,
1913, of Said Director General; -
And Whereas, The said Director General has requested approval
for filing, under section 15 of the act to regulate commerce, of
joint rates, fares, charges, and classifications, on basis Of the
rates, fares, charges anº classifications set forth in said general
Order, applicable jointly between points on the lines of Carrie T S
under federal control and points on the lines of other Carriers :
It is ordered, That the presently effective joint rates, fares,
charges and Classifications, applicable to the joint transportation
of freight and passenger 3, between points on the lines of carriers
under federal control, on the one hand, and points on lines of car-
riºrs not under tederal control, on the other hand, may be iſ ºf eºsº
to the bases set forth in the said general order No. 38, of May º
1918, and that such joint rates, fares, charges and classifications
so increased, be, and they are hereby, ºr cº-ed for filing, without
formal hearing, which approval shall not tº got any subsequent pro-
ceeding relative thereto;
i. It is further ordered, That sche
joint rates, far es, charges and classifi ---
ner and form authorized by special permission No. 45350 (freight)
and No. 45951 (passenger), effective upon not less than one (1) -
day's notice to the Commission and to the general public in the man-
ner prescribed in section 6 of the act to regulate Commerce :
ules containing such increased
f : dations may be filed in man-
-r -
And it is further ordered, That joint schedules fi led under
- - - -, -, -------- --—-º-º: - - J-T-, -, -º
authority of this order shali near on title-pages there of the fol-
lowing notătion
- Increased “joint rates and charges contained in
this schedule are filed on one day's notice under all-
thority of Interstate commerce Commission's Fifteenth
Section Order No. 666 of May 27, 1916, without formal
hearing, which approval shall not affect any subsequent
proceeding relative ther et O.
~
The approval herein given is void if the schedulº is sº *::::
under is not filed with the Commission within thirty (30) days Trot.
the date hereof, unless extension is granted by the Commi 3549°
By the Commission: -
(SEAL) - GTORCE B, MCGINTY,
Secretary : , , \l
* (If a passenger schedule substitute "joint fºes and charges",
or if a classification substitute "classifications", for joint
rates and charges, ) -





º - *-
7 3
1/ JUP 3 1918
- -
sº fares and baggage chasses on Jºe Q. 1913, and re-º º
GENERAT, Cº.
At a General Session of the rººtſ. COMMERCE COMMISSION,
held at its office in Washington, D, C, , on the 37th
day of May, A. D., 1918 * * .. " ..
In THE MATTER OF MODIFICATION OF OUT STANDING ORDERS.
# *eating. That on May 25, tº e President, through
the Director General of Railroads, initiated certain rates, fares
and charges as specified in Generál order No. 28, and --
It appearing, That certain of the present freight rates,
pºssenger fares and baggage charges of the carriers are fixed
for the future by outstanding orders Cº., this C Cºmmission, Which
Were made for the most part under norº, acaditions of traffic
and without ocnsideration of the present wał Fenergency, and
It further appearing, That the carriers have heretofore.
filed C 3rtain increases in said rates and fares, which said in-
creases have been suspended by this Commission in various pro-
ceedings: * , , , ,
2 * *.
It is ordered, That all orders upon formal complaint hereto-
fore entered and unexpired, in so far as they prescribe specific
maximum freight rates, passenger fares and baggage charges for
the future, be, and they are mereby, modified to the extent of
permitting the defendants in said cases to make effective passen-
on June 25, 1918, not in excess of those prescribed in said ºn-
eral Order No. 23.
- It is further ordered, That all outstanding orders of this
Commission heretºfore entered and unex which prescribe a
fixed differential, arbitrary or other d.f. ºence as between
reby, modified so as
1.
Li
points and localities, be, and they are he w : -. -
to permit the carriers defendant in said as to make effective
-
ei: S C&Y.C.lſ, ſº
ship prescribed in said ºrders will be prººtly restored:
And it is further ordered, That all orders heretofore
entered in investigation and suspension proceedings which have
not been decided, in so far as tº ey require that the ºt
rates and fares be not increased during the pendency ºf º,
proceedings, be, and they are hereby, modified so as, ſº P.
the carriers respondent in said proceedings to establish r º
not in excess of those specified in said Geºgral Order No. 38.
By the Commission:
(SEAL) GEORGE B. McGINTY,
Secretary -




Jup 3 1918
Fourth Section Order No. 7316, General No. 17.
At a. General S C S Si on º' tºº, º TE COMMERCE COITISSION,
held at its office in a Gºiâgº on, D. C., on the 27th
day of May, A. D., 1913, -
Whereas, The President of the United States through the Di–
rector Ceneral, United States Railroad Administration, has initi G.t, C
and prescribed rates, fares, charges, and classifications to be a 2-
plied on all traffic carried by railroad and steamship lines under
federal control, except traffic carried entitely by Water to and
from foreign countries, as set forth in General Order No. 28, dated
*ēy 25, 1918, of said Director General;
-
- -
And Whereas, The said Director Ceneral has requested such re-
from the long-and-short-haul and aggregate-of-the-interredi-
provision of section 4 of the act to regulate commerce as Will
permit said carriers under federal control to file schedules con-
taining rates, fares, charges, or classifications containing de-
partures from the aforesaid provisions of section 4, enabling car -
riers under foderal control, in the present emergency, to secure
increased revenues to be derived from increases in rates, fares,
charges and classifications initiated and prescribed by said Gen-
eral Order No. 28 of May 25, 1913;
lief
3.t, e.g
It is ordered, That in those insºnces in which carriers
under federal control are required by General Order No. 38 of the
Director General, United States Railrºad Administration, to apply
to the movement of traffic locally or jointly, or jointly With car-
riers not under federal control, higher rates, fares, charges, and
classifications for shorter than för longer distances over the same
line or roºte in the same direction, the shorter being included
within the longer distance, or rates, fares, charges and clºsłł
cations which exceed the aggregate of the intermediate rates, fares,
charges, and classifications, as set forth in General Order No. 28
of the Director General, the said carriers be, and they are hereby,
authorized to estabiish’ such rates, fares, charges, and classifi-
cations prescribed in said General Orº ºr it. 23 of the Director
General without obesrving the provisiºns of the fourth section of
the act to regulate commerce. - - -
And it is further ordered, That Carriers not under federal
contrºëiºiºsº, fares, clarges, and classifica-
tions with carriers ºnder federal control may establish such joint
rates, fares, charges, and classifications as are negessºry tº
comply with the terms of the said General Order No. 28 of the Di-
rector General, without observing the provisions of the fourth
section of the act to regulate commerce. -
- - - - - T.
It is further ordered, That this order sºll supersede and tal:
the place of any provision or provisions of any fourth section orde
or orders heretofore issued that may be in conflict here with
---
The Commission does not hereby approve any rates, fares,
charges, and classifications that may be filed under this permis-
sion, all such rates, fares, charges, and classificatiº being
subject to complaint, investigation, and correction if * **T
flict. With any provision of the act . -
By the Commission:
(SEAL) GEORGE B. McGINTY,
Se Cretary .





-
º
--
Service Order No. 9.
(Amending and Supplementing Service Order No. 7)
º
At a Session of the INTERSTATE COMMERCE COMMISSION, Division 5,
held at its office in Washington, D. C., on the 13th day
of July, A.D. 1930.
-
It appearing, in the opinion of the Commission that because
of a shortage of equipment and congestion of traffic, aggravated.
by unfavorable labor conditions which continue to exist upon the
lines of each and all the common carriers by railroad subject to
the Interstate Commerce Act within the territory east of the Mis-
sissippi River, and because of the inability of said common car-
Tiers properly and completely to serve the public in the transpor-
tºn of coal, an emergency exists which requires immediate a C-
iOI) ×
It further appearing, That as the result of a hearing recent- i
ly had by the Commission concerning the question whether any
change or addition shall be made in the existing rules, regula-
tions and practices of common carriers by railroad east of the
Mississippi River, as to open top cars or in Service Order No. 7
of the Commission relative thereto made and entered June 19, 1930,
the said Service Order No. 7 should be modified as hereinafter
ordered. - - -
It is ordered, That said Service Order No. 7 shall be amended
and supplemented in the following respects; effective forthWith:
ºs-second-paragraph thereof an
follows: -
e
d
d
i
t
i
3.-
Q
T
O
V
1.
S
O
a.
"Provided, that the phrase 'coal cars' as
used herein shall not include or embrace flat
bottom gondola cars with sides less than 36
inches in height, inside measurement, or cars
equipped with racks, or cars which on June 19,
1930, had been definitely retired from service
for the transportation of coal and stenciled
or tagged for other service. "
- (3) That the words "for the period of 30 consecu-
tive days beginning with June 21, 1920, " in the fifth
and sixth lines of the second paragraph of said Service
Order No. 7 be amended so that the same shall read, "for
jºº of 60 consequtive days beginning with June 21,
- Q \, ,
(3) That the fifth paragraph of said service order
No. 7 be amended to read as follows: -
"It is further ordered, That all common car-
riers by railroad within the territory hereinbefore
described be, and they are hereby, guthorized and
directed, until the further order of the Commission
to place an embargo against the receipt of coal or
other freight transported: in open top cars suitable
for coal loading, as hereinbefore defined, by any
Consignee and against the placement of such open top
cars for consignment to any consignee who shall fail
or refuse to unload such coal or other freight so
transported in coal cars and placed for unloading






-2–
within 24 hours after such placement, until all
coal or other freight so transported in Coal car's
and so placed has been unloaded by such consignee,
provided, that this authorization and direction
shall not interfere with the movement of coal un-
der permit to any coal pool or pools when author-
ized by any order heretofore or hereafter entered
by the Commission or coal consigned to tidewater
or the lakes for transshipment by water, nor shall
it apply where the failure of the consignee to un-
load is due directly to errors or disabilities of
the railroad in delivering cars."
(4) That following the fifth paragraph of said Service
º: No. 7 shall be inserted an additional paragraph as
Oll. O'N's
"It is further ordered, That until and incluº
August 19, 1920, all common carriers by railroad within
said territory, to the extent that may be necessº lſ.
order that public utilities including street and inter-
urban railways, electric power and lighting plant s >
gas plants, ice plant s, water and Sewel' works, alsº
hospitals, schoois and other public institutiºns.”
be kept supplied with coal for Current us? but not i OT
storage, be and they are hereby authorized to Pº:
furnish and assign ºars to coal mines for tº tº 3,1] Sº CI -
tation of such coal, in addition to and without regard
to the existing ratings and distributive shº for
fines upon said railroads; provided no Cars shall be
so placed, furnishes of sºlº ETEy any such carrier
without written application therefor from the public-
utility concurred in by the delivering railroad, sº
- - - -- -, *, *, *, *, +,
ing that such coal is needed for curren º' and now
for storage, in order that the applicant may continue
that such
in daily operation, and provided further,
Coal shall not be subject to reconsignified
public utilities or public institutions, and that s
written report of the cars placed her eunder shall be
promptly made to the Interstate Commerce Commiss”
by the railroad placing the cars. "
t except to
And it is further ordered, That copies of this order be served
e Car Ti 31' 3
upon the carriers herein before described, by the sam
7, and that
upon whom service has been made of Service Order No. -1 - - -
l public by depositing
f the Commission
notice of this order be given to the genera.
a cºpy thereof in the office of the Secretary o
at Washington, D. C.
-
By the Commission, Division 5.
(SEAL)
GEORGE B. McGINTY,
Secretary.





º APR 24 1920
INTFRSTATE COM fºr Cº. COMMISSION
--------
OROTR .
At a General Session of the INTFRSTATE COMMERCF COMMISSION,
held at its office in Washington, D.C., on the 5th day ºf
April, A. D., 1920.
roºfton conſºrce of DFR No. 1.
wner eas, section 25 of the Inter state Commerce Act as added by
the Transportation Act, 1920, re-uires:
(1) Every common carrier by Water in for eign commerce
-
whose vessels are re listered under the laws of the United States
to file a schedule or schedules giving certain information with
the Commission within thirty days after the section be comes
effective and regularly thereafter, as changes are made.
(2) Carriers by railroad on a plication of any shipſ er to
make request for, and carriers by water up on receipt of Such
reſ, ue st to name, vessel, rates and rort charges -
- (3) Carriers by water to file changes or modifications
in schedules as early º, after changes are ascertain-
ed, and authorizes the Commissi on to make and publish º
tions governing the manner and for m in which such carriers are
to coºrly with the for egoing requirements,
It is ordered, That the following regulations be , and they
hereby are , inade and ºublished:
- REGULATIONS,
1. Such coſamon carriers by Water in foreign commerce shall
furnish the information required in ºr inted Or typewritten
notices 8 x 10: " in size in the followin, form and order:
(a) Corporate name of carrier, or, if carrier is not
-
a corporation, its official title.
(b) Date
(c) Foreign commerce number -
(Each carrier shall number notices consecutively, -
beginning with number 1, the number to be showſ,
on the right-hand margin following the date , )
(d) Name and address of officer to whom inquiries
shall be direct, ed., - -
(If more than one officer is designated, arrange
alphabetically by ports, )















App 2 1970 -
(
&
)
SAILINGS OF STFA'ſ WFSSFLS
* U. S. Ports : *Foreign : Name : Date Hºli, º, ..."
of loading: Ports of of Vessel; in a will mate dºte : ***** y
: Dº 3 tº i º) at i Oil : : commence of sail- :
: : :- - * if:
X Arrange orts alphabetically, - ------
* Arrange alphabetically opposite each U.S. port of Lööding,
Three copies of the notice shall be filed addressed to
*º-
"Interstate Commerce Commission, Bureau of Tariffs, Washington, D.C."
, 3. Information furnished to rail carriers u. On re u = St.
Shall name the vessel, the date loading will commence and the
proximate date of sailing, ocean rates and whether ar: li cable in
Cârload or less than our load lots, requirements as to handline
and packing, storage charges, if any, and the conditions under
which assessed, free time, stora e charges and rort charges, if
ăily ,
Until regularly changed by tariff publications filed by
rail carriers the loading, unloading and handling charges, free time,
demurrage, storage and other charges or privileges will be those
published as applicable on "export shipments" or "for export, "
Placing the property alongsi the vessel with in reach of
side
the shi 's tackle will constitute delivery to vessels.
- - C iſ - - -
3. Information as to charges modifications in the schedule 3
filed with the Commission by such carriers by water shall be fur-
inished in metress similar in form to and under the same for e i (i.
commerce number as the original and shall be designated as a mead-
ſle I) is there to ,
By the Commission:
(SEAL) GFORGF B, MC GINTY,
Secretary ,








Jun 2n 1919
-
FIFTEENTH SECTION ORDER NO, 1434. HºRRRIAA's ſº
Cancels Fifteenth Section Order No. 1030.
At a Session of DIVISION 2 of the INTERSIATE COMMERCE COMMISSION,
held at its office in Washington, D. C., on the 7th day of
June, A. D. 1919,
EDGAR. E. CLARY,
WINTHROP M, DANIELS, Commissioners,
ROBERT W. WOOLLEY,
- Application under Section 15 of the Act to Regulate Com-
ºr Cº., as amended August 9, 1917, for approval for filing of an -
- increased rate, fare, charge or classification,
RULE FOR DISPOSITION OF FRACTIONS.
------
It appearing that the Director, Division of Traffic, United
States Railroad Administration having ºn August 20, 1818, issued
freignt Rºte Authority No. 563 authorizing Sarriers unºer Federal
control by the publication of changes in instances where joint
tº fºugh rates are stated in tariffs by use of differentials or
ºr bitraries to be added to or deducted from base rates, to apply
in e rule for disposition of fractions shown in Section 6 of Genera.
Order No. 23 of the Director General, United States Railroad Admir-
i Stration, and request having been made for authority to lice" is a
revise all joint rates between points on lines under Federal coºl-
trol and points on lines not under Federal control, and considerº-
tion having been given the matters involved,
-
It is ordered, That as to all freight rates and charges
which have been increased under authority of fifteenth Section
Order No. 666 of May 27, 1913, or under subsequent authority from
the Commission, including joint through rates stated in tariffs
by use of differentials ºr arbitraries to be added to or deducted
from base rates, all carriers, be, and they are hereby authorized
tº revise same by applying the following rules in the dispositicſ,
of tractions :
(a) Rates in cents or in dollars and certs per 100 pounds
or per package.
Fractions of less than + or O. 25 to be omitted.
Fractions of + or 0, 25 or greater, but lº S than
# or o, 75 to be snown as one half (+).
Fractions of 4 or 0.75, or greater, to be in- -
creased to the next whole figure.














a 102
| Tºtº
(b) Rates per ton: - - . . . .
Armounts of less than five cents to be omitted .
— `
Amounts of five cents or greater, but less than
ter, cents, to be increased to ten cents.
(c) Pates per car:
Amounts of less than twenty-five cents to be
Cºit, t, ed.,
Amounts of twenty-five cents or greater, b
less than seventy-five oents, to be s
as fifty cent gº,
ut
º
T -
in Cºſſi
Amounts of seventy-five cent s or greater, ºut
less than one dollar, to be increased to
Crie dicllar .
and that rates and charges so increased, be, and they are he***Y.
approved for filing with out formal hearing, which approval shºt-
tº 3 -
not affect any subsequent proceeding relative there to :
º- - - -
-
It is further ordered. That the schedules filed under
rity of tº Is ºrder sº I bear on title pages there of the
Wiſ 2 notation : |
3.
ſt
º
Increases resulting from application of tule
governing disposition of fractions contained in
this schedule are filed under authority of the
Inter state Commerce Commission' s Fifteenth Sec-
tion Crder No. 1434 of Junt 7, 1919, With Cut
formal hearing, which approval shall not affect
any subsequent proceeding relative ther et O. - -
The approval herein given is void if the schedule issued
reunder is not filed with the Commission on or before December
he
30, 1919, unless extension is granted by the Colºmission.
Note – This authority permits no greater increas:
to be made than that due win olly to di Spoff
tion of fractions.
*_ _ _^ - - T-- - - - -
By the Commission, Division 3:
Secret 3 Cy .
-







ºrio:
Ian
-4-
Amount authorized by Congress . ,
Appropriated and will expend, , , , , , , , $2,625, 431,000
Additional appropriation required , , , , , , 673, 368, 301
Credit for administration :
(l, 37% of total &Iount appro-
priated and requested) . . . .
w
-
-
w
-
-
*
-
-
--
Credit for net cost of shipyard
development, housing and trans-
portation (5.5% of total amount
- -
**
Credit for cancelling ship contracts. * - A
, , , , , , , , , , , , $3,671,200,099
appropriated and requested) , , , , , , , , , , . . . .
--"
45,000, 000
189,210,275
$3,298,318,301 $437,063,731
-- 437,063,731-
| -
Moncy spent and to be spent for
construction of 13, 885, 106 dead-
weight tons of ships , , , , , , , , , , 2,861, 755,570
Tax paid by shipbuilders
($25 x 13, 885, 106 deadweight
tons)
–vº -
-
Net cost of 13,885, 106 deadweight
tons of ships
Average not cºst of ships per deadweight tons
$2,514,627, 920
$1EO