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BEFORE THE 
 
 Iiltep-gtate Comirierce eommission. 
 
 In the matter of the application of sundry 
 railroads for relief from the operation of 
 section 4 of the act to regulate commerce. 
 
 Argument submitted by the Iroquois Club 
 against granting such relief. 
 
 At a meeting of the Iroquois Club, on the third day 
 of May, 1887, the following resolutions were adopted:. 
 
 Resolved by the Iroquois Club, That the interests of 
 the public demand the enforcement of compliance on the 
 part of the railroad companies with the provisions of the 
 act to regulate commerce, passed at the last session of 
 Congress. 
 
 And that the Commission thereby created does not 
 possess any such dispensing power as that invoked by 
 numerous railroads in the effort to procure general sus- 
 pension of the fourth section of the act. 
 
 Nor is it desirable or expedient that such power as 
 
the Commission does possess in the premises should be 
 exercised until it becomes apparent, after honest and sin- 
 cere effort on the part of the railroads to comply with 
 the law, in its letter'.and its spirit, that some of the evils 
 which they so persistently predict necessarily attend upon 
 its faithful enforcement, and then only upon a broad con- 
 sideration of public interests, and not for the benefit of any 
 class or monopoly. 
 
 Resolved, That a committee of five be appointed to 
 present these views to the Commission. 
 
 In accordance with these resolutions a committee was 
 appointed, by which this argument is presented. 
 
 I. 
 
 The first proposition of these resolutions may, in one 
 sense, be said to be immaterial. For in so far as it is 
 commendatory of the general policy of the act, it may be 
 urged that the Commission is not concerned with this sub- 
 ject; and in so far as it seems to advocate an enforcement 
 of the law, it may be considered unnecessary. It is, how- 
 ever, a mere preliminary, suggested by the clamor raised 
 by persons supposing themselves especially affected by the 
 law, to the effect that it is utterly destructive, not merely 
 of their interests, but of the business and commerce of 
 the country — a cry not unfamiliar to those who have ob- 
 served the efforts of the Government to deal with these great 
 monopolies during the last twenty years. Therefore it 
 was not deemed wholly impertinent to preface a statement 
 as to construction with an announcement that those who 
 held to this construction did not concur in the views so 
 persistently maintained and sedulously fostered by the 
 opponents of the law as to its general pernicious and 
 destructive character. 
 
 Further than this, it may be observed that it aids 
 construction to examine somewhat the policy of a statute- 
 
to consider what is its general scope and policy, "\i»!3^tf-]t 
 seeks to accomplish, and learn whether it should be liber- 
 ally or strictly construed. In doing this some prognosti- 
 cation as to the probable effects of its enforcement is not 
 wholly out of place. 
 
 II. 
 
 As preliminary to the discussion of that part of the 
 subject indicated by so much of the resolutions as ques- 
 tions the dispensing power of the Commission, as invoked 
 by the railroads, it may be well to consider the general 
 situation of affairs, to change which this law was adoptdH. 
 In so doing it is not intended to discuss the question as 
 legislators called upon to formulate a statute, but as those 
 who, accepting the law as it is, seek from every legitimate 
 source light as to its true meaning and interpretation. 
 
 It may be premised at the outset that there is no 
 purpose in this argument to deny the great importance of 
 railways to the State, nor to depreciate the character of 
 the service rendered by them. 
 
 To quote the language of a gifted judge: " Railroads 
 " are the great public highways of the world, along which 
 " its gigantic currents of trade and travel continually pour, 
 " highways compared with which the most magnificent 
 " highways of antiquity dwindle into insignificance. They 
 " are the most marvelous* invention of modern times. 
 " They have done more to develop the wealth and 
 " resources, to stimulate the industry, reward the labor, 
 " and promote the general comfort and prosperity of the 
 " country, than any other, and perhaps all oth^r, mere 
 " physical causes combined. " 
 
 Paine, J., in Whiting v. Sheboygan, etc., R. 
 R. Co., 25 Wis. 167-219. 
 
 And it may be conceded pro hac vice, what it would 
 certainly be difficult to demonstrate, though often asserted. 
 
that freight and passenger rates are lower in this country 
 than elsewhere. It is also true that in all departments of 
 railroading the tendency constantly is to give more and 
 better service at diminished cost. It is well understood 
 that a reduction in rates ddes not, necessarily, involve loss 
 of revenue, though this simple proposition is frequently 
 lost sight of in the complicated calculation of pool com- 
 missioners and traffic managers. And so it is, that while 
 railroad companies have, by pooHng arrangements, traffic 
 agreements, and every device known to human ingenuity, 
 sought to destroy competition, yet the tendency has been 
 towards lower rather than higher rates, under the influence 
 of great economic laws, before which even banded monop- 
 oly is impotent. 
 
 Therefore, if this law were aimed merely at a reduc- 
 tion of'rates, it might plausibly be urged that this was a 
 matter requiring no legislation, and which was self regula- 
 tive in a large degree. But that is not the scope of the 
 act, nor the occasion of its adoption. .The latter can be 
 stated in two words: Unjust discrimination. This has per- 
 meated every department of railway service and compli- 
 cated and disturbed everj' commercial and industrial 
 problem. 
 
 It is within- the knowledge of every man conversant 
 with the business of large cet|tres, that by a system of 
 special rates and rebates a favored shipper would, under 
 the old system, be enabled to outstrip all competition sim- 
 ply by means of this discrimination. Special trades were 
 fostered^ towns and cities built up or left to languish — one 
 individual raised to affluence and his competitor sunk in 
 financial ruin — all at the will of the corporations controUino- 
 transportation, and all by means of discrimination in 
 carrying charges. Strange as it may seem, the common 
 law, while compelling a common carrier to content himself 
 with reasonable compensation for his service, yet appeared 
 
5 
 
 to tolerate discrimination between localities and indi- 
 viduals. 
 
 " At common law, a person holding himself out 
 " as a common carrier of goods was not under any obliga- 
 " tion to treat all customers equally. The obligation which 
 " the common law imposed upon him was to accept and 
 " carry all goods delivered to him for carriage, according 
 " to his profession (unless he had some reasonable excuse 
 " for not doing so), on being paid a reasonable compensa- 
 " tion for so doing; and if the carrier refused to accept 
 " such goods, an action lay against him forso refusing; and 
 " if the customer, in order to induce the carrier to perform 
 " his duty, paid. Under protest, a larger sum than was rea- 
 " sonable,he might recover back the surplus beyond what 
 " the carrier was entitled to receive, in an action for money 
 " had and received, as being money extorted from him. 
 " But the fact that the carrier charged others less, though 
 " it was evidence to show that the charge was unreason- 
 " able, was no more than evidence tending that way. 
 " There was nothing in the common law to Iiinder a carrier 
 "from carrying for favored individuals at an nnreason- 
 " ably low rate, or even gratis. All that the law required 
 " was, that he should not charge any more than was rea- 
 " sonable." 
 
 (Citing authorities) per BLACKBURN, J., in 
 'Great Western Ry. Co. v. Sutton, 22 L. 
 T. R.N. S. 43-45- 
 
 Now, it was especially and particularly to change the 
 common law rule in this respect, and to prevent the exer- 
 cise of this power of discrimination, that this act was 
 passed. 
 
 The second section is directed against discrimination 
 between individuals, while the third is broader, and also 
 includes localities within its provisions. It is a familiar 
 rule of statutory construction that an act must be consid- 
 
ered together, and one part or section will not be con- 
 strued so as to destroy or abrogate the effect of another 
 provision, unless absolutely necessary. Therefore, it is 
 important, in view of the main object of the law, to first 
 ascertain what is the true construction of sections 2 and 
 3, and then so to construe section 4 as not to impair these 
 preceding provisions. 
 
 In view of the notorious prevalence of unjust dis- 
 crimination, and its baneful influence, as well as the very 
 general demand for legislation to abate it, which, under the 
 late decision of the Supreme Court in the Wabash Railway 
 case, must be national and not State, in order to be effect- 
 ive, this act should be liberally construed and applied as a 
 highly remedial measure. 
 
 Sections 2 and 3 endeavor to secure to every in- 
 individual and to every locality absolute and exact equal- 
 ity in the tolls to be exacted for railway service. The 
 whole theory of the law is that railways are great public 
 highways, free to all, upon payment, not only of reasona- 
 ble, but of equal tolls for the sa^e service. It is true rep- 
 resentatives of corporate interests, not unnaturally, have 
 attempted heretofore, and to some extent still attempt, 
 to maintain a contrary notion. This is well stated in the 
 report of the Railway and Warehouse Commission of Illi- 
 nois for 1870 and 1871, at page 26. 
 
 " The reports of many of the railroad companies 
 " show, and the views expressed to the Commissioners by 
 " many of the prominent representatives of these corpo- 
 " rations in this Stfite, leave no doubt that those corpora- 
 " tions are strongly impressed with the idea, that outside, 
 " perhaps, of a few police regulations, the Legislature has 
 " no power, under the Federal Constitution, to modify or 
 "regulate in any manner their actings and doings, and 
 " that their charters furnish the only measure of their rights 
 " and duties. * * * # * jj^^^ ^^ ^^^ 
 
 " consider, apparently, that when a part of the sovereignty 
 
" of the State, the right of eminent domain, was freely 
 " delegated them, and when, in order to assist them, cities, 
 counties and towns were allowed to exercise the taxing 
 " powers, all of which could only be justified under the plea 
 " that it was for the public good, that they therefore 
 " ceased to be strictly private, and became at least quasi 
 " public corporations. They do not seem to reflect that 
 " such powers as were granted to them must always be 
 " understood to have been granted with the reservation 
 " that they should be exercised for the public good also, 
 " and must, from the necessity of the case, become con- 
 " trollable by the sovereignty of the people, so as to have 
 " the objects of such grants justly accomplished." 
 
 Although this language was applied to State legislation, 
 it is not inapplicable to all attempts by the Government 
 to deal with these quasi public corporations, who, upon 
 every principle of sound law, as well as good morals, must 
 always be regarded as trustees for the people, of the great 
 powers conferred upon them. 
 
 The business of these corporations being, in the lan- 
 guage of the Supreme Court, " clothed with a public in- 
 terest," and they exercising "a sort of public office" 
 (Mmm v. Illinois, 94 U. S. 113, 132), this law endeavors 
 to apply to that business the rules which govern or should 
 govern the exercise of governmental powers. As all men 
 are free and equal before the law, and equally entitled to 
 the benefits and compelled equally to bear the burdens of 
 government, so does this law intend-them to stand as to 
 these great quasi governmental agencies. 
 
 It may be remarked, as will be seen hereafter, that 
 an unwarranted discrimination 'between locahties is prac- 
 tically a discrimination between individuals, within the 
 meaning of the law. It is the shipper who is discriminated 
 against in either case. And if the location of the shipper 
 in whose favor the discrimination is made does not warrant 
 
8 ' 
 
 it, then it is clearly within the inhibition of section 3; 
 because it gives an imdne advantage to particular persons. 
 
 Sections 2 and 3, being obviously intended to estab- 
 hsh equal rights of all to railway service, upon payment df 
 the same tolls for the same or similar service, section 4, 
 with the construction of which this argument is particu- 
 larly concerned, proceeds more specifically and narrowly 
 in the same direction. It prohibits a greater charge 
 for " transportation of passengers or like kinds of prop- 
 " erty, under substantially similar circumstances and condi- 
 " tions, for a shorter distance than for a longer distance, 
 " over the same line, in the same direction, the shorter 
 " being included within the longer distance." It maybe 
 doubted whether, in view of the true construction of the 
 preceding sections, this clause adds- anything to the law. 
 But it seems to have been inserted out of excess pf cau- 
 tion, so that under no specious pretext could the provisions 
 against discrimination between localities be evaded. 
 
 It may. be well now, however, to consider the proper 
 construction of these preceding sections in connection with 
 this provision, in the light somewhat of authority, before 
 proceeding to discuss the power vested in the Commission 
 by that portion of section 4 which follows. 
 
 III. 
 
 It has been claimed by Mr. Fink, on behalf of the 
 railroads, and. also by Mr. Smith, of the Louisville and 
 Nashville Railroad, in the course of his very able argu- 
 ment on behalf of the application of The Southern Rail- 
 way and Steamship Association, that the clause, " under 
 substantially similar circumstances and conditions," 
 inserted in section 4, warrants a greater charge for trans- 
 portation for a shorter than for a longer distance where the 
 charge for the longer distance is afifected by .competition. 
 
 Mr. Fink, utterly ignoring the vital object and pur- 
 pose of the law, which beyond all question is especially 
 
aimed at discretionary discrimination by railroads, and 
 assuming that its only purpose was to secure reasonable 
 charges for transportation, sums the matter up thus: 
 
 " The qualifying clause in the fourth section, ' under 
 " substantially similar circumstances and conditions,' 
 " therefore leaves the determination of whether a greater 
 " charge can justly be made for a shorter haul than for a 
 " longer, under different circumstances and conditions, to 
 " the judgment of the carrier in the first place, to be finally 
 " passed upon by the courts. Section 4, therefore, does 
 "not prescribe a more definite rule than section i, by 
 " which the carriers could be guided in determining in all 
 " cases what are reasonable and just charges. That section 
 " might, therefore, have been omitted altogether, as it con- 
 " veys no other meaning than that -wliich is already 
 " expressed in section i , viz: that the railroad charges 
 " shall be reasonable and just." 
 
 To which he adds complacently: 
 
 " There can be no doubt that the above is the correct 
 interpretation of section 4." 
 
 The same qualifying words, " under substantially sim- 
 ilar circumstaces and conditions," are found in section 2. 
 Words of like import have been employed in various 
 English statutes, and have been considered and construed 
 by the courts of that country. The construction there 
 adopted by the highest authority is, that the material 
 circumstances and conditions which differentiate the rate 
 are circumstances connected with the carriage of the 
 goods. All idea of competition being such a circum- 
 stance is expressly excluded, as is also the idea that the 
 purpose or business of the consignor, or of the consignee 
 (as that shipment is for export by him), is at all material. 
 The case already cited is a leading authority on this subject. 
 The Great Western Railway Co. v. Sutton, 
 H. of L. 22, L. T. R. i\. S. 43- 
 
lO 
 
 There plaintifif was a kind of small expressman, collect- 
 ing small parcels in London, enclosing them in one package; 
 to his agents in the country, for distribution by them to 
 various parties. These packages were called packed parcels 
 and carried by the railway, but at a higher charge than 
 packed parcels of similar exterior appearance, shipped 
 by various wholesale houses in London. Judgment was 
 for the plaintiff in the Exchequer Chamber, where the case 
 is reported in 13 Law Times Report, N. S. 225, 226. 
 
 Without entering intq any very critical examination 
 of the language employed, and the various statutory 
 enactments employed, which were construed on appeal to 
 the House of Lords, it may be observed that their plain 
 import was substantially that of the clause under con- 
 sideration here. 
 
 It is to be remembered that in the discussion of great 
 questions of law, too minute study of grammar and syntax 
 not infrequently leads to the neglect of more important 
 considerations, although it may be said that the clause in 
 the Railway Clauses Consolidation Act, 8 and 9 Victoria, 
 chapter 20, section 90, is more favorable to the position 
 taken by Mr. Fink than is that in our statute. In that act 
 it is provided, that such tolls be at all times " charged 
 " equally to all persons, and after the same rate, * « * 
 " in respect of all goods or carriages of the same descrip- 
 " tion, and conveyed or propelled by a like carriage or 
 " engine passing over only the same portion of the line of 
 " railroad, under the same circumstances." 
 
 Mr. Justice BLACKBURN, after stating the common 
 law rule as to discrimination, in language already quoted, 
 and reviewing the course of legislation on the subject, 
 uses this language: 
 
 " Then comes thcquestion, what is the legal effect of 
 " this provision for equality? I think it appears from the 
 " preamble of the 90th section of the Railway Clauses 
 
II 
 
 Consolidation Act of 1845, that the Legislature was of 
 " opinion that the changed state of things, arising from the 
 " general use of railways, made it expedient to impose an 
 " obligation on railway companies acting as carriers, beyond 
 " what is imposed on a carrier at common law. And if 
 " this be borne in mind, I think the construction of the 
 " proviso for equality is clear, and is, that the defendants 
 " may, subject to the limitations in their special acts, 
 
 charge what they think fit, but not more to one person 
 " than they during the same time charge to others, under 
 " the same circumstances. And I think it follows from 
 " this, that if the defendants do charge more to one person 
 " than they during the same time charge to others, the 
 " charge is, by virtue of the statute, extortionate." 
 
 And again: " It would be the very essence of the case 
 " to prove that the goods were of the like description and 
 " carried under the like circumstances. But I think that 
 " this applies to the description of the goods and the cir- 
 " cumstances of the carriage, and not to the trade of a 
 " consignor or consignee. " 
 
 And again: " I have already intimated to your Lord- 
 " ships my opinion that the circumstances must be those 
 " relating to the carriage, not to the consignor; and that 
 " the fact that the plaintiff was a rival carrier does not in 
 " itself make a difference in the circumstances, such as to 
 " justify a difference in the charge, under the statute; it 
 " rather makes against the defendants, as supplying a 
 " motive for an attempt to evade the statutable provision." 
 
 Justice WiLLES, in treating thesame question, uses this 
 language: 
 
 " The question, what is the meaning of the equality 
 " clause, when it speaks of things of ' like description,' 
 " conveyed under ' the like circumstances,' ought, I think, 
 " to be answered by saying that things of a ' like descrip- 
 " tion,' when, although their composition and structure are 
 
12 
 
 " not ' identical,' which would be expressed by ' the same 
 "description,' not 'like description,' they are similar in 
 " those qualities which affect the risk and expense of car- 
 " riage, and that they are conveyed under like circum- 
 " stances where the route, risk and expense are, in the 
 " opinion of a jury, the same; otherwise not. For instance, 
 " bags of red wheat and bags of white wheat are of like 
 " description, and bags of cotton and bags of jute, of like 
 " weight and value, are of the like description, if there be 
 " no dissevering circumstances proved; but if it were super- 
 " added that really one was more risky or troublesome to 
 " carry than the other, the jury would hold that the goods 
 " were of different descriptions; and bags of silk may be 
 " suggested as an instance in which a jury Would be sure 
 "'so to hold." 
 
 And again: " In effect, I think the phrase, 'like de- 
 " scription,' is exhausted upon the goods, and 'likecircum- 
 " stances ' upon the route, expense and risk of carriage, and 
 " that neither can be extended to the personal qualities of 
 " the individual who sends the goods." 
 
 Baron Bramwell dissented, but the House of Lords 
 adopted the views laid down by Blackburn, and affirmed 
 the judgment in favor of plaintiff. 
 
 Lord Chelmsford, in delivering the opinion, used 
 this language: " It is extremely difficult to understand 
 " what the Legislature meant by goods of a like descrip- 
 " tion, though at first sight more capable of interpretation, 
 " because the word same is constantly used in popular lan- 
 " guage for similar. It seems to me that the words same. 
 " and like have not different meanings in the two acts, and 
 " that the words must be used, not with reference to the 
 " contents of parcels, which the defendants have no means 
 " of knowing, but to the parcels themselves, whether, 
 " as WiLLES, J., said, in answer to your Lordships' ques- 
 " tion to the judges, they were like or different, for the 
 
13 
 
 " purpose of carriage. I have felt greater difficulty in 
 " ascertaining the meaning of the words, under the same 
 " or under like circumstances. I do not, see, however, 
 " how they can relate to anything else than, the convey- 
 " ance of goods. To say that because the plaintiff is what 
 " has been called an intercepting carrier, and the other 
 " persons using the railway are wholesale dealers, there- 
 " fore the goods are not conveyed along the railway under 
 " the like circumstances, is an application of the words 
 " which I am not able to comprehend." 
 
 This is a very important and instructive case on this 
 subject, and contains such full review and comment upon 
 the course of legislation in England as to make it especially 
 convenient for reference. 
 
 In another case decided in the Court of Appeal, before 
 Bramwell, Brett and Cotton, Lord Justices, the exact 
 question whether competition with a rival company was a 
 defense for violation of the equality clause considered in 
 the last case, was decided, and in accordance with the 
 principles there laid down it was held not to be. 
 
 Evershed v. London Northwestern Railway 
 Company, 37 Law Times Reports, N. 
 S. 623. 
 
 There the plaintiff was a brewer at Burton, Three 
 other brewers at Burton had breweries united with the 
 Midland Railway, and, doing the cartage themselves, were ' 
 not charged by the Midland Railway Company for it, and 
 were also allowed a rebate of nine pence per ton in respect 
 of loading and unloading, etc., performed by themselves. 
 
 In order to compete with the Midland Company, the 
 defendant exempted the three other brewers from any 
 charge for cartage, but did not exempt the plaintiff, and 
 allowed a rebate of nine pence per ton to the three other 
 brewers, but not to the plaintiff. The plaintiff sued to 
 
14 
 
 recover the sums paid by him in excess of what was paid 
 by the other brewers, and his action was sustained. 
 
 Lord Bramwell used this language : " No doubt, it 
 ' looks harcf at first that the defendants should have to lose 
 " the traffic of these three firms of brewers, or else make 
 " an abatement in their charges in other cases where it is 
 " not to their interest to make such abatement; but they 
 " can get the traffic of the favored brewers, if they reduce 
 the charge to Evershed and the others, so as to make the 
 '' charges to all equal. I think this was the intention of 
 " the Legislature. The plaintiff has a right to complain 
 ' because an advantage of one shilling nine pence is given 
 ' to the other firms, which is denied to him. I think, 
 therefore, that there is an undue advantage given to the 
 " favored brewers, and there is an undue and unreasonable 
 " prejudice and disadvantage to which the plaintiff is sub- 
 jected." 
 
 The other judges concurred. Lord Justice Cotton 
 remarking : " Here the facilities which the three firms of 
 " brewers possess are entirely facilities as to the Midland 
 " Railway Company, while as to the defendants the only 
 " facility which they have is the facility to make a good 
 " bargain." 
 
 This decision was affirmed in the House of Lords, at 
 the conclusion of the argument for appellants. CairnS, 
 then Lord Chancellor, delivered an opinion in the case, in 
 which he used this language : 
 
 " It appears to me that the question in cases like the 
 " present must always be simply this: Is the plaintiff 
 " obliged to pay one sort of remuneration for the services 
 " which the company perform for him, while they perform 
 " the same services for other traders, either for less remun- 
 " eration or for no remuneration at all? In my opinion, 
 " undoubtedly the company is performing identically the 
 " same services for the plaintiff in this action as for the two 
 
IS 
 
 " other firms of brewers whose names have been referred 
 " to. Now, as a matter of policy and expediency, it may 
 " well be that they have good reasons for treating those 
 " other firms in the way they do; but with those consider- 
 " ations the plaintiff in this action has nothing whatever to 
 " do. That is exactly what Parliament has not left open to 
 " railway companies to judge of — whether in that way they 
 " will equalize their capacity for competing with other lines 
 "or not." 
 
 Lord Blackburn, in the course of his opinion, used 
 this language: " I quite agree that this is not done with 
 " any view of injuring the respondent. It is done with a 
 " view to coax some of the traffic which would otherwise 
 " go upon the Midland Railway, to come to the appellants' 
 " railway. It may be that it would have been provident 
 " and proper on the part of the Legislature to say that 
 " there should be an exception in such cases, in order to 
 " induce traffic to go by a route different from that by 
 " which it would otherwise have gone. However, it is not 
 " what the Legislature has said. What the Legislature 
 " has clearly said is, that the tolls nriust be charged equally 
 " to all persons under the same circumstances. I think 
 " that means under similar circumstances as to the goods, 
 " not as to the person." 
 
 Same case, 39 L. T. R. N. S. 306. 
 
 All the authorities were reviewed, and similar prin- 
 ciples announced in a very recent case in the House of 
 Lords, decided in 1885. 
 
 Denaby Main Colliery Co. v. Manchester, etc., 
 Railway Company, 54 L. T. R. N. S. i. 
 
 There are other matters involved in this case, but, 
 among other things, it appeared that the railway company 
 had carried coal along' the same portion of its line to 
 Grimsby, for persons who shipped coal to the West Indies 
 
i6 
 
 and to other ports, at a reduced charge, and that was held 
 to be in violation of the Railway Clauses Consolidation 
 Act of 1845. 
 
 Lord Blackburn, in discussing the question, said: 
 " But I am unable to agree in their judgment as to the 
 " coal carried from the appellant's colliery to Grimsby, and 
 " there shipped on the American steamers, and the coal 
 " carried from the colliery to Grimsby and shipped to 
 " ports south of Harwich. I do not think that a desire, 
 " however bona-fide, to foster a new trade, can justify 
 " making a difference of charge on coals passing only over 
 " the same portion of the line of railway under the same 
 " circumstances. And I do not think that it makes any 
 " difference in the circumstances where the coals are de- 
 " livered at Grimsby for shipment, that one parcel is 
 " shipped on a vessel bound for one port, and another 
 " parcel on a vessel bound for another. " 
 
 Lord Selborne, formerly Lord Chancellor, used this 
 language: " The questions as to the allowance of eight 
 " pence per ton to Bannister upon coal shipped by the 
 " Hamburg-American steamers, and the payment to him 
 " of six pence per ton upon coal shipped from Grimsby 
 " for ports south of Harwich, remain. To both these 
 " allowances the same principles appear to me to be 
 " applicable. I cannot think that the circumstances under 
 " which the six pence per ton was allowed, as stated in the 
 " special case, ought to make any difference. All these 
 " coals are proved to have been carried only over the 
 " same portion of the line and under the same circumstances 
 " as the plaintiff's coals. The motives and reasons for 
 " making these allowances are plainly not material as 
 " against the appellants' claim to have their coals carried 
 " on the same terms." 
 
 It would unduly extend this argument to fully state 
 and comment upon the exact language of the various 
 
17 
 
 English statutes, and to discuss at length' the very able 
 and instructive opinions upon them which were delivered 
 in the cases already cited; but it may be noted in passing 
 that the opinion of Lord Cranwprth, in the case of Finney, 
 2 MacQ. 183, wherein he differed with Lord St. 
 Leonards, is very much discredited by the opinions in 
 the last case. 
 
 It may be remarked, and a more extended examina- 
 tion of the cases would fortify the conclusion that they 
 established firmly the doctrine of the English courts, that 
 a discrimination on the ground that a shipment is made 
 under dissimilar circumstances and conditions, can only 
 be justified when those circumstances relied upon relate to 
 the carriage of the goods, and not to the circumstances of 
 the shipper or consignor. And by parity of reasoning, 
 the different location of the town or city with reference 
 to the competition, either of water or rail, can not afford 
 any ground whatever for such discrimination. 
 
 These decisions may fairly be said to establish, that 
 under the true construction of sections 2, 3, and the first 
 part of section 4, no discrimination whatever would be 
 permitted, on the ground that the person or locality in 
 whose favor the discrimination was made enjoyed the 
 advantages of a line competing with that which makes the 
 discrimination. 
 
 IV. 
 
 Thef argument of Mr. Smith before referred to asks 
 this Commission to grant leave to the Southern roads to 
 discriminate in six classes of cases. An examination of 
 the first four classes will show that the only ground upon 
 which such relief is sought is that the points between 
 which it is desired to make a less charge for a. long than 
 for a short distance, are points where the railroads for whom 
 application is made are brought into competition either 
 with other rail or water lines, and it is fair to say, although 
 
Mr. Smith, subscribing to the doctrine advanced by Mr. 
 Fink, declares that there is no necessity for the application 
 which he makes, because the right to make these discrimi- 
 nations exists in the railroad company; that under the 
 qualifying clause we have considered, no such right what- 
 ever can be held to exist, in view of the cases cited. 
 
 The fifth case, in which application is made to charge 
 less for transportation for a long distance than for a short 
 distance, is a case where the differential circumstances are 
 alleged to be the competition " of market with market and 
 product with product;" as, for instance, where one town 
 manufactures cotton goods in large quantities, and there- 
 fore might need cotton from another town where a great 
 deal of cotton was stored and handled. 
 
 It is not deemed to be necessary to spend any time in 
 discussing the proposition whether this is or is not within 
 the inhibition of the law. 
 
 The sixth case, in which similar application is made, 
 is with reference to freights to and from a city which is 
 alleged to have been built up by a system of unjust dis- 
 crimination against surrounding localities. It requires no 
 argument to show that this is'an application which might 
 be properly addressed to this Commission, if the Commis- 
 sion possessed dispensing powers, which it has repeatedly 
 and expressly disclaimed. Such an application can not be- 
 considered by any tribunal acting judicially. 
 
 These six classes of cases may be said, in a general 
 way, to embrace practically all cases in which thus far 
 application has been made to the Commission for relief 
 under the fourth section of this act. It seems to be plain, 
 that in every one of these cases to grant the relief prayed 
 for would-be a practical abrogation of other sections of the 
 Yaw. 
 
 The extent and variety of discrimination practiced 
 by tfle carriers within the provisions of this act are no- 
 
19 
 
 where more clearly shown than in the applications made 
 for relief, and the arguments filed in support thereof. 
 
 It is undoubtedly true that the business and commerce 
 of the country havp adjusted themselves to these condi- 
 tions. It is undoubtedly true that any sudden change will 
 be productive of much inconvenience and some loss and 
 injury, not merely to favored interests, but to the commu- 
 nity at large. But if that be the ground upon which the 
 power of the Commission, under the fourth section, is to be 
 invoked, then it must be upon the theory that the law has 
 vested in the Commission a dispensing power over this act, 
 and it is for this Commission to say, acting as a legislative, 
 and not as a judicial body, whether, in the judgment of 
 the Commission, the evils alleged to be involved in the ad- 
 ministration of the law overbalance the advantages which 
 may be reasonably considered likely to follow upon its 
 enforcement. But it is thought that that is exactly not 
 the power which was intended to be vested in the Commis- 
 sion by the statute. 
 
 The language of the 4th section has been so often 
 quoted that it is hardly necessary to quote it again; yet 
 as it has sometimes been misquoted, it may perhaps be 
 proper to notice the exact language used. The proviso to 
 the 4th section is that " a common carrier may, in special 
 " cases, after investigation by the Commission, be authorized 
 " to charge less for longer than for shorter distances for the 
 "• transportation of passengers or property, and the Com- 
 " mission ^lay from time to time prescribe the extent to 
 " which (not a but) such designated common carrier may 
 " be relieved from the operation of this section of this act." 
 
 The ambiguity in the construction of this proviso 
 arises on the language " in special cases." It is exceed- 
 ingly difficult to say what special cases may hereafter arise 
 which, when presented to the Commission, will authorize 
 such action as has been invoked in the applications already 
 made. But it is equally plain that none of the applications 
 
20 
 
 pow pending for relief under this clause make any 
 " special case " within the meaning of the act. 
 
 The application on behalf of the Southern roads is for 
 a virtual suspension of the act as to their entire lines, and 
 as to all classes of freight, and a consideration of the argu- 
 ment by which that application is supported will show 
 the far reaching effect which the exception even of one 
 line might naturally be expected to have. If relief be 
 granted simply because of water competition between two 
 points where the relief is sought, then upon similar prin- 
 ciples like relief should be granted where there is compe- 
 tition between two points by rail, upon a rate based upon 
 the water rate between two other points; and if relief be 
 afforded in such cases, then it should be granted in cases 
 where there is simply rail competition upon like principles. 
 
 The obvious effect of establishing any such principle 
 would be simply to nullify not merely section 4, but sec 
 tions 2 and 3, which immediately precede it, and to open 
 the door to every form of discrimination and unreasonable 
 preference in a manner not contemplated by the law, nor 
 justified by its terms. If competition between localities is 
 aground for relief under this section, then a railroad com- 
 pany is permitted, where such competition is by water, to 
 increase the natural advantage which the point on the 
 water line enjoys, as against other points not so favorably 
 situated. If the competition be by rail, then a railroad 
 company is permitted to increase the advantage which the 
 favored point enjoys in having two lines of railroad, at the 
 expense of local ppints on the line of the road making the 
 discrimination. Now, it may be that there are reasons 
 why this should be permitted. Indeed, it seems somewhat 
 paradoxical to insist, in the interests of the public, that rail- 
 ways should not be permitted to compete with waterways, 
 or other rail lines. But it is obvious that this is a question 
 rather to be addressed to the law-making power than to a 
 tribunal charged with its interpretation; and against all 
 
21 
 
 such discrimination the law and the legislative purpose 
 are plainly arrayed. 
 
 In this connection it may be instructive to consider 
 the language employed by a parliamentary committee of 
 England in considering the efforts made in that country 
 to secure competition. A joint committee of Lords and 
 Commons in 1874 used this language: " No means have 
 " yet been devisedby which competition ^a.n be maintained, 
 " nor is there any reason to suppose that the progress of 
 " combination will cease until Great Britain is divided . 
 " between a small number of great companies." 
 
 It is apparent, that by means of pools and traffic 
 arrangements, which, as we learn by the daily papers and 
 as Mr. Smith admits in his argument, the railroad companies 
 continue to make since the passage of this law, competition 
 is practically out of the question. In the transportation 
 problem there is an element of a certain sort of compe- 
 tition, but so far as any fair, open, honest competition is 
 concerned, it is an unknown quantity in the solution of the 
 question. 
 
 Now, it is not the part of a court to decide cases until 
 they are presented. It is not necessary for this Commission 
 now to announce in what special cases it will or will not 
 grant relief, under the proviso of the 4th section of this 
 act. It is possible to conceive of such cases, as, for 
 instance, should Chicago be destroyed by a conflagration 
 similar to that which visited the city in r 871, the Commission 
 might feel warranted in authorizing transportation compa- 
 nies, if they saw fit to make such application, to give 
 Chicago a reduced rate for the transportation of building 
 material. 
 
 And, again, where one railway company controls and 
 operates two lines of different lengths between two terminal 
 points, it might be proper, when the shorter line was very 
 much crowded with traffic, to permit through freight to be 
 sent by the longer Hne at the same rate as that charged on 
 
22 
 
 the shorter line, without making corresponding reductions 
 in the local tariff of the longer line. It is not strictly cor- 
 rect to say that necessarily the framers of the law had some 
 special cases in view in making this provision. Rather 
 would the inference be that the legislative power, mindful 
 of the contingencies that so frequently occur, not contem- 
 plated at the time a law is enacted, attempted to provide a 
 remedy which might be resorted to in case of any particu- 
 lar exigency or emergency thereafter arising, though none 
 such was then in any definite form anticipated. The words 
 " in special cases " are practically eliminated from the act 
 by the construction sought to be applied by the railroads. 
 But they are significant rather of this legislative purpose to 
 provide against possible contingencies, than to lay down 
 any general rule of action. ' 
 
 If this Commission will take the canons of construc- 
 tion laid down in the oft-quoted and weighty words of 
 the Barons of the Exchequer in Heydon's case (3 Rep. 7), 
 there. can be but little difficulty in reaching a construction 
 which dispose? of all pending applications. 
 
 " For the sure and true interpretation of all statutes 
 " in general, be they penal or beneficial, restrictive or en- 
 " larging of the common law, four things are to be dis- 
 " cerned and considered : 
 
 I . What was the common law before the making 
 " of the act? 
 
 " 2. What was the mischief and defect against which 
 " the common law did not provide? 
 
 " 3. What remedy the Parliament hath resolved and 
 " appointed to cure the disease of the commonwealth; and, 
 " 4thly, the true reason of the remedy? 
 
 " It was then held to be the duty of the judges at all 
 " times to make such construction as should suppress the 
 " mischief and advance the remedy; putting down all sub- 
 " tie inventions and evasions for continuance of the mis- 
 
23 
 
 " chief, et pro private commodo, and adding force and life 
 " to the cure and remedy, according to the true intent of 
 " the makers of the act, /ro bono publico." 
 
 The last clause of section 4 seems to have been in- 
 serted to leave the matter of granting such authority to 
 the common carriers applying in a special case, at all times 
 within the control of the Commission, and subject, after 
 leave granted, to revocation or modification, at the dis- 
 cretion of the Commission. 
 
 In addition to the special cases suggested, others may 
 be imagined, but it is not necessary here to discuss them, 
 nor is it probable that they can all now be anticipated. 
 In the course of time cases will naturally arise where 
 special application will be made for special relief, which 
 may be fairly considered to be within the terms of this 
 provision. But it is obvious that thus far there has 
 been no application in a special case; but simply an 
 attempt to invoke a general dispensing power to be exer- 
 cised by the Commission over this fourth section, and the 
 third as well, which would be destructive of the purpose 
 and object of the law. It would, thei'efore, seem to- be 
 absolutely necessary for the Commission to deny all 
 pending applications thus far made without prejudging" 
 any that may hereafter be submitted, and to give the law 
 a fair trial before ;acting on the theory of its injurious and 
 destructive character. It is exceedingly difficult to fore- 
 cast the future, and the alarming prognostications of rail- 
 road managers as to the effect that this statute will have 
 upon their interests and the country at large are to be 
 received with great caution. 
 
 It is within the memory of all that when regulative 
 legislation against railroads in various States was attempted 
 some years ago, the railroads were loud in their declaration 
 of the utter financial ruin and bankruptcy which must 
 necessarily follow in the train of these enactments; and the 
 writer distinctly remembers when Judge Davis, of the 
 
24 
 
 Supreme Court of the United States, in the case of Peck 
 V. The Northwestern Raliway Company, heard at the 
 Circuit, decided the law of one of the Western States, 
 regulating the charges of railroad companies within that 
 State, to be constitutional, that a distinguished lawyer and 
 statesman, since deceased, arose arid addressed the court, 
 and with evidence of great feeling and sincerity announced 
 that the two great corporations for whom he then 
 appeared would be absolutely ruined and bankrupted by 
 the enforcement of that law. The law was enforced until 
 repealed, and the unfortunate clients for whom the learned 
 counsel's sympathies were so warmly enlisted have con- 
 tinued to grow and increase until to-day they are the two 
 largest railroads in the world, and their prosperity was 
 never more firmly established than at the present moment. 
 It has not escaped the attention of this Commission, 
 as well as that of the general public, that there has not thus 
 far been any effort made in good faith by the railroads 
 generall)' to obey this law, and there is a moral question 
 involved here that cannot be entirely ignored. If this 
 Commission possessed all the power which the railroads 
 attributed to it, it would still be a grave question as to 
 whether there was any |jropriety in an attempt to exercise 
 it at the present time. There is a deep-seated conviction— 
 whether well or ill-founded it matters not — that the rail- 
 roads propose to antagonize and resist any law which may 
 be enacted for their regulation. They have, in defiance 
 of law, as is known, for many years maintained pooling 
 agreements and arrangements, openly and ostentatiously. 
 It is alleged that they have corrupted legislation; that they 
 have subsidized boards of aldermen in cities, and that they 
 have tampered with the administration of justice in the 
 courts, in the effort to thwart and pervert the law. Cer- 
 tain it is, that in our great cities they enjoy franchises 
 which have cost them nothing, except what may have been 
 expended in the endeavor to persuade public servants to 
 
25 
 
 betray their trusts, adequate compensation for which to 
 the municipality would be nearly, if not quite, sufficient to 
 .pay all the expenses of municipal government. 
 
 It would be a salutary spectacle for the American 
 people to see the railroads of this country obeying the 
 law in the same spirit with which they insist that it shall 
 be obeyed whenever their rights are threatened or assailed; 
 and while questions of law, rather than political questions, 
 are here involved, this tribunal, in the exercise of its discre- 
 tionary power, may well consider whether it is not more truly 
 serving the purpose of its creation in insisting upon a strict 
 compliance with the law by the corporations which it was 
 established to regulate and control, than it would be by 
 any latitudinarian construction in impairing and nullifying 
 the very objects which the framers of the law had in view, 
 and which may properly be presumed to have been in the 
 legislative mind in its enactment. 
 
 All that is said and can truly be said in favor of the 
 service performed by railroads, is aside from the question. 
 The people demand, and they have a right to demand, 
 that railroads shall be faithful servants, and not good 
 masters. 
 
 This argument is submitted on behalf of a corporate 
 political organization, which has no pecuniary interest in 
 this question, nor any end to serve further than to aid this 
 Commission in reaching a sound, and salutary construction 
 of this act. 
 
 It did not seem wholly improper where there was no 
 one appointed or provided for to appear against these 
 applications, that such a body should ask to be 
 heard against them. The law provides that any 
 " body politic " may complain to the Commission, and that 
 no complaint shall, at any time, be dismissed because of 
 absence of direct damage to the complainant. (Section 13.) 
 If this be the law, it would seem fitting for any body poli- 
 tic, without being in danger of any direct damage from 
 
26 
 
 the ruling of the Commission, upon the complaint or appli- 
 cation of another, to be permitted, in the discretion of the 
 commission, to appear and be heard upon the propriety of 
 allowing such complaint or application. There is no pro- 
 vision in the law providing anyone to oppose the applica- 
 tion of carriers under section 4, and yet it would seem 
 desirable that within reasonable bounds there should be 
 opportunity afforded to do so-. 
 
 It is also provided that the Commission may institute 
 inquiry into matters sought to be regulated by the act; 
 and in section 17, that the Commission may conduct its 
 proceedings in a manner such as will best conduce to dis- 
 patch and the ends of justice. Section 21 also requires. 
 the Commission to file an annual report, and to recom- 
 mend legislation; and section 19 provides for . sessions in 
 any part of the United States where the interest of the 
 parties or public may require. It would thus appear that 
 this subject is regarded as one of public concern, and it is 
 hoped that it may not be deemed wholly unwarranted for 
 the organization which this committee represents, under 
 the circumstances, to address this Commission. 
 
 This argument has been prepared amid the engross- 
 ing cares of active, professional and commercial avoca- 
 tions; None are more conscious of its imperfections and 
 shortcomings- than this committee. But such as it is, it 
 is submitted in the sincere conviction that the principles 
 here sought to be maintained are such as should not be 
 lost sight of in the decision of the questions now pending 
 before this Commission. 
 
 Respectfully submitted, 
 
 S. S, Gregory, 
 Erskine M. Phelps, 
 James A. Miner, 
 George J. Brine, 
 C. L. Bonney, 
 
 Committee. 
 
IN RE; 
 
 -THE- 
 
 WATER TRANSPORTATION INTERESTS, 
 
 ARGUMENT' SUBMITTED 
 
 IN OPPOSITION TO THE SUSPENSION OF SECTION 4, OF THE 
 INTERSTATE COMMERCE LAW. 
 
 In presenting this review of the investigation had 
 by you, and ouTr argument upon the same, it may be 
 well, perhaps, first to explain some facts not fully 
 appreciated. When railroads were built because of 
 their need, and to sections not parallel with water 
 courses, and before the day of pools, combines and 
 syndicates, the competition between river and rail 
 was legitimate, and the stronger of the two was never 
 in a position to crush the weaker. In those days 
 rates were equitable and non -discriminative, and it 
 was not for one community to prosper, under ill-con- 
 ditioned circumstances, at the cost of other communi- 
 ties, nor was it the custom to favor one individual, 
 firm, corporation or locality as against another. In 
 
those days the steamboat, prospered ; but now, under 
 the new dispensation, the system of pools, combines 
 and syndicates, all is changed. Placed in a position 
 almost greater than the law itself, rich from the treas- 
 ure giren by a generous and indulgent people and 
 government, arrogant from self-importance, strong 
 through combinations, greedy and grasping to an ex- 
 treme, and believing that all rights, privileges and in- 
 terests are not so great as their own, or else must be , 
 made subordinate thereto, the railroads have been en- 
 abled to slowly but surely dispossess the river of its 
 prosperity, and the steamboat interest now languishes. 
 In the day of its life and hope, the owners and em- 
 ployees of the steamboat were great in number, 
 strong in organization, and their voice was heard. 
 Now that they are so nearly within the grasp of their 
 all-powerful enemy, they are without organization al- 
 most, few in numbers, and their voice is weak. The 
 railroad, whose system and perfectness of organiza- 
 tion — offensive and defensive — is the wonder of all, 
 
 4 
 
 have been able successfully to use the power of its in- 
 fluence against all who are not for it, or of it, and the 
 subtlety and extent of that influence, it has been in- 
 sinuated, reached even to the interstate commerce act 
 itself. Disheartened and weakened from the contest 
 so long waged against that influence, finding from ex- 
 perience that it was a struggle of might more than of 
 right, without means and without organization, witl\- 
 out hope, and of the opinion, in common with others, 
 that the haste and unanimity in which the force arid 
 application of the law had been arrested, precluded 
 their cause almost frOm even a passing consideration, 
 
the steamboatnieii at first concluded to take no part 
 in the investigation, but as the railroad developed its 
 case, and true to past history, sought to distract at- 
 tention, confuse and mislead the public mind, to mis- 
 represent the steamboat, and hold it as a menace to 
 those who were wavering, and besides, just a little 
 encouraged by j^our invitation to appear, the steam- 
 boatmen, unprepared as they were, have taken a part 
 in this investigation. 
 
 At this point it will be proper to again call the at- 
 tention of the Commission to the actual relations as 
 they exist between the steamboat and the railroad, 
 it may be said that the part taken is not entirely dis- 
 interested ; we acknowledge this, and briefly our po- 
 sition may be stated. In aid of the railroad lands , 
 have been expropriated, moneys voted, rights of way 
 granted, blocks of land donated for business purposes, 
 passage along and through river front and steamboat 
 wharves allowed. 
 
 The rivers are free to the steamboat, it is true, but 
 the government in preserving the navigation of these 
 rivers has not done all that was desired, and the fail- 
 ure in which contributes largely to the prevailing 
 high rates of insurance, and the costs, delays and 
 hazards of navigation to an extent equaled only by 
 the liked increased risks and delays occasioned by the 
 numerous railroad bridge^ being built across the 
 navigable highways. The statutes teem with enact- 
 ments as hurtful and restrictive in character as it 
 affects the build and management of a steamboat, as 
 otherwise they are beneficial and indulgent to the 
 railroad. The steamboat pays the same tax as the 
 
railroad, but has besides to pay wharfage taxes, the 
 railroad in itself is a close, rich and powerful corpo- 
 ration, while the steamboat is representative only of 
 individual capital, and is held to accountabilities not 
 attempted in general against a railroad. These are 
 some of the conditions that make the railroad the 
 stronger and the steamboat the weaker of the two, 
 and these inequalities have been as detrimental to 
 the one as beneficial to the other. The steamboatmen 
 felt that while from causes beyond their control the 
 condition were against them, and against which they 
 have been contending with becoming grace, they had 
 yet the right to feel exercised at the manner in which 
 the railroad used its advantages against them, design- 
 edly >vith the purpose of piling up burdens and driving 
 them from the field. Therefore, when Congress 
 passed a law that dispossessed the railroad of that 
 portion of its power, which had been so illy used, and 
 made it impossible to practice longer its peculiar 
 methods of pulling down or building up at will, they 
 believed that favors should no longer be shown, and 
 that the law should be enforced as impartially against 
 it as the law had been enforced against the steamboat.. 
 The steamboatmen recognize, and are free to ac- 
 knowledge all that has been accomplished through 
 the development of the railroad^ they appreciate its 
 value and good, its necessity, popularity and need of 
 fostering care, but the steamboat as well has quali- 
 ties that must not be overlooked ; it has, and may 
 continue yet to play a useful part. The government, 
 States, communities and individuals have prospered 
 through the steamboat, it was the steamboatmen, the. 
 
owners, the masters, the crews of the water-craft on 
 our rivers, lakes and seaboard — ^the first agencies in 
 the transportation and more rapid transit of passen- 
 gers and products, mails and treasure, along the great 
 water courses and inland seas of our country, whose 
 efforts and capital, enterprise and ingenuity, unaided 
 by gorernmental subsidies, laid the foundations of 
 the great cities on the Mississippi river and its con- 
 fluents, and on the borders of the great lakes and sea 
 coast, and developed the commerce of sections hitherto 
 inaccessible. 
 
 The people have in the steamboat a certain and in- 
 dispensable factor in the obtaining of and regulating 
 cheap rates of transportation. The steamboat is also 
 a value and good, a necessity and quality of popu- 
 larity, and by the same token, needful of, and entitled 
 to a fostering care, and if the decision of the Com- 
 mission shall be in favor of the railroad, and adverse 
 to the interests of the steamboat, we will yet hope, 
 for we know that our cause is the cause of the peo- 
 ple, and that justice will prevail, therefore are we 
 justified in urging this before you even though our 
 motives be those of self-interest. 
 
 All this admitted, however, it may still be asked 
 are we before the Commission with clean hands. If 
 the steamboat can carry so cheaply why should it 
 complain because of the railroads underbidding for 
 business, and does rnftt-the steamboat itself discrimi- 
 nate in rates ? The radical difference between a rail- 
 road and a steamboat is that the one can suppress or 
 neutralize competition, the other cannot ; besides the 
 railroad, the steamboat has rivalries among its own 
 
to contend with. As a rule steamboats are owned by 
 individuals, not corporations or syndicates, the aver- 
 age steamboatman is a free lance, who brooks not re- 
 straint ; where one fails another is ready always to 
 fill his place. When he believes that another else- 
 where is doing better than himself, he forthwith packs 
 up, so to speak, and goes for that other fellow. This 
 is their history, and safe to say, always will be. 
 There is an ever-present competition 'on rivers that 
 keeps the rates at a minimum. Take the cotton 
 trade of the lower Mississippi, for instance, running to 
 and from points of shipment, there is the St. Louis and 
 ^ew Orleans Anchor Line, the St. Louis and Missis- 
 sippi Valley (barge) Line, the Ohas. P. Chouteau- 
 Helena Line, the Southern Transportation (Ohio 
 River) Line, the Memphis and Yicksburg Packet 
 Company, the Oreenville, Yicksburg and N"ew Or- 
 leans packets, and numerous other steamboats run- 
 ning between local points. These interests, all sep- 
 arate and distinct from the other, and antagonistic, 
 provoke a most active competition, that stands as 
 a bar to maximum rates, but though they do have 
 to carry cheap cotton, never yet have they been found 
 in the position of the railroad, which, as quoted by 
 Milton H. Smith, in his statement made before you : 
 
 " Can transport traflBc and yield a profit at a rate that is less 
 than the averasre cost," ' in \':i 
 
 because their losses are irBo ^ ftooi b ic .^ Por example, 
 according to statements made before you, the rail- 
 road takes cotton at 65 cents a bale from Memphis, 
 at $2 25 from Shaws's Station (non-competitive), 
 and 50 cents from Yicksburg, an average of say 
 
f 1 13 per bale. ]N'ow, to compete, and deducting the 
 difference in insurance, the steamboat must take this 
 cotton at 45 cents from Memphis, and 25 cents from 
 Vicksburg, which with the maximum rate of f 1 00 
 from non-competitive points, gives her an average of 
 55 cents, as against $1 13. 
 
 Tliis is why the steamboat can prevail no longer 
 against the railroad, and it was that this advantage 
 might by them be retained which moved Mr. Henry 
 Pink to declare before you in Washington, that : 
 
 "If they (the railioad) put up the through rates to ii level 
 with the local rates, they would lose their trafiftc, and that 
 means bankruptcy. If they put down local rates, they could 
 never get them ba^ k, and that, too, meant bankruptcy. 
 
 Though the same be impossible with the steaiu- 
 boat, the railroad must be allowed to recoup its losses 
 in order to meet water competition, and under a sys- 
 tem by which communities have suifered, but against 
 the continuance of which the people have for years 
 vainly protested, which protests have been renewed 
 before the Commission in Washington, Atlanta, Mo- 
 bile, l^ew Orleans arid Memphis, backed by data and 
 proofs, which if examined carefully, would in itself 
 show cause sufficient for the lav's enforcement, and 
 at the 'same time prove the ruling motive to be 
 not any more to attract patronage, develop trade, or 
 to meet competition than to cripple the steamboats 
 and monopolize traflB^c, very much after the manner 
 which Mr. Pattersfija, of the Memphis Exchange, put 
 put it, when he stated that of the cotton handled by 
 Miemphis, not over one-fourth was received, and less 
 than one-fourth shipped by river. 
 
 We believe that the statements heard by you in 
 
¥ew Orleans, Hud at Memphis in partioiilar, is suffi- 
 (dent at least, to show that the very existance of 
 transportation by steamboat, as well as the best inter- 
 ests of the entire country will depend upon, and be 
 the best subserred by the enforcement of the pro- 
 visions of the section which has been temporarily 
 suspended. A thoughtful and imj)artial review of 
 the statements made before you at Memphis will 
 prove this, and the whole of the testimony will show, 
 after all, that it is not a question of competition as 
 ibetween water and rail, but the fact of a more pow- 
 erful and favored rival crushing the other out of ex- 
 istence the more surely and profitably to enjoy the 
 monopoly of traffic. How ! N^ot because of superior 
 advantages, better facilities, lessening of time, short- 
 ening of distances, or like causes ; not because the 
 railroad is the cheaper means of transit, for it is not, 
 and was so acknowledged in Washington by Mr. 
 Milton H. Smith, counsel for the Southern Railroad 
 and Steamship Association, when he said in argu- 
 ment : 
 
 ■' The railroad coinpauy would prefer uot to make the lower 
 charge for the long haul, but to assess the people along the line 
 of the road ratably, according to the distance which freight is 
 carried; but this is rendered impossible by the very nature of 
 the case when railroads compete with water routes, because of 
 the cheaper cost of transportation by water thau by rail." 
 
 It is not, therefore, a question, we say, of the "stir- 
 vival of the fittest," but it is a question of whether 
 you, in your conclusions, shall say, " we see tk^ injus- 
 tice in all this ; the railroads and those who live upon 
 its favor, must receive the liberal though strained 
 
ctnistruction of the law, even though other interests 
 and sections do suffer and have protested. 
 
 At a meeting of railroad magnates and counsel, 
 reported to have been held just after the passage of 
 this act, and at the time when it was popularly sup- 
 posed the law itself would be first applied and relief 
 under it given after. It was promised that the act would 
 be given a trial, and that time and the public should 
 be the judges as to its wisdom, how that trial was 
 made, and time and the public given the oppor- 
 tunity to judge of its wisdom, is best shown in the 
 following declaration made by the Atlanta Chamber 
 of Commerce, filed before you, and which reads : 
 
 " We will say that under the construction placed upon this 
 clause of the law by the railroads operating in this territory, 
 and the ruinous change in freight rates which they appeared to 
 believe the law required, we unanimously favor the permanent 
 suspension of the fourth section." 
 
 " It is, perhaps, not out of place to add that the Atlanta 
 Ohamber of Commerce has always favored the enactment of the 
 interstate commerce law, and construing the law now, as we be- 
 lieve to fee its true intention, we feel that it cau be made bene- 
 iicial to both the railroads and the people. But in the (as we 
 believe) strained interpretation by the railroad companies of the 
 fourth section of the law, applying it alike to the large railway 
 centres, trade distributing points, and all the small local sta- 
 tions aqd water tanks throughout the laud, is au interpretation, 
 in our opinion, not contemplated by the framers of the law, nor 
 even permitted by the law itself." 
 
 Encouraged by your indulgence, and the time al- 
 lowed, they have lowered through or competitive 
 rates, raised local or non-competitive rates, and other- 
 wise disturbed the relations of trade, so that when 
 your committee came to hear, the people would be in 
 
10 
 
 the condition to say, rather than all of this give us 
 back what we had. 
 
 The masterly and largely successful manner in 
 whicli it has been attempted to make the act obnox- 
 ious, and to bring about this demonstration in favor 
 of the permanent suspension of the fourth section is 
 clearly shown all through the Memphis testimony, 
 and in the very nature of many of the petitions there 
 presented. Many of the Memphis witnesses testified 
 in effect that they could only do business with far- 
 distant competitive points so long as they obtained 
 the rates prevailing at localities nearer situated to 
 those points, and to whom such trade legitimately 
 belonged. Others said that owing to the refusal of the 
 railroad under this law to give them a special rate they 
 were losing business and money. ]^ow, it is hard to 
 believe that the Commission will give serious thought 
 to such testimony, or that such unnatural conditions 
 shall be possessed of influence. We do not believe 
 that you will rule that communities to whom trade 
 legitimately belongs shall be disposseissed of it be- 
 cause a railroad so wills, or to favor communities 
 less fortunately situated. In other words, and to 
 quote from a memorial from the Merchants' Ex- 
 change 6f St. Louis to the State Legislature : 
 
 "We do not deprecate reasonable competition, bnt we do 
 raaiiitaiti that any system of transportation that thus taxes home 
 industry to destruction for the benefit of far-off competition is 
 unwise, unjust and not to be endured. Applying this view to 
 our owMi State and city, we claim that with comimlsory equita- 
 ble rates to and from all parts of the State, developing the local 
 traflflc of the roads and the communities, the wealth aud pros- 
 perity of the State will increase, and the city will be thereby 
 
more beuelited tlinu under au.y scliediile of freights discriminat- 
 i I iji ill her favor. * * * We claim the protection of 
 iiiir geographical position, and that the enforcement of the long 
 and short haul clause will give us the first chance to control the 
 trade of our own territorj'. This would prevent distant localities , 
 from damping their surplus manufactures on us, and we have 
 nothing to gain by returning the compliment. On the equitable 
 adjustment of rates under the absolute prohibition of greater 
 rates for a shorter haul, we can and will do more business and 
 at better profit through better control of rapidly developing 
 country near home, and the same will be- true of other trade cen 
 tres that have any natural and cultivated advantages. Pointg 
 that have been boonjed and can only be maintained by discrim- 
 ination will, of course, suffer until they learn that the local trade 
 fairly within the limits of their control must sufSce. Railroads 
 have no charter to build up one point at the expense of many 
 others. They have done this, and will continue to do it unless ' 
 the law prohibits it." 
 
 Or, as stated more briefly, by the Association of 
 Warehouse and Cotton Commission Merchants of 
 Atlanta in their protest made before you : 
 
 " That no custom should be permitted to divert the trade to 
 other sections from its legitimate channels." 
 
 It was attempted at Kew Orleans and Memphis to 
 make much out of the advance claimed to have been 
 made in river rates, ^ow, as generally understood, 
 the interstate commerce act is to regulate interstate 
 commerce, and not to deal in detail with freights or 
 traffic ; nor does section 4 deal with rates of freight 
 except in the gross, or in so far as they may be made 
 the means of discrimination, and just what was 
 sought in bringing out the fact of an advance in river 
 rates is hard to guess, unless, indeed, it be a cunning 
 device to mislead and deceive, or to justify the rail- 
 road in its advance in rates already made or in con- 
 
12 
 
 templation, like, perhaps, unto the following circum- 
 stance : Anticipating your coming, charging the 
 steamboatmen with having jumped up their rates on 
 the first opportunity, and either with the intention of 
 entrapping the steamboatmen, or the desire to still fur- 
 ther bring the law into disfavor, but at the same time 
 with an eye to the gain involved. Several of the 
 large roads terminating at New Orleans thought it a 
 good plan to make a combine on rates with the 
 steamboat, and quietly they made proposals in ac- 
 cordance. How these propositions were put and met 
 we read from the following affidavit : 
 
 Affidavit— (Copy ) . 
 
 Mr. J as. H. Wright, agent of the Southern Transportation 
 Line, at Xew Orleans, being duly sworn, deposes and says, 
 that on or about the ninth day of April, 1887, he was approached 
 by the freight agents of the Illinois Central, the Mississippi 
 Valley (L., Ii|. O. and Texas Kailroad), and the Louisville and 
 Nashville Railroads, who proposed to him that he should enter 
 into a combination to increase the rate of freight from New Or- 
 leans to Memphis, the rates to be about double what they were 
 then charging ; that this was immediately reported by affiant 
 to the President of the Southeru Transportation Line at Cincin- 
 nati, Ohio, and that upon receipt of ^nswer, affiant notified said 
 freight agents that he would not enter into the proposed com- 
 bination. 
 
 Affiant further deposes and says, that on the 4th of April, 
 1887, the rate of freight on a barrel of molasses, from New Or- 
 leans to Memphis, by rail, was fifty cents; that on the 9th of 
 April, said rate was increased to equal one dollar and two cents 
 per barrel, by rail, and that, on the very next day after the re- 
 ceipt of affiant's answer declining to enter into the proposed 
 combination, the rate was reduced back to fifty cents per barrel, 
 as it was previously. 
 
 (Signed) J. H. WEIGHT, 
 
 Agent Southern Transportation Liue, 
 
 (Ohio Eiver Steamboats). 
 Sworn to and subscribed before me, the 3d day of May, 1887. 
 CHAS. J. THBARD, Notary Public. 
 
13 
 
 Now to develop the country, to open up and en- 
 courage trade, to assist struggling enterprises, to deal 
 fairly with the people, to maintain their traffic with 
 competitive points, the railroads say it must be left 
 with us to make such rates as demanded, but if this 
 cannot be, and we are to come under the law, then 
 shall others suffer besides, and in what way this affi- 
 davit clearly shows, and it may have been through 
 such like advances, though more cleverly suggested, 
 that that preponderance of testimony in favor of and 
 by the railroad, claimed to have been presented, was 
 mainly induced. 
 
 Mr. Heilman, of Evansville, Ind., who told you that 
 he was a large miller, brewer and shipper, but failed 
 at the same time to tell you that he was largely inter- 
 ested in a railroad, testified that the enforcement of 
 Section 4 would ruin his industries, that they could 
 stand no advance in competitive rates ; but he did not 
 tell you that the rate on a barrel of flour by rail from 
 Evansville to an intermediate point was 70 cents, to 
 New Orleans 32 cents, an average of 51 cents, and 
 the steamboat to get this same flour had to carry it 
 at an average of 27 cents. Yet Mr. Mitchell, a 
 railroad agent at Evansville, and who testified after 
 Mr. Heilman, said that steamboats fixed rates, and 
 to which the railroad must conform closely or lose 
 business. But even if this be true, it has also been 
 just as conclusively shown that the railroad can strike 
 a paying average all the same, further proof of which 
 we offer in a statement made by Oapt. Hamilton. 
 Says the Captain : 
 
14 
 
 (ArriDAViT.) 
 
 Otipt. James Hamilton, master of the Bra No. 10, rimniug be- 
 tween points on the Bceuf river and "Sew Orleans, being duly 
 sworn, deposes and says, that some time in June, 1886, he re- 
 ceived a bull for shipment to Grand Bay, on the line of the 
 Louisville and Nashville Railroad, via New Orleans; that he 
 received $5 freight for bringing this bull to New Orleans from 
 Eason's ferry, on Bceuf river, a distance of about 600 miles; that 
 affiant was requested to deliver the bull at the railroad depot in 
 New Orleans and prepay the freight on. same to Grand Bay; 
 that he did so, and was presented with a freight bill of delivery 
 from New Orleans to Grand Bay (about 125 miles from New Or- 
 leauM), amounting to the sum of $17.90. 
 
 Afilant fuwher deposes that on expostulating at the enormity 
 of the charge, he was told, in answer, first, that because of the 
 railroad being released from risk, as in case of death, accident 
 or escape, he was given a. half rate; and secondly, that he was 
 shipping the bull just a little too far; that if he knew any one 
 ill Scrauton — a competitive point about six miles this side of 
 Grand Bay — who would receive the bull and have it driven 
 overland to destination, he (affiant) could ship it to S(;ranton 
 for $6; but that Grand Bay being a non -competitive point, he 
 would have to pay the sum of S17.90, which freight was paid by 
 Oapt. Hamilton, the affiant. 
 
 (Signed) JAMBS HAMILTON. 
 
 Sworn to and subscribed before me at New Orleans, this 13th 
 day of May, 1887. Chas. J. Theabd, 
 
 Notary Public. 
 
 To have the law so construed as ' to continue them 
 in such a position as this, is explanation sufficient of 
 the extraordinary efforts being put forth, to make a 
 case before the Commission. 
 
 In Washington Mr. Milton H. Smith said before 
 you : 
 
 ■ " I think we can all agree that the act to regulate commerce 
 was not intended to, and will not, necessarily, increase trans- 
 portation charges," 
 
15 
 
 Yet much of the testimony taken before you, par- 
 ticularly at Memphis, was to the effect that the 
 charges for transportation h-ed been increased not- 
 withstanding. W. T. Boardman, who resides on the 
 line of the Louisville and Kashville road, of which 
 Mr. Smith is a prominent representative, testifies : 
 
 (Affidavit.) 
 
 William T. Boardman, being duly sworn, deposes ami say.s, 
 that he resides at Bay St. Louis, in the State of Mississippi, on 
 the line of the Louisville and Nashville Railroad, about 52 miles 
 from the city of New Orleans, State of Louisiana; that before 
 the act of Congress known as the Interstate Commerce Law ws^s 
 adopted and went into effect, the rate of freight charged by said 
 railroad from New Orleans to Bay St. Louis was 10 cents per 
 100, as shown by the bill attached and made part of this affida. 
 tit; but that since the adoption of said law, said rate of freight 
 has been increased from 10 cents to 35 cents per hundred, as 
 sli^own by the oth^r bill attached to and made part of this affi- 
 davit. 
 
 W. T. BOAliDMAN. 
 
 Sworn to and subscribed before me, at New Orleans, La., this 
 12th day of May, 1887. Ohas. J. Theaed, 
 
 , Notary Public. 
 
 Perhaps it was through such means as this and 
 already suggested that some were induced to sign 
 the maily petitions presented through the railroad at 
 Memphis, they, in the words of one of the Oolnfliis- 
 sion, "preferring the ills that were, to others they 
 knew not of." 
 
 Therefore the railroad and many of its favored pat- 
 rons have urged you to make permanent the suspension 
 of section 4, and from the first have claimed thiat such 
 woTild be your conclusion. They say the evidence in 
 support of their petition preponderates, and there- 
 
fore you cannot but grant their prayer ; they want 
 you to practically nullify a law ; they want authority 
 from } ()u to do that which Congress by a very decis- 
 iye vote has forbidden them to do ; they are pressing 
 upon you such a construction of one section as will 
 practically repeal the law, in preference to that sound 
 legal construction which will make each section con- 
 sistent with every other, and give effect to the act as 
 an entirety. 
 
 They know that section 3 of the act renders impos- 
 sible in law and logic the interpretation assumed by 
 them of the words "under substantially similar circum- 
 stances" contained in section 4, but they want all the 
 same to be continued in the right to discriminate, even 
 though discrimination be expressly forbidden. They 
 want you to ignore the truth as expressed in the pro- 
 test filed before you in 'New Orleans by the Louisiana 
 State Agricultural Society that : 
 
 " The principle of equity iu railroa'd charges for trausporta- 
 tion, under like conditions established by law, is equitable and 
 just, and should be rigidly enforced in the manner and form in- 
 dicated by Congress; and that the power to saspend the opera- 
 tion of the law should be exercised only in special cases and for 
 motives affecting public and not private interests." 
 
 And they would have you set aside the fact urged 
 also by that association : 
 
 " That the special cases referred to in said fourth section of 
 the Interstate Commerce Act do not embrace competition by 
 waterways, which is a general cause operating by reason of nat- 
 ural laws of commerce and not from any special circumstances 
 requiring investigation, but the special cases referred to in said 
 act are those lequiring investigation, and arising from except 
 ional causes affecting public interests and having no relation to 
 the question whether railroad corporations can or cannot make 
 money in competition with water routes." 
 
17 
 
 I^ow we would have you rule instead that the inter- 
 ests of others than the railroad and its favored patrons 
 require a fair and impartial treatment of persons and 
 localities ; that to each community should be allowed 
 such advantages as the undisturbed laws of commerce 
 bring them, and that all discriminating and uneqiTal 
 rates obstruct the natural laws of trade and are inju- 
 rious to the permanent welfare of the country, and 
 that the effort to bring freight under like conditions 
 from a distant point at cheaper rates than from a 
 nearer point is to defy the laws of nature and to cre- 
 ate wealth in favored and poverty in unfavored 
 localities. 
 
 Therefore, these premises considered, we ask that 
 you reverse the action had by you in suspending sec- 
 tion 4 of the act, or until such a time as the effect of 
 the enforcement of the act in its entirety shall demon- 
 strate the wisdom of the law, and the course to be 
 
 pursued. 
 
 Respectfully submitted, 
 
 ^BW ORLEAifs, May 14, 1887. 
 
 ^'^^/^■^^^^^^ 
 
To the Meiiihers of the 
 
 Inter-State Commerce Commission. 
 
 I assume that it was not the intention of Congress, in passing 
 the Inter-State Oommerce law, to wreck weak, struggling, local 
 railroads, nor to compel them to abandon through freight unless 
 they would consent to local rates so low as to be ruinous. I assume, 
 also, that it was not the intention to prevent'the successfur appli- 
 cation to the carrying trade, of just and well-established business 
 principles- nor to revolutionize fai'iiequitable and long-practiced 
 business methods ; nor to take away the benefitsjof-eompetition in 
 transportation which cities and communities have struggled for 
 years at great expense to secure; nor to destroy the prosperity of 
 commercial centers, that is due to their geographical position, 
 combined with the enterprise and liberality of their inhabitants. 
 I assume, with equal confidence, that you, as the interpreters and 
 administrators of this law, do not desire that these results shall 
 follow in the wake of your administration. And yet, it cannot 
 have escaped your notice that widespread apprehension already 
 exists, and that vigorous efforts are already directed to warding off 
 these unintended but no less disastrous consequences of a rigid 
 enforcement of section four of said bill. 
 
 Under existing circumstances, all applications to your Board, 
 for the present, must largely be gropings in the dark. I have the 
 honor to represent the Terre Haute k Peoria Railroad, and the 
 Board of Trade of the City of Peoria. Should you decide that 
 through freight shipped from points liaving railroad and water 
 competition, or having railroad competition only, is not shipped 
 under "substantially similar circumstances and conditions" as 
 freight shipped from points having no competition, then the " long 
 and short haul " clause of Section Four, would not affect the Terre 
 Haute & Peoria Eailroad nor the City of Peoria, and in such case, 
 neither would have any relief to ask, for in such case neither 
 would be obstructed by the law in the prosecution of its business. 
 
But if it should be held that the words "similar circumstances 
 and conditions " do not refer to circumstances and conditions of 
 competition, but refer to other facts and environments, then the 
 Terre Haute & Peoria Eailroad will be, by the enforcement of the 
 long and short haul clause of Section Four, seriously hindered in 
 the prosecution of its legitimate business, and prays to be excepted 
 from this clause. The grain trade of the City of Peoria depends 
 upon the unrestricted operation and free competition of the roads 
 carrying its east-bound freight. The Peoria Board of Trade 
 therefore unites with the Terre Haute, and all other railroads lead- 
 ing eastward from Peoria, that ask to be excepted, in praying that 
 their petition may be granted. The grounds upon which this 
 prayer is made are briefly as follows: 
 
 The grain raising section of this country is of such vast extent 
 that in order to market the crops in an economical and satisfac- 
 tory manner, it has been found necessary to have points of accu- 
 mulation and distribution. These have developed with the settle- 
 ment of the country and have been located by the force of natural 
 causes. They are nearly all situated on a navigable body of water, 
 they have ample railroad communications, and are terminal points. 
 As they grow, other agencies and instrumentalities become neces- 
 sary for the transaction of the business of receiving and distrib- 
 uting, and these agencies are supplied. Such are ample elevators 
 and warehouses for storing grain, authorized to issue warehouse 
 receipts, upon which money is advanced by the banks and which 
 are recognized by the courts as part of the commercial paper of 
 the country. Such are, also, business organizations known as 
 Boards of Trade, whose functions are to gather together the daily 
 quotations of other markets, to send their own abroad, to provide 
 a suitable building for holding daily sessions, to establish grades 
 of grain and appoint ofiicials to do the grading, to seek out mar- 
 kets where shipments may be made, to adopt rules for the govern- 
 ment of business, and to select committees under the authority of 
 the state to hear and adjust such differences as may be referred to 
 them. 
 
 At an early day natural causes made Peoria one of these cen- 
 ters of reception and distribution. Before the era of railroads 
 grain was hauled to this point from long distances and shipped by 
 water to distant markets. The same causes made it an important 
 
railroad center. Twelve railroads already radiate from it, while 
 others are in process of building and will enter the city during the 
 present year. But one of these passes through it; to the others it 
 is a terminal point. It is on the shostest line of railway carriage 
 for the productions of Southern Iowa and Nebraska, for Northern 
 Kansas and Missouri, and for Central Illinois. For the cereals 
 coming eastward from this wide section, by way of Peoria, it is as 
 much a terminal point as are St. Louis and Chicago for grain 
 coming eastward through these cities. The demands of business 
 h^ required the erection of warehouses and elevators, and it has 
 these with a storage capacity of 2,500,000 bushels. It has a per- 
 manent Board of Trade, with a membership of one hundred and 
 twenty members, which has been in successful and continuous 
 operation for seventeen years. It has water communication by 
 way of the Illinois and Mississippi Elvers to the South and West, 
 and by way of the Illinois River and the Illinois and Michigan 
 Canal to the great lakes to the East. It has an established barge 
 line for the transportation of grain by the river and canal, which 
 affords direct water competition with the railroads to eastern mar- 
 kets. Measured by the amount of grain shipped East by rail, it 
 ranks next to Chicago among western cities. The statistics of 
 grain carried eastward by rail from the four largest shipping 
 
 points for the last ten years are as follows: 
 
 Bushels. 
 
 From Chicago 509,500,463 
 
 " Peoria 162,403,800 
 
 " St. Louis 96,829,406 
 
 " Milwaukee 62,999,486 
 
 Corn, oats and rye are the principal cereals handled at Peoria. 
 The following table shows the receipts and shipments in bushels 
 by water and rail, of these grains, for the year 1886, at the eight 
 leading grain centers of the West: 
 
 Receipts. Shipments. 
 
 Chicago 103,792,850 89,358,230 
 
 St. Louis 24,261,830 14,950,935 
 
 Peoria 19,137,230 15,217,590 
 
 Toledo 14,805,190 13,937,590 
 
 Kansas City 6,652,970 4,544,943 ' 
 
 Milwaukee 3,013,940 594,760 
 
 Cincinnati ...... 10,192,540 5,473,680 
 
 Detroit 4,588,280 3,365,708 
 
— •4 
 
 The following table shows the movement of oats alone at Peoria 
 
 for the year 1886: 
 
 Receipts. Shipments. 
 
 Chicago : ; . . . . .39,976,315 32,]64,200 
 
 Peoria 13,182,670 11,729,205 
 
 St. Louis 7,426,915 2,764,922 
 
 Cincinnati 4,066,131 2,563,413 
 
 Milwaukee 2,073,000 388,361 
 
 Toledo ; ,. 1,966,915 1,764,088 
 
 Detroit '.". 1,893,206 1,121,298 
 
 Kansas City 1,646,536 909,489 
 
 It will be seen that, leaving out Chicago, Peoria shipped more 
 oats than all of the above named markets combined. 
 
 In addition to these shipments of grain, there are immense 
 shipments of the products of grain. Peoria is the greatest distill- 
 ing center in the world. For the last fiscal year there was paid 
 into the United States treasury by the collector of internal reve- 
 nue at Peoria, over thirteen millions of dollars, being a larger 
 sum than was paid as a tax upon distilled spirits by any other col- 
 lection district in the United States. Her mills, starch factories, 
 glucose works and distilleries have a manufacturing capacity of 
 over 50,000, bushels of grain a day. Their products mainly seek 
 eastern markets by railroad transportation. 
 
 There is one other feature of the grain business at Peoria that 
 should not be overlooked. It is in fact peculiar to this market. 
 It is not an option market. Its sales are legitimate and bona fde. 
 Grain is bought and sold both by grade and by sample. In option 
 markets deals are bj' grade alone. This peculiarity has made 
 Peoria the great distributing point for the interior grain trade of 
 the United States. Chicago ships more grain to the seaboard for 
 export than Peoria. But Peoria ships more grain to the interior 
 markets of New England and the Eastern States than Chicago. 
 This results largely from the fact that purchases can be made at 
 Peoria by sample instead of by grade. Take corn for instance. 
 Grade No. 2 Mixed may be two-thirds white and one-third yellow. 
 This would suit the Southern trade, where white corn has the 
 preference. But Grade No. 2 Mixed may also be two-thirds yellow 
 and one-third white. This would not suit the Southern trade, but 
 would suit the New England, where they prefer the yellow to the 
 white. Now customers in these markets, ordering from a dis - 
 
tributing point where sales are made by grades alone, can never 
 tell whether their orders will be filled with a mixed corn where 
 white predominates or with a mixed corn where yellow predomi- 
 nates. They prefer then a distributing point where they can buy 
 by sample, and know exactly what they are buying. The same 
 advantage accrues to. sellers. They get the advantage in selling 
 by sample, of receiving what their grain is intrinsically worth, and 
 of doing business, through a receiving and distributing point that 
 meets by sample the exact wants of purchasers, and thereby is 
 enabled to pay a fraction more for the exact grain that will fill 
 these wants. 
 
 There is more in this peculiarity of the Peoria grain market 
 than may be apparent to you at first mention. It has become a 
 part of the established methods of business between interior pur- 
 chasing points from Maine to New Orleans, and Peoria, the chief 
 distributing center for these points. A radical change in transac- 
 tions, that will drive the local roads at either end of the line out 
 of the through carrying trade, and limit them to local business 
 alone, will take away the power of Peoria and of Peoria roads to 
 continue this traffic. It will bring delay into inter-state commerce 
 where there is now despatch, and confusion where there is now 
 simplicity. It will disorganize and overturn a business that has 
 been developed into hundreds of millions, by the survival of 
 methods that have stood the test of experience, and substitute for 
 them an arbitrary decretal, unyielding, perplexing, destructive, and 
 revolutionary. 
 
 These are the facts then, in brief, in reference to Peoria as a 
 receiving and distributing point. Railways have sought connec- 
 tion with her in view of these facts. The competition created by 
 the building of these roads in both bringing grain to her market 
 and in carrying it thence to other markets on the seaboard and in 
 the Eastern and New England States, has been to the benefit of 
 the producer, the consumer, the shipper, and the carrier. It has 
 brought producers and consumers closer together to the mutual 
 advantage of each. It has furnished agencies, and instrumentali- 
 ties, that have sought customers and found markets that would not 
 have been discovered by local dealers at non-competitive points. 
 It has furnished to the railroads carrying east-bound freight, a 
 large and stable amount of business, with the best modern facili- 
 
— 6 — 
 
 ties for handling, on account of which they have been able to take 
 and carry it, at a much less cost, than when the volame is small, 
 the supply irregular, and the expense of loading and unloading 
 greater. 
 
 The railroads east desire to continue to carry through freight. 
 The City of Peoria desires to retain the advantages of competition 
 by and between all of these roads. It is the life of her business, 
 and the cause of its own wonderful growth. But this competition 
 cannot be retained if the "long' and short haul" provision is 
 applied to her east-bound freights. ^A tariff of through rates has 
 been agreed upon by the trunk lines and is now in force, making 
 25 cents a hundred the rate from Chicago. Taking the Chicago 
 rate as a basis, the rate from Peoria is made 10 per cent, higher, 
 or 27| cents. This through rate is not complained of as excessive. 
 Still it is as high as east-bound freight from Peoria will bear, with- 
 out being diverted to the water-route by way of the Illinois River 
 and Canal, or to other lines of railroad. But at this rate, 27|- per 
 hundred, the roads east cannot make a schedule of local rates that 
 will not be ruinous. They will be compelled to abandon through 
 business, or to fix rates so high that through business will seek 
 other channels, which is the same thing in effect, and to confine 
 themselves to local trafSc, The Terre Haute & Peoria Railroad is 
 one of these roads and is in this exact predicament. Every with- 
 drawal from through business lessens competition and injures not 
 only the City of Peoria, but the whole country tributary thereto. 
 
 In addition to this, an eleinent of uncertainty is introduced 
 which cannot be avoided. The . present rate from Chicago, as 
 stated before, is twenty-five cents a hundred. But it is the expe- 
 rience of years thsit as soon as lake navigation becomes a,ctive, rail 
 rates from Chicago will be lowered to meet this competition. Rail 
 rates will fall to twenty cents per hundred, perhaps much lower, 
 as they have done heretofore. A corresponding reduction always 
 follows from Peoria, because it is in water connection with 
 Chicago. The competition between water and rail that exists at 
 Chicago differs from that at Peoria in extent only, not in charac- 
 ter. The roads must meet this decline or see their through freight 
 diverted. But if, at 27i cents a hundred, local rates under section 
 four have to be reduced below existing rates, when existing rates 
 with through business combined pay no net earnings, what will be 
 
— 7 — 
 
 the condition when there is a decline from 27i to 20 cents, or even 
 ■less? With each local road the situation resolves itself into this: 
 .Whenever it pays better to do local business at local rates, rather 
 than to do both through and local business under the restrictions 
 of the Inter-State Commerce law, the through traffic will be aban- 
 doned and the local traffic retained. No one will be 'benefited 
 thereby, but many will be injured. We believe that it was to pre- 
 vent such complications, and to relieve common carriers from the 
 embarrassments that arise under such contingencies, that the 
 power of exception was vested in yeur Board. While in terms it 
 seems that the application for exception must come from the com- 
 mon carrier, the city or shipping point is as much interested as 
 the carrier, and the granting of an exception to one carrier from a 
 given point upon the grounds of water competition or for other 
 reasons alleged herein, would, in effect, be granting an exception 
 to the city or shipping point from which that carrier does business. 
 
 In this connection, I desire to call attention to the conclusions 
 to be drawn from the exhibits attached to the petition of the Terre 
 Haute & Peoria Railroad. They are: — 
 
 First. That the local rate s are fair and equitable as pro- 
 nounced by the Illinois Board of Railroad Commissioners. Hence 
 there is no demand for a reduction of these rates. 
 
 Second. The small proportion or per cent, of the total 27^ 
 per hundred allowed to the Terre Haute & Peoria Railroad for its 
 share of the haul upon through freight. 
 
 Third- That for the year 1886 at these local rates, combined 
 with the r^tes at which grain was billed through from local points 
 together with the through rates from Peoria at 27^ cents, and all 
 revenues from other sources, there were no net earnings for the 
 road. 
 
 Fourth. The approximate reduction that will follow upon the 
 basis of a 27^ through rate, if the " long and short haul "clause is 
 enforced. 
 
 It may throw more light upon the situation, both as to the 
 claims of the Terre Haute & Peoria Railroad and of the City of 
 Peoria to be excepted as before prayed, to state that all grain 
 going East from Peoria has already paid local freight rates. This 
 comes from the fact that grain seeking this market from the West 
 is billed froni local stations to Peoria. The roads entering here 
 from the West make this a terminal point. It is not then as if 
 
— 8 — 
 
 grain shipped from here had been collected by wagons or by water 
 even. The local rates paid upon grain shipped here from the 
 W est, plus the through rates ftom here to Eastern markets, 
 always have been, and always j, will be, higher than through 
 rates from local points easWard in the States that are 
 East of us. No injustice then is done to these last 
 named local points. Their relation to Peoria is the same as 
 the relation of points east of Chicago and St. Louis to these two 
 great centers. Grain comes to Peoria as a central point of distri- 
 bution the same in character as Chicago and St. Louis. When 
 Peoria loses this character, which it inevitably must if it loses the 
 power to distribute by rail eastward, billing to destination, by rea- 
 son of the roads ceasing to compete for through freight and con- 
 fining themselves to local busineiss, it becomes in turn a local sta- 
 tion, and ceases to be a receiving and distributing center. No one 
 desires this. The railroads want to continue to carry through 
 freight east from here. The producers, consiimers, and shippers 
 want them to continue to carry it. No local point loses anything 
 by its continuance. Why thenjBhould they be compelled to aban- 
 don it? The law clearly contetoplates that under such circum- 
 stances an exception to its operation may be granted by your 
 Board. It is this exception that is prayed by the Terra. 
 Haute & Peoria Railroad. Its local rates conform to the 
 state law of Illinois. There is no claim that they are unjust or 
 unreasonable. There is no claim that through rates from local 
 points east of Peoria c n its line are unjust and unreasonable. But 
 they are higher than the rates for through freight from Peoria 
 that the road must accept if it secures any share of this class of 
 traffic. Heretofore it has received its fair share of through busi- 
 ness and maintained its local rates, and yet has paid nothing to its 
 investors. It petitions for an exception under the law that will 
 allow it to continue to struggle to reach a paying basis, without 
 being compelled to relinquish a part of its already insufficient 
 revenues. 
 
 N. E. WORTHINGTON, 
 
 Al tome;/ for Terre Haute rf- Peoria Railrond. 
 
TO THE 
 
 HONORABLE COMMISSIONERS 
 
 APPiiINTEn UKDEE THE 
 
 INTER-STATE COMMERCE ACT. 
 
 Mr. Chairman and Gentlemen : 
 
 The undersigned, a Committee of the Chamber of Com- 
 merce of Danville, Va., an organization formed to promote 
 the business and prosperity of our city and country adjacent, 
 and to further tlie just purposes of trade and commerce, beg 
 to represent to your honorable body : 
 
 That Danville is a young and growing city of some twelve 
 or fifteen thousand people, situated in Pittsylvania county, 
 Virginia, and in the centre of the fine tobacco-producing 
 regions of Yirginia and North Carolina. That at the close 
 of the late war Danville had a population of less than three 
 thousand — its business had been destroyed, its people im- 
 poverished, and its adjacent country presented almost a scene 
 of desolation. 
 
 With a recuperative energy wonderful to contemplate, our 
 people commenced life anew^ and not only rebuilt their waste 
 places, but extended and enlarged their manufacturing, me- 
 chanical, and mercantile enterprises until Danville became 
 known and esteemed as one of the handsomest, best built 
 and most enterprising cities in the South. 
 
 Thousands of workmen, mechanics and operatives are en- 
 gaged in our several enterprises. During the last year 
 nearly thirteen million (|13,000,0C0) dollars were used in the 
 conduct and maintenance of snid business. In the tobacco 
 trade alone, forty million (40,000,000) pounds were sold here 
 the last year, and at a higher average price than shown by 
 any other market in the United States. 
 
These results were obtained only by liard labor, push and 
 enterprise coupled with such advantages and facilities as we 
 in great measure compelled to our aid. For a long time we 
 had only one railroad — the Eichmond and Danville. We 
 soon found that ruinous transportation and freight rates 
 were charged us by that line. As a consequence, our ener- 
 gies and trade facilities were greatly crippled, until our 
 people, with extraordinary boldness and liberality, a few 
 years ago, compelled the building of a line of road between 
 Danville and Lynchburg, Va., called at first and until ab- 
 sorbed by the "Virginia Midland, with which it connected, 
 the Lynchburg and Danville railroad. In conseqiaence of 
 the competition thus built up, just transportation and freight 
 rates were accorded to us, and our city and country greatly 
 prospered. As we have said, the Midland by some means 
 absorbed the Lynchburg and Danville road. Then the Mid- 
 land went into liquidation, or something else, and in- turn 
 ■was two or three years ago absorbed, or "gobbled," by the 
 Bichmond and Danville — ^thus we are again in the hands of 
 that voracious monopoly (and its connections,) whicii has 
 shown neither liberality nnr a spirit of accommodat:ii)n, al- 
 though it was inauguarated and in great part built by the 
 brains, means and energy of this very community. 
 
 Since we have been deprived of a competing line of road, 
 freight rates have been greatly advanced, and our people put 
 to much trouble and costs, not only by high charges for trans- 
 portation and freight rates, but by reason of unjust discrim- 
 ination against us in all trade relations. In fact the discrim- 
 inations by the Richmond and Danville railroad and its con- 
 nections, have been of such marked character against us, that 
 our trade has been greatly injured and damaged, in many 
 instances broken up, and our interests warred upon to such 
 an extent that unless a remedy can be found, commercial 
 ruin will be the fate of many of our industries. As a matter 
 of fact, high charges and discriminations by railroads have 
 driven from Danville some of our best business and business 
 men. 
 
To make the matter plain, we beg to call your attention to 
 certain facts which speak for themselves. Before the Mid- 
 land road got under the control of the Danville road, the 
 merchants and traders of Danville drove a large business in 
 grain, bulk meat, and heavy goods generally, with all points 
 South in Virginia, North and South Carolina and beyond. 
 Now that trade is quite destroyed because those roads grant 
 better rates, and afford greater facilities to points North of 
 us, and at greater distance from our late fields of trade, than 
 are accorded to us. For example : Lard by the car-load is 
 shipped from St. Louis to Eichmond, Petersburg or Norfolk, 
 and re-shipped thence say to Durham or Ealeigh, N. C, 
 much greater distances, at about the same price as to Dan- 
 ville. Flour in sacks, per car from Grand Eapids, Michigan, 
 
 to Lynchburg, -miles, costs in freight charges $75.00; 
 
 while to Danville, only 66 miles farther, the charge is $114.00, 
 or fully 331 per cent, more in proportion. 125 barrels flour 
 from the same point to Lyncliburg costs $50.00, the same to 
 Danville $86.25. Grain shipped from Chicago via Richmond, 
 or say re-shipped at Richmond to Durham, costs about 43c. 
 per cwi; to Danville thence to Durham, much shorter dis- 
 tance, costs about 49c. per cwt. In fact, the rates accorded 
 to Richmond from Chicago enable shippers to place goods at 
 Charlotte, Greensboro, Durham, or Raleigh, N. C, cheaper 
 than they can be placed from Danville, although there is a 
 difference of over two hundred miles distance in favor of 
 Danville. Upon he&vj iron goods the rates to Danville are 
 from $4 to $5 per ton greater than those charged to Lynch- 
 burg or Richmond, and the charges upon coal to Danville are 
 almost double those charged Lynchburg and Richmond. A 
 Danville man was charged $242.00 freight for iico car-loads 
 horses — $121 per car. A man from Charlotte, N. C, at the 
 same time, and by the same train, was charged for tine car- 
 load horses $110. Charlotte is 141 miles south of Danville. 
 We specify these things only to attract your attention to the 
 subject, but will present proof of these and other matters. 
 We are oppressed by reason of the matters aforesaid, and we 
 
know not where to appeal except to that tribunal created hj 
 Congress for the redress of such wrongs as are meted out 
 to us. 
 
 We are advised that the '' Act for the regulation of com- 
 merce " passed by the last Congress, was so passed to pre- 
 vent unjust discrimination in the matters of freight and 
 transportation, and the imposition of wrong by excessive 
 charges or otherwise, up<m the trading and travelling public, 
 by common carriers. To you, gentlemen, were entrusted the 
 power and authority to investigate comp^ints, and in proper 
 oases to compel obedience to law. 
 
 In behalf of our people we charge that' the Richmond and 
 Panville Eailroad, the Virginia Midland road and their con- 
 necting lines between Danville and St. Louis, Missouri, Dan- 
 ville and Chicago, Danville and Cincinnati, Danville and 
 Grand Kapids, Michigan, Danville and Mansfield, Ohio, Dan- 
 ville and New York, Danville and other points north, south, 
 and west, have violated the 1st, 2.1, 3d, and other sections of 
 the ''Inter-State Commerce" Act. 
 
 They have charged us and our people exorbitant rates for 
 the handling and transportation of our goods. 
 
 They have, by means direct and indirect, made special 
 rates, rebates and drawbacks in favor of other persons and 
 localities which they have, denied to us. 
 
 They have discriminated in their freight charges in favor 
 of other persons ami places, and against us and our section. 
 
 They have charged other persons and localities less for long 
 than they have us and our locality for short hauls, and, in 
 fact, have used such unjust and discriminating measures 
 against us, our locality and people, as to paralize our trade, 
 cripple our enterprize, and render migatory all our efforts to 
 compete with others possessing Ipss financial and natural 
 advantnges. We have protested to the authorites of both 
 the Danville and Midland roads, against these wrongs, to no 
 purpose. 
 
 We now lay our protest before you. Gentlemen Commis- 
 sioners, against these violations of just trade regulations and 
 
the law which was intended for the protection of the great 
 commercial public. 
 
 We humbly submit that the operations of the 4th sections of 
 the "Act for the regulation of commerce" aforenamed SHOUU) 
 NOT be suspended, or practically nullified, but that the same 
 should be executed with that force and vigor intehded by 
 the Congress which passed it. The clamor for its suspen- 
 sion comes mainly from Eailroad corporations whose grasp- 
 ing propensities, and inexorable demands, it was the inten- 
 tion of Congress to curb in the interest of the people, or 
 from Competitive points long separated from each other, 
 Nvhich prosper upon the hardships inflicted by their allies, 
 the Railroads, upon intermediate points not favored by a 
 competitive system. 
 
 One grant of favor in behalf of the Railroads and Com- 
 petitive points, by suspending the operations of said section 
 will be availed of as a basis for other and increased de- 
 mands, and in the end it will appear that the great objects 
 aimed at by Congress will not be attained,' and the law itself, 
 though reasonably clear and fair, will be converted into a 
 measure for the oppression of those whose rights it was de- 
 signed to protect. 
 
 Very respectfully submitted, 
 
 B. S. CREWS, 6%'m'n Tram. Com. 
 JAS. E. SCHOOLEIELD, 
 D. A. OVERBEY. 
 
 Danville, Va., May 10th, 1887. 
 
Inter-State Commerce Commission. 
 
 In the Mattee op the Petitions 
 
 OP 
 
 The Southebn Pacific Company, 
 Atcheson, Topeka and Santa Fe) 
 
 E. E. Co., 
 St. Louis and San Feancisoo E. E. Co., 
 Union PAcrpic E. E. Co., 
 The Northern Pacipic E. E Co. 
 
 Statement and Points, in Opposition to 
 above Applications, by E. N. Taft, Esq., 
 Counsel for Sutton &, Co., of Netv York. 
 
 The Nature of the Applications. 
 
 These applications are made under the proviso of 
 section 4 of the act, which is as follows : " Provided, 
 " however, that upon application 'to the Commission 
 " appointed under the provisions of this act, such com- 
 " mon carrier may, in special cases, after investigation 
 " by the Commission, be authorized to charge less for 
 " longer than for shorter distances for transportation 
 " of passengers or property ; and the 'commission may 
 " from time to time prescribe the extent to which said 
 " designated common carrier may be relieved from the. 
 " operation of this section of the act. 
 
 What is asked for by the applicants under this sec- 
 • tion, is not the sanction of this Commission to specified 
 
lower rates on specified classes of goods, to and from 
 the points indicated, but an absolute and permanent 
 suspension of section 4 in favor of the petitioners at 
 such points. At the outset of the introduction of the 
 petition of the Southern Pacific Company, by Mr. 
 Tweed, the following occurred between him and the 
 President of the Commission. 
 
 " President Cooley : Did you bring with you a 
 " statement of the rates which you desired the Com- 
 " mission to determine? " 
 
 " Me. Tweed : No, sir ; for this reason. If we should 
 " bring in a competitive rate before the Commission 
 " with an application to be allowed to charge that rate, 
 " and our application should be granted to-morrow, that 
 " rate would be cut by the Canadian Pacific, so that 
 " the relief which we should derive would be purely 
 ■" temporary and wholly illusive. That is to say, that 
 " business can only be done by giving us as free a foot 
 " as our competitors have and authorizing us to do 
 " that competitive business, if it can be done by us, in 
 " competition with the other existing methods, and yet 
 '• at rates which would pay us anything at all above 
 " the cost of actually doing the business." 
 
 It will be observed that the proviso declares that 
 " the Commission may frain time to tirne prescribe the 
 extent, etc.," from which it appears that, if the Commis- 
 sion have the power to authorize charging less for the longer 
 distance than for the shorter distance in consequence of 
 the existence of competition in the case of the longer dis- 
 tance, all competitors must see that, in the case of un- 
 reasonable cutting of rates by them, the Commission can 
 at all times authorize a reduction of rates, so as to meet 
 such cutting, and that thus the subject of competition 
 is under the control of the Commission ; and it is to be 
 presumed that all competitors recognizing this power 
 of the Commission would be disposed to come into ac- 
 cord with the views of the Commission in respect to 
 what should be reasonable rates. This particular 
 clause, " from, time to time,"- does not seem to have 
 impressed itself upon the minds of the petitioners, or if 
 otherwise, why are they unwilling to have the matter 
 
kept under the supervision of the Commission, but 
 leaving them free at any time to ask the sanction of the 
 Commission for any proposed reduction of rates for 
 long haul distances below what the Statute permits, and 
 why are they seeking to be left entirely free from the 
 operation of the Statute and at liberty to do as they 
 think fit; in other words, to be left at liberty to 
 enter into any war of rates hereafter to the same extent 
 that they have done heretofore. 
 
 The war of rates during 1886 was not excptional. It was 
 but one instance of undue competition. And it is fairly 
 to be considered whether the conduct of the managers 
 of these railroad lines in respect to the matter of com- 
 petition in the past has been such as to incline the 
 Commission to the granting of such absolute freedom 
 as they now seek- to obtain, and whether, in case the. 
 Commission should be of the opinion that competition. 
 can he such in any instance as to constitute a special 
 case within the meaning of the proviso, the commission 
 will not confine itself to the direct and specific^ work of 
 sanctioning tariffs of rates with such departures from 
 the statute in the case of longer distances as they may 
 think just, and as may be clearly expressed, in the 
 tariffs that may be approved by the Commission. 
 
 The Charactek of the Evidence Peoduced. 
 
 The nature of the applications being such as is above 
 described, the applicants have presented their eases in 
 the most general way, and have shown little attention 
 to the convenience even of the Commission by neglect- 
 ing to place distinctly before the Commission in figures 
 and classifications the changes which they desire to 
 make. Kepeated inquiries for tariffs of rates, I ob- 
 serve, have been made in the course of the proceed- 
 ings, but they did not seem to have been at hand for 
 immediate reference, and the promise has been made in 
 one or more instances to send in the tariffs of rates- 
 asked for to the Commission. Giving these railroad 
 managers credit for the shrewdness and tact and skill in 
 
management which they have undoubtedly acquiried, 
 it would seem as though they did not care to have 
 the Commission go beyond such general view of 
 the situation, as they have chosen to present. In- 
 deed they seemed to me to have treated the matter 
 rather lightly, and to have calculated upon going on 
 without any very stringent scrutiny. 
 
 They have evidently assumed that the proceeding 
 •was one that was ex parte iu its nature. They have 
 produced their own petitions, made their own state- 
 ments and examined witnesses powerfully interested in 
 favor of the applications, and whose testimony has been 
 given upon information which they assumed to have, but 
 -which was, in many instances, piirely conjectural and 
 misleading. 
 
 As for instance, in the matter of the smallness of the 
 through business which was done after the adoption of 
 the new tariffs since the act went into effect, the 
 two witnesses who were examined at the first hear- 
 ing before the Commission made this fact the strong 
 ground for action on the part of the Commission ; 
 whereas Mr. Stubbs, who has been recently ex- 
 amined, tells the Commission that there was very little 
 shipping to be done during the time between the adop- 
 tion of the new tariff of rates and the order of the 
 Commission granting relief, for two reasons, one was 
 that in anticipation of the act taking effect, shipments 
 had been very largely made, leaving very much less to 
 be done immediately after the act went into operation, 
 and again what little there was of this was held back 
 in anticipation of lower rates arising iPbm the expected 
 suspension of the operation of section 4. This shows 
 how much allowance must be made in case of repre- 
 sentations made by parties who are eagerly seeking to 
 obtain an important object. Then again the cry that 
 the Canadian Pacific was to get all the business was 
 regarded by the petitioners as one that would have 
 very great weight with the Commission, and that was 
 put forward in the most positive way, but yet it will 
 appear that the more searching examination to which 
 members of the Commission subjected Mr. Stubbs, 
 
bringing out some of the salient points in regard to 
 distance and connections with American roads, pre- 
 sented that matter of the Canadian Pacific rather in 
 the nattire of a bugbear. 
 
 How THE Law came to be Passed. 
 
 It is very clear that the agitations which led to the 
 passage of this act grew very largely out of the unscru- 
 pulous methods in which railroad corporations were 
 made to subserve the interests of favored persons or 
 localities, and the recklessness with which compe- 
 tition was very often carried on. Indeed the unjust 
 discriminations complained of arose very largely from 
 these methods and this competition, and hence it was 
 that the effort was made to get at some rule which 
 would constitute an outside limit that the carrier 
 should not over pass, and hence it was also that the 
 penalties of the act were made so very stringent. 
 It is entirely apparent from the terms of the act that 
 Congress recognized that the devices of railroad mana- 
 gers were many and often times past finding out, so 
 that when these railroad managers come before the Com- 
 mission with an object in view on which they have set 
 their hearts, it is but fair to presume that they will 
 state their cases as strongly and indeed more strongly 
 than the whole truth of the case would warrant. But 
 on the other hand, it is also equally apparent that, as 
 they are stating matters which concern themselves, the 
 means which the general public has for detecting errors 
 or partial statements are comparitively limited. 
 
 Competition vs. Discrimination. 
 
 The case sought to be made is that discrimination 
 which it was the object of the statute to prevent should 
 be allowed in order to permit free and unrestricted com- 
 petition. Now, as to this matter of competition of rail- 
 roads, I find some instructive words in the " report of 
 
6 . 
 
 the advisory oommittee on differential rates between the 
 West and Seaboard," consisting of Messrs. Thurman, 
 Washburne and Oooley, in 1882. In this report the 
 committee say : 
 
 " We have found, however, in the course of our 
 " investigations, that a species of competition has pre- 
 " vailed from time to time, which has brought satisfac- 
 " tion to few persons, if any, and which has resulted in 
 " inequalities and disorders greatly detrimental to trade. 
 " Such competition exists when the railroad companies 
 " or those who are permitted to solicit business, and to 
 " make contracts on their behalf, set out witll the 
 " determination to withdraw freights from their rivals 
 " and secure them for themselves at all hazards and 
 "regardless of gain or loss; and when acting upon 
 " this determination they throw to the winds all settled 
 " rates, and in the desperate strife for business offer any 
 " inducement in their power which will secure it. The 
 "country not long since had experience of suieh'a 
 " season, and everywhere we listened to complaints 
 " of the injury which legitimate business suffered 
 " from it." 
 
 Again : 
 
 " Under such circumstances persons were favored 
 " and localities were favored, when the object to be 
 " immediately accomplished seemed to require it 
 " regardless of the just maxims of legitimate business, 
 " and pf the rules of the common law, which enjoin 
 " upon common carriers that they shall deal with all 
 " customers upon principles of equity and relative 
 " fairness. Legitimate business, it was said, necessarily 
 " passes into an unsettled and speculative state while 
 " this condition of things exists ; safe and close cal- 
 " culations are impossible ; transportation becomes 
 " cheap, but neither producer nor consumer is certain 
 " to reap the profit, for the middleman cannot cal- 
 " ealate upon the steadiness of low rates, and as he 
 " takes the risk of their being raised upon him, so he 
 " is in the best position to appropriate the benefit 
 " while they continue. Meanwhile railroad profits dis- 
 " appear, and dividends cease to be paid to the great 
 
' distress of thousands who rely upon them for their 
 ' living ; and every interest in any degree dependent 
 ' on railroad prosperity naust participate in the de- 
 ' .pression and disaster which accompanies the owner- 
 ship of railroad shares." 
 ' The mere statement of these resiilts is sufficient to 
 show that this is not what in other business is known 
 ' and designated as competition. Competition is the life 
 ' of trade, but this is its destruction ; competition 
 ' brings health and vigor, and secures equality and 
 ' fairness, but this paralyzes strength and makes con- 
 ' tracts a matter of secrecy and double dealing." 
 
 Let me quote also from the argument of Charles 
 Francis Adams, Esq., before the Committee on Com- 
 merce of the United States House of Kepresentatives, 
 in which he says : 
 
 " What then is this mysterious underlying cause of 
 " which the railroad abuses I have referred to as so 
 " notorious are the outward manifestations ? With all 
 " possible confidence I assert that it is excessive and 
 " unregulated railroad (Competition. This, and nothing 
 " else. * * * Competition is a great thing, but 
 " it works in, rough ways. In other words, every abuse 
 " in the railroad system, so far as the inter-State com- 
 " merce of this country is concerned, can be shown to 
 " be the direct, the logical, the inevitable outcome of 
 " unregulated and desperate competition, and a mere 
 " outward skin symptom of it." 
 
 FoBM OF Belief. 
 
 If there can be competition such as to constitute a 
 special case within the meaning of the proviso, then the 
 question arises whether the measure of relief cannot be 
 prescribed by the Commission from time to time as the 
 competition goes on and as it develops, in such form 
 that all competitors shall see that they have really to 
 deal with the Commission ; to the end that if possible, 
 the Commission may prove to be in the exercise 
 of its proper jurisdiction, really and emphatically 
 
8 
 
 a regulator of competition, and to a large degree a 
 controller of rates. The facts as to how competition 
 has been conducted in the past are so much a matter of 
 general knowledge that the Commission will undoubt- 
 edly take notice of then. The effect of the competition 
 among these Transcontinental lines upon the business 
 of the Clipper ships is top palpable to need anything 
 more than a reference to it. The same that they have 
 suffered in the past they cannot but anticipate as likely 
 to occur in the future, if the application of these peti- 
 tioners shall be granted. As individuals of the general 
 public, for whose benefit the law was passed, it is en- 
 tirely proper that they should urge upon the Commis- 
 sion the subjecting of this competition to the control of 
 the law, and thus prevent the evils which the law is 
 calculated to correct. 
 
 Why the Urgency foe so Speedy Action by the 
 Commission. 
 
 If these petitioners could bear for a year and more 
 the loss of carrying through goods at the ruinous rates 
 which obtained during the war of rates carried on 
 through 1886 and up to the time this act took effect, 
 why cannot they endure the application of this section 
 so long at least as may be necessary to give it an ad- 
 equate trial ? 
 
 There is certainly no propriety in such undue ur- 
 gency towards the commission. 
 
 Bates Since the Suspension of Fourth Section. 
 
 , These rates and the system of common points 
 adopted show that ruinous competition is set on foot 
 again. Is it to punish and silence those interested in 
 clipper ships ? 
 
POINTS. 
 
 First. I submit that the petitioners do not make 
 out special cases such as are contemplated, by the pro- 
 viso to the act. What they urge is general competi- 
 tion far and wide, and they seek to gain general 
 relief. They do not even specify classes of goods or 
 rates. Thej' do not ask the Commission to say how 
 much less they may charge on particular goods for the 
 long distances, but they ask to be relieved from the 
 operation of the section altogether at a large number 
 of points indicated by them. The ground, on which 
 they ask this general sweeping action on the part of 
 the Commission as a permanency, is what they allege 
 to be their own interest. They do not deny that it 
 will lead to discrimination ; indeed they cannot do 
 that, but they say that their interest is such that it 
 ought to be regarded as sufficient to warrant dis- 
 crimination. 
 
 Second. I insist that competition does not con- 
 stitute a special case within the meaning of the pro- 
 viso, and upon tliis I refer to the recent book of J. C. 
 Harper, Esq., entitled, "Law of Inter-State Com- 
 merce," at page 55, and the cases there cited. 
 
 Third. If competition could be such in any in- 
 stance as to constitute a special case within the mean- 
 ing of the proviso, I insist that no such competition is. 
 shown here. 
 
 The petitioners presented themselves before the 
 Commission as having the same grounds for relief as. 
 though they were carriers within the meaning of the 
 act for the whole distance between New York and San 
 Francisco. They are not such carriers in fact. They 
 are carriers for part of that distance, and they are for- 
 
10 
 
 warders for the balance of the distance. They have ar- 
 rangements with connecting lines so that through 
 freight is carried at through rates. (And here let it be 
 noted that as to aU connecting lines the statute pro- 
 vides for impartiality towards all as to rates, etc. (See 
 section 3, part 2.) 
 
 Not one of these appUcants is " a carrier to or from 
 New York, and not all of them are carriers to or from 
 San Francisco. The competition which they say they 
 wish to meet is not chiefly competition existing between 
 points on their own roads. It is not, for instance, in 
 the case of the Southern Pacific Company competi- 
 tion between New Orleans, the eastern terminus and 
 San Francisco. The competition which the petition- 
 ers urge is mainly at points beyond and outside of 
 their lines ; it is, in fact, a world-wide competition. 
 It includes competition at any or all points 
 to which they may secure a connection. The South- 
 ern Pacific Company is a carrier from New Or- 
 leans to San Francisco. The Southern Development 
 Company (a company not under the jurisdiction of this 
 Commission) runs a line of steamers between New 
 Orleans and New York. These two companies run 
 their lines in connection and make through rates from 
 New York to San Francisco. The Southern Develop- 
 ment Company meets with competition from New York 
 with the Clipper ships or from other railroads. There- 
 upon the Southern Pacific Company hastens to this 
 Commission, and by reason of that competition at New 
 York asks to be permitted to charge a less rate for car- 
 rying through goods from New Orleans to San Fran- 
 cisco than for the same kind of goods manufactured at 
 and sent forward from points nearer to San Francisco. 
 If a connecting line of steamers should run between 
 New Orleans and some port in Europe or South 
 America or in the Gulf or Atlantic States, then similar 
 competition at such port would, of course, have the 
 .same bearing. 
 
 It would be too tedious to bring into review all the 
 phases of competition which the applicants urge as a 
 ground for the intervention of this Commission. The 
 
i-i 
 
 above reference to the Southern Pacific Company must 
 answer for a fair illustration. 
 
 The possibilities of competition are at once seen to be 
 of almost limitless scope, and such is the competition 
 which the Commission is asked to investigate in order 
 to find a special case in which to authorize a carrier to 
 charge less for a long than for a short haul. At such 
 an investigation all the intermediate localities along the 
 Pacific roads are to have 10 days' notice, printed in two 
 newspapers published along the line, to attend in 
 Washington. , 
 
 The niaking of such competition a ground for sus- 
 pending the 4th section is simply to involve the Commis- 
 sion in an extent of inquiry and investigation altogether 
 beyond human capacity to perform with any thorough- 
 ness, and in fact to substantially nullify the section. 
 
 In the English cases referred to in Harper's Law of 
 Inter-State Commerce, supra, it appears that the ques- 
 tion was presented' as to whether, if there was com- 
 petition at a given point, transportation from that point 
 was under "the same circumstances and conditions "as 
 where it was from a point where there was no com- 
 petition. The language of the English Act has the 
 words " under the same circumstances and conditions," 
 and the Queen's Bench Division, and the Court of Ap- 
 peals, and afterward the House of Lords, held that the- 
 circumstances and conditions were t"he same notwith- 
 standing the existence of competition at one point and 
 not at the other. 
 
 Lord Chancellor Caienes, said : " That is exactly one^ 
 " of those things which Parliament has not left open to- 
 " railroad companies to judge of — whether in that way 
 " they will equalize their capacity for competing with 
 " other lines or not" (Lond., etc., Ey. Co. vs. Evershed, 
 L. E., 3 App. Cas., 1029, 1035 ; L. E., 3 Q. B. Div., 134 
 (Court of Appeal) ; L. E., 2 Q. B. Div., 254). 
 
 The same result was reached by the Exchequer Di- 
 vision (Budd vs. Lond., &c., Ey. Co., 36 L. T. (N. S.), 
 302). See also C. J. & C. A. E. Co. vs. The People, 67 
 Ills., 11, 18, 222. It is true that U. S. District Judge 
 Deady, in instructing a Eeceiver, arrived at a different 
 
12 
 
 conclusion. In the case that was before him the points 
 of competition were upon the line operated by the Ee- 
 ceiver, as I understand it. I do not think, however, 
 that the opinion of Judge Deady can be regarded as 
 having the better reason, or as one that the Commis- 
 sion should follow. 
 
 Fourth. The evidence placed before the Commis- 
 sion is not such as to warrant the conclusion that the 
 petitioners would in the long run be benefited by the 
 granting of their petition. This is a question that can 
 only be determined by actual experience. It is more 
 than likely that the' advantage to the short haul lo- 
 calities would be such as to return to these petitioners 
 greater profit than they would make if the section was 
 suspended. 
 
 It is entirely clear that in many instances they have 
 been carrying through traffic at a rate that did not 
 pay them, and that they are under a temptation to do 
 so where there is a free and unrestricted competition, 
 and notwithstanding all that may be said about 
 special reasons why such low rate does not result in 
 loss, it nevertheless remains a, matter of serious con- 
 sideration whether it does not in fact prove a detri- 
 ment to the railroad company. 
 
 The claim of advantage to them of having this sec- 
 tion suspended is not so clearly made out as to war- 
 rant the conclusion that they are right in respect to it. 
 
 Fifth. Again it should be said that the cases pre- 
 sented are altogether too general to be regarded as 
 special cases in any sense suitable for investigation. 
 
 Sixth. There is much to be said in regard to the 
 existing rates at intermediate points ; there is no reason 
 to believe but that, in consequence of the competition 
 
13 
 
 existing before the law went into effect in respect to 
 through rates and the losses consequent thereon, the 
 intermediate rates had become unduly high iu order to 
 meet these losses, and that the fact, if such be the fact, 
 that intermediate rates have not been advanced, and 
 were not to be advanced under the operation of the 
 act, is not a fact entitled to much consideration, for the 
 reason that it may very well be that if the law is en- 
 forced and the losses on through rates are prevented 
 that the intermediate rates will be brought to a lower 
 figure as a consequence of such prevention. 
 
 Seventh. There are several important factors that 
 can never be determined satisfactorily without the ac- 
 tual test of experience, and one of the most important 
 perhaps, is how far the rates at which the various eom- 
 ptting parties can afford to carry goods, will demonstrate 
 in the long run that the lines that comply with the 
 Inter-State Commerce Act can do as profitable a busi- 
 ness under it as they would otherwise be able to get. 
 That is a great and important question, and it will be a 
 very great pity, as it seems to me, if that question is not 
 brought to the test of actual trial, even if it should be 
 at the expense of temporary losses. 
 
 The questions put by the Commissioners to Mr. 
 Stubbs in regard to carriage over the Canadian Pacific 
 and the rates at which that company can afford to carry 
 any considerable length of time were very important in 
 their bearing upon this question. 
 
 It is quite possibly true that the regrets reported to 
 have been expressed by one of the U. S. Senators at the 
 suspending of the long and short haul clause without first 
 allowing its practical effects to be tested, were very well 
 founded, and there may be some force in his idea that 
 instead of suspending it for ninety days the Commis- 
 sion should have tried it for ninety days, although it is 
 fair to say that the magnitude of the matter involved 
 and the shortness of time which the Commission had 
 
14 
 
 to determine what was wise and proper to 'be done 
 under the law, seemed to afford a reasonable justifica- 
 tion for the course pursued. 
 
 Eighth. But if the Commission should finally be of 
 the opinion after all proper efforts on the part of the 
 petitioners have been made that so great hardship was 
 occurring as to make a special case for intervention, then 
 I submit that the form of that intervention should be 
 that of sanctioning specific reductions of rates, at points 
 specified on the road of the carrier, and that this sanc- 
 tion of the Commission should be obtained from, time 
 to time, so that competing carriers would understand 
 that in cutting rates they would be liable to lead to re- 
 ductions at the hands of the Commission. 
 
 My idea is that the Commissioii would exert an in- 
 fluence to secure fair and just competition between all 
 competitors by superintending and sanctioning changes 
 of tariffs from time to time, and that under such a sys- 
 tem all the outside parties would come into accord with 
 the views of the Commission, and the competing parties 
 into fair and satisfactory business relations towards 
 each other. 
 
 Ifinth. The skill and shrewdness of managers of 
 railroads, as I have said, ar6 well known. At present, 
 and while these applications are pending, the petition- 
 ers would be thwarted in their plans for perfect free- 
 dom from the operation of the 4th section by securing 
 any understanding with the Canadian Pacific, the Pa- 
 cific Mail or the Clipper ships as to rates. They are 
 under the temptation to make the situation in which 
 the law places them appear as unfavorable as possible, 
 but when it comes to be understood that they must ad- 
 just themselves to the law, we may reasonably suppose 
 
lb 
 
 that all these matters of competition will be found to 
 work in suoh a way as that the .benefits of the law will 
 be secured. 
 
 Tenth. The object for which the law was passed, 
 should be constantly kept in view. 
 
 The consideration of competition is brought by 
 these petitioners into the balance against the objects 
 which the law was intended to promote.. 
 
 On the one hand, it is supposed to be the future in- 
 terest of the carrier that should be considered, and on 
 the other, it is the interest of those yvho have been un- 
 justly discriminated against that must be considered. 
 
 If the claims of competition are to have the effect 
 contemplated by these applications, then the prohibi-; 
 tion contained in. the 4th section will become the ex- 
 ception and the suspension of the section will become 
 the rule. 
 
 This is a result I cannot believe was ever contem-. 
 plated, and one which I do not think the Commission 
 will sanction. 
 
 Xiastly. I cannot omit to say a word in conclusion 
 on behalf of the American Merchant Marine. 
 
 It was an impressive allusion made by the Hon. 
 Chauncey M. Depew, at the memorial services at Al- 
 bany in honor of the late President Arthur when he 
 mentioned how deeply Mr. Arthur always lamented 
 the decay of our merchant marine. The Clipper ships 
 that sail around Cape Horn are the best specimens that 
 remain of what was once the pride of our people. 
 
 The competition which these lines of ships have met 
 with on the part of the railroads has been all that was 
 so vividly described in the report of the advisory com- 
 mittee which I quoted above. 
 
16 
 
 The Commission are fully apprised of thp character 
 of the business of those lines. It has been shown be- 
 fore the commission that there is a class of that busi- 
 ness which they alone can do at any fair profit. 
 
 They can meet the ordinary competition which 
 exists at sea, and do a successful business, and it is 
 only when these railroad companies enter into a deadly 
 struggle to grasp business at all hazards and without 
 regard to the cost of carrying that they become serious 
 sufferers, and are thrown into imminent danger of ruin. 
 
 While I do not claim that the makers of this law had 
 such consideration? in immediate view in passing it, I 
 maintain that the law was expected to promote the 
 general weal and that many would be benefited by it 
 who were not had specially in view when it was enacted. 
 Such are my clients. Aiid they simply ask that this 
 Commission do not suspend the law in any such way 
 as to put them in the way of suffering again from such 
 wars of rates as have heretofore occurred from time to 
 time between these great railroad corporations. 
 
 The very fact that these corporations have been so 
 aided and subsidized by the Government of the United 
 States is an additional reason why they should not be 
 allowed to bear down unduly individual enterprise. 
 
 It is undoubtedly the tendency of corporations to be- 
 come monopolists. They are powerful, and their man- 
 agers are inclined to exert the power which they pos- 
 sess without very considerable regard for the rights of 
 others. 
 
 I trust that the law which is now upon the statute 
 book will be afforded a full and fair trial and that it will 
 prove — what it was designed to be — a blessing to the 
 country at large. 
 
 I am sure that the Commission can have no better 
 guide iii this matter than what is so well expressed in 
 the following quotation from Dwarris on Statutes : 
 
 " It has been held to be the duty of the Judges, at 
 " all times, to make such construction as should sup- 
 " press the mischief and advance the remedy — putting 
 " down all subtle inventions and evasions for continu- 
 
17 
 
 " ance of the mischief et pro privato oommodo, .and 
 " adding force and life to the cure and remedy accord- 
 " ing to the true intent of the makers of the act pro 
 " bono publico." 
 
 EespectfuUy submitted, 
 
 Enos N. Tapt, 
 Counsel for Sutton & Co., 
 76 Wall St., N. Y. City. 
 
 [14906] 
 
Suggestions concerning Transcontinental Ap- 
 plication for Suspension of the Fourth 
 Section of the Inter-State Commerce 
 Act. 
 
 It is not my purpose to restate, here the facts which re- 
 quire that, in respect of transcontinental traffic, the carrier 
 should be permitted to make a lower rate for a longer than 
 a shorter distance. The facts have been fully presented to 
 the Commission, and are, I do not doubt, fully understood 
 by it. 
 
 It is obvious that, with the competition of the clipper 
 ships, the Pacific Mail Steamship Company and the Cana- 
 dian Pacific Railway Company, it is necessary that the 
 transcontinental railroad carriers of the United States 
 should have a " free foot " in respect to fixing rates for 
 through traffic to meet competition ; or otherwise these 
 competitors, who are themselves absolutely or practically 
 beyond the control of the Commission, will fix rates just 
 enough below the rates permitted to the transcontinental 
 lines, to take away from them substantially the entire 
 through traffic, — except only in respect of the single com- 
 modity of green fruits. 
 
 The rates heretofore fixed for intermediate traffic have 
 been so low that the earnings from both local and through 
 business for several years have been insufficient to pay any 
 dividends at all upon the capital stock of the companies 
 which I represent. The Central Pacific Railroad Company 
 has not paid a dividend since February, 1884, an^ no 
 dividend has ever been paid upon the capital stock of 
 
the Southern Pacific Company or the Southern Pacific 
 Railroad Companies. 
 
 It is, therefore, obvious that, having regard to the pay- 
 ment of fixed charges alone, it is impossible to make any 
 substantial reduction from the intermediate local rates. If 
 through rates should be maintained at figures not less than 
 the requisite local rates, no substantial transcontinental 
 through business (except that in green fruits) could be 
 carried by the transcontinental lines of the United States. 
 The truth of these statements has been fully shown before 
 the Commission, and the facts in respect to the matter are 
 quite as well understood by the Commission as by myself. 
 
 It will, I think, be conceded that the alternative is clearly 
 presented, that either we must have a " free foot" for fixing 
 competitive rates, or the transcontinental through business 
 will be done by outside agencies. 
 
 Assuming this to be a correct statement of the facts, what 
 is our position under the law ? 
 
 First. — It must be observed that although very many 
 petitions for relief in respect to the operation of the 
 Fourth Section have been presented to the Commission, 
 they cover but a small portion of the points at which the 
 railway business of the country is transacted. As regards 
 our own line, it may be stated that the points in respect of 
 which temporary suspension has been granted are only 14 
 in number whereas the whole number of points at which 
 railway business is transacted upon our line is upwards of 
 300 or 400. 
 
 The constant presentation to the Commission of applica- 
 tions for relief is no doubt well calculated to convey the 
 impression that the points in respect of which suspension 
 is asked preponderate. It may be, and very likely is, the 
 
fact that suspensions are requested in respect of very much 
 traffic and very many points in respect of which no occa- 
 sion for suspension exists ; but the fact should not be over- 
 looked or disregarded that the general rule embodied in 
 the Fourth Section is and must remain in force, wholly un- 
 affected by any action of the Commission, in respect of the 
 -vast preponderance of points of traffic ; and even though it 
 might seem that the suspensions which were made or 
 might be called for were numerous and extended, yet it 
 should not be overlooked that the points in respect of 
 which no such request would, or could reasonably, be 
 made, or in respect of which the Commission would not 
 seriously think of granting or permitting it, vastly pre- 
 ponderate. 
 
 Second. — Another, and it seems to me the most im- 
 portant, point, is not to be overlooked or disregarded ; 
 that is, that the act in question, while providing for the es- 
 tablishment of a general rule in certain cases, clearly and 
 distinctly provides that this Commission shall act as a gov- 
 ernor or regulator in respect of its operation. Reference 
 to the progress of the bill in Congress, and to the debates 
 thereon, will clearly show that no such provision as the 
 general provision of the Fourth Section of this act would or 
 could have been adopted by Congress, except for the fact 
 that the Commission was by the act itself invested with a 
 regulating and controlling power to prevent injury, in- 
 justice and disaster. 
 
 It must undoubtedly be assumed that it was the pur- 
 pose of Congress that what may be called the general 
 rule of the Fourth Section should apply, except in those 
 cases where, in the judgment of the Commission, reasons 
 existed for suspending or dispensing with its operation. 
 It must be recognized also that the subject was 
 
one requiring special knowledge ; and it is clear 
 from the act itself that Congress well understood 
 that any tentative action which it might take on the 
 subject ought to be coupled with qualifications, which, 
 .as far as possible, should obviate any danger of serious 
 injury from the rule; on this account, while it was con- 
 cluded to undertake to establish a general rule in re- 
 spect of the comparative rates of transportation to different 
 points as respects each other, that legislation was coupled 
 with conditions intended to operate and to be enforced 
 as substantial safeguards against abuse or injury from the 
 estabhshment of the. rule ; in doing this Congress imposed 
 upon the Commission the duty and responsibility of deter- 
 mination in respect to the exercise of the dispensing, power, 
 not undertaking to prescribe whether that power should 
 be exercised in many or in few cases, but prescribing that 
 it should be exercised in those cases where, after investiga- 
 tion, the Commission concluded that occasion existed for 
 its intervention in this regard. 
 
 It may be said, in a general way, that outside of the 
 Fourth Section, the rules and principles embodied in this act 
 may be deemed to be the rules of the common law in respect 
 to rates of charges for transportation ; these rules and prin- 
 ciples as so stated are, however, to be enforced by special 
 and peculiar penalties and remedies of a very stringent and 
 effective character provided in the act. 
 
 The provisions of the Fourth Section, as I understand it, 
 suggest the establishment of a rule not embodied in the 
 rules of the common law. It is not my understanding that 
 • the common law prescribes anything in respect of the com- 
 parative or relative rates of charges for transportation to 
 different points. The rate of course to each point must be 
 reasonable; there can be no unjust discrimination at the same 
 
point ; but the common law has no rule, as I understand it, 
 in respect to comparative or relative rates to different 
 points ; the common law is complied with if reasonableness 
 of rates and equality between parties exist in regard to each 
 particular point. Under the common law, I know of no rea- 
 son why, from mere willfulness or self-interest or arbitrary 
 exercise of power if you will, a carrier may not in respect 
 of any particular point prescribe a rate less than that which 
 is reasonable in itself, notwithstanding in respect of another 
 and perhaps adjacent point the rate is fixed at the 
 highest reasonable point for the traffic. But it is obvious 
 that in endeavoring to add to the principles of the 
 common law in respect to adjustment of rates Congress 
 has acted in what was intended to be a guarded and tenta- 
 tive manner, and has advisedly given to this Commission 
 a power and responsibility of determining what the cases 
 are in which the proposed new rule of relativity should not 
 apply. 
 
 It is this power and this responsibility which we re- 
 spectfully ask the Commission to exercise according to its 
 own judgment upon the facts presented by these petitions. 
 We ask that it will not refuse to exercise this power and re- 
 sponsibility on account of any clamor or outcry, or on ac- 
 count of any estimate of the absolute or even the relative 
 number of cases in which applications are or may be made, 
 or in which circumstances are or may be found to exist, 
 where in its judgment suspensions should properly be 
 granted ; but we ask that it should, as we believe it will, 
 recognize the fact that what may be called the general rule 
 of the Fourth Section would never have been adopted 
 and could never have been adopted except for the regu- 
 lating and controlling power coupled therewith and 
 vested by the act in this Commission, and that we are en- 
 
6 
 
 titled to have the fair exercise of the judgment of this Cbm- 
 jnission upon the question whether circumstances have been 
 shown which justify the suspension of the operation of this 
 general rule in respect to transcontinental business. 
 
 Charles H. Tweed, 
 
 Counsel for Southern Pacific Co. 
 
INTER-STATE COMMERCE COMMISSION. 
 
 In the Matter op the Petition of the 
 MOBILE AND OHIO RAILROAD COMPANY 
 
 New York, May Y, 1887. 
 To the Hon. T. M. Cooley, 
 
 Chairman of the Inter-State Commerce Commission: 
 
 The evidence taken by the Inter-State Commerce Com- 
 mission at Atlanta and Mobile, so far as it is applicable to 
 the case of the Mobile and. Ohio Railroad Company, will, 
 we believe, sustain the following propositions : 
 
 1. That a large proportion of the freight traffic of the 
 Mobile and Ohio Railroad Company is competitive with 
 water, or combined rail and water lines, which are not 
 under the control of the Inter-State Commerce Law or 
 the Commission. 
 
 2. That in granting the privilege to the Mobile and 
 Ohio Railroad Company to meet such competition, the 
 Commission will merely recognize and authorize the con- 
 tinuance of such discriminations as result from natural 
 causes, which are beyond control and cannot be deemed 
 either unjust or avoidable. 
 
 3. That the exercise by the Mobile and Ohio Railroad 
 Company of the privilege of charging more to interme- 
 diate non-competitive points, will impose no burden upon 
 the non- competitive business which is not just and reason- 
 able and does not properly pertain thereto. 
 
 The first proposition is a matter of fact, which, we 
 think, has been fully substantiated by the evidence. 
 The second proposition involves a question as to the dis- 
 
2 
 
 cretionary power of the Commission, the discussion of 
 which will be left to the General Sohcitor of the Mobile 
 and Ohio Railroad Company. 
 
 The third proposition involves certain principles of rail- 
 way economy, to the proper understanding of which I 
 may be able to contribute from' the results of my own 
 experience and study. 
 
 , Navigable rivers furnish highways for commerce, of Na- 
 ture's own providing, and when Nature has failed to 
 make them broad enough or deep enough, the Government 
 may enlarge them. This is often done at great cost, but 
 they are always open to the carrier without restriction as 
 to the" rates to be charged, except that the law prohibits 
 extortion. 
 
 When water courses cannot be made available in the 
 direction of the traffic, artificial channels may be opened, 
 such as canals, which are fed from existing streams, and 
 afford all the facilities of a public highway at small cost 
 to the carrier. 
 
 When nature has not furnished open highways and it 
 is impracticable to enlarge the existing streams, or to sup- 
 plement them by means of canals, railroads must furnish 
 not only the highway but also the means of transporting 
 goods over them, thus combining the service of the carrier 
 with the care and maintenance of the highway. Whether 
 the carrier service be coupled with the use of a highway 
 which is free, or one upon which tolls are charged, the 
 cost of transportation is always largely influenced by the 
 volume of the traffic, and additional business can be done, 
 at a profit, for less than the average cost of the whole ser- 
 ■ vice in which it is included, much less than the cost of the 
 previous service to which it is an addition. 
 
 If there is sufficient local use of a canal or a turnpike to 
 pay for its maintenance, additional business which pays 
 no toll would be in itself a source, neither of profit nor ex- 
 pense, to the owner of such canal or turnpike; but it might 
 nevertheless be a source of great profit to the merchants 
 of a city or town, and as residents of such city or town, 
 or in trading therewith, these same owners might be in- 
 
directly benefited to such an extent as to fully compen- 
 sate them for the remission of tolls on business carried 
 over their canal or-turnpike. The lo( al carriers and their 
 patrons might regard it as an unjust discrimination to 
 collect tolls from them and let others have the use of the 
 highway free, but if the result was to build up a local 
 market for their products by developing the manufactur- 
 ing or other interests of an adjacent city or town, the local 
 shippers would derive an actual benefit from the apparent 
 discrimination against them, and the carriers would un- 
 doubtedly get the benefit of the increased products to be 
 transported to market, even if they did not participate in 
 the transportation of through business to or from such city 
 or town. 
 
 It may often happen that the remission of tolls on the 
 raw material over a canal or turnpike through a sparsely- 
 settled country to a point favorable for the inanufacture 
 of such raw material, or on the manufactured goods re- 
 sulting therefrom, would be the means of developing local 
 productions and of increasing local population along its 
 line to such an extent as to greatly benefit the very per- 
 sons who are seemingly discriminated against in the matter 
 of tolls, and that, not only by furnishing a market for 
 local products and furnishing occupation to local popula- 
 tion, but also by reason of the increased facilities for trans- 
 portation incident upon a larger business. 
 
 The local freights on railroads must necessarily be as- 
 sessed with charges in the nature of tolls for the mainten- 
 ance of the highway, and much of the competitive freight 
 may and does also pay tolls, which contribute to the cost 
 of maintaining the road, and to that extent relieves the bur- 
 den on the local business ; but when there is competition 
 with water lines the tolls must be remitted so as to place 
 the steam-propelled cars more nearly on an eqality with 
 the steamboats, for the movement of the freight alone is 
 vastly more expensive in cars, which are forced over grades 
 and around curves on iron wheels, grinding against steel 
 rails, than it is when propelled in smooth-bottomed boats 
 through the gentle curi-ents of a flowing river, or moved 
 
4 
 
 on the bosom of the ocean by the winds of heaven and the 
 auxiliary power of steam. It is all a railroad can do to 
 carry goods at rates which water lines can well afford 
 to charge their customers, and but for the ability of the 
 railroads to command a little more than the water rates by 
 reason of the insurance charges being against the water 
 lines and the greater frequency and regularity of rail trans- 
 portation being also in favor of the rail lines, there would 
 be no profit- whatever in the business and. the water lines 
 would have undisputed control of all traffic which can be 
 done by vessels. 
 
 That railroads can increase their earnings by the addition 
 of traffic at a rate far below the previous cost of trans- 
 portation is a well understood fact, but the reasons there- 
 for and the extent to which this may be carried is not 
 generally known or appreciated, and hence the charge that 
 local freights are made to pay the losses on through 
 freight. 
 
 The local freight business of a road must be accommo- 
 dated by regular trains which run at frequent intervals, 
 stopping every few miles to receive and deliver freight, 
 and for this purpose side-tracks, warehouses and other 
 buildings must be maintained, a full equipment of engines 
 and cars must be provided, the necessary arrangements for 
 fuel and water for the engines must be supplied, and a full 
 corps of officers, agents and employees kept on duty. 
 
 So long as the local business alone is to be accommodated 
 the whole expense of maintaining and operating the roaS 
 and the interest on the capital invested must be derived 
 from such local traffic, but as it develops, the cost of receiv- 
 ing, transporting and delivering it, is diminished, for the 
 cost is largely influenced by the volume of the business, so 
 that when there is a large local freight traffic which re- 
 quires many local trains the cost of this class of service ap- 
 proximates more nearly to that of through traffic, and ' 
 then, but not until then, can a railroad company afford to 
 make its rates even approximately the same for both local 
 and through business. 
 
 When new business offers, it is not a question of whether 
 
it can be done at the average cost which has been pi'evious- 
 ly ascertained, but merely what will such business add 
 to the expense already incurred, or necessary to be in- 
 curred, for the accommodation of existing traffic ; so 
 also when competitive business which has been done 
 at however small a profit is abandoned, the profits 
 of such business are lost and the remainder of the busi- 
 ness must yield additional revenue in order to compensate 
 for such a loss, unless the margin of profits is large enough 
 to admit of such reduction. That there is no such margin 
 in the earnings of the Mobile and Ohio Eailroad is apparent. 
 
 Much of the business done at low rates by the Mobile 
 and Ohio Eailroad would, if abandoned by this Company, 
 be diverted to other lines, but it consists in part of pro- 
 ducts and manufactures the sale of which would be re- 
 stricted, and the production and manufacture checked, 
 if they cannot be transported long distances at very low 
 rates. 
 
 This brings us to the consideration of the question as to 
 what are the lowest rates that can be made to yield a 
 profit on the cost of transportation, to determine which we 
 must analyze the service to see what the items of cost are 
 and how much they are increased by additional business. 
 On the Mobile and Ohio Eailroad the expenses (exclusive 
 of interest, which, if included, would add largely to the 
 fixed expense) are classed as follows, and the relative 
 proportion of each is as indicated, viz. : 
 
 Fixed expenses d9% 
 
 Terminal or station expe ases 14^ 
 
 Train expenses -.23% 
 
 Car expenses ,-- --. -.24^ 
 
 Expenses which are called ^'Jixed" are such as are not 
 affected by the volume of the traffic either as to cost of re- 
 ceiving or delivering the goods or the cost of transporting 
 them. 
 
 " Terminal or station expenses " are such as relate to the 
 receiving and delivering of freight and are not affected in 
 
6 
 
 whole or in part by the distance that the freight is trans- 
 ported. • 
 
 " Train expenses " are those that depend on the number 
 of trains and the distances they run, without reference to 
 the number of cars in such trains. 
 
 " Car expenses " are such as depend upon the number of 
 cars used and the number of miles they run without refer- 
 ence to the number of trains, or to the train mileage. 
 
 Additional traffic may be accommodated in any of the 
 following ways, without additions to the cost of, or the 
 expense of, maintaining of the highway. 
 
 First.— In cars which are returning empty, or only 
 partly loaded. 
 
 Second.— By adding cars to trains which must be run, 
 although the intermediate business does not require as 
 many cars as the engine can pull. 
 
 Third. — By running additional trains of cars. 
 
 Fourth. — By adding to the facilities for receiving and 
 delivering freight, as well as by running more cars or addi- 
 tional trains. 
 
 In the first case the additional cost would be very small, 
 only what the additional weight would produce, such as 
 additional fuel, and more wear and tear of rails and 
 running gear. 
 
 In the second case only 24% of the expenses would be 
 affected by the additional business, and it does not follow 
 that they would be increased proportionately by the in- 
 crease in the traffic. 
 
 In the third case 47% of .the expenses would be affected, 
 but this would not necessarily make the additional traffic 
 cost as much as 4 7% of the cost of what was previously 
 done, for the additional traffic would almost inevitably 
 be moved without a proportionate increase of either the 
 train mileage or car mileage. 
 
In the fourth case 61% of the expenses would be more 
 or less affected, but it is hardly supposable that the ter- 
 minal ex]ienses could be increased by additional traffic, 
 except in a very much less proportion than the increase in 
 the traffic itself. 
 
 Takinjjf into consideration all of these several conditions 
 it may be safely stated that if there should be added to the 
 freight traffic of the Mobile and Ohio Railroad an addi- 
 tional amount equal in volume to w^hat it now has, no part 
 of such additional business would cost more than 50% of 
 the present average cost per ton per mile, while much of 
 it would be carried at from 20 to 25% of the present cost 
 and all north bound business could probably be trans- 
 ported in cai's now going empty in that direction at about 
 10 or 15% of the present average cost per ton per mile. 
 
 While there would be no injustice in making the local 
 business of the road pay the entire cost of main- 
 taining the highway, there would be no impropriety 
 in assessing tolls as well as transportation charges on 
 all through business that could bear such additional 
 charge. But I wish to urge upon the Commission 
 the utter impossibility of competition between railroads 
 and water lines, if railroads are required to charge for the 
 use of their roads in addition to a reasonable and proper 
 charge for the transportation or carriage of the goods, 
 while their competitors enjoy the fiee use of natural high- 
 ways, the availability of which is often maintained at the 
 expense of the national government. Not only is this the 
 case where there is actual contact with water lines, but 
 also .where the effect of water competition is felt at junc- 
 tion points, as with the Mobile and Ohio Railroad at Meri- 
 dian and Corinth, which are connected with important 
 cities on the Mississippi River by short rail lines, either 
 wholly, or almost entirely within one State; for in the 
 case of the Memphis and Charleston Railroad, the rates 
 'between Memphis and Corinth would not control the rates 
 of intermediate points, except perhaps one station near 
 Corinth, which is in Mississippi, the others being, like 
 Memphis, in the State of Tennessee and beyond the con^ 
 
8 
 
 trol of the Commission, as, for instance, from Ohewalla., 
 Tenn., to Memphis, 84 miles, the rate on a bale of cotton 
 maybe $1.50, while the rate from Corinth to Memphis, 
 93 miles, may be only 75 cents per bale, an arrangement 
 which would draw the cotton from local stations on the 
 Mobile and Ohio Eailroad through Corinth to Memphis, 
 and in that case the Mobile and Ohio Railroad should, we 
 think, be allowed to adjust its rates to Mobile, Mei-idian, 
 Cairo and East St. Louis to meet this competition at or 
 near Corinth without having as a consequence to reduce 
 its rates from intermediate points, which would entail a 
 heavy loss of I'evenue. 
 
 Very respectfully yours, 
 
 T. M. R. TALCOTT, 
 
 V. P. &G. M. 
 
BEFORE THE HONORABLE 
 
 (] 
 
 IN RE 
 
 Petition of the Chicago, 
 
 St. Paul, Minneapolis, and 
 
 Omaha Railroad Company. 
 
 BRITTON & GRAY, 
 
 Solicitors for Petitioner 
 
To the Honorahle 
 
 The Interstate Commerce (Jommiission : 
 
 The petition of the Chicago, St. Paul, Minneapolis & 
 Omaha Eailway Company, a corporation organized under 
 the laws of Wisconsin, would respectfully show unto your 
 Honorable Commission : 
 
 The Chicago, St. Paul, Minneapolis & Omaha Eailway 
 Company operates, under lease, a line between Minneapolis 
 and St. Paul, in the State of Minnesota ; and it owns and 
 operates a line from St. Paul, Minnesota, through Superior, 
 Wisconsin, to Duluth, Minnesota. 
 
 The distance from St. Paul to Duluth by this line is 
 176.6 miles, and its business between Minneapohs, St. 
 Paul, and Duluth thus passes out of Minnesota into Wis- 
 consin, and thence returns into Minnesota at Duluth. 
 
 The company also owns and operates a line from Su- 
 perior Junction to Washburn, both in the State of Wis- 
 consin. This line is used in connection with a portion of 
 the line first above mentioned, and the distance from St. 
 -Paul to Washburn is 187.6 miles. 
 
 Duluth, Superior, and Washburn are all ports on Lake 
 Superior. All of the through business, to and from eastern 
 points, between aforesaid Lake ports and St. Paul and 
 Minneapolis, is competitive with the St. Paul and Duluth 
 Railroad Company. That company owns and operates a 
 line of railroad from St. Paul and Minneapolis to Duluth, 
 wholly vnthin the State of Minnesota, and consequently 
 not amenable to the interstate law. The distance, from 
 St. Paul to Duluth by this line is 154 miles. 
 
 Duluth rates maintain via the Lakes between Superior 
 and Washburn and all eastern points. 
 
It thus appears that whilst business from Minneapolis 
 and St. Paul via the Lakes to all eastern points is com- 
 petitive between said railroads to Duluth on the one parf, 
 and to Superior and to Washburn on the other part, yet that, 
 as Duluth is the terminal point of shipment common to 
 both railroads, Duluth rates necessarily control the rates 
 at Superior and at Washburn. 
 
 So that to enable your petitioner to handle through 
 business in competition with that going to or beyond 
 Du!luth ma the St. Paul and Duluth R.K. Co., your peti- 
 tioner has within the past four years expended for terminal 
 facilities at Washburn, Wisconsin, more than $500,000 ; 
 at Duluth within the year last past more than $300,000 ; 
 and it is proposed to expend a large sum at Superior for 
 the same purpose during the present season. 
 
 The tariifs of your petitioner, both through and local 
 (hereinafter to be submitted), will show that its competi- 
 tive rates for through business to Superior and Washburn 
 are less in many instances than its local rates for shorter 
 distances over the same line, the shorter being included 
 within the longer distance. That result is inevitable, if 
 competition on through business with Duluth rates is to 
 be maintained. Otherwise the St. Paul and Duluth Rail- 
 road, not being within the operation of the interstate law, 
 could make rates to Duluth which would be beyond the 
 competitive power of your petitioner on its longer lines. 
 No greater rates could be obtained than the value of the 
 transportation to the shipper, and that would be meas- 
 ured by the Duluth rate. 
 
 The local rates of this company are believed to be just 
 and reasonable. It has from time to time made material 
 reductions in such rates of transportation for both pas- 
 sengers and traflfie, so that the rates now received per ton 
 per mile, and per passenger per mile, are as low as will per- 
 
mit of carriage at a profit. To fix Duluth rates as the 
 maximum for its local rates would compel your petitioner 
 to abandon its local traffic, or to carry it at a ruinous loss. 
 On the other hand, an increase of its through rates to Su- 
 perior or Washburn beyond the Duluth rates fixed by the 
 St. Paul and Duluth Company would necessarily force it 
 to abandon its competitive traffic. , 
 
 Wherefore your petitioner prays to be relieved from the 
 provisions of section four of the Interstate Commerce 
 Act of February 4, 1887, and to be authorized to charge 
 less for longer than for shorter distances for the transpor- 
 tation of property between Minneapolis and St. Paul, Min- 
 nesota, on the one part, and Superior and Washburn, Wis- 
 consin, and Duluth, Minnesota, on the other part, or for 
 such other relief as wiU enable your petitioner to transact 
 business between aforesaid points upon a basis competitive 
 with rates of the St. Paul and Duluth Railroad Company 
 between the two first-named companies and Duluth. 
 
 BEITTON & GRAY, 
 Solicitors for Petitioner. 
 E. W. WINTER, 
 General Manager Chicago, St. Paul, 
 
 Minneapolis <& Omaha Pailvjay Company. 
 
 CoxjNTY OF Ramsey, ) 
 State of Minnesota, 3 
 
 .Personally appeared before me, a notary public, duly 
 commissioned and qualified in and for the county and 
 State aforesaid, E. W. Winter, with whom I am personally 
 acquainted, and whom I know to be the general manager 
 of the Chicago, St. Paul, Minneapolis & Omaha Railway 
 Co., the above-named petitioner, and who made oath in 
 due form of law that the facts stated in the foregoing peti- 
 
tion as of petitioner's own knowledge, are true, and that 
 those stated upon information and belief he believes to be 
 true. 
 
 Sworn to and subscribed before me this 16th day of 
 April, A. D. 1887. 
 
 [SEAL.] GEO. A. HAMILTON, 
 
 Notary Pvhlixi.. 
 
BRIEF 
 
 Herewith are filed the existing local tariifs of the St. 
 Paul and Duluth R.E., between St. Paul and Duluth, 
 taking effect April 15, 1887 (Exhibit C), and the Chicago, 
 St. Paul, Minneapolis & Omaha R.R. between St. Paiil 
 and Duluth, Superior and Washburn, taking effect April 5, 
 1887.- (Exhibit A). 
 
 The coincidence of through rates between these roads, 
 and for such competitive points, is shown by the following 
 table, compiled from these tariffs for convenient under- 
 standing : 
 
■S,i>:,. 
 
 "^ r-t 
 
 HO 
 
 
 *8UTA\.g 
 
 p HB S3S JOH 
 
 •soiodtid'BiSaiax 
 
 o. ^'"r 
 
 ■jaqomT: 
 
 ^ g : . 
 
 
 
 P 
 o 
 
 SB 
 - o. 
 ■I? ■ 
 
 QQ 
 
 '^ 
 
 00 
 
 
 00 
 
 a 
 
 ro 
 
 
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 o 
 
 O 
 
 o 
 
 o 
 
 
 s g § .a m « 
 
 
 
 i| 
 
 ^1 
 
 
Examination of the Omaha Company's existing tariff 
 (Ex. A) will disclose : 
 
 1st. That the rates between St. Paul and non-competi- 
 tive intermediate stations on the company's line are ^aade 
 to conform to the rates prescribed for through transporta- 
 tion between St. Paul and the company's lake terminals at 
 Duluth, Superior, and Washburn, and in no case exceed 
 the rates thus prescribed to such lake points. 
 
 Thus the rates from Minneapolis or St. Paul to Turtle 
 Lake station — 75 miles distant from Minneapolis and in- 
 termediate points — are less than the rates to the lake, and 
 from this point onward nowhere exceed such local lake 
 rates. 
 
 The slight increase in rates to stations beyond Turtle 
 Lake, and named as South Chippewa Falls, Chippewa 
 Falls, Eagle Point, O'NeU Creek, Bloomer, Cartwright, 
 Chetek, Cameron, Hart's Siding, Eice Lake, Bear Creek, 
 and Bashaw, is explained by the fact that these are points 
 not on the line between St. Paul and the lake, but off 
 therefrom, on the road between Eau Claire and Chicago 
 Junction, as appears by the diagram attached to the 
 original petition. 
 
 Comparison of such existing tariff (Ex. A) with the for- 
 mer tariff of February 18, 1884 (Exhibit D herewith), will 
 show the large deductions made in local rates to such inter- 
 mediate non-competitive points. 
 
 Whilst space will not permit a tabulated statement 
 showing deductions to all such points, the following is 
 submitted as fairly illustrative thereof : 
 
9 
 
 Q 
 
 ^ 
 
 o 
 
 lO 
 
 o 
 
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 o 
 
 
 
 
 
 
 
 
 
 
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 HN 
 
 
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 r^ 
 
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3d. Whilst a comparison between the rates shown in 
 existing tariff (Exhibit A) between St. Paul and the Lake 
 ports with the rates shown in tariff of Aug. 23, 1886 (Ex-^ 
 hibit E herewith), will show a slight advance in the rates 
 to the Lake ports, such advance was necessary to prevent 
 a further reduction in local rates to intermediate stations 
 which the company could not grant and continue lopal 
 business with profit. 
 
 . This company has therefore conformed to both the spirit 
 and letter of the Interstate Commerce Law, and, as by 
 that Act intended, local shippers are receiving the full 
 benefit of the largely reduced rates now estabhshed by it. 
 
 But the present opening of lake transportation will start 
 the shipment of grain and other products to the Atlantic 
 seaboard thereover. Through shipment partly by rail and 
 partly by water must meet competing rates via other lines, 
 and the Chicago, St. Paul, Minneapolis, & Omaha Com- 
 pany must conform to such competing rate or retire from 
 the business. The company cannot do this, inasmuch as 
 fully ninety per cent, of its carriage between St. Paul and 
 the lake ports is of merchandise coming from or going to 
 eastern points, and but ten per cent, of its business of a 
 local character. Whilst rates for such through shipments 
 for the present season have not yet been fixed, an approxi- 
 mate estimate thereof may be made upon the business of 
 1886. 
 
 The rates that were in effect between St. Paul and Wash- 
 burn on through business interchanged with. Lake lines 
 during the season of 1886 were as follows : 
 
 1st. 
 
 2d. 
 
 3d. 
 
 4th. 
 
 5th Classes. 
 
 April 7th > ■ .. 
 to May 1st, 5 
 
 12 
 
 8 
 
 7 
 
 6c. per cwt. 
 
 May 1st ) ' nn 
 
 to July 10th, ^ 
 
 15 
 
 10 
 
 8 
 
 6 
 
 
 
 
 
 July 10th > 12 ■ 
 to close of navigation, y 
 
 10 
 
 8 
 
 6 
 
 5 
 
 
 
 
 
10 
 
 The through rates in effect from St. Paul or Minneapolis 
 to eastern points on wheat and its products during the 
 season of 1886 were as foUows : 
 
 May 26th to Juxy 20th. 
 
 PEK CWT. PEE CWT. 
 
 To New York 27Jc. To Boston, export. .27|e. 
 
 " Philadelphia 25ic. " Boston, local . . . 32|c. 
 
 " Baltimore 24|c. « Albany 27|c. 
 
 of which this line received as its proportion of through 
 rate above named 5c. per cwt. from St. Paul or Minneap- 
 olis to Washburn. 
 
 July 20th to Aug. 1st. 
 - The rates were changed and made as follows : 
 
 PEB OWT. PEK CWT. 
 
 To New York 25c. To Boston, export. . . . 25c. 
 
 " Philadelphia 23c. " Boston, local 30c. 
 
 " Baltimore 22c. " Albany 25e. 
 
 of which through rates this Company received as its pro- 
 portion from St. Paid or Minneapolis to Washburn 2Jc. 
 per cwt. 
 
 August 1st to Close of Navigation. 
 
 These rates were again changed and made as f oUows : 
 
 PEJt CWT. PEB OWT. 
 
 To New York .... 27Jc. To Boston, export . . 27ic. 
 
 " Philadelphia 25|c. " Boston, local 32|c; 
 
 " Albany 27|c. " Baltimore 24|c. 
 
 of which through rates this line received as its proportion 
 from St. Paul or Minneapolis to Washburn 5c. per cwt. 
 The following amount of business was interchanged with 
 
.11 
 
 Lake Imes- at the port of Washburn during the navigating 
 season of 1886 : 
 
 Flour, - - - - 496,077 barrels, 
 
 Mill-stuffs, - - - 3,567,390 pounds. 
 
 Merchandise, - - 14,729,831 pounds, 
 
 besides a large volume of miscellaneous' freight ndt 
 
 specified. 
 
 The average rate on the merchandise business was' one 
 and twenty-six hundredths cents per ton per mile ($.0126). 
 
 The average rate on wheat and its products was fifty- 
 three hundredths cents per ton per mile ($.0053). 
 
 It thus appears that this company received from one- 
 fourth to one-half of the rate now established between St. 
 Paul and the Lake ports on such through business, and it 
 cannot expect higher rates will prevail during the coming 
 season. 
 
 If, then, it is denied the privilege asked, of competing 
 with the St. Paul and Duluth Company, because its 'share 
 of such through transportation is less than its local rates 
 between the same points, it must either perform local busi- 
 ness at a loss, or retire from such through business, leav- 
 ing its competitor, who is not amenable to the Federal law, 
 in sole possession of the field. 
 
 But we confidently submit the facts thus presented es- 
 tablish that its transportation of "like kind of property" to, 
 or destined for, points beyond the Lake ports, is not per- 
 formed "under substantially similar circumstances and 
 " conditions" with the carriage between intermediate sta- 
 tions on its own line. The dissimilar circumstances which 
 create this obvious difference are : 
 
 1st. Competition with a rival line not made subject to 
 the interstate law, and which rival line may alter or 
 change its rates between St. Paul and the Lake without' 
 reference thereto, and whoUy within its own pleasure. 
 
12 
 
 2d. Extension of sucli competition to the Atlantic sea- 
 board without the control of the interstate law in the 
 mode set forth by the following clipping from the New 
 York World of April 15, 1887 : 
 
 " Dodging the Inteestate Law. 
 
 " [SPECIAL TO THE WOBLD.] 
 
 " St. Paul, Minn., April 14. — General Freight Agent 
 " Dodge, of the St. Paul and Duluth, has gone East to 
 " make arrangements whereby freight can be taken from 
 " New York city by the New York Central, a road whoUy 
 " within the State, to Buffalo, there to be reshipped to 
 " Duluth by steamboait lines, which are not under control 
 " of the new Interstate Commerce law. At Duluth the 
 " freight can be reshipped by the St. Paul and Duluth 
 " over a route wholly within tlais State. In this manner 
 " it is thought a rate can be established which is much 
 " cheaper than all-rail rates via Chicago." 
 
 Wherefore your petitioner asks that such order be made 
 as prayed, viz., that this company, in the language of the 
 statute, " be authorized to charge less for longer than for 
 " shorter distances for the transportation of passengers or 
 " property " between Minneapolis and St. Paul, Minne- 
 sota, on the one part, and Superior and Washburn, Wis- 
 consin, and Duluth, Minnesota, on the other part, until 
 the further order of this Honorable Commission. 
 EespectfuUy submitted. 
 
 BEITTON & GEAY, 
 Attys. for Chicago, St. Paul, 
 
 Minneapolis db Omaha B.R. Co. 
 Washington, D. C, 
 April 20, 1887. 
 
ARGUMENT 
 
 Gen. E. p. ALEXANDER 
 
 ON BEHALF OF THE 
 
 Central R.R. Co. of Ga. 
 
 BEFORE THE 
 
 INTERSTATE COMMERCE COMMISSION, 
 
 ATLANTA, GA., APRIL 28, 1S87. 
 
 JOHNS & EASTON, 
 
 Official Stenoobafhebb, 
 
 Washington, D. C, 
 
BEFORE THE 
 
 Interstate Commerce Commission. 
 
 Argument of Gen. E. P. Alexander. 
 
 Atlanta, Ga., April 28, 1887. 
 
 Mk. Chairman and Gtentlemen : 
 
 Making a speech is not one of my accomplishments, 
 probably because I was not brought up as a farmer, as was 
 the gentleman who last spoke (D. P. HiU). That part of 
 my education was entirely neglected, and I can only at- 
 tempt a plain talk on a few matters of business that I un- 
 derstand. 
 
 The " construction " of the law that is before us I do 
 not propose to touch upon at all. I think the law was 
 passed, as the gentleman who spoke last before me said, 
 at the demand of the people of the country, who have an 
 idea that, in some remarkable way, everybody everywhere 
 was being discriminated against. That being the situ- 
 ation, Mr. Eeagan imbibed the theory that a less charge 
 on a longer haul was an outrage, and preached a crusade 
 against it until the result was the passage of this law. 
 
 The gist of the law, I think, is contained in two provi- 
 sions — one for the prevention of pooling between the rail- 
 roads, and the other preventing the charging of a greater 
 rate for a short than for a long haul. Only the last of 
 these two provisions is before your honorable body for 
 consideration and approval or disapproval. The first, het 
 subject of pooling, is, unfortunately for the country, not 
 
before you. It is not in your power to consider it. I be- 
 lieve," if it were in your power to look into the subject, the 
 former practice of the railroads in that respect would be 
 approved, and the Commission itself would become, in 
 effect, the pooling commission of the railroads of the 
 United States for the purpose of enforcing contracts for 
 division of business and maintenance of uniform rates. 
 But the only question before us now is whether railroads 
 shall be allowed to continue the present universal custom 
 of accepting less rates f6r long hauls upon competitive 
 traffic than they charge non-competitive or less competitive 
 traffic over shorter hauls. Let me first make the present 
 custom clear by a practical illustration of a line of rates 
 now in operation. 
 
 DIAGEAM A. 
 
 
 
 
 
 157 
 
 
 
 
 
 
 
 
 
 
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 \ 
 
 1.37 
 
 
 
 
 
 J 
 
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 y^ 
 
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 120 
 
 
 
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 65 
 
 D E 
 
 G 
 
 I have drawn a diagram which illustrates the method in 
 which through rates from New York are at present ad- 
 justed along the line extending from Savannah to Mobile. 
 The horizontal line A I will represent the railroad, and 
 at various points along it representing a succession of 
 
competitive and local points, I have erected perpendicu- 
 lars proportioned to the amount charged for first-class 
 freight from New York to the point represented. The rate 
 from New York to Savannah by ocean is taken at 45 cents. 
 Going west, to that rate is added the rate to different local 
 stations from Savannah, as fixed by the Georgia Eailroad 
 Commission. At Tennille (135 miles from Savannah) it 
 will be seen they reach $1.36, but the through rate from 
 New York to Macon (192 miles from Savannah), fixed by 
 competition with other lines reaching that place, is only 
 $1.09. Hence, goods can go from New York to Macon 
 and come back eastward and reach stations between Macon 
 and Tennillfe at less to these stations than the rate to Ten- 
 nille. Going west from Macon again the rates rise at the 
 local stations until they reach $1.57 at Butler (240 miles 
 from Savannah). From thence they fall as we go west on 
 account of the competitive rate of $1.14 which prevails at 
 Columbus (292 miles from Savannah). From Columbus 
 they rise again gradually to $1.37 at Notasulga (340 miles), 
 where the influence of the through rate of 90 cents which 
 prevails at Montgomery affects them. From Montgomery 
 (386 miles) they rise to $1.20 at Evergreen (550 miles), 
 and then fall going west to 65 cents at Mobile (650 miles). 
 The rate from New York to Mobile is fixed by direct ocean 
 transportation, and cannot be advanced — in fact it is not 
 maintained at 65 cents, but in competition sometimes goes 
 as low as 20 cents. 
 
 The lines joining the tops of the perpendiculars which 
 represent the rates at the various points mentioned, make 
 a zigzag line with high points at the local stations most 
 distant from points of competition, and low points at the 
 latter places. 
 
 Now, a line of rates which will comply with the require- 
 ments of the fourth section, or which wiU not be less upon 
 
any longer haul, cannot have any such succession of high 
 and low points. When the rate has once reached a cer- 
 tain height as we go west from Savannah toward Mobile, 
 it cannot after that descend. It must either continue to 
 rise or keep on a horizontal. If, therefore, the road ex- 
 pects to compete at Mobile for freights from New York 
 it must cut off all rates east of Mobile by a horizontal 
 through the Mobile rate, which is 65 cents. A glance at 
 the diagram indicates what an enormous reduction of aU 
 intermediate rates this would effect, many of them being 
 reduced more than fifty per cent., even when the Mobile 
 rate is maintained at 65 cents, its highest point. Should 
 competition there force it down to 40, 30, or 20 cents, as 
 may happen, all intermediate rates also would have to 
 submit to the same reduction. Evidently, therefore, the 
 railroad cannot enter into competition at Mobile, or even 
 seek to do any business tq Mobile at regular rates, if the 
 restriction is put upon its line of rates, that a lower charge 
 shall never be accepted for a longer haul. The water line 
 would be always free to reduce rates, while rail lines would 
 sacrifice all interior business with every reduction. The 
 diagram makes it absolutely clear that a rail line cannot 
 compete at a water point under this restriction. 
 
 Next, let us go back to the state of competition at 
 Montgomery, the first competitive point east of Mobile. 
 The competition of the water lines does not cease at the 
 waters' edge, but reacts by river and rail into the interior. 
 At present the best rate which can be maintained at Mont- 
 gomery upon first-class goods is 90 cents. If the restric- 
 tions of the fourth section are put upon competition at 
 Montgomery, all rates east of that point must be reduced 
 to the 90 cent level. The diagram shows how severe the 
 penalty would be. Similarly at Columbus and Macon 
 the effects of any such restriction will be seen to cause 
 
large reductions in the local rates. These local rates 
 we can confidently claim are not exorbitant ; they are 
 fixed by the Georgia EaUroad Commission, and there 
 has been neither public or private complaint of them 
 to my knowledge. Another proof that they are not 
 exorbitant lies in the fact that our railroads do not 
 return to their stockholders large profits upon their invest- 
 ment. Since its organization, the company I represent 
 has averaged about six per cent., and it is an exception in 
 returning that much to any other railroad in the South. 
 I do not think there is another road in the South whose 
 record is equal to it. Three or four large systems com- 
 prise most of the railroads : the Eichmond and Danville, 
 the East Tennessee, Virginia and Georgia, the Louisville 
 and Nashville, and the Cincinnati Southern. None of these 
 roads have been steady dividend prayers ; many of them 
 have never paid any dividends at all, and many have passed 
 through the hands of receivers, owing to their not being 
 able to meet fixed charges and expenses. 
 
 The Central Eailroad, which I represent, is exceptionally 
 well situated, in that it is the short line to most of the 
 territory that it serves ; that its stocks and bonds aggre- 
 gate only about $20,000 per mUe ; that it has exceptionally 
 good terminal facilities at all points, acquired many years 
 ago when land was cheap, and that being one of the oldest 
 roads in the South population and business has grown up 
 along its lines, under the stimulus which railroad transpor- 
 tation affords, for over forty years. It cannot be claimed 
 that our stock is watered, that our profits are larger than 
 such an investment is reasonably entitled to receive, or 
 that our rates are oppressive. Nor do I think the same 
 can be asserted of the railroads generally in the South. 
 The effect of the restriction of the fourth section is plain 
 from a glance at the diagram exhibited above. 
 
8 
 
 There are few subjects, however complicated, which can- 
 not on a thorough understanding be reduced to a single prin- 
 ciple or fact expressible in a very few words. The whole 
 moral law of the Old Testament was expressed in the Golden 
 Rule, " Love thy Neighbor." Similarly, I think the whole 
 tendency and effect of the fourth section can be condensed 
 in the single phrase, " A Penalty on Competition." 
 
 Is that what the people demand ? Is it not a complete 
 reversal of the system under which the country has grown 
 and business developed and the valuations of property been 
 adjusted ? 
 
 The diagram that I have drawn indicates, too, that the 
 severity of the penalty is such that it must seriously and 
 powerfully restrict competition. . It will be competition in 
 irons. Competition with a ball and chain attachedj and 
 competition grossly unfair t© the railroad interests, in that 
 the water routes are to be left entirely unrestricted. Ocean 
 lines, and lines running only upon rivers, are not subject 
 to the provisions of the bill, and are not under the juris- 
 diction of this Commission. They are left free to reduce 
 rates and to raise them at their pleasure ; to give rebates ; to 
 make pools, and to carry out their own devices as they see 
 fit. As every fact must illustrate the truth, so I think 
 every argument against our petition which has be'fen, or 
 which will be, presented to your honorable body in its tour 
 through the South will only illustrate the truth of what I 
 have said. 
 
 There are four classes who will oppose its being granted, 
 and samples of them all have already been before you. 
 
 First are the steamboat men from the Mississippi riveir. 
 This interest and the ocean steamship interest of course 
 wiU oppose the granting of the petition, because it would 
 be greatly to their profit to have railroad competition with 
 them thus thrown into irons and hampered with a ball and 
 chain. 
 
Next -will appear representatives of wliat I venture to 
 call a narrow-minded class, sometimes found in cities along 
 the sea-shore. They have the benefit of competition by 
 water lines which the law does not touch. It seems to 
 them that a restriction upon the system of railroad com- 
 petition would give their cities large comparative advan- 
 tages over cities located in the interior. Comparative 
 advantages are positive advantages, and they think that 
 the growth of interior places being checked, the future de- 
 velopment of this country would be forced to take place 
 principally at its seaports. Hence they wish to see inter- 
 ior competition throttled. They do not express their 
 wishes in those words, but advance to you only such 
 general arguments as this : That Congress must be supposed 
 to know best what the interest of the country demands ; 
 that Congress in its wisdom has passed this law, arid that 
 it is a reflection upon that wisdom for the Commissioners 
 to suspend its operation. They entirely ignore the point 
 that Congress in its wisdom hesitated as to its results, and 
 confided to your honorable body the duty to investigate 
 and the discretion which I ask you to exercise. 
 
 The third class of objectors to our petition will be from 
 local points in the interior, which do not possess the ad- 
 vantages of competition, and, not having it themselves, 
 want it taken from those who have. The committee from 
 Opelika represented this class of objectors. OpeUka is an 
 interior and non-competitive point ; it lies at the intersec- 
 tion of two railroads, which have both been through bank- 
 ruptcy. It can present no argument why it should have 
 competitive rates which will not apply to Salem, Cusseta, 
 or any other local point upon any other railroad. I will 
 touch, further on, upon the results which would follow if 
 all such petitions were granted and all interior points put 
 on an equality or on rates proportioned to distance which 
 
10 
 
 would be the result. The last class of objectors to our 
 petition was well illustrated by the gentleman who ad- 
 dressed you last before dinner. His address was not an 
 argument, nor was it based upon any facts. 
 
 It was the stale old story that railroads are immense 
 corporations which oppress the public, and which, having 
 had the right of eminent domain exercised in order to se- 
 cure their rights of way, should now be required to serve 
 the public at whatever rates the public choose to pay. 
 
 Gentlemen who use such arguments cannot be argued 
 with ; their minds are possessed with one idea, which ex- 
 cludes all others, and it is useless to enter upon anj* pro- 
 cess of reasoning with them. 
 
 An excellent story was told by Dr. Depew, of New York, 
 as illustrating the state of mind on this subject, of Mr. 
 Eeagan, the father of the feature of the law under discus- 
 sion, and I wiU repea,t it as equally appropriate to the 
 gentleman who preceded me. A visitor to a lunatic asylum 
 saw there a lunatic sitting astride of a chair, cracking a 
 whip and crying, Go on ! Go on ! To please the lunatic, 
 the visitor remarked, " That is a very fine horse you are rid- 
 ing." The lunatic stopped for a moment, and looking up 
 at him said, " This is not a horse, it's a hobby," and again 
 he cracked his whip and cried " Go on !" Stopping again, 
 he said, " Don't you know the difference between a horse 
 and a hobby?" "No," said the visitor, "what is it?" 
 Why, said the lunatic, " you can get off of a horse." 
 
 I only regret that the other matter upon which Mr. 
 Eeagan had a hobby, and which he also incorporated into 
 the bill, viz., the provision of pooling, is not also before 
 your body for investigation and report. I should expect, 
 to see the transportation millennium approaching should 
 your honorable body be appointed Commissioners for life 
 to regulate contracts between railroads for the maintenance 
 of equal rates, based upon fair divisions of business. 
 
11 
 
 "We in the South were probably the first in the United 
 States to adopt that method of abolishing rebates and 
 maintaining uniform rates, and we had carried it to such 
 success as to greatly allay, if not entirely remove, the ap- 
 prehension with which the public first regarded it. They 
 had grown to recognize that pooling contracts not only did 
 not give rise to too exorbitant rates, but that, under them, 
 rates were gradually reduced while being maintained equal 
 to all. 
 
 We can point with pride, I think, to the general satis- 
 faction with the transportation service of the South, which 
 is made apparent by the general support which our peti- 
 tions before you are receiving. Considering the light 
 character of our business and our sparse population as 
 compared" with the North, I thiak it is apparent that we 
 are fostering with much success the growth of manufac- 
 turing, mining, and commercial enterprise throughout our 
 territory. But there is one important fact concerning the 
 transportation business of the South which ha* not here- 
 tofore been touched on before you, to which I wish to call 
 your attention. 
 
 I have shown by the diagram exhibited above that any 
 large reduction of our rates would reduce our revenues to 
 the point of bankruptcy of the railroads ; but it might be 
 asked whether a large reduction would not turn a great 
 volume of business from the West to our Southern sea- 
 ports, and thus compensate us by the large increase in vol- 
 ume for the lower rates at which it would have to be worked. 
 Some such idea is, indeed, prevalent in the South, and 
 often finds expression in our newspapers, and has led to 
 the throwing away of a great deal of money in the South 
 in building unnecessary lines. It has been imagined that 
 it would be an easy thing to make outlets of our Southern 
 ports for the grain and hog products of the West on their 
 
12 
 
 way to the North or to Europe, but both reason and ex- 
 perience contradict the idea. 
 
 The products of the South which we have to ship coast- 
 wise to the North, or on vessels across the Atlantic, are 
 all heavy and bulky, such as cotton, rice, naval stores, 
 lumber, and pig-iron. These products furnish our coast- 
 wise shipping, and the ships which go abroad full cargoes, 
 but coming back they have very little freight to load in- 
 ward, and to a great extent they must come back empty. 
 The eastern products which they have. to bring are princi- 
 pally such as dry goods, shoes, hats, &c., which come in 
 comparatively small quantities, and are light in weight: 
 hence our Vessels coming southward come merely in bal- 
 last. 
 
 Tl^ere are two results from this. First, their rates upon 
 the outgoing products have to be nearly enough to pay 
 for the round trip. Second, they want heavy freights for 
 ballast coming South, and can afford to bring such freights 
 at excessivftly low rates — almost for no rates at aU. 
 
 Now the Northern and Eastern ports, New York, Phila- 
 delphia, and Baltimore, by means of the lakes and canals, 
 have water transportation as far west as Duluth. More- 
 over, their rail lines serve very dense populations which 
 supply traffic enough to support double and even quad- 
 ruple tracks, and they can work at rates far below what it 
 is possible to support the single track roads of the South 
 upon, running through sparsely settled communities. Again, 
 the money centres of the country have become established 
 in the North and East, and the large movement of the 
 crops must be made to and through these money centres. 
 The result of aU this is, that instead of our Southern ports 
 being outlets for Western products, they are in fact in- 
 lets, through which these products carried first to New 
 York by the lakes and the trunk lines, and then brought 
 
13 
 
 coastwise by steamers and sailing vessels, which are 
 glad to get them for ballast, actually come in at and 
 supply a large part of the territory near the coast. 
 From this fact, railroads built to Port Eoyal and Bruns- 
 wick, under the idea that the deep water of those harbors 
 coiild be utilized for the export trade, have been financial 
 failures in every instance. Not a ton of western products 
 has ever gone North from them, but instead these products 
 come around by- the route above indicated, and to a con- 
 siderable extent actually deprive the railroads of western 
 business for the ports themselves, and largely reduce the 
 rates on what they are able to control at all. When it 
 is remembered that these products are best handled in car- 
 load lots, and that if brought to our southern ports for 
 shipment North, would have to break bulk and go on ship- 
 board and be handled off ship again at the northern cities, 
 it is plain that we can never hope to turn this tide back- 
 ward. Neither can we ever hope to build up an export 
 business to foreign countries. That business must always 
 be done through the commercial and financial centres such 
 as Ne^ York, Philadelphia, Baltimore, and Boston. 
 
 Several years ago, being connected at the time with the 
 LouisviUe and NashviUe Eailroad, the president of the 
 Port Royal Railroad came to me for help in making an ef- 
 fort to start an export business from Port Royal. He had 
 believed in its possibility, and built an elevator to. handle 
 grain. His elevator was finished and an English vessel 
 with a cargo of steel rail was expected to unload at his 
 wharf. He was anxious to get a return cargo of grain to 
 Liverpool by this vessel, and came to me to ask a low rate 
 on the grain for this purpose. I agreed to dead-head it 
 for him all the way from the Ohio river, or from Chicago 
 if necessary, to load his first vessel, but after Ifeeping her 
 on demurrage for some weeks in a vain effort to get a cargo 
 even with this cpncession his vessel sailed away empty. 
 
14 
 
 To return now for a moment to the state of affairs which 
 would follow if it were possible to abolish the present cus- 
 tom of giving lovsr rates to interior competing points, than 
 to points which are local or non-competitive. 
 
 In the first place, it should be noted that the injustice 
 which is apparently done to the local points is much more 
 apparent than real. The concessions in rates which are 
 given to the competing points do not stop within the city 
 limits, but are carried outward in the trade of the town by 
 wagon and by rail to every consumer or producer who 
 buys or sells there. The town is but a distributing centre, 
 which receives the concessions in rates and passes them 
 on to those who trade there. Those who are near get the 
 full amount ; those who are far off get the benefits in de- 
 gree proportioned to their distances. The function of the 
 distributing centre is to act as a middleman who collects 
 and handles in large quantities the articles produced and 
 consumed by a scattered agricultural population, in small 
 quantities at a time, and the middleman simply passes 
 on to producers and consumers the low rates which he en- 
 joys. 
 
 Next, it must be observed that the present system of 
 giving lower rates to competing points, and thus building 
 up distributing centres, possesses incidental advantages 
 which are of great importance to the country at large, and 
 which it could not afford to dispense with. 
 
 First. It provides concentration of capital and business 
 in large concerns, which can serve their customers more 
 efficiently and cheaply than smaller ones. 
 
 Second. It enables the smaller consumers and pro- 
 ducers and dealers to trade near home where their credit 
 is better known, and where they can secure better terms 
 than if they had to trade in distant centres in the North 
 and East. 
 
15 
 
 Third. The bringing of people together in cities and 
 larger communities promotes both the growth and the 
 variety of manufactures, thus furnishing employment not 
 only for men, but for children and females, and rendering 
 possible many industries which could not otherwise esdst. 
 
 My time will not permit me to expand thi# line of 
 thought, or to illustrate it further, but no more I am sure 
 is necessary to make it apparent that any radical change 
 in the methods of transportation now prevalent promises 
 only great disturbance and no improvement. They are all 
 natural outgrowths of the political system of the country 
 and of its geographical features. In the language of Dar- 
 win, they are " developments " or " adaptations to environ- 
 ment," and the only complaints which have come before 
 you are plainly, palpably, only those of the selfish or of 
 the uninformed. 
 
 Commissioner Walkee. You have omitted one point 
 which I would like you to explain. As a matter of fact, 
 are you able to make long hauls at less than three-tenths 
 of a cent a ton a mile ? 
 
 Gen'l Alexander. Yes ; if it is extra business — business 
 in addition to what I am now doing. My whole business 
 at the end of the year wiU average, of course, more than 
 that in cost, but being now organized for business, having 
 equipment and rolling-stock, and a track not fully em- 
 ployed, I can take extra business at a very small expense, 
 and would be willing to undertake it in any quantity. If 
 return freights could be given at the same rates, I would be 
 glad to undertake to move the mountains to the sea at that 
 rate. An illustration, drawn from ordinary business, will 
 make the principle clear. A merchant opens a hat store 
 here in Atlanta, and lays in a large stock of hats. He 
 finds that to pay his rent and clerk hire, and interest on 
 his investment, he must charge, say, an average of 20 per 
 
16 
 
 cent, profit on his retail sales. Suppose that a stranger 
 passing through the city should enter his store and say, 
 " I am a resident of New lOrleans, and on my way home. 
 If you wiU sell me a hat at three per cent, profit on its 
 cost to you, I wiU buy it and throw away my old hat, but, 
 if you c*nnot, I will wear the old one until I get home, 
 then buy a new hat, and save this for rainy days." Would 
 not the hat merchant make a mistake not to accept the 
 offer and make the sale ? He has the stock on hand, his 
 store rented, and his clerks hired. The man is not one of 
 his regular customers, and he is able to sell him only, as 
 it were, by accident. If he were to reduce his profits on 
 all his sales to that amount, he would go into bankruptcy, 
 but he would be plainly losing money not to sell a hat at 
 three per cent, profit to the, traveller who could not afford 
 to pay more. 
 
 That is the principle upon which a railroad can afford 
 to take extra businetip. Its money is already invested, its 
 officers employed, its track maintained, its equipment pro- 
 vided. There may be a theoretical injustice in the hat 
 merchant selling to a stranger for less than he sells to his 
 own customers, but it is only theoretical ; for if many 
 strangers will patronize him and increase what we might 
 call his foreign trade, he can even afford to reduce his 
 prices to his local trade. So when a railroad is free to 
 take any business which wiU pay it a profit above the bare 
 extra cost of handling that business, it should be free to 
 do so, and its doing so tends to benefit even the local cus- 
 tomers who seem to be discriminated against. 
 
 Finally, after all, the railroads, in petitioning your hon- 
 orable body to relieve them from the restrictions which 
 the fourth section otherwise puts upon us, is preferred 
 more in the interest of the communities we serve than in our 
 own, I have shown that these restrictions act as a pen- 
 
17 
 
 alty npon competition. If you enforce these penalties it 
 cuts off competition. This will leave each railroad to 
 serve the territory to which it is the short line. It would 
 give it the business which it was built to carry on, and 
 prevent it competing in the territory of any other railroad. 
 This state of affairs I really believe would make more 
 net money for each of the railroad systems of the South 
 than the present system which allows them to compete in 
 each other's territory. To apply it to the system which I 
 represent (the Central Railroad), I can say confidently that 
 I can willingly abandon competition at Mobile and New 
 Orleans, and give up the business which I get to those- 
 points, if the long lines which compete for my nearer busi- 
 ness are restricted in the competition. I do not care to 
 take business into the territory of anybody else, if no other 
 system is allowed to come into mine. But I foresee clearly 
 that it is not to the interests of the country that so radical 
 a change should be introduced. It could not stand if it 
 were attempted. The few cranks and people representing 
 selfish interests who now favor it would never be heard 
 from in the general and universal protest which the en- 
 forcement of such restrictions upon competition would call 
 forth. It would be as useless to attempt it as it would be 
 to make the Mississippi river run up stream. The effort 
 to do so would only produce temporary disturbance and 
 calamity, and it would ignominiously fail in the end. 
 Therefore, I ask your honorable body to exercise the discre- 
 ti on vested in you, and to permanently suspend the operation 
 of the fourth section. It must come to that in the end, 
 and the sooner and more thoroughly it is done the better 
 it will be for all interests involved. 
 
ARGUMENT OF 
 
 limU A. SDELBON, 
 
 Receiver of the Texas and Pacific Railway^ 
 
 BEFORE THE 
 
 Inter-State Commerce Commission. 
 
Mr. Chairman and Gentlemen of the Commission : 
 
 TUe fourth section is the principle feature of the Interstate 
 Gomiuerce Law, that is causing perplexity to carriers by rail- 
 way, and giving work and trouble to the honorable Commission. 
 Confusion is a necessary consequences of changes from oue 
 system to another, and as this section, in some respects, is a 
 radical innovation or complete revolution as to the principles 
 which have heretofore governed transportation, and is .«o sudden 
 (as little time has been given for consideration and preparation) 
 that all find themselves confronted by uncertainty and doubt. 
 
 The Interstate Commerce Law was passed to prevent certain 
 supposed evils which, it is believed, have grown up under past 
 methods. These evils are alleged to be as follows : 
 
 1. Unjust and unreasonable charges. 
 
 2. Unjust and unreasonable discriminations against individ- 
 uals. ' 
 
 3. The withholding of proper frtcilities from shippers and 
 other patrons of the railways. 
 
 4. Instability of rates. 
 
 5. Discriminations against localities. 
 
 The last paragraph of Section 1, is intended to be a corrective 
 of the first alleged abuse, and is simply an enactment of the 
 principle of the common law, which also has a cognate in the 
 civil law. For centuries, in England and during the life of this 
 nation, the courts have been open to redress grievances arising 
 under this principle and whenever appealed lo they have afforded 
 adequate relief. The fifth section may have been intended to re- 
 move the inducement to this abuse by forbidding pooling of 
 earnings. Section 2 and the first paragraph of Section 3, amply 
 provide against discriminations as to individuals and are a repi- 
 tition of common law principles which have been enforced by 
 the courts, whenever ai)pealed to and to grant redress in such cases 
 
may be said to have become a part of the settled jurisprudence 
 of this country. 
 
 The last paragraph of Section 3 sufficiently covers the matter 
 of supplying facilities, and to do this has long been recognized 
 as an obligation of carriers, whether by rail, water or otherwise. 
 
 The sixth section, in its many paragraphs, is in part designed 
 to prevent instability of rates, and it may have that effect to a 
 certain extent, and it may have some bearing in avoiding also 
 discriminations against individuals as a sudden and secret 
 changing of rates has operated to render trade uncertain and 
 unreliable, and has been the cause of much individual injury 
 and sometimes disaster. That rates must be printed and pub- 
 lished and cannot be advanced until ten days' notice has been 
 given, nor reduced until new schedules have been printed and 
 posted or changes noted on existing ones, may be some hindrance 
 to sudden fluctuations, but it would have been far wiser and 
 more efficacious if it had been required that rates should not be 
 increased or lowered until thirty days' notice is given, for re- 
 duction is as unsettling and may be as effective in producing 
 individual discrimination as an advancement in rates. 
 
 I make these general observations as preliminaries to saying 
 that none of these evils are in the slightest degree affected by 
 the provisions of the fourth section, except possibly discriminat- 
 ing against localities, and were that section stricken out of the 
 law every other alleged abuse can be prevented under other 
 sections and provisions. Even discriminations against places 
 are practically by the last paragraph of Section 1 inhibited, and 
 can be prevented by its enforcement. Hence the fourth section 
 has very little practical value, even in preventing discrimina- 
 tions against localities. If the long and short haul clause were 
 wholly suspended, or had never found a place in the statute, this 
 abuse could be successfully prevented by enforcing the inhibi- 
 tion against unjust and unreasonable charges, for to redress this 
 grievance the courts are always open, under the common law as 
 well as the act of congress, and under it any person deeming 
 himself aggrieved may appeal to the honorable Commission. 
 
'I 3] 
 
 One feature of this law is peculiar aud harsb, and with due 
 respect to the Oongress of the United States, I must say ope- 
 rates unjustly. The whole law is aimed at railroad transporta- 
 tion only. It is true that certain water lines itre included when 
 operated in connection with railroads in the manner designated 
 in the act. Their offense is not that they are water lines, but 
 because they are adjuncts of railway lines. Water lines, whether 
 by sea, lake or river, are in many instances engaged in inter- 
 state commerce as much as railways. These and all other car- 
 riers, though subject to the common law, are exempt from the pro- 
 visions of this act.. This is an undisguised discrimination against 
 one class and in favor of another — a feature of legislation with- 
 out precedent in this country. It matters not that railway com- 
 panies are chartered corporations and in their behalf the right 
 of eminent domain is exercised by the government, as in all cases 
 they are required to pay for all they get from private persons. 
 All carriers pursue their occupation for private gain, but are 
 made responsible to the public and heretofore have been equally 
 regulated and controlled by law. 
 
 I am aware that the clamor has been especially against rail- 
 roads becaus", probably, they do the bulk of internal transpor- 
 tation and are therefore most prominent. I assert that whatever 
 abuses have been practiced in railway transportation, whether 
 they are unjust and unreasonable charges, unjust discrimina- 
 tions against persons aud places, instability and fluctuations in 
 rates, withholding proper facilities, traffic agreements or pooling 
 contracts, those engaged in transportation by other methods 
 have been equally gailty, except in magnitude, and there is 
 nothing that railroads can do that cannot be done by those who 
 employ other carrying agencies. 
 
 One is puzzled to know what there is to justify this discrimi- 
 nation. It is contrary to our practices as a nation, aud in 
 marked violation of the principles of our institutions. There are 
 some reasons why railroads should be singled out for favor in- 
 stead of disfavor as against water lines. Seas, lakes and rivers 
 cost nothing to man in construction and nothing for mainten- 
 
[*] 
 
 ance, except to the public treasury, while railroads, as a rule, 
 have been built with private capital. It is a rule that has ex- 
 isted for centuries in ail civilized countries, and which none but 
 socialists and communists combat that those who put their 
 money into enterprises, business or property, are entitled to a 
 reasonable rteturn upon their investments. Besides it is a fact 
 publicly known that, through the agency of railroads, the cost 
 of transportation has been materially cheapened all over the 
 country, and the efforts of the water lines against railroads are 
 not iaoited entirely by considerations of public welfare, because, 
 wherever railroads can be embarrassed or driyeu out of bu-iiiess 
 competitiou is removed and rates may be increased. 
 
 These considerations are pertinent, as the exercise of the sus- 
 pensive i)ower under the fourth section, it is assumed should 
 take place after consid .'ring all the surrounding circumstances 
 and with reference to private and public interests. If tbe fourth 
 section was designed to prevent discriminations against locali- 
 ties if rigidly enforced, it will effectually suppress competition 
 in numerous instances. 
 
 Congress approached the enactment of the fourth section with 
 doubt and misgiving, as is shown in the debates and the fact 
 that the first clause was not made a cast iron rule, and that its 
 non-enforcement to a certain extent was placed within power of 
 the Commission. It is provided that suspension may be granted 
 in special cases, but this power, after all, must be exercised 
 upon some general and recognizable principle. After sufficient 
 investigation, I have no doBbt, all cases will be decided upon 
 rules specifically declared or easily deduced from precedents 
 that are made by your honorable body. 
 
 Some iliffereuces have already arisen as to, when and under 
 what circumstances the Commission may exercise this power. 
 The inhibition against charging less for a longer than for a 
 shorter haul over the same line and in the same direction, is 
 only in cases wiien the " circumstances and conditions are sub- 
 stantially similar." When substantial similarity clearly appears, 
 the commission is without authority to suspend. I conclude 
 
f5] 
 
 that railway officials may undertake to decide for themselves 
 and at their own risk, when the circumstances and conditions 
 are not substantially similar, and if they are sustained by the 
 Commission and the courts they are not answerable to the law, 
 and that the province of the commission under this section is to 
 determine when the circumstances and conditions are so far dis- 
 similar as to justify suspension. 
 
 The difficult question is to determine when there is a substan- 
 tial dissimilarity, and what facts shall constitute it. No rule 
 would be justifiable that would entail upon railways a grievous 
 loss or deny them legitimate opjiortunity to earn a reasonable 
 income upon the money invested in them, nor to deprive any 
 part of the public of the benefits of competition, for it is the 
 life of commerce, the very spirit of progress and development, 
 and the effectual antidote for monopoly. 
 
 What are just and reasonable charges depends upon many 
 circumstances and conditions, — generally upon the necessary 
 cost of construction, expense of operating and the volume of 
 business. Railroads are built with reference to all the business 
 they can command on the line and at the termini. They are es- 
 tablished with reference to objective points, those that have 
 traffic of value as an existing fact or have it in prospect. It 
 would seem to be unjust to compel them to forego either the 
 through or the local business in any case. If the first clause 
 of the fourth section is rigidly enforced many railways will be 
 compelled to abandon the through for the local business. This 
 will in some cases leave terminal points without rompetition, 
 aud consequently without competitive rates and without any 
 benefit to the intermediate people. 
 
 Charging less for a longer than for a shorter haul is not neces- 
 sarily unjust discrimination, nor is it a conclusive presumption 
 tliat the larger charge tor the shorter distance is unjust and un- 
 reasonable. Volume of business has an important bearing. If 
 the charge of a dollar per hundred pounds enables the railway 
 to secure a daily train of ten loads from New Orleans or St. 
 Louis to El Paso, and if it is reduced to seventy-five cents fif- 
 
[6] 
 
 teen loads are secured, the railway makes more money in the 
 latter case than in the former; and also in case it charges only 
 sixty cents and thereby gets twfnty "loads, its profits are still 
 greater, because the increase in cost of handling the latter 
 trains is not in proportion to the increase of freight hauled. So 
 also should the charges be less when the cars can have loads 
 both ways than when they must go loaded one way and empty 
 in returning. Competitive points usually furnish much more 
 trafftc than way stations, because as a rule they are important 
 trade centres, from which commodities move in all directions, 
 while local points are rarely able to furnish any considerable 
 amount of return freight. It cost as much to switch one car as 
 a whole train. 
 
 The principle that Vhat appears to be, and in a certain sense 
 is, discrimination, is not iieressarily unjust discrimination, is not 
 only recognized among carriers and in commercial circles, but 
 has been repeatedly so declored by the courts in this country 
 and in England. In his treatise on the Law of Railroads, by 
 Mr. Wood, the author in speaking upon the rate for transporta- 
 tion of large quantities of freight, in contradistinction to that of 
 a small quantity, says that to charge the same rate in both cases 
 would be unreasonable equality and would be unreasonable dis- 
 crimination against the large shipper. P. 570. Ajudge,inacase 
 cited in a note on p. 568, uses this language : " The charging of 
 another party too little is not charging you too much." 
 
 The real question is, whether it is unjust discrimination if a 
 rate is fixed at one point that a lower one may be charged when 
 the transportation is for a longer distance. Is it either right or 
 proper to shut a railroad out of through business when it can- 
 not afford to Sr. orifice just and reasonable rates on local business ? 
 An Oregon court has recenily said in passing upon a similar 
 question under State law: "If the legislature cannot require a 
 railway corporation formed under the laws of the State to carry 
 freight for nothing, or at any less rate than a reasonable one, 
 then it necessarily follows that this provision of the act canuot 
 be enforced so far as to prevent the railway from competing 
 
[7] 
 
 with the water craft at Gorvallis and other similarly situated 
 points, even if in so doing they are compelled to charge less for 
 a long haul than for a short one in the same direction. . It is not 
 the fault or contrivance of the railway that compels this discrim- 
 ination, but it is the necessary result of circumstances altogether 
 beyond its control. It is not done wantonly, for the purpose of 
 putting the one place up or the other down, but only to main- 
 tain its business against rival and competing lines of transpor- 
 tation. In other words, the matter, so far as the railway is con- 
 cerned, resolves itself into a choice of evils. It mu>t either com- 
 pete with the boats during the season of water transpurtation, 
 and carry freight below what the legislature has decjlaied to be 
 a reasonable rate, or abandon the field and let its road go to rust. 
 
 "I^^or can the shipper at the non-competing point or Over the 
 short haul com[)lain so long as his goods are carried at a reason- 
 able rate. It is not the fault of the railway that the shipper who 
 does business at a competing point has the advantage of him. It 
 is a natural advantage which he must submit to, unless the leg- 
 islature will undertake to equal'ze the matter by prohibiting the 
 carriage of goods by water for a less rate than by rail. And 
 when this is done the inequalities of distance, as well as place, 
 may also be overcome by requiring goods to pay the same rate 
 over a short haul as a long one, and then the shipper at Ash- 
 land will be as near the market as any one." 
 
 Lansing on Railway Lines, p. 22, uses the following language: 
 "The cost of no single shipment can be determir:ed It is car- 
 ried on a freight train, which also carries many other shipments 
 consigned to many places. The same train often carries emi- 
 grant passengers, and is run over a track which is also used by 
 passenger trains. Besides these e'ements, there are large ex- 
 penses incurred by the company, of which an indefinite amount 
 is chargeable to the various classes of traffic, each by itself — as 
 passengers, freight, express, or mails. 
 
 "The only course then left to the railroad is to take the freight 
 at whatever rate the shipper can send it with profi-t to himself, 
 
,L3J 
 
 and hope^the whole of its truffle; will amount to a greater sum 
 than the cost of the service. The railroad may thus for years 
 continue carrying freight at rates which do not cover the cost 
 of the service, while the shipper will immediately stop his 
 freight as scon as its transportation cea?es to t»e remunerative 
 to him. The rates caa in no case be more than the value of the 
 service, but they may be less than its cost. Between these two 
 limits, the former of which ultimately determines the point below 
 which no rates will be held, and the latter of which immediately 
 determines the point above which no freight will be sent, there 
 is in practical operation a varying scale of rates determined by 
 competition both of parallel lines and various commercial forces." 
 It may be possible for legislation to override all the laws of 
 trade and attempt to create equality as to circumstances and 
 conditions as to every locality in the country, but it will be both 
 impracticable and unjust. A, through his foresight or good 
 luck, settles at a point which is or turns out to be a competitive 
 point, while B, through stupidity or bad luck, settles out in the 
 countji'y, where there is little business and no competition. Is 
 it the mission of legislation to step in and make up for B's dull- 
 ness or ill fortue ? The greater part of the population of the 
 country is remote from natural channels of transportation. Eail- 
 roads have penetrated the interior by tunnelling mountains, fill- 
 ing valleys and bridging rivers. It is true that this has been 
 done that an income may be derived from investment, but it is 
 at the same time an accommodation to the interior people, and 
 the cost of doing their business is comparatively greater because 
 of the smalluess of the volume. It is more expensive in many 
 instances to build to them, and it is nearly as expensive to main- 
 tain the way as it is where the volume is greater. The fact that 
 there is substantial competition is the most cogent reason for 
 suspending the operation of the law, especially where competi- 
 tion is from water lines in consequence of the pecuniary invest- 
 ments in railroads and in the cost of operating — investments 
 and expenditures which those who use nature's roadways are not 
 called upon to make. It seems unjust to deprive railways of 
 
[9] 
 
 traflEic which they have a natural right to, or compel sacrifice of 
 their interests as to other business. 
 
 As has been stated, a suspension of the fourth section wholly 
 will not leave the public without redress for unjust and unreas- 
 onable charges, for under the luterstate Oommerce Law an ap- 
 peal can be made to this houorable Commission and to the 
 courts, and the courts are open to their complaiats under the' 
 common law, and they hare not failed iu the past to rectify the 
 wrongs done by carriers. It may have some bearing to say that 
 railroads are under legal obligations to run their trains over 
 their entire lines, and they were built before the Interstate Com- 
 merce Law was passed, and if it is so construed and enforced as 
 to drive some of them at least out of traffic at competitive 
 points, tne effect will be essentially retroactive, They cannot 
 cease carrying on their business without danger of forfeiture of 
 charters, and the alternative is presented of losing their char- 
 ters or running at a loss. More money is invested in this coun- 
 try in railways and their equipment than in any other kind of 
 property, e^ept in other real estate. To prevent the earning 
 of a reasonable income from these large properties, would not 
 only be injustice to private persons but a calamity to the public. 
 
 The Texas and Pacific railway has presented two applications 
 for suspension of the long and short haul provision, and both 
 are based substantially upon the fact of competition. The dif- 
 ference in the two cases are that competition in one is by for- 
 eigners and in relation to foreign (iommerce, and the other is 
 where there is competition with domestic carriers and for domes- 
 tic trade. 
 
 In regard to the transportation into El Paso, and through 
 that place into Mexico, the facts are partially stated in the ap- 
 plication. Some others are pertinent to the question. I have 
 been unable to lay my hands upon late statistics concerning the 
 foreign commerce of Mexico. A few years ago I had occasion 
 to examine the subject and found the statistics to be aibout as 
 follows : 
 Thet tfttal esjftfrts" and itflpjrtB arffouated to" flfty-five millioll 
 
[10] 
 
 dollars, of which Great Britain controlled a little more than 
 thirty -eight million; the TJnited States, less than thirteen mil- 
 lions, and less than five millions of this was carried by our own 
 people. The balance was distributed among other European 
 nations. The foreign commerce of Mexico has, undoubtedly, in- 
 creased since the date of the statistics I have given. The trade 
 of Mesico is valuable to our people, as that country consumes 
 considerable quantities of our surpluses, especially those of the 
 Mississippi Valley and the Northwest, and gives us in ])aynient 
 such valuable commodities as hides, wool, chocolate, valuable 
 wood and precious metals, particularly silver. By giving re- 
 duced rates on the part of the railroads in this country and the 
 Mexican Central, which is the property almost wholly of citizens 
 of this country, trade in the interior of Mexico with this coun- 
 try has been largely developed and the prospects are promising 
 for a further growth, unless a rigid enforcement of the long and 
 short haul provision of the Interstate Commerce Law becomes an 
 obstacle. 
 
 This traflSc over the Texas and Pacific in 1886 was- more than 
 double that of 1885. In 1886, the earnings of the Texas and Pa- 
 cific were a little more than six million dollars, and its receipts 
 at El Paso were about $560,000, and more Ihan one-half of it 
 was derived from Mexican business. It should be stated that a 
 portion of this earning belonged to connecting lines. The greater 
 part of the merchandise destined 1o Mexico over the line of the 
 Texas and Pacific is from St. Liuis, Kansas City, Kew Orleans, 
 Chicago, and several other cities in the Mississippi Valley and 
 the Northwest, and some of it is from New York and other places 
 on the Atlantic coast. If the rates at intermediate points should 
 be reduced to those we are compelled to make to continue in the 
 Mexican trafflc, the losses to the revenue of the road would be 
 severe and cannot be endured. The local business for three hun- 
 dred miles east of El Paso is of no consequence, and were it not 
 for the through business it would be a loss to run the road be- 
 yond Big Springs ; in fact, without the through business, so far 
 as earnings are concerned, the trains had better in such case be 
 
Mi] 
 
 taken ofi" west of Ooloriido City, a distance of nearly four hun- 
 dred miles east of W Paso. 
 
 Suspension is applied for as to transportation of freights to BI 
 Paso for local delivery, because the merchauts there have a large 
 t^ade with Mexico and are well situated to further increase it, 
 and it would be a source of great expense and trouble to desig- 
 nate and trace that which if? sold into that country, and that 
 which is sold elsewhere and locally consumed is inconsequential 
 as compared with the importance of giving the merchants the 
 fullest scope in developing the Mexican trade. In consequence 
 of making successful competitive rates, British trade has been 
 pushed far southward from Bl Paso, and to some extent freights 
 have been transported into the City of Mexico over the Mexican 
 Central Railway. Mexico purchases in this country all kinds of 
 commodities, and hence suspension, if granted, should include 
 the AVhole trafiSc. 
 
 The other application relates to traffic between I^Tew Orleans 
 and Missouri river points. The particular places are Kansas 
 City, Atchison, Leavenworth, St. Joseph, Council Bluffs, Omaha 
 and less important points in their vicinity. Prom New Orleans 
 to St. Louis, the Mississipi>i river is navigable the whole year, 
 and there are rail lines from St. Louis not more than three hun- 
 dred miles long to Kansas City, which is a common point from 
 which the other cities and places named are reached by water 
 and rail. The water transportation above St. Louis is not 
 seriously competitive for more than three or four months of the 
 year, but competition by rail is continuous. 
 
 New Orleans is the natural entrepot for sugar, molasses, coffee 
 salt and many otluir commodities, and from which the country 
 west of the Mississippi river should be largely supplied. Louis- 
 iana produces quantities of rice, salt, sugar and molasses; New 
 Orleans also purchases at said Missouri river places wheat, corn 
 and hog products. The trade between it and them had grown 
 into considerable proportions, and had become advantageous to 
 all the parties thereto, but it can be participated in only by 
 meeting competitive rates on the part of the Texas and Pacific 
 
(12] 
 
 and its connecting Hues. By looking on the map it will be 
 seen that this line from New Orleans to Kansas City, is 
 substantially as short as any other, and on investigation 
 it will be discovered that it is as feasible as any other 
 in the matter of the physical characteristics of the country 
 through which it runs. From Xew Orleans to the Indian Ter- 
 ritory the local business is large, while that through the Terri- 
 tory is comparatively small. It would be iujurious, specially to 
 the revenues of the Texas and Pacific to make local rates to 
 correspond with the competitive cues at the places hereinbefore 
 named. The freights through to Kansas City and beyond, are 
 rarely less than carload lots and frequently they fill several cars 
 and sometimes there are full train loads. The traflSc is of such 
 character and magnitude as to enable the lines to fill their curs on 
 the return, while the local freights are less in quantity to any 
 intermedi£tte point, and frequently are sent out in piecemeal 
 lots, but are much greater in the aggregate to and from all in- 
 termediate points than to and from Missouri river points. 
 
 Some of the rail lines from New Orleans, I am informed, en- 
 tertaining a different view as to the construction of the fourth 
 section frnm that entertained by the managers of the Texas and 
 Pacific, have continued competitiv^e rates at said Missouri river 
 points without reducing their locals, and one other, not having 
 so valuable an intermediate traffic has reduced the locals in 
 order to raaiDtaie the competitive through rates. The result, has 
 been that the line I represent has been obliged to practically 
 withdraw from the Missouri river traffic and the monopoly is 
 enjoyed by its competitors. Thus we are deprived of a revenue 
 to which we think we are justly entitled, but which we are una- 
 ble to receive without submitting to a greater loss unless the 
 fourth section of the act is susjjended- as to the traffic between 
 New Orleans and these Missouri river points. 
 
 In the months of October, November and December last, the 
 Texas and Pacific transported to Missouri river points, sugar; 
 molasses, rice, >^offee, earthenware, salt and tin plate, amounting 
 in the aggregate to 6,886,282 pounds, or abont two hundred and 
 
[13] 
 
 tMrty carloads of these commodities alone, not to mention other 
 articles. It will be feen that to deprive oar line from participa- 
 tion in traffic at Missouri river points does not benefit the people 
 the-e by reducing rates nor the people at intermediate places. 
 Nobody is therefore benefited except the lines that can enjoy 
 the monopoly of the transportation without being otherwise in- 
 jured. 
 
 Mr. W. W. Pinley, General Freight Agent of the Texas and 
 Pacific, writes me as foll6ws on this subject : "I beg to present 
 to you our unfortunate position with regard to business from 
 New Orleans to points on the Missouri river. We have always 
 enjoyed a very large percentage of the business which has moved 
 from Few Orleans to that territory; we have only been able to 
 effect this through the transportation of this freight on basis of 
 lower rates to that territorj^ than charged on our intermediate 
 business to Texas territory. Under the operations of the Inter- 
 state Commerce Law, we have been obliged to withdraw from 
 this Missouri river business for the following reasons : 
 
 1st. The rates have been established by the Illinois Central 
 and L., N. O. & T. railroads, upon basis of the figures contained 
 in statement hereto attached. 
 
 2d. In making these rates the lines in question have deter- 
 mined for themselves the conditions justifying a smaller charge 
 for the longer haul than for intermediate carriage. 
 
 3d. We do not subscribe to this construction of the law, and 
 as we feel that our intermediate interests would suffer by a re- 
 duction of the figures to the Missouri river basis, we havei^ith- 
 drawn from the Kansas City business in the hope that we will 
 not be forced by these cirmstances to remain out of it alto- 
 gether and forever on account of the claim we think we have 
 upon the Commission for a, suspension of the long and short 
 haul principle in our iavor in this case. 
 
 It is not necessary to recite to you the disadvantages under 
 which railroads penetrating new and sparsely settled countries, 
 labor, and the loss which must result to those roads through a 
 reduction of rates to these new and sparsely settled local terri- 
 
[14], 
 
 tories in order to put itself into competition for variable ainl 
 competitive business. I hope that you will be able to present 
 to the Commission this matter in such shope as will justify the 
 suspension asked for, for in operating under such suspension, 
 we would uot be working any hardship upon our intermediate 
 or local communities, from the fact that the rates which we asic 
 authority to adopt are alreadj- in force via other routes." 
 
 The petition filed asking a suspension of the 4th section as to 
 traffic between New Orleans and Missouri river points may not 
 be sufficiently specific and comprehensive, and should this hon- 
 orable Commission feel disposed to favorably consider our ap- 
 plication, we may feel obliged to ask permission to amend our 
 application for the suspension of the section as to traffic at all 
 points in the State of Louisiana wirh those on the Missouri 
 river and the lumber traffic in the State of Texas. 
 
 Heretofore steamships have run between New York and New 
 Orleans, carrying considerable quantities of merchandise dcs- 
 timed to points on the Pacific Coast, particuliarly to San Diego, 
 Los Angeles, San Fracisco and adjacent points, and the Texas 
 and Pacific Railway has had no inconsiderable share in this 
 traffic from New Orleans to El Paso, a distance of 1163 miles, 
 and at the latter place it connects with the Southern Pacific 
 Eailway, which directly reaches all the aforesaid points on the 
 Pacific Coast. There is competition for this trade by the Cana- 
 dian Pacific Railway and water lines along the Pacific Coast, 
 and by water lines via the Isthmus of Panama and around 
 Cape Horn, a large part of which competition is controlled by 
 foreign nations. The rates which water lines are able to make 
 with profit to themselves, cannot be competed with by the rail 
 lines from the Mississippi river to the Pacific Coast without loss 
 if they are compelled to reduce the local intermediate rates to 
 those which are necessary to enable them to participate in the 
 through business. 
 
 The honorable Commission is aware that the Pacific roads 
 have been constructed at great coat and running through long 
 stretches of comparatively barren and sparsely populated couu- 
 
[15] 
 
 try, the cost of operating is much greater than that of lines east 
 of the Mississippi river as compared with the amount of local 
 business done ; that these roads are invaluable to the country 
 generally, that the tradewith Asiatic countries, is important and 
 unless the rail lines are able to compete with the water lines, 
 the greater part of the profits in this transportation will iuur'c 
 to the benefit of other people instead of our own. If competi- 
 tion constitutes a good reason for suspending the 4tli section, 
 surely when that competition is from cheaper water lines iu the 
 hands of foreigners, the reason acquires a greater force The 
 Texas and Pacific joins other interested lines iu urging a sus- 
 pension as to the Pacific Coast traffic. 
 
 The honorable Commission has probably gone i'ar enougli to 
 have become impressed with the idea that interference with 
 competition is the most objeetionable, confusing and injurious 
 , feature of the act. It was undoubtedly intended to be beneficial 
 in its effects but when practically applied it is a matter of grav- 
 est doubt whether the good it may possibly do iu preventing 
 local discriminations, will compensate for the injury to property 
 values, and the unwholesome restraint it places upon trade and 
 the shackles it puts upon the energies of the commercial classes. 
 If the principle embodied in the first clause of section 4 is to be 
 immutable so far as the action of this honorable Commission is 
 concerned, in addition to repressing energy, it will produce great 
 inequality in many instances. As the law ^oes not apply to 
 State commerce and cannot be made to do so under the National 
 Constitution we have two classes of traffic or transportation con- 
 ducted by the sa-ne carriers, under different laws and met;hods, 
 so that C aud D, v^ho are near neighbors but reside on opposite 
 sides of the line between two States, are not charged the same 
 rates, and this inequality cannot be removed through any legis- 
 lation by Congress aiid can only be obviated by all the States 
 enacting the same laws, which is not likely to take place. This 
 inequality is produced only under the fourth section. Every 
 abuse intended to be reached by this act, whether in State or 
 Interstate transportotion, has an ample correction at common 
 law, which applies equally to both classes. 
 
,I.16J 
 
 This houorable Gomiiissiou has full power to remove what- 
 ever may be objectionable and injurious under this section and 
 relieve from any inequalities that may arise thereunder. This 
 can be well accomplished by basingthe rule of suspension upon 
 the fact of substantial competition, even if it reaches so far as 
 to nearly annul tlie operation of the section. Then everybody 
 will understand it and merchants and railway carriers will feel 
 free again to develop the commerce of the country. The thor- 
 ough enforcement of the other provisions of the law may ac- 
 complish all that is necessary to remove complaints but should 
 the experiment prove unsatisfactory, the fourth section which 
 has been held as a reserved and unused power, may then be en- 
 forced to the fullest extent. 
 
 LIONEL A. SHELDON, 
 
 Eeceiver Texas and Pacific Railway. 
 New Orleans, May 2, 1887. 
 
Transportation Tar 
 
 A DISCUSSION 
 
 THE PROPER RELATIVE RATES ON SHORT HAULS AS 
 COMPARED WITH LONG HAULS. 
 
 BY 
 
 BASIL W. DUKE. 
 
 LOUISVILLE, KY: 
 
 PEiifTED BY John P. Moeton and Compant. 
 
 1886 
 
THE ADJUSTMENT OF TEANSPOETA- 
 TION TAEIEFS. 
 
 No feature of railway management has elicited so much un- 
 friendly criticism as the practice of charging higher rates for freight 
 hauled shorter than for freight hauled longer distances. Yet prac- 
 tical railroad men contend that, when justly understood — when the 
 entire field and purpose of railway service is considered — it may be 
 successfully defended as a necessary method of equitably adjusting 
 rates. They offer in its defense almost every reason on which they 
 base their general system of tariffs ; they plead in its excuse the facts 
 which, they claim, control the conduct of transportation. 
 
 It should not be, but often is, confounded with unjust discrimina- 
 tion — discrimination between parties similarly situated, and receiving 
 from railroad companies like service in like measure. For such dis- 
 crimination there can be no excuse ; it is rarely done, but when done, 
 it merits and should receive severe punishment. But that is some- 
 thing totally distinct from the lesser charge for the "long haul" than 
 for the "short haul;" and to confuse the one practice with the other 
 makes a correct understanding of either impossible. 
 
 The public judgment has been already convinced that much which 
 is apparently arbitrary and oppressive in the general system of railway 
 charges is reaUy fair, necessary, and adjusted to the true interests of 
 business and natural movement of commerce. Every proper explana- 
 tion, it may be stated, of the rules which govern prices of transporta- 
 tion, or to which they are made to conform, may be offered in justifi- 
 cation of the practice under discussion. In nearly every instance it is 
 forced by competition. It is in consequence of competitive rates which 
 railroad companies are compelled to make, and do right in making, 
 not only to earn an adequate revenue, but to properly facilitate th^ 
 trafiic of the territory which each is expected to serve. 
 
 (3) 
 
4 The Adjudmmt of Tramportatixm Tariffs. 
 
 So far as the cost of transportation can, or should be, taken into 
 consideration as a factor in determining the prices of transportation, it 
 may be justified on that score. Every one at all familiar with the dis- 
 cussion of the raUroad "problem" knows that there are certain fixed 
 expenses to be maintained by railroad companies — station, terminal, 
 and transportational facilities, interest on debt, and pay of employes — 
 whether they do much or little business, and with little regard to where 
 or how far the freights are carried. And raUroad cars are less profit- 
 able when detained by consignees at way stations, and used as private 
 storehouses, than when they roll uninterruptedly between terminal 
 points fuUy laden. 
 
 It is not, however, upon the cost of transportation that the defense 
 of this method should be rested. It is impossible to apportion prices 
 of transportation to the cost with any degree of certainty ; whUe ex- 
 perience may enable it to be approximated with more or less success, 
 no skUl can pre-determine the cost of maintaining and operating a 
 railroad for any given future period. Nor could fair and reasonable 
 rates be made on such data, if they could be accurately obtained. 
 
 There are wide difierences in the cost of constructing, maintaining, 
 and operating different railroads. The attempt to adjust the rates of 
 transportation according to the cost would result, if successful, in a 
 total abolition of every thing like uniformity of rates — that is to say, 
 a like rate for like service, a matter greatly to be desired — and in cre- 
 ating disastrous incertitude and confusion. 
 
 Many roads which have been constructed at heavy cost, and are 
 exceedingly expensive to operate, offer less inducement to trafiic than 
 others much less costly. Nevertheless, it would be neither just nor 
 reasonable to require shippers to pay higher rates for inferior service. 
 
 When this subject is under consideration, it is well to keep in mind 
 the paradox, that "The roads which cost the most money are usually 
 worth the least," and statutory regulation, meant to adjust prices of 
 transportation upon the basis of cost, would, if enforced, simply have 
 the effect of depriving the public of the use of railroads, which, if 
 traffic was permitted its natural course, would be actively employed. 
 
 The attempt to apply to railway service as to any other service — 
 or to any product or commodity — ^the rule that price must be deter- 
 mined strictly by cost wiU infallibly lead to errror and injustice. As 
 well insist that the wheat, grown on soil which yields only after the 
 
The Adjustment of Tratisportation Tariffs. 5 
 
 sweat of the husbandman and the costliest fertilizers have been abun- 
 dantly given it, shall sell, bushel for bushel, at higher prices than the 
 harvests which more generous fields produce for the mere dropping of 
 the seed. With as much reason enact that more money shall be given 
 in hire of an old-fashioned agricultural implement than may be de- 
 manded for the use of one of newer pattern and which does better 
 work, because the former originally cost more and is more expensive 
 to keep in repair. 
 
 The true basis upon which to fix the price of transportation is its 
 value — the value of the service rendered. It is a simple rule, and 
 adapted to the understandings and experience of all men. It is one 
 which obtains and governs in all other departments of business, and is 
 the formula by which commercial exchanges generally, whether of goods 
 or service, are regulated. It is the law of supply and demand. As 
 applied to compensation for railroad service, it is not a difiicult or im- 
 possible criterion, like the future cost of transportation, but can itself 
 be readily determined. It is a question which addresses itself to the 
 judgment of both parties to the contract of carriage, as one of imme- 
 diate present effect ; a question to be solved by existing conditions and 
 facts already known to both. The shipper and the railroad company 
 know the value of the commodity which is to be carried. They know 
 the price it wiU fetch at the point of shipment, and the prices ruling 
 in the market to which it is to be carried. Both know the existing 
 state of each and every market in which the article may be ofiered 
 for sale. 
 
 The shipper can certainly determine with reasonable accuracy 
 whether he wiU find it more profitable to ship than to sell at home, or 
 not sell at all. He can make a just calculation of what he can afibrd 
 to pay to have his freight hauled to any market in which he may wish 
 to sell. He will pay what he has reason to believe the service is worth 
 to him, and he wiU not pay more. And despite all the rant and cant 
 which has been uttered about the extortions and oppressions of rail- 
 roads, no power on earth, no iafluence possible, can make him pay 
 more than he believes the service is worth. For every one instance 
 in which a shipper has paid a rate proportionately greater than the 
 value of the transportation furnished him, there have been a thousand 
 wherein railroad companies have furnished transportation at less than, 
 cost. 
 
6 The Adjustment of Tramportatwn Tariffs. 
 
 Every departure from this principle of charging for transportation 
 (uihat it is worth, and leaving that to be ascertained by the economic 
 conditions which unerringly fix all values, has always been, and will 
 always be attended with confusion and disappointment. 
 
 The theory of equal mileage rates — of arriving at an equitable 
 apportionment of price to service, by charging rates in exact propor- 
 tion to the distances which freight is hauled — has been one of the far 
 vorite and most frequent, because one of the most obvious suggestions 
 which has occurred to those who have believed that it is possible to 
 regulate the matter by some sort of mathematical' formula, better than 
 by a strict conformity to economic laws. Time and again has it been 
 shown that this method is utterly impracticable, and leads to the veri- 
 est absurdities; yet, in some shape, it is constantly revived, and enters, 
 seemingly without the conscious purpose of the author, into more than 
 one legislative prospectus for railroad regulation, put forth with grave 
 pretense of statesmanship. 
 
 The Reagan bUl embodies much of the purport of this shallow and 
 impotent device, without having the merit of adhering to the theory 
 with logical consistency. Indeed, a more illogical provision than that 
 of the bin in regard to the " long haul" and the " short haul" can not 
 weU be imagined. It falls short of the principle of charging rates in 
 proportion to distance ; it permits the rail companies to charge as 
 much for short hauls as for long, but prohibits their charging more. 
 Now, if there ever be circumstances or conditions which wUl justify 
 the charging as much for the lesser distance as for the greater, is it not 
 certain and manifest that there may be, indeed must be, commercial 
 conditions which will equally warrant the roads in charging more ? 
 
 The inevitable effect of the equal mileage rate would be to either 
 compel rates so absurdly low for average distances that the roads would 
 receive, practically, no compensation on such hauls, or to induce a 
 rate which would operate as a practical prohibition upon the shipment 
 of many classes of freight for long distances. 
 
 It would virtually do away in large measure with the classification 
 of freights, a species of discrimination which all parties have found 
 eminently just and beneficial. Many high-priced articles, or first-class 
 freight, upon which high rates may be and are charged without in- 
 justice to the shipper or consignee, or sensible diminution either of the 
 profit of the sale or increase of price to the consumer, must, if such 
 
The Adjustment of Transportcdion Tariffs. 7 
 
 a rule obtain, either be shipped only to certain terminals or distribut- 
 ing points, or not shipped at all. 
 
 It would absolutely destroy the efficacy of railroad management in 
 contributing to the development of the country further than by facUi- 
 tating travel, and to that extent encouraging immigration; for it 
 would put it out of the power of the corporations to " create traffic," 
 by helping to buUd up industries and manufactures, or to move farm 
 products to distant markets. The injurious effects of such rates in 
 proportion to distance would be vastly greater in a country like Amer- 
 ica, with its immense territory dependent on a railway system, aU parts 
 of which should work in harmony, than in England with a smaller 
 area, comparatively insignificant distances, and searboard contiguous 
 to aU important commercial centers. Nevertheless, the idea has been 
 condemned there by the highest authority and in the most emphatic 
 terms. 
 
 The Commission of 1865 reported that "Inequality of charge in 
 respect of distance, besides being a necessary consequence of competi- 
 tion, is an essential element in the carrying trade ; that is to say, the 
 principle which governs the railway company in fixing the rate is that 
 of creating a traffic by charging such a sum for conveyance as wUl in- 
 duce the product of one district to compete with that of another in a 
 common market. The power of granting special rates thus permits a 
 development of trade which would not otherwise exist.". . . "The 
 conditions under which such rates are granted are so numerous that 
 no special law could be framed to regulate them." 
 
 The committee of 1872, of which some of the ablest men in Eng- 
 land were members, and which gave the subject of railroad legislation 
 more labor, and, confessedly, far more of intelligent consideration than 
 it had ever received before, pronounced equal mileage rates and aU 
 attempts to make rates in proportion to distance utterly impracticable 
 and unwise. Mr. Charles Francis Adams, jr., says this committee; 
 "Showed with grim precision how, during that period" (thfe nearly 
 forty years of railway experience in England) "the English railroad 
 legislation had never accomplished any thing which it sought to bring 
 about, nor prevented any thing which it sought to hinder." It strongly 
 protested against any form of restrictive legislation which would "pre- 
 vent railway companies from lowering their fares and rates so as to' 
 compete with traffic by sea, by canal, or by a shorter or otherwise. 
 
8 The Adjustment of Transportation Tariffs. 
 
 cheaper railway, and would thus deprive the public of the benefit of 
 competition, and the company of a legitimate source of profit." And 
 among the "perfectly fair arrangements which the railway companies 
 rfiould be permitted to make," they emphasized the "carr3Tng at a 
 lower rate than usual goods brought in large and constant quantities," 
 and "carrying for long distances at a lower rate than for short di*- 
 tenceSi" The committee concluded its report by the comment upon 
 previous effort at statutory regulation of rates, that "the Ul success of 
 this attempt may well justify hesitation in entering upon further gen- 
 eral legislation of the same kind." 
 
 The rule which would prohibit railroad companies from charging^ 
 more (under any circumstances) for hauling freight short distances 
 than for long hauls is only a partial application of the equal mileage 
 rate, and is equally ill-advised. Its efiect would be the same ; that 
 is, to prevent the public from getting the fuU worth of the railway 
 system by impeding, in many cases, its best service. It has been 
 sometimes absurdly argued that the equal mileage rate should be ap- 
 plied to freight, because it is applied, in great measure, to the passen- 
 ger service. It may be answered that men, unlike freight, load and 
 unload themselves, and that no commercial value is given a man by 
 transporting him from point to point. 
 
 Yet even in the passenger traffic practices analogous to the making 
 of special rates obtain: "commutation" tickets, "thousand-mile" 
 tickets, etc., are sold, and when aU persons may buy them, and dis- 
 crimination is not, therefore, practiced, no one thinks of condemning 
 them. 
 
 Upon no other matter connected with the practical conduct of rail 
 transportation has so much and such concurrent intelligent testimony 
 been given as to the propriety of fixing the rate upon the basis of the 
 value of the service, and not necessarily estimating the distance of the 
 haul in the computation of the charge. 
 
 In an argument upon the Eeagan bill, while discussing the provis- 
 ion prohibiting a greater charge for the shorter distances, Mr. Albert 
 Fink very clearly illustrated its restrictive and disastrous efiect. He 
 said: 
 
 " I have also endeavored to show that the fourth section of the 
 bill, according to which it is to be unlawful to charge or to receive any 
 greater compensation for carrying property a shorter than a longer 
 
The Adjmtment of Transportation Tariffs. 9 
 
 distance, is unjust as tending to restrict competition between the rail- 
 roads and the water routes. 
 
 "As a general rule this principle is fuUy recognized and acted upon 
 by railroad companies, as I have already explained, and it is proper 
 and right that it should be ; but there are exceptions to it, as there 
 are to all general rules regulating railroad tariffi. Should it be at- 
 tempted to enforce this rule in all cases, it would result to the injury 
 of the public, not to its benefit. For example, take the traffic be- 
 tween New York and New Orleans, the bulk of which is carried by 
 ocean steamers at very low rates ; the railroad companies can compete 
 with the steamers for the higher classes of freight, on which the cost 
 of insurance is considerable, and they derive from this business a small 
 profit. 
 
 " Now, the effect of the proposed law is to oblige inland rail routes 
 between New York and New Orleans to charge no more from New 
 York to the interior points located on these routes — say to Atlanta or 
 Montgomery — than the ocean steamers charge from New York to New 
 Orleans. 
 
 "There is neither sense nor justice in such a demand, nor can it be 
 enforced. The railroad companies can not work as cheap as ocean 
 steamers, and place the interior points precisely upon the same footing 
 as if they were located upon the sea-shore. If the attempt is made to 
 force them to adopt the low rates from New York to New Orleans, 
 upon the whole > of their inland business, they simply would retire 
 from the New Orleans traffic altogether, which, compared with the in- 
 land traffic, is small, both as regards the tonnage and the profit derived 
 from it. The only result of the enactment of the Eeagan bill in this 
 case would be to prevent the railroads from competing with the ocean 
 steamers, and to give the latter the monopoly of carrying freight be- 
 tween New York and New Orleans, without in any way restricting the 
 railroads from charging such rates as they would to the interior points. 
 The tendency would be to increase their rates on the inland freight to 
 compensate for the loss of profit on the New Orleans business. The 
 ocean steamers would probably increase rates of transportation to New 
 Orleans as soon as the railroads cease to compete, and the people of 
 New Orleans would be deprived of the facilities and convenience of 
 railroad transportation." 
 
 And in his testimony before the Senate Committee on Education 
 
, 10 The Adjustment of Transportation Tariffs. 
 
 and Labor, pp. 13 and 24, Mr. Fink has very clearly explained the ra- 
 tionale of the railroad tariffs, as suggested by the general intent and 
 uses of the railroad system for the service of the entire public, and as 
 exacted by the necessities of their own business, as weU as adjusted to 
 the constant and imperative influences of competition. 
 
 "The proper plan," he says, "is to assess railroad charges in ac- 
 cordance with the value of the services rendered. No body should 
 ask service for less than cost. The tendency of railroad competition 
 is that by one road underbidding the other on the competitive busi- 
 ness the rates soon become so low that the business is worth nothing. 
 They have often carried it, and sometimes carry it yet, at less than 
 cost ; and this is not to the advantage of the public. The public can 
 always afford to pay reasonable rates for the service. 
 
 " It is not to the advantage of the public at large to do otherwise, 
 because if you send all these raUroad companies into bankruptcy, and 
 thus ruin the people (who are really the owners of the railroads), you 
 ruin the credit of the country, and you ruin the industries that are 
 dependent on railroads, such as the iron industries, and the other man- 
 ufacturing establishments which furnish supplies to the railf oads ; you 
 also necessarily reduce the wages of the laborers. When railroads can 
 not earn money, the laborers employed on the roads have their wages 
 reduced, or frequently lose their pay altogether. I may refer to the 
 difficulties which arose in 1877, during and after a long railroad war, 
 when the employes rose and 'struck.' This was the result of low 
 wages or reduced time of labor during the railroad wars." 
 
 Mr. Fink was asked if the railroad companies ought not to leave 
 competitive business, which they could not get without greatly reduc- 
 ing their rates, to the water routes. He answered that they would 
 not do that, and it was better for the public that they should not. 
 The competition served to keep both "in order," the steamships as 
 much as the railways. Both were required to conform to the natural 
 course of commerce. 
 
 The railroad commissioners of Alabama, in their report for 1882, 
 after discussing the question in the light both of cost and value of 
 railway service, thus summarize their conclusions : 
 
 " These facts and illustrations conclusively demonstrate that there 
 would be no justice or fairness in fixing the freight charges of railroads 
 .strictly according to distance, as is done in the case of passenger fares, 
 and particularly on short hauls of freight. 
 
The Adjustment of Transportation Ta/riffs. 11 
 
 "Distance does indeed enter as an element into fixing the freight 
 rates of a railroad, but it is not a consideration so controlling as com- 
 petition. The truth is that the longer the haul the cheaper a railroad 
 can afford to transport freight in proportion to distance, and it is well 
 for commerce and business generally that this is true. 
 
 ' ' Whoever would attempt to regulate the rates of a raiboad strictly 
 according to distance, as in the case of passenger fares, would cut ofi 
 the trade of aU the interior sections of the country from the cities and 
 best markets, and to this extent would injure both and the general 
 public ; while at the same time it would greatly reduce the business of 
 railroads without benefiting any body except a few greedy merchants 
 at poor markets in a few cross-road towns, who sell goods at extoi'tion- 
 ately high prices, in absorbing the produce of the country at low 
 prices." 
 
 Even the Georgia railroad commission has recognized the principle 
 that the value of the service ought to be taken into consideration in 
 determining the compensation, and has not insisted on any arbitrary 
 rule in the nature of regulating prices of transportation according to 
 distance. In prescribing freight rates for the railroad companies oper- 
 ating within their jurisdiction, the commissioners permitted a reduction 
 of rates at competitive points, without requiring a corresponding re- 
 duction along the whole line. And in their third semi-annual report 
 they say : 
 
 "We can not too strongly express the conviction that it is not to 
 the interest of the public to get work out of the railroads for less than 
 it is worth. It is the general interest that capital and profits should 
 be distributed aright. It is just as unfair to discriminate against rail- 
 road capital as against mercantile or agricultural capital ; and either 
 of these is fully as unjust on the part of the public as railroad discrim- 
 ination among customers entitled to equal rights is on the part of 
 the railroad. Such unfairness on either side drives capital out of 
 its natural channels into artificial channels less suited to the general 
 welfare." 
 
 No writer in Europe or America upon these subjects is held in 
 higher repute, or is more entitled to be regarded as authority than M. 
 de la Goumerie, and his ofiicial position has enabled him to acquire 
 most accurate information and experience regarding them. He has 
 borne frequent and emphatic testimony to the justice of the principles 
 
12 The Adjustment of Transportation Tariffs. 
 
 of adjusting railroad tariffs adopted by practical railroad managers 
 both in the Old World and here. He rests the whole case on the ar- 
 gument derived from values, and the fact that, as he puts it, "The law 
 of supply and demand contains a regulative principle indispensable to 
 society. . . . It is a universal suffrage, where each person is frequently 
 called upon to vote as a producer and as a consumer. The totality of 
 what is offered for sale, the totality of demands, determine the im- 
 pulses, and their resultant governs the industrial world." 
 
 Applying the principle to the question of railroad charges, he says : 
 
 "An article of transportation, like every article of goods and every 
 service, has a value determined by the action of supply and demand ; 
 we should pay for it not whai it costs, but what it is wortii. An excep- 
 tion to the general law of transactions should be made only for power- 
 ful motives." 
 
 Among the instances he cites in illustration of his proposition is 
 the following, given the more particularly because of the admirable 
 clearness with which he deduces from it certain general rules : 
 
 "The Northern and the Mediterranean railroad companies carry 
 wool from Marseilles to Koubaix at the rate of 76.50 francs per ton. 
 A few years ago the wool sent from Algiers to the same destination 
 was carried to Dunkirk by English vessels for 65 francs. The ex- 
 penses at Dunkirk and the carriage thence to Roubaix barely exceeded 
 11.50 francs; so that under the action of supply and demand the 
 transportation of wool to Koubaix had practically the same value from 
 Algiers as from Marseilles. 
 
 "The wool shipments from Algiers could not be attracted to our rail- 
 roads and secured for French vessels except by asking 76.50 francs for 
 the whole distance. This is what the companies agreed to do. They 
 pay 20 francs for the freight across the Mediterranean, and retain the 
 sum of 56.50 francs, which they consider sufficient to indemnify them 
 for the expenses imposed by the transportation from Marseilles to 
 Roubaix. We may suppose that they may find a slight profit in this 
 transaction ; a railroad in its own interest and in that of the country 
 ought not to neglect any traffic of a kind that will increase its receipts 
 more than its expenses. 
 
 " The inhabitants of Marseilles believing, no doubt, that the cost of 
 transportation determines its value, demand that the wool which they 
 ship be charged at the same rate as that which comes from Algiers. 
 
The Adjustment of Trangpffrtation Tariffs. 13 
 
 If the rate of 56.50 francs is remunerative, they 8ay, the companies 
 should not ask more. 
 
 "The different units of transportation carried by a company are 
 far from giving equal profits. If, because some of them leave as net 
 profit only a very small part of the receipt, we assume to regulate the 
 tariff so that it shall get only the same proportion of the whole gross 
 receipts, it wUl not be able to meet the obligations which it has con- 
 tracted. The certain result of requirements of this kind would lead 
 the companies to refuse all shipments on which they could not make a 
 high profit, and consequently to abandon a considerable income while 
 depriving the country of cheap transportation for a great quantity of 
 merchandise." 
 
 M. de la Gournerie shows how the same apparent anomalies in the 
 railroad system obtain in France just as they do in England and 
 America, and induced by precisely the same causes. He states 
 that "they are not new in the transportation business. Before the 
 establishment of raUroads the carters likewise imposed a higher rate 
 from Paris to Angers (191 mUes) than from Paris to Nantes (266 
 miles)," just as the wagoners formerly made similar charges in this 
 country. 
 
 "The boats, on their part, formerly charged more from Chalons- 
 sur-Saone to Villefranche (60 mUes) than from Chalons to Lyons (81 
 miles); more from Lyons to Tarascon (156 miles) than from Lyons to 
 Aries (165 miles). . . . The railroads are under the same conditions 
 as the carters and the boatmen. I do not see how it could be possible 
 to establish that transportation never has a less value for a longer than 
 for a shorter distance, or that each separate transportation should not 
 be paid for according to its value." 
 
 It is impossible to eliminate from the consideration of this question 
 the influence of competition ; and it must enter into every phase of 
 its discussion, just for the reason that it is the most prominent and po- 
 tential factor in determining the results. When a raUroad meets at a 
 given point another railroad line not under the same management, or 
 a water route which can carry the same freight to the same destina- 
 tionS or equally favorable markets, it must compete or it must aban- 
 don that particular business — give up the carriage of that freight. 
 If it competes, solicits the business and takes the freight, it must do so 
 upon conditions of transporting that freight at a rate certainly as low 
 
14 The Adjustment of Transportation Tariffs. 
 
 as the rival line wiU carry it. Necessarily sharp and unregulated 
 competition at some of these points quite frequently forces rates down 
 far below any remunerative standard, and compels the roads to carry 
 for less than cost. Just here arises the question which has occasioned 
 so much of difficulty and contention. Should the railroad companies, 
 when thus , compelled to reduce rates at competitive points or lose the 
 business which those points furnish, be required at the same time to 
 correspondingly reduce rates along their entire lines ? 
 
 The advocates of the Eeagan bUl, the advocates of equal mUeage 
 rates, all those who unite in condemnation of competitive rates of any 
 character, will answer this question affirmatively, or virtually abandon 
 the position they have assumed. Presupposing, even, that the rates 
 of transportation to the intermediate (or other than competitive) 
 points, are reasonably just and not more than the service is fairly 
 worth, this class of thinkers, nevertheless, assert that the forced re- 
 duction at the competitive points makes a maintenance of previous 
 rates (and rates previously reasonable) at intermediate points inexcus- 
 ably wrong. This is very curious logic. It must find a basis in some 
 ethical principle not commonly understood ; it has no support in ordi- 
 nary morality, and is in absolute contradiction of all generally ac- 
 cepted commercial and economic principles. That it is to the interest 
 of the railroad company to take the business offered at the competitive 
 point at a reduced rate rather than lose it altogether is clear and unde- 
 niable. Its line is already in operation, its equipment and structure 
 must be maintained, its terminal and station facilities must be kept up, 
 a certain amount of expense must be and is incurred in any event. 
 The company, therefore, can better afford to take this business at less 
 than cost than to lose it, because even the low rate it pays swells, to 
 that extent, receipts ; defrays, in some measure, the current expenses, 
 and helps to diminish the burden of outlay. In the words of M. de 
 la Gournerie, a railroad "ought not to neglect any traffic of a kind 
 that wUl increase its receipts more than its expenses." 
 
 On the other hand, by competing for the business it does no injury 
 to, but is ultimately enabled to benefit the general public and the 
 people at the very points where the complaints are heard. For by in- 
 creasing the volume of its business it is enabled to reduce its general 
 rates ; nor can it be denied that such has been the result. The increased 
 mileage of American railways from 35,000 in 1866 to 127,000 miles 
 
The AdjustTnent of Transportation Tariffs. 15 
 
 at the close of 1883, and the vastly increased traffic thus produced has 
 occasioned the most astonishing reduction of rates ; the average reduc- 
 tion has been nearly 66 per cent. The effect upon the general develop- 
 ment of the country also has been most remarkable. But why elabo- 
 rate this feature ? Every one not only admits but insists that compe- 
 tition is ■wholesome and necessary. How is it possible to have compe- 
 tition unless railroads compete? K, then, it is to the manifest and 
 positive interest of the railroad to struggle for business at competitive 
 points, and it is right from that stand-point; and if, further, it is to 
 the interest of the general public that the roads shall compete, how and 
 wherein is it worthy of censure, and does it call for suppression ? Can 
 it be possible that these two " rights" make a "wrong?" 
 
 "But," say the censors, "if the railroads reduce rates and carry 
 for less than cost at the competitive points, they should do the same at 
 all other points on their line ;" in other words, they should deliberately 
 destroy themselves. Peculiar circumstances induce certain advantages 
 for a few favored localities, which can not be universally extended 
 without ruin to the whole system. "Therefore," say these severe 
 moralists, " since you have given unto one give also unto aU, although 
 it ruin all." Deprive the country generally of the benefit of railway 
 service, because competition enables some localities to obtain it more 
 cheaply than others. Was ever the "biting off the nose to spite the 
 face " policy more cogently illustrated ? 
 
 Some years ago one of the numerous and periodical outcries against 
 coal rates occurred in Massachusetts. It was insisted that the Boston 
 and Albany Eailroad Company, in endeavoring to meet the coal com- 
 petition at New York harbor, had discriminated against certain points, 
 and especially against Pittsfield, in Massachusetts, by maintaining the 
 local rate from Hudson, to that point, $1.25, when the competitive rate 
 was lower. The Board of Railroad Commissioners of Massachusetts 
 answered the complaint as follows : 
 
 "But it is argued in reply that the railroad company is charging 
 unreasonable local rates in order to recover the losses it incurs by per- 
 sisting in doing its through business at a loss. This, it is insisted, is 
 unjust, and constitutes a good cause of complaint. In the first place, 
 however, as the commissioners thought they very clearly showed in 
 their report already referred to, the rates now charged by the Boston 
 and Albany road for the carriage of coal to Pittsfield are, considering 
 
J6 The Adjustment of Tranaportatwn Tariffs. 
 
 the nature and amount of the traffic, neither unusual nor unreason- 
 able ; and in the second place, it must be remembered that neither the 
 Boston and Albany nor any other railroad engaged in the through- 
 freighting business has any control over the rates at which it does that 
 business. It can only influence them by taking the extreme course of 
 going out of the through business altogether, and charging local rates 
 on every thing which goes over the line. For the Boston and Albany 
 road to undertake to do this, as the complainants very well know, is 
 simply out of the question. The very suggestion of such a policy on 
 its part would lead to a popular excitement and clamor in the State, 
 which would put a stop to it at once. The fact is, as the business firms 
 of Pittsfield must perfectly well understand, so long as the present 
 system of railroad competition continues, rates must vary. The busi- 
 ness community which enjoys the advantage of low through rates will 
 have to accept the burden of relatively, if not absolutely, high local 
 rates. If the companies are compelled to reduce every thing pari 
 passu, they would have to go out of the freighting business." 
 
 "The business com/munity which enjoys the advantage of low through 
 rates udll have to accept the burden of relatively, if not absolutely, high local 
 rates." Mark this incisive truth in the passage just quoted ; rarely has 
 a more pregnant sentence been penned, or the gist of a matter more 
 completely compressed into one. It is surprising that those who con- 
 demn this practice in railroad management of taking business at cheap 
 rates, which could not otherwise be gotten at. all, do not discover that 
 it does and must obtain in all transactions, and in the whole business 
 of mankind. 
 
 The farmer who sells only when he can command the very highest 
 prices, and refuses to part with any portion of his produce unless he 
 can get as much as he may have received at some more favorable pe- 
 riod, or as much as some one more eligibly located receives, will not be 
 m prosperous in the outcome as if he utilizes all that he raises. He 
 will find it a thriftless and short-sighted policy to permit a part of his 
 crop to rot and waste rather than sell it at low prices. The merchant 
 who has made his arrangements to do a certain amount of business 
 with certain customers, or at points whose trade he feels assured he may 
 control, never hesitates to extend his business when a favorable oppor- 
 tunity occurs, although to dq so he must sell at reduced prices. He. 
 knows that the new customer must have an inducement, he is aware 
 
The Adjustment of Transportation Tariffs. 17 
 
 that his goods may be of less value to the purchaser whose custom 
 he seeks, if that purchaser be so situated that he can get similar 
 goods more cheaply and conveniently from other merchants. 
 
 The principle is of universal application, and is one whence every 
 body in turn and in time derives benefit. Those who control the vari- 
 ous modes of water transportation, deemed by legislators impeccable 
 and immaculate, and never menaced with statutory regulation, even 
 these sinless and conscientious common carriers recognize it. Compe- 
 tition prevails on the lakes and rivers, and between the water routes 
 themselves, sometimes reducing rates to unremunerative figures. The 
 ocean craft carry American goods to Liverpool and Havre, a distance 
 less than four thousand mUes, at higher rates, sometimes, than the same 
 or similar vessels transport freight from Australian, Indian, or South 
 American ports to the same European destinations, covering distances 
 three or four times as great. This is done when the vessels sail in bal- 
 last from the other side of the Atlantic, for the express purpose of 
 carrying back the American merchandise or produce, but go out to 
 Australia, India, or South America laden with valuable and remuner- 
 ative cargoes, and find it better to bring back low priced freight than 
 return empty. The value of the service in every instance determines 
 the price of the transportation. It is worth so much to the American 
 shipper and he pays it. It is worth less to the Australian shipper ; he 
 will pay only what it is worth, and the ship takes it at the low rate 
 rather than lose the carriage altogether. 
 
 Transportation is simply one form of labor out of many necessary 
 to make products and commodities marketable. It is an element which 
 enters into the ultimate value, is.nd therefore price, of every article 
 which is not consumed on the spot where it is grown. But the pecu- 
 liar value of transportation is determined, not solely by the value of 
 the article moved, but also by the amount and kind of the transporta- 
 tion itsdf which the owner or shipper of the article may be able to 
 purchase. If all products and commodities were consumed just where 
 they are grown or made, transportation would have no value at aU. 
 The difierence between the value or price of the article at the point of 
 shipment and its value at its destination or market wUl, of course, 
 largely influence the value of its transportation. But if there be a 
 number of different routes or modes by which the article may be car- 
 ried between the same points or to more than one market-^, e., com- 
 
 2 
 
18 The Adjustment of Transportation Tariff's. 
 
 petition — the value of the transportation is still further affected, and 
 affected just in proportion as the different routes compare in speed, 
 convenience, and certainty. 
 
 Now, since the amount of competition and the number of compet- 
 itive points have the effect always of reducing rates, transportation 
 must necessarily become proportionately cheaper as its distance in- 
 creases ; because, the greater the distance the greater will be the com- 
 petition and number of competitive points. There are not only more 
 routes and modes by which freight may be carried between terminal 
 points one thousand miles apart than between points five hundred miles 
 apart, but there are a greater number of connections with other com- 
 mercial or distributing centers which influence the traffic. There are 
 more routes between Chicago and New Orleans than between Louis- 
 ville and New Orleans, and more between Louisville and New Orleans 
 than between Memphis or Atlanta and New Orleans ; while Chicago 
 and Louisville both feel the influence of St. Louis upon their Southern 
 trade more than they would were they nearer to these markets. 
 
 It may be said, in a general way, that the local trafiic of a railroad 
 is its regular business, and the through traffic is incidental. The local 
 traffic may be said to resemble the trade which the merchant (in the 
 illustration heretofore employed) has a right to rfely on, and has made 
 all his arrangements to conduct, while the through traffic is in the na- 
 ture of the casual trade which he must reach after, bid for, and obtain 
 at some reduction of price and profit. 
 
 The original purpose for which railroads were constructed was the 
 transaction of a commerce that might be termed local. By connect- 
 ing with each other they formed long routes over which through traffic 
 was induced ; and the ultimate consolidation of many connecting roads 
 into trunk lines did not and could not alter the terms upon which the 
 commodities which moved long distances were transported. Indeed, 
 consolidation of short connecting lines into comprehensive systems, as 
 well as the eventual construction of roads between very distant termi- 
 nal points were both responses, not only to the increasing commercial 
 growth and necessities of the country, but to the imperative demands 
 for cheap rates upon long hauls. 
 
 "When railroads were first built and put into operation in America 
 their construction was confined to the parts of the continent which had 
 been long settled, where were found the most populous communities, 
 
The Adjustment of Transportation Tariffs. 19 
 
 with already existent commercial relations, and accustomed to com- 
 mercial exchanges. 
 
 The railroad simply superceded the old methods of carrying the 
 commodities of commerce and of facilitating traffic by a mode of 
 transportation speedier and of far greater capacity. The business 
 which the railroads at first did, therefore, was, as has been said, what 
 would ia their parlance be termed "local." The prices of rail trans- 
 portation, while cheaper than those of the carts and wagons, were 
 based upon what was supposed to be the reasonable value of the 
 service. 
 
 The maxima rates of charge which were incorporated in nearly aU 
 of the earlier charters, and which would now be regarded as excessive 
 and are not even approximated, were but the expression of the legis- 
 lative idea of the then reasonable charge. 
 
 But the inevitable effect of furnishing better modes of transporta- 
 tion and increased facilities for the conduct of trade was, as it always 
 is, to quicken commercial activity, stimulate production, and vastly 
 multiply the demand for all articles, and as a consequence the demand 
 for transportation. A larger surplus of all commodities was every 
 where produced, and shipments to greater distances from the points of 
 production became more frequent. 
 
 Until 1861 or '62 raUroad construction was intended to serve a 
 traffic already existent and a territory already peopled. After that - 
 •date many mUes of railroad were built to stimulate and accommodate 
 immigration, to settle territory previously almost uninhabited, and to 
 create a commerce which did not before exist. 
 
 It is not necessary to discuss here the wisdom of the latter policy ; 
 but it will at once be perceived that it operated to immensely acceler- 
 ate the tendency already noticed as an effect of rail service to induce 
 exchanges between remote points— shipments of freight for long dis- 
 tances. 
 
 When, therefore, an almost unlimited general railroad system had 
 multiplied, in connection with the water routes, the modes and avenues 
 of transportation indefinitely, and had made the competition of pro- 
 duct with product felt from one end of the continent to the other, the 
 rates on the long hauls became necessarily reduced in the ratio of these 
 influences. 
 
 The character of competition which is most generally felt and easily 
 
20 The Adjustmerd of Transportation Tariffs. 
 
 recognized, and of which account has been heretofore taken in this 
 article, is the direct competition of rail with water or of one railroad 
 with another — a rivalry, in short, between different carriers, all having 
 transportation to sell. 
 
 But there is another kind of competition almost if not equally as 
 potent — the competition just mentioned of product with product. 
 And it is one that must continue to increase with the development of 
 the country and the cultivation of its resources. Its effect upon 
 prices of transportation is constant and emphatic. 
 
 The price of wheat at New York may be fixed by that at Liver- 
 pool, but when the grain from the Northwest thunders in on full 'trains 
 over the tracks which stretch away beyond the Mississippi, the iron 
 lines which penetrate the Middle States and the Ohio Valley must 
 haul the wheat grown there for rates which will enable it to compete 
 in the market with that of Iowa and Dakota. Unless the railroads 
 can or will enable an article produced in one section or part of the 
 country to meet the same article produced in some other section on 
 fair terms in any given market, it wiU not seek that market, and the 
 railroad will lose just so much transportation. 
 
 A most excellent illustration of this competition of product with 
 product, and of how it operates to reduce the prices of transportation, 
 is furnished by the history of the traffic in early vegetables and fruits 
 brought from the South in the spring or before similar productions 
 have ripened in higher latitudes. When this trade, which is of com-- 
 paratively recent date, began, it was confined to the roads along the 
 Atlantic sea-board, which carried the fruits and vegetables of Florida 
 to New York, Baltimore, and other Eastern cities. The roads further 
 west determined to create a similar traffic, and, to do so, built cars es- 
 pecially adapted to the trade and offered very low rates. The conse- 
 quence was that not only much of the Floridian trade of this charac- 
 ter diverted to the Western roads, but an extraordinary production of 
 early vegetables at MobUe Bay and other points in Alabama and of 
 fruits in Tennessee was induced. Some years ago corn shipped from 
 Louisville to Montgomery, Alabama, commanded a rate several cents 
 higher per 100 pounds than now, because the Alabama corn now 
 competes with the Kentucky corn. In the same way an abundant 
 corn-crop in East Tennessee compels lower rates on corn shipped from 
 Kentucky to Georgia. Until quite recently cement was shipped from 
 
The Adjustment of Transpmiation Tariffs. 21 
 
 Louisville to Atlanta at 24 cents per 100 pounds. Competition with 
 the cement manufactured at GrayviUe, on the Western Atlantic Eail- 
 road and at other points in Georgia, now compels a rate of 12 cts. per 
 100 pounds, or the Louisville cement can not be sold in Atlanta at all. 
 
 This form of competition is extended almost indefinitely. City 
 competes with city, section with section, country with country. The 
 Lidian and Eussian wheat competes with American wheat ; Odessa with 
 Chicago.* 
 
 Universal activity is imparted to the commercial world by the 
 pliant and ready service transportation yields to this competition. 
 Production may safely be kept at the maximum when the surplus can 
 always find a market. The residue reserved for home consumption 
 becomes more valuable if the surplus can always be sold. If Kansas 
 raises fifty mUlions of bushels of wheat, and requires only ten millions 
 for her own people, the ten millions 'have a positive increased value 
 when she can ship and sell forty millions. 
 
 In the Senate during the pendency of the Reagan bill, Mr. Beck, 
 of Kentucky, discussed these questions after a fashion somewhat sur- 
 prising in one of his strong sense and usually accurate information. 
 He said: "It was proven before the Committee of the House that a 
 railroad would haul a bale of cotton from Memphis to New Orleans 
 for one dollar a bale, and charges three dollars per bale from Winona 
 to New Orleans, which is one hundred and twenty miles south of Mem- 
 phis and nearer to New Orleans on the same line. I am seeking to 
 guard against that class of discriminations without going into any 
 other question just now. There can be no injustice in saying that 
 no railroad shall charge for hauling over a part of its line more than 
 it charges for hauling over the whole length of its line." 
 
 Mr. Beck is not singular in his desire to select an apparent abuse 
 of power by the railroad companies and discuss that apart from and 
 without any examination of the reasons which induce or the circum- 
 stances which attend it. 
 
 It is quite a common predilection with writers and speakers who 
 express his views. It is doubtless quite convenient to " seek to guard 
 
 *Tlie differential rates fixed by the Joint Executive Committee for the trunk lines 
 from Chicago to New York, Philadelphia, and Baltitaore were based in great measure 
 upon the ocean rates from those points to European ports. The rate from New York to 
 Liverpool and Havre is less than from Philadelphia to those ports. It is less from Phila- 
 delphia than from Baltimore. The rail rate was therefore made less from Chicago to Phil- 
 adelphia than to New York, and less to Baltimore than to Philadelphia. 
 
22 The Adjudmemi. of Transportation Tariffs. 
 
 against that class of discriminations without going into any other ques- 
 tion," but when the "other question" is part and parcel, cause and 
 raison d'etre of the alleged "discrimination," its consideration can not 
 be fairly or logically avoided. 
 
 "It -will not do to say," he proceeds, "that they have to haul 
 more cheaply from Memphis because of competition, as will be con- 
 tended in the Winona case; for example, because there is competition 
 with the river, and, therefore, they are compelled to make up a profit- 
 able through haul by charging enormous rates to the people of Winona, 
 who can not reach the river. 
 
 " The very evil I propose to guard against is that a railroad shall 
 not be permitted to reduce its rates below the cost of hauling at the 
 end of a line in order to run off Some competing way, so that they 
 may absorb the trade, and, the moment they run off their competitors, 
 put up the price to what they please, and in the mean time make up 
 the loss they incur on the through hauls by doubling, trebling, and 
 quadrupling the charges along the line." 
 
 When a man of Mr. Beck's conceded ability speaks in a manner 
 so positive, and bases an argument in behalf of restrictive legislation 
 of the nature he advocates upon general allegations of the kind m 
 which he has indulged, it is well to examine both his statements and 
 his conclusions. Is Mr. Beck in earnest when he professes apprehen- 
 sion that the railroads will drive shipping and traffic from the Missis- 
 sippi River and " absorb the trade?" This is a matter which must be 
 determined by the aid of facts and experience. 
 
 A correct understanding of it can not be attained by mere asser- 
 tion ; certainly not by exaggerated assertion. Is there any good rea- 
 son for believing that the railroads WiU ever be able to transport 
 freights through the Mississippi Valley— which may be moved on the 
 river — at rates which the boats will not be able to successfully meet? 
 No one knows better than Mr. Beck that water transportation can 
 always be furnished at less cost than transportation by rail. The ex- 
 penses of the water routes are far less. Now while there will almost 
 certainly be a constant future diminution in the number of passengers 
 carried by the Mississippi River steamers, will there be any decrease at 
 all in the present volume of freight which they carry — especially of 
 heavy traffic for which rapid transit is not desired? Can such de- 
 crease be predicted because of existing facts? 
 
The Adjustment of Transportation Tariffs. 23 
 
 The statistics furnished by the tenth census, for 1880, indicate na 
 cause for apprehension that such traffic will fall off. 
 
 "Upon the Ohio Eiver there were in 1880, 473 steamers with an ag- 
 gregate tonnage of 107,472.48, an invested capital of $6,051,522, and 
 carrying 3,961,798 passengers, and a freight traffic of 2,446,353 tons. 
 On the Upper Mississippi there were 366 steamers with a tonnage of 
 83,918.09, an invested capital of $6,086,760, which carried 1,299,553 
 passengers, and, including 867,120 tons towed by the barge lines of 
 St. Louis, 3,500,035 tons of freight. On the Lower Mississippi there 
 were 315 steamers with a tonnage of 48,303.06, an invested capital of 
 $3,260,450, which carried 1,385,357 passengers, and 1,276,972 tons of 
 freight. 
 
 The total receipts and shipments of all classes of freight at New 
 Orleans, excepting ice, stone, lumber, brick, and agricultural ma- 
 chinery, was estimated for 1880 at 2,300,000, and it is added that 
 "These exports show a material growth since the completion of the 
 jetties and the increase of the barge lines." 1,154 steamers with an 
 aggregate tonnage of 239,693— about equivalent to 20,000 freight 
 cars with an adequate equipment of locomotives — and the barge lines 
 may be said to represent the transportational capacity of the Ohio and 
 Mississippi rivers. 
 
 So long as it is maintained some confidence ought to be felt in the 
 ability of the water carriage to hold its own against the encroachments 
 of the railroad. 
 
 These figures would seem to show, too, that the water craft have 
 carried the larger share of traffic just where they have come in most 
 direct competition with the roads, for the large tonnage given the barge 
 lines — ^which is chiefly at St. Louis — swells the freight traffic of the 
 Upper Mississippi to its larger comparative dimensions. 
 
 It is not contended, of course, that the volume of river traffic has 
 increased in the same proportion as that borne by the roads ; nor wiU 
 it ever do so. On the contrary, there will probably be a greater rela- 
 tive difference between the two ; but all the facts go to prove that there 
 wiU be an absolute increase of transportation by the river, and that it 
 will always suffice to maintain competition at points where it now 
 exists. 
 
 No one need fear, then, that the railroads which run from the Ohio 
 to the Gulf will ever force the boats which ply on the waters of the 
 
24 The Adjustment of Transportcdion Tariffs. 
 
 Mississippi to quit its bosom, and, having gotten rid of their rivalry, 
 make up the losses incurred in destroying such competition by " doub- 
 ling, trebling, and quadrupling" charges. 
 
 Nor is there any danger that competition of railroad with railroad 
 will cease. The rails once down, the road is "there to stay," and can 
 not be moved to some other line because competition reduces its rates. 
 I might trust to the explanation already attempted of how many influ- 
 ences combine to cheapen rates on long hauls as a sufficient response 
 to Mr. Beck's complaint in behalf of Winona. But when he makes a 
 charge it deserves specific attention. 
 
 He very emphatically pronounces that " it will not do to say that 
 they have to haul more cheaply from Memphis because of competi- 
 tion." With aU due deference, whether " it wUl do to say" so or not, 
 it is so ; it -is a stubborn fact, and the controlling fact in the case. 
 
 The railroad companies have ascertained by that sort of experience 
 and proof, which no amount of sf)eculative argument can controvert, 
 that they do "have to haul more cheaply from Memphis on account of 
 competition," or not haul at aU. They have examined, considered, 
 discussed, and practically tested this problem in aU its phases and in 
 every conceivable way, and it is reduced to the simple alternative of 
 " haul for the low rate or let it alone." 
 
 It may possibly be better for all concerned and juster to the general 
 public to compel the railroads to lose all such freight, and not carry a 
 bale of cotton from Memphis to New Orleans ; but it will do no good 
 to predicate the prohibition on false premises. 
 
 The railroad is more necessary to Winona than to Memphis. The 
 haul from Winona to New Orleans is more valuable to the Winona 
 people, than is the haul from Memphis to New Orleans to the people 
 of Memphis. 
 
 Before the road was constructed the Winona shippers could by no 
 means or mode get their cotton to New Orleans so cheaply as three 
 dollars per bale; a vast deal of money was invested in a railroad, 
 which had the effect of furnishing them transportation at that price. 
 
 Surely it is fair tc look at both sides of the question. To regard 
 in some measure the former as well as the present situation of Winona, 
 and give some consideration to the claims and interests of the parties 
 who expended their money in building the road. To obtain cheap 
 .transportation for Winona it was necessary to remove Winona to the 
 
The Adjustment of Transportation Tariffs. 25 
 
 Mississippi River, to move the Mississippi River to Winona, or to build 
 the railroad. If lower rates have been obtained, and rates reasonable 
 in themselves, Winona has no right to complain of Memphis, which 
 has both the road and the river. 
 
 It should be remembered, also, that the cotton shipped from Mem- 
 phis is not grown in the streets of Memphis. It has been brought 
 from a number of points more or less distant, each bale paying its own 
 local rate, and the one doUar per bale from Memphis to New Orleans 
 is only a part of the entire rate paid on the cotton from the place 
 where it was grown to New Orleans. 
 
 Low rates are made from terminal points, distributing points, or 
 ■centers of transportation — ^by whatever name men may elect to call 
 them — ^because they gather up commodities and produce and reship 
 them to distant destinations. The freight charge upon this last ship- 
 ment is only a part of the entire charge which the article pays. 
 
 But distributing points or competing points can not be made "to 
 •order," and it is impracticable to force them by legislation. Natural 
 or geographical advantage of situation has much to do with making 
 them, and the influences of commerce and conveniences of business 
 imperatively determine their tenure of existence. Of courf.e, superior 
 enterprise exhibited by some community, as in the building of a rail- 
 road, wUl better its condition. But those which nature and man have 
 both favored must inevitably have the advantage. There must neces- 
 sarily be a limit to the number of these distributing points. As well 
 attempt to make every farm a point of shipment where through rates 
 shall commence, as every station or every town. 
 
 Mr. Beck complains that the railroads ' ' have destroyed the only 
 other highways the people had before the railroad was built, as they 
 have done virtually in my State, as my colleague knows." 
 
 Now this is putting it rather strong. It may be that because the 
 raUroads carry more cheaply and conveniently, the " other highways" 
 are not so much used as formerly. But the other highways still sur- 
 vive for the use of all who prefer them. Improved and cheaper meth- 
 ods wiU always " virtually destroy " those which are more imperfect 
 and expensive. Human nature may be perverse in this respect, but 
 such is its invincible propensity. Fire-arms made bows and arrows 
 obsolete, vaccination superseded inoculation, gas has largely restricted 
 the use «f candles, electricity is making rapid inroads on the domain 
 
26 The Adjustment of Transportation Tariffs. 
 
 of gas, balloons may some day cause railroads to be regarded as too 
 slow for passenger traffic. 
 
 But certainly no one should complain of all this. The world gets 
 something better all the time ; and whoever chooses can always shoot 
 with bows and arrows, burn candles, and be inoculated wiiA. the small- 
 pox rather than be vaccinated to prevent it. 
 
 But Mr. Beck goes on to say that while the railroad companies 
 have a "monopoly" of their tracks and road-beds, upon which no other 
 persons can put cars, "every man at LouisviUe or Cincinnati, or any 
 where else, if he has money enough, can put his barge with goods 
 on the Ohio or Mississippi, can float it down to New Orleans, land at 
 any public wharf, and ask no favor of any railroad or steamboat cor- 
 poration." 
 
 Of course he can. He simply doesn't want to spend the money 
 necessary to build and equip the barge, and pay and provision the 
 crew ; and he does n't want to take the risk, and lose the time from his 
 regular business, and constitute himself a transportation company, 
 ceasing to be pro tempore a farmer or merchant. That is aU. If "he 
 has money enough" he can not only put on the barges, but he can also 
 buUd a idUroad — charters are easUy gotten — or buy one, many are in 
 the hands of receivers and may have to be sold cheap. 
 
 The refusal of the corporations to permit "every man" even "if 
 he has money enough," to put his own locomotive and cars on the rail- 
 roads and run them to suit himself, seems to strike Mr. Beck as very 
 harsh, and to those who think like him it is perhaps indefensible. Yet. 
 some suggestions may be offered in its excuse. 
 
 An impression prevails that a better discipline can be enforced ia 
 this way, and better and more certain results obtained. It is thought 
 that the lines can be operated more efficiently, as well as more safely, 
 if under one executive management, than if the public have access to 
 them, as to a turnpike or a dirt road, and all men use them at their 
 own time and pleasure. It is contended and indeed believed by rail- 
 road men, that the precautions now in use to secure the safe conduct 
 of trains and minimize the risk of accident could not be successfully 
 observed if " every man" were allowed to take the track with his own 
 private vehicle whenever it suited his inclination or convenience. 
 
 But inasmuch as this free and universal use of the railroads has 
 never yet been attempted, and Mr. Beck evidently believes it practi- 
 
The Adjustment of Transportation Tariffs. 27 
 
 cable and proper, it may be that the experiment ought to be tried. It 
 may be that to establish in fact the contention in law, that the rail- 
 ways are public highways, such general use of them ought to be per- 
 mitted and encouraged. A few hundred "wrecks" more or less, and 
 several thousand lives more lost annually, may be a small matter to a 
 free people — not worth consideration when a question of ' ' monopoly " 
 is involved — yet there seems to be a prejudice against Mr. Beck's 
 policy even in the popular mind. 
 
 If such a measure be enacted as the Eeagan bill, compelling rail- 
 road companies to discontinue altogether the practice of charging less 
 for long than for short distances — prohibiting it under all circumstances 
 and conditions — the effect must be extremely disastrous on the cities 
 already established and recognized as distributing and shipping points. 
 Capital already collected at such points to be used in advances on sta- 
 ple products, or expended in providing the facilities for handling and 
 expediting large amounts of merchandise and produce wUl be in large 
 measure paralyzed and perhaps lost. 
 
 Cotton, instead of receiving through rates at Metnphis, will pay 
 the same thence as from the way stations, and the railroads taking it 
 up at the local stations wUl be forced to make non-competitive points 
 make up on local rates for the loss of competitive business. In order 
 that the law shall not be violated high rates wiU be charged every- 
 where. 
 
 Nashville is now a considerable shipping point of tobacco. It 
 comes there, paying a local rate, from all parts of Tennessee, and is. 
 shipped thence South or East at reduced or through rates. But under 
 the operation of legislation of this character the roads could no longer 
 permit NashviUe the benefit of through rates as heretofore, or rates 
 reduced by competition. 
 
 The change of policy would be very detrimental to NashvUle, but 
 equally so to the smaller shipping points and farmers ; for many of 
 the latter have been helped by advances of Nashville capital. Many 
 points of original shipment would be required to pay higher rates than 
 they are charged under the present system. 
 
 The Eeagan bUl, with the prohibitory provision on charges in it, 
 would revolutionize the system of commercial exchanges and the whole 
 mercantile business of the country. It would greatly injure the trade 
 of the large towns and terminal points, make producers pay high 
 
28 The Adjudm^nl of l}ramportatum Tariffs. 
 
 where they now pay low through rates, discourage production, in 
 short, hurt many and help none. 
 
 Unless the present system of railway rates — that is, charging al- 
 ways relatively less and sometimes absolutely less on the "long haul" 
 than on the " short haul " — be permitted and continued, the people of 
 the interior can not reach the markets of the searboard with their prod- 
 ucts, and the sea-board cities must relinquish a large part of the bus- 
 iness they are now doing with the interior. i 
 
 No one believes or wUl claim that any perfect and altogether scien- 
 tific system of railway tariffs has yet been devised; it is scarcely -to be 
 hoped that there ever will be. BaUroad managers are the readiest to 
 admit that there are defects and faults ia the general methods which 
 they are compelled to adopt in the adjustment of prices of transporta- 
 tion for a vast and varied traffic, for they have to deal directly with 
 the innumerable factors which complicate the problem and difficulties, 
 some of which are insuperable with the best purpose and effort ; and 
 under the most favorable conditions rates can never be absolutely but 
 only relatively just, inclining sometimes in favor of the carrier, and 
 very often in favor of the shipper. No work done by human agencies 
 wiU ever be perfectly done. 
 
 But the grievances and Uls, whatever they may be, which the im- 
 mense transportation business of this continent evolves, which its nec- 
 essary friction produces even when its machinery is in best condition 
 and is working most smoothly, can never be obviated by precautions, 
 or cured by remedies of the nature suggested. Empirical treatment 
 will only aggravate the disorders already existing. 
 
 No good can be accomplished by pursuing a policy calculated to 
 disintegrate the great systems and trunk lines which have been formed 
 in response to the demands of commerce, and which, lessening the ex- 
 penses of railway administration, have cheapened as well as facilitated 
 transportation. 
 
 Legislation can effect nothing in determining what is an equitable 
 and proper charge for railway service, and, therefore, nothing in in- 
 ducing or compelling it. It is a matter of grave doubt whether any 
 legislation upon this subject can ever be beneficial ; but if it be needed 
 at all, it is that, while the widest and freest scope be left to healthy and 
 legitimate competition, a stop be put to that reckless competition 
 which makes all commercial business insecure, by making all rates un- 
 
The Adjustment of Transportation Tariffs. 29' 
 
 certain, •whicli renders any just calculation impossible to the merchant, 
 and places the solvent railway corporation at the mercy of the bank- . 
 rupt road. 
 
 K the judicial idea of what is public policy as applied to contracts 
 between common carriers for the maintenance of rates were to change 
 as the circumstances under which it originated have altered, or railroad 
 companies were forced by statutory penalty to observe and execute 
 agreements between themselves, it might be better for all concerned. 
 The result would be a stability in commercial transaction not now ob- 
 taining, and, the agreement binding only the corporations, no shipper 
 
 would be affected by it. 
 
 BASIL W. DUKE. 
 
Hon,. W. S. OHISHOLH!, 
 
 nCJS-fSES. SAVANNA ff, PLOlilDA ■&= 'IV£StERN-.RAILIVAY CO. 
 
 ATLANTA, Ga„ Apm 28th, 1887. 
 
 George F. Nesbitt & Co., PMSiTESs. Naw Yokk. . 
 
G-ENTLEMEN : 
 
 All of the petitioners before the Commiysion askthe same relief. 
 
 The facts which have been elicited in the different cases are in 
 
 some respects different, but all ask the suspension of the fourth 
 
 section of the Act in special cases. There are two constructions 
 
 which may be given to this section. One construction will 
 
 materially affect the companies which I represent. The other 
 
 construction will aflfect them, but not so seriously. 
 
 Section 4 prescribes: 
 
 That it shall ie unlawful for any common carrier, subject to the 
 provisions of this Act, to charge or receive any greater compensation 
 in the aggregate for the transportation of passengers or of like kind of 
 property, under substantially similar circumstances and conditions, 
 for a shorter than for a longer distance over the same line, in the 
 same direction, the shorter being included within the longer distance. 
 
 The point is upon the meaning of the words " aggregate com- 
 pensation." Do they refer to the aggregate joint rates on differ- 
 ent lines, or to the aggregate rate upon one particular line ? 
 
 My suggestion is that the words refer to the aggregate rate 
 upon a particular line. I read in connection with Section 4 to 
 sustain that interpretation Section 6. 
 
 Section 6 prescribes : 
 
 That every common carrier subject to the provisions of this Act 
 shall print and keep for public inspection schedules showing the rates 
 and fares and charges for (he transportation of passengers and prop- 
 erty which any such common carrier has established, and which arein 
 force at the time upon its railroad, as defined by the First Section of 
 this Act. The schedules printed as aforesaid by any such common 
 carrier shall plainly state the places upon its railroad between which 
 property and passengers will be carried, and shall contain the classi- 
 fication affreight in force upon such railroad, and shall also state 
 separately the terminal charges and any rules or regulations which in 
 any wise change, affect or determine any part of the aggregate of such 
 aforesaid rates and fares and charges. 
 
 Here is an interpretation of the word "aggregate" in the 
 schedule which is required to be published according to Section 
 
9 ; and it is to be determined by an addition to the transporta- 
 tion of the terminal and any other charges which may be estab- 
 lished by any rule or regulation in force upon that liae. See 
 also the definition of a " railroad," in Section 1, which I will read 
 presently. 
 
 Further on in Section 6- there is a provision made for joint 
 rates. 
 
 Every common carrier mhject to the provisions of this Act shall file 
 with the Commission hereinafter provided for, copies of its schedules 
 of rates, fares and charge^ which have been established and published 
 in compliance with the requirements of this section, and shall prompt- 
 ly notify said Commission of all changes made in the same. Every 
 such common carrier shall also file with said Commission copies of 
 all contracts, agreements or arrangements with other common carriers 
 in relation to any traffic affected by the provisions of this act to which 
 it may be a parly. And in cases where passengers and freight pass 
 over continuous lines or routes operated by more than one common 
 carrier, and the several common carriers operating sxtch lines or 
 routes establish joint tariff's of rates or fares or charges for such con- 
 timwj^ lines or routes, copies of sv^h joint tariffs shall also, in like 
 manner, be filed with said Commission. But no common carrier 
 party to any such joint tariff shall be liable for the failure of any 
 other common carrier party thereto to observe and adhere to the rates, 
 fares or cha/rges thus made and published. 
 
 In this part of the section, referring to joint tariffs, the Com- 
 mission will perceive that the plural number is used. The sec-' 
 tion speaks of lines. In Section 4 the reference is to a common 
 carrier in respect to a line. The plural j.s not used. The further 
 limitations in Section 4 all support this view. They are that the 
 transportation ' must be for a shorter than for a longer distance 
 over the same line in the same direction, the shorter being included 
 within the longer distance. Now, if I should be right in this 
 interpretation, then the longer and the shorter haul clause applies 
 to such rates as may be made by a common carrier having one 
 line, or a common carrier operating continuous lines but still 
 under one management, or control, as defined by the First Section 
 of the Act, and not to several carriers under different manage- 
 ments, but engaged in the transportation of Inter-State traf&c by 
 a system of joint rates. 
 
 The first section prescribes : 
 
 That the provisions of this Act shall apply to any common carrier 
 or carriers engaged in the transportation of passengers or property 
 
3 
 
 wholly by railroad, or partly hy railroad and partly by water when 
 both are used, under a common control, management, or arrangemerit, 
 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 
 lerrilory of the United States, or the District of Columbia, or from 
 any place in the United States to an adjacent foreign country, or 
 from anyplace in the United States through a foreign country to any 
 other place in the United States, and also to the transportation in like 
 manner of property shipped from anyplace in the United States to a 
 foreign country and carried from such place to' a port of trans-shipr 
 mem, or shipped from a foreign country to a/ny place tn the United 
 States and carried to such place from a port of entry either in the 
 United States or an adjacert foreign country; provided, however, that 
 the provisions of this Act shall not apply to the transportation of pas- 
 sengers or property, or to the receiving, delivering, storage or handling 
 of property, wholly within one State, and not shipped to or fiom a •. 
 foreign country from or to any State or Territory, as aforesaid. 
 
 The term. " railroad," 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 corporation operating a railroad, 
 whether owned or operated under a contract, agreement, or lease; 
 and the term " transportation " shall include all instrumentalities of 
 shipment or carridge. All charges made for any service renderedy or 
 to be rendered, in the transportation of passengers or property as 
 aforesaid, or in connection therewith, or for the receiving, delivering, 
 storage or handling of such property, shall be reasonable and just ; 
 and every unjust and unreasonable charge for such service is pro- 
 hibited and declared to be unlawful. 
 
 The Commission will notice that after the words " or from any 
 place in the United States to a foreign country, etc.," there is a 
 stop, and after the disjunctive there is a distinct kind of traffic 
 provided for. The first part of the section provides for the pass- 
 enger and property traffic between States and Territories. The 
 other portion provides for traffic to and from foreign countries. 
 The property which comes from or goes to a foreign country is 
 stamped with the character of the traffic which is controlled by 
 this bill. The traffic which comes from or goes to different 
 States is not stamped with this character if it is received by an 
 independent common carrier in a State and transported to its 
 destination in the same State. 
 
 To illustrate now this idea with regard to the Savannah, 
 Florida & Western Railroad : At Savannah we do business with 
 the Ocean Steamship Company, and we do business with the 
 Charleston & Savannah Railroad. The Charleston & Savannah 
 
Railroad in turn does business with the Atlantic Coast Line. 
 The Atlantic Coast Line in turn does business with the Pennsyl- 
 vania Railroad. The Savannah, Florida & Western commences 
 in Georgia, at Savannah, There is no restriction in the Act upon 
 the l^eceipt of its freight whether it should be from a merchant or 
 another common carrier. It receives freight from the Charleston 
 & Savannah Railroad in Georgia, and it receives it from the 
 Ocean Steamship Company in Georgia. It handles it in Georgia. 
 It transports it then from Savannah to Thomasville, BainbriSge, 
 Albany and other stations in Georgia and in Florida. Under 
 the construction which I glaim for the Act, the traffic from 
 Savannah, after it is received by the Savannah, Florida & 
 - Western Railroad, is not subject to the provisions of the Inter- 
 State Commerce Bill if it is handled, received and delivered in 
 Georgia. If it is handled and received in Georgia but delivered 
 in Florida, then it does become subject to those provisions. 
 
 In further illustration, we do business at Albany, and at Al- 
 bany the Savannah, Florida & Western Road connects with the 
 Central Railroad, and that system connects with the Louisville & 
 Nashville and other roads leading to the west and northwest. 
 The freight comes to Albany, and if that freight is to go from 
 Albany, it is delivered to the Savannah, Florida & Western Rail- 
 way Company for farther transportation. Now the Savannah, 
 Florida & Western Road is not a part of any continuous line. It 
 is not operated nor is it managed by any other sj stems. It has 
 joint rates with other lines. 
 
 This property is received at Albany, and if it is transported to 
 any point in Georgia, then the carriage by the Savannah, Florida 
 & Western Railway Company is not affected by the Inter-State 
 Commerce Bill. But if it is transported to Florida it is affected. 
 Therefore, if I am right in this construction, the principal part of 
 the business which this road does, being the receipt and de- 
 livery of this commerce in the State of Georgia, is not affected by 
 the Act, and it would only ask to be relieved from the operation 
 of the 4tb Section on its business received or delivered in the 
 State Qf Florida, at its terminal and junctional points. 
 
 Many of the petitioners, whose cases are under investigation, 
 however, differ with me in this interpretation of the law, and 
 
think that the words "aggregate compensatioa " refer to an ag- 
 gregate of joint rates, and that the 4th Section applies as well to 
 continuous lines under separate and different managements work- 
 ing under joint rates as well as to a single or consolidated line 
 under the same management or control. This constraction would 
 of course afEeot the traffic from other States to every station on 
 the Charleston & Savannah Railway, and the Savannah, Florida 
 & Western Railway, notwithstanding the fact that the traffic may 
 have been received, delivered and handled by said companies 
 wholly within one State. 
 
 But whatever construction is placed upon the fourth section it 
 is necessary to ask for some relief. And this brings me to the 
 consideration of the power given to the Commission. It is 
 granted in the following proviso to the 4th section : 
 
 Provided, however, that upon application to the commission ap- 
 pointed under the provisions of this Act, such common carrier may, in 
 special oasts, after investigation by the commission, be authorized to 
 charge less for longer than for shorter distances for transportation of 
 passengers or properly ; and the commission may from time to time 
 prescribe the extent to which said designated common carrier may be 
 relieved from the operation of this section of this Act, 
 
 The discretion conferred is unlimited. The commission is 
 certainly empowered to permit a common carrier to charge a 
 greater compensation in the aggregate for the transportation of 
 passengers or of the like kind of property when the eircum- 
 stances and conditions are dissimilar. The Court would grant 
 relief in such cases and the discretion of the commission is con- 
 current with that of the Court. The commission I believe have 
 much more power than ttie Courts in such cases ; after an investi- 
 gation they may in any case authorize a common carrier to charge 
 less for longer than for shorter distances for the transportation of 
 passengers or property. The intention of the law-makers was to 
 make the Act elastic. When the conditions and circumstances of 
 the transportation are not substantially similar the carrier has a 
 right under the law to charge less for a longer than for a shorter 
 distance ; but as cases might arise which had not been provided 
 for and where the enforcement of the law would create distress 
 either to the carrier or to communities, the power to authorize a 
 less charge for longer than for shorter distances was made unlira- 
 
6 
 
 ited. In construing discretionary powers the general rule, it is 
 true, is that the exercise of the power shall not be reckless, but 
 conservative and legal. Apply this rule to the law and the cases 
 under investigation, and it seems to me that the Commission 
 could well grant the prayers of the petitions. 
 
 Section 1 of the Act prescribes that the rates shall be just and 
 reasonable. These are legal terms. They have been construed 
 by the Courts of England and this country and held to be rates 
 which are not excessive. A rate is not unjust and unreasonable 
 because the carrier has made a discrimination. At common law 
 a carrier could charge A one dollar, B fifty cents and C nothing 
 for a like and contemporaneous service, and the charge to A 
 would not be unjust and unreasonable unless it was too great_ 
 Discriminations were proliibited in England by Acts of Parlia- 
 ment and in this country by statutes. Sections 2, 3 and 4 of this 
 Act regulate discriminations. Section 2 deals altogether with 
 discriminations in charges made to persons for a like and contem- 
 poraneous service. Section 3 relates to undue and unreasonable 
 preferences or advantages and to undue and unreasonable preju- 
 dices or disadvantages. And Section 4 refers solely to the prac- 
 tice of charging a greater compensation for a shorter tharii a longer 
 distance. 
 
 The key-note of the whole Act is that the' rate shall be just and 
 reasonable. The Commission have full power to authorize a com- 
 mon carrier to charge less for longer than for shorter distances, 
 provided the charge for the shorter distance is not unjust and 
 unreasonable, that is, not excessive, and provided fnrther, the 
 granting of the authority would not be a violation of either Sec- 
 tions Two or Three. Section Two could not be violated, for the 
 reason that it refers entirely to charges for a like and contempo- 
 raneous service in the transportation of a like kind of traffic under 
 substantially similar circumstances and conditions. It could 
 then apply to traffic only between the same places, while Section 
 4 relates altogether to traffic between places on the same lines 
 where one is more distant from the staiting point than the 
 other. 
 
 And I contend that granting the prayers of the petitioners 
 would not be a violation of Section Three, but that a refusal in 
 
most cases would operate against the spirit of that section. For 
 years most of the railway companies south of the Ohio and- 
 Potomac rivers have been members of an association called the 
 Southern Railway & Steamship Association which has made the 
 rates for all the lines. The system adopted by them was the 
 , best they could formulate, and has been fully explained to the 
 Commission. The principle of recognizing competitive and non- 
 competitive points may not be in accord with the Inter-State 
 Commerce Act, but the principle was considered right at the 
 time the system was created. It is now recognized in Georgia, 
 as appears by Rule 6 of the Georgia Railroad Commission which 
 has been introduced in evidence during the progress of the 
 hearing. 
 
 Under the system trade centres have grown and the people 
 have spent money in building railroads to their respective cities 
 to obtain the benefit of lower and competitive rates. These peo- 
 ple have united with the railroads and ask you to authorize the 
 charge of a less rate to these points than to intermediate stations. 
 The intermediate or non-competitive stations on the other side 
 have appeared in some instances and opposed the petitions and 
 asked for a strict enforcement of the law. These non-competitive 
 places have been content in the past to sleep whilst their neigh- 
 bors were building railways and pushing forward their stations to 
 be towns and their towns to be cities. The opponents ask now 
 to have these places deprived of the advantages which they have 
 acquired and that the non-competitive places should receive the 
 fruits of enterprises in which they never engaged and for which 
 they never paid. Would not a refusal of the prayer of the peti- 
 tioners result in giving an unreasonable preference or advantage 
 to these non-competitive places, and would it not further result in 
 subjecting these trade centers and competitive places to an undue 
 and unreasonable prej udice or disadvantage in the present state 
 of their prosperity? It seems to me that a refusal to continue of 
 force the order of April 6th in its principal features, would pro- 
 duce a financial revolution and seriously disturb the fixed chan- 
 nels of trade to the prejudice and disadvantage of those places 
 which by their money and enterprise have become competitive 
 points. 
 
The terms under substantially similar circumstances and condi- 
 tions are words of very broad import. No purely local shipment 
 is ever made under substantially similar circumstances and condi- 
 tions with a like through shipment. As a general rule cars run 
 through to terminal points, and the cost of transporting a ship- 
 ment to a through is no greater than to a local point, with the differ- ' 
 ence against the local on account of the stopping and unloading and 
 the waste of labor which cannot be constantly employed at many 
 local points, although engaged and paid by the day or oionth. Nor 
 are the circumstances and conditions of the transportation substan- 
 •tially similar to competitive and con-competitive points. The 
 shorter line will make the rate and the longer must conform^ or 
 withdraw from business, and if the longer conforms it must corres- 
 pondingly reduce rates to the intermediate stations which may be 
 already too low. And when this competition is with a water 
 line or a line part water and part rail, unless the rail line is 
 authorized to charge the same rates to points reached by the 
 water or water and rail lines, it must retire from the competitive 
 business to its own serious disadvantage as well as to the preju- 
 dice of the point thus deprived of competition. The water lines 
 in many instances have no intermediate stations, they sail with- 
 out stopping from port to port, and if under the jurisdiction of 
 the Commission cannot be controlled in rates as they have no 
 longer and shorter distances. 
 
 There are many circumstances and conditions surrounding the 
 transportation of Inter-State traffic on the Charleston & Savannah 
 and the Savannah, Florida & Western Railways which are pecu- 
 liar to those companies. They compete with steamships and sail- 
 ing vessels directly at Charleston, Savannah and Jacksonville, and 
 with steamships, sailing vessels and short lines of railroads at 
 Yemassee in South Carolina, at Jesup, Waycross and Albany in 
 Georgia, and at Callahan, Live Oak, Lake City, Gainesville and 
 Chattahoochee in Florida, and at Bainbridge, in the State of 
 Georgia, with steamboats on the Apalachicola, Chattahoochee and 
 Flint Rivers, running in connection with the Florida Railway & 
 Navigation Company and the Central Railroad & Banking Com- 
 pany, and the ocean lines from Jacksonville, Fernandina, Bruns- 
 wick and Savannah. To meet this competition by water and by 
 
9 
 
 water and rail, I ask the Commission to authorize the Charleston 
 & Savannah and the Savannah, Florida & Western Railways to 
 charge less to and from the above named points than to and from 
 intermediate stations. And to that end I ask that the names of 
 those companies and of the above named places, which are either 
 terminal or junctional points on said railways, be added to the 
 order of April 6, and be included in any additional order extend- 
 ing the whole or any portion of the same, or that such other relief 
 from the operation of the said Fourth Section may be granted to 
 them in the premises and to the extent that may seem equitable 
 and just to the Commission. 
 
 We do not ask for auihority to charge higher rates than are 
 just and reasonable for our shorter distances, but to charge less 
 for these specified longer hauls to enable us to participate in a 
 business which we would otherwise lose, and the loss of which 
 would deprive us in a great measure of the ability to continue 
 our present just and reasonable rates to other stations and places. 
 The prayer of our petition is, not that we may be permitted to 
 undercharge the water lines, but to meet them in such a manner 
 that we may enjoy a part of the business without being forced to 
 reduce our just and reasonable rates between intermediate sta- 
 tions. Granting this authority to these rail lines to compete will 
 not deprive Charleston, Savannah, Brunswick, Fernandina and 
 Jacksonville of their fine water lines, but it will cause those 
 water lines to maintain lower rates than if relieved of rail compe- 
 tition by an enforcement without exceptions of the Fourth Sec- 
 tion, and it will insure to the agricultural interest of the States 
 of Florida, Georgia and South Carolina the present system of 
 rapid transportation to the markets of the North of the perish- 
 able fruit and vegetable products of those States. 
 
 The Chairman : We have been accustomed to ask those who 
 request orders of us to draft the order that they think themselves 
 entitled to upon their petition and present it for our examination 
 in the light of the facts. 
 
 Commissioner Walker : I think the papers we have here will 
 answer. 
 
BEFORE THE HONORABLE INTER-STATE COMMERCE COMMISSION 
 
 .I2sr i^E. 
 
 LOUISVILLE & NASHVILLE RAILROAD CO 
 
 Application f6r Relief from the Fourth Section of the 
 Act of Congress to Regulate Commerce. 
 
 OF COUNSEL FOR THE APPLICANT. 
 
 "Under substantially similar circumstances and conditions." 
 
 MARSHALL & BRUGE, TATlONEBS, NASHVILLE. : 
 
ARGUMENT. 
 
 To the Honorable Interstate Commerce Commission :, 
 
 I- 
 The applicant, the Louisville & Nashville Railroad 
 Company, has tiled its petition, praying to be relieved 
 from the operation of the fourth section of th^ act of 
 Congress "to regulate commerce," so as to be authorized 
 to charge less for longer than for shorter distan(;es for the 
 transportation of property between Cincinnati, Louis- 
 ville, Evansville, St. Louis, Meniphis, Nashville, New 
 Orleans, Mobile, Selma, and Montgomery, and \'arious 
 other cities situated upon' or reached by its lines of rail- 
 way, and between which cities there exists active com- 
 petition between the applicant and various other trans- 
 portation lines. Between most of the cities mentioned 
 in the prayer of the petition there is competition by 
 water as well as by rail, but between some of the cities' 
 there is competition pnly by rail. '"- 
 
 The object of the applicant is to be released and left 
 free to meet such competition as may prevail at any of 
 the points mentioned in the prayer of the petition, by 
 acc&pting such rates as the applicant may be able to ob- 
 tain at Such competiti\'e points, without being forced to 
 reduce its local rates at intermediate points where no 
 such competition exists, , 
 
 'The applicant has no desire to make its local or non-' 
 competitive rates extortionate or unreasonable. On the , 
 contrary, the petition avers that though the local or 
 ■ non^competitive rates of the applicant ha\'e been change^ 
 from time to time in the past, such changes have in all 
 
i2) 
 
 eases been recluctions, so that the average of such rates 
 is now much less than it formerly was,; the reductions 
 in some instances having ainounted to as much as fifty 
 per cent. i 
 
 The petition further a\'ers that all such rates are a,nd 
 have been just and reasonable. 
 
 It is averred in the petition that not less than eig-hty 
 per cent, of the net earnings accruing to the applicant 
 from the transportation of property, is derived from 
 property which is moved to and from local or''non-com- 
 petitive stations ; that if the applicant is forced to 
 >abandon either its competitive or its 'local tratfic, self- 
 preservation will force it to abandon the competitive 
 tratfic from which so small a proportion of its net rev- 
 eiiue is derived ; that the forced abandonment of i,ta 
 competitive tratfic will inflict a loss upon the applicant 
 of over three millions of dollars per year, and that the 
 cities between which such competitive tratfic has "here- 
 totbre existed, will be injured to a corresponding exteut. 
 l»y the loss of the applicant's competition. 
 
 Th& apj)licant submitted with its petition its tariffs 
 of rates, and the petition concedes that in many in- 
 stances the rates of transportation charged by the appli- 
 cant for the shorter distance, are greater than for the 
 longer distance, over the same line in the same direction, 
 though the shorter is included within the longer dis- 
 tance. But the petition avers that such is the case onh' 
 where competition has forced such an adjustment, and in 
 all of the instances except two,, the competition is b;^ 
 water as well as 1)y rail. The applicant insists that 
 where such competition exists, the transportation is not 
 conducted under substantially similar circumstances and 
 conditions as where no such competition does exist. The 
 applicant therefore submits that its present tariffs, com- , 
 
{■6) 
 
 ply fully wjth the spirit as well as the letter of the 
 fourth section of the act to regulate commerce ; and the 
 applicant would not have presented a petition to be re- 
 lieved from the operation of that section, had it not been 
 for the fact that all of the railroad companies north of 
 the Ohio River notilied the applicant, in effect, that they 
 would, on April 5th, withdraw all through rates from 
 the applicant's lines, unless the applicant would agreo U) 
 reduce its local, to its competitive rates, which, for the 
 reasons above stated, the applicant was unable to do. 
 
 The applicant therefore was compelled to appeal to 
 this Honorable Commission to be relieved from the op- 
 eration of said section, so far -as the same relates to the 
 transportation "of property be'tween competitive points, 
 notwithstanding the applicant did not then believe, and 
 does not now believe, that its tariffs violate the provis- 
 ions of that section. '• 
 
 If the applicant is correct in its construction of the 
 fourth section, it recognizes the fact .that it Avill be neces- 
 sary for the Commission to dismiss the applicants' peti- 
 tion. But if the Commission shall place the dismissal of 
 the petition upon that ground, the applicant will not feel 
 that its petition has been filed altogether in vain. 
 
 In the matter of the. application made by certain rail- 
 road companies in relation to the export trade of Boston, 
 the Commission used this language : "Indeed any legal 
 ground for affirmative action on the part of the Commis- 
 sion is precluded, when those who bring the practice to 
 its attention, do so with explanations of its propriety, 
 and insisting upon its lawfulness." (1st Interstate Com- 
 merce Reports, p. 27.) i I 
 
 The course taken by the Commission in that case was 
 to decline to make any order on the petitions, except that 
 the petitioners should havp leave to withdraw them. 
 
(4)^ 
 
 If the Commission should be of the opinion that com- 
 : petition does not create a substantial dissimilarity in the 
 circumstances and conditions under which transporta- 
 tion is conducted, and therefore that the applicant's tariffs 
 are technically violative of the fourth section, then the. 
 question will remain , whether there are any other facts 
 presented by the applicant, which will justify the Com- 
 mission in relieving the applicant from the operation of 
 that section. 
 
 My argument will necessarily divide itself into a con- 
 sideration of those two questions. 
 
 V II. 
 
 The fourth section of the a^t of Congress "to regulate 
 ■ commerce " provides : " That it shall be unlawful for any 
 ^^ommori carrier, subject to the provisions of this act, to 
 charge or receive any grea;ter compensation, in the ag- 
 gregate, for the transportation of passengers, or of like 
 kind of property, mnder substantially similar circum- 
 stkn^es and conditions, for a shorter than for a longer dis- 
 tance Qver the same line in the same direction, the shoi:ter 
 being included within the' longer distance." (See Ap- 
 pendix, 45.) 
 
 The ninetieth section of the English "Railways Clauses, 
 Consolidation Act of 1845" authorized railway compa- 
 nies to A'ary the tolls upon their railways "so as to ac- 
 commodate them to the circumstances of the traffic : " 
 but it was provided that such power of varying tolls 
 should not be used for the purpose of "prejudicing or 
 favoring particular parties, nor for the purpose of col- 
 lusively and unlawfully creating a monopoly, either in 
 the hands of the company or of particular parties." 
 The companies were therefore authorized to vary 
 their tolls upon the whole, pr upon any parliicular por- 
 
( 5 ) 
 
 tions of the railway, as they should think fit; provided 
 "that all such tolls be at all times charged equally, to 
 all persons, and after the same rate, whether' per ton, 
 per mile, or otherwise, in respect of all passengers, and 
 of all goods or carriages of the same description, and 
 conveyed or propelled by a like carriage or engine, 
 passing only over the same portion of the line of rail- 
 way, under the same circumstances ; and no reduction or 
 advance in any such toll shall be made, either directly 
 or indirectly, in favor of, or against any, particular com- 
 pany or person traveling upon or using the railway." 
 (4 R'y and Canal Traffic Cases, p. 445.) 
 
 It is said that the words, "under substantially sim- 
 ilar circumstances and conditions," contained in the act 
 of Congress, were intended to have the same meaning 
 a& the words "under the same circumstances," contained 
 in the English act; and that the construction which the, 
 English courts have placed upon the words "under the 
 same circumstances," or "under like circumstances," 
 ought to be followed by the courts of this country in 
 construing the fourth section of the act of Congress. . > 
 
 The rule, as stated by the United States Supreme 
 Court upon this subject, is, " that where English stat- 
 utes, such, for instance, as the statute of frauds and the 
 statute of limitations, have been adopted into our oAvn 
 legislation, the known and settled construction of ,thos3, 
 statutes, by courts of law, has been considered as silently, 
 incorporated into the acts, or has been received with all 
 the weight of authority. (See 110 U. S., 628, McDon-. 
 aid vs. Hovey.) 
 
 It, therefore, becomes important to see whether there 
 has been any "known and settled" construction of the 
 English statutes by the courts of that country, and if so, 
 what that- construction has been; and as an aid in un- 
 
(6) 
 
 ^derstanding the decisions of the English courts upon' 
 those statutes, it will be necessary to see what the com- 
 mon law of England was, as understood and defined by 
 those courts. 
 
 In Baxenilale m. E. C. Ey, 4 C. B. N. S., 93, E. G. 
 L. (pages 78, 79), decided February 11th, 1858, Byles, 
 Judge, said: "I know of no common law reason why a 
 carrier may not charge less than what is reasonable to 
 one person, or even carry for him free of all charge." 
 
 In Branley vs. S. K Ey Co., 12 C. B. N. S., 104, E. 
 C. L. (pages 74, 75), decided May 12th, 1862, Willes, 
 Judge, said that the obligation of a carrier at common 
 law is " to charge reasonably, but not to charge equally." 
 
 The case of G. W. Ey Co. vs. Sutton, L.'R. 4th, H. 
 L. (English and Irish Appeals), page 226, was decided 
 July 13th, 1869. Mr. Justice Blackburn said (page 
 237): "At common law a person holding himself out 
 as a common carrier was not under any obligation to treat 
 all customers equally. The obligation which the com- 
 mon, law imposed upon him, was to accept and carry all 
 goods delivered to him for carriage according to his 
 l^rofession, (unless he had some reasonable excuse for 
 not doing so), on being paid a reasonable compensation 
 for so doing. *^ * * The fact that the carrier 
 charged others less, ■ though it was evidence to show 
 that [a higher] charge was unreasonable, was no more 
 than evidence tending that way. There was nothmg in 
 the common law to hinder a carrier from carrying for 
 favored individuals at an unreasonably low rate, or even 
 gratis; all that the law required was that he should 
 not charge any moi'e than was reasonable. 
 
 "But when railways came into operation, and it was 
 found that they practically superseded all other modes 
 of transit, it became a question for the Legislature how 
 
(-7) 
 
 far they would, when granting numerous persons power 
 to make a railway and act as carriers on that line, im- 
 pose on them restrictions beyond what the common law 
 imposed on ordinafy carriers. 
 
 "At first the 'Legislature, in each special act, inserted 
 such clauses as Seemed to the particular committees rea- 
 sonable in each case. Very soon those came to be usual; 
 clauses, which the then Chairman of Committees of the 
 House of Lords used to require to be inserted in all 
 railway bills with more or less modification. They 
 were known* by his name as Lord Shaftesbury's clauses. 
 Finally, in 1845, the Legislature' embodied in a general 
 act (8 and 9 Vict., C. 20), those clauses which it was 
 thought expedient should generally be inserted in rail. 
 way acts, and the act was known as the Railways 
 Clauses, Consolidation Act of 1845." 
 
 III. 
 
 The first thing to be understood in api^roaching the, 
 consideration of the English railway statutes, is that. 
 Parliament was not actuated by any communistic de- 
 signs upon the railway interests of the realm. It was 
 not intended to confiscate the railways, nor to take the 
 management of them away from the companies, nor to 
 compel the companies to work for the public for noth- 
 ing. On the contrary. Parliament intended that the 
 companies should retain the possession and management 
 of their railways, and should operate them for the hen- 
 fit and in the interest of the shan -holders^, and for that 
 purpose, that the companies should be allowed to make 
 all necessary contracts and arrangements in regard to 
 rates and tolls, provided they acted with perfect impar- 
 tiality and fairness, between all persons seeking to use 
 the railways for traffic. 
 
(8) 
 
 The sole object of the statutes was to prevent rail- 
 way companies from "prejudicing- and favoring par- 
 ticular parties," and to require them to charge "equally 
 ito all -persons" where the service was rendered "under 
 the same circumstances." ,' 
 
 ■ In Parker vs. G. W. Ey Co., 3 Eng. R'y and Canal 
 Cases, page 599, Tindal, Chief Justice, said: "From 
 these several enactnients, it appears clearly to have been 
 the intention of the Legislature, that parties incorporated 
 should be empowered to construct the railway, and hold 
 it as their property, and derive certain profits from it, but 
 that every member of the community should have an 
 equal right to use it on the terms prescribed by the act; 
 and that the payment to be made for such user, whether 
 under the denomination of rates or tolls, or charges fixed 
 by the company, should be reasonable and equal to all 
 persons, without reference to the particular advantage 
 derived by any individual, or class of individuals, from 
 such user." 
 
 In The Attorney-General vs. B. & D. J. Ry Co., 2 Eng. 
 R'y and Canal Cases, pages 132-133, the Lord Chancellor 
 said that the object of the Legislature was to prevent 
 "those who should get the monopoly of the carriage of 
 the public from exercising that monopoly to the preju- 
 dice of individuals ; that is to say, they shall not be at 
 liberty to carry the goods of one manufacturer and re- 
 refuse the goods of another. It was to ghe an equal 
 right to the public to the convenience, * * * * 
 .and not to prevent tlie compwng frain. mahing such ar- 
 ratujemrntx loithin the powers of their act as they might 
 fia'l iiidkI convenient ti> themseloes.^'' 
 
 In the case of Nicholson et al. vs. G. JV. R'y Co., 1st 
 Xev. & Mac.,' 148, 149, Earle, Chief Justice, said: "I 
 take the free power of niaking contracts to be essential 
 
(9) 
 
 to commercial profit. Bailway companies have that 
 power as free as any merchants, subject only (as to' this 
 court) to the duty of acting impartially without respect 
 of persons; and this duty is performed when the offer 
 is made to all who wish to adopt it. Large contracts 
 may be beyond the means of small capitalists; con- 
 tracts for long distances may be beyond the needs of 
 those whose traffic is confined to a home district ; hut 
 the power of the railway cotnpany to contract is not re- 
 stricted by these considerations.'" 
 
 In the case of West vs. L. d- N. W. Fy Co., 1st 
 Nev. & Mac, 172, Chief Justice Bovill said: "The 
 Legislature has placed a restriction upon the companies 
 from using their powers and their railways for the ben- 
 efit of one person to the exclusion, of others, and has re- 
 quired that all persons shall be treated alike, At the 
 same time it has been considered that due regard may 
 be had to all peculiar circumstances, as well as to the 
 Safety and con^^enience of the public, and the fair in- 
 terests of the companies themselves." 
 
 In the case of Bansome vs. E. C. Ry Co., 1st Nev. & 
 Mac, 70, the Court said: "After a good deal of con- 
 sideration we think that the fair interests of the railway 
 ought to be taken info account." 
 
 In the matter of the petition of the Order of Railway 
 Conductors, this Commission used the following lan- 
 guage: - "Throughout the act [of Congress] as it now 
 stands, in confessedly experimental form, there is ex- 
 hibited an obvious and a generous purpose to allow to 
 the corpjorations ample scopte in the conduct of their busi- 
 ness as common carriers for the peoj)le, and fair consid- 
 eration of every reasonable claim while insisting upon 
 just, impartial, open, and consistent rates of charge fo 
 which every citizen shall be subject alike whose situation 
 2 , 
 
. - ( 10 ) 
 
 is- the same.'''' (See First Interstate Commerce Reports, 
 .p. 20.) 
 
 As illustrations of what is meant by the English 
 ■ courts in saying that they will allow the ^fair interests 
 of railway companies to be taken into account, the En- 
 glish Railway Commissioners in the case of N. & L. 
 Coal Co. vs. Caledonian Wy Co., 2 Nev. & Mac, p. 39, 
 decided in October^ 1874, use this language on p. 46: 
 , "We think it will be right to guard against precluding 
 the railway company if it costs them more, all things con- 
 sidered, to carry over the one> line than the other from 
 making a proportionate diiference in the mileage rates." 
 
 In the case of Bellsdyke Coal Co. vs. N. B. E'y Co., 
 2 Nev. & Mac, p. 110, decided in 1875, .the English 
 Commissioners said "that a railway company pays no 
 more than a due regard to its own interests, if it charges 
 for its services in proportion to their necessary cost, and 
 Jias only such variety in its rates as there is in the cir- 
 cw^istances of its customers." 
 
 In the^case ot Nicholson et a I. vs. Gr. W. B'y Co., 1st 
 Nev. & Mac, p. 142, decided in 1858, it was held that 
 the English act "was not contravened by a railway 
 company carrying at a lower rate in consideration of a 
 guarantee of large quantities and full train loads at reg- 
 ular periods, provided, that the real object of the rail- 
 way company be to obtain, thereby a greater remunerative 
 profit by the diminished cost of carriage ; although the 
 effect may be to exclude from the lower rate those per- 
 sons who cannot give such a guarantee." 
 
 And to the same effect was the decision of the En- 
 glish Commissioners in the case of Greenop et al. vs. S. 
 E. B'y Co., 2 Nev. & Mac, p. 319, decided in 1876. See 
 also Bansome vs. E. C. B'y Co., 1st Nev. & Mac, 158.- 
 
- (11) 
 
 In the case of Oxlade vs. K E. Ey Co., 1st Nev. & 
 Mac, p. 91, decided in 1857, the Court said: "Other 
 special circumstances are stated in the arguments, which, 
 h(id they effected the peov/niary interests of the com- 
 2yany., might have furnished ground for contending that 
 the preference was not undue or unreasonal^le." 
 
 And in Lees vs. L. & Y. Ey Co., IstNev. & Mac, 352, 
 decided in 1874, the English Commissioners held that " in 
 determining whether a preference shown by a railway 
 company to one of its customers is undue or unreasonable 
 within the ineaning of the Railway and Canal Traffic 
 Act of 1854, regard should be had to the benefit and con- 
 venience of the public, and also to the convenience of the 
 railway company with reference to its general traffic.^' 
 
 If in considering the circumstances and conditions un- 
 der which railway transportation is conducted, it is legiti- 
 mate to regard "the fair interests "' of the railway com- 
 panies ; "if their general pecuniary interests " are tO/be 
 consulted; and if their "convenience with reference to 
 their general traffic" is to be taken into account; then, if 
 it can be shown that the pecuniary interests of the com- 
 pany will be subserved, and that the convenience of their 
 general traffic will be promoted, by allowing them to 
 compete for business at competitive points on the best 
 terms that such business can be obtained, I submit that 
 the cases above cited, are, at least, indirect authorities 
 for the jiosition that competition upon such terms was 
 never intended to be prohibited either by the English 
 statutes or by the act of Congress. 
 
 I agree that where competitive business is taken at 
 less than its actual cost, so that the pecuniary interests 
 of the railway companies, instead of being promoted are 
 injured, such competition ought not to be permitted. 
 But if it can be shown that cowpetitiye traffic, though 
 
(12)- 
 
 carried at Ibss than the average cost of the entire traffic 
 of a company, can yet be carried above its own actual 
 cost, then the pecuniary interests of the company will 
 be subserved, at least to some extent, by permitting the 
 competition ; and if such competitive rates are allowed 
 equally to every one shipping to or from such competi- 
 tive points, no injustice whatever is done to any one. 
 
 . IV. 
 
 I am not forced, however, to rely upon indirect au- 
 thorities for the position assumed by the applicaht in 
 .this case. The precise contention of the applicant is 
 that transportation conducted between competitive 
 points is not conducted under substantially similar cir- 
 cupistances and conditions with traffic conducted be- 
 tween points that are not competitive, and therefore 
 that the fourth section of the act of Congress to regu- 
 late commerce does not aj)ply. 
 
 The Attorney-G-eneral vs. B. <& D. J. E'y Co., 2 Eng. 
 R'y. & Canal Cases (page 124), was decided August 8th, 
 1840. The B. & D. J. R'y act empowered that com- 
 pany to receive from passengers conveyed by the com- 
 pany's carriages, tolls, not exceeding a specified amount. 
 By a subsequent act it was provided that the charges 
 by the first act, authorized to be made for the carriage 
 of passengers, goods, etc., "shall be at all times charged 
 equally, and after the same rfite per ton per mile, in re- 
 spect of all passengers and goods of a like description, 
 and conveyed or jDropelled by a like carriage or engine 
 passing on the same portion of the line only, and under 
 the smne circujiistcuices," etc. 
 
 The B. & D. J. R'y, commencing at Derby, inter- 
 sected the L. & B. R'y at JIampton-in-Arden. After- 
 wards the M. C. R'y was built from Derby to an inter- 
 
(13) 
 
 section with the L. & B. R'y at Rugby. There were 
 then two competitive routes from Derby to London, 
 and the new route opened by the M. C. R'y was the 
 shortest. In order to meet that competition, the B. & 
 D. J. R'y Co. charged through passengers who were 
 traveling between tlie competitive points — Derby and 
 London — at the rate of two sliillings between Derby 
 and Hampton-in-Arden, while they charged local pas- 
 sengers who were only traveling between the non-com- 
 petitive points — -Derby and Hampton-in-Arden— at the 
 rate of eight shillings between those points. 
 
 The Attorney-General filed a bill against the B..& D. 
 J. R'y Co., charging that said company had fixed the 
 aforesaid unequal charges, since the opening of the 'M. 
 C. R'y, "iM order to induce passengers, goods, and mer- 
 chandise to he conveyed to Derby by way of their railway ; 
 and for that purpose have made a reduction in the charge 
 for conveyance by them, in favor of persons traveling' 
 upon the railway between Hampton - in - Arden and 
 Derby, who a7-e proceeding from or to London along th^ 
 L. & B. R'y, and who would otherwise travel by the M. 
 C. R'y, although such persons travel upon and use the 
 railway between Hampton-in-Arden and Derby under 
 the same circumstances with persons in favor of whom no 
 such deduction is made." (Page 129.) '\ 
 
 The bill prayed (page 130) "that it may be declared 
 that the charges made by the B. D. & J. R'y com- 
 pany for the carriage of passengers, goods, wares, and 
 merchandise conveyed by the company, and passing on 
 the line of the railway for the whole distance between 
 Hampton-in-Arden and Derby by the same or like trains, 
 propelled by the same or the like carriages, ought to be 
 charged equally and after the same rate, whether such 
 passengers, goods, merchandise, etc., proceed on, or are 
 
: . ■, (14) :■ ;; 
 
 conveyed along the L. & B. Railway for the whole dis- 
 tance from or to London or not, * * * and that the 
 Company be restrained from charging lower rates in re- 
 spect of such passengers, goods, and merchandise" as pass 
 along the L. & B. Railway for the whole distance be- 
 ,tween London and Hampton-in-Arden, than the rates 
 charged by said company, in respect of such passengers, 
 .goods, and inerchandise as do not pass along the B. P. 
 '& J. Railway at all, or so pass for a distance short of 
 the whole distance between London and Hampton-in- 
 Arden." 
 
 The Lord Chancellor dismissed the motion with costs, 
 saying, ^'it is not denied that they (the company) carry 
 those who are going (from Derby) to Hampton-in-Arden 
 at the charge which they are authorized to make, Ijwt 
 persons traveling under other circumstances, not intending 
 to stop there, but going on to London, are, according to 
 the Attorney-General's complaint, charged two shillings 
 instead of eight shillings. Now, I do not know who 
 will suffer by that arrangement, whatever may be the 
 cause of it. * * * Tbe Attorney-Greneral 
 now asks me to interfere to prevent the company carry- 
 ing passengers (between competitive points) at'too low 
 a rate. * * * It is not necessary to say 
 anything about the jurisdiction of the Court, or how 
 fer I should interfere if I had the power, because I am 
 quite clear that the siwty-third section has not the slightest 
 reference to this case.'" (Page 132.) 
 
 It will be remembered that the sixty-third section re- 
 quired that all passengers, etc., should be charged 
 equally, etc., passing on the same portion of the line, etc., 
 "and under the same circumstances" (p. 127), and his 
 lordship held that said section laad no reference to the 
 case before him, because persons traveling between com^et- 
 
(15) 
 
 itive points were not traveling '^ under the same circum-' 
 stances'^ as local passengers traveling between non-com- 
 petitive points, notwithstanding both classes of passen-' 
 gers traveled over the same portion of the railway, 
 propelled by the same engines, and in the same cars. 
 
 The English Railway and Canal Traffic Act of 1854 
 provided that no railway company " shall make or give 
 any undue or unreasonable prefei'ence or advantage to 
 or in favor of any particular person, * * * 
 nor subject any person " to any undue or unreasonable 
 prejudice or disadvantage in any respect whatever." 
 (1 Nev. & Mac, p. 2.) 
 
 Hozier filed a petition against the Caledonian R'y 
 Co., alleging that he was aggrieved by being charged 
 nine shillings six pence for traveling between Mother- 
 well and Edinburgh, a distance of forty-three miles, 
 while passengers traveling in the same train, and in the 
 same class of carriage between Glasgow and Edinburgh, 
 a distance of fifty-nine miles, were , charged only two 
 shillings. (1 Nev. & Mac, p. 28.) 
 
 It was alleged by the defendant that the petitioner 
 was a large stockholder' in a rival railway, which com- 
 peted with the defendant ^between Glasgow and Edin- 
 burgh, and that the real object of his petition was to put 
 a stop to the competition of defendant between those 
 points. (1 Nev. & Mac, p. 29.) 
 
 The petition was dismissed January 20, 1855. 
 
 Lord Curriehill said: "The only case stated in the 
 petition, is that passengers passing from Glasgow to 
 Edinburgh, or from Edinburgh to Glasgow, are carried 
 at a cheaper rate (aggregate) than passengers from 
 Motherwell to either of these places. Now, that is aii 
 advantage, no doubt, to those passengers traveling be- 
 tween Edinburgh and Glasgow. But is it an unfair ad- 
 
(16) 
 
 vantage over other passengers traveling between inter- 
 mediate stations ? The complainer must satisfy us that 
 there is something unfair or unreasonable in what he 
 complains of, in order to warrant any interference. Now 
 I have read the statement in the petition, and I have 
 listened to the argument in support of it, to find what is 
 unreasonable in giving that advantage to through passen- 
 fgers. What disadvantage do Motherwell passengers 
 sufl^er by this ? I think that no answer was given to 
 this, except that there was none." 1. Nev. & Mac, 
 pages 31, 32, Hozier vs. Caledonian B'y Co. 
 
 ;'•, This case also, certainly decides that to charge local 
 passengers a greater compensation in the aggregatie for 
 a shorter distance than' is charged through passengers 
 for a longer distance between competitive points, does 
 not subject the local passengers "to any undue or unrea- 
 sonable prejudice or disadvantage in any respect what- 
 ever," notwithstanding the passengers, through as well 
 ,as local, may travel over the same line, ii) the same di- 
 rection, in the same trains, and in the same class of car- 
 riages. 
 
 In Jones m. E. C. Ey Co., 1 Nev. & Mac, 45, it ap- 
 peared that defendant charged 45 pounds per year for 
 season tickets from Colchester to London, a distance 
 of twenty miles, while it charged for such tickets only 
 20 pounds per year from Harwich to London, a distance 
 of over seventy miles. It was insisted that this was an 
 undue preference of the inhabitants of Harwich over 
 those of Colchester. 
 
 The Court (on January 27, 1858) refused the rule. 
 Williams,. Judge, said: "For anything that appears, 
 there may be very good reasons for making suck difference 
 in the: price. * * * At this moment there is- active 
 CO mjMition at Beading between the Great Western and 
 
- (17) 
 
 SoutJiwestern Raihoays; the consequence is, that consid- 
 erably less is charged for tickets from that place to 
 London, and vice versa, than for intermediate stations; 
 There is no such reason for the difference here, for there 
 is but one line to Harwich, and consequently no compe- 
 tition." " ■ 
 This case also, decides that to charge local passengers 
 a greater compensation in the aggregate for a shorter 
 distance than is charged through passengers for a longer 
 distance between competitive points, does not subject 
 the local passengers "to any undue or unreasonable prej- 
 udice in any respect Avhatever," notwithstanding the 
 passengers, through as well as local, may travel over 
 the same line, in the same trains, and in the same direc- 
 tion. ' 
 
 It further decides that the fact that active comjjetition 
 exists at the points between which the through passen- 
 gers are carried, affords "rt reri/ good reason for making 
 a difference" between the rates charged such through 
 passengers, and the rates charged local passengers at 
 points where no competition exists. (1 Nev. & Mac, 
 46.) 
 
 And I submit that if competition affords a good rea- 
 spn for making a difference between through and local 
 rates, it cannot be maintained that the transportation 
 of local passengers is done "under substantially similar 
 circumstances and conditions " with the transportation 
 of through passengers, when competition forces the 
 company to make the lower through rate. 
 
 The case of Wapier vs. G. & S.-W. Fy Co., 1 Nev. & 
 Mac, 292, was decided June 19th, 1859. The defend- 
 ant operated a railway from Glasgow to Ardrossan, on 
 the sea coast, and endeavored to build up a trade be- 
 tween Grlasgow and Belfast, via Ardrossan, in competi-, 
 3 ^ 
 
(18) 
 
 tion with certain steam vessels which carried direct 
 from Glasgow to Belfast without any trans-shipment 
 whatever. With a view to foster and encourage this 
 competitive through trade between Grlasgow and Bel- 
 fast, the defendant made an arrangement with the dwn- 
 er of a vessel called the "Oscar," by which the Oscar 
 was to ply between Ardrossan and Belfast in connec- 
 tion with defendant's trains. Through tickets and 
 through bills of lading were issued between Grlasgow 
 and Belfast, via Adrdrossan, and the through rates 
 were divided between the defendant and the owner of 
 the "Oscar" in certain proportions, the defendant's pro- 
 portion of the through rate, covering the distance from 
 
 .; Grlasgow to Ardrossan, being much less than the local 
 rates charged by the defendant between those points. 
 In fact, said local rates were in some instances much 
 higher than the entire through rates. (Page 295.) 
 The plaintiff was the owner of a vessel called the 
 "Lancefield," which also plied between Ardrossan and 
 Belfast, and he complained that the defendant refused 
 to sell through tickets or issue through bills of lading 
 by his vessel, and refused to prorate with him on 
 through rates. On the contrary, the defendant charged 
 its full local rates between Glasgow and Ardrossan on 
 ail freights and imssengers carried by the plaintiff's 
 ressel between Ardrossan and Belfast, and the plaintiff 
 prayed that the defendant be required to make the same 
 arrangement with him that existed with the owner of 
 the " Oscar," or that defendant be restrained from con- 
 
 , tinuing the arrangement with the latter. 
 
 ' The Court refused the relief sought principally upon 
 the ground that the English Railway and Canal Traffic 
 Act of 1854 did not apply to deep-sea traffic ; but aside 
 from that consideration, the Court held that the plaintiff 
 had no case at all. 
 
(19) 
 
 It was impossible for the defendant to build up a com- 
 petitive business between Glasgow and Belfast unless it 
 could make some reliable and permanent arrangenient 
 for the sea transfer between xlrdrossan and Belfast, and 
 to make such an arrangement special inducements had 
 to be offered to the owner of some vessel, as there was 
 not traffic enough for more than one vessel. If plaintiif 
 had the right to demand that the same facilities be' 
 afforded him as were afforded to the "Oscar," the 
 owners of all other vessels would haA^e a similar right ; 
 and if they all had. that right, the transfer business 
 would be divided among so many vessels, that it would 
 not be profitable to any of them, and none of them could 
 be. relied upon to continue in it. In order to preserve 
 to the public the benefit of th,e competition afforded by 
 defendant's- route between Glasgow and Ardrossan it 
 was absolutely necessary to refuse the plaintiff's appli- 
 cation, though the inevitable consequence was to compel the 
 plaintiff or his customers to pay local rates between Glas- 
 gow and Ardrossan^ which, as before stated, were in all in- 
 stances, higher than defendant's proportion of the through 
 rate covering the distdnce between those pioiufs ; and in some 
 instances much higher than the entire through rate from 
 Glasgow to Belfast. 
 
 In the case of E. & W. J. Ey Co. vs. G. W~. Ey Go., 
 1 Nev. & Mac, p. 346, decided May 12, 1874, the En-, 
 glish Railway Commissioners use this language : " There 
 can be little doubt that through rates generally, are a con- 
 venience to the public, and that the public are interested 
 in having a through rate for this particular traffic. But 
 it must not be overlooked that through rates are in 
 amount greatly below the sum of the local rates, and rest 
 upon the supposition th,at the traffic to which they ap- 
 ply is worked as economically as possible." 
 
 The case of Foreman vs, G. E. Ry Co,, 2 Fev, & Mac, 
 
(20) 
 
 ,202, was decided in July, 1875. The following facts are 
 extracted from the opinion of the English Commission- 
 ers: "The applicants in this case are coal merchants 
 at Great Yarmouth, and complain that the coal rates of 
 the Great Eastern Company to various places on their 
 lines, as, for example, to Norwich, are very much higher 
 in proportion to distance from Yarmouth than from Pe- 
 tersborough. The coal the applicants deal in is brought' 
 
 ' to Yarmouth by sea, and is thence sent inland by rail ; 
 but being an expensive coal, the railway is used only to 
 carry' it to places near. To these places coal is also 
 brought from Petersborough, and this coal competes suc- 
 cessfuUij with sea-borne coal, and its ability in this re- 
 
 :spect is attributed by the complainants to the practice 
 of the railway company in their ojjj^osition to their (com- 
 plainant's) carriage of coal by ship, and their (the com- 
 
 ' pany's) efforts to attract it to themselves, of charging 
 imich less in proportion for long distances than for short 
 
 ' onesr (2 Nev. & Mac, pp. 204, 205.) 
 
 Tte Commissioners, after examining the scale of rate^ 
 charged by the company, said that "as to their com- 
 parative amounts for the different mileages, it does not 
 
 ' appear that there is a greater disproportion in relation 
 to distance in these charges than in the cost of carriage 
 to the company, and if the principle on which the scale 
 is graduated, is a fair consideration of the coSt to the 
 company, of carrying coal for the different distances, it 
 is not a valid, objection to the scale that it is better 
 adapted to the business of some merchants than of 
 others, and that its low rates for long distances are use- 
 less, to those who deal in the over-sea coal ; nor does 
 THE Teafeic Act prevent a railway company from 
 
 HAVINU SPECIAL RATES OP CHARGF TO A TERMINUS T.O 
 WHICH TRAFFIC CAN BE CARRIED BY OTHER ROUTES OR 
 OTHER MODES OF CARRIAGE WITH WHICH THEIRS IS IN 
 
 COMPETITION." (2 Nev, & Mac, 205, 206.) 
 
(21). 
 
 The case of W. & B. Canal Co. et^al. vs. B. Canal Co., ^ 
 Nev. & Mac, 113, was decided in November, 1877. The 
 applicants and defendants were severally proprietors of 
 canals, which formed links in a continuous chain of in- 
 land navigation between South Staifordshire and the 
 river Severn on, the one hand, and London and the river 
 Thames on the other. 
 
 The applicants were the proprietors of two of said . 
 canals, and they alleged that the several canals formed : 
 valuable routes in the interest of the public for traffic be- 
 tween those extreme points, and also between intermedi- 
 ate places, and that in order to enable the canals as routes to 
 compete with the railway system it was necessary that there 
 should le through rates for traffic passing through said ca- 
 nals, and as the sum of the local rates charged on the several 
 canals was too high to allow of competition with the rail- 
 ways, the applicants asked the commissioners, under, the 
 English Act for the Regulation of Railways passed in 
 1873, to fix through rates for the canal traffic, which, of _ 
 course, were to be less than the sum of the canal local 
 rates. (See pp. 114, 115). 
 
 In other words, the applicant canal companies were 
 doing in that case what the Louisville & Nashville R. R. >• 
 Co. is asking to be allowed to do here — viz., to make 
 their through rates between competitive points less than 
 their local, wherever necessary to enable them to com- 
 pete. One diiference between the two cases is, that in 
 that case, the water route was struggling to compete 
 with the railways, and in our case the railways are strug-' 
 gling to compete with the water route ; and another dif- ^ 
 ference is, that, in that case, the applicant canal compa- 
 nies were asking the English Railway Commissioners to ■ 
 compel the defendant canal companies to adopt through 
 rates lower than their locals, so as to make competition 
 practicable, while in this case the L, & N. R. R, Co. is, 
 
(220 
 
 asking the U. S. Commissioners for permission to charge 
 the low through rates which water competition has itself 
 forced upon it. ' , 
 
 In the pase cited one of the defendants, the Birming- 
 ham Canal Co., objected to the application upon the 
 
 •ground that as its proportion of the through rates 
 would be less than its local rates, and as its special act 
 contained what is known in England as the "equality 
 clause," the acceptance of its proportion of the through 
 
 grates would compel it to reduce its local rates to cor- 
 respond. But the ^commissioners replied (p. 120) that 
 the restriction contained in defendant's special act 
 against varying rates, did not apply to through rates 
 which the commissioners were authorized to establish 
 under the General Act of 1873; at least that the re- 
 striction did not extend to preventing differences between 
 the tlirougli rates fixed by the commissioners wider the act of, 
 1873 mid the ordinary^ or local, rates which the company 
 could take under its special act." 
 
 And, in stating a case for a Superior Court, the com;; 
 missioners said (p. 133) : " Fke portions alloted by us to 
 the Birmingham Canal Company out of the said through 
 rates, or tolls, allowed by our judgment, are in some cases 
 lower than the rates or tolls, which the Birmingham 
 Canal Comfany are entitled to charge, and are now 
 charging, for local traffic carried over the same parts of 
 their canals and navigations.''^ 
 'The case of Richardson et al. vs. Midland Ey Co., 4: 
 Eng. R'y and Canal Traffic Cases, page 1, Brown & 
 Maenamara,' was decided Aug. 6, 1881. 
 
 The a])plicants were brewers and maltsters at Newark 
 and complained that their traffic was' unduly prejudiced 
 by the defendant, by not being carried on as favorable 
 terms as to rates and in other respects,' as similar traffic 
 at Burton, 
 
(23) 
 
 Newark and Burton were both situated on defend- 
 ant's railway, and defendant was in competition at both, 
 places with other railway carriers, and also with carriers 
 by water ; defendant's rates, " to and from loth places, 
 had been settled xoith rtfirence to what it could obtfiin, 
 having regard to other means of getting the traffic to its 
 destination^ (Pages 6 and 7.) 
 
 In discussing the difference between the rates which 
 obtained from other points to Burton and Newark re- 
 spectively, the commissioners said (p. 9) : " The differ- 
 ence, or part of it may possibly b: required by the route 
 from the same district not being the same all the way 
 to the two places, and by the separate portions of line 
 passed over, being more costly to work or construct, in 
 the one case, than in the other ; or aaairi, it mi/y be re- 
 quired by a competition for the conveyance of the par- 
 ticular traffic between the ttoo termini, existing in the one 
 case and not in the other. ' ' 
 
 The case of the Brougldon, etc.. Coal Co. vs. Gr. W. Ey 
 Co., 4 Eng. R'y and Canal Traffic Cases (Brown & Mac- 
 namara), page 191-, was decided February 14th, 1883. 
 The applicants were colliery owners in North Wales, 
 and complained that the defendant charged them- a 
 higher mileage rate upon their coals, than was charged 
 by the defendant to the colliery owners in South Wales, 
 though all of the collieries were shipping to the same 
 market. One of the defenses relied upon was that the 
 South Wales coal was carried by the defendants in 
 competition with the L. & N. W. R'y Co. by rail, and 
 also in competition with vessels by sea (page 194). 
 The Commissioners (on page 196) said: "In deter- 
 mining the question whether the lower mileage rate 
 from South Wales, is, or is not an undue advantage to 
 South Wales traffic, we mnaf also take info account how 
 the case stands, as to either coal being able to be carried 
 
(24) 
 
 at a less cost to the company than the other, or as to 
 the two coals being under different conditions as regards 
 competition of other special circumstances J' 
 ' The case of Strick vs. Swansea Canal Co., 16 C. B. N. 
 S. Ill, E. C. L., p. 245, was decided April 25th, 1864. 
 A proviso in a canal act directed that the tolls of the 
 canal company should be " charged equally to all per- 
 sons, and after the same rate, whether per mile, or per 
 ton per mile, in respect of all barges, etc.,iof the like 
 description, passing along or using the same portion of 
 the canal, and all goods, etc., of the like description, con- 
 veyed or propelled in a like boat, and passing along or 
 using the same portion of the said canal, etc., under the 
 like circumstances," etc. It was held "that it was com- 
 petent to the company to agree to carry at a lower rate 
 for a particular individual, in consideration of a large 
 guaranteed minimum toll, in order to enable them (the 
 company) to enter into competition with a rival line of 
 railway." 
 
 ~ It is true that the Judges do not, in their opinion, 
 lay any stress on the fact of competition, and place 
 their justification of the company's rates, upan the 
 ground that the individual to whom lower tolls had 
 been charged than those charged the plaintiff, had 
 guaranteed large quantities of goods, for long distances, 
 in regular loads. But in the statement of the case 
 (page 248), and in the argument of counsel (page 
 252), reference was made to the fact that at the place, 
 where the company received the traffic of the individ- 
 ual to whom the lower rates had been conceded, the 
 canal company was in active competition with a certain 
 railway company, whereas there was no competition 
 whatever at the place where the plaintiff's goods were 
 received. While, therefore, the effect of competition 
 was. not discussed in the opinions of the Judges, they 
 
(25)^ 
 
 being unanimous in favor of the canal company on the' 
 other point, it is quite certain that the matter of com- 
 petition was debated before the Court ; and the Court 
 would doubtless have said that competition could not 
 be regarded in considering " the circumstances " under 
 which the transportation had been conducted, if the 
 Court had believed that such was the law of the case. 
 ■ In the case of Bmisome v.^. E. C. li'' y Co., 1 Nev. & 
 Mac, p. 63, decided in 1857,' though the Court granted 
 relief to Ransome & Co., they were qareful to say that 
 ,they did it without deciding that a railway company 
 may not charge diiferent rates '•'•where the difference U 
 fin the purpose of competing witli- another line^ 1st 
 Nev. & Mac, p. 71. - 
 
 And in Harris vs. (lockermouth R^y (Jo., 1st Nev. & 
 Mac, pp. 102-3, Chief Justice Cockburn said: "I 
 quite agree that this court has intimated, if not abso-; 
 lutely decided, that a conipany is entitled to take into, 
 consideration any circumstances, either of a general or of 
 a local character, in considering the rate qf charge which 
 they will impose upon any particular traffic. As, for 
 instance, in respect of terminal traffic, there might he 
 competition roith another railway ; and in respect to ter- 
 minal traffic as distinguished from iutermediate traffic, 
 it might well be that they could afford to carry goods 
 over the whole line cheaper, or proportionately so, thaii ' 
 they could over an intermediate part of the line." * ' 
 
 In the case of Ransome vs. E. C. R'y Co., 1 Nev, & 
 Mac, p. 120, decided in 1858, Crowder, Judge, said; 
 "There are many circumstances which may induce a 
 railway company to charge, on parts of their line, rates 
 which leave little or no remuneration, as the proximity 
 of rivers, or canals, or other lines of railway, which 
 may enter into competition with them and materially af- 
 fect their interests.^' 
 
 4 . ■ ' 
 
(26) 
 
 I am quite sure that a careful examination of the cases 
 , pited above in this sectioA of my argument will leave no 
 reasonable doubt but that the English courts and the En- 
 glish Railway Conrimissioners have never regarded traffic 
 conducted between competitive points, as conducted " un- 
 .der the same circumstances" as traffic conducted be- 
 tween points not competitive, and therefore that to 
 charge . less for lx>nger distances between competitive 
 points, than for shorter distances between points not com- 
 petitive, was never regarded as a violation of Section 
 90 of the Railway Clauses, Consolidation Act of 1845. 
 
 The same authorities also establish the proposition 
 that the forced concession of competitive rates between 
 competitive points has * never been regarded by the 
 English courts or Commissioners as an "undue or un- 
 reasonable preference or advantage to, or in favor'of "' 
 shippers at those competitive points, nor an "undue or 
 un;reasonable prejudice or disadvantage to, or against" 
 shippers at points not competitive, and therefore that 
 the concessions by railway companies of such compet- 
 itive rates to shippers at competitive points, was never 
 regarded as a violation of Section 2 of the English Rail- 
 way Act of 1854. 
 
 ,It has been said, however, that the cases just referred 
 to, or at least some of them, have been overruled by 
 later English cases. : 
 
 I have examined all of the cases cited as overruling 
 th-ose cases, and have examined all other English cases 
 which were accessible to me, and I state with great 
 confidence, and without hesitation, that the cases above 
 referred to have not been overruled, and that their ku- 
 thority has not even been shaken, by any adjudication 
 either in the English courts, or by the English Commis- 
 sioners. 
 
(27) 
 
 As late as 1873, a Parliamentary Committee, discuss- 
 ing in their report the subject of equal mileage rates, 
 or charges in proportion to distances, express the opinion 
 that such a system was inexpedient and impracticable, fdr 
 the following, among^ other reasons: That "it would 
 prevent railway companies from lowering their fares 
 and rates so as to compete with traflRc by sea, by canal, ' 
 or by a shorter or otherwise cheaper railway, and would 
 thus deprive the public of the benefit of competition 
 and the company of a legitimate source of profit." (See 
 Report of Senate Select Committee on Interstate Com- 
 merce, 1886, p. 57.) 
 
 To insist that rates between competitive points shall 
 never exceed those between points not competitive, 
 would, of course, as effectually destroy competition, as 
 to insist that all rates shall be placed uj)on a mileaga 
 basis, or made in proportion to distance ; and it would be 
 singular indeed, if the English courts or Commissioners 
 should have placed a construction upon the English 
 statutes, which would as certainly have destroyed com- 
 petition, as the, system which the Parliamentary Com- 
 mittee repudiated, and against the adoption of wliich 
 it earnestly protested. , 
 
 In examining the English cases which are supposed 
 to have overruled the cases referred to by me in the last 
 section of my argument, it will save time to divide them 
 into classes. 
 
 In the first class will be placed those cases in which 
 it has been held, that under the English statutes a rail- 
 AYay company has no right to discriminate against an 
 individual on ^account of his dcctbpaUon or personal status, 
 
 Section 90 of the Railway Clauses Consolidation Act, 
 while it authorizes railway companies to vary their 
 
( 28 ) 
 
 tolls "so as to accommodate them to the circumstances 
 of the traffic," provides that such tolls shall be at all 
 times charged equally to all persons, and after the same 
 rate in respfect of all goods of the same description, con- 
 veyed only over the same portion of the line;, "under the 
 same circumstances, " and in considering whether the 
 goods of one person have been conveyed oyer a railway 
 "under the same circumstances " as the goods of another 
 person, the\ English courts have invariably held that the 
 company has no right to consider the occupation or per- 
 sonal status of the shippers, but must confine itself to a 
 comparison of the services rendered by the railway to 
 the respective shippers. 
 
 The case of Edwards vs. G. W. B\/, 11 C. B., 73, E. 
 C/L. (588), was decided November 'l5th, 1851. The 
 i statute of 7 and 8 Vict., C. 3, S. 50, provided tha,t in 
 whatever way the charges of the Gr. W. R'y Co. " may 
 be made, they shall be made, equally to all passengers, 
 and to all persons, in respect of all animals, and of all 
 goods, wares, merchandise, etc., of like description and 
 quality, and conveyed in, or propelled by, a like carriage 
 or engine passing only over the same portion of, and 
 over the same distance along, the said railway and un- 
 der the l\he circumstances." (Page 647.) 
 
 Parker was what is now known in this country as an 
 express carrier, but in England was called an "inter- 
 cepting " carrier, and did business over the defendant's 
 railway. The defendant charged him, and other ex- 
 press carriers, higher rates than were charged others 
 who were not such carriers. Jervis, C. J., said (pages 
 647-8): " The question, therefore, is this. Is the fact of 
 Parler being a. cai-rier a dif'ererU circumstance? or, are 
 the goods carried under different circumstances when 
 they are carried for anybody else? Now, looking at 
 the words (of the statute), I cannot say that they are. 
 
The goods carried are of the like quality, and they are 
 carried along the same portion of the railway, and by 
 the same power, and at the same time, and siibject to, 
 the same risks and liabilities. In, the case of Pickford 
 vs. G. J. H'lj 6V., 10 M. & W., 399, it was expressly 
 decided that the fact of a person being a carrier made 
 no difference in the circumstances. The words of the 
 Act of Parliament in that case were 'under the same 
 circumstances,' which are nejirly identical with those 
 now in question." 
 
 It will be noticed that the Court did not say that the 
 goods being of the like quality, carried over the same 
 portion of the railway, by the same power, and at the 
 same time, etc., are the only circumstances that are to 
 be regarded. On the contrary, all that the Court said 
 was, ^^that the fact of a person being a carrier made n^ 
 difference in the circumstances.'''' The case is authority 
 for the position that whether Parker shipped from com- 
 petitive points, or from points not competitive, he was 
 entitled to the same rates at those points as the general 
 public, and that his being an intercepting carrier, could 
 make no difference in the circumstances of his shipments ; 
 but the case is no authority whatever for the contention 
 that Parker, though shipping from non-competitive, 
 points, was entitled to the same rates that may have 
 been conceded by the company at points where compe- 
 tition- prevailed. 
 
 The case of Pa7-her vs. G.'W. R ij Co., 73 E. C. L., 
 p. 545, 11 C. B., decided November 14th, 1851, and Far- 
 her vs. a. W. R'y Co., 49 E. C. L., p. 253, 7 Man. & 
 Gran., decided February 12th, 1844, and Crouch vs. L.xk 
 N. W. R'y Co., 2 Car. & Ker., 789, and Crouch vs. O. 
 N. Ry Co., 9 Exchr., referred to in 1st Nev. & ]^ac.j p. 
 16, were all cases of discrimination against intercepting 
 carriers in fator of the general public, and where the 
 
■ (30) 
 
 discrimination was placed upon the sole ground of .the 
 occupation of the party discriminated against — they 
 therefore need no comment in addition to what I have 
 said in relation to the Edwards case, referred to above. 
 
 If the Louisville & Nashville R. R. Co. were tp 
 charge the Southern Express Company, which do/es 
 business over its lines, higher rates than the general 
 public on shij)ments from Louisville to' New Orleans, 
 the Express Company would, under the cases just 
 noticed, be clearly entitled to redress. There is copipe- 
 tition between Louisville and New Orleans, and pom- 
 petitive rates prevail at Louisville, and the Southern 
 Express Company, when shipping from Louisville, is 
 entitled' to precisely the same competitive rates as the 
 general public at Louisville. 
 
 But Rowlett is a non-competitive local station, a short 
 distance south of Louisville ; and if, the Express Com- 
 pany should insist that it was entitled to the same rates 
 from Rowlett to New Orleans, as prevail between Louis- 
 ville and New Orleans, then a totally different question 
 would be presented, and upon which, the cases just no- 
 ticed throw no light whatever. ■ ,'^' 
 
 The case of Baxeridale vs. &. W. R''y Co. (known 
 . as the Reading' case), 1st Nev. & Mac. 202, decided 
 Nov. 15, 1858; Garton vs. G. W. M'y (7o., 1st NeV. 
 & Mac. 214, decided Jan. 29, 1859, and G. W. R\j Go. 
 vs Sutton, L. R. 4, H. L. 226 (English and Irish Ap- 
 peals), differ from the cases just noticed only in this : 
 that the discriminations*, while made against intercep- 
 ting carriers, were not made in favor of the general 
 public, but were made in favor of the railway conipa- 
 nies themselves, they being engaged as rivals of the 
 plaintiffs in the accessoriaL business of intercepting or 
 express carriers; and the point decided was that if a 
 railway company engages in such an accessorial bvisi- 
 
(31) \ 
 
 ness, it can no more discriminate in its own favor, than 
 it can in favor of another individual, or of the general 
 public. 
 
 In the Sutton case, Law Reports, 4 H. L. p. 238, 
 Mr. Justice Blackburn said: "The defendants ( i. e..- 
 the railway company) may, subject to the limitations in 
 their special, acts, charge what they think fit, but nut' 
 more to one person than they, during the same time, 
 charge to others ' under the same circumstanaes, ' and I 
 think it follows from this, that if the defendants do charge 
 more to one person, than they, during the same time, charge 
 to others, the charge is by virtue of the statute extortion- 
 ate. * * * * j^ would be of the es- 
 sence of the case to prove that the goods were of like 
 description and carried under the like circumstances. 
 But I think that this applies to the description of 
 the goods, and the circumstances of the carriage, and 
 not to the trade of the consignor or consignee''. (Pages 
 239, 240). Again he said on page 245 : " The circum- 
 stances must be those relating to the carriage, not tothe 
 consignor, and the fact that the plaintiffs was a rival 
 (express) carrier does not in itself make a difference in 
 the circumstances, such as to justify a difference in the 
 charge under the statute. " - 
 
 Mr. Justice Willes said (p. 247): " Such (express) 
 carriers are entitled to have their packed parcels car- 
 ried upon the railway for the same price as other per- 
 sons. This gives no preference to rivals in trade; it 
 only puts carriers upon an equality with the rest of the 
 public as to the price of the same work done for them 
 by the company; * * * goods are con- 
 veyed under like circumstances where the route, risk, 
 and expense are, in the opinion of the jury, the same. 
 * * * In effect,! I think the phrase ' like des- 
 cription' is exhausted upon the goods, and 'likecircum- 
 
(S2) 
 
 stances ' upon the route, expense, and risk of carriage, 
 and that neither can be extended to the personal qual- 
 ities of the individua I who sends the goods. ' ' (Page 249. ) 
 
 Lord Chelmsford said (p. 260) : "I have felt greater 
 difficulty in ascertaining the meaning of the words 
 'under the same,' or 'under like circumstances.' I do 
 not see, however, how they can relate to anything else 
 than the conveyance of the goods. To say that be- 
 cause tJie plaintiff is what has been called' an intercept- 
 ing {express) carrier, and the other persons using > the 
 railway are wholesale dealers, therefore the goods are 
 not conveyed along the railway under the like circum- 
 stances, is an application of the. words which I am- un- 
 able to comprehend." 
 
 I have quoted largely from this case because it has 
 been cited as holding that competition cannot, in any 
 case, be regarded in considering whether one ' traffic is 
 conducted under the same circumstances as another; 
 but it is manifest that no such question Was made or 
 decided in the case. 
 
 The only question touching the matter of competi- 
 tion that was considered by the Court,. was the compe- 
 tition which existed between the plairitiif, Sutton, and 
 the railway company in the accessorial express busi- 
 ness. The railway company in that case acted in two 
 distinct capacities : 
 
 First^As a railway company proper, in the transpor- 
 tation of freight and passengers from poiiit to point. 
 
 Second^In the capacity of an express carrier, in col^ 
 lecting and delivering packages transported over the 
 railway. ": 
 
 The point decided by the Court was, that whenever 
 a railway conlijany assumes to act in the capgicity of an 
 
■ (3S) ' \ 
 
 express carrier, it must treat its own express business, ' 
 precisely as it treats express business oifered to it by. 
 other expres^ carriers. But as to whether a company, 
 acting in its proper capacity as a railway company, may. 
 compete with other railway companies, or with water 
 lines, and in such competition, may concede lower rates 
 at competitve points than prevail at non-competitive 
 points, was not involved, nor was it even discussed by 
 the Judges in the Sutton case. 
 
 Quite an unfair use has b^en made of the Sutton case, ^ 
 by putting an improper emphasis upon certain words 
 used by the Justices; and by isolating thosfe words 
 from the connection in which they were used. Thus: 
 Justice Blackburn has been quoted as having said that 
 the words "under the like circumstances" applied only 
 to the circumstances of the carriage; whereas, what 
 he did say, was, that those words applied to the cir-- 
 cumstances of the carriage, and noi tu the trade of the 
 consignor or consignee. (See pages 239, 240.) Again 
 he said, on page 245: "The circumstances must be 
 those relating to the carriage, not to the consignor, and 
 the fact that the plaintiff was a rival express carrier 
 does not in itself make a difference of circumstances,' 
 such as to justify a difference in the charge under the 
 statute." 
 
 In that case the only question was whether the cir- 
 cumstances of the carriage or the trade and occupation, 
 of the consignor' should be considered; and all that his 
 Honor meant was that, as between the two, the circum- 
 stances of the carriage ought to be regarded, and not 
 the trade or occupation of the consignor. He did not 
 intend to say that in no case was any thing to be con- 
 sidered except the circumstances of the carriage. 
 
 Mr. Justibe Willes has been quoted as saying that , 
 
 5 . . 
 
(34) ' - 
 
 the effect of the phrase "like circumstances" is ex- 
 hausted upon the route, expense, and risk of carriage. 
 But what he did say (see page 249) is, that the phrase 
 'Hike circumstances" is exhausted upon the route, ex^ 
 pense, and risk of carriage, and must not be extended 
 to the personal qualities of tliB individual who sends 
 the goods. , ; • ' 
 
 Evidently his meaning was the same as that of Jus- 
 tice Blackburn. He did not intend to say that in no 
 case could anything be considered except the route, ex- 
 pense, and risk of carriage. But he held that where 
 the only question presented was.whethfer consideration 
 should be given to the -route, expense, and risk of car- 
 riage, or whether it should be given to the personal 
 qualities of the individual who sends the goods, it should 
 be given to the former, and not to the latter. 
 
 Lord Chelmsford has been quoted as holding that 
 the words '^' under the same circumstances" cannot re- 
 late to anything else than the conveyance of the goods ; 
 hut what he did say (page 260) was this: "I do not 
 see, however, how they can relate to anything else than 
 the conveyance of the goods. To say that because the 
 plaintiff is ivhat has been called (in interceptUig aari'ier 
 and the other persons using the railway are wholesale 
 dealer-^, therefore the goods are not conveyed along 
 the railway under the like circumstances, is an applica- 
 tion of the words, which I am unable to comprehend." 
 
 He evidently meant no more than Justices Blackburn 
 and Willes. He did not intend to say that in no case can 
 anything be considered except the mere fact of the con- 
 veyance of the goods, but he meant that, as between that 
 fact, and the fact that the plaintiff was an intercepting 
 carrier, consideration should be given to the former, 
 and not to the latter. In a word, all that was intended 
 
(35) 
 
 to be^said by any of the Justices was, that a railway 
 company has no right to look to the occupation or personal 
 status of a shipper ; and the question as to whether the 
 company would be justified in charging lower rates at 
 competitive points, than it was charging at non-compet- 
 itive points, was never presented to the minds of the 
 Justices, nor considered by them for a moment. 
 
 VII. 
 
 The next class of English cases to be considered is 
 where the courts have held under the Railway and Canal 
 Traffic Act of 1854 that a railway company cannot le- 
 gally discriminate in favor of a traffic because of its " 
 oriffin or antecedents. The act of 1854 provides that ■ 
 "no such company shall make or give any undue or 
 upreasonable preference or advantage to or in favor of 
 any particular description of traffic, nor shall aily such 
 copapany subject any particular description of traffic to 
 any undue or unreasonable prejudice or disadvantage in 
 any respect whatsoever." (See 1st Nev. & Mac, p. 2.) 
 
 This class of cases is well illustrated by the case of ■ 
 Mafisume v. E. C. R y Co., 1st Nev. & Mac, 63, decided 
 January 29th, 1857. It appeared in that case that the 
 defendant railway company charged Ransome & Co., coal ■ 
 merchants at Ipswich, who shipped from thence over de- 
 fendants' railway, coal, which had come thither by sea, a 
 higher rate for the carriage of their coal over the defend- 
 ants' lines than was charged to Prior & Co., whose coal 
 came over another railway to the defendant's at Peterbor> 
 ough, It appeared that the lower rates were given to 
 Prior & Co. to enable them to compete with Ransome & , 
 Co.,, whose coal had the advantage of cheaper transp9rta- 
 tion by sfea, before reaching defendants' railway. The 
 defendant, therefore, appeared to have discriminated in 
 favor of Prior & Co., simply because it had cost them 
 
(36), . 
 
 •.more to get their coal to the defendants' railway, tha-n 
 
 ; it had cost Ransome & Co., to get their coal there; and 
 the court, in effect, held that a railway company cannot 
 
 'legally prefer one traffic to another, simply because the 
 0T16 has cost more than the other in getlang it to the rail- 
 way, or because one traffic was brought to the railway by 
 
 ■ sea, and the other by some different mode of conveyance. 
 In other words, the origin or antecedents of a traffic are 
 not to be, considered by a railway cotopany at all ; if all 
 the other circumstances are alike, one traffic is entitled 
 to the same rates and facilities as the other. 
 . If freight is brought to the Louisville & Nashville R. 
 R. Co. at Louisville by steamboat from Pittsburg, and 
 
 "similar freight is brought from Pittsburg via. the 0. & 
 M. R'y to Louisville," and both shipments are tendered 
 to the Louisville & Nashville R. R. Co. for transporta- 
 tion to New Orleans, that company cannot, according to 
 the class of cases just cited, legally discriminate in favAr 
 of the freight brought by railway to Louisville, over that 
 brought by steamboat. 
 
 I do not controvert the correctness of this class of 
 decisions, but I say, that they have no application to the 
 question now under consideration. 
 
 The Louisville & Nashville R. R. Co. does not pro- 
 pose to make any diiference m rates, whether the 
 traffic comes to its lines by one mode of conveyance or 
 another, or whether the goods have cost their owners 
 more in the one case than in the other. It simply claims 
 the right to allow to all shippers alike, competitive rates ' 
 Where competition exists, and to charge reasonable rates 
 where no competidn does exist. 
 
 VIII. 
 
 The next class of English cases to be considered is 
 where the courts have held under the act of 1854 that 
 
■(37) ' ' ■■■'•'■. 
 
 » ■ ■ - I 
 
 a railway company cannot legally discriminate in favor of 
 •A trsiffic, because of the ultimate use to which it is to be put, 
 after the railway transportation has been completecl 
 and ended. In other words, that it is not for a railway 
 company to consider whether goods shipped o.ver its 
 line are to be used for one purpose or another. 
 
 This class of cases is illustrated by the case of M. S'. 
 & L. Wy Co. vs. Denaby Colliery Co., 4th Eng. R'y and 
 Canal Traffic Cases, 452, decided in December, 1884. 
 It appeared in that case, that the plaintiff's railway ran 
 
 ' through the South Yorkshire coal field, in which the 
 defendant company's colliery was situated ; and that most , 
 of the coal from that field was shipped oyer plaintiff's 
 railway to Grimsby, on the sea-coast. , The plaintiff's 
 railway was the only railway leading from that coal fieW 
 to Grimsby, so that plaintiff' had no competition whatever 
 
 for the traffic. (Page 438.) 
 
 Some of the coal shipped to G-rimgby, was for " land 
 sale" there, or local consumption. 
 
 Some of it was sold to the Hamburg and American 
 Steamship Company, for steam purposes. 
 
 And some of it was shipped from Grimsby to English 
 ports south of Harwich.' 
 
 The Hamburg and- American Steamship Company 
 had been using Welsh coal for their steamers, but it 
 was ascertained by plaintiff, that if the steamship com- 
 pany could get the South Yorkshire coal, at a certain, 
 reduction on the then current price, they would buy coal 
 at Grimsby, in place of the Welsh coal. To enable this , 
 to be done, and in the hope that the South Yorkshire 
 coal might thus ,be introduced to the West India,n 
 market, the plaintiff agreed to make to one Bannister a 
 certain reduction from plaintiff's regular rates, upon 
 ' all South Yorkshire coal sold to the Hamburg- Ameri- 
 
('3g)- , - 
 
 can steamers. Plaintiff' gave no public or other notice 
 that it was allowing Bannister this reduction, nor did plain- 
 tiff notify the public that it would make similar reductions 
 to other persons under similar circumstances. There was 
 no contract on' the part of Bannister that any definite 
 quantity should be so shipped; and the services per- 
 formed by plaintiff in respect of such coal, were identical 
 with those performed by it in respect of any other coal 
 •shipped to Grimsby. (Page 139.) 
 
 The plaintiff also allowed said Bannister a certain re- 
 duction from plaintiff 's regular rates on all coal shipped 
 by him from Grrimsby to English ports south of Har- 
 wich. There had been but little trade of that kind, and 
 
 ; Bannister undertook to develop the trade, to provide 
 vessels, and to run the risks incidental to the working 
 of such a traffic ; and in consideration of his doing so, 
 and in view of the anticipated advantage, to plaintiff by 
 the increased tonnage over its railway, the plaintiff" 
 
 ■agreed to allow him the reduction upon such coal as he 
 might ship to English ports south of Harwich. JS'o op- 
 portunity was afforded to the public in general, or to other 
 pefsons sending coal by plaintiff"' s raJilway to Grimsby, 
 of getting the same reduction on sucji coal as they might 
 ship to English ports south of Harwich. There was no 
 contract on the part of Bannister that he would ship 
 any definite quantity of such coal ; and the services per- 
 fornied by the plaintiff in respect to such coal as was 
 shipped by Bannister from Grrimsby to English ports 
 south of Harwich were identical with the services per- 
 formed by plaintiff in respect to any other co^-l shipped 
 over plaintiff's railway from the South Yorkshire coal 
 field to Grimsby. (Pages 441, 442.) 
 
 As stated before, the plaintiff's railway \yas the only 
 railway leading from the South Yorkshire coal field to 
 
"" (39) 
 
 Grimsby, and the plaintiff had no competition for that 
 traffic. 
 
 The coal field was a local, non-competitive point on » 
 plaintiif's railway, and the only question before the- 
 Court was whether a railway company can make a re- 
 duction from its regular local rates, in favor of one local 
 shipper, merely because he agrees to try to develop a 
 certain traffic, and thereby increase the tonnage of the 
 railway, when he does not obligate himself to ship any 
 definite quantity, in any specified time, and when the rail- 
 way company does not offer similar reductions to other local 
 shippers, who may he as willing and as able to aid in de- 
 veloping the proposed traffic as the shi2Jp)er who toas fa- 
 vored. 
 
 But while it may be true that a railway company - 
 has no right to charge one local shipper less than 
 another local shipper, merely because the former agrees 
 to aid to some indefinite extent in developing a new 
 traffic, it does not follow that either of th6 local shippers 
 is entitled to rates that may be prevailing at competitive 
 points. 
 
 The most that can be claimed as having been actually , 
 decided in the case is that where the services performed 
 by a railway company in respect of one local shipment 
 are identical with the services performed by said com- 
 pany in respect of another local shipment, the two ship- 
 ments will be regarded as having been made "under 
 the same circumstances," notwithstanding any differ- 
 ence that may exist between them as to the ultimate use 
 to which they are to be put after their arrival at the p)lace 
 of common destination. But in deciding that propo- 
 sition, the Court did not decide that the services per- 
 formed by a railway company are the only matter to be 
 considered in determining the " circumstances " under 
 
(40) 
 
 which a shipment is made ; and. still less did the Court 
 decide that a shipment accepted under the duress of 
 competition is accepted " under the same circumstances " 
 as one made from a local point where no, such com- 
 , petition exists. .'I 
 
 See the same case reported in L. R., 11 App. Cas. 97, 
 where the decision of the Queen's Bench Division was 
 affirmed by the House of Lords. 
 
 - The case of Oxladem. K E. E'y Co., IstJSTev. &Mac., 
 72, ;decided in 1857, may be said to belong to the same 
 class as the Denaby case just noticed. In the Oxlade 
 case it appeared that the defendant railway company, 
 'from a desire to introduce the northern coke into Staf- 
 fordshire (page 94) charged lesS for the carriage of that 
 Icind of coke than they charged for other kinds of coke. 
 It did not appear that the northern coke was mined 
 upon defendant's line, or that the defendant was directly 
 interested in its development ; on the contrary, it seems 
 to \vA\Q been brought to the defendant's road from the 
 'M. C. R'}", just as the other cokes were brought to de- 
 fendant's road from other railways. 
 
 The Court held that the mere desire to introduce north- 
 ern coke into Staifordshire was not a legitimate ground 
 for discriminating in its favor against the other cokes. 
 But the Court remarked "that other special circum- 
 stances are stated in the a,rguments which, had they af- 
 j-ected the pecuniary interests of the company, might have 
 furnished ground for contention that the preference was 
 not undue or unreasonable. " - 
 
 If two merchants at Louisville offer to the Louisville 
 & Nashville R. R. Co. similar shipments consigned to 
 New Orleans, they are, under the class of cases just no- 
 ticed, entitled to the same' competitive rates, though one 
 of them may intend his shipment for export to Cuba, 
 
' . (41-) 
 
 and the other may intend his for lo^cal consumption at , 
 New Orleans. The Louisville & Nashville R. R. Co. is 
 not seeking to be allowed to make any discrimination 
 between any such shipments. It is willing to charge all 
 Louisville shippers equal rates on similar classes of 
 freights to New Orleans, without regard to what they ! 
 propose to do with their shipments. What the com- 
 pany does claim is, tha^t because it is forc'ed to concede; j 
 certain competitive rates to Louisville shippers, it ' 
 shall not be forced to give the same rates upon sirnilar 
 shipments from local stations where no such competition /■ 
 exists, provided it charges no more than reasonable rat4s ■*' 
 from those local stations. 
 
 It may be argued, howe^'er, that if a railway com* * 
 pany cannot legally discriminate in favor of l6cal traf- V 
 fie, with the view of developing it, and thereby in- > 
 creasing the tonnage of the road, so as to promote the ' 
 pecuniary interests of the company, it cannot be al- 
 lowed to develop traffic at competitive points, by charg- 
 ing lower rates than it charges upon similar traffic from 
 points that are not competitive. 
 
 By a close examination of the Denaby case, it will be 
 seen that the objection which the Court found to thp ' ' 
 conduct of the railway cotopany in that case was, not 
 tha,t the company was attempting to develop its local'-' jS 
 traffic, and thereby promote its pecuniary interests, but ij 
 that in its attempt to develop that traffic, it had giyen ,;■; 
 Bannister certain rates which it had not offered to other '\f 
 local shippers engaged in the same traffic, and lower 
 'rates- than it had charged the Denaby Company, which 
 was engaged in the same local traffic. And in the Ox- J; 
 lade case, it will be seen that the railway company was .. ' 
 not attempting to de\'elop a Ipcal coke trade,' located 
 upon its own line, but was dispriminating in favor of' , . 
 coke brought to its road by cefrtain railways, and against • 
 6 
 
'(•12) 
 
 fioke brought to its road over certain other railways. 
 Whether the real object of the company in desiring the 
 introduction of northern coke into StaflPordshire, was 
 to increase its own tonnage, and thereby promote its 
 own pecuniary interests, does not distinctly appear irom 
 the report. But if those cases are to be taken as hav- 
 ing decided that a railway company cannot legally dis- 
 criminate in favor of a new. and undeveloped local 
 traffic, merely because such local traffic may tend to in- 
 crease its tonnage, it does not follow that the dbmpany 
 may not secure competitive traffic to its line by con- 
 ceding such rates as may prevail at competitive points, 
 notwithstanding it may not reduce its local rates; pro- 
 vided always, — that the local rates are, in and of them- 
 selves, reasonable. 
 
 To illustrate : The St. Bernard Coal Company has 
 a coal mine in operation at Eaxlington, Ky., on the line 
 of the Louisville & Nashville R. R. It has been 
 operated for many years, and furnishes considerable 
 local tonnage to the railroad company. If a new coal 
 cornpany should propose to open a new coal mine near 
 ■ Earlington, and offer to ship its coal over the Louis- 
 ville & Nashville R. R. from Earlington, provided ut 
 was allowed lower rates than the St. Bernard Company, 
 it might be urged with great force, that though the open- 
 inii' of the new mine would increase the tonnage of the 
 Louisville & Nashville R. R. Co., and thereby subserve 
 its pecuniary interests, the lower rates given to the new 
 company would have the effect to correspondingly in- 
 jure the established business of the St. Bernard Com- 
 pany, especially if it could be shown that the St. Ber- 
 nard Conipany was able to fully supply the present 
 demand for that kind of coal ; and it might be claimed 
 that it would be unfair to allow the' railroad company 
 to promote its own interest at the sacrifice of the St. 
 
(43) 
 
 Bernard Company. But where a railroad company 
 concedes at a competitive point, competitive rates to 
 shippers at that point, while they may have a certain 
 advantage over shippers at non-coinpetitive points, it is 
 an advantage which the competitive shippers have, not 
 by reason of the action of the railroad company, but by 
 reason of the fact that they can secure similar rates by 
 other competing routes. 
 
 In the Deriaby case, and in the supposed case of the 
 St. Bernard Company, the^ discrimination loould be 
 made hy the raliroad company itself, in favor of one lo- 
 cal shipper against another local shipper; and though" 
 the company's own pecuniary interests might be pi"o- 
 moted, it would inflict an injury upon one of its local 
 customers in order to benefit itself; whereas, at com- 
 petitive points like Louisville, etc., the Louisville & 
 Nashville R. R. Co. does not fix the competitive rate at 
 all. The rate is fixed by competing lines, and if the 
 company declines to take business at the competitive 
 rate it will go by the other lines of transportatioUj and 
 the local shippers on the Louisville & Nashville R. R. 
 w;ill be left jvist where they were. 
 
 IX. 
 
 The next class of English cases to be considered. is 
 where the courts have held that a railway company has 
 no right to discriminate between different local shippers 
 by depriving one of them of a natural advantage which 
 he may have over the other, by reason of location, dis- 
 tance, etc. This class of eases is illustrated by the case 
 of Ramome vs. E. C. Ry Co., 1 Nev. & Mac.,' lD9, 
 known as case No. 2, and decided on February 25th, 
 1858. It appeared that after the decision of the first 
 .cage betweeii the parties, and which has been cited 
 
,' ' <44) . '; 
 
 above, the, defendant readjusted its rates upon an anom- 
 alous scale, which, while it applied to places where 
 the plaintiff did not deal, as well as to places where 
 he did deal, was so arranged as to practically continue 
 the discrimination against him ; and it was, therefore, 
 " in realty a disguised infringement of the principles on 
 which the judgment of the Court had proceeded in the 
 first case." The discrimination in the second case was 
 ( effected, however, by so adjusting' the rates as '■'■todi- 
 minisih the natural, advantages which, the position of the 
 plaintiff and other' dealers at Ipswich, by reason of its 
 greattr proximity, gave them over the dealers at Peters- 
 borough, in respect of the traffic of a certain territory, 
 by annihilating, in point of expen^^e of' carriage, a certain 
 portion of the distance between Petersborough and the 
 aforesaid territory." (Page 114.) 
 
 It dees, not appear that Petersborough tvas a compit- 
 ing point, or that it was other than a mere local station. 
 The defendant had therefore undertaken to prefer ship- 
 pers at one local station over shippers at another local 
 station, in its adjustment of rates to the territory into 
 which the shippers at both of said stations were in the 
 habit of shipping competitive coals, by giving a lower 
 mileage rate to the more distant station ; no satisfactory 
 explanation of its conduct was given by the defendant, 
 and probably for the reason that none could be given. 
 
 The case of Iknaby Main Colliery Company w. M . 
 S. & L. ICy, 3 Nev. 'Mac, 426, decided in 1880 by the 
 English Commissioners, may also be considered in this 
 class. The Denaby colliery was located on the eastern 
 edge of a coal field, which was about twenty miles wide, 
 and which was crossed by the defendant's railway. 
 There were a number of other collieries in the same 
 coal field, and some of them were situated ten or fifteen 
 miles farther west than Benaby. , The coals were all 
 
(45) ^ ;^ ,/ 
 
 shipped to the same markets, the principal markets .5 
 being east of the coal fields. Instead of charging each 
 colliery according to the distance its coals were carried, 
 the defendant grouped all the^ collieries in that coal field 
 into one class, and charged the same rate per ton to all \ j 
 of them, without regard to the distances carried for any ; 
 of them. The Denaby Company insisted that it was 
 entitled to its natural advantage of being ten or fift^env ;ii 
 miles nearer the market than some of the other collier- - '(\ 
 ies, and that it was unduly prejudiced by being charged 
 as much per ton as the collieries that were more distant 
 from the common market. There was no rmlrnad nr ''1 
 other route competing with, defendant for any of the 
 traffic, and the only point involved or decided by the 
 commissioners in the case was, that as between diiferent > 
 ^r^c'fli shippers shipping froan won-competiti ve points to the , , 
 same market, they ought, other things being eqxuil, to 
 be charged according to their respective distances from ■ ' 
 the market, so as to give to ea^h the benefit of his nat- ' 
 Ural advantages of location. Though the opinion of the , 
 commissioners upon this point was overruled by the. 
 Court of Api^eals and the House of Lords (see 4 R'y 
 & Canal Traffic Cases, 437, and L. R. 11 Apj). Cas., 
 97, 99), I am content for the purposes of my argument a' 
 to accept the opinion of the commissioners as correct. ,, .C% 
 
 As I understand the tariffs of the L. & N. R. R. Co., 
 
 they do not deprive any of its local shippers of any ,; 
 
 natural advantages which any of them may posses^ by -; 
 
 reason of location, etc. On the contrary, all of them are - 
 
 charged reasonable rates, and proportionate to their i^e-, <\ 
 spective distances from the nearest competitive points ; 
 
 so that at all local stations the indirect advantages of ^ f 
 
 competitive rates are secured by the local shippers. ' 'f. 
 
 What the company asks is, that while it charges all of > ■' 
 
(46) 
 
 its local shippers reasonable rates, and in, proportion 
 to their respective distances from competitive points, 
 it may nbt be forced to give to them the same rates as 
 those which may prevail at such competit^ive points; 
 for, to do so, would, in the opinion of the company, be 
 unjust to the shippers at the competitive points, by de- 
 priving them of the natural advantages which they pos- 
 sess over local shippers, by reason of the former being 
 located at such competitive points. 
 
 The next class of English cases to be considered is 
 where the courts have held that'a railway company has 
 no right to give to some of its local shippers the benefit of 
 competitive rates, while it refuses those rates to other local 
 shippers, upon some ground that is capricious, arbitrary 
 and unreasonable. .r- 
 
 ' An illustration of this elass of cases will be found in 
 the case of Budd vs. L. & N. W. B. B., which was de- 
 cided June 18th, 1877. See 4 Eng. R'y & Canal Traffic 
 cases, 393 (Brown & Macnamara). 
 
 The plaintiflf's company were the proprietors of iron 
 and tin-plate works situate neal- defendant's railway, 
 running from -the seaport of Swansea to Liverpool, and 
 about twelve miles from Swansea. The defendant 
 charged plaintiflf's company higher rates on plaintiflf's 
 traffic to Liverpool, than were charged by defendant 
 upon similar traffic to other manufacturers whose works 
 ■^were situate within, a radius of six miles of Swansea- 
 
 There was communication by sea between Swansea 
 and Liverpool, "but the distance was greater than by 
 railway. The sea passage was cheaper than the rail- 
 way, but manufacturers preferred the railway because 
 delivery was quicker and more certain, There was, IiqxO' 
 
^ . (47) 
 
 ever, an arrangement between the carriers of goods by sea 
 and the defendants, for the carriage of such goods,'" and 
 defendant's rate (from Swansea) was fixed to enable de- 
 fendant to compete with the sea carriage. (Page 394, 
 395.) : 
 
 Chief Baron Kelly was of opinion that the defend-' 
 ant's conduct amounted to an undue preference and ad- 
 vantage to the manufacturers within the six.miles radius 
 of Swansea ; because it enabled those manufacturei^s to 
 sell their goods at a rate of ten or twelve per cent, 
 cheaper than the plaintiff 's company in the Liverpool 
 market. 
 
 The defendant had not confined its competitive rate 
 to the town of Swansea proper, where the only semb- 
 lance of competition existed ; but had allowed the com- 
 petitive rate to manufacturers whose works were out- 
 side of the town, provided they were not more than six 
 miles from the town. The six mile limit seems to have 
 been a purely arbitrary arrangement on the part of the 
 defendant ; no reason whatever was offered for making- 
 it, and yet, in the language of the Chief Baron, "a 
 manufacturer who happened to be a half mile within 
 the six mile limit was preferred to one who happened to 
 be immediately outside of it." i 
 
 Manifestly none but Swansea shippers proper were 
 entitled to the Swansea competitive rate ; and defendant 
 had no more right to allow that rate to manufacturers 
 who were six miles away than to those who were sixty 
 miles distant. The attempt to allow the Swansea com- 
 petitive rate to local shippers whose works were six 
 miles distant from Swansea, was, of course, an undue 
 preference of those local shippers, over other local' 
 shippers whose works may have actually adjoined those 
 of the favored shippers, provided the former happened 
 to be a few inches over the arbitrary six mile limit: 
 
' ' '. (48,) - / ^ V '. - ;; 
 
 In a word it was an undue preference of one local 
 shipper over another local shipper. 
 
 , The Court did not decide that the defendant could not 
 charge a lower rate to meet competition at Swansea, 
 when the freight was delivered by the shippers to the 
 defendant at the regular Swansea station or depot. It 
 may be claimed that the Court would have gone that 
 length, but no such point was actually decided. The 
 Chief Baron said : " The question still would remain, sup- 
 posing they are entitled to charge <t lower rate for some 
 and not for others., ivhere are they to stop f" (Page 
 396.) The defendant in that case claimed the right to 
 exteijd its Swansea rate to a distance of six miles from 
 Swansea, whereas it ought to have been confined to 
 freights delivered at its Swansea station proper. Every 
 shipper in the kingdom was entitled to the Swansea 
 competitive rate, provided he would deliver his freight 
 to the defendant at the Swansea station ; and no shipper 
 was entitled to that rate, if he delivered his freight at 
 ^ny other point, whether the point of delivery was sixty 
 or only six, miles distant from Swansea. 
 
 It is worthy of notice, in estimating the weight to 
 which the Budd case is entitled, that there ^ was, in 
 realty, no actual competition at Swansea. The rail 
 route was the shortest, quickest, and most certain, and, 
 therefore, preferred. There was an arrangement of 
 some sort existing between the defendant and the car- 
 riers by sea, which had resulted in the rate which de- 
 fendant was charging from Swansea ; and as the nature 
 of that arrangement is not disclosed, I suspect that "a 
 pool" existed between the defendant and the carriers 
 by sea, by which an agreed rate on the traffic from 
 Swansea to LiAovpool was fixed high enough to justify 
 the defendant in dividing the proceeds of the traffic 
 
(49) 
 
 with the sea, carriers. What effect the suspicion of 
 such an arrangement may have had upon the mind of 
 the Chief Baron, of course cannot be known. 
 
 The Louisville & Nashville R. R. Co. makes, no such 
 arbitrary or capricious distinction between its custom- 
 ers as was made in the, Budd case. The company is 
 perfectly willing to conced'e competitive rates to every 
 shipper who delivers his freight to the company at com- 
 petitive points, without regard to where the shipper 
 may li^e, and without regard to where his manufactory 
 or other business enterprise may be located. But what 
 the company insists upon is that no shipper is entitled 
 to competiti\'e rates unless his shipment is delivered to 
 the comjiany at a competitive point, and that whether 
 the shipper lives one mile or one hundred miles from a 
 competitive point makes not the slightest difference. 
 
 XI. 
 
 The next class of English cases to be considered is, ' 
 where the courts have held that a railway company can- 
 not legally discriminate in favor of one local shipper against 
 another local shipper merely to prevent a threatened comper 
 tition at a point where no actual competition exists. The 
 cases oiBdrrisvs. Cockcvviouth R'y Co., IstNev. &Mac., 
 page 97, decided January 15th, 1858 ; Slate Co. vs. Festin- 
 iog It'y CO'., 2d Nev. & Mac, 73, decided in December, 
 1874, apd the case of Holland et al. vs. Festiniog Ky Co., 2d 
 Nev. & Mac, 278, decided in February, 1876, all belong 
 to this class. 
 
 There was no actual existing competition in either of 
 the cases, and yet the railway companies had undertaken 
 to concede lower rates to certain local shippers than to 
 others, with the hope that they would thereby secure 
 the traffic of the favored shippers and prevent them 
 from constructing, or aiding in the construction of rival 
 7 
 
(50) : 
 
 lines. In the Harris case it appeared that the plaintiflfe 
 shipped coal over the defendant's railway, as did also 
 certain' tenants of Lord Lonsdale. The shipments were 
 made from different stations, but they were all made 
 from the same district, and all of the stations from which 
 the shipments were made were within half a mile of each 
 other ; for all practical purposes the shipments were all 
 made from the same point, and to the same point. There 
 was no existing competition whatever ; but the defend- 
 ant aA^erred that Lord Lonsdale had threatened to build 
 a competing line, unless his tenants were given lower 
 rates than the plaintiffs, and that the defendant had made 
 the concession to his tenants for fear that Lord Lons- 
 dale would execute his threat, and injure defendant's 
 business by building the competing line. The Court 
 held that a mere threat of that kind was no sufficient 
 justification for such a preference. Willes, J., said 
 (page 108) that "it would be absurd to proceed upon 
 mere speculations as to what may happen," and that 
 the Court could only deal with the state of things actu- 
 ally existing. 
 
 . The defendant had confessedly undertaken to give 
 one local' shipper a preference over another local shipper, 
 where both were shipping under substantially similar 
 circumstances and conditions, merely because the former , 
 had threatened to build a competing line sonaetime in 
 the future. The Court was careful to distinguish the 
 case then before them from one where actual compe- 
 tition exists, and it was in that case that Cockburn, 
 Chief Justice, said (pp. 102, 103), that the Court had in- 
 timated, if not absolutely decided, that a railAvay com- 
 pany is entitled to take into consideration any special 
 circumstances, either of a general or of a local charac- 
 ter, including the circumstances of actual competition 
 with another railway. ' 
 
( 51 ) 
 
 In the"'cases of the Slate Company vs. Festiniog Ry Co., 
 2 Nev. & Mac, p. 73, and Holland et al. vs. FesUniog R'y 
 Co,, 2 Nev. & Mac, 278, it appeared that the shate quar- 
 ries were all located in the same district and shipped to 
 the same market over the defendant's railway. There 
 was no other railway or competing route by which any 
 of the slate could be shipped. The defendant railway 
 company, with the object of discouraging the construc- 
 tion of a competing line, had agreed to carry slate for cer- 
 tain quarry owners at a lower rate than was charged to 
 the other quarry owners in the same district. The fa- 
 vored quarry owners had obligated themselves to ship 
 all their slates over the defendant's line for a certain 
 number of years, but they had not agreed to ship any 
 definite quantity, in any specified time, nor in train 
 load lots. 
 
 The same terms were offered to the plaintiffs, but they . 
 refused to accept them. The decision in efi'ect was, as in 
 the Harris case — viz., that a railway company has no 
 right to prefer one local shipper to another, simply be- 
 cause the former has agreed to give all of its traffic to 
 the company, and not to aid in the construction of a com- 
 peting line. 
 
 If the Louisville & Nashville R. R. Co. were to give 
 lower rates to certain shippers at Gallatin, a local sta- 
 tion upon its road, than it gives to other local shippers 
 at that point, in consideration that the former should 
 agree to ship all their traffic over the company's road, 
 3,nd not aid in the construction of the contemplated Ches- 
 apeake & Nashville R. R., a case would be presented 
 precisely within the class of cases just cited. But the 
 Louisyille & Nashville R. R. Co. makes no such dis- 
 crimination between its local shippers. All shippers at 
 Gallatin are placed upon terms of perfect equality as 
 
: ^ (52) • , ' 
 
 between themselves. The only contention of the com- 
 pany is that that the local rate at Grallatin -being reason- 
 able in and of itself, Gallatin shippers are not entitled 
 to the competitive rates which prevail at Nashville or 
 L'oiiisville. •■ 
 
 It maybe argued, however, that if a railway com- 
 pany ca.nnot legally discriminate between its local ship- 
 pers in order to prevent competition which is merely 
 threatened, it has no right to discriminate where the 
 competition has become an existing fact. But the rea- 
 son why the discrimination is unjust in the one case 
 and not in the other, is that where the competition is 
 merely threatened the traffic is as yet purely local, and 
 the discrimination is therefore the act of the railway 
 company, and has no justification except the mere de- 
 sire of the company to protect its interests from a com- 
 petition which may or may not exist in the, future; 
 ^ whereas, in the case where comjoetition actually exists, 
 the discrimination is not the act of the railway com- 
 'pany at all. The competitive rates at competitive 
 points, which are really the cause of the discrimination 
 which exists in favor of competitive shippers, are not the 
 act of the railway company at all, but the act of com- 
 peting lines over which the company has no control, 
 and for which it ought not to be punished. 
 
 XII. 
 
 The next class of English cases to be considered is 
 where the courts have held that a railway company 
 cannot legally dUori mi nate in favn of one local shipper 
 ayainst aicother local shipper simply because the former 
 has agreed to ship the whole, or some indefinite amount 
 of his traffic over the defendant's line, while the other 
 has not, 
 
(53) 
 
 In this class may be placed the cases 6i Baxendale 
 vs. G. W. Rtj Co. (known as the Bristol case), 1st Nev. 
 & Mac, 191, decided November 9th, 1858, and the case 
 of Bellsdyke Coal Co. vs. N. B. R\>j Co., 2 ISTev. & Mac, 
 ' 105, decided in March, 1875. In the latter case it ap- 
 peared that the defendant railway company had given 
 to Messrs. Baird less rates upon coal than it charged 
 the plaintiffs and other coal owners, notwithstanding 
 the coal mines were all located in the same district and 
 shipped to the same markets. The defendant's railway 
 was the only one running into that district, and had no 
 actual competition whatever. 
 
 One excuse given by the defendant for the preference 
 in favor of Messrs. Baird was, that the latter had agreed 
 to ship all of the traffic of one of their coal mines by de- 
 fendants railway ; but they had not obligated themselves 
 to ship any sj)ecific quantities at regular periods, nor in 
 train load lots. 
 
 It was not pretended that the discrimination in favor 
 of Messrs. Baird would have been unjust if they had 
 bound themseh'^es to shijo definite quantities, at regular 
 periods, and in train' load lots ; because such traffic could 
 have been handled by the company at less cost. But 
 the agreement of Messrs. Baird having been wholly in- 
 definite, the English Commissioners were of the opinion 
 that there was no reason to belieye that the ti-affic of 
 Messrs. Baird could be handled by the defendant at any 
 less cost than the traffic of the plaintiff's, and that as 
 all the coal mines were situated in the same district and 
 shipped to the same markets, there was no substantial 
 difference in their circumstances. 
 
 The L. & N. R. R. Co. makes no such discrimination 
 between its customers as was practiced in the cases just 
 cited. It gives the same rates equally to all shippers 
 
(54) .■ 
 
 of the same class of freight between the same points, 
 whether the shipments are greater or less in amount. 
 0f course car-load rates are less than rates on small lots, 
 
 ; because car-load lots can be handled with less cost. 
 But all the rates, whether they be car-load rates or 
 other rates, are open to all shippers without distinction. 
 This obtains as well at non-competitive points, as at points 
 that are competitive. Nor does the company desire any 
 change in this regard in the future. While treating all 
 
 [ shippers similarly situated precisely alike, it insists that 
 it shall not be compelled to place shippers at non-com- 
 
 ' petitive points, upon equality with shippers at compet- . 
 itive points ; and for the reason that such shippers are ■ 
 not similarly situated or circumstanced. 
 
 ,v XIII. 
 
 f': The last class of English cases which it will be neces- , 
 sary to consider is where the courts have held that a 
 railway company cannot legally discriminate in favor of 
 one competitive sliipper against another competitive ship- 
 per, shipping the same class of freight between the same 
 competitive points, unless there be some substantial 
 idifference in the cost of the service to the .company. 
 The case of Garton vs. B. & E. Ky Co., 1st Nev. & Mac, 
 218, decided June 13, 1859, will furnish one illustration 
 of this class of cases. It appeared in that case that cer- 
 tain special contracts had been entered into by the de- 
 fendant with certain individuals, under which those per- 
 sons were charged lower rates than the plaintiif Grartoni 
 in the carriage of heavy packages of grocery and hard- 
 ware between Bristol and Bridgewater. It was sug- 
 
 , gested that the reason for such discrimination was, that 
 the persons with whom the special contracts were made, 
 had agreed to ship all of their goods by defendant's rail-" 
 way,' and not by water or other means. It is evident 
 
( 55 ) 
 
 from the opinions of the Judges that they did not be- 
 lieve that the reason assigned, was the true one. It was 
 not shown that there was any actual competition by water ' 
 between Bristol and Bridgewater ; and if there was, it 
 •was not shown what the rate of charge for such water 
 carriage was, as compared with the rates charged by de- 
 fendant's railway. Without undertaking to express an 
 opinion as to the legality of such contracts, if the Court 
 had been satisfied of their bona fides, it was held that 
 the plaintiff had made out -a prima facie case in showing; 
 that he did not have the same rates and facilities afforded 
 him, for the conveyance of his goods, as were conceded 
 to the favored individuals with whom the special con- _ 
 tracts were made. 
 
 A similar case would be presented if the Louisville 
 & Nashville R. R. Co. should select a few favored mer- . . 
 chants at Louisville, and agree to charge them less to 
 New Orleans than the general public at Louisville, pro- 
 vided said favored merchants would agree to ship all 
 their goods to New Orleans by the Louisville & Nash- 
 ville R. R. and not by river, nor by the C. 0. & S. W. 
 R. R., a rival railway. 
 
 One objection to such an arrangement would be that 
 it would not be open to the general public, and no one 
 coilld get the benefit of it except the favored merchants / 
 selected by the company. 
 
 If such an arrangement' had been offered to the entire 
 .public at Louisville, and some merchants had agreed to 
 it, while others had not, there is nothing in the case last 
 cited, holding that the merchants who declined to enter 
 into the arrangement, could complain that an undue ,br 
 unreasonable preference had been shown to tho.se mer- 
 chants who had entered into it. But, even if the case 
 had gone to that extent, it would not have touched the 
 
( 56 ) 
 
 question now under consideration; for, while it might 
 be held that the company could not charge one portion 
 of the community at a competitive point like Louisville, 
 higher rates to New Orleans, than the other portion of 
 the community, simply because the former had refused 
 to restrict themselves to that company's line, yet it 
 would not follow that because all shippers at Louisville , 
 were equally entitled to the competitive rates there pre- 
 vailing, other shippers who reside at nor^-competiti ve 
 stations between Louisville and New Orleans, would be 
 entitled to the benefits of Louisville competition. 
 
 It will be remembered that the special contracts in the 
 case last cited were for the shipments of indefinite quan- 
 tities. If the contracts had been for the shipment of 
 definite' quantities, at regular intervals, in train-load lots, 
 there could have been no question as to the legality of 
 the preferences under the numerous cases cited in the 
 preceding part of this argument; because freight ship- 
 ped in definite quantities at regular intervals, can be. 
 handled at less cost to the company ; than where it is un- 
 certain in amount and uncertain as to when it will be 
 ofi'ered for shipment. 
 
 The case of Thompson et. al. vs. L. & JV. W. Ry Co., 2 
 Nev. & Mac, 115, decided by the English Railway Com- 
 missioners in February, 1875, and the case of L'. <&■ N. 
 W. Ey Co. vs. Ever shed, decided by the House of Lords 
 July 5th, 1878, L. R. 3 App. Cas."^, p. 1029, et se^., fur- 
 nish ainother illustration of the class of cases now under 
 consideration. 
 
 They both grew out of discriminations made by the 
 London & Northwestern R'y Co. between certain com- 
 petitive shippers at Burton-upon-Trent, and are sub- 
 stantially alike in all of their essential facts. ^ There were 
 three raihvay companies having stations in the town of 
 
(57) 
 
 Burton-upon-Trent, by any one of which goods could be 
 sent from Burton to any part of the United Kingxlom; ,■ 
 The Midland R'y Co. and the London & Northwestern r 
 R'y CJo. were two of those companies, and in active com- 
 petition with each other at, that point. Certain persons 
 owned breweries adjacent to the main line of the Mid- . 
 land Railway, and had side tracks running from said: '■ ' 
 main line into their breweries, so that their freights ^^ 
 could be loaded and unloaded by their own servants di- ' 
 rectly upon the cars of the Midland Railway, without, ; 
 any expense for drnyage or, other terminal charges. 
 
 The practice with most of the English railway com^ ': ; 
 panies is to collect or receive freights at the, houses of 
 .consignors, haul them to the railway depot at j)lace of 
 shipment, load them upon the cars, and after carrying ; 
 them upon their trains to stations of destination, the , 
 companies unload them and haul them, to the houses of 
 consignees. The companies charge for hauling, load- 
 ing, and unloading when those services are performed V 
 by them, but if shippers see proper to haul, load and 
 unload their own freights, or to employ some third per- 
 son to do, it, the I'ailway companies charge only for /' ' 
 carrying the freight in their trains from point of ship- 
 ment to point of destination, and this ;last mentioned' ! 
 charge is known as the "station to station rate." 
 
 As the persons above referred to, whose brewei'ies' ■: 
 were connected with the Midland Railway by side 
 tracks, did their own loading and unloading info and ' 
 out of the cars of the Midland Railway, and as their 
 goods were riot hauled or drayed to or from its railway, 
 the Midland company made no charge against those 
 persons except the " station to station rate ; " and evei;i 
 allowed them a certain rebate from that rate. The ► 
 London & Northwestern Railway Company charged > 
 
.■■ • ■": ■ (58), \ \\ ■ 
 
 the plaintiflfs, and the public generally,, at Burton,, 
 whose breweries were not connected with the Midland 
 Railway, in addition to the "station to station" rate, 
 certain rates for hauling, loading, and unloading; but in 
 : order to compete for the business of those persons whose 
 y^' breweries Were connected with the Midland Railway by 
 ■ side tracks, the L. & N. W. R'y Co. agreed to haul 
 their freights to and from the depot, to load and unload 
 them free of charge, and to allow them the same rebate 
 •on the " station to station " rate as was allowed them by 
 the Midland Railway Company. It was held that this 
 Was an undue preference of those persons over the plain- 
 tiffs,' and the general p^ublic at Burton. 
 
 The English Commissioners (2 Nev.^ & Mac, p. 119) 
 refer to the fact that there was no agreement on the 
 ■"part of the persons favored, to ship any definite quantity 
 of frei'ght by the L. & N. W. R'y, and that there was 
 - no evidence of any saving of cost to that company, to 
 ■ compensate it for the concession made to those person^ ; 
 the preference therefore could not be justified upon the 
 ground that it was to the pecuniary advanta-ge of th« 
 defendant. The defendant then took the brOsad ground 
 that aiiij " advantage given by a railway company to 
 obtain traffic for which it competes with another railway 
 company" is not undue or unreasonable in the sense of 
 t\vd statute ; but the Commissioners replied : " Such a 
 proposition cannot, in our opinion, be laid down imre- 
 neriK'ily. If, miy he true in certain circumstances ; it would 
 not 1)0 so in others, and what degree of favor can law-^ 
 fully 1)0 shown to some persons to the prejudice of oth- 
 ers, under the 2:)ressure of competition, can only be de- 
 cided in any ca.se that arises by a reference to its special 
 circumstancos. " (2 Nev. & Mac, 120. ) 
 
 It must be kept in mind that in the case before the 
 
(59) 
 
 Commissioners, a railway company' had attempted to ; 
 discriminate in favor of certain competitive shippers, 
 against other competitive shippers, shipping to and 
 fi'om the same competitive points, where the services 
 rendered by the company to the different shippers were 
 precisely the same, and where the shipments were in , 
 every other respect made under precisely the same cir- 
 cumstances and conditions. But that is not the case pre- 
 sented by the Louisville & Nashville R. R. Co. at all ; 
 that company concedes to every competitive shipper at 
 every competitive point, precisely the same rates that it 
 concedes to any other shipper at that point. What 
 the company insists upon is, that it shall not be com- ' 
 pelled to concede to shippers ^t non-competitive points, 
 the rates which it is forced to concede to shippers at' 
 competitive points. " *< 
 
 It will be noticed that the Commissioners in the 
 Thompson case, above cited, say that even where the ' 
 discrimination is made between different competitive 
 shippers at the same "competitive point, there may be 
 certain circumstances, not mentioned by the Commis- 
 sioners, which would justify such discrimination. But 
 as the Louisville & Nashville R. R. Co. is riot seeking 
 to discriminate between competitive shippers at com- . 
 petitive points, it is unnecessary to inquire what those 
 circurhstances may be. 
 
 The Reporters in their note to Thompson v?. L. Sf ^ ■ 
 W. Ky Co., 2 Nev. & Mac, 121, state the rule as the nuil- 
 derstood in Englan,d as follows: "It apjjears that com- 
 peiition between two railways, or by sea, or canal, is a suffi- 
 cient Justification for a railway company reducing iiainxeii 
 to the public who are, affected by such competition, and.,, 
 dan take advantage of it. But that a riiUlway company 
 cannot, merely for the sake of increasing their traffic. 
 
' (60) V : 
 
 reduce their fares in favor of individuals^ unless there is 
 a sufficient consideration for such reduction, which sliall 
 lessen the .cost to the company 6f conveyance, or other 
 services rendered by them to such individuals." Citing 
 . Strick et al. vs. Swansea Canal Co., 16 C. B. N. S., page 
 245; Ransome's case (No. 1), 1 Kev. & Mac, page 63; 
 Oxlade's case (No. 1), 1 Nev. & Mac, page 72; Har- 
 ris' case, 1 Nev. & Mac, page '97; Nicholson's case, 1 
 Nev. & Mac, 121-143, and Garton vs. B. & K Ry, 1 
 Nev. & Mac, 218. 
 
 This note of the Reporters, states exactly my concep- 
 tion of the English, law, which is that a railway com- 
 
 •pany may, in order to meet competition with other 
 railways or with water lines, reduce its fares or rates to 
 
 ' the j)ublic at such competitive points, provided it makes 
 its reductions eqitally and impartially to every one who 
 offers to ship from such competitive points. But it can no 
 more discriminate between different competitive ship- 
 pers at competitive points, than it can discriminate be- 
 tween different non-competitive shippers at non-compet- 
 itive points, unless the shippers have obligated them- 
 
 , selves to ship definite quaiitities, at regular intervals, in 
 train-load lots, or have in some other way, offered a 
 traffic to the company which can be conducted at less 
 cost to the company than other traffic. 
 
 In the Evershed case, above cited, L. & N. W. R'y 
 Co., 3 App. Cas., page 1035, the London & North- 
 western R'y Co. had discriminated in favor of Messrs. 
 Trueman and Messrs. Inn, whose breweries were con- 
 nected with the Midland R'y by side trnck, against 
 Evershed, whose brewery was not connected with the 
 railway. The discrimination was precisely the same as 
 in the Thompson case last cited. The Lord Chancellor 
 ( Cairns ) said ; " The question in cases like the present 
 
(61) .- . ' ' 
 
 must always be simply this : Is the plaintiff in the ac- 
 tion obliged to pay one sort of remuneration for services 
 which the railway company performs for him, while the . 
 compaiiy performs the same services for other traders, ; - 
 either for less remuneration, or for no remuneration at , 
 all." * * * * " The railwiiy company ' 
 is, in the collecting, loading and delivering of goods, , 
 performing identically the same service for the plaintiff ;. 
 in this action as the two other firms of brewers whose ' ' 
 names have been referred to." ' , 
 
 " Now, as a matter of policy and expediency,' it may 
 well be that the appellants have good reasons for treat- , 
 ing those other firms in the way they do ; it may be, that if ■ 
 they do not do that, those other firms, from the natural ' , 
 advantages of the situation which they have been able 
 to occupy, will send their goods by another railway, and 
 not by the railway of appellants. But with those. con- ',' 
 siderations the plaintiff in the 'action has nothing 'vv'hat- 
 ever to do. That is exactly one of those things which 
 Parliament has not left open to railway companies to 
 judge of — whether in that way they will equalize their . 
 capacity for competing with other lines or not. The . 
 one right, to my mind, the clear and undoubted right, 
 of a public trader is to see that he is receiving' from a 
 railway company equal treatment with other traders of ' } 
 the same kind, doing the same business, and supplying ;'■ 
 the same traflflc. In my opinion, that is not the case 
 with regard to this plaintiff, and therefore I think he is ' 
 entiled to recover the moneys he has paid under protest." ' 
 
 It will be noticed that in the Evershed, as in the ; i; 
 Thompson case, the railway company was discriiTiinat- 
 ing in favor of certain conxpetitive shippers against cer- 
 tain other competitive shippers at the same competitive ' 
 point, where the services rendered by the railway com- 
 
(62) 
 
 pany to the different shippers were precisely the same, 
 , and where they were rendered under precisely the smae 
 circumstances and conditions ; and that it was -with ref- 
 erence to that kind of discrimination that the Chancel- 
 lor was speaking when he said that it was one of those 
 things which Parliament lias not left open for railway 
 
 , companies to do. And when he used the expression that 
 railway companies cannot equalize their capacity for 
 competing with other lines by discriminating between 
 different shippers, he referred to discrimination between 
 
 .different competitive shippers at the same competitive 
 
 ,^point; and was not considering the right of a company 
 
 to reduce rates at competitive points to meet Competi- 
 
 ' tion with ri^'al lines, where such competitive rates are 
 offered equally and impartially to every one pi*oposing 
 to ship from such competitive points. 
 
 It will be seen by reference to the opinions in the 
 Budd case, commented ftpon in Section 10 of this argu- 
 ment, that the Judges based their decisions in that case 
 .upon the decision in the Evershed case, and that two of 
 . the three Judges in the Budd case, seem to have fol- 
 lowed the Evershed case rather reluctantly. 
 
 V The difference between the Budd case and the Ever- 
 :' shed case was simply this : That in the Budd case the 
 railway company had attempted to give to certain local 
 shippers, within a certain arbitrary six-mile radius, the 
 - benefit of the competitive rates prevailing at Swansea 
 proper, while it refused to allow those j-ates to other local 
 shippers whose manufactories were located just outside 
 of the arbitrary limit ; whereas, in the Evershed case, 
 the company was discriminating in favor of certain 
 competitive shippers, against certain other conipetitive 
 shippers, at the same competitive point, while the ,ser- 
 vices rendered by the company to all the competitive 
 
- (63) 
 
 shippers were precisel}- the sauK^, and rendered under 
 precisely similar circumstances and conditions. A 
 mere statement of the two cases is sufficient to show 
 that neither the Budd case, nor the Evershed case, has 
 any application to the question now presented by the 
 Louisville & Nashville R. R. Co. 
 
 XIV. 
 
 In Section 4 of this argument I cited the English cases 
 which, I think, show that under the," known and settled 
 construction" of the English railway acts, transporta-; 
 tion between competitive points is not conducted under 
 "substantially similar circumstances and conditions" 
 with traffic between non-competitive points ; and in the 
 succeeding sections, I ha^e endear- ored to show that the 
 cases cited by me have not been overruled, or even ques-: 
 tioned by the courts or railway commissioners of that, 
 country. I propose now to notice the American cases 
 upon the circuinstances and conditions under which 
 competitive transportation is conducted. 
 
 The Constitution of Colorado provides that " all indi- 
 viduals, associations, and corj)orations shall ha;Ve equal 
 rights to have persons and property transported o^er 
 any railroad in this State, and rjo undue or unreasonable 
 discrimination shall be made in charges, or i^icilities of 
 transportation of freight or passengers within the State, " 
 etc. , 
 
 The Atchison, Topeka & Santa Fe R. R. Co. (here- 
 inafter called the " Atchison " R. R. Co.) operated a rail- 
 road from Kansas City ,to Pueblo, about 634 miles. 
 When its line first reached Pueblo, it had no connection 
 of its own with Denver. The Den\'er & Rio Grande 
 R. R. ( hereinafter called the "Rio Grande" R. R.) was 
 built and running between Den\'er and Pueblo, but the 
 the .gauge of its "track was different from that of the 
 
"Atchison" R. R. Other companies occupying differ- 
 ent routes, had at the time, substantially the control of 
 the transportation of passengers and freight, between the 
 "Missouri River and Denver. The "Atchison" R. R. 
 Co. being desirous of competing for this business, en- 
 tered into an arrangement, as early as 1879, with the 
 " Rio Grrande" R. R. Co. for the formation of a through 
 line of transportation for that purpose. 
 
 By this arrangement, a third rail was to be put down 
 bn the track of the " Rio Grande" Road, so as to admit 
 of the passage of cars continuously over both roads, and 
 terms were agreed upon for doing business, and for the di- 
 vision of rates.. The object of the parties was to estab- 
 lish a new line, which could be worked with rapidity and 
 economy in competition with the old ones. In the di- 
 vision of rates the " Rio Grrande " Company was allowed 
 compensation at the rate of a mile and. a half for every 
 mile of actual haul. - ' 
 
 As the distance from the Missouri River to Pueblo 
 by this route, was about the same as to Denver by the 
 competing routes, the through rates over this line to 
 
 , and from Denver, were usually made about the same as 
 rates to and from Pueblo. This was necessary to-fcom- 
 pete with other lines for Denver business. Afterwards 
 an agreement was made between the "Atchison" R. R. 
 Co. and its competitors, by which rates werd established 
 
 , between Denver and the Missouri River, and arrange- 
 ments made for a division of business among those com- 
 panies, and for the regulation of their conduct towards 
 each other, with a \'iew to avoiding competition between 
 themselves, or from others. 
 
 In 1882 the Denver & New Orleans R. R. Co. (here- 
 inafter called the "New Orleans" R. R. Co.) completed 
 its road between Denver & Pueblo, and requested of the 
 
(65) ■ . 
 
 "Atchison" R. R. Co. that it be placed upon an equal- 
 footing with the "Rio Grande" R. R. Co. in all traffic 
 over the "Atchison" R. R., for which the "New -Or- 
 leans '"R. R, Co. and the "Rio Grande" R. R. Co. were 
 competitors. 
 
 This request was refused and the "Atchison " R. R. Co. 
 continued its through business with the ''Rio Grande" 
 R. R. Co. as before, and declined to deliver freights or 
 passengers at the Junction of the "New Orleans" R. 
 R., or to give or take through bills of lading, or to sell 
 or receive through tickets, or to check baggage over that 
 line. All passengers or freight coming from, or des- 
 tined for that line, were taken or delivered at the reg- 
 ular depot of the "Atchison" Company in Pueblo, and 
 the jJi'ices charged were according to the regualr rates to , 
 and from that point, which were more than the '•Atchison" 
 Conqjang received on a division of through rates to and 
 from Denver under its arrangement with the " Rio Grande" 
 Company. 
 
 The " New Orleans " Company filed a bill against the 
 "Atchison" Company, the general purpose of which J 
 was to compel the "Atchison" Company to unite with 
 the "New Oideans" Company, in forming a through line 
 of railroad transjDortation to and from Denver over the 
 "New Orleans" Road, with all the privileges as to ex- 
 change of business, division of rates, sale of tickets, is- 
 sue' of bills of lading, checking of baggage, etc., that' 
 were, or might be granted to the " Rio Grande" R. R. 
 Co., or to any other railroad company competing with ■ 
 the "New Orleans" Company for Denver business. (See 
 110 U. S., 668, 669, 670, 671, A. T. & S. Ry vs. D. & ' 
 JV. 0. Ey.) . : 
 
 : It will be seen that the case just cited bears a very 
 close resemblance to. the case of Napier vs. G. & S. W, 
 9 ' . 
 
' r (66) ,. 
 
 Fy Co., 1 Nev. & Mac, 292, cited in the fourth section 
 •of this argument; and the United States Supreme 
 Court, thqugh not referring to that case, refused the 
 'relief sought by the complainant, as was done .by the 
 Court in Napier's case. The United States Supreme 
 Court, while holding that <'both by the common law, 
 and by the Constitution of Colorado, a railroad company 
 is iprohibited from discriminating unreasonably in favor 
 of, or against another company seeking to do business 
 on its road" (page 682), said that it did not follow that 
 a company "must under all circumstances give one 
 connecting road the same facilities, and ihe same rates 
 that it does to another, with which it has entered into 
 contract relations for a continuous through line, . and 
 arranged facilities accordingly." (Page 685.) And as 
 to the rates insisted upon by the "New Orleans " Com- 
 pany the Court used this language (pages 683-4) : " That 
 the price must be reasonable is conceded, and it is no 
 doubt true that in determining what is reasonable, " the 
 prices charged for business coming from, or going to 
 other roads connecting at Pueblo, may be taken into 
 Consideration. But the relation of the "New Orleans" 
 Company to the "Atchison " Company is that of a Fuehlo 
 customer, and it does not necessarily follow that the 
 price which the "Atchison" Company gets for trans- 
 porting to and from Pueblo,' on a division pf through 
 rates among the component companies of a through 
 line, to Denver, must settle the Pueblo local rates. It 
 may be that the local rates to and from Pueblo are too 
 ' high, and that they ought to be reduced, but that is an 
 entirely different question from a division of through 
 rates. There is no complaint of discrimination against 
 the "New Orleans" Company in respect to the regular 
 Pueblo rates, neither is there any thing, except the through 
 rates, to show that the local rates are too high. 
 
(67> ' 
 
 The bill does not seek to reduce the local rates, but 
 only to get their company put into the same position as 
 the "Rio Grande" Company on a division of throiigh 
 rates. This cannot be done until it is shown that the 
 relative situation of the two companies with the "Atch- 
 ison " Company, both as to the kind of service, and as to 
 the conditions under which it is to be performed, are 
 substantially the same, so that what is reasonable for , 
 one must necessarily be reasonable for the other. 
 
 When a business connection shall be established be- 
 tween the " New Orleans " Company and the "Atchison " 
 Coliipany at their junction, and a continuous line formed, 
 different que^ions may arise ; but so long as it is now, , 
 we cannot say that as a matter of law, the prices charged 
 by the "Atchison" Company for the transportation of ,- 
 persons and property coming from or going to the 
 "New Orleans " Road, must necessarily be the same as 
 are fixed for the continuous line over the " Rio Grrailde '/' 
 Railroad." 
 
 It will be seen that the opinion of the Court estab- 
 lishes the following propositions : ' * 
 
 First — That in order to meet competition, two or more . 
 railroad companies may by voluntary agreement form a ■ 
 through line, and that the through rates charged over 
 such line, may be less than the sum of the locals of the " 
 roads forming the line. 
 
 Second — that the proportiop of the through rate which 
 each of the companies receives, may lawfully be less ' 
 than the local rates charged by such company at the 
 time for transportation over the entire length of its own 
 road; and, 
 
 Third — That freight tendered to one of the companies 
 at an intermediate po'int on the through line, though 
 such point may be 6ne of the termini of the road of 
 
.. ' (68) 
 
 such company, and though such freight may be trans- 
 ported by said company over its entire line, is not trans- 
 ported by it under substantially the same circumstances 
 and conditions as other freight transported by it pass- 
 ing between competitive points, notwithstanding the 
 freight in both cases may be carried over the- entire 
 length of such company's road, in the same cars, and in 
 the same trains. 
 
 In other words, notwithstanding the service rendered 
 by the company may be the same in both cases, the fact 
 of competition in the one case,, and not in the other, 
 creates a substantial dissimilarity in the circumstances 
 and conditions of. the tranportation ; and this is precisely 
 the point for which the Louisville & Nashville R. R. 
 Co. is now contending. 
 
 If freight passing from New York to New Orleans, 
 via Louisville, and which is carried in the same cars 
 and trains from Louisville to New Orleans, with other ' 
 freight of the same class originating at Louisville, is 
 not carried imder substantially similar circumstances 
 and conditions; then 'freight originating at Louisville and 
 carried from Louisville to New Orleans, though it may 
 be carried in the same cars and trains with freight of 
 
 -the same class originating at Rowlett, is not carried 
 under substantially similar circumstances and condi- 
 tions with' the freight originating at Rowlett; it being 
 
 ' remembered that Rowlett is a local station a short dis- 
 tance south' of Louisville. 
 
 ^ ,-. If the Louis^'ille & Nashville R. R. Co. may lawfully 
 
 charge more from Louisville to New Orleans on freight 
 
 ■originating at Louisville, than its proportion of the com- 
 
 ' petitive through rate from New York to New Orleans on 
 
 that class of freight, so it may charge more from Rowlett 
 
 to New Orleans on freight originating at Rowlett, than the 
 
; (69) ,, 
 
 proportion which the part of the road between Rowlett, 
 and New Orleans, bears to the entire length of the road;' 
 and the reason is precisely the same in both cases, viz. : 
 that the freight in the one case is not transported under 
 substantially similar circumstances and conditions as 
 the freight in the other. 
 
 The sixth section of the fct of Congress, passed July 
 1st, 1862, relative to the Union Pacific R. R. Co.,' pro- 
 vides that the Go vernment shall at all times have the 
 preference in the use of the railroad "at fair and reas- 
 onable rates of compensation, not to exceed the amount 
 paid by private parties for the same kind of service. (See 
 104 U.S.,663, U. P. R. R. vs. U. S.)' The words, for, the 
 same kind of service, evidently mean for services ren- 
 dered "under substantially similar circumstajices and con- 
 ditions." , 
 
 In a case between the same parties, reported in 117 
 U. S., page 362, it appeared that the company's uniform 
 rate for the transportation of local passengers between 
 Council Bluffs and Ogden, when passengers purchased 
 tickets at either of those places, was $78.50 each; but, 
 by contracts with connecting railroad companies who 
 sold through tickets at reduced rates from New York, 
 San Franbisco, and other places over their own, and the' 
 Union Pacific R. R., the latter company received, as its 
 proj)ortion of the through ticket, only |54 for eaclj 
 through passenger carried between Council Bluffs and 
 Ogden. Of course the reduced rates at which the 
 through tickets were sold, were the result of competition 
 by other lines, at the points between which the through - 
 tickets were sold. 
 
 The contention on the jicirt of the United States (see 
 page 363) was, that local passengers carried on its ac- 
 count between Council Bluffs and Ogden, should be car- 
 
(70)- , • 
 
 ' ried at the same rates as were charged for through i pas- 
 
 jisengers passing between those points as part of a jour- 
 
 < ney over the whole line, and the question of law involved 
 
 :: in that contention as stated. by the Supreme Court was, 
 
 y*" whether the service rendered in transporting a local 
 
 passenger between two points is, in law, identical 
 
 with that rendered in transporting a through passenger 
 
 between the same points as part of the transit over the 
 
 distance of the whole line, " and the Court held that the 
 
 service in the two cases was not identical. , 
 
 ■ It does not appear in the report, but it was doubtless 
 the fact, that the local passengers were carried by the 
 Union Pacific R. R. in the same tralins, and in the class 
 of cars, as the through passengers. Or, in other words, 
 that the service rendered by the company was precisely 
 the same so far as cost, risk, etc., were concerned in the 
 case of a through passenger, as in the case of a local 
 passenger, and the only reason that the transportation 
 of the through passenger, was not done under substan- 
 tially similar circumstances and conditions as the trans- 
 portation of the local passengers was, that in the former 
 case competition controlled the rate for transportation, 
 ' while in the other it did not. 
 
 It will be noticed that the , case last cited bears a 
 strong resemblance to the' English cases of the Attorney 
 General vs. B. & I). ^. liy Co.., 2Eng. R'y and Canal Cases, 
 page 124; Hozier vs. Caledonian B^y Co., 1 Nev. & Mac, 
 page 28, and Jon6s vs. E. C. ,B'y Co., 1 Nev. & Mac, 
 page 45, cited in the fourth section of this argument, 
 and in all three of which it was held, in effect, that non- 
 competitive traffic was not conducted under the same cir- 
 cumstances as competitive traffic. ' 
 
 In the case of Ragan. &: Buffet vs. Aiken, dth. Lea 
 ;• (Tenn.), 619, it appeared that the defendant was the 
 
(71) ' , 
 
 owner of a railroad about fifteen miles long, running 
 from Rogersville to a Junction with the E. T., V. & Gr. 
 R. R. The complainants were merchants at Rogers- ., 
 ville, and they alleged that they had been required by 
 the defendant to pay freight at a rate of from twenty 
 to twenty-five cents per hundred pounds, the gross 
 amount of their payments a'ggregating about four thou- 
 sand dollars ; that the defendant, as an inducement to 
 other merchants in Lee County, Virginia, and Hancock, 
 County, Tennessee, to have their goods shipped to Rog. 
 ersville, over defendant's railroad, instead of by other 
 routes, had entered into; contracts not to chai'ge them 
 exceeding fifteen cents per hundred j)ounds on similar 
 freights ; and complainants insisted that such discrimi- - 
 nation was illegal. The Supreme Court of Tennessee 
 (see page 622), said: "That in determining whether 
 a company has given an undue preference to a particu- 
 lar person, the Court may look to the interests of the 
 company," citing and appro virig the case of Ransome vs. 
 E. C. Ftj Co., 1 C. B. U. S., 437, cited in the second 
 section of this argument, The Court further said that ; ' 
 "If the charge on the goods of the pai'ty complaining- 
 is 'reasonable, and such as the company would be re- ' 
 quired to adhere to as to all persons in like condition, it 
 may nevertheless lower the charge of- another person, if 
 it be to the advantage of the company, not inconsistent 
 with the public interest, and based on a, sufficient rea- 
 son. It is obvious that the intention of the defendant, 
 in this instance, was not to discriminate against the 
 complainants in favor of any person of the same place,, 
 and in the same condition. His object was to get busi- 
 ness for his road from persons at a distance from its 
 terminus, which otherwise would reach its destinati6n! 
 by a diiferent route. Under these circumstances we 
 cannot see that the contracts complained of are against 
 
-(72) 
 
 public policy, or that complainants have been damaged, 
 ' if the ciiarges on their goods were reasonable." 
 
 .. It is, submitted that the case last cited is a direct 
 authority for the position, that competitive traific.is not 
 "in the same condition" as traffic that is not competi^ 
 five; or, in other words, that the two traffics are not 
 .qbriducted under substantially similar circumstances and 
 -conditions. 
 
 In the C9,se of Ex parte Koehler, reported in 21st Am. 
 andEng. R. R. Cases, 52, Deady, Judge, in considering 
 the Oregon Statute, which provides that no greater 
 irates shall be charged for carrying similar pi-operty 'a 
 short haul than a long one in the same direction, said: 
 "The Act prescribes a reasonable rate for carrying 
 V freight between Corvallis and Portland, or from either, 
 to points intermediate thereto. But Corvallis is on the 
 river, and has the advantage of water transportation 
 for some months in the year. The carriage of goods by 
 water usually costs less than by land, knd as water crafts 
 are allowed to carry at a rate less than a maximum 
 fixed by the railway, they will get all the freight from 
 this point, unless the latter is allowed to compete for it. 
 But, if to, do this, it niust adopt the water rate for all 
 the points intermediate between Portland and Corvallis, 
 where there is no such competition, it is, in effect, re- 
 quired to carry freight to and from such points at a less 
 ' rate than that which the Legislature has declared to be 
 ; reasonable, or else give up the business at CorVallis 
 altogether. * , * * * . It is not the fault 
 or contrivance of the railway that Compels this dis- 
 crimination, but it is the necessary result of circum- 
 stances altogether beyond its control. It is not done 
 wantonly, for the purpose of putting the one place up, or 
 the other down, but only to maintain its business against 
 
rival iind eompeting lines of transportation. In other 
 words, the matter, so far as the railway is concerned, 
 resolves itself into a choice of evils. It naust either ' 
 .compete with the boats during the season of water • 
 transportation, and carry freight below what the Legis- 
 lature declared to be a reasonable rate, or abandon the 
 field and let its road go to rust. Nor can the shipper 
 at the non-competing point, or over the short haul, com- 
 plain so long' as his goods are carried at a reasonable ' 
 rate. It is not the fault of the railway that the shipper 
 who does business at a competing point, has the ad- 
 vantage of it. It is a natural advantage which he (the 
 local shipper), must sul)mit to, unless the Legislature 
 will undertake to equalize the matter, by prohibiting, the ' 
 carriage of goods by water fpr a less rate than by rail." 
 
 The o]Dinion of Judge Deady states clearly and for- 
 cibly, the substantial difference that exists between the^ ' 
 circumstances and conditions of competitive trafiie, and 
 those of non-competitive traffic. Where the traffic is non- 
 competitive, the railroad coinpany can, according to the 
 English cases, charge any rate that is reasonable, though 
 according to some of the American cases, the rate must ' 
 be not only reasonable, but equal and impartial. But 
 where the traffic is competitive, the railroad company is 
 forced to "accept such rates as competition has estab- 
 lished, or abandon the field and let its road go to rust."v < 
 In the one case the company is free to act within the 
 limits of reasonable and. equal rates. In the other \^ 
 case it is forced to accept whatever may be offered. .^ 
 
 .; To say that traffic between competitive points, is con- 
 ducted under substantially similar circumstances and 
 conditions with traffic conducted between points that 
 aye non-competitive, is, to my mind, as absurd as to say 
 that a slave is under substaintially similar circum- 
 10 
 
(74) 
 
 stances and conditions with a freeman. See, also, In re T. 
 
 d- P. JR. Co., 1st Interstate Conimerce Reports, pages 
 
 30, 31. 
 
 XV. ■ 
 
 I ■ 
 
 I would like to notice in detail such of the American 
 cases as may possibly be cited against me, but the 
 length of this argument will prevent it. All of such 
 American cases, so far as I have seen, fall under some 
 ■one of the classes into which I have divided the En- 
 glish cases, and upon which I have commented in sec- 
 tions five to thirteen of this argument. 
 
 If I have succeeded in showing that none of the En- 
 glish cases classified in those sections, militaite against 
 the position I have assumed, the same course of reason- 
 ing will dispose of the American cases, and render a de- 
 tailed examination of them unnecessary. 
 
 'I have been unable to find any case, either English 
 , or American, in which it has been decided, or even in- 
 timated, that trafl&c conducted between competitive 
 points, is conducted under substantially similar circum- 
 . stances and conditions with traffic between points thai 
 are not competitive. 
 
 The case of C. & A. R. R. Go. vs. People, 67 111., .13, 
 also reported in 5 Am. Corp. Cas., page 196, has been 
 cited as deciding that competition does not create 
 a (Substantial dissimilarity in the circumstances and con- 
 ditions of transj)ortation ; but no such question was in- 
 vohod in that case, and therefore it could not have 
 been decided. ■ 
 
 The statute of Illinois provided that "no railroad 
 corporation in this State shall charge a larger com- 
 pensation for the transportation ol' freight over any 
 distance tlian it is charging at the same time for freight 
 of the same class over a less distance." 
 
Chief Justice Lawrence states the jorecise question,- 
 and the only question, that was before tlie court, as fol- 
 lows : " The ' question involved in -this record is the 
 constitutionalitij of the act of the Legislature under • 
 which the intbrmation was filed." 5 iVm. Corp. Cas., 
 X98. 
 
 Of course, anything that may have been said with, 
 reference to the effect of competition upon the circum- 
 stances and conditions of traffic, in the course of an opili- 
 ion involving only the constitutionality of the statute, 
 was mere obiter. 
 
 The Illinois statute was an absolute prohibition 
 against charging more for a shorter than a longer dis- ' 
 tance, and of course, under such a statute, the effect. of ^ 
 competition as a fact, could cut no figure whatever. Any 
 averment, or jiroof as to the effect of competition upon 
 transportation, would have been wholly irrelevant. Con- 
 gress refused to adopt any such absolute prohibition as 
 is contained in the Illinois statute, and instead thereof, 
 prohibited charging more for shorter than for longer 
 distances, only where the transportation is conducted 
 "under substantially similar circumstances and condi- 
 tions." . 
 
 It is true that the Chief Justice does say that there 
 must be something more than the mere fact that there is 
 competition at one point, and not at the other, to justify 
 the company in charging more for a shorter than for a ^ 
 longer distance; but he was speaking with the Illinois ' 
 statute before him, which precluded altogether, the con- 
 sideration of the effect of competition. He might have 
 goiie much farther than he did, and have said that un- 
 der 'the language of that statute, neither competition 
 nor any other fact, would justify a comi)any in charging, 
 liioYe for a shorter than a longer haul. 
 
That His Honor did not intend 'to say that compe- 
 tition does hot constitute a substantial dissimilarity 
 in the circumstances and conditions of traffic, is proved 
 by an illustration which he uses when comparing 
 the rates at Bloomington, a competitive point, with 
 the rates at Lexington, a non-competitive point. He 
 says : " The rates to Bloomingtoh would be established 
 under the influence of a fair competition, which, by the 
 ordinary latws that govern commerce, might be relied 
 upon as establishing a rate not u.nreasonably low. At 
 Lexington, the rates would be established by the uncon- 
 trolled discretion of the company; and it should not 
 cause surprise, if they were fixed unreasonably high." 
 5 Am. Corp. Cases, p. 203. 
 
 In other words, according to his Honor's statement, 
 competition certainly does create a very substantial dis- 
 si>milarity in the circumstances and conditions of traffic. 
 ' If a railroad company has, as he cissumes, an "uncon- 
 trolled discretion" at non-competitive points, and is ab- 
 solutely controlled by competition at competitive points, 
 the diflference between' the two cases, is j^recisely the dif- 
 ference between absolute freedom, and absolute slavery. 
 Llis Honor, however, Wiis mistaken in lissuming that a 
 railroad company has an "uncontrolled discretion." in 
 fixing its rates at non-compotitive points ; for, he him- 
 self says, in another part of his opinion, that at com- 
 mon law the rates of a carrier must, at all times and 
 at all places, be not only reasonable, in and of them- 
 selves, but open alike to every yne, eqiially and im- 
 partially. It>, was probaV)ly the opinion of the Chief 
 Justice that competition ought not to be allowed, as a 
 matter of justice or policy, to be taken into consideration, 
 in determining the circumstances and conditions' of 
 transportation. But we luu'e nothing to do with the 
 question of justice or policy, and his Honor's pri- 
 
rate -opinion upon that question may, ot may not he' 
 correct. 
 
 The only question now under discussion, is whether ■ 
 competition, rightfully or wrongfully, justly or, unjustly, ' 
 creates a substantial dissimilarity in the circumstances 
 and conditions of transportation. If it does, then the , 
 fourth section of the act of Congress does not apply, , 
 ' and the Honorable Commission will have nothing to do,; , 
 but tOfdisraiss onr petition upon that ground. 
 
 XVI. , " ■ ■' ■_ 
 
 If, however, the Commission should hold that, com- ' 
 petition does not constitute a substantial dissinjilarity 
 in the circumstances and conditions of transportation, 
 and consequently that the fourth section of the act of 
 Congress does aj)ply, the question remains, whether the 
 applicant in this case has presented any facts to justify 
 the Commission in suspending the operation of that 
 section so far, as the applicant is concerned. 
 
 The fourth section provides, that in "special cases ' 
 and "after investigation," the Commission may author- 
 ize a common carrier "to charge less for longer than 
 for shorter distances." 
 
 I do not understand that the phrase in "special cases" ' ' 
 means that the applicant must present special or pecu- 
 liar facts, differentiating its case from the cases of all 
 other common carriers; but .that the application must 
 be special, particular, and certain in its form', as contra- 
 distinguished from vague, general, and indefinite. 
 
 I do not understand that the apj)licanf s petition is to 
 be dismissed, merely because it presents as grounds for 
 relief, certain facts, which may also be presented with 
 equal truth, by a large number of other common car- / 
 riers. AH that is required bj*- the word, "^special," is 
 
(78) ^^ ■;■..; 
 
 that the petition shall state with certainty and clearness, 
 the exact kind of traffic in regard to which the applicant 
 desires to be relieved, and the precise facts it relies 
 upon, as constituting a substantial dissimilarity be- 
 tween the circumstances and conditions of that traffic 
 and other traffic in regard to which no such relief is 
 asked. 
 
 The petition in this case does describe, the kind of 
 traffic in regard to which the applicant desires to be re- 
 lieTed, and it states the various cities and towns be- 
 tween which that traffic is conducted. It states not 
 only that competition exists at those towns and cities,- but 
 it further states that the competitive traffic of the ap- 
 plicant bears but a small proportion to its non-competi- 
 tive traffic; that if it is forced to abandon either its 
 competitive or ndn-competitive traffic, it will necessarily 
 abandon its competitive traffic, a.nd that to abandon its 
 competitive traffic will inflict ;) loss of about 13,000,000 
 par annum upon the applicant, and seriously involve the 
 applicant'ssolvency. 
 
 The further fact has been proven before the Commis- 
 sion, and probably would have been judicially noticed 
 without proof, that the applicants's system of railways 
 is located, for the most part, in States South of the Ohio 
 River. Most of those States were devastated by the late 
 civil war, and since the war they have been forced to 
 change from agricultural, to mining and manufacturing 
 industries. The latter are now in their infancy, and for 
 their devel()|)ment need every facility in the way of 
 transportation, that can possibly be afforded them. The 
 territory, through which tlie applicant's lines of railway 
 run, is, for the most part, but thinly settled, and the traffic 
 upon those parts, as compared with the traffic of the 
 trunk lines, and manv other lines north of the Ohio 
 
(79) 
 
 River, is comparatively light. If, therefore, the Com- 
 mission should be of the opinion that the phrase _ 
 "special cases" means that the applicant must present 
 facts which differentiate its case from that of other rail- - 
 road companies in general, the applicant in this case 
 relies upon the considerations just mentioned, as rea- 
 sons why the Honorable Commission should grant the 
 relief sought, whether such relief may, or may ,not be 
 necessary in the case of other railway companies in the 
 United States. It is submitted, however, that the fact 
 that other companies, however numerous they may be, 
 are , entitled to similar relief, ought not to prevent the 
 applicant from obtailiing relief, provided the special > 
 facts set forth in its application entitle it to such relief. 
 
 I have not the time left me in which to enlarge upon 
 the special circumstances and conditions which the ap- 
 plicant has presented in its petition and proof as grounds 
 for relief, and I lea^^e them to your Honor's with entire 
 confidence that they will receive the careful and intel- 
 ligent consideration to which their importance entitles 
 
 them. 
 
 Respectfully submitted^ 
 
 ED. Baxter; 
 
 Solicitor for L. ^ N. R. R. Co. 
 
ARGUMENT OF E. B. STAHLMAN 
 
 ON BEHALF OP THE LOUISVILLE & NASHVILLE RAILROAD, 
 
 AND MEMBERS OF THE SOUTHERN RAILWAY 
 
 AND STEAMSHIP ASSOCIATION. 
 
 rOE RELIEF FROM THE OPERATIONS OP THE FOURTH SECTION OF THE 
 "ACT TO REGULATE COMMEBCE." 
 
 Washington, D. C. 1 
 
 Submitted May 27, 1887.) 
 Mr. Chairman and Gintlemen : 
 
 The pending question is one of the utmost Importance, not only to the rail- 
 roads but to the business interests of the entire South. 
 
 Whatever may be said of the relations that railroads sustain to the people 
 elsewhere, in the South they are friendly, they are mutual. The railroads and 
 the people are working together in an earnest effort to build up and develop 
 the resources of that section. 
 
 In this view of the case, I have been amazed at the position taken by Maj. 
 John C. Gault, who, as the General Manager of the Cincinnati, New Orleans 
 & Texas Pacific Company, appeared before this honorable Commission a few 
 days ago. 
 
 When a man essays to speak, and does speak, especially upon a question in- 
 volving so much, his views become the object of favorable or adverse criticism. 
 Maj. Gault has spoken ; it is to his remarks that I desire to address myself for 
 the present. 
 
 I have no feeling in this matter, Mr. Chairman; Maj. Gault is my warm 
 personal friend. I respect his age, I respect his experience, but his vagaries, 
 inconsistencies, and hidden motives I can not endorse or allow to pass unnoticed. 
 
 Maj. Gault informed (he Commission at the outset that he "asked for relief 
 only at points where there was water competition, and for no other reason, and 
 that he did not believe in any other reason." He also stated that rates to and 
 from Chattanooga were not influenced by water competition. It is clear, Mr. 
 Chairman, that Mr. Gault entirely overlooked (I will not say concealed) the 
 fact that all of the important trade centers of the West have water navigation 
 via the Ohio, Mississippi, and Cumberland rivers to Nashville, which, with a 
 short rail haul from Nashville to Chattanooga over a purely State road, prac- 
 tically fixes the rates for the all-rail lines, and that the Ohio, Mississippi, and 
 Tennessee rivers via Johnsonville, Tenn., and Florence, Ala., wiih a short rail 
 haul thence to Chattanooga may be and have been utilized for a like purpose. 
 
 Further on we are informed that the Cincinnati, New Orleans & Texas Pa- 
 cific Company does not make the rates on its lines ; that it has not the power ; that 
 
the Southern Kailway and Steamship Association makes them, and that the plan 
 of making these rates is vicious and stupid, and in the same connection we are 
 told that (1 quote Maj. Gault's language) " The rate on grain to Birmingham 
 from Cincinnati is about twenty-six cents, and the rate from Birmingham to 
 Tuscaloosa, only sixty miles further on, is practically double. I mean to say 
 that this is a stupidity in making rates." 
 
 Now, Mr. Chairman, I desire to say, for the information of this honorable 
 Commission, that this statement is unwarranted. I do not charge Mr. Gault 
 with a desire to mislead the Commission, but the form in which he has put his 
 statement is calculated to mislead you. The Southern Railway and Steamship 
 Association does not make the rates to local stations. There is abundant proof 
 of this in the testimony taken by the Commission at the different points in 
 the South. The Association simply makos rates to terminal points, and there 
 is nothing in the rules of the Association to prevent the Cincinnati, New Or- 
 leans & Texas Pacific from making a rate to Tuscaloosa, or any other local sta^ 
 tion on its line, as low as they are to Birmingham, if it sees fit to do so; and 
 the diagram of rates to his local stations, which Mkj. Gault says "looks like 
 saw teeth, up and down," are not controlled' by the Southern Railway and 
 Steamship Association, but made to suit the pleasure of the management of the 
 Cincinnati, New Orleans & Texas Pacific Company. Further on he informed 
 the Commission that all freight shipped from Cincinnati to a point fifty miles 
 this side of Atlanta pays first through rate to Atlanta and then local rate hack. 
 While the testimony of the experts before the Commission showed that the 
 rates are based on the rates to Chattanooga, plus the Georgia Commission rates 
 from Chattanooga, and that only one or two stations west of Atlanta are 
 based on Atlanta, and only those for the reason that the Georgia Commission 
 rates added to the Chattanooga rate would be higher than the rates based on 
 Atlanta. Maj. Gault says a man living fifty miles out of Atlanta can do 
 better in Atlanta than he can in Cincinnati or New York. This is a remark- 
 able statement, in view of the fact that the rates to all intermediate points are 
 never higher from New York or Cincinnati than a combination of rates on 
 Atlanta would make. Maj- Gault must therefore have assumed that a merchant 
 living within fifty miles of Atlanta, who is able to carry on a direct trade with 
 Cincinnati and New York, would rather pay the Atlanta merchant a profit as 
 a middle man than to go direct to Cincinnati or New York for his supplies. 
 I insist that there is no adjustment of rates which will enable the Atlanta 
 merchant to buy his goods in New York or Cincinnati and reship to intermedi- 
 ate points at less rates than the through rates from New York or Cincinnati 
 direct to such intermediate points. Further on he informed the Commission 
 that " we (his company) had prepared a tariff to conform to the law, and our 
 President and .Executive Committee had not only been willing to adopt it and 
 to put the law into effect, but hiid been anxious to give it a fair trial." But 
 when pushed on this question, he admits that he could not afford to enforce the 
 law at points where there is water competition; and when further pressed ad- 
 mitted that water competition affected rates for a considerable distance in the 
 interior. 
 
 Maj. Gault pretended that there was no relief needed except at points where 
 
there was water competition, and that water competition was of no consequence 
 any where except on the Ohio and Mississippi rivers. As he proceeded, how- 
 ever, the fact was developed that his line wanted relief at Monroe, located on 
 the Ouachita River, at tihreveport, located on the Eed River, and at Tusca- 
 loosa, Ala., located on the Warrior Kiver. Not only were those particular 
 points involved in the competition of water, but the territory tributary to them 
 for some distance. True, he sought to belittle the competition at Tuscaloosa by 
 saying that they only had water for eighl months in the year. 
 
 Commissioner Bragg: Do you know what the population of Tuscaloosa is? 
 
 Mr. Stahlman: I think it is in the neighborhood of twenty-five hundred or 
 three thousand. I may be mistaken. It is quite an important and progressive 
 point. 
 
 Commissioner Bragg : It is about five thousand. 
 
 Mr. Stahlman : It is larger than I supposed. I know that they are a pro- 
 gressive people. They have been urging us for years to build a railroad to their 
 town. They have established iron and other manufacturing industries, and, 
 with an investment of a few thousand dollars in steamboats, can fix the rates 
 for Maj. Gault's railroad ten months in the year. They are doing so now with 
 the boats they have. 
 
 Maj. Gault dwelt on the character of the competition between New Orleans 
 and Cincinnati quite extensively; and, while at the outset he demanded that 
 water was the only competitive force to be considered, he grew quite earnest in 
 a discourse on commercial equalities and the competitive forces arising from 
 competition between rival markets. He told the honorable Commissioners that 
 the rate from New Orleans to Cincinnati on sugar and molasses could not be 
 above a certain figure, not because there was competition by water, but because 
 ' there was competition between the markets of Baltimore and New Orleans for 
 the Cincinnati and Western trade. And, going on this hypothesis, he explained 
 that while he could only get twenty cents from New Orleans to Cincinnati on 
 sugar, because of the competition with Baltimore, he could get thirty-five cents 
 from New Orleans to Tuscaloosa, considerably less than half the distance, be- 
 cause Baltimore oould not lay it down in Tuscaloosa for less than thirty-five 
 cents. Now I submit, Mr. Chairman and gentlemen, that commercial equali- 
 ties or competition between markets being considered an important factor in 
 controlling rates between New Orleans and Cincinnati, the same influences must 
 be considered in fixing rates to and from other points, whether there be compe- 
 tition between water and rail lines or not. To illustrate: If, in fixing the rates 
 on sugar from New Orleans to Cincinnati, the rate from Baltimore to Cincin- 
 nati is to be considered (and I freely admit that it should be), the rate on grain 
 from St. liouis to Atlanta, Ua., must be considered in fixing the rates on 
 grain from Cincinnati, Evansville, and Louisville, and other Western points 
 to Atlanta, all being competitors for the trade of Atlanta; and upon the same 
 principle the rates on Western produce Irom St. Louis to Augusta, Ga., should 
 be considered in determining the rates from St. Louis to Atlanta, for the reason 
 that Atlanta and Augusta compete for the same trade. 
 
 Maj. Gault says, further on, that he wants permission to make the rates to 
 Vicksburg, Miss., less than to stations on the Vicksburg & Meridian road, and 
 
at the same time informs you that he wants to make the rates to all points 
 hetween Vicksburg and Meridian the same. This, of course, includes Jackson, 
 Miss, (an intermediate point on their line), while in another portion of his tes- 
 timony he insists that the rates to Jackson are affected by competition through 
 New Orleans and Vicksburg. 
 
 He tells you that Meridian, Miss., ou;;ht to be considered an intermediate 
 local point, but fails to inform the Commission that by having Jleridian and 
 Jackson made practically local points on interstate traffic, he will be able, 
 through the city of Vicksburg, with his Vicksburg & Meridian line, to supply 
 Jackson and Meridian and the interior of Mississippi with Western produce, 
 to the exchision of the all rail interstate lines running direct from the West. 
 
 He tells you in one instance that a diagram of rates to local stations on his 
 lines " looks like saw-teeth, up and down," and in the next breath informs you 
 that under the system of rates made by ihe Southern Railway and Steamship 
 Association every local point in the South is really a competitive point; and 
 that is why he objects to it. 
 
 He says he wishes the long and short haul clause enforced so that rates to all 
 points may be progressive and relatively the same, and then insists that rates 
 should be made practically on the mileage basis, according to distance. 
 
 I am not drawing any inferences, Mr. Chairman, I am stating Maj. Gault's 
 position as I find it expressed by him in his testimony before the honorable 
 Commission, and on this point of mileage rates I desire to call the attention of 
 the Commission to an arbitration had about a year ago between the Louisville 
 & Nashville and the Cincinnati, New Orleans & Texas Pacific companies, in 
 which the distinguished chairman of this Commission officiated as arbitrator. 
 He will remember the circumstances, and will bear me out in the statement I 
 am about to make. 
 
 Commissioner Bragg: Are you referring to the case where there was a eon- 
 test over the Wetumpka rates? 
 
 Mr. Stahlman : No, sir. I am referring to an arbitration which involved 
 the question of a relative adjustment of rates from the West. 
 
 The Chairman : Yes, I remember that. You have very much the same sort 
 of a question. 
 
 Mr. Stahlman: In that case the Cincinnati, New Orleans & Texas Pacific 
 management, through Maj. Gault, insisted that distance was no factor in deter- 
 mining the rates of transportation, and that commercial equalities were the 
 principles which should govern. In other words, although one city was further 
 distant from points south than another, the rates of transportation should not 
 therefore be higher; that no matter what the difference in distance might be 
 hetween any two markets, both must be put on an equality, and in this matter 
 he went to the extreme of insisting upon an adjustment which gave the more 
 distant naarket the advantage over the nearer market. 
 
 He informs you that rates to Atlanta should not be any le.=s than to inter- 
 mediate points, and, so far as his line is concerned, he does not want to make 
 higher rates to intermediate points than lo Atlanta, but conceals the fact that 
 this same ruling on business to Macon, Augusta, Columbia, Athens, and other 
 pities, on business from the West would prove disastrous to the Southern roads. 
 
and that the syBtem he is willing to invoke to Atlanta on business from the 
 "West would prove disastrous to other lines on business from the East to Atlanta. 
 
 He informs the Commission that Birmingham need give herself no concern 
 on the [.ig iron question, and if the long and short haul clause is enforced he 
 will say to them, " Gt'ntlemen, this price to Pittsburgh is like carrying coals to 
 Newcastle," meaning, I presume, that they have no right to sell pig iron at 
 Pittsburgh. He fails, however, to show that Birmingham has a large pig iron 
 trade with New York, Philadelphia, and other points east, which is being carried 
 at less rates than the rates to intermediate points. He also fails to t?llthe Com- 
 mission what effect the long and short hiiul provision would have on the manu- 
 facturer of bar iron, stoves, and other articles upon which higher rates are 
 charged for the shorter haul than for a longer ; also, what effect the law would 
 have on the general merchandise and produce business, which is now a liirge 
 part of the business of Birmingham. 
 
 He admits that there has jeen an advance of rates north of the Ohio Eiver 
 since the Interstate Commerce Act was enforced, but attributes it to the stupid- 
 ity of the railroad companies and not to the passage of the act. He says em- 
 phatically that he does not believe the iron interests of Birmingham need any 
 relief, whereas, it was abundantly shown by the testimony of Mr. Bowron, 
 Mr. Mack, and otbers, that the enforcement of the act by the lines north of the 
 Ohio River had resulted in advancing rates very materially, and to a large ex- 
 tent paralyzed their business. 
 
 When asked if the large lumber industries in the South needed any reliif, he 
 answered, " No, sir; it is getting easier every year to sell Southern lumber in the 
 Northern markets, and the lumber men as well as the pig iron men had nothing 
 to worry about," entirely ignoring the fact that lumber was largely carried at less 
 rates from far distant points in the South than from intermediate points, and 
 that the rates on lumber, as shown by the testimony, had been advanced by all 
 lines north of the Ohio Eiver as soon as the act went into effect, and that its 
 enforcement in the South would only serve to further cripple these industries; 
 also that the Southern ports of Pensacola and Brunswick, in close proximity 
 to the pine lumber districts, were active competitors for a large portion.of this 
 traffic. 
 
 He informed you that an interstate road, although competing with a State 
 road which is not subject to the jurisdiction of the Interstate Commerce Act, 
 would not be entitled to relief if there was no water in it, ignoring the fact 
 that a number of State roads in Tennessee, Alabama, and Mississippi, bordering 
 on rivers, were able to throw large volumes of traffic into Chattanooga, Bir- 
 mingham, Meridian, Jackson, etc., to the detriment of the direct rai} interstate 
 roads. Evidently having in view the perfection of plans which would enable 
 his Vicksburg and Meridiun line us a purely State road to inaugurate a raid on 
 the business of Mississippi and portions of Alabama to the exclusion of the direct 
 interstate rail lines kading to and from the West, he admits that the cities of 
 Birmingham, Atlanta, Montgomery, Augusta, and all like cities would not have 
 the same chance to supply the people of the country that they now have, but 
 consoles himself with the fact i hat the people now supplied by these interior 
 centers would have the opportunity of tiading direct with New York and other 
 distant markets. 
 
After testifying at great length, endeavoring to show that commercial 
 centers should have no advantage over interior local towns, regardless of 
 what they invested to give them competition, he gives emphasis to his views 
 by saying "/ take the broad ground that there is no competition between rail- 
 roads." A stirring piece of information to the people of Cincinnati, who in- 
 vested $20,000,000 in the construction of a railroad between Cincinnati and 
 Chattanooga for the purpose of obtaining a competing railroad to the South! 
 Stirring news indeed, Mr. Chairman, coming as it does from the general man- 
 ager of the railroad the people of Cincinnati built ! It is equivalent to saying 
 to them that this large sum of money was spei;t in vain, and that the construc- 
 tion of their road entitles them to no greater benefits than those enjoyed by 
 interior local towns. 
 
 There can be no mistaking his position in this matter. If it means any 
 thing, it means that the only competition to which the city of Cincinnati is enti- 
 tled is by reason of her water transportation facilities, and not by reason of any 
 railroad facilities she may have. 
 
 Desiring to impress the honorable Commission with the importance of his 
 views, he says : " I have been an oflScer of railroads thirty-one years ; I was con- 
 nected with the roads west of Chicago from 1859 until two or three years ago, 
 and we never had any such system (meaning the Southern system of rates). We 
 built railroads out in the country where there were no people living at all, 
 where there was nothing but grass ; but our rates were made so as to let every 
 town have a fair show. I was on the Wabash road in the States of Illinoi.=, 
 Iowa, and Missouri. That road crosses the Chicago, Burlington & Quincy road 
 in thirty-four places, and we made thirty-four pools at the junction points; we 
 did not make our rates to these points much lower than to neighboring points in 
 order to attract all the business there to be divided, but we made them some- 
 what lower than they were on either side. That is the way we did business 
 there." 
 
 Mark the language, Mr. Chairman ! Here are new railroads going through 
 a new country where there are no people living, where there was nothing but grass, 
 and where these lines had thirty-four different pools in order to prevent compe- 
 tition, and yet they made the rates "somewhat lower at junction points than they 
 were made on either side." And this, Mr. Chairman, is the plan held up to show 
 that the basis of adjusting rates in the South is both " vicious and stupid." We 
 are told by this gentleman that it is all right to make the rates from new rail- 
 road crossings in the West, where there were no people and nothing but grass, 
 " some lower than from points on either side," but to adjust the rates to or from 
 important commercial centers in the South, which existed before railroads were 
 built, on practically the same basis, is a crime which ought not to be tolerated. 
 
 I shall deal with commercial centers in the South later on, and show under 
 what influence they were created. 
 
 Maj. Gault expresses surprise at not seeing the officers of the Southern Rail- 
 way and Steamship Association present to hear his testimony while he must 
 have known that none of them were invited, and none of them advised as to 
 when or where the testimony on behalf of the Queen and Crescent route would 
 be taken, and none of them should probably know to-day that the evidence had 
 
been taken but for dispatches through the press, several days ago, announcing 
 the fact. 
 
 It will be gratifying intelligence to the railway managers of the South to 
 learn that the promise which Maj. Gault says he made "not to antagonize their 
 petition at all," has hoen faithfully kept, and they will he especially gratified, 
 after being charged with s/wjoid and vicious practices, to learn that in his judg- 
 ment " there ia no doubt but that the railroad management of the South has been 
 wise." I think, Mr. Chairman, we can all understand, in view of what has 
 been said, why the gentleman in closing turned to the reporters and said : "I have 
 great reaped for the newspaper men, but donH want the newspapers to have all 
 my testimony printed." 
 
 Now, Mr. Chairman, I have dealt quite freely, and I trust gently, with the 
 vagaries and Inconsistencies embodied in the testimony of this distinguished gen- 
 tleman. But I must bog the indulgence of this honorable Commission a little 
 further. It is well known by the railroad managers of the South that what- 
 ever the Louisville & Nashville Railroad deem* fnr the best interest of the rail- 
 road and business interests of the South the management of the Cincinnati, 
 New Orleans & Texas Pacific Company is sure to antagonize. This, in my judg- 
 ment, would have been quite sufficient to incur opposition from that quarter in 
 the absence of any other consideration. 
 
 But there is some " method in the madness " of this gentleman, which I have 
 already alluded to in part, and which I deem it my duty to explain at greater 
 length. To illustrate : The two competing lines between Cincinnati and Chat- 
 tanooga are the Louisville & Nashville, via Nashville, four hundred and, forty- 
 six miles in length, and the Cincinnati, New Orleans & Texas Pacific, three 
 hundred and thirty-six miles in length. The former has fifteen or more impor- 
 tant towns on its line between Cincinnati and Chattanooga with a large local 
 traffic ; the latter has on its line only one or two towns of importance. 
 
 The Cincinnati, New Orleans & Texas Pacific Company's route has one hun- 
 dred and ten miles less local territory than the Louisville & Nashville on which 
 to reduce its intermediate rates. Therefore the enforcement of the fourth sec- 
 tion would compel the Louisville & Nashville to reduce its rates on ji hundred 
 and ten miles more territory, with a large local traffic at least two hundred per 
 cent greater than the local traffic of the Cincinnati, New Orleans & Texas 
 Pacific, or withdraw from competitive business between Cincinnati and Chat- 
 tanooga. 
 
 The management of the Cincinnati, New Orleans & Texas Pacific Company 
 believes the latter course would be adopted, and I have no hesitation in saying 
 that such would be the case, certainly on all classes of traffic moved between 
 intermediate points and upon which local rates would have to be reduced 
 if the road continued to carry competitive traffic. The same may be said of 
 traffic between Lexington and Chattanooga, for which both lines compete. The 
 diflerence in the distances being as great as between Cincinnati and Chatta- 
 nooga. 
 
 The same may be said of the traffic between Lexington and Cincinnati. 
 The distance between Lexington and Cincinnati via the Cincinnati, New Or- 
 leans & Texas Pacific road being seventy-nine miles, while the distance via the 
 
8 
 
 Louisville & NasbviHe is one hundred and fifty-two miles. Both of these lines 
 are active competitors, and notwithstanding the Louisville & Nashville has the 
 longer line it carries a large percentage of this traffic. The Louisville & Nash- 
 ville can not continue to compete for this traffic under the rigid enforcement of 
 the act, to do so would necessitate a reduction of its local rates for one hundred 
 and fifty-two miles against a reduction on the part of the Cincinnati, New Or- 
 leans & Texas Pacific road of only seventy-nine miles. The Louisville & Nash- 
 ville Company's only recourse would he to establish a delivery and receiving 
 depot at Newport for Cincinnati business, and this, coupled with its disadvant- 
 age in being the longer line, would practically force it out of the businf^ss. 
 
 1 have already alluded to the advantage? the enforcement of the law would 
 give to the Cincinnati, New Orleans & Texas Pacific road on business through 
 Vicksburg, but I think it well to refer to this again. The line from Vicksburg 
 to Meridian, although a part of the Cincinnati, New Orleans & Texas Pacific 
 system, can be handled as a purely State road. The Cincinnati, New Orleans 
 & Texas Pacific management has, by all sorts of devices and manipulations, 
 endeavored to make the city of Vicksburg a leading distributing market for 
 Western produce to the interior of Mississippi and Alabama. The manage- 
 ment of that road recognizes the fact that Western produce, such as corn, flour, 
 hay, provisions, etc., are cheaper in Kansas, Mi-souri, and Southern Illinois 
 than in Ohio and Indiana; that the city of Cincinnati can hardly hope to 
 compete successfully with Kansas City, St. Louis, Evansville, Cairo, and other 
 trade centers located in the immediate vicinity where the Western produce is 
 grown. The rail lines leading from Kansas City, St. Louis, Cairo, and Evans- 
 ville direct have been able to control a large proportion of the Western-produce 
 trade of the South. The Cincinnati, New Orleans & Texas Pacific management 
 hopes to divert this trade from the direct rail lines by having Western produce 
 floated down the Ohio and Mississippi rivers on barges aud steamboats, at nom- 
 inal rates, to Vicksburg; and, by opening up that city a« an important trade 
 center for the distribution of Western produce, to praolieally control this busi- 
 ness. I hope I have made myself clear. It is that the management of the 
 Cincinnati, New Orleans & Texas Pacific road, having but one Western termi- 
 nus—to wit, Cincinnati — and realizing that it can not draw the produce from 
 the cheap producing sections of Kansas and Mi-souri and Southern Illinois a 
 long distance, through Cincinnati, against the Louisville & Nashville, Nash- 
 ville, Chattanooga & St. Louis, and Memphis & Charleston railroads, which 
 have direct rail lines through St. Louis, Evansville, Cairo, Columbus, Ky., and 
 Memphis, Tenn., is seeking, through the medium of nominal rates, by steamers 
 and barges do." n the Mississippi and Ohio rivers, to make the city of Vicksburg 
 the leading distributing center, and thus secure this large traffic over its Vicks- 
 burg and Meridian line. 
 
 The Commission will bear in mind that the city of Vicksburg has but one 
 railroad leading into the interior of the South, and that is the Vicksburg & 
 Meridian, a part of the Cincinnati, New Orleans & Texas Pacific system, which 
 has nothing to lose and much to gain by the transfer of this large trade to the 
 city of Vicksburg. 
 
 Up to this time, with the long and short haul provision out of the way, we 
 
9 
 
 hsLve been in a position to say, " Tou can have from Vioksbiirg just aftd faif 
 rates as compared with the rates from other points, hut we shall not allow you to 
 dictate what the rates from Viokshurg shall he, and at the same time fix them 
 in such a way as to preclude the direct rail lines which are largely interested in 
 this traffic from doing business in that section of the country. The contest on 
 this question has been going on for years, and the same question was up before! 
 the distinguished chairman of this Commission, " What the rates should be from 
 Vicksburg, from Memphis, from New Orleans, from Louisville, from CincinJ 
 nati, etc., in comparison with the rates from other railroad points." 
 
 This is the gist of it, and the reasons why Maj. Gault insists upon the en- 
 forcement of the fourth section. He wants to tie our hands so that he may be 
 free to do as he pleases, for the purpose of controlling the Mississippi and a 
 large portion of the Alabama traffic through Vicksburg. I do not believe that 
 the Interstate Commerce Act was designed for such a purpose. I do not be- 
 lieve that the framers of the act intended that the law should be enforced so as 
 to prevent rail lines from competing one with the other, or that it was designed 
 to throttle one line in the interest of another, or to throttle one rail line or two 
 or three rail lines in the interests of the water crafts. 
 
 APPLICATION OP THE LOUISVILLE & NASHVILLE 
 KAILKOAD. 
 
 I shall now, Mr. Chairman, proceed with the consideration of the main ques- 
 tion. 
 
 The application of the Louisville & Nashville Railroad Company for relief 
 from the operations of the fourth section of the act known as "An Act to 
 Regulate Commerce," quite clearly and specifically sets forth the territory in 
 the transportation of property to and from which relief is sought. 
 
 Concisely put, this application embraces transportation of property to, from, 
 and through the following points, to wit ; 
 
 Cincinnati, 0., Newport, Ky., Lexington, Ky., Frankfort, Ky., Louisville, 
 Ky., Owensboro, Ky., Henderson, Ky., St. Louis, Mo., East St. Louis, 111., Shaw- 
 neelown, 111., Evansville, Ind., Clarksville, Tenn., Nashville, Tenn., Memphis, 
 Tenn., Birmingham, Ala., Montgomery, Ala., Selma, Ala., Mobile, Ala., Pensa- 
 cola, Pla., and New Orleans, La. 
 
 The transportation facilities of the Ohio and Mississippi river cities and the 
 Gulf ports are so well known that it is not necessary to refer to them except in . 
 a general way. 
 
 Ohio and Mississippi Kivbr Cities. 
 
 The city of Cincinnati, located on the Ohio River, has the following lines of 
 steamers plying southward: 
 
 The United States Mail Line, daily, between Cincinnati and Louisville. 
 
 The Cincinnati & Memphis Packet Company, composed of six steamers, be- 
 tween Cincinnati & Memphis. 
 
 The Cincinnati & New Orleans Packet Company, composed of six steamers, 
 between Cincinnati and New Orleans. 
 
 2 
 
10 
 
 In addition to these regular lines there are a number of steamers plying be- 
 tween Cincinnati and various points which have no connection with the lines 
 named. It is hardly necessary to say that these lines and independent outside 
 crafts afford active competition to the rail lines on all traffic to and from Cin- 
 cinnati destined for important points located on the Ohio, Mississippi, and trib- 
 utary rivers and Gulf ports. 
 
 The city of Newport, Ky., on the opposite side of the Ohio Eiver from Cin- 
 cinnati, enjoys like advantages. 
 
 The city of Louisville enjoys the same advantages with the addition of a 
 line of steamers between Louisville and Henderson, Ky 
 
 The cities of Owensboro and Henderson, Ky., have all the benefits enjoyed 
 by the city of Louisville. 
 
 The cities of Bvansville, Ind., and Shawneetown, 111., enjoy like advantages. 
 
 The cities of East St. Louis, 111., and St. Louis, Mo., have water transporta- 
 tion facilities consisting of extensive lines of steamers and barges plying be- 
 tween St. Louis, Memphis, Vicks})urg, and New Orleans. 
 
 The city of Memphis, Tenn., enjoys like advantages. 
 
 The city of New Orleans has all the benefits accruing to her location at the 
 mouth of the Mississippi Eiver. 
 
 The cities of Pensacola, Fla., and Mobile, Ala., have direct communication 
 with steamers on the Mississippi River, , both by short rail haul and by Gulf 
 steamers and schooners plying between New Orleans, Mobile, and Pensacola. 
 
 Frankfort, Ky. 
 
 The city of Frankfort, located on the Kentucky River, a navigable stream, 
 has the advantage of river navigation by steamboats plying on that river 
 between Frankfort and CarroUton, connecting at that point with the Ohio River 
 steamers in both directions ; $762,500 has been appropriated by Congress for the 
 improvement of the Kentucky River. 
 
 The Louisville, Cincinnati & Lexington Railroad, now a part of the Louis- 
 ville & Nashville system, extending from Frankfort to Cincinnati, a distance of 
 one hundred and twenty-two miles, and from Frankfort to Louisville, a distance 
 of sixty miles, was completed in 1869. The steamboats on the Kentucky River 
 absolutely control the rates on traffic to and from Frankfort. 
 
 This city has contributed a large sum of money for the construction of this 
 railroad, and to compel the road to withdraw from competition for the traffic to 
 and from Frankfort would in a large measure deprive that city of the benefits 
 which she hoped to derive from the construction of the line, and entail a loss 
 upon the Louisville & Nashville Company to the extent of the revenue arising 
 from such traffic. 
 
 Nashville, Tenn. 
 
 This city is located on the Cumberland River, a stream which is navigable 
 for nine months in the year with steamers of four to eight hundred tons capacity, 
 plying between Nashville, Evansville, Cairo, and connecting at the latter point 
 with the Ohio and Mississippi river steamers, also with the rail lines centering 
 at Cairo and Evansville. She also has a line of boats on the Upper Cumber- 
 
11 
 
 land River, connecting at Port Burnside with the Cincinnati, New Orleans & 
 Texas Pacific Railroad, t 
 
 The city of Nashville was a commercial distributing center for a large ter- 
 ritory, and furnished a market for the produce of that territory for many years 
 before any railroads were constructed. There were large wholesale jobbing 
 houses at Nashville, and quite large fortunes were made for that day and lime 
 in the jobbing trade of that city. The county, municipality, and the citizens 
 subscribed large sums of money for the construction of the railroads which 
 centered at that point. 
 
 The first railroad built vras the Nashville & Chattanooga, extending frpm 
 Chattanooga to Nashville, completed in 1854. The second, the Louisville & 
 Nashville, extending from Louisville to Nashville, completed in 1859. 
 
 The third, the Nashville & Northwestern, extending from Hickman, Ky., 
 on the Mississippi Eiver to Nashville, completed in 1869. 
 
 The fourth, the Tennessee & Pacific, extending from Lebanon Tenn., to 
 Nashville, completed in 1870. 
 
 The fifth, the Edgefield & Kentucky, now known as the Henderson Division 
 of the Louisville & Nashville system, extending from Evansville, Ind., to Nash- 
 ville, oorapleied in 1872. 
 
 As unreasonable as it may seem,' there are persons residing in Nashville to- 
 day who claim that the cily would have fared better if no railroads had ever 
 bei-n built ; and that Nashville was more prosperdus before she had any rail- 
 roads than she is now. 1 do not of course concur in this view of the case, but 
 I am free to say, located as the city is on a navigable stream, that she enjoyed 
 advantages relatively as great before railroads were constructed as she has en- 
 joyed since, and that local and intermediate points through the State of Ten- 
 nessee reached by the different railroads of the State, have been more bene- 
 fited relatively by railroad construction than the city of Nashville. In this 
 view of the case I submit if it vfould be fair to enforce an adjustment of rates 
 which would practically deprive the city of Nashville of the natural advantages 
 she possesses. In other words, would it not be eminently unjust to take from 
 her the advantages which nature has bestowed, and by artificial means, at the 
 expense of persons who invested their money in railroad enterprises, transfer 
 them to other less favored localities. 
 
 Olaeksville, Tbun. 
 
 This city is located on the Cumberland Kiver, and has the advantage of two 
 lines of steamers plying between Clarksville and Cairo and Evansville, con- 
 necting at those points with Ohio and Mississippi river steamboats as well as 
 rail lines centering at Cairo and Evansville. Eor many years Clarksville has 
 been a commercial and distributing center. The city ranks as the second larg- 
 est leaf tobacco market in the United States. There are a number of jobbing 
 houses in the city representing various branches of trade. 
 
 The people of Clarksville subscribed about a half million dollars to secure 
 railroad facilities. The Memphis, Clarksville & Louisville Railroad, now a part 
 of the Louisville & Nashville system, was chartered in 1852, and completed in 
 1860. 
 
12 
 
 A road is being constructed from Olarksville to Princeton, Ky., connecting 
 at Princeton with the Newport News & Mississippi Valley system, which will 
 be completed in a few months. The Cumberland River, navigable the year 
 round up to Olarksville, is the factor in the adjustment of rates to and from 
 that city. The testimony of T. G. Kyman, F. P. Gracey, and M. H. Clark, abund- 
 antly shows that the Cumberland Kiver fixes the rates to and from Olarksville. 
 
 The people of that city had excellent transportation facilities before any 
 railroads were built. The rates of transportation to and from ClalrksviUe by 
 rail can not be advanced without transferring the city's large business to the 
 river lines. Nature has done much for the city, which Congress has materially 
 aided by appropriations aggregating $803,000, for the improvement of the Cum- 
 berland River. The rail lines have not made Olarksville a commercial center; 
 they accepted the situation as they found it, which they could not have ignored 
 if they would. As the leaf-tobacco trafBc from intermediate stations is very 
 large, the Louisville & Nashville can not afford to reduce its local rates to cor- 
 respond with rates fixed by water transportation from Olarksville. 
 
 MONTQOMBBY, AlA. 
 
 The city of Montgomery is located on the Alabama River, a navigable 
 stream. Congress has appropriated $145,000 for the purpose of facilitating 
 navigation on this river. Like all other points similarly situated, this city was 
 a commercial trade center before railroads were built. 
 
 The first railroad built into this city was the Montgomery & West Point, 
 extending from Montgomery to West Point, Ga., completed In 1854. 
 
 The second, the Mobile & Montgomery, extending from Montgomery to 
 Mobile, completed in 1868. 
 
 The third, the Western, of Alabama, extending from Selma to Montgomery, 
 completed in 1870. 
 
 The fourth, the Montgomery & Eufaula, now a part of the Central of Geor- 
 gia system, extending from Montgomery to Eufaula, Ala., completed in 1870. 
 
 The fifth, the South & North, of Alabama, extending from Montgomery to 
 Decatur, Ala., completed by the Louisville & Nashville Company in 1872. 
 
 The sixth, the Montgomery & Florida, projected to run from Montgomery 
 to Rutledge, Ala., a distance of fifty miles ; twenty miles completed in 1882. 
 
 This city has had accorded to it such rates of transportation as her geo- 
 graphical location and river transportation advantages clearly demanded. 
 
 Although this has given to Montgomery rates considerably less than those 
 enjoyed by intermediate points, the business interests of that city have not been 
 satisfied, and have during the past year organized a company, known as the 
 Montgamery Trade Company, whith company has established a regular line of 
 steamers on the Alabama River, to run between Montgomery and Mobile, in 
 the interest of the former city. This line of steamers is run independent of 
 the line which has been occupying the river for many years, and has added 
 very materially to the competitive forces at Montgomery. The testimony in 
 the investigation throughout shows that "Western produce and merchandise of 
 all kinds is going into Montgomery by river at less rates than those fixed by 
 (.he all-rail lines. 
 
13 
 
 Selma, Ala. 
 
 The city of Selma is located on the Alabama Eiver, and was also a commer- 
 cial trade center before any railroads were built. 
 
 The first railroad built into this city was the Selma & Meridian, now a 
 part of the East Tennessee, Virginia & Georgia system, extending from Selma 
 to Meridian, Miss., completed in 1859. 
 
 • The second, the New Orleans & Selma, prcijected to run from Selma to New 
 Orleans, completed for twenty miles in 1869. 
 
 The third, the Western Railroad of Alabama, extending from Selma to 
 Montgomery, compjeted in 1870. 
 
 The fourth, the Selma, Rome &Dalton, also now a part of the East Tennessee, 
 Virginia & Georgia system, extending from Selma to Daltnn, completed in 1870. 
 
 The fifth, the Pensecola & Selma, now a part of the Louisville & Nashville 
 system, extending from Selma to Pineapple, completed in 1881. 
 
 The sixth, the Cincinnati, Selma & Mobile, extending from Selma to Akron, 
 a point on the Cincinnati, New Orleims & Texas Pacific road, completed to 
 Greensboro in 1872, and to Akron, seventy-one miles, in 1882. 
 
 The city has also had accorded to it such competitive rates as were forced 
 upon the rail lines by its advantageous location on the Alabama Eiver, and, like 
 the city of Montgomery, her merchants have been asking additional concessionSj 
 and with a view to securing them have also formed an organization known as 
 the "Selma Trade Company," which company has put on steamers between 
 Selma and Mobile and thus added to the competitive forces with which the rail 
 lines are obliged to contend. 
 
 Lexington, Ky. 
 
 The city of Lexington is located in the center of the blue-grass region of 
 Kentucky. While it has no direct water competion, this city is known to have 
 been a commercial distributing center for a large section of Kentucky, which it 
 is serving to-day. 
 
 The first railroad built into Lexington was constructed at the expense of the 
 people of that city in 1832, extending from Lexington to Frankfort, Ky. The first 
 locomotive run on this line failed after a trial of about six months to satisfacto- 
 rily perform its functions. The road was then operated with horses until the 
 latter part of 1834, when a more servicable engine was secured, and from that 
 time to the present the road has been successfully operated as a steam railroad. 
 
 The second railroad, the Kentucky Central, extending from Lexiugton to 
 Covington, Ky., opposite Cincinnati, a distance of ninety-eight miles, was com- 
 pleted in 1856. The Maysville branch of the Kentucky Central, extending 
 from Lexington to Maysville on the Ohio River, a distance of sixty miles, was 
 completed in 1859. 
 
 The third, the Louisville, Cincinnati & Lexington, now apart of the Louis- 
 ville & Nashville, connecting the Lexington & Erankfort road with a direct 
 line to Louisvilli', ninety-four miles, and a line to Cincinnati, one hundred and 
 fifty-two miles, was completed in 1869. 
 
 The fourth, the Cincinnati Southern, now Cincinnati, New Orleans & Texas 
 
14 
 
 Pacific, extending from Lexington to Cincinnati, seventy-nine miles, was com- 
 pleted in 1877, and the line Lexington lo Chattanooga, distance two hundred 
 and fifty-seven miles, was completed in 1880. 
 
 A remarkable fact developed in the testimony is that the city of Lexington, 
 Ky., sold sugar and coifee to Cincinnati in early years. Lexington was a distrib- 
 uting point not only for Central Kentucky, but reached out to Ohio River 
 points. 
 
 Before the canal was constructed around the Falls at Louisville steamers 
 could only go up to Louisville, and there being no wagon roads around the Palls 
 the trafiic for points above Loui-sville, it is said, was wagoned through Kentucky 
 by way of Lexington, which made Lexington a distributing center before Cin- 
 cinnati had acquired any importance. Of course the people of Lexington' feel 
 proud of this fact. They have not grown as much as Cincinnati, but they feel 
 proud of the fact that they once sold goods to Cincinnati. As shown by the 
 testimony of Mr. LeCompt, at Memphis, the citizens of Lexington contributed 
 over $1,000,000 to secure railroad facilities. 
 
 The question is, sh<.uld they and can they be deprived of them? I insist 
 that they should not, and I will undertake to show why they can not. 
 
 The traffic from Louisville to Lexington, being within the State of Kentucky, 
 's not subject to the Interstate Commerce Act. Traffic from Cincinnati, O., 
 to Lexington, Ky., is subject to the act. The rates therefore can be so adjusted 
 between Louisville and Lexington as to practically force the trade of Lexington 
 to the city of Louisville. Of course the lines leading from Cincinnati will not 
 assent to such an arrangement, and all they will have to do to hold their traffic 
 will be to establish receiving and delivering depots for Lexington business on 
 the Kentucky side of the river. The Kentucky Central road does not enter 
 Cincinnati, and receives its Cincinnati freight at Newport anyway. The Cin- 
 cinnati, New Orleans & Texas Pacific Company at present receives its Lexing- 
 ton freight at Cincinnati. It may and doubtless would determine to receive 
 such freight at Ludlow on the Kentucky side of the river. 
 
 I am sure that it will not be claimed that the carters carrying freieht be- 
 tween Cincinnati and Newport and Cincinnati and Ludlow are any part of the 
 transportation lines within the meaning of tlie act, and hence so long as the 
 Kentucky Central and the Cincinnati, New Orleans & Texas Pacific companies 
 receive the freight at Newport and Ludlow, although the parties shipping it 
 may be engaged in business at Cincinnati, the transportation of such property 
 can in nowise be regarded as coming within the scope of the Interstate Com- 
 merce Act. 
 
 I have already shown how the Louisville & Nashville road, the longer line 
 between Lexington and Cincinnati, would be debarred from the privilege of 
 participating in this traffic, a result certainly never contemplated by the friends 
 of the act. 
 
 Birmingham, Ala. 
 
 This ciiy is perhaps the best known and regarded as the most progressive 
 city of the South. It has been very appropriately termed " The Magic City." 
 Its growth has been simply wonderful. The first railroad built to Birming- 
 
15 
 
 ham was the Alabama Great Southern, extending to Chattanooga in the 
 northeast and to Meridian in the southwest, opened for business in 1871. 
 
 The second was the South & North Eailroad of Alabama ; opened for business 
 
 October 1, 1872, extending to Decatur in the north and Montgomery in the south, 
 
 being part of the Louisville & Nashville system, and reaching the Qulf ports of 
 
 Mobile, Pensacola, and New Orleans and the Western commercial centers of 
 
 SNashville, Louisville, Cincinnati, Evansville. St. Louis, etc. 
 
 The next was the Georgia Pacific Railroad, extending to Atlanta, Ga., in 
 the ekst and Columbus, Miss., in the west; completed to Birmingham in 1882. 
 The Kansas City, Memphis, & Springfield Railroad Company is building a line 
 froii Memphis, Tenn., to Birmingham, which will be completed wiihin the next 
 few Tponths. The Birmingham & Sheffield Railroad Company is building 
 a line^jfrom Sheffield to Birmingham, which will be completed within a 
 very short time. The Central Railroad system of Georgia is building an ex- 
 tension to Birmingham to connect with its system at Goodwater. This city 
 competes in trade of merchandise and Western produce with the cities of Mont- 
 gomery, Selma, Chattanooga, Atlanta, and Anniston. 
 
 Birmingham is the center of the great pig iron producing district of the 
 South. Pig iron, coal, bar iron, stoves, and machinery represent the principal 
 articles shipped from that city. It is often necessary to malie lower rates to 
 distant points than to intermediate points. For example: Pig iron from Bir- 
 mingham to New York is taken via Savanah for $3.75 per ton. Of this rate the 
 steamers take about $1.50 and the rail lines to Savanah an average of about $2.25 
 per ton. There being few points between Birmingham and Savannah using pig 
 iron, the roads to Savannah can without injury apply this rate to all intermediate 
 points, and being a water line between Savannah and New York, there is lio 
 intermediate territory to consider. 
 
 The Chairman : What are your rates to New York on pig iron, it being $3.76 
 by way of Savannah? 
 
 Mr. Stahlman: By rail it should be about $4, insurance making the differ- 
 ence. 
 
 Commissioner Walker; Do you understand that the Pennylvania Company 
 wants to participate in it? 
 
 Mr. Stahlman: I see no reason why it should not. The iron is going to the 
 East; the Pennyslvania Company can not keep it from going there; and the 
 question is whether the Pennsylvania Company will participate in carrying it or 
 let it go by some other route and receive no benefit. 
 
 The Chairman : How much benefit would they receive from it, any road that 
 would participate in taking it, at those prices? 
 
 Mr. Stahlman : Pour dollars a ton would be eighty dollars per car. The dis- 
 tance is about twelve hundred miles. They have carried freight from Chicago 
 to New York for a great deal less than that. 
 
 The Chairman : Tou assume that because a particular traffic will not bear 
 any higher rates, therefore you must take it at those rates. That is the assump- 
 tion cf your argument here and elsewhere. 
 
 Mr. Stahlman: Then I have certainly not made myself clear. 
 
 The Chairman : It seems to me that is what you are assuming. 
 
Mr. Stahlman : What I have endeavored to convey is that competitive forcels 
 fix the rates of transportation, whether they consist of competition between rail 
 lines, between rail and water lines, or between markets. 
 
 The Chairman: Exactly; I understand. 
 
 Mr. Stahlman : These arc the conditions which I have endeavored to impress 
 upon the Commission. On this particular traffic we have two classes of com- 
 petition. First, the competition by water ami r;iil lines through Savannah,' 
 whose intermediate busintss will not be aflFected by the low rates to New York; 
 the other, the competition between the Alabama manufacturer of iron and the 
 English manufacturer — iron from England coming to New Yoric at a nominal 
 rate of transporiation as ballast for steamers. Mr. Bowron's testimony shows 
 that this rate has frequently been as low as twenty-five cents per ton. 
 
 The Chairman : But does not that sometimes raise the question whether 
 the traffic should be taken at all? There is a question whether traffic should 
 be taken at all when you must take it at such extremely low rates. Now, evi- 
 dently the idea that existed In the mind of Congress to some extent, and in the 
 minds of the people to a larger extent, has been that when you act upon that 
 principle so far as to impose some share of the expense of the distant traffic 
 upon the intermediate traffic, you burden the local traffic in order that you may 
 carry a distant traffic from which you get no profit at all. 
 
 Mr. Stahlman: Apprehending this feeling from the tendency of the inves- 
 tigation in the South, I brought out all the facts relating to it in Mr. Culp's 
 deposition. I want to show just what we are doing. The impression prevails 
 that the Southern roads are carrying lumber, coal, cotton-factory products and 
 pig iron for the manufactories of the South at any rates necessary to enable 
 them to sell — in fact at rates which will enable them to cripple the manufactur- 
 ing industries of other sections. This is a great mistake. I have in my hand 
 Mr. Culp's deposition, which is very clear and full. It shows that the average 
 rate on pig iron from the Birmingham district to all leading points in .the West 
 is $5.12 per ton; that the average distance carried is 675 miles, and that the 
 rate per to n per mile is 7 mills. From the Hooking Valley district to the 
 same points the average rate is $2.64 per ton ; the average distance 360 miles, 
 and the rate per ton per mile 7 mills. From the Mahoning and Shenango Val- 
 ley districts to the same points the average rate is $2.46 per ton ; thi- aviTaye dis- 
 tance 389 miles, and the rate per ton per mile 6 mills. From the Hanging Rock 
 district to the same points the average rate is $2.39 pur ton ; the average dis- 
 tance is 383 miles, and the rate per ton per mile 7 mills. Surely the iron manulac- 
 turers of the Hocking Valley, the Mahoning and Shenango Valley, and the 
 Hanging Buck districts have no right to complain of an average rate from Bir- 
 mingham of $5.12 per ton against $2.54, $2.46 and $2 39 per ton respectively, 
 while the rate per ton per mile from tiie South is as great — and in one case 
 greater — than from the Pennsylvania and Ohio iron-making districts ! You may, 
 Mr. Chairman, compare these rates with the table furnished Vdu from Birming- 
 ham, and you will see that the highest rates are to Minneapolis and St. Paul, 
 and that they come down as they reach Louisville, the nearest point. 
 
 Commissioner Walker: Louisville may be very profitable and Minneapolis 
 a great loss. 
 
17 
 
 Mr. Stahlman: No, sir; the rate to Louisville is $3.40 per ton; distance 394 
 miles — 8 mills per ton per mile. 
 
 Commissioner "Walker : How many tons on the car ? 
 
 Mr. Stahlman: Fifteen, sometimes twenty. The rate to Minneapolis is 
 $7.90 per ton ; distance, 1,071 miles — 7 mills per ton per mile. Minneapolis is 
 the most distant point. The rate to Cincinnati is $3.65 per tonj distance, 479 
 miles, 7 mills. Columbus, Ohio, $4.40 per ton ; 699 miles, 7 mills. Pittsburgh, 
 Penn., $5.2.5 per ton ; 792 miles, 6 mills. At Pittsburgh we come in direct com- 
 petition with iron from the Pennsylvania district, but the Pennsylvania road 
 has given us a rate to Pittsburgh. 
 
 The Chairman : Their competition is a competition of business and not of 
 carriage. 
 
 Commissioner Walker: That was scaled down, as I understand it, under 
 your contract with the pig iron people. 
 
 Mr. Stahlman: I want to show that. Our minimum rate, which was $2.75, 
 to Cincinnati is now $3.65, a difference of 90 cents ; but remember that while this 
 scale has advanced the rate 90 cents per ton as between Cincinnati and Birming- 
 ham, where the rate goes down, it does not scale it down to Minneapolis rela- 
 tively, because the lines from river points have fixed the rates on pig iron, and 
 they fix them in line with the rates from other districts; and while we may 
 reach the minimum by a reduction of 90 cents between Birmingham and Cin- 
 cinnati, the reduction would not exceed 90 cents on the rates to Minneapolis, 
 unless the rates from other districts were reduced proportionately. This is a 
 very interesting table, Mr. Chairman, covering all of the principal points, which 
 I should be glad to have the Commission scrutinize very carefully. It shows, 
 for example, that while the rate from Birmingham to Louisville, a distance of 
 394 miles, is $3.40 per ton, the rate from the Mahoning district to Louisville, a 
 distance of 410 miles, is only $2.70. 
 
 The Chairman : Have not these rates come into conformity with the law ? 
 
 Mr. Stahlman ; This is the basis on which the rates have been adjusted for 
 years. There has been an advance north of the Ohio River since the law went 
 into effect, and this advance and uncertainty has given our Southern iron man- 
 ufacturers a great deal of, trouble. 
 
 The Chairman : I have no information that they are not complying with the 
 law in the West. 
 
 Mr. Stahlman : I do not understand, Mr. Chairman, that an advance in rates 
 would be a violation of the law, but that the advance was the result incident to 
 the enforcement of the law. The point I am endeavoring to make is, that the 
 Southern railroads are not and have not been carrying pig iron from the South 
 to the Western consuming markets at a less rate of per ton per mile than pig 
 iron is being carried to the same markets from the Hocking Valley, the Mahon- 
 ing Valley, the Shenango Valley, and the Hanging Rock districts, and Mr. 
 Gulp's testimony clearly demonstrates this fact. 
 
 Commissioner Walker: That does not prove that there is any money in the 
 rate for your road. 
 
 Mr. Stahlman : I do not suppose any one will controvert the proposition that 
 seven mills per ton per mile is money to the railroad. 
 
 3 
 
18 
 
 Commissioner Morrison : They get less than that from the Mahoning Valley 
 down. That is on the same principle that it costs them more to make the iron. 
 
 Mr. Stahlman : I want to remove frqm the mind of the Commission the idea 
 that tte Southern roads have deliberately gone to work to flood the whole 
 "Western country with Southern pig iron to the detriment of the manufacturers 
 of iron in other sections. 
 
 Commissioner Bragg; Is that Mr. Culp's deposition you have been reading 
 from? 
 
 Mr. Stahlman: Yes, sir. I take the position, Mr. Chairman, that our 
 Southern furnaces, being considerably further distant from the consuming mar- 
 kets than the furnaces in the East, ou^ht not to be taxed in excess of what 
 other people pay, or what would seem reasonable. If they are paying frcjm ' 
 $2 to $5 per ton more than the other furnaces are paying, it is protection enough, 
 I do not believe this law was designed to protect the Lake Superior man's ore- 
 bed, where he is asking $4 to $6 per ton for ore, in order to cripple the Ala- 
 bama man, who is willing to sfell his ore at 75 cents to a $1 per ton. ' 
 
 The Chairman : The feal question is between the competitive points, as you 
 call them, and the small poitits on your road, and- not any question between 
 you and these other people. If you are giving to these intermediate stations 
 what are fair rates, and- not charging them with any burdens on traffic to com- 
 peting and distant points, then there is no equitable claim against you. 
 
 Mr. Stahlman : I think that is true. I do not think it will be claimed that 
 we have not given to, all our points a line of reaisonable riites. Our local busi- 
 ness is not all strictly local business. Take a certain class of traffic at a local 
 point on the line of one railroad, and the busine s is more or less affected, by 
 competition between markets; we are obliged to recognize this fact, and adjust 
 our rates accordingly. We have not fixed any rates from Birmingham on either 
 pig iron, bar iron, or iron products in any form, which are onerous, exorbitant, 
 or oppressive to the people. I say frankly that wo have so adjusted rates on the 
 line of our road that the people do not feel oppressed. I believe the people 
 generally are satisfied, and satisfied with our basis of making rates. 
 
 The Chairman : What is the highest -aggregate charge on pig iron to inter- 
 mediate points between Birmingham and Cincinnati? 
 
 Mr. Stahlman: There is no pig iron consumed at intermediate points except 
 Louisville and Nashville, that I am aware of now. The rates to those points 
 are lower than to Cincinnati; but considerable bar iron, stoves, etc., are manu- 
 factured at Birmingham, on which the rates to intermediate points are higher 
 than to Cincinnati. 
 
 The Chairman : Then, so far as pig iron is concerned, you have no occasion 
 for relief. i 
 
 Mr. Stahlman: So far as pig iron is concerned we are precisely in the same 
 condition as the gentleman who appeared before ynu a few days ago represent- 
 ing the Lake Shore road. We have a long line and want permission. 
 
 The Chairman : Is it only with reference to New York, Boston, and Phila- 
 delphia business that you ask relief? 
 
 Mr. Stahlman : So far as I now know, it is. 
 
 The Chairman : Then that is the only traffic that needs discussion here ; all 
 else is immaterial. "* 
 
19 
 
 Mr. Stahlman; I was discussing it only in connection with the general 
 business of liirmingham. , 
 
 Commissioner Walker: That is a matter for the trunk lines. 
 
 Mr. Stahlman : I do not so understand it. We have applied for general 
 relief on behalf of the city of Birmingham, concorning not only the pig iron, 
 but bar iron, stoves. Western produce, merchandise, and general business of the 
 city. So far as relief on pig iron to the East is concerned, it will not apply to 
 any line which does not participate in the relief The idea seems to prevail 
 that tlie people of Birmingham have no cause for complaint; they are not in 
 any trouble ; they are not being liurt. The facts are, they are being hurt, and 
 being hurt by the enforcement of the law north of the Ohio Eiver. It is not 
 mere imagination, the testimony shows that the lumbermen, the cotton-factory 
 men, in fact, all classes who have business intercourse with the East and Westi 
 are.being seriously affected by the enforcement of the law. 
 
 The Chairman : That is a matter for Congress, not for us. 
 
 Mr. .Stahlman : I want to show you how our people reason : " If the roads 
 north of the river, in complying with the law, have advanced their rates, it 
 stands to reason that the lines south of the river, when they enforce the law, 
 will be obliged to advance their rates also, and this we can not stand." TJpoB 
 that point it seems to me, Mr. Chairman, there can be no doubt. You may say 
 to us, you should reduce your rates, or you should so adjust your rates that they 
 shall not be higher to and from intermediate points than they are to and from 
 competing points. I say to you, in all frankness and candor, that we can not 
 do. You may say, "You ought. to do it." I say that we can not unless we are 
 willing to throw ourselves right into the jaws of bankruptcy. That is a plain 
 proposition. If we were to fix our rates to intermediate points between Mont- 
 gomery and Louisville on the basis of our rates to Montgomery, it means ruin. 
 If we were to fix our rates to intermediate points between Mississippi Kiver 
 points and Louisville and Cincinnati on the basis of those rates, that means 
 rnin. If we were to withdraw from traffic at competitive points, it means 
 ruin, unless we advance our local rates ; and if we were to advance our local 
 rates it means ruin to the business interests of the country. Mr. Culp's evi- 
 dence is very full and explicit on these points. It bristles with facts which can 
 not be controverted, and I beg you, Mr. Chairman and gentlemen, to carefully 
 consider all that this testimony implies. ■: , : 
 
 It may be that this Commission has no power to grant relief in cases where 
 the circumstances and conditions are di^similar. If the Commission shall con- 
 strue the law to give such power, I am clearly of the opinion that it should be 
 exercised to arrest the threatened disaster. 
 
 The Chairman: As to this iron, I do not understand that you need any 
 relief in respect to towns on your own line. .You are not making any higher 
 rates than to any terminus or any other competitive point? 
 
 Mr. Stahlman: I think not. , 
 
 The Chairman : How is it as to New York rates?, 
 
 Mr. Stahlman: This is a large and growing, business. It has grown up 
 within the last two years between the Birmingham di.strict and the Chattanooga 
 district and Philadelphia and New York. ,Take the line from Birmingham 
 
20 
 
 through Savannah, and there is nothing in the act to obstruct the movement. 
 There is no pig iron of any consequence consumed between Birmingham and 
 Savannah at intermediate points. Of course none is consumed between Savan- 
 nah and New York. So that this ]ine can fix any rate it pleases without affect- 
 ing its intermediate business. This route has fixed the rate from Birmingham 
 to New York at $3.75 per ton, which is a fair revenue. We could cajry that 
 business, and we ought to carry our share of it, at least, by fixing a rate of about 
 $4.00 per ton. 
 
 The Chairman : How much would that be per mile ? 
 
 Mr. StiihJman : Something over three mills; very small, to be sure. But 
 remember, as shown in the testimony, and I have it here in figures, that our 
 cars are going north-bound empty, and while we have been able to increase our 
 tonnage north-bound considerably, by reason of the development of this iron 
 industry, a large number of our cars are still going back empty. The move- 
 ment for the last nine months shows the excess of empty car.s moved north to be : 
 
 Over the Nashville & Decatur Division 11,400 cars. 
 
 Over the Henderson Division 14,700 cars. 
 
 Over the Main Stem 6,935 cars. 
 
 Over the Mobile & Montgomery Division 9,040 cars. 
 
 Over the South & North (Birmingham) 15,017 cars. 
 
 The Chairman : What route does that traffic take now, through Cincinnati ? 
 
 Mr. Stahlnian : Yes ; through Cincinnati, or through Louisville without 
 going through Cincinnati, or it might go through Evansville. 
 
 The Chairman ; Then on this New York traffic you would not need any re- 
 lief. You charge but $3.65 to Cincinnati. 
 
 Mr. Stahlman : How about Pittsburgh ? 
 
 The Chairman ; That is another thing. How much do you charge to Pitts- 
 burgh ? 
 
 Mr. Stahlman: $5.25 per ton. 
 
 Commissioner Morrison : You do not expect to sell any there? 
 
 Mr. Stahlman: I suppose our Pennsylvania friends do not care to have us, 
 but there is considerable southern iron sold at Pittsburgh. 
 
 The Chairman : If you can build up a market there at $4.00, why do you not 
 carry it there for $4.00? 
 
 Mr. Stahlman : We can not get there very well without the consent of the 
 Pennsylvania Railroad. 
 
 The Chairman : You can not get any where else without the consent of 
 some road. 
 
 Mr. Stahlman : Quite true; but lines leading to other points have no partic- 
 ular interest in excluding us. Take the Pittsburgh business. Of course, if the 
 Pennsylvania Railroad can fairly protect its own industries, I assume that it 
 will do so, although it has joined us in the rate of $5.25, making a rate from 
 Cincinnati to Pittsburgh $2.00 per ton, and that is no violation of the law. The 
 point I make is this: They do not want that rate any less; that would look 
 like discriminating against their own industries. But as to the New York 
 business the situation is different. The business is going there by another route, 
 find to carry it via Cincinnati is so much gained by the all-rail lines. 
 
21 
 
 The Uhalrman: This is the point I want explained. You are asking relief 
 as to a particular traffic on your road, and when we come to look at your line 
 you do not need it on your road Ht all. Now, if it is needed in respect to some 
 distant traffic which you can not take at all except in connection with other 
 roads, is it not an answer that these other roads should unite with you in asking 
 relief? They can not participate with you until they are given permission- 
 You ask for an order from this Commission which, when obtained, will he en- 
 tirely futile upon its face, depending upon contingencies and the will of other 
 people. , 
 
 Mr. Stahlman : Suppose the order were granted, would it he considered a 
 violation of the law on the part of the Erie to participate in this traffic to New 
 York ? 
 
 The Chairman : It would depend on what the order was. The proper thing 
 would be for them to come and unite with you, as has been done in other oases. 
 
 Mr. Stahlman : I do not understand that this would be necessary. I men- 
 tion the New York, Lake Erie & Western Railroad, because I believe it is so 
 situated that it could participate in carrying this Birminghwrn iron without in- 
 volving any of its intermediate business, and that in doing so it would not vio- 
 late the fourth section of the act. 
 
 The Chairman ; It would not ? 
 
 Mr. Stahlman : No, sir; I am quite sure the New York, Lake Brie & West- 
 ern Kailroad has no intermediate business which would be affected by joining 
 in the transportation of the Birmingham pig iron to New York. 
 
 Commissioner Walker : Then you don't want any order ? 
 
 Mr. Stahlman : I do not see how we can get along without relief under a 
 rigid construction of the act. While it may be true that the New York, Lake 
 Erie & Western road would not violate the fourth section by participating in 
 this New York traffic, because it has no intermediate business, it might hesitate 
 to do so unless relief is granted to the LouisAille & Nashville road, and would 
 not relief to the Louisville & Nashville road be necessary, inasmuch as it has 
 business to intermediate points upon which higher rates are charged ? 
 
 The Chairman : May you not have some erroneous opinions on that subject? 
 But that is neither here nor there. I do not see as you state, the fact that you 
 have ftny particular occasion to come to us unless the others unite with you. 
 
 Commissioner Morrison : We get communications by every mail, saying, 
 " that if the Commission will say that this will not violate the law, we will 
 have it to make terms with these people. They will treat with us." 
 
 Mr. Stahlman : No doubt of it. 
 
 The Chairman: We have supposed that you needed relief in respect to bus- 
 iness to stations on the line of your road. 
 
 Mr. Stahlman: No, sir; not on the line of our road as to pig iron. 
 
 The Chairman: If you want to make a through rate to some distant point, 
 and it is in respect to that distant traffic that you want relief, then the line in 
 connection with which you expect to carry the traffic should appear with you. 
 
 Mr. Stahlman : We have not askod for relief on traffic to and from Birming- 
 ham.- Concerning pig iron alone, as has already been stated, the lines north of 
 the river have fixed arbitrary rates on pig iron and the lines south of the river, 
 
22 
 
 including the! Louisville & Nashville Railroad, have establiished a basis of rates 
 to Ohio River points. It may heqcme necessary for the lines'south of the Ohio 
 River to fix a less rate, in the aggregate, to more distant points than is fixed to 
 nearer points. This can be done by the lines south of the Ohio River reducing 
 their rates, up to the river vrilhout asking any concessions from the lines north 
 of the river. Now I submit if it would be necessary for a connecting road 
 north of the Ohio, which has made no concession in its rates, to unite with the 
 Louisville & Nashville road in an application which would allow this company 
 to make a concession in its rates between Birmingham and the Ohio River? I 
 should say that a joint application in such a case would be unnecessary; and I 
 should say, in the case of the New York pig iron traflSc, if the New York, Lake 
 Erie & Western road should see fit to participate in this transportation, that no 
 application from that road would be necessary, because it has no intermptliate 
 business which would be affected, and the only application necessary would be 
 upon the part of the Louisville & Nashville road, which transports large vol- 
 umes of intermediiite bu.einess upon which the rates are higher. Speaking of 
 this $4 rate between Birmingham and New York, when we come to consider it, 
 it's not so excessively low. It would pay the lines east of Cincinnati about 
 thirteen cents per 100 pounds, while we all know they have in years past 
 carried large volumes of grain and provisions from Cincinnati to New Ydrk at 
 rates as low as eight and ten cents per 100 pounds. But the pig iron business 
 is not the entire business of Birmingham. There are other branches of busi- 
 ness which need this relief. 
 
 Commissioner Bragg: Are there iron works at Montgomery? 
 
 Mr. Stalhman : They are building now. 
 
 Commissioner Bragg ; Are there iron works at Nashville ? 
 
 Mr. Stalhman : Tes, sir. 
 
 Commissioner Bragg: At Louisville? 
 
 Mr. Stahlman : Yes, sir. 
 
 Commissioner Bragg; At any other points on your line than those three? 
 
 Mr. Stalhman : No, sir. 
 
 Cominissioner Bragg : Take the rates from Birmingham to Montgomery, for 
 instance, would you charge the same rates on iron from Birmingham to Ver- 
 bena, Ala., that you do to Montgomery ? 
 
 Mr. Stalhman : Oh, no. 
 
 Commissioner Bragg : Verbena is an intermediate point? 
 
 Mr. Stalhman : Yes, sir. 
 
 Commissioner Bragg: Do you charge the same rate from Birmingham to 
 Calera that you would to Montgomery? 
 
 Mr. Stalhman : No, sir. 
 
 Commissioner Bragg : You charge less on iron to Montgomery than at inter- 
 mpdiate points? 
 
 Mr. Stalhman : Yes, sir. 
 
 Commissioner Biasrg: Prom Montgomery to Nashville, is your Nashville 
 rate on iron from Montgomery higher or lower than it would be to Columbia, 
 Tunn., and intermediate points? 
 
 Mr. Stahlman ; Lower, 
 
23 
 
 \ 
 
 Commissioner Bragg:. Is it lower from Birmingham to Nashville than^ t» 
 any of those intermediate points ? 
 
 Mr. Stahlman : Yes, sir. 
 
 Commissionir Bragg: From Birmingham to Louisville do you charge lower 
 rates than to intermediate points hetween Nashville and Louisville? 
 
 Mr. Stahlman: Yes, sir. 
 
 Commissioner Bragg : Then, so far as iron is concerned, there are points on 
 your road where you would want relief? 
 
 Mr. Stahlman : Oh, yes. 
 
 Commissioner Bragg:- But I understood you to say a while ago you would 
 not want relief? 
 
 Mr. Stahlman : I was speaking of pig iron. There is no consumption in pig 
 iron to amount to a great deal at these local intermediate points now, that I am 
 , aware of. 
 
 Commissioner Bragg : That does not make any diiferenoe ; they are inter- 
 mediate points. 
 
 Mr. Stahlman : Unquestionahly. 
 
 Commissioner Bragg : On general freight, do you charge less or more to 
 Birmingham than to intermediate points ? 
 
 Mr. Stahlman : Less. 
 
 Coramifsioner Bragg: You want relief then as to them? 
 
 Mr. Stahlman : Certainly. I want to say, Mr. Chairman, that while the 
 manufacture of pig iron is the basis of all business of Birmingham, it does not 
 by any means cover the total business of that ciiy. We did not suppose that 
 it Whs tlje design of the Commission to apply relief to any particular branch 
 of business. The application for relief was not made in that form, but to cover 
 the general business of that city. We desire very much to have relief on pig 
 iron to the end of our line, and we will do the best we can with it beyond that. 
 If the New York and Philadelphia traffic continues to grow as it has donn for 
 some time, it will be a very serious question with us, but independent of pig 
 iron we need relief on the general businessof Birmingham. The manufacture 
 of bar iron, ' spikes, rails, stoves, and other articles the product of iron, has 
 grown, to quite large proportions. ■■ . 
 
 In supplying the Southern coast with such articles a lower rate is necessary 
 to the coast than to intermediate points; and in supplying the West with such 
 articles a lower rate is necessary to Cincinnati, Louisville, and other points, to 
 meet competition of iron coming from the Pittsburgh districts. down the Ohio 
 Eiver, than is made to intermediate points between Cincinnati and Birmingham ; 
 besides there is a large traffic in merchandise from the Bast, and grain, provis- 
 ions, etc., from the West. 
 
 Birmingham, it is tiue, is not directly affected by water competition, but 
 indirectly it is. The towns of Florence and Sheffield are located on the Ten- 
 nessee Kiver, a stream which is navigable the year round. ShefSeld is about 
 one hundred miles from Birmingham, and a railroad will be completed there 
 within a few months. The Memphis & Charleston and the Louisville & Nash- 
 ville via Decatur have a line in there now. The town of Florence was some- 
 what of a distributing center several years ago, before the Memphis & Charles- 
 
• 24 
 
 ton road felt the necessity of having the Western business como over its long 
 line from Memphis, since which time they have not encouraged business yi^, 
 Florence. The rail lines from the West being compelled to charge as much to 
 Birmingham as to intermediate point?, would make that progressive center a 
 local station. The Birmingham & Sheffield Kailroad will not want any thing 
 better than the opportunity of going in and saying to Florence, " Now build 
 up your commercial center for the supply of Alabama; ours is an Alabama 
 road. You can bring your supplies from the Ohio and the Mississippi rivers. 
 You have regular lines of steamers the year round. Bring it in any quantity 
 from Cincinnati, Louisville, St. Lnuis, Bvansville, and Cairo to Florence, and 
 we will give you distributing facilities at Birmingham and other Alabama 
 points." This is an element which in our judgment makes it necessary to give 
 us the right to charge to and from Birmingham less rates than we charge to 
 and from intermediate points. It is an element over which we have no control, 
 and over which this Interstate Commerce Act has no control. The supplies 
 are shipped from the West to Florence, and Florence is made the center from 
 which they are reshipped. The only question is, whether they shall go through 
 Florence by steamboat line or direct by rail as heretofore. 
 
 I have now, Mr. Chairman, covered all the points involved in the applica- 
 tion for relief made on behalf of the Louisville & Nashville Kailroad Company. 
 They are not so numerous as would appear from the form of application. There 
 are only twenty, and all of these, except Lexington, Ky., and Birming- 
 ham, Ala., are located on navigable streams, favored with direct water trans- 
 portation, which the proof in the investigation clearly shows to be the leading 
 factor in fixing the rail rates to and from those points. 
 
 I desire to imprers upon this honorable Commission another fact clearly 
 established by the proof, and that is that the Louisville & Nashville Rail- 
 road Company has not been engaged in the practice of building up one city . 
 or locality to the detriment of another. The proof, I aver, is overwhelming 
 that the rates of transportation to and from these several cotnmercial centers 
 have not been arbitrarily fixed by the Louisville & Nashville Company in the 
 interest of any particular city, but have been forced upon the company by cir- 
 cumstances and conditions over which it has had no control. The Congress of 
 the United States has from time to time appropriated the following sums for 
 the improvement of the following rivers : 
 
 The Kentucky ; $762,500 00 
 
 The Ohio... 3,341,562 91 
 
 The Mississippi below Cairo 20,194,188 53 
 
 The Cumberla,nd and tributaries 857,000 00 
 
 The Tennessee and tributaries 3,377,456 94 
 
 The Alabama and tributaries 695,500 OO' 
 
 Total .-. , $29,228,208 38 
 
 These appropriations have served to largely augment the competitive forces 
 which the Louisville & Nashville Kailroad Company has been unable to ignore. 
 
25 
 
 APPLICATION ON BEHALF OF THE SOUTHERN BAILWAY AND 
 STEAMSHIP ASSOCIATION. 
 
 The application presented on behalf of the Southern Kailway and Steam- 
 ship Association prays for relief from the operation of the fourth section of the 
 act on traffic to, from, and through various points within the territory of the 
 Association, fifty-one in number. Assuming that the lines directly inter- 
 ested in the relief will undertake to show why relief at many of the points 
 should be granted, I will confine my presentation of the question to points with 
 which I am familiar, twenty-one in number. The cities of Wilmington, N. C, 
 Charleston, S. C, Port Royal, S. C, Savannah, Ga., Brunswick, Ga., are all 
 coast points, and, as shown by the evidence, have the benefit of and afford 
 active competition on all traffic passing to and from the East and to and from 
 the West. 
 
 The city of Jacksonville, Fla., .is located on the St. John's River, enjoying 
 practically all the advantages of a port. 
 
 Columbia, S. C. 
 
 The city of Columbia is located on the Congaree River, which was naviga- 
 ble for a long distance above and below that point. 
 
 Commissioner Walker: Is it not navigable now? 
 
 Mr. Stahlman : It undoubtedly is. 
 
 This city became a distributing center prior to the construction of any rail- 
 roads, being practically in control of the commerce and trade of a large por- 
 tioa of the interior of South Carolina. 
 
 As early as 1840 the Columbia branch of the South Carolina Railroad was 
 •completed from Charleston to Columbia. 
 
 In 1869 the Charlotte, Columbia & Augusta Railroad was completed be- 
 tween Augusta, Columbia, and Charlotte. 
 
 In 1881 the Wilmington, Columbia, & Augusta Railroad was completed, 
 extending from Wilmington, N. C, to Columbia. 
 
 The construction of these railroads tended very materially to aid ' in the 
 development of the country tributary to Columbia, and to that extent eplarged 
 the business which the city enjoyed prior to the construction of railroads, and 
 induced large investments of capital in mercantile and manufacturing pursuits. 
 
 It is safe to assume that the building of these roads added to the importance 
 of Columbia only to the extent that they aided in the development of tributary 
 territory, and that the business of Columbia would have been relatively as large 
 as it is now if there had been no railroads constructed in that section of the 
 country. 
 
 Augusta, Ga. 
 
 The city of Augusta is located on the Savannah Elver, a navigable stream, 
 which, to make and keep in a navigable condition, Congress has appropriated 
 $674.6,098.6 
 
 Augusta became a trade center before the State of Georgia had any rail- 
 
 4 
 
26 
 
 roads, handling the cotton of a large section and supplying merchandise to that 
 section. 
 
 The first railroad built into Augusta was the South Carohna Eailroad, ex- 
 tending from Charleston, S.' C, to Augusta, completed in 1833. 
 
 The second, the Georgia Eailroad, extending from Atlanta to Augusta, 
 completed in 1845. 
 
 The third, the Central Eailroad of Georgia, extending from Savannah to 
 Augusta, completed in 1854. 
 
 The fourth, the Charlotte, Columbia & Augusta, extending from Charlotte, 
 N. C, to Augusta, completed in 1869. 
 
 The fifth, the Macon branch of the Georgia Eailroad, extending from Ma- 
 con to Augusta, completed in 1872. 
 
 The sixth, the Port Eojal & Augusta, extending from Port Eoyal, S. C, to 
 Augusta, completed in 1873. 
 
 The seventh and last, the Augusta & Knoxville Eailroad, extending from 
 Spartanburg, S. C, to Augusta, completed in 1882. 
 
 Of course the construction of these various railroads added very much to 
 the importance of the city of Augusta as a distributing center, and aided 
 very much in the development of its tributary territory. But having the 
 Savannah Eiver, which afforded good transportation facilities, it is reasonable 
 to assume that the city of Augusta to-day enjoys no greater advantages 
 relatively than she would have enjoyed had no railroads been constructed 
 within the limits of the State of Georgia. 
 
 Athens, Ga. 
 
 This is an important town, located on the lines of the Eichmond & Danville 
 and the Georgia railroads. 
 
 In 1845 the Georgia Eailroad and Banking Company completed its main 
 line between Augusta and Atlanta, Ga., and its branch line from Union Point 
 to Athens. 
 
 In September, 1876, the Northeastern Eailroad of Georgia was completed 
 from TuUulah to Athens, Ga., thus giving Athens competing lines via the 
 Eichmond & Danville through Eichmond to Norfolk, and via the Georgia 
 Eailroad through Charleston and Savannah, on business to and from the 
 East; also, competing lines, via the Eichmond & Danville and the Georgia 
 Eailroad through Atlanta, on business to and from the West. A large sum 
 of money was subscribed by the citizens of Athens lo aid in the construction 
 of those railroads, particularly the Northeastern Eailroad, for the purpose 
 of obtaining additional railroad facilities and competition. In September, 
 1881, the Eichmond & Danville Company purchased ihe stock of the North- 
 eastern Eailroad owned by the city of Athens, agreeing at the time that the 
 rates to and from Athens should be the same as the rates to and from Augusta, 
 Ga. The distance from points in the West to Athens are practically the same 
 as the distance from the West to Augusta, Ga., and there is little if any differ- 
 ence in the distance from the East to Augusta and 'Athens, Ga. Athens com- 
 petes with Augusta for trade in the same territory, and it would only seem fair, 
 in view of the money contributed by the people of Athens to secure a competing 
 
27 
 
 line, and the contract with the Bichmond & Danville Eailroad, that the people 
 of Athens should have the benefit of such rates as may, from time to time, he 
 enjoyed by the city of Augusta. 
 
 The Chairman: I vfill ask a question which you may have in mind as you 
 proceed. In ease there should be an order by the Commission establishing such 
 a state of things as you think they can establish and ought to establish, and in 
 view of all the facts which you have presented, what would be the difference 
 in the condition of things through the country reached by your road, after the 
 law settles down into its full operation under our orders, compared with what it 
 was before ? 
 
 Mr. Stahlman ; I do not know that there will be any material difference. 
 
 The Chairman : Then, is not what you ask — you can direct your attention to 
 it to any extent you please as you proceed — in effect to nullify the law in all that 
 region ? 
 
 Mr: Stahlman: Practically, yes, so far as the fourth section is concerned; 
 and I think before I get through I will show why the South, and the business of 
 the railroads in the South, should be made an exception. 
 
 The Chairman: The whole country down there — through its members of Con- 
 gress at leas-t — asked forthis law, and it is to be supposed that they were aiming at 
 something which they thought was wrong. You say it is all right. After all, 
 are we not obliged to assume that it was wrong, that is, if Congress considered 
 it wrong, no difference whether we think so or not. And in the same connec- 
 tion, as you proceed, there is another question to be borne in mind: Point out 
 how and where you think power has been given us to do what you say is prac- 
 tically to nullify that provision in the law in that whole section of country, 
 embracing six or eight Stales. 
 
 Mr. Stahlman : I want to answer that. To the first proposition I said, 
 "Practically, yes." The suspension would leave every thing in the condition 
 that it was before. 
 
 Commissioner Morrison: As to long and short hauls? 
 
 Mt. Stahlman : Yes, sir, as to long and short hauls, with this reservation, 
 there are a number of minor points embraced in the territory covered by the 
 Southern Railway and Steamship Association which have had the benefit of 
 competitive rates for which there may be ho absolute necessity. All told there 
 are seventy-one points in the ten States on behalf of which the railroads 
 have applied for relief. From the form of the application it would look as 
 though there were five hundred. 1 have examined the application pretty care- 
 fully, and while I do not want to pay that this or that point ought to be ex- 
 cluded, it is my judgment that about forty points will cover the list, which 
 ou'.;ht to have relief. I am undertaking to show why a number of these 
 ought to be relieved. I will leave other points to the lines immediately inter- 
 ested. With these exceptions the condition would be practicallj the same as 
 before. 
 
 On the point as to what the people wanted 1 may say the masses look very 
 little interest in the question, In n)y own State the question is thor.iughly un- 
 derstood. 
 
 The Chairman: We have to assume that it was thoroughly understood by 
 Congress. 
 
28 
 
 Mr. Stahlman : I am aware of that, Mr. Chairman ; but in assuming that it 
 was understood by Congress, ought we not to consider the situation as we find 
 it in the various Southern States? Is not the legislation i^ the various Status a 
 better indication as to what the people want? Wjb find no commission law in 
 Louisiana, none in Florida, none in North Carolina, practically none in Vir- 
 ginia, and none in Tennessee. We do find a law in Alabama, Mississippi, 
 South Carolina, Kentucky and Georgia. But in none of these States has an at- 
 tempt been made to enforce the long and short haul provision. Nor has any 
 legislation been enacted which would warrant the enforcement of that law, ex- 
 cept in Georgia, where the Commission has absolute power to do what it will 
 in respect to rates of transportation — but it has not undertaken to enforce a 
 rule or an order which would prevent the railroads from charging more for a 
 shorter thao for a longer haul. 
 
 Commissioner Walker: The Georgia Commissioners say they have; they 
 claim that is the meaning of their rules and regulations, and they have practi- 
 cally put it in force. 
 
 The Chairman ; And because the other States did not comply they went to 
 Congress. 
 
 Commissioner Walker : It is the good example of Georgia which has set it 
 going every where. 
 
 Mr. Stahlman: Does that information come from the Georgia Commis- 
 sioners? 
 
 The Chairman : Oh, directly — officially. 
 
 Comrriissioner Walker: They claim that they have enforced as far as they 
 can the principle of the long and short haul on their local business. 
 
 Commissioner Bragg: I would ask, as a matter of information, where they 
 said that, for I know very well they have not done it. 
 
 Commissioner Walker: I do not know whether you were present when Mr. 
 Campbell Wallace was talking about it. He says he made an exception where 
 they were within twenty miles of a town on account of competition with the 
 wagons. 
 
 Mr. Stahlman: I want to read Commissioner Wallace on himself. He was 
 asked by the Kentucky Commission to give his views on the general question of 
 Railway Regulation, including the "long and short haul." Here is what he 
 said : 
 
 "Under the law, the Commission recognize their duty to make a tariff of 
 rates that would be 'just and reasonable for both the people and the railroads.' 
 We recognize the right of every man in the State of Georgia, no matter where 
 located, to have his freights carried at 'just and reasonable' rates, to be fixed in 
 accordance with his facilities for transportation, natural or artificial, or both. 
 
 "I mean this: A community having more railroads than one, or having one 
 only, and a navigable water-course, has commorcial and transportation advan- 
 tages and facilities that, according to all the laws of trade and commerce, do not 
 accrue to a community or an individual with only one railroad, of simply a 
 navigable water-course. Now, with this idea governing the Georgia Commis- 
 sion, we recognize the right of every man in the State of Georgia to select his 
 own market in which to buy his supplies or sell his products without obstruc- 
 tion on the part of transportation compnnies, either in the form of unreasonable 
 and unjust rates or arbitrary rules. No agreement or contract, expressed or 
 implied, among or between such companies, should be permitted to deltiy or in- 
 
29 
 
 terfere with the shipment of freights to any market, or over any route the ship- 
 per may designate. Division of the earnings or the quantities of tonnage by a 
 stipulated percentage among themselves to the injury of shippers subjects the 
 common carrier to damagps. 
 
 "The shipper, on his part, must be content with the advantages or disad- 
 vantages of his commercial location. If a man voluntarily builds his house on 
 the top of a hill, he must make up his mind when he goes from home to have 
 the inconvenience and labor of climbing that hill when he returns. If a man 
 raises his bale of cotton ten or twenty miles from a railroud station, or cultivates 
 his land on the banks of a navigable river, or on the line of a railroad without 
 competition, he can neither expect or rightfully demand as low a rate of freight 
 as the man with all the advantages of competition accruing to him by a multi- 
 plicity of the means of transportation. If the former gets the 'just and reason- 
 able' rates contemplated by the law of Georgia, he has his full rights, not only 
 under the law of his State, hut his equitable rights under the law governing 
 commerce adapted to his location and transportation facilities.'' 
 
 Maj. Wallace handed me this paper while we were in Atlanta, saying: 
 " These were the views we entertained then ; we entertain them now. We are 
 governed by that principle in adjusting the rates to and from points in Geor- 
 gia." Maj. Wallace has never been charged with any partiality toward the 
 railroads of Georgia. On the contrary, he hat been considered a hard task- 
 master, an extremest on the question of ra-ilway regulation, and has enforced 
 many orders and decrees which have proven a great hardship to the railroads. 
 
 I do not know what correspondence has passed between this honorable Com- 
 mission and the Commission of Georgia. But the paper from which I have 
 read represents the situation as it is to-day, according to my information, which 
 was confirmed by the statement made by Maj. Wallace to me at Atlanta. It 
 is true that during the Atlanta sitting a Mr. Jonathan Norcross and his brother- 
 in-law Hill, claiming to represent the farming interests, came bffore the Com- 
 mission to ask the enforcement of the fourth section. But I aflBrm that thej" 
 did not represent the true sentiment of the farmers of Georgia. They came 
 under false colors ; neither of them had any interest in common with the farmer. 
 Mr. Hill claimed to be a farmer, but it is well known that he never farmed a 
 day in his life. It occurs to me that if the people of Georgia wanted the long 
 and short haul provision enforced, they would have asked the Commission of 
 Georgia to enforce it. That Commission has ample power, which has never 
 been called in question. 
 
 In the Slate of Mississippi, I have been informed, strenuous efforts were 
 made during the last session of the legislature to embody the long and short 
 haul provision in the law, but they failed. In the States of South Carolina, 
 Virginia, and Kentucky, no attempt has ever been made to enforce such a 
 provision. In the Statq of Alabama the Commission has never seen fit to 
 suggest the enforcement of the long and short haul provision. And the people 
 throughout the South are generally satisfied. The only dissatiifaction we 
 heard during the entire session of the Commission as to the State of Alabama 
 was froln Opelika, which had better rales than its neighbors, and wanted still 
 better. 
 
 Mr. Dunklin came from Greenville, Ala., a point on the line of our road, 
 and said: "Tou havu treated us well ; we have no fault to find with the Louis- 
 ville & Nashville Railroad, but we would like to have this law enforced, just to 
 
30 
 
 see how it will work." He was the only man on the line of the Louisville & 
 Nashville road and the people of Opelika were the only people in Alahama 
 who came forward to ask the enforcement of this law. , 
 
 Commissioner Bragg: There was a request from Evergreen. 
 
 Mr. Stahlman : I think perhaps there was a small petition from Evergreen. 
 But there was also quite a large one asking for the suspension. And there was 
 alsj a petition from Greenville, Mr. Dunklin's towri, asking for a suspension. 
 The people of the South are not hankering after the enforcement of this law. 
 I mean the masscs-^the farmers, if you please. They are not troubled about it. 
 They are very well satisfied with the treatment they are receiving, while the 
 business men generally ask for the suspension. The people in the^nterior 
 towns feel like Mr. Wallace ahout it : ■' If a man voluntarily builds his house 
 on the top of a hill, he must make up his mind when he goes from home to have 
 the inconvenience and labor of climbing that hill when he returns." 
 
 Commissioner "Walker : What Maj. Wallace said was about this (reading) : 
 Rule 6 accomplishes the object of the law as near as it can practically be done, 
 while rulf 7 allows a free reduction of freight rates under twenty miles, there 
 being competition on the short haul by wagon. And the same rule allowed re- 
 stricted reduction on long hauls of two hundred and fifty miles, which takes 
 them outside the limits of the State. 
 
 Mr. Stahlman: Do you consider that this rule would apply to the long and 
 short haul in Georgia? 
 
 Commissioner Walker : Not absolutely. 
 
 Mr. Stahlman : This rule allowing a reduction on twenty miles to meet the 
 competition of wagon explains the rates to Bolton as compared with Marietta, 
 of which we heard a good deal in Atlanta. Bolton is only a short distance from 
 Atlanta, and comes in under the twenty-mile provision. 
 
 The fact that the Georgia Commission recognizes wagon competition makes 
 our case only thafmuch stronger If competition by wagon is a legitimate object 
 of recognition on purely State traffic, how can we afford to ignore water and 
 other like competitive forces on interstate traffic? 
 
 As to Tennessee, the only State in the Union where the question has 
 been brought squarely before the people, I want to say that we had a commis- 
 sion law in 1882 giving the Commission power to fix rates. The Commis- 
 sioneis were elected by the people. The question was taken before the 
 people in the next campaign, one party declaring against regulation and the 
 other party for it, the party declaring for it being the miijority party in the 
 State by ab ut forty thousand. The campaign was fought out on that issue, 
 and the minority party carried the State by about eleven thousand votes. 
 
 Commissioner Morrison: Your people bolted the ticket? 
 
 Mr. Stahlman; I think almost any body would bolt when he is starving, or 
 somebody is doing something which is calculated to produce starvation. But 
 the bolt was not confined to the railroads, it was general all along the line. 
 The business men from one end of the State to the other holted to repudiate 
 the doctrine that a man should not be allowed to manage his own affairs as long 
 as he was doing right and kept within the bounds of the common law. The 
 holt and vote meant that the railroads were doing right, and the people were 
 
31 
 
 satisfied. And in deference to public sentiment, thus expressed at the ballot- 
 hox, the Democratic party two years thereafter, in the largest representative 
 convention ever assembled at ihe Oapitol of the State, by a vote of over two 
 to one voted down the proposition to again embody such a plank in its plat- 
 form; and the Republican party, in convention the same year, by a unanimous 
 vote gave an emphatic declaration against it. 
 
 The Chairman : It is the fighting of the railroad companies half the time 
 that brings you to the point of starvation. If you had not fought between 
 yourselves and with the steamboat men so much you would have been better off. 
 
 Mr. Stiihlman : I am glad you have brought this out, for I should probably 
 have forgotten to consider the point. I wish the law had been framed so as to 
 prevent wars between transportation companies. But I do not construe the 
 law in that way. So far as the contests with the steamboats are concerned, it 
 has simply tied the hands of the railroads in ordor that the steamboats may 
 cudgel them to their heart's content. Mr. Gulp's deposition shows to what ex- 
 tent we have been fighting the steamboats. It is very clear on this point. It 
 gives the rates in detail in effect between river points during the past seven 
 years; and a careful scrutiny of this table, compared with the rates to the inte- 
 rior where there is no river competition, will show that the rates by rail into the 
 interior have been relatively reduce d as much as or more than the rates between 
 river points during that period. This, Mr. Chairman, proves conclusively that 
 the railroads have not forced the issue, and if there is any issue it is due to the 
 steamboat people .themselves, who have brought it on. The railroads have had 
 fights among themselves, and very vigorous fights at that, but the section which 
 I represent has been comparatively free from such troubles. We have had our 
 disagreements and disturbances, and here and there some friction, but as a rule 
 all of our troubles have been adjusted without wars. We had a little brush in 
 Birmingham with the Queen and Crescent route, several years ago, to determine 
 what the rates from Cincinnati and Louisville should be to Birmingham, which 
 was settled by arbitration. 
 
 The Chairman : Have the rates as fixed by that arbitration been left so ever 
 since ? 
 
 Mr. Stahlnian : Yes, sir; they have not been disturbed. The disturbing ele- 
 ment with us in the South all the way through has been that of a relative 
 adjustment of rates. We have had our disagreements, but, as a, rule, have been 
 too conservative to fight about it. The Southern Railway and Steamship Asso- 
 ciation was one of the earliest organizations of that kind created in this coun- 
 try. Through it and through similar appliances we have been able to adjust 
 our troubles, so that we have been comparatively free from wars. The Louis- 
 ville & Nashville Company, although it traverses a vast territory and is con- 
 sidered a strong line, is not in a position to arbitrarily demand any thing or to 
 fix an arbitrary adjustment of rates to and from any point. Although we have a 
 direct line from the West to Montgomery, we are not in a position to say that the 
 rates to and from Montgomery shall be absolutely fixed at a given figure. To 
 take that position would warrant another line in faying that the rates to At- 
 lanta shall be made a certain figure ; and still another to say that the rates to 
 Augusta should be a certain figure ; and still another, that the rates to Macon 
 
82 
 
 should be a certain figure ; and still another, that the rates to Selma should be 
 a certain figure, and so on through i the list ; thereforethe lines directly inter- 
 ested in the traffic to and fromthese various centers come together and agree 
 among themselves what the rates shall be, and if they can not agree the ques- 
 tion is submitted to arbitration. This method, which is undoubtedly the best, 
 has enabled the lines of the South to avoid the rate wars so frequent between 
 the trunk lines of the East and the railroads of the West. I do not moan 1o 
 say that the Southern railroad men are more capable than the railroad mana- 
 ger." of the ^ast and "West, but I do believe they are more conservative ; and I 
 believe, furthermore, they realize that the Southern roads have no margin^ to 
 spare ; that their earnings are barely sufficient to meet the demands upon them, 
 and that they could not afford to participate in wars which would result in dis- 
 aster. And it is because the Southern roads have no margin and can not afford 
 to lose any part of their revenue, that they have appeared before this honorable 
 Commission for relief. It is because they can not afford to reduce their local 
 rites to the basis of their competitive rates ; and because they can not afford to 
 withdraw from the competitive business without advancing rates to and from 
 their local points; and because the business interests of the people can not 
 stand an advance of rates to and from local points, that they are before you 
 to-day pleading for relief. 
 
 Macon, Ga. 
 
 Let us, now, Mr. Chairman, consider the claims of the city of Macon, 
 Ga. This city is located at the head of navigation of the Oomulgee River. 
 It is shown that Macon was a distributing center many years before rail- 
 roads were built, and that she handled as much as eighty to one hundred 
 thousand bales of cotton per annum, which in those dilys was a large quantity. 
 In 1843 the Central Baitroad of Georgia was completed from Savannah to 
 Macon. 
 
 In 1846 the Central Eailroad of Georgia completed its line from Macon 
 to Atlanta, Ga., one hundred and three miles. 
 
 In 1851 the Southwestern Railroad, now part of the Central Railroad system, 
 completed its line from Macon to Columbus, Ga. 
 
 In 1872 the Georgia Railroad & Banking Company constructed a branch 
 of seventy-four miles from Camak, connecting the cities of Augusta and Macon. 
 
 Some years later the Macon & Brunswick Railroad was constructed from 
 Macon, Ga., to the Port of Brunswick, distance one hundred and nine miles. 
 
 In 1882-3 the East Tennessee, Virginia & Georgia constructed a road from 
 Rome, Ga., to Miicon, Ga., distance one hundred and fifty-eight miles, connect- 
 ing Macon with the East Tennessee system at Rome, Ga. 
 
 The city of Macon, therefore, has competition between three independent 
 railroad systems to and from all points north, east, and west; through the 
 ports of Charleston, Savannah, Port Royal, Brunswick, and Norfolk, and 
 through Atlanta, Chattanooga, and Montgomery. 
 
 It is clear that the city of Macon was a distributing center many years prior 
 to the construction of any railroad and did a large business ; and if no railroads 
 had been constructed it is likewise clear she would l>e one of the largest dis- 
 tributing centers in the State of Georgia to-day. 
 
33 
 
 I submit, if it would be just to deprive this city of the natural geograpbical 
 advantages she possesses, and inflict punishment on her simply because her citi- 
 zens had the enterprise and push to make her the center of several important 
 railroads. , 
 
 Macon competes with the cities of Savannah, Augusta, Columbus, and At- 
 lanta for business in the same territory, and is practically the same distance 
 from the East and West as Augusta. 
 
 Atlanta, 6a. 
 
 The testimony of Messrs. Powers and Ogden give a very interesting account 
 as to how Atlanta became the leading commercial center of the State of Geor- 
 gia. The people of Georgia, through the legislature, as early as 183^, inaugu- 
 rated a system of internal improvements, which resulted in the construction of 
 a number of leading railroads centering in Atlanta. What is now the city of 
 Atlanta, we are told, was then known as Cross Plains, and what is now the 
 city of Chattanooga was then called Boss' Landing. The construction of the 
 Western & Atlantic road was commenced in 1836 ; completed to Dalton, Ga., 
 one hundred miles, in 1846, and finished to Chattanooga, on the Tennessee Kiver, 
 one hundred and thirty-eight miles, in 1850. This railroad was constructed 
 with money appropriated by the legislature of Georgia. It is still the property 
 of the State, but being operated under a lease to an organization known as the 
 Western & Atlantic Bailroad Company, The lease will expire within the next 
 three years, and the control of the property revert to the State. While the 
 Western & Atlantic road was being constructed, the Georgia Kailroad and 
 Banking Company built a railroad from Augusta to Atlanta, a distance of one 
 hundred and seventy-one miles. This road was finished in 1845. The South 
 Carolina Kailroad bad already completed its line from Charleston, S. C, to 
 Augusta, Ga. The Central Kailroad of Georgia having completed a line in 
 1843 from Savannah to Macon, the Macon & Western Kailroad Company built 
 a road from Macon to Atlanta in 1846. Thus, under the influences of a move- 
 ment inaugurated by a convention at Milledgeville in 1835, then the capital 
 of the State of Georgia, the insignificant village of Cross Plains became tlie 
 leading railroal center of the State. I know of nothing on record in the his- 
 tory of the developiiient of the South where a little cross-road village, perhaps 
 not even a village, had at as early a date as 1846 two important railroads lead- 
 ing to the South Atlantic coast, and another pointing toward the great West. 
 
 These important railway enterprises, inaugurated under the inspiration of 
 the day, gave to Atlanta an impetus which was obliged to put her to the front. 
 These railroads were constructed by the people of Georgia; one of them was 
 built outright by the State, and for many years operated by the State. These 
 roadajwere controlled by the people who built them ; the stockholders, boards of 
 directors, and the managers, all resided in the various portions of the State, at 
 intermediate as well as terminal points. The basis of adjusting rates, which 
 made the city of Atlanta a commercial center, was inaugurated under their 
 auspices and directions ; men who would scarcely, forty years ago, have dreamed 
 that their efforts to build up a great railway center in the State of Georgia 
 
 5 
 
34 
 
 would be pronounced by the average politician {not statesman) of to-day as 
 gross acts of extortion and discrimination. 
 
 In 1857 the Atlanta & West Point Railroad Company, extending from At- 
 lanta to West Point, Ga., was built. As early as 1854 the line from Montgom- 
 ery, Ala., to West Point, Ga., was completed, thus giving to Atlanta another 
 connection with the seaboard via Montgomery and the Alabama Eiver through 
 the port of Mobile. 
 
 In 1873 the road from Charlotte, N. C, to Atlanta, Ga., known as the At- 
 lanta & Charlotte Air Line, was finished,, connecting at Charlotte with the 
 Richmond & Danville system. 
 
 In 1881 the Georgia Pacific Railway Company bought what was known as 
 the road-bed of the Georgia Western Railroad— in the construction of which the 
 citizens of Atlanta had contributed about ^300,000, The people of Atlanta sold 
 this road-bed for a nominal sum (about $35,000) in order to insure the completip^i 
 of the liiie. The Georgia Pacific Company constructed this road to Birming7 
 ham, Ala., a distance of one hundred and seventy-seven miles, which road has 
 now completed its extension to Columbus, Miss., and is now operating three 
 hundred and thirteen miles. 
 
 In 1882^'83 the East Tennessee, Virginia & Georgia extended its line from 
 Rome to Atlanta, from Atlanta, thence to Macon, connecting with the line 
 which it had bought from Macon to Brunswick, Ga. 
 
 Chattanooga,'; Tenn. 
 
 Chattanooga isi located op the ^Tennessee River;, originally known as Ross' 
 Landing. What volume of business was transacted at this point prior to the 
 construction of railroads is not known, although it had all the advantages of 
 river navigation on the Tennessee River by steamers plying between Knoxville, 
 Tenn,, and the head of Mussel Shoals near Florence, Ala., a distance of about 
 four hundred miles, where, through the medium of a short horse-railroad 
 aroynd the Shoals, communication was made with the Lower Tennessee River 
 packets, connecting with the Ohio and Mississippi river packets at Smithland, 
 Paducah, and Cairo. " , , i 
 
 The first railway built into Chattanooga was the Western & Atlantic, built 
 by the State of Georgia, and completed in 1850. 
 
 The second, the Nashville & Chattanooga Railroad, extending from Chatta- 
 nooga to Nashville, Tenn., completed in 1854, giving direct communication 
 with the Cumberland and other navigable Western rivers. 
 
 The third, the East Tennessee, Virginia & Georgia, extending from Chatta- 
 nooga to Bristol, Tenn., completed in October, 1856. 
 
 The fourth, the Memphis & Charleston, ' extending from Chattanooga to 
 Memphis, and at that point, connecting with the Mississippi River steamers, 
 completed in 1858. 
 
 The fifth, the Alabama Great Southern Railroad, extending from Chatta- 
 nooga to Meridian, Miss., chartered in 1853, and the whole line completed in 
 1871. 
 
 The sixth, the Cincinnati Southern, now the Cincinnati, New Orleans & 
 
35 
 
 Texas Pacific, extending from Chattanooga to Cincinnati, completed in Feb- 
 ruary, 1880. , , 
 
 The seventh, the East Tennessee, Virginia & Georgia extension, from Chat- 
 tanooga through Rome and Atlanta to Macon, Ga., completed in 1882. - 
 
 Being located on Tennessee River afad the western terminus of the Western 
 & Atlantic Railroad, completed in 1850, it goes withouts aying that the impor- 
 tance of Cliattanooga dates from that period; that the Western & Atlantic road 
 made Chattanooga a distributing center for the large territory covering the 
 four hundred miles traversed by the boats on the Tennessee River between 
 Florence, Ala:, aild the head of navigation; and the completion of the Nash- 
 ville & Chattanooga road in 1854 only served to add to the commercial impor- 
 tance of that city as a trade center. 
 
 Chattanooga is no longer a mere village; it is a city of great importance. 
 In addition to its importance as a commercial trade center, it has large manu- 
 facturing interests, consisting of rolling-mills, foundries, machine-shops, fur- 
 naces, etc., nil of which have grown up during a period of thirty-seven years. 
 
 I attach no importance to the effort of the Queen and Crescent management 
 to localize the business of Chattanooga. The city is of sufficient importance to 
 speak for herself. She is no mere railroad crossing, " where there are no people 
 living, and nothing but grass." Chattanooga is a city of enterprise and push, 
 fully entitled to hold what her people have for thirty or more years struggled 
 to acquire. And, Mr. Chairman, as already indicated, I do not see how it is 
 within the power of the act "to regulate commerce" to prevent the city of 
 Chattanooga from.maintaining her position as a commercial center. 
 
 - The cities of Nashville and Chattanooga are both in the State of Tennessee. 
 Nashville is a distributing pointj having connection with all of the leading 
 Western cities via the Cumberland, Ohio, and Mississippi rivers. The Nash- 
 ville, Chattanooga & St. Louis road can send businoss fiom Nashville to Chat- 
 tanooga at any rate she may see fit, and Chattanooga, being the southern ter- 
 minus of its road, will feel an interest in doing full justice by Chattanooga. 
 
 Chattanooga also has a connection with the Western rivers via the Memphis 
 & Charleston, through Florence, on the Tennessee River, a navigable stream 
 all the year round. There is no intermediate business between Florence and 
 Chattanooga through Alabama which wpuld be afi'ected, and the Memphis & 
 Charleston is likewise interested in enabling Chattanooga to maintain her posi- i 
 tion. This is an. important phase of the question. , It might look as though it 
 were an attitude of defiance to the law, but I beg to assure you, Mr. Chairman, 
 that such is not the case. I am simply endeavoring to show that the city 
 of Chattanooga has advantages of which she ought not and can not well be 
 deprived. 
 
 Knoxville, Tbnn., 
 
 Is located on the Tennessee River, and we are informed, was a distributing and 
 jobbing point of considerable importance before it had any railroads. As early 
 as 1840 it had a large jobbing business, and up to 1854 there were as many as 
 eighteen steamboats running regularly i et\veen Knoxville and the head of the 
 Muscle Shoals, near Decatur, Ala, some of them. quite large, having accommo-/. 
 
36 
 
 dation for as many as a hundred and fifty passengers. Prior to 1854- freight came 
 to Knoxville from New York via New Orleans, and from Pittsburgh via the 
 Ohio and Tennessee rivers, at rates as low as $1.00 per one hundred pounds, and 
 a very much less rate on sugar and coflFee from New Orleans. The route was 
 via the Mississippi, Ohio, and Tennessee rivers to the foot of Muscle Shoals, 
 near Florence, Ala., connecting with the Upper Tennessee Eiver boats at that 
 point by a short horse-rail haul around the Shoals. The testimony shows that 
 Knoxville had eight jobbing and wholesale houses before a single railroad was 
 completed to that city ; that she distributed goods then to about the same terri- 
 tory she serves now; that she has at present about $5,000,000 invested in the 
 merchandise jobbing trade, and that the city by virtue of her geographical posi- 
 tion has a large tributary territory in Bast Tennessee, North Carolina, and South- 
 western Virginia, which depend upon her for their supplies. 
 
 The first railroad built into Knoxville was the Bast Tennessee & Virginia, 
 from Knoxville to Bristol, a distance of one hundred and thirty-one miles ; com- 
 pleted in July, 1855. 
 
 The second, the East Tennessee and Georgia, extending from Knoxville to 
 Ohattanooga, one hundred and eleven milfs, completed in October, 1856. 
 
 The third, the Knoxville & Augusta, designed to connect Knoxville with the 
 port of Charleston, S. C. Sixteen miles of this line was built and has been in 
 operation since 1867. 
 
 The fourth, the Knoxville & Ohio, extending from Knoxville, Tenn., to the 
 Kentucky State line, completed in 1882, connecting at Jellico, Ky., with the 
 Louisville & Nashville system. It is proper perhaps to say that the railroads 
 centering at Kuoxville are practically controlled by the East Tennessee, Vir- 
 ginia & Georgia and the Richmond & Danville systems; but it does not follow, 
 because this is true, that the city of Knoxville should be deprived of the advan- 
 tages she had before a single raiilroad was constructed; in other words, that the 
 construction of the several railroads to and from the city of Knoxville should 
 operate to deprive her of the advantages she had before these railroads were 
 built. 
 
 EOMB, Ga., 
 
 Is located at the confluence of Oostanawla and Ettawah rivers, these two form- 
 ing the Coosa Kiver. "We are informed by the evidence that Rome was a dis- 
 tributing point for merchandise long before railroads were built, and was also a 
 large cotton shipping point ; that the merchandise was shipped in and the cotton 
 shipped out by steamers plying between Rome and Wetumpka. There being 
 shoals — or falls — near Wetumpka, the merchandise and cotton was carted 
 around the falls, connecting the steamers of the Coosa and Alabama rivers 
 in that way. After the completion of the Western & Atlantic Railroad by the 
 State of Georgia from Atlanta, Ga., to Dalton, the people of Rome built a line 
 from Kingston, on the Western & Atlantic, to Rome, Ga., distance twenty miles. 
 This little road was opened for traflic in December, 1848. Connecting with the 
 State road of Georgia, and through that road with lines via Atlanta and the ports 
 of Charleston and Savannah, and subsequently with lines via Chattanooga to 
 Nashville and the West, and via Knoxville to the Virginia ports, this little 
 
37 
 
 road of twenty miles has been a most important factor inenabling the people of 
 Borne not only to hold the business they had built up by means of water trans- 
 portation but to increase their trafBc. It is proper to say that this road is still 
 owned by the citizens of Rome and others in the State of Georgia. 
 
 In 1870 the Selina, Rome & Dalton road, now a part of the East Tennessee, 
 Virginia & Georgia system, was finished from Rome to Selma, a distance 
 of two hundred and thirty-five miles. 
 
 In 1882 the East Tennessee, Virginia & Georgia system completed a line of 
 road from Rome through Atlanta to Macon, Ga., a distance of one hundred 
 and sixty-two miles, and also built a link of road making a direct line be- 
 tween Rome and Chattanooga, Tenn. 
 
 These several railroad lines, reaching to and from the Virginia, Georgia !and 
 South Carolina ports and Western markets, have not detracted from the import- 
 ance of Rome as a commercial center, but simply gave increased facilities to the 
 business of Rome and the country tributary to Rome. There are now five steam- 
 ers on the Coosa River, with which the railroads centering at Rome connect. 
 To advance the rates to and from Rome would simply result in compelling the 
 people of that city, and on the Coosa River, to pay more for their supplies and 
 pay higher rates of transportation to get their cotton to market. That Rome 
 was a large distributing center before railroads were built does not admit of 
 doubt, and I submit if it would be right to deprive her of the advantages she 
 enjoyed prior to railway construction, simply because she was more fortunate 
 than intermediate points in having natural advantages and securing railroad 
 transportation facilities which such points do not enjoy. 
 
 Albany, 6a. 
 
 This city is located on the Flint River, a navigable stream, for the im- 
 provement of which Congress has appropriated $117,000, and we are informed 
 was a distributing center befor'fe any railroads were constructed, handling large 
 quantities of cotton and supplying the country tributary with merchandise. 
 
 The first railroad built into this city was the Southwestern, now a part of 
 the Central of Georgia system, extending from Albany to Macon in the Bast, 
 and to Eufaula and Columbus in the West, completed in 1851. 
 
 The second was the Brunswick & Albany, extending from Albany to Bruns- 
 wick, Ga., on the coast, completed in 1868. 
 
 The third was the Savannah, Florida & Western, connecting Albany with 
 Jacksonville, Fla., and "Savannah, Ga., completed in 1870. 
 
 In adjusting rates to and froni^ Albany, the rail lines have merely recog- 
 nized the advantages whicii this city enjoyed before railroads were built, and 
 tbe competitive elements which were sufficient to enforce such an adjustment. 
 
 Anniston, Ala. 
 
 This enterprising and manufacturing city, the center of the charcoal iron 
 producjng region of the State of Alabama, is located on the Selma, Rome & 
 Dalton road, now a part of the Bast Tennessee, Virginia & Georgia system, 
 about midway between Rome, Ga., and Selma, Ala. Its first road, the Selmai 
 Rome & Dalton, was built in 1870. 
 
38 
 
 : The Georgia Pacific, three tundred and thirteen miles long, extending to 
 Atlanta in the east and Columbus, Miss., in the west, was completed to Annis- 
 ton in 1882. 
 
 The Anniston & Atlantic Bailroad, fifty-three miles in length, extending 
 from Anniston to Talladega, Ala., was completed in 1883. Large sums of 
 money have been invested at Anniston based on the present adjustment of rates. 
 It would bring 4V very great hardship to this city and to the people who have 
 invested their money to enforce the fourth section of the act. This city com- 
 petes with Atlanta, Rome, Birmingham, and Montgomery for trade. ' 
 
 EtJFATiLA, Ala. 
 
 The city of Eufaula is located on the Chattahoochee River, a navigable 
 stream, which furnishes active competition to the railroads centering at that 
 point. 
 
 Congress has appropriated $429,750.29 for the improvement of this and the 
 Appalachicola rivers, through which the Chattahoochee finds an outlet to the 
 coast. There can be no doubt but what the city of Eufaula occupies a very 
 advantageous position, and that she occupied this position prior to the construc- 
 tion of railroads. 
 
 The first railroad built into Eufaula was the Southwestern, now a part of the 
 Central Bailroad of the Georgia system, extending from Eufnula to Macon, Ga., 
 completed in 1851. . . 
 
 The second, the Montgomery & Eufaula Railroad, extending from Eufaula 
 to Montgoinery, completed, 1870. ■ 
 
 The third, the Eufaula & Clayton, extending from Eufaula to Clayton, Ala., 
 completed in 1872. 
 
 The great improvements in the navigation of the Chattahoochee River, and 
 the active competition between steamboat lines on that river, has at times 
 resulted in very low rates. The rates on first-class freight from New Tork to 
 Eufaula via the Chattahoochee River lines have been, within the past eighteen 
 months, as low as fifteen cents per one hundred pounds. 
 
 GOLTJMBUS, Ga. 
 
 - The city of Columbus is located at the head of navigation on the Chatta- 
 hoochee River, only a short distance above Eufaula. This city enjoys the same 
 water transportation facilities which are enjoyed by the city of Eufaula, arid is 
 one of the most enterprising cities of Georgia; being one of the pioneer cities 
 of the Sduth in the manufacture of cotton goods, which is being carried on to 
 a large extent, and increasing every year. This city has a large trade with the 
 contiguous territory and with points on the Chattahoochee River, especially in 
 Western produce. 
 
 The first railroad built into' the city of Columbus was the Southwestern, 
 extending from Columbus to Macon, Ga., completed in 1851. 
 
 The second, the Mobile & Girard, extendmg from Columbus to Troy, Ala., a 
 distance of eighty-five miles, completed in 1872. , 
 
 * The third, the Columbus & Western, extending (rom Columbus to Good water 
 (now being extended to Birmingham, Ala.), completed in 1874. . 
 
39 
 
 The fourth, the Columbus & Rome, projected to extend from Columbus to 
 Rome. Completed from Columbus to Greenville, a distance of fifty miles, in 
 1885. 
 
 The fifth, tlie Georgia, Midland & Gulf Eailroad, projected to extend from 
 Columbus to Athens, Ga., a distance of one hundred and sixty miles, now being 
 constructed. 
 
 The evidence of Mr. Hockstrasser, who appeared before the Commission at 
 Atlanta in behalf of Columbus, very clearly indicated the situation. He said 
 in substance: "What we ask you to do is to let these railroads alone. We do 
 not ask the railroads to make us any rates Into and out of Columbus; wo will 
 compel them to make us rates. We have ample competition on the Chatta- 
 boochie River to compel the railroads to give us the benefit of competitive 
 rales." 
 
 What Mr. Hockstrasser said of Columbus will apply with equal force to 
 the situation at Eufaula. 
 
 I have no figures before me, but it is undoubtedly true that the citizens of 
 Columbus, like the citizens of other commercial centers of the State of Georgia, 
 contributed large sums of money for the construction of these several railroads, 
 and it would be a great hardship to the people to deprive thc-m of the competi- 
 tion which they have paid to secure, as well as a hardship upon the railroad 
 companies to be obliged to practically withdraw from competition for this traffic 
 and transfer it to the steamboats on the Chattahoochee River. 
 
 Fort Gaines and Gkoegetown. 
 
 The towns of Fort Gaines and Georgetown are located on the Chattahoochee 
 River. The one immediately on the opposite side of the river from Eufaula, 
 and the other a short distance below Eufaula. 
 
 The Southwestern Division of the Central Railroad of Georgia was completed 
 to these points in 1851. They both have the same river facilities enjoyed by 
 the cities of Eufaula and Columbus, and both towns compete with Eufaula and 
 Columbus for the trade on the Chattahoochee River. 
 
 Meridian, Miss. 
 
 The first railroad constructed to Meridian was the Mobile & Ohio, four hun- 
 dred anl ninety-three miles in length, extending to Mobile in the South and to 
 Cairo, Ills., in the North. The road was completed in 1859. 
 
 The second, the Selma & Meridian, now a part of the East Tennessee, Vir- 
 ginia & Georgia system, extending from Meridian to Selma, Ala., was completed 
 in 1859. ■ 
 
 The third, the Vicksburg & Meridian, extending from Meridian to Vicks- 
 burg, on the Mississippi River, a distance of one hundred and forty-two miles 
 was completed in 1868. 
 
 The fourth, the Alabama Great Southern, now part of the Cincinnati, New 
 Orleans & Texas Pacific, extending from Meridian to Chattanooga, Tenn., two 
 hundred and ninety-six miles, completed in 1871. 
 
 The fifth, the New Orleans* Northeastera, part of the Cincinnati, New 
 
40 
 
 Orleans & 'Dexas Pacific, extending from Meridian to New Orleans, one hun- 
 dred and fifly-flve miles, completed in 1883. 
 
 Tills city has been a commercial trade center for many years. Being io 
 close proximity to Vioksburg, Miss., it is Clear that shipments from all points 
 can be made by river to Vicksburg^ and, with a short rail haul of one hundred 
 and forty miles from Vicksburg to Meridian, can and will be delivered to Me- 
 ridian at competitive rates. 
 
 It is well known that the city of Vicksburg ia quite a commercial center, and 
 that the management of the Cincinnati, New Orleans & Texas Pacific Company 
 has bten trying to make it a large distributing point, and has insisted upon the 
 right to fix such rates from Vicksburg to Mississippi points as it may deem fit, 
 not being restricted by the Mississippi laws from carrying freight at less rate for a 
 long than for a shorter distance. The enforcement -of the Interstate Commerce 
 Act will have the efiect of largely aiding the Cincinnati, New Orleans & Texas 
 Pacific road in making Vicksburg such a center for the sale of Western prod- 
 ucts to Meridian and other Mississippi points, and thus the enforcement of the 
 fourth section of the act would not deprive Meridian of the advantage of com- 
 petitive rates, but simply transfer the business from the West, and leading to 
 the West, to Vicksburg for the benefit of Vicksburg and the Cincinnati, New 
 OrleanSi& Texas Pacific Company, to the detriment of the Mobile & Ohio and 
 other lines running to the West. In this view of, the- case it can readily be 
 seen why the Cincinnati, New Orleans & Texas Pacific is favorably^ inclined to 
 the enforcement of the fourth section against all intermediate points not favored 
 with direct water competition. 
 
 Jackson, Miss. 
 
 The first road built into Jackson, Miss., was the New Orleans, Jackson & 
 Great Northern, now part of the Illinois Central system, extending from New 
 Orleans through Jackson to Canton, Miss., completed in 1860. 
 
 The Vicksburg & Meridian road, extending from Meridian to Vicksburg, 
 through Jackson, was completed in 1868. 
 
 The Natches, Jackson & Columbus road, extending from Jackson to 
 Natchez, one hundred miles, was completed, to J«ckson in 1882. 
 
 The Yazoo City & Mississippi Valley Eailroad, extending from Jackson to 
 Tazoo City, Miss., forty-five miles, was completed in 1884. ' 
 
 The city of Jackson is only forty-four miles from Vicksburg; hence what 
 has been said of Meridian will apply with equal if not greater force to Jackson, 
 Miss. . 
 
 Commercial Centers a Necessity. 
 
 There are a nutaberiof other points, Mr. Chairman and gentlemen, on be- 
 half of which applications for relief have been made, and which are fully 
 entitled to relief. There may be some which are not entitled to sue u relief, but 
 I am fully persuaded that the several points I have discussed are so situated 
 that relief sbould not be withheld. Comparing the statement of facts as to 
 how, when, and why the commercial centers of the South were created with the 
 testimony of Major. Uault as to how such centers were created in the West, 
 
41 
 
 it will be seen that the circumstances and conditions which created these centers 
 in the South are totally different from the circumstances and conditions which 
 creatod the trade centers in the West. The Southern States were in existence 
 and the South was inhabited many years before the Western territory was 
 explored — indeed, before the Great West of to-day was Irnown to civilization or 
 even dreamed of. Nenrly all of the cities in the South to which I have invited 
 your attenti^'n, and in whose interest relief has been applied for, were commer- 
 cial or trade centers before many of us were born ; and the cities of Atlanta 
 and Chattanooga, which seem to have been the especial points of attack by 
 Major Gault, were trade centers while ho was yet a mere swaddling. How these 
 cities became trade centers has been fully detailed. The majority of them were 
 so situated before railroads were built, and the construction of railroads has 
 added to their importance only to the extent that the railroads have developed 
 the interior country tributary to them. I insist, Mr. Chairman, that no effort 
 has been made by the railroads of the South to establish trade centers at the 
 expense of the interior, and that the railroads, when they reached these trade 
 centers, simply adjusted rates of transportation to meet the existing condition 
 of things. It will not be assumed that railroads are not entitled to a just and 
 reasonable compensation for the transportation facilities they furnish commu- 
 nities which they are endeavoring to serve. It will not be claimed that the 
 railroads of the South are colleoling excessive rates of transportation on the' 
 traffic moved to or from interior local points; and it must be conceded that 
 railway transportation companies are entitled to charge what the service is 
 worth, and that the service at a local point is worth more than at a competitive 
 point. What I mean is, that at a point where there is no competition transpor- 
 tation is worth a just and reasonable compensation, and at a point where there 
 is competition between two or more lines transportation is worth only what it 
 will bring, and the more active the competition the less the value of the trans- 
 portation. The competitive forces with which the railroads of the South have 
 had to contend are very extraordinary as compared with any other section of 
 the United States. The several States east of the Mississippi are traversed by 
 numerous rivers, which furnished transportation facilities to the people of the 
 South years before any railroads were built, and which have furnished competi- 
 tion to the railroads ever since they were constructed. 
 
 Congress has appropriated large sums of money for the improvement of 
 these rivers. These vast sums, appropriated especially for the improvement of 
 the rivers of the South, embracing the States of Kentucky, Tennessee, Missis- 
 sippi, Alabama, Georgia, Florida, Virginia, and North and South Carolina, 
 have Improved the extraordinary transportation facilities enjoyed by the com- 
 mercial trade centers of the South, and have largely aided in diminishing the 
 value of the transportation at these centers, and have at all times fixed the limits 
 of rates charged by the rail lines. 
 
 I was much impressed, Mr. Chairman, with the testimony relating to the 
 business customs of the South. Of course I knew what the custom was, but 
 such forcible illustrations as we had given us at Atlanta, Memphis, and other 
 points only served to impress upon my mind the importance of commercial 
 trade centers, and the great value and convenience of such centers to the 
 
 6 
 
42 
 
 masses. CoL Hanson, of Macon, Ga., explained this to us at Atlanta. Gen. 
 Patterson, representing the Ootton Exchange of Memphis, explained it to us 
 at Memphis, and Mr. Penzel, of Little Ebck, gave a very clear explanation. I 
 can do no better than to give his testimony on the subiect: 
 
 "One peculiar thing, perhaps, in the Southern States — I don't know whether 
 it is so in other States — the small country dealer sells the consumer, and is to a 
 large extent dependent, perhaps, on the merchant who does the furnishing bus- 
 iness. These men are not able to go abroad, where they have no standing or 
 credit ; they are confined to home trade. If the freight rates become so much 
 higher to any of those trade centers, of course the merchant computes the first 
 cost on the goods and his freight. The increased freight necessarily enters into 
 the cost price, and the small dealer and consumer naturally have to pay more 
 for their supplies, and in consequence they suffer as well as the trade centers. 
 In other words, they are taxed more than they were taxed before." 
 
 Keferring to the cotton trade he said : 
 
 " The producers' or small dealers are able to pay local freight into Little 
 Bock, either by wagon or by railroad, and market their cotton there themselves, 
 thereby saving all the commission, insurance, warehouse charges, etc. They go 
 in and sell it and get their momy for it right away and go off. If the Liltle 
 Eock rate had to be equally as high as the local rati', the people would have to 
 stand that or ship to distant markets, where they are exposed to all the charges 
 of Insurance, commission, etc., and very often exposed to great inconven- 
 .ience by not being able to get their money." 
 
 This is the general custom of the South. The principal products of the 
 soil in the South ti-ansported are leaf tobacco and cotton, while the principal 
 product of the West is grain of all descriptions. In the "West a farmer may 
 take a sample of his wheat, corn, or other grain from the field to the nearest 
 town an"d sell the whole crop by that sample, shipping it from his station to any 
 consuming market the purchaser may designate. No such transaction would 
 be admissible in the cotton and tobacco growing region. Every bale of cotton 
 grown Is sampled, weighed, and classified on its own merits, and is sold by that 
 sample. It is only after it reathes a commercial center that the cotton coming 
 from the Interior in quantities to that center is classed, in round lots of one hun- 
 dred to one thousand bales, and sold for shipment to consuming markets. Such 
 classification and sales would be impossible at local stations, moieover cotton 
 for shipment to distant markets must be compressed ; there i.<i not a sufiicient 
 quantity at local stations to warrant the erection of compresses, and hence, if 
 for no other reason, the cotton from local stations must go to trade centers. A 
 large number of local points handle only a few hundred bales, the largest but 
 five to ten thousand bales. A suitable compress can not be erected and operated 
 at any point at a profit upon the investment when the receipts of cotton fall be- 
 low twenty thousand bales per annum. 
 
 Leaf tobacco is marketed in a like manner. The tobacco is gathered and 
 put into hogsheads by the planter ; it is then shipped to market, where the cas- 
 ings of the hogsheads are removed, and samples drawn from three or four dif- 
 ferent portioi^s of the hogshead by a sworn inspector, an officer created under 
 the laws of the States. Every hogshead is sold on its merits by each individual 
 sample. In Tennessee and Kentucky this sale is made through the medium of 
 an auctioneer, and 1 think this is also true of Virginia and other tobacco-grow- 
 ing Statei. A leaf-tobacco sale is reaily an interesting sight. Sales in these 
 
43 
 
 centers, sueh as Clarksville, Louisville, and Nashville, are made usually ev<'ry 
 day. The warehouses in each city rotating in the sales, so that no two houses 
 sell at the same hour the same day. All the buyers congregate around the one 
 hogshead or i-ample which is bfioB, cried offW the auctioneer, and in this way 
 (it is quick work) from one to two^^RSSTno^sheads are sold in large markets 
 each day during the busy season. The buyers for Spain, Italy, Liverpool, Bre- 
 men, and other consuming markets, of course congregate at those centers where 
 they can buy in large quantities, po as to make shipments in round lots of one 
 to five hundred or a thousand hogsheads each. They could not be induced to 
 go to interior stations where receipts are small. 
 
 Convenient commercial centers are, therefore, a necessity to the cotton and 
 tobacco trade of the South. These products can not be concentrated in any 
 other way so as to admit of satisfactory sale. 
 
 I had the pleiisure of traveling with an Arkansas planter on my way to this 
 city. His views impressed me with the impurtance of commercial centers. 
 Said he, " We want to trade near home." He lived a short distance from Little 
 Rock, and raises annually about four hundred bales of cotton — a pretty big 
 plantation for that section. " My dear, sir," said he, "it would ruin me if I had 
 to trade any where else but Little Rock. I want to do business with people I 
 know ; I want to be sure that my cotton is properly classified and sold; I don't , 
 want to ship my cotton to New York, New Orleans, or Liverpool ; I want to 
 place my cotton in the hands of men I know ; men who will advance me money 
 to make my crops if I need it. • Twenty-five or fifty cents a bale is a small 
 matter to me if I know I am getting justice; if I know the man with whom I 
 am trading; if I know he is the right sort of man, and will classify my cotton 
 rightly and account to me for every dollar." These views were expressed in a 
 casual way, and yet I am sure they represent the general views and customs of 
 the South. 
 
 It is clear, therefore, that any advance in rates to and from the commercial 
 centers would seriously affect the people residing at the interior towns. These 
 people pay local rates to and from such interior markets to the centers, and any 
 advance of rates to and from the commercial centers would not only reduce the 
 value of the product they sell but increase the cost of the supplies they pur- 
 chase. 
 
 SouTHBBN Ports as Competitors. 
 
 In the further discussion of this question it is hardly necessary for me to 
 refer at length to the commercial centers located on the Ohio and Mississippi 
 rivers, or to the Gulf or South Atlantic coast ports embraced in this application 
 for relief. Their advantages and surroundings are too well known to require 
 any detailed argument from me. 
 
 Commissioner "Walker : It is rather curious that Savannah, Charleston, Mo- 
 bile, New Orleans, these Gulf ports to which the Southern roads make the low- 
 est rates of any points on their line, should all of them substantially say that 
 they want this law strictly enforced. 
 
 Mr. Stahlman: The people at these ports believe that the enforcement of 
 the act against the interior will advance the rates from the interior, and pre- 
 
44 
 
 elude the shipment on long rail hauls to and from the East and other distant 
 markets, and therefore the business which the interior centers have been doing, 
 and the cotton which they have been handling, will naturally drift toward the 
 ports on short rail hauls, or float down the rivers and fall into their laps. 
 
 Commissioner Bragg: A man's hand was never plainer to his eye than 
 that is. 
 
 Mr. Stahlman : One not familiar with the business of the South would sup- 
 pose that these Southern ports were of great value to the railroad systems of 
 the South. They are in some respects, but in the main they are competitors to 
 the railroads. They are not to the Southern rail lines what the Eastern ports 
 are to the trunk lines. The ports of New York, Philadelphia, Baltimore and 
 Boston are feeders to the trunkjlines They do an immense business. Do any 
 of these Gulf ports feed the Louisville & Nashville road ? Assuredly not. It 
 is a mere trifle as compared with, the business furnished by the Eastern ports. 
 The Southern ports import very little from abroad, so that the Southern roads 
 realize but very little traflic and revenue from that source. The steamships 
 entering the ports are engaged in the carrying trade between the Eastern ports 
 and the South, and through the Eastern ports between the West and the South. 
 It is safe to say ninety per cent of all the steamers which enter the Southern 
 harbors are competitors to the rail lines instead of feeders. It is true they fur- 
 nish an outlet for the products of the South, but that outlet is in the nature of 
 a competitor to all of the interior Southern roads. The proof taken during the 
 sittings of the Commission in the South .*hows very conclusively that a great 
 deal of the competition between the South and the East and the South and the 
 West is forced upon the rail lines by vessels plying between the Southern and 
 Eastern ports at very low rates. Congress has, from time to time, appropriated 
 $5,483,571.62 for the improvement of these harbors. The railroad people have 
 not complained, although these appropriations have added very materially to 
 the competitive forces which they have been obliged to meet. The proof is 
 clear, that many vessels entering the Southern ports come loaded with grain 
 and other Western produce as ballast, and returning take naval store?, rosin, 
 cotton, etc., for the East and West, in competition with the rail lines. But for 
 this strong competition we would doubtless be able to arrange an adjustment 
 of rates which would appear more equitable to the general public. But if we 
 hope to do any business between the West and Southern ports we must take it 
 at rates fixed by these competing lines. There is absolutely no escape from it. 
 Of course the traffic carried to the ports works back into the interior, and thus 
 fixes the rates to the interior. 
 
 Competition Forced Upon Rail Lines by Navigable Rivers. 
 
 Let us now, Mr. Chairman, take up, in a general way, the competition 
 which is forced upon the rail lines through the navigable rivers. I have already 
 alluded to the vast appropriations made for the improvement of rivers which 
 furnish active competition to the Louisville & Nashville Railroad. I have had a 
 table carefully prepared, showing the appropriations made for the improvement of 
 the rivers of the South traversed by the system of roads which have applied to 
 you for relief, and the total sum, as shown by this table, is $41,919,149.28. (See 
 
45 
 
 Exhibit "A." ) Now I assume that this vast sum of money was appropriated for the 
 purpose of giving the people of those States increased transportation facilities and 
 the benefits of competition. I do not believe these appropriations could have been 
 made for any other purpose. Would it be right to practically deprive the peor 
 pie of the competition which this vast sum of money was designed to give? 
 Surely such a thing could not have been contemplated by the enactment of the 
 Interstate Commerce Act I 
 
 I have been very much interested, and really I may say amused, at the 
 course of the people representing the river interests who have appeared before 
 you and have asked that you enforce the law against the rail lines. They have 
 come as though they were the objects of special favor ; as though the law was 
 designed for their benefit. Congress has always been so liberal in its appropri- 
 ations to promote their interests that they have about concluded, no matter 
 what Congress does, it is especially designed to help them. One would suppose 
 from their appeals and pleadings that they were the embodiment of all that is 
 pure and good. They dwell at great length, and with great emphasis, on the 
 vices and iniquities of railway transportation lines, assuming for themselves a 
 Pharisaical garb. They know they have been the especial wards of the Gov- 
 ernment, and now seek to become masters of the situation. They appear as the. 
 advocates of the people, holding up their hands in holy horror because the rail- 
 roads, where circumstances and conditions are dissimilar, are charging more for 
 a shorter than for a longer haul, adroitly concealing, at the same time, their cus- 
 tom, which is even more pernicious; and I may say, more vicious. I say 
 vicious, Mr. Chairman, and I will undertake to demonstrate that this is true. 
 Nature has furnished these people a free right of way and road-bed. Congress 
 has built for them their trestles, bridges, and laid their track, and is keeping 
 their roadways and track in repair. These great highways have cost them noth- 
 ing. The equipment is their only investment. It costs them less to build a 
 steamboat than it does the railroads to purchase equipment capable of moving 
 the same amount of tonnagel 
 
 Taking the line between Cincinnati and New Orleans as an illustration, we 
 find- 
 Outside cost of steamer, 1,000 tons capacity $40,000 00 
 
 Cost of railroad equipment to move same quantity ; 
 
 2 engines,' capacity 25 cars of 20 tons each $20,000 00 
 
 50 cars of 20 tons each 25,000 00 
 
 45,000 00 
 
 Does any one for a moment suppose that a railroad company, with an invest- 
 ment of many millions in its right of way, road-bed, bridges, trestles, tracks, 
 etc., and a sum besides for equipment equal to the cost of a steamboat, with an 
 enormous expense in keeping up the road-bed, bridges, trestles, tunnels, etc., 
 running over steep grades, etc., can live if it were to reduce its rates on inter- 
 mediate traffic to the basis of rates established in competition with such a fa- 
 vored rival as this ? Of course not. And yet this is what these gentlemen ask ; 
 but what they really want 13 that the law shall be rigidly enforced so ihat, as a 
 measure of self-preservation, the rail carriers will be compelled to abandon traf- 
 fic in competition with them. 
 
46 
 
 I gay I have been amused, Mr. Chairman ; amused, it is true, but at 
 the same time amazed at the effrontery of these men. I have taken some 
 pains to look into their methods. It is fully explained in Mr. Gulp's depo- 
 sition, and I can do no better than to- make that part of the deposition: 
 a part of ray argument. I will file it as Exhibit No. "B." What a de- 
 lectable crowd, to be sure I (I refer now to the class represented by Messrs. 
 Bryant and Mossett, and not to Capt. Eyman and others, who were candid 
 enough to state facts as they were while they were on the stand.) Appeal- 
 ing to this honorable Commission to oppress the railroads in their interest 
 because, as they say, the railroads oppress the people, while they, at the 
 same time, are using nature's great highways, improved with money from 
 the public treasury, to oppress the masses in every conceivable manner. 
 
 This table and testimony shows that the steamboat lines on the Ala- 
 bama, Arkansas, Cumberland, Ohio, Missouri, Upper Mississippi, and Lower 
 Mississippi rivers are charging more for the short haul to intermediate 
 landings than for the long haul to terminal landings. And on the very day, 
 while Mr. A. J, Mossett, the representative of the steamboat interest, was 
 at Atlanta appealing to this- honorable Commission to enforce the law so as 
 to protect the people, his representative and agent in Cincinnati was exacts 
 ing the "pound of flesh" by charging much higher rates to all intermediate 
 river points for short distances than to terminal points for a much greater 
 distance^— not to intermediate plantation landings alone, where they put off 
 an occasional box or barrel, but to such important points as Friar's Point, 
 Bayou Sara, Columbia, etc., where the business is large. 
 
 The railroads, they say, pool their issues, and combine to make war on 
 them. Steamboats never pool their issues ; they never combine ; they 
 never make war on any one ! Oh, no, of course not ! I suppose, Mr. Chair- 
 man, in the history of combinations in proportion to the amount involved, 
 there have been none more formidable, none more selfish, than the combi- 
 nations between water crafts. 
 
 The Southern Transportation Company, consisting of six steamers, 
 epresenting the line between Cincinnati and New Orleans, of which Mr. 
 Mossett is the accredited agent, is a combination of steamboats pure and 
 simple. The boats are all owned separately, and pool their issues, and com- 
 bine to prevent competition. 
 
 The Cincinnati and Memphis Packet Company, consisting of six steam- 
 ers, is a combination of boats formed in the same way. 
 
 The Cumberland Eiver Packet Company, consisting of five steamers, 
 is established on the same basis. Look where you may and go where you 
 will, and you will find these organizations, which are nothing more nor less 
 than combinations between the different owners of steamboats, which pool 
 their issues for the purpose of avoiding competition, and making a united 
 war on such boats as may not see fit to enter these combinations. Even after 
 these several combinations are made they divide their territory so as to not 
 come in conflict with each other. For instance, the Upper Cumberland 
 
47 
 
 Siver Packet Company will not compete for traflSc in the Lower Cumber- 
 land, and the Lower Cumberland Packet Company will not compete for traf- 
 fic in the Upper Cumberland, and the two will interchange traffic with 
 each other but will not interchange traffic with any independent or out- 
 side steamers. 
 
 The Southern Transportation Company and the Cincinnati & Memphis 
 Packet Company will not compete with the United States Mail Line for 
 traffic between Louisville and Cincinnati; and the United States Mail 
 Line in turn declines to compete for traffic destined to points on the river 
 below Louisville. The Cincinnati & Memphis Packet Company will not 
 compete with the Southern Transportation Company for traffic on the river 
 between Memphis and New Orleans; and the Southern Transportation 
 Company in turn will not compete for traffic on the river between Cincin- 
 nati and Memphis. The same is true of the steamers on the Mississippi 
 above Cairo. All these interests agree among themselves to protect each 
 other's territory, and all of them refuse to interchange traffic with out- 
 side steamboats. 
 
 But this is not all. When an outside boat makes its appearance in the 
 trade between any particular points, it is the custom of these combinations 
 to select a particular boat, commonly called a "a Raider," which is to fol- 
 low in the wake of the independent boat, or rather move with the move- 
 ments of the independent boat, starting from the terminal point on the 
 same day and at the same hour, landing at the same points at the same 
 time, cutting the rates and keeping up the raid until the independent boat 
 is vanquished or falls into line by joining the combination. This is the 
 general practice on all of the navigable rivers, and yet these gentlemen, 
 representing these combinations, appear before this honorable Commission 
 in robes of white, innocent apparently as babes, pleading for the enforce- 
 ment of the act to the end that rail competition may be removed and they 
 be allowed to advance the rates and indulge to a greater extent in their 
 nefarious practices. 
 
 Congress did not Intend to Enforce the Act in Competition With 
 Water Carriers. 
 
 Can it be that Congress intended to enforce the act against rail carriers 
 and promote this state of things on the navigable rivers 1 I can not believe 
 it. The article of the Constitution which gave to Congress the right to 
 regulate commerce with foreign nations, and among the several States, cer- 
 tainly never contemplated any thing of this kind. The right to regulate 
 commerce with foreign nations was designed to regulate the duties on im- 
 ports and exports. The right to regulate commerce among the several 
 States, I believe, was designed for a like purpose. In other words, designed 
 to prevent either of the several States from levying duties on imports or 
 exports passing from one State to another. I do not believe it was designed 
 to regulate rates of transportation. But, assuming that the right to regu- 
 
48 
 
 late commerce among the several States carried with it the right to regu- 
 late rates of transportation, theframers of the Constitution could not have 
 had in view the regulation of transportation by railroads. When the Con- 
 stitution was framed there were no grounds for supposing that there would 
 ever be any railroads constructed. The Constitution was framed at least 
 fifty years before transportation by railways was heard of. If, therefore, it 
 was designed to regulate the rates of transportation, the framers of the 
 Constitution could have had in view only transportation by rivers, lakes, 
 and canals. It is fair to assume .that Congress was not unconscious of this 
 fact, and, having failed in the act to take supervision over transportation 
 by water carriers, it is not unreasonable to conclude that Congress did not 
 iindertake to regulate, or rather restrict, transportation by rail in competi- 
 tion with the water carrier. This conclusion is warranted by the language 
 of the act itself, which confines the long and short haul restriction to " the 
 transportation of passengers or like kind of property, under substantially 
 similar circumstances and conditions." That traffic carried in competition 
 with water lines is not moved under substantially similar circumstances 
 and conditions as traffic between intermediate local points where no compe- 
 tition exists will hardly be controverted. 
 
 The question may be asked, why then are you here asking relief ? We 
 are here, Mr. Chairman, in obedience to a doubt which surrounds all ques- 
 tions of legal import ; We are here to express our views as to the construc- 
 tion of this act, and to ask, in case you do not concur in this view, that 
 you give us the relief to which we are clearly entitled. 
 
 How IT EFFEcyrs the Louisville & Nashville Eaileoad on 'Special 
 Classes of Fkeight. 
 
 Mr. Chairman and gentlemen, I desire now to enter into a further dis- 
 cussion of this question so far as it affects the Louisville & Nashville Rail- 
 road. Let me again invite your attention to the testimony of Mr. Culp as 
 to the volume of the business of the Louisville & Nashville Railroad 
 which will be affected by the rigid enforcement of this act. It is not only 
 the pig iron, the bar iron, the lumber, the coal, and the provision busiue.ss, 
 but it is the general business between local and competitive points. 
 
 Coal. 
 
 Take the coal business as presented, from the Alabama mines to New Or- 
 leans: We are trying to build up a Business at New Orleans; the people of 
 New Orleans are paying from one to two cents per bushel lesS for coal now than 
 they were five or six years ago. Competition between the Alabama and 
 Pittsburgh mines has forced down prices. We are charging higher rates to 
 intermediate points than we are to New Orleans. If you say we can not 
 make a lower rate to New Orleans than to intermediate points, you drive 
 us out of New Orleans. We simply can not afford to compete for the New 
 Orleans business. 
 
49 
 
 We also have a growing eoal traffic at Fensaeola, Savannah, • and points 
 in Georgia, and we are supplying several railroads in Georgia with coal. 
 On all of this traffic we charge less rates than we do to intermediate points. 
 There is no telling to what extent this business can be increased if we are 
 permitted to do so. But it would be very much diminished, in fact en- 
 tirely cut off, if we are compelled to enforce higher rates. 
 
 From our Henderson Division in Southwestern Kentucky we are carrying 
 large quantities of coal to Nashville, Clarksville, and Memphis, in competi- 
 tion with coal from the Tennessee and Pennsylvania mines. The latter float- 
 ing down the Ohio River on barges, the former reaching the markets over 
 purely State roads. If we are to charge as much on this traffic as we do on 
 traffic to intermediate points, we will be obliged to abandon the business at 
 Memphis, Nashville, and Clarksville, and this includes a large business the 
 mines have built up by contracts to supply several Tennessee and Mis- 
 sissippi railroads, which coal is delivered to them at Milan, Humboldt, 
 and Memphis, Tenn. 
 
 This competitive coal, as shown by Mr. Gulp's deposition, is carried at 
 a fair profit to the railroad company. A careful estimate shows that at 
 least sixty per cent of the coal traffic of the Louisville & Nashville road 
 from our Alabama and Henderson Division mines, aggregating a gross reve- 
 nue of about $800,000, will be lost under the rigid enforcement of the 
 fourth section. The people of Memphis, Nashville, New Orleans, Mobile, 
 Pensacola, etc., will be obliged to pay higher prices for their coal, the min- 
 ing interests seriously crippled, if not ruined, and the poor miners of Ken- 
 tucky and Alabama thrown out of employment. I do not believe that 
 Congress ever intended to enforce this law in such a way as to cripple any 
 particular interest, or to prevent a free interchange of traffic between the 
 several States. If the framers of the Constitution meant any thing, 
 they meant to guarantee to the people the freest interchange of traffic 
 possible. 
 
 The Chairman : They intended to turn that subject over to Congress. 
 
 Mr. Stahlman : Very true ; but I do not believe that the right to regu- 
 late commerce among the several States was designed to put restrictive 
 measures on commerce between the States. 
 
 The Chairman : We do not deny that this law was framed to promote 
 traffic and encourage competition. Do you find that purpose in the law ? 
 
 Mr. Stahlman : I do not. Although the effect of the law, as rigidly con- 
 strued by some who urged its passage, would as I have already shown, 
 undoubtedly restrict competition. These men perhaps thought they were 
 promoting competition, and that the rail carriers would give the benefit of 
 competition to every little intermediate point. The members of Congress 
 generally did not, in my j udgment, agree in this view, and hence, when 
 they were about ready to pass the bill, they coupled with it a provision for 
 relief, and it is under this provision that we are seeking relief at your 
 h^nds. The actions of some of the members of Congress reminds me very 
 
 7 
 
50 
 
 much of an old fellow who owned a little steer. This steer was his hobby. 
 I say this with great respect to Congress. 
 
 Commissioner Bragg : I must interrupt you one moment with this one 
 word : Remarks reflecting upon the intelligence of Congress in the enact- 
 ment of a Law, 1 think are out of order addressed to a tribunal created by 
 Congress. Congressj you know, is the supreme law-making power of this 
 land. 
 
 Mr. Stahlman : I think the point is well taken. I am not a lawyer, and 
 therefore liable to get a little off the track. Lawyers even do that some- 
 times. 
 
 Lumber. 
 
 What I am endeavoring, Mr. Chairman, to show, is the effect of the rigid 
 enforcement of this act upon the various kinds of traffic carried by the 
 Louisville & Nashville Railroad. Let us now take the lumber traffic. Maj. 
 Gault says this traffic will not be affected. 
 
 The Chairman : Explain that. . 
 
 Mr. Stahlman : This is explained very fully on pages 28, 29, 30, and 31 
 of Ms. Culp's deposition, which is in substance this : That we have a large 
 lumber traffic all along the line of our road between Mobile, Ala., and 
 Louisville, Ky., including the Pensacola & Atlantic road between Pensa- 
 cola and River Junction. At Nashville, Tenn., the industry is especially 
 large. It has been developed within the past few years. The logs and 
 lumber are floated from the Upper Cumberland and tributary rivers down 
 to Nashville. Prior to 1880 nearly all of the lumber and logs were floated 
 down the river past Nashville to the mouth of the Cumberland, and there 
 distributed. About 1880 some enterprising mill-men concluded to estab- 
 lish a market at Nashville. They located' mills and began manufactur- 
 ing and shipping lumber. The lumber consists of oak, hickory, walnut, 
 poplar, etc. At first they shipped largely by barges and steamboats to 
 Evansville and Cincinnati. Later on the Louisville & Nashville road' put 
 in a line of rates frhieh, with its other facilities, enabled it to share in this 
 traffic. The business at this point has grown to such an extent that Nash- 
 ville handled during the year 1886 about 125,000,000 feet. Competition is 
 very strong. There is no difficulty in getting steamboats, rafts, and barges 
 to transport this lumber dowti the Cumberland River. Our present rates 
 have be6n virtuallj' fixed for us by the steamboats and barges. Large ship- 
 ments have been made from Nashville to Evansville by river during the 
 past year, aiid we shall probably be obliged to make further reductions to 
 compete with the rates by river. Any advance in these rates from Nash- 
 ville to the intermediate rates would force the entire traffic by riVer, We 
 bring a great many logs into Nashville from points South of Nashville, 
 which are manufactured into lumber, and we thus get two hauls on a large 
 share of this business^-one into Nashville on the logs, ^.nd another out on 
 manufactured lumber. These shipments of logs in and lumber out would 
 stop if the local intermediate rates were charged. The same can be said 
 
51 
 
 of the large pine lumber interests from the Pensacola & Atlantic and 
 South and North Alabama, and Mobile & Montgomery divisions. The 
 rates on this lumber to intermedinte points are higher than to more distant 
 points. That is to say the rates from Bowling, Ala., on the Mobile & Mont- 
 gomery road are higher to Lynnville Tenn., and other intermediate stations 
 than to Na-ihville, and higher to Cave City, Ky., and other intermediate 
 stations than to Louisville. There seems to be an impression that the 
 Southern roads are flooding the West with pine lumber to the exclusion of 
 the lumber of other pine regions, Mr. Culp presents a table of rates from 
 all points on our line to the leading points in the West, which shows that 
 there is no rate as low as seven mills per ton per mile, while some of the 
 lumber pays as much as 1.16 per ton per mile. Mr. Culp, speaking of these 
 rates says : 
 
 " We undertake to make rates which will enable the manufacturers of 
 this lumber to fairly compete in Northern, Western, and Eastern markets, 
 with the pine and other lumbers of those sections. We do not make 
 the rates unnecessarily low, or on a basis which does not yield to the transpor- 
 tation lines a profit ; nor is it our aim to make rates which will destroy the 
 lumber interests of other sections. To illustrate that the rates are not such 
 as to destroy the lumber interests of other sections, I will say that we have 
 brought large quantities of white pine lumber from Michigan to Nashville, 
 and such articles as sash, doors, and blinds are sold all over the South in 
 competition with like articles made from yellow pine and the poplar of the 
 South. The policy of the railroad has been to fix such reasonable rates so 
 as to allow a free interchange of product between the different lumber-pro- 
 ducing sections." , 
 
 Geain, Floue, and Pkovisions. 
 
 The next item of magnitude is grain and flour. We have some of this 
 on the line of our own road, of which a limited surplus is shipped as .shown 
 on page 40 of Mr. Culp's deposition. We are obliged to make less rates for 
 the long haul than for a short haul on this business. 
 
 To charge the same rates to Savannah and Charleston as are charged to 
 Atlanta, would prohibit our farmers from selling their products at Charles- 
 ton or Savannah. We are obliged to make a less rate from our stations to 
 the coast than to Atlanta, the same as we are obliged to do from Western 
 points, not, however, for the same reasons. From Western points we make 
 a less rate, because of the competition between rival transportation lines as 
 well as rival markets. From our local points we make less rates, because, 
 we deem it but fair to place our local producers on a footing to enable 
 them to compete with other producing sections at the coast as well as in 
 the interior. 
 
 This rule holds good as to Montgomery, Pensacola, and Mobile. 
 
 The Chairman : That is the necessity of the situation ? 
 
 Mr, Stahlman: Yes, sir ; and our people appreciate it. They know that 
 the enforcement of this section will prevent them from reaching distant 
 markets with their products. 
 
52 
 
 ' The volume of Western products, including provisions and hay, trans- 
 ported over the Louisville & Nashville Railroad will aggregate 800,009 tons 
 per annum. All this traffic is involved in the application for relief. The 
 testimony is overwhelming that a large proportion of this traffic must be 
 carried, if at all, at less rates to distant points than to intermediate points. 
 And that this basis of rates is forced upon us by water lines over which 
 we have no control. 
 
 The testimony given by Mr. Gulp and others on behalf of the Louis- 
 ville & Nashville Railroad clearly indicates that the rigid construction and 
 the enforcement of the fourth section of the act to regulate commerce 
 would cause a loss in the net revenue of the Louisville & Nashville Com- 
 pany of a sum approximating $1,500,000. And that this, loss can be made 
 up only by a material advance of local rates, which would, in the end, seri- 
 ously cripple the business interests of the country. Now, I submit, Mr. 
 Chairman, with this state of facts, which can not be successfully contro- 
 verted, how can this honorable Commission refuse to give the relief asked 
 
 for? 
 
 Power of the Commission to Suspend. 
 
 The Chairman : That comes right back to the question which I asked 
 at the beginning. Where do you find authority in this law for the Com- 
 mission to suspend that provision in six States of the Union, which is prac- 
 tically what yOu have asked in your argument so far? 
 
 Mr. Stahlman : I do not think it is. I have been discussing the question 
 covering about thirty-seven points, which, in my judgment, should be made 
 an exception. There may be, and doubtless are, quite a number of others. 
 
 The Chairman : Then all that region is to be made an exception ? 
 
 Mr. Stahlman : That is my judgment, in so far as it applies to the 
 points, which I have been discussing. My deliberate judgment is, that the 
 whole South presents an exceptional case, differing in every material respect 
 from other sections of the country. 
 
 The Chairman : Very likely that section is more seriously affected than 
 any other, but even that does not reach the question. 
 
 Mr. Stalhman : If the circumstances and conditions are such that the 
 enforcement of the law will prove a hardship upon any community or any 
 railroad in any part of the country, my judgment is relief ought to 
 be granted. If the general benefits to be derived from the suspension of 
 tie law are greater than by its enforcements in all such cases, relief ought 
 to be granted, although it covered the whole country. I do not concur in 
 the view expressed by some, that the law is here and ought to be rigidly 
 enforced, regardless of the effect upon any particular interest or locality. 
 I believe that where the injury, resulting from the enforcement of the 
 fourth section, will exceed the benefit, that suspension ought to follow. 
 The law must have been enacted for the general good, and where it fails to 
 accomplish that purpose it ought not to be enforced. 
 
 The Chairman: All that may be, but still it does not reach the ques- 
 
53 
 
 tion. Perhaps the law ought to be repealed, but where is the power? It 
 certainly can not be in any administrative or judicial board. 
 
 Mr. Stahlman: The construction of the law on this point deserves im- 
 portant consideration, such perhaps as I may not be able to give. I do ngt 
 believe that there is any thing in the law confining relief to exceptional 
 cases ; but assuming that to be true, I think I have already sufficiently in- 
 dicated where the exceptional cases are to be found. I would take up each 
 particular point and consider it on its own merits. Take the business be- 
 tween Cincinnati and New Orleans, Cincinnati and Memphis, Cincinnati 
 and Louisville, Louisville and Nashville, Louisville and Montgomery, etc., 
 and we find exceptional cases. Again, take Louisville and Atlanta, Louis- 
 ville and Macon, Louisville and Savannah, and we have other exceptional 
 cases — special cases, if you please, and the proof is overwhelming to show 
 that these points ought to be relieved. 
 
 Commissioner Bragg: You do not see any thing in the law that limits 
 the number of special cases which Congress intended the Commission to re- 
 lieve, provided they are entitled to it? 
 
 Mr. Stahlman: No, sir; I do not. This question was discussed at great 
 length, and in the Senate with a good deal of ability. Senator CuUom, who 
 may be regarded as the father of the measure in its present form, speaking 
 of the fourth section and the transportation of passengers and like kind of 
 property under substantially similiar circumstances and conditions, said: 
 "As I understand them, the words /circumstances and conditions' mean 
 the conditions that govern railway traffic and the circumstances under which 
 it is transported. To my mind these words are full of meaning. They com- 
 prehend all the circumstances and conditions that may justify differences in 
 rates, such as competition with other railroads and with water routes, the 
 volume and character of business at different points, the difference in ter- 
 minal expenses, and the cost of service in each case." 
 
 Senator George thereupon put this question : "I understood the Senator to 
 ?ay — and that is what I want to have settled — that if one point from which 
 the shipment is made is a competitive point, either by having a competing 
 railroad or by having water transportation, and the other point from which 
 the shipment is made is not a competitive point, then the circumstances are 
 not substantially similar?" Senator OuUum answered i " I do say the facts 
 should be considered." 
 
 Senator George then said: "With that construction of it I think the 
 Senator gives away all the beneficial part of the bill." 
 
 To which Senator CuUom responded : "The Senator does no such thing. 
 The fact to-day is — and I want the Senator from Mississippi to hear it — ^^that 
 there is an utter disregard by the railroads of the country of the circum- 
 stances ; there are thousands and tens of thousands of shipments, madeunder 
 exactly similar circumstances and conditions, where one is discrirninated 
 against and another is not, where one place is broken down and another is 
 not, where one man gets rebates and another does not; and the purpose 
 of the bill is to prevent that in so far as we may be able to do it without 
 ciippUng the commerce of the country." 
 
54 
 
 The original Senate bill, Mr. Chairman, authbrized the Commis- 
 sion to make exceptions and grant relief to common carriers in cases 
 where there was competition by river, sea, canal, or lake. Upon motion 
 of Senator CuUom this provision was stricken out, for the purpose, 
 as Mr. Cullom said, that "it simpUfiee the section and at the same time preserves 
 all the power the Commission had before" and, as Senator Harris added, "it 
 gives a broader diseretion to the Commission than it had before," in which ex- 
 pression Senator Cullom concurred. This means that while originally it 
 was designed to confine the relief which the Commission might grant to 
 points affected by competition, either by river, sea, canal, or lake, under the 
 law as it now stands, the commission may give relief at points where there 
 is competition by rail only, and that this relief should be granted at such 
 points if the enforcement of the act would be likely to cripple the railroads 
 or the business interests of the points thus affected. 
 
 Commissioner Morrison : You are asking us to restore the old order of 
 things. Now, if that is so, why was that section put in there at all ? What 
 does the fourth section mean ? 
 
 Mr. Stahlman : Exactly what Senator Cullom says, to prevent the carry- 
 ing of traffic for a long distance at less rates than for a shorter distance to 
 or from points where the "circumstances and conditions are substantially 
 similar." There are said to be " thousands of places under exactly similar 
 circumstances and conditions, where one is discriminatrd against and another 
 is not, or where one place is broken down and another is not," but this, Mr. 
 Chairman, can not be made to apply to points where competitive forces, 
 either in the nature of sea, lake, river, canal, or railroad, produce entirely 
 different "circumstances and conditions." 
 
 Commissioner Bragg: If Congress did not intend to promote competition 
 among railroads by the act, why did it prohibit pools ? Pools are known to 
 nullify competition. 
 
 Mr. Stahlman : That is a clear proposition ; that is what it was done 
 for ; that is the only argument against pools. There were no arguments 
 against theruBxcept that they prevented competition. 
 
 Commissioner Morrison : You were candid enough to say, if you got 
 the relief that you want, it would restore substantially the old order of 
 things, and in restoring the old order of things you do not relieve any body 
 at local points. 
 
 Mr. Stahlman : If yon relieve us at terminal points, that relieves us to 
 that extent at local points. In other words, the rates from local stations 
 are based on the rates from competing points. If the rates come down to 
 and from Nashville, they come down to and from all stations tributary to 
 Nashville ; if they come down from Birmingham it is the same way, they 
 are scaled all the way along the line, and local points have the benefit of 
 reductions. 
 
 The Chairman : I do not think any one in Congress supposed that this 
 section would give the Commissioner power to suspend the law in onej two, 
 three, four, or five States, at their option. 
 
55 
 
 Mr. Stahlman : We are not asking that ; we are asking it only in so far as 
 the business interests and the competitive forces with which we have to 
 deal demand such relief. The Louisville & Nashville and other Southern 
 railroads, forming the Southern Railway and Steamship Association, trav- 
 erse the territory south of the Ohio and east of the Mississippi rivers, em- 
 bracing ten States. I append a table as Exhibit " C," showing that the 
 railway stations in these States number 2,888, of .these 184 are junction 
 terminal points, and of this number the Southern roads have asked for 
 relief at only seveniy-one points, and I have discussed the question only as 
 to thirty-seven. 
 
 I remember, Mr. Chairman, when, in 1881, 1 became connected with the 
 Louisville, New Albany & Chicago road, a line extending from Louisville 
 and Indianapolis to Chicago, four hundred and seventy -seven miles 
 in length. Outside of the cities of Chicago, Indianapolis, and Louisville there 
 was but one point on the line with a population exceeding five thousand 
 inhabitanis, and yet it had on its line twenty-four junction or competing 
 points from which the rates were made less than from stations on either 
 side. After an earnest endeavor, I succeeded, with the co-operation of the 
 railroad managers of Indiana and Illinois, in making the rates from all of 
 these junctions points except one, Lafayette, Ind., practically the same as 
 from local stations. 
 
 The custom which prevailed on this road before I went there, prevailed 
 largely all over the West, and I have no doubt but what members of Con- 
 gress were aware of this fact, and that this state of thingf gave rise to the 
 belief that this practice was general in all .sections. 
 
 The table I have presented shows that there are one hundred and thirteen 
 junction and terminal points in the South on behalf of which no relief has 
 been asked — points which have not been favored with competitive rates, 
 because the circumstances and conditions did not seem to warrant such con- 
 cessions. They are railroad crossings such as I have referred to, and such 
 as were referred to by Maj. Gault in his testimony to and from which the 
 Wabash and other roads in the West had been making less rates than from 
 points at either side. These railroad crossings of the South, however, have 
 some people and something more than grass, and yet the railroads of the 
 South have refrained from indulging in practices calculated to give these 
 points advantages over contiguous stations on either side. Of the one hun- 
 dred and thirteen junctional and terminal points for which no relief has 
 been asked, twenty-six are located on the line of the Louisville & Nashville 
 road. So fer as the Louisville & Nashville Railroad is concerned, nothing 
 is clearer than that it has not indulged in the practice of building up one 
 town to the detriment of another or discriminated in favor of one place 
 or shipper to the detriment of another. The testimony taken during the 
 sitting of the Commission will bear me out in the statement, that the 
 Louisville & Nashville Railroad has treated the people on its line fairly, 
 that rates of transportation to and from intermediate points have been ad- 
 
56 
 
 justed so as to avoid discrimination between places similarly situated,- while 
 the rates to and from commercial centers have been established under: the: 
 ihiiuences of strong competitive forces which the road could not afford to 
 i^ore. 
 
 The twenty-six junction points for which no relief is asked embraces 
 Bowling Green, Ky., for example, a large town located on our line seventy- 
 one miles north of Nashville, and at the head of navigation on Green 
 River, a stream made navigable by locks nad dams from its mouth, near 
 Evansville, on the Ohio, to Bowling Green, Ky. The navigation on 
 this river is at present controlled by a private corporation known as the 
 "Green & Barren River Navigation Company." With the managers of 
 this corporation we have been able to agree upon a reasonable adjustment 
 of rates to and from Bowling Green, so as to avoid making rates lower than 
 from intermediate stations on either side. 
 
 Congress during the last session was appealed to, and an act was intro- 
 duced appropriating $300,000 for the purpose of purchasing all the right 
 and title of the "Green and Barren River Navigation Company" in the 
 locks and dams on that river, so that navigation on that river might be free 
 to all. 
 
 Decatur^ Ala., is another point where the Memphis & Charleston Rail- 
 road crosses our line. We have been able, by agreement with the Memphis 
 & Charleston road, to ' maintain as high rates to and from Decatur as from 
 stations on either side. This town is located on the Tennessee River above 
 the Mussel Shoals. We have some competition by river through Chatta- 
 nooga, which, however, has only been spasmodic and not sufficient to cause 
 us to reduce our rates to and from_Decatur. But Congress has appropriated 
 about $3,000,000 for the purpose of removing obstructions at the Mussel 
 Shoals. This work will be completed within the next twelve months, and 
 will of course give us active competition by river at that point. 
 
 Now, I ask, after Congress has taken these large sums of money from 
 the public treasury for the purpose of enforcing competition on the Louis- 
 ville & Nashville Railroad at these points, if it would be right to say to 
 this company that it shall not compete for traffic at these two points, or, if 
 it does compete, that it shall be compelled to reduce its rates to interme- 
 diate local stations to correspond with competitive rates forced upon it at 
 Bowling Green and Decatur through the action of Congress? 
 
 This; Mr. Chairman, is the gist of the question which runs all through 
 the competition which the Louisville & Nashville is obliged to meet at all 
 points, largely augmented by appropriations of money made by Congress 
 from the public treasury. 
 
 Of the twenty commercial centers located on the Louisville & Nashville 
 Railroad, which I have been discussing, and in the interest of which relief 
 is sought, eighteen are on navigable streams, and the other two, Lexington 
 and Birmingham, are so situated that, with the aid of purely State roads, 
 the act to regulate commerce can not deprive them of the advantages they 
 
57 
 
 now enjoy. These twenty points, then, are exceptional cases. They repre- 
 sent less than one and a half per cent of the whole number of railway sta- 
 tions in the States of Kentucky, Tennessee, and Alabama. If relief can be 
 granted only in exceptional cases, you have them here fully and clearly set 
 forth, and with ample reasons why relief should not be withheld. If you 
 can not grant relief in these cases, you will be unable to find any cases 
 where relief may be granted, and the provisions of the act which authorizes 
 you to give relief will thus become a dead letter. 
 
 It may be said that this would give benefits only to the few to the in- 
 jury of the many. Not so, Mr. Chairman ; the many are equally involved 
 in this relief. A refusal to give it to the few means a general disruption, 
 a general revolution of the business relations which the people of the South 
 sustain to each other. It means a general upheaval and a leveling process 
 for which the country is not prepared. It means an untold loss of revenue 
 to the railroads in the interest of water carriers, and a general advance of 
 rates to the interior, which the many are ill prepared to bear. 
 
 It is useless, Mr. (Jhairman, to say that a refusal to grant the relief 
 will benefit the interior ; that the rates to the interior will be reduced to 
 correspond with the rates to competitive points. It is simply out of the 
 question ; and I want to impress this fact upon this honorable Commission. 
 
 If relief is not granted, and the act is rigidly construed and enforced 
 the railroads.of the South will be obliged, as an act of self-preservation, to 
 advance the rates to competing points, and such an advance will force the 
 business to the water lines, and this large loss of revenue to the rail carriers 
 can only be made up by an advance of rates to the interior. 
 
 Products op the South Compared with the West. 
 
 And this, Mr. Chairman, brings up another phase of the question. The 
 Eastern and Western roads, it is said, are enforcing this act, and the ques- 
 tion naturally arises, why can not the roads of the South do likewise? I 
 think I have demonstrated, Mr. Chairman, in what respect the business of 
 the South differs from the business of any other section of the country. 
 These Southern trade centers for which we are asking relief were not made 
 by the railroads, they were in existence before railroads were constructed. 
 The business of the South is so entirely different from the business of 
 other sections, that I have prepared some statistics which I desire to pre- 
 sent, and which to my mind very clearly and forcibly illustrate the reasons 
 why the roads of the East and West may enforce the law while the roads 
 of the South can not afford to do so. I hold in my hand a table which I 
 will file as Exhibit "D." This table shows the products of Ohio, Michigan, 
 Indiana, Illinois, Minnesota, Iowa, Missouri, Kansas, and Wisconsin — nine 
 Western States bordering on the territory covered by the Southern Rail- 
 road and Steamship Association. The products of these nine Western 
 States, Consisting of corn, wheat, etc., yield an average tonnage per acre of 
 1,603 pounds. Compared with this we have the products of nine Southern 
 
 8 
 
58 
 
 States to Wit : Virginia, North Carolina, South Carolina, Georgia, Florida, 
 Alabama, Mississippi, Tennessee, and Kentucky. These States produce an 
 average tonnage of only 602 pounds per acre, but of the products of the soil in 
 the South, the exports or shipments which the railroads carry are con- 
 fined exclusively to cotton and tobacco — there being very little surplus 
 grain shipped, and that surplus very limited indeed, confined to only two 
 States, Kentucky and Tennessee. Upon this point, I present a table which 
 I will mark Exhibit "'E." This includes corn, wheat, and oats produced in the 
 West, and cotton and tobacco produced in the South. This table shows that 
 the average tonnage per acre in the nine Western States is 1. 366 pounds, while 
 in the Southern States it is only 175 pounds. Thus a railroad in the West, 
 fourteen miles in length, will secure as much tonnage as a railroad in the 
 South of one hundred miles in length. It may be said in response to this, that 
 if the people of the South produce so much less than the people of the West, 
 they can ill aflford to pay higher rates of transportation. The people of 
 the South do not pay higher rates of transportation in the aggregate. It 
 is hardly necessary to go into an extended argument on this point, but I 
 want to illustrate by comparing some of the leading Western roads, in the 
 grain growing region, with the Louisville & Nashville, which is generally 
 conceded to be one of the leading railroads of the South. The earnings 
 per ton per mile for the fiscal year ending in 1885, were 
 
 For the Louisville & Nashville 1.16c 
 
 For the Chicago & Northwestern 1.19c 
 
 For the Chicago, Milwaukee & St.' Paul 1:28c 
 
 For the Chicago, Rock Island & Pacific 1.40c 
 
 But, Mr. Chairman, this table presents another fact. While it is true 
 the tonnage to the railroads of the South, per acre, is only 175 pounds, as 
 against 1,366 pounds to the railroads of the West, it shows that the cotton 
 and tobacco of the South is worth to the producer $15.27 per acre, 
 against $8.63, the average value of the corn, wheat, and oat crop of the 
 West. I am aware that it costs more to produce an acre of cotton or 
 tobacco than it does an acre of wheat or corn, but it is safe to assume that 
 the difierence in the products per acre will more than pay the difference 
 in the cost of making the crop. There is another point, Mr. Chairman. 
 The cotton crop of the South, moved largely uncompressed, will only load 
 24 bales or 12,000 pounds to the car, and the tobacco will only load 10 
 hogsheads, or 20,000 pounds to the car, while the grain crop of the West 
 will load 40,000 pounds to the car, and even in cases where the cotton is 
 compressed^ it wOl not load to exceed 24,000 pounds to the car. Of course 
 it costs relatively but little more to move a car of 40,000 pounds than it 
 costs to move a car of 12,000 or 20,000 pounds. So that the Southern 
 railroads in this respect are laboring under a very great disadvantage. 
 
 Commissioner Morrison : You give that as a reason why this is a special 
 case justifying relief to all that country. Now, let us see if that would 
 not force us to relieve another country further north. You mentioned that 
 
59 
 
 there was a railroad building from Kansas City across the States of Mis- 
 souri and Arkansas to Memphis, in the direction of Birmingham, where, of 
 course, it will have an eastern coiinection over your road or some others. 
 Now, at Kansas City you are right in that grain field, right in the pork- 
 houses right at the point where they furnish all this tonnage. They reach 
 out from Kansas City, circling to the north as far as Chicago, and get in 
 that way, another eastern connection. Now, if we relieve your road 
 through Tennessee and Alabama, up into Missouri and Kansas City, and 
 then on to New York, shall we not have to do the same thing with the road 
 that goes out of Kansas City through Illinois and Michigan, and on to New 
 York in that way ? 
 
 Mr. Stahlman : I do not understand that the relief applied for by the 
 Louisville & Nashville Railroad will have the effect Col. Morrison suggests. 
 For instance, we ask for relief on business from St. Louis and business from 
 beyond. This means that if we are given relief on business from St. Louis 
 to Savannah, that business from beyond delivered to our road at St. Louis 
 may be taken on the same basis. It does not mean that the lines west of 
 St. Louis bringing this business to us shall be authorized to avail them- 
 selves of the relief granted to us on business for the south to carry traffic 
 in another direction. In other words, the relief applies only to business 
 from St. Louis to the South. 
 
 Commissioner Morrison : According to your teaching, if we turn your 
 road loose through the Southern country, and tie up all the other roads at 
 Kansas City, would it not force the produce for the East over your road ?. 
 
 Mr. Stahlman : Not at all. That is not our design. 
 
 Commissioner Morrison : Would not that be the effect ? 
 
 Mr. Stahlman: No, sir; it could not be in any event. Starting at 
 Kansas City to go to Savannah or Charleston, the distance is about the 
 same as to New York. (Distances, Kansas City to New York, 1,348 miles; 
 distances, Kansas City to Savannah, 1,189 miles.) 
 
 The Chairman : Could you not carry freight in competition with those 
 lines ? 
 
 Mr. Stahlman : We might do so, but that is not our aim. All we ask is 
 relief on business to the South, such as we are carrying to the South now 
 to supply our own people. If there is any apprehension on this point, the 
 Commission can fix the limit ; it has ample power under the provisions of 
 the act to " prescribe the extent " to which such relief shall apply. 
 
 Earnings of Soutiiebn Compared with Eabteen and Western 
 
 Railroads. 
 
 I have another table, Mr. Chairman, which I desire to file as Exhibit 
 'F." This table likewise bears directly on the question as to whether or 
 not the Southern railroads can afford to enforce the law simply because it is 
 being done by lines in the East and West. This table makes a comparison 
 between seven of the leading Eastern and Western roads and seven of the 
 leading Southern roads. It shows the following : 
 
60 
 
 Average tons freight carried per mile of road-^ 
 
 Eastern and Western roads 11,853 
 
 Southern roads : 2,327 
 
 Average number passengers carried per mile of road — 
 
 Eastern and Western roads 7,926 
 
 Southern roads 1,204 
 
 Gross earnings per mile of road — 
 
 Eastern and Western roads $12,166 93 
 
 Southern roads 4,184 47 
 
 Need I say more, Mr. Chairman ? Have we not reached a point in this 
 discussion where further argument is unnecessary ? We have shown you '. 
 
 1. When and under what influences the commercial trade centers of the 
 South were created, and under what influences they are being maintained. 
 
 2. That these trade centers were not made by the railroads. 
 
 3. The strong competitive forces at work to compel the adjustment of 
 rates now in vogue to and from these trade centers. 
 
 4. The vast sums appropriated by Congress from the public treasury 
 which have served to augment the competitive forces with which the rail- 
 roads are obliged to contend. 
 
 5. The absolute necessity to the railroads of the South of recognizing the 
 existing conditions at thc^e centers as they found them, and as they are 
 to-day. 
 
 6. The utter impracticability of reducing rates to intermediate points 
 on the basis of rates to competitive points. 
 
 7. The absolute necessity of advancing rates to the interior under the 
 rigid construction of the fourth section of the act. 
 
 8. The disaster which will befall the manufacturing, commercial, and 
 agricultural interests of the South by an advance of rates to the interior. 
 
 9. The character and customs of the Southern trade calling for conven- 
 ient trade centers. 
 
 10. The character and volume of the traflSc carried by the Southern 
 roads as compared with roads in other sections. 
 
 11. That the products of the South have not been carried to distant 
 markets at rates which do not insure to the rail carriers a fair profit. 
 
 12. That like products of other sections have had free access to the 
 South upon equal terms. 
 
 All these things, Mr. Chairman, have been shown. We haveshown also 
 that the granite of South Carolina and marble of Tennessee have been car- 
 ried to Louisville, Cincinnati, and other points East and West ; while the 
 granite of the East and the building stone of Indiana and other sections of 
 the West has in turn been shipped into Tennessee, Georgia, and other 
 Southern States. 
 
 That the hardwood and pine lumber of the South has been carried to 
 the East and West, and the pine of Michigan and the mahogany of Cali- 
 fornia, and the lumber of other sections have, in turn, in various forms 
 been sold and shipped into the South. 
 
61 
 
 That the early produce and vegetables of the South have gone to thie 
 Western and Eastern markets, and that like products of the West, later in 
 the season, have found consuming markets in the South. 
 
 That Southern iron products have been shipped East and West, and 
 that like products from the West and East have found markets in the 
 South. 
 
 Tha,t the products of the cotton factories of the South have been ship- 
 ped to Eastern and Western markets, and like products of the Eastern 
 factories have been shipped freely into the Southern States. 
 
 That wagons manufactured in Tennessee and other Southern States 
 have been sold in the West, and that wagons manufactured in the West 
 have been shipped freely and sold in competition with wagons in the South. 
 
 That stpves manufactured in the South have been shipped to distant 
 points in the East and West, including California, and that stoves manu- 
 factured at Cincinnati, Pittsburgh, and elsewhere have been sold freely in 
 the South. 
 
 That the movement of the products of the farm and factory of the 
 South has not been obstructed, and that the products of the farm and fac- 
 tory of the North, East, and West have had free access to the Southern ter- 
 ritory on like terms. 
 
 All these things have we shown, and much more, which I need not now 
 enumerate. i 
 
 It is suflBcient to say that the history of this investigation, impartially writ^ 
 ten, will demonstrate beyond question that the railroad managers of the 
 South have labored earnestly and well to secure a free interchange of com- 
 merce among the several States; that they have not placed embargos on any 
 business, but with an eye to what is just as between them and their patrons 
 have adjusted rates of transportation so as to encourage and promote the 
 material welfare of the masses, irrespective of classes or sections. 
 
 The people of the South who know us best appreciate this. The people 
 living on the line of the Louisville & Nashville Railroad appreciate this. 
 They came from local as we'll as terminal stations during the sittings of the 
 Commission to manifest their appreciation by presenting memorials and 
 testimony in favor of relief. They came from one end of the line to the 
 other and said, "Do not enforce this law." They realize the situation. 
 They know what effect it will have upon their business. They know what 
 effect it will have upon the manufacturing and other interests of the South. 
 They know the condition of our road. They know what effects the enforce- 
 ment of the law will have upon the revenue of our road. They know that 
 if we are forced to withdraw from competition, where competition exists, 
 that we can not live without advancing our local rates ; and they know 
 that an advance in local rates means serious damage to the farming, the 
 manufacturing, and tie business interests of the country. 
 
 They know as well as we do that we can not afford to carry the business 
 to and from intermediate points at the rates we are obliged to accept on 
 
62 
 
 business between New Orleans and Cincinnati, between New Orleans and 
 Louisville, New Orleans and Nashville, Memphis and Cincinnati, Memphis 
 and 'Louisville, Nashville and Louisville, or Nashville and Montgomery. 
 They know that the rates being made to these terminal points in competi- 
 tion with water carriers do not hurt tbem ; but that it will inflict a great 
 loss of revenue upon us to deprive us of the privilege of competing for this 
 traflSc. 
 
 More than all that, the people of the South are fair minded, they are 
 not aggrarians, they are not communists, those residing at local points 
 realize the fact that they have " built their houses on hills," and hence can 
 not expect rates accorded to terminal competing points. I was much in- 
 terested in a question put to a gentleman at Atlantaj who came before the 
 Commission asking th« suspension of the law ; he lived at a local station 
 between Macon and Brunswick, and was content with his lot. The ques- 
 tion asked him was, " Would you not like to have Brunswick rates ?" He 
 said, " I would not object to it." Of course he would not object to it, and 
 yet he was candid enough to say that he was not entitled to them. 
 
 This is the feeling, with an isolated exception here and there, through- 
 out the entire South (outside of the ports, and we know why they feel 
 differently). This is what the memorials and petitions mean, and the 
 unanimity with which the people of the South came to our rescue is 
 to me the most gratifying feature of this whole matter. I was myself 
 surprised— agreeably surprised — when this Commission had finished its in- 
 vestigation, to find that there had been no more complaint. In the vast 
 magnitude of a business covering eight or ten Southern States, embracing 
 fifteen or twenty railway systems, it was to be expected that there should 
 be some complaints ; that some would complain of this and some of that 
 that some would demand one thing and some another. I undertake to say, 
 Mr. Chairman, that there is not a business house in the city of New York, 
 Philadelphia, Baltimore, or elsewhere, with a trade covering such a vast ter- 
 ritory, although able to exercise the closest supervision over its business, 
 which can show a cleaner record than the railroads of the South have shown 
 It is marvelous, and I feel proud of the fact, that the people of the South 
 during this inveistigation, have come to our rescue, and have said to this hon- 
 orable Commission that the railroads have treated them fairly ; that they 
 are more than satisfied, and that the relief prayed for should be granted. 
 
 A word, Mr. Chairman, in respect to the act itself. I would not have 
 this honorable Commission conclude that I have sought to make an attack, 
 either directly or indirectly, upon an act which it is your duty to execute. 
 In many respects the act is a good one. There are provisions in it which 
 should commend themselves to all fair-minded people. 
 
 In these you are clothed with the power to prevent unjust discrimina- 
 tions between individuals. 
 
 To prevent discrimination between localities similarly situated. 
 
 To prevent the payment of rebates for the purpose of discriminations. 
 
 To prevent the cutting of rate*. 
 
63 
 
 To prevent extending favors in any form to one man, which may not be 
 extended to another. 
 
 To prevent the frequent changing of rates, so injurious to commercial 
 Communities. 
 
 All of these features are good, and the enforcement of these provisions 
 must result in much good. 
 
 I have now, Mr. Chairman, said about all that it is necessary for me to 
 say. The views entertained by the management of the Louisville & Nash- 
 ville Railroad as to the construction of the act are known to the Commis- 
 sion. In these views I fully concur. It is not necessary for me to deal 
 with this phase of the question. 
 
 It has been my privilege and pleasure to participate in the investigation 
 so far as it affected the interests of this company and it has been made my 
 duty to present to you such facts as might have a bearing upon the issue 
 involved. This duty I have endeavored to perform, ' 
 
 You now have all the facts as far as I am capable of presenting them. 
 Should your decision be favorable, I shall feel gratified. Should it be the 
 reverse, and thereby, as I believe, involve the railroads of the South in 
 serious complications and the business interests in grave troubles, I shall 
 have the satisfaction of knowing that I made an earnest effort, feeble though 
 it be, to avert the disaster. 
 
 The question is now with you to dispose of in such manner as you in 
 your best judgment may deem equitable and right. 
 
 For the many courtesies and kindnesses received at the hands of the 
 honorable Commission, both here and elsewhere, I beg to make my grateful 
 acknowledgements. 
 
EXHIBIT A. 
 
 UNITED STATES GOVERNMENT APPROPRIATIONS TO WATER 
 
 WAYS, as per record of Congress to States named below, from the 
 
 beginning' of the Oovernment to and including the 49th. 
 
 Congress, 1885-'86. 
 
 ALABAMA.— Appropriations. 
 
 Alabama Kiver $145,000 00 
 
 Black "Warrior River 106,250 00 
 
 Cahaba River 37,500 00 
 
 Tnllapoosa River 32,500 00 
 
 Tombigbee River 63,750 00 
 
 Warrior River 40,750 00 $425,750 00 
 
 OEORGIA.- . ,,.„„„ „„ 
 
 Altamaha River 55,000 00 
 
 Etowaha River 10,000 00 
 
 Flint River 117,000 00 
 
 Ocmulgee River 64,500 00 
 
 Oconee River 32,500 00 
 
 Oostanaula and Coosawatter rivers.... 26,000 00 
 
 Romlev Marsh 37,475 00 
 
 St. Augustine Creek 5,000 00 
 
 Savannah River..., 676,096 64 
 
 Surveys of rivers in Georgia 10,000 00 1,023,57164 
 
 PLORiDA.- 
 
 Appalachicola River; 102,750 29 
 
 Chipola River..... 9,000 00 
 
 Calvosahatchie River 9,000 00 
 
 Esoamhia River 3,000 00 
 
 Indian River 6,500 00 
 
 LaGrange Bayou 2,000 00 
 
 Manatee River 20,000 00 
 
 Oohlawaha River : 10,000 00 
 
 Ochlochnee River 5,000 00 
 
 Pease Creek 16,000 00 
 
 St. John's River 769,000 00 
 
 St. Mark's River. 37,530 00 
 
 Suwannee River.... 38,000 00 
 
 Upper St. John's River 5,000 00 
 
 Volusia Bar 25,000 00 
 
 Withlaeoochee River 13,500 00 
 
 Yellow River. 500 00 1,081,780 29 
 
 Big Sandy River 235,500 00 
 
 Kentucky River 762,,500 00 
 
 Ohio River 360,000 00 
 
 South Pork of Cumberland River 12,000 00 
 
 Trade Water 10,500 00 1,370,600 00 
 
 liOXTISIANA.- 
 
 Amite River 15,000 00 
 
 Bayou Black 25,000 00 
 
 Bayou Boeuf 20,000 00 
 
 Bayou Bartholomew 16,000 00 
 
 Bayou Oourtableau 24,000 00 
 
 Bayou Teche 75,700 00 
 
66 
 
 Ukited Statis Govbenmbnt Appkopbiationb to Watbk-watb. 
 contintjed. 
 
 Iiouisiana continued. Appbopkiations. 
 
 Bayou D'Arbonne 7,000 00 
 
 Bayou La Fourche 32,500 00 
 
 Bayou Terrebonne 35,800 00 
 
 Brazos River 10,000 00 
 
 Bayou Pierre...'. 8,600 00 
 
 Calcasieu Puss ' 30,000 00 
 
 Calcasieu River 16,500 00 
 
 Chifuncte River 7,500 00 
 
 Cypress Bayou $18,000 00 
 
 Ouachita and Black rivers 32,500 00 
 
 Red River 225,000 00 
 
 Tangipahoa River. 11,500 00 
 
 Tensas River and Bayou Macon 11,000 OO 
 
 Tickfaw River 4,000 00 
 
 Tchefuncte and Bogue Falia rivers 40,000 00 
 
 Vermillion River 9,900 00 $674,500 00 
 
 MISSISSIFFI.- 
 
 Big Sunflower River 47,000 00 
 
 Big Black River 10000 00 
 
 Bayou Pierro 5,000 00 
 
 Coldwater River 11,000 00 
 
 Horn Island Pass 5,000 00 
 
 Noxubee River 45,000 00 
 
 Old Tom Creek 3,000 00 
 
 Pascagoula River 125,400 00 
 
 Pearl River 118,125 00 
 
 Steel's Bayou 5,000 00 
 
 Tallahatchie River 27,500 00 
 
 TchulaLake 9,000 00 
 
 Tombigbee River 1,000 00 
 
 Tallabusha River 11,000 00 
 
 Yazoo River 158,000 00 581,025 00 
 
 NOBTH CABOIilNA.— 
 
 Aahlev River 1.000 00 
 
 Black" River 3,000 00 
 
 Cape Fear River 2,299,478 92 
 
 Conteatnia Creek 40,000 00 
 
 Croatan Sound 50,000 00 
 
 Currituck Sound .125,000 00 
 
 French Broad River 5,000 00 
 
 Lillington River 6,000 00 
 
 Meherin River 6,000 00 
 
 Neuse River 237,600 00 
 
 New River 70,000 OO 
 
 Ocracoke Jnlet 133,750 00 
 
 Pamlico and Tar Rivers 68,000 00 
 
 Pasquotank River 80 00 
 
 Perqulmone River 2,500 00 
 
 - Roanoke River 73,000 00 
 
 Scuppernong River 8,000 00 
 
 Town Creek! 1,000 00 
 
 Trent River 45,500 00 
 
 Waceamaw River 4,400 00 
 
 Water-way rBeaufort to New River) 10,000 00 
 
 TadkinRiver 87,000 00 3,275,208 92 
 
 9 
 
66 
 
 United States Gotebnment Appeopeiations to "Watbr-tvays. 
 continttbd. 
 
 SOUTH CABOLIXA.— Apfbopbiationb. 
 
 Ashepoo Eiver 1,300 00 
 
 Ashley Kiver 4,500 00 
 
 Congaree Kiver.. 7,500 00 
 
 Edisto River..... , 16,000 00 
 
 Great Peedee River 47,000 00 
 
 Santee River 75,750 00 
 
 Salkelatchee River 10,000 00 
 
 Town Greek and Stone River . 7,500 00 
 
 Wac'camaw River 21,000 00 
 
 WappooCut 23,000 00 
 
 Wateree River.. 35,500 00 249,050 00 
 
 TENKESSEE.- 
 
 Big Hatchie River $22,000 00 
 
 Caney Fork River 20,000 00 
 
 Clinch River 26,000 00 
 
 Duck River 13,000 00 
 
 French Broad River 14,500 00 
 
 Hiawassee River 34,000 00 
 
 Ohed River 6,500 00 
 
 Obeys River 5,000 00 
 
 Red River 5,000 00 
 
 South Fork Deer River 10,000 00 $156,000 00 
 
 VIB&INIA.- 
 
 Accotink Greek 5,000 00 
 
 Appomattox River 428,750 00 
 
 Archers' Hope River 10,000 00 
 
 Aquia Creek 10,500 00 
 
 Black Water River 14,000 00 
 
 Chickahominy River 19,000 00 
 
 Dan River 22,500 00 
 
 Elizabeth River 40,080 00 
 
 Hampton River 12,000 00 
 
 James River.. 923,000 00 
 
 Mattaponi River 13,300 00 
 
 Nansemond River 37,000 00 
 
 Neabsco Creek 6,000 00 
 
 Nomoni Greek 32,500 00 
 
 Nottoway River . 7,000 00 
 
 New River 10,000 00 
 
 Occoquan River 25,000 00 
 
 I Pagan Creek 10,000 00 
 
 PamunkeyRiver 12,600 00 
 
 Potomac River 8,600 00 
 
 Rappahannock River 190,500 00 
 
 Staunton River 39,500 00 
 
 Totusky River 10,000 00 
 
 Urbanna Creek 15,500 00 
 
 York River 78,750 00 1,979,880 00 
 
 WEST VIRGINIA.- 
 
 Buckhannon River 3,000 00 
 
 Elk River , 19,500 00 
 
 Great Kanawha River 1,979,500 00 
 
 Guyandotte River 12,500 00 
 
 Little Kanawha Rivor 146.175 00 
 
 Shenandoah River 17,500 00 2,178,175 00 
 
67 
 
 United States Government Appbopkiations to Wateb-ttat s. 
 contintjed. 
 
 UISCELIiANEOUS.— Appkopeiations. 
 
 Chattahoochee and Flint rivers (Ala., Fla., 
 
 and Ga.) 225,000 00 
 
 Choctawhatchee Eiver (Ala. and Fla.) 102,000 00 
 
 Coosa Eiver (Ala. and Ga.) 455,000 00 
 
 Cumberland Eiver (Ky. and Tenn) 803,000 00 
 
 Cumberland Sound (Ga. and Fla.)... 130,000 00 
 
 Dan Eiver (Va. and Nor. Carl.) 18,000 00 
 
 Entrance to the Dismal Swamps (Nor. Car. 
 
 and Va.) 35,000 00 
 
 Escambia Eiver (Ala. and Fla.) 23,500 00 
 
 French Broad Eiver (Tenn. and Nor. Carl.)... 51,500 00 
 Louisville and fortland Canal, purchase and 
 
 management of 1,250,000 00 
 
 Mississippi Eiver (below Cairo) 20,194,188 53 
 
 Monongahela 'Eiver (Penn. and W.Va.) 307,000 00 
 
 New Eiver fVa. and W. Va.) $102,000 00 
 
 North Landmg Eiver 47,500 00 
 
 Ohio and Louisville Canal, Falls of the 1,741,562 91 
 
 St. Johns and St. Marys rivers (Fla. and Ga.) 78,000 00 
 
 Tennessee Eiver (Ky., Tenn., and Ala.) 3,138,456 94 
 
 Waccamaw Eiver (Nor. Carl, and So. Carl.).. 25,000 00 
 Warior and Tombigbee rivers (Ala. and Miss.) 197,000 00 $28,923,708 38 
 B!A.SBOItS — 
 
 Appalachicola, Fla 47,000 00 
 
 Beaufort, S. C 100,000 00 
 
 Brunswick, Ga 102,500 00 
 
 Cedar Keys, Fla 94,500 00 
 
 Charleston, S. C 1,632,200 00 
 
 Key We.«t, Fla 27,500 00 
 
 Mobile, Ala 1,406,751 82 
 
 Norfolk, Va 622,500 00 
 
 Pensacola, Fla 215,000 00 
 
 Savannah, Ga 1,132,000 00 
 
 St. Augustine, Fla 33,569 80 
 
 Tampa, Fla 70,000 00 5,483,521 62 
 
 BECAFITtniATIOIT of Blvers, Harbors, etc., by States and Iiocatiou.— 
 
 Alabama $425,750 00 
 
 Georgia ; 1,023,571 64 
 
 Florida 1,081,780 29 
 
 Kentucky 1,370,500 00 
 
 Louisiana '. 674,500 00 
 
 Mississippi 581,025 00 
 
 North Carolina 3,275,208 92 
 
 South Carolina 249,050 00 
 
 Tennessee 156,000 00 
 
 Virginia 1,979,880 00 
 
 West Virginia 2,178,175 00 
 
 '" Total as per States $12,995,440 85 
 
 Miscellaneous (as per States above) 28,923,708 38 
 
 Harbors (as per States above) 5,483,521 62 
 
 Grand total $47,402,670 85 
 
EXHIBIT B. 
 
 From Deposition of J. M. Ctstr. 
 
 Question by Mr. Stahlman: The memorial presented by the river men stated 
 that the river tariffs, ■which were submitted with the memorial, phow that the 
 steamboats never make rates. of freight and passage more to intermediate than 
 to terminal points, but generally less. Please state fully what you know as to 
 this, giving rates and distances. 
 
 Atis. I have the sworn statement of a resident of Cincinnati that on the 
 28th day of April, Mossett & Co., Agents of the Southern Transportation 
 Company, of which firm of agents A. J. Mossett is the principal member, 
 stated to him that to wharf landings on the Miississippi River their rates 
 were five cents pi r hundred pounds higher than to Vicksburg and New 
 Orleans ; that to bank landings on the Mississippi River the rates were fr^m 
 ten to fifteen cents per hundred pounds higher than the rates to Vicksburg and 
 New Orleans, and that the through rate on whisky to points between Memphis 
 and New Orleans was fi'om one dollar and fifty cents to two dollars per barrel, 
 according to the landings, and that ihe through rate to New Orleans was sev- 
 enty-five cents per barrel. This sworn statement of the aflBant further says that 
 he has seen a bill of lading of the Southern Transportation Company's steam- 
 IjoatS, "Thomas Sherlock" and " Golden Rule," dated on or after April 20th, at 
 $2 per barrr'l on whisky, Cincinnati to Omega Landing, La., and $1.25 
 per barrel from Cincinnati to Bayou Sara, La. I ask leave to file an 
 exhibit, marked "A," being a printed list of the landings on the Ohio and 
 Mississippi rivets between Cincinnati and New Orleans, which I believe to be 
 correct. This table shows the distance from Cincinnati to Omega Landing to 
 be l,108f miles, and to Bkyou Sara 1,345} miles. The distance- to Vicksburg is 
 1,132^ mile.=, and the distance to New Orleans 1,613 miles. I desire further to 
 say, that on the 28th of April, 1887, Mossett & Go. quoted to a firm in Cincin- 
 nati a rate on saw-mill m&chinery, knocked down and small pieces boxed, 65 
 Cents per 100 pounds Cincinnati to Bayou Sara, and to New Orleans 50 cents 
 per 100 pounds, the distance to Bayou Sara being 1,345}-, and to New Orleans 
 1,513 miles. On the same day Mossett & Co. quoted to a firm in Cincinnati on 
 whisky, Cincinnati to Friars Point, Miss., $1.50 per barrel, and to Baj'ou Sara 
 $1.25 per barrel, and to New Orleans 75 cents per barrel. The distance, Cin- 
 cinnati to Friars Point, being 832} miles, and to New Orleans, 1,513 miles, and 
 to Bayou Sara 1,345} miles. On the same day Mossett & Co. quoted to a Cin- 
 cinnati firm on roofing and corrugated iron to Friars Point, Miss., 35 cents per 
 100 pounds; to Meyersville, Miss., 40 cents per 100 pounds, to Grand Gulf, 
 Miss., 40 cents pet' 190 pounds; to Bayou Sara, 25 cents per 100 pounds, and to 
 New Orleans, 20 cents per 100 pounds, the distance, Cincinnati to Friars Point, 
 being 832} miles, to Meyei-sville, 1,064J miles, to Grand Gulf, 1,171J miles, to 
 Bayou Sara, 1 345} niile.s, to New Orleans, 1,513 miles. The rates of transpor- 
 tation on plaster by the same line from Cincinnati to points named were on the 
 same day as follows : 
 
 Per 100 Pounds. Distance. 
 
 To Friars Point, Miss 30 cents. 832} miles. 
 
 To Australia, Miss. 35 " 884 " 
 
 To Arkansas City, Ark 25 " 959} " 
 
 To Meyersville, Miss 36 " 1,064J " 
 
 To Lake Providence, La ...' 30 •' 1,074^ " 
 
 To Vicksburg, Miss.. .20 " ' l,i32J " 
 
 To Grand Gulf, Miss 40 " 1.171J " 
 
 To Plaquemine, La , 25 " 1,402 " 
 
69 
 
 The rates f join St. Louis to landings on the Mississippi River, including 
 New Orleans were, on April 8th, as follows: 
 
 ^ 
 
 bd 
 
 
 1 
 
 f 
 
 t 
 
 1 
 
 PROM 
 
 
 ': 
 
 ■ ■ t^' ' 
 
 EB 
 
 g 
 
 m 
 
 10 
 
 ST. LOUIS 
 
 
 j 
 
 s 
 
 p. 
 
 1 
 
 
 
 
 : 
 
 o. 
 
 B 
 
 ^. 
 
 o , 
 
 
 
 
 0. 
 
 
 
 ff 
 
 e 
 
 
 
 
 1 
 
 
 » 
 
 s 
 
 n 
 
 
 
 J 
 
 s 
 
 
 i 
 
 
 s 
 
 Points betweeen Greenville and Donaldson- 
 
 
 
 
 
 
 
 
 vlUe, including Vicksbnrg, Natches, etc 25 
 
 20 
 
 20 
 
 20 
 
 20 
 
 20 
 
 30 
 
 New Orleans *. , . 2 
 
 % 
 
 1% 
 
 "K 
 
 l^y, 
 
 17}^ 
 
 17>i 
 
 26 
 
 
 
 I liave the sworn statement of a prominent steamhoat man on the Alahama 
 Biver, with reference to the business of that river, in which he says that " on 
 business offering at Mobile for Montgomery and Selma the rate on dry barrels 
 (meaning barrels of flour, etc.), the rate on whieh between intermediate land- 
 ings is forty cents per barrel, would in some cases be as low as fifteen or twenty 
 cents per tiarrel, and on wet barrels (meaning barrels of whisky, poTte, etc.)", 
 where the rate between intermediate landings would be sixty cents per barrel, 
 the rale on the ^ame offered at Montgomery or Selma, for Mobile, or vice versa, 
 would, under circumstances where the competition is strong, be reduced as 
 much as one halT." In other words, the hoats. fcequently on account of com- 
 petition, are compelled to haul freight a longer distance for less than they would 
 the same freight a much shorter distance in the same direction.- 
 
 The testimony of Captain Ryman, of Nashville, shows that it is the custom 
 to charge less for long hauls than short hauls on the Cumberland Biver. 
 
 The following table, which, to the best of my knowledge and belief, gives 
 the exact rates in effect one year ago, shows that on the Ohio, Mississippi, Mis- 
 souri, and Green and Barren rivers the boats charged more for a long than for 
 a short distance : 
 
 BATES OF TBANSPOBTATION VIA BIVEB. 
 
 Ohio River, via Cinciknati and Louisville United States Mail 
 Line Company. 
 
 Dry 
 Goods. 
 
 Oil and 
 Whisky 
 
 Po- 
 tatoes. 
 
 Nails. 
 
 Cincinnati to Louisville, 131 miles... 
 Cincinnati to Bising Sun, 36J miles.. 
 
 $0 10 
 16 
 
 $0 35 
 
 $0 12^ 
 
 • as 
 
 $0 04 
 
 Via Memphis and Cincinnati Packet Company. 
 
 Cincinnati to Evansville, 315 miles 
 
 Cincinnati to Maukport, 175 miles 
 
 Cincinnati to Cairo, 600 miles 
 
 Cincinnati to Ellzabethtown, 409 miles, 
 
 Cry Oil and Sugar 3^ 
 Goods. Whisky Ccfflfefe, 
 
 16 
 20 
 16 
 25 
 
 $0.40 
 60 
 40 
 60 
 
 $0 12^ 
 
 "J 
 12J 
 20 
 
70 
 
 Via Cincinnati and New Okleans Packet Company. 
 
 Meat. 
 
 Whisky 
 per liU. 
 
 Cincinnati to New Orleans, 1513 miles.... 
 Cincinnati to Leota Landing, 1043 miles. 
 
 $0 20 
 30 
 
 $1 08 
 2 00 
 
 LOWER MISSISSIPPI RIVEB. 
 Anchor Line— St. Louis and New Orleans. 
 
 * 
 
 Glasses. 
 
 
 1 
 
 2 
 
 3 
 
 4 
 
 
 $0 35 
 50 
 
 $0 32 
 40 
 
 $0 26 
 35 
 
 $0 19 
 
 IVlpmnliis to Ooliimbifl. Ark 216 miles 
 
 30 
 
 
 
 ARKANSAS RIVER. 
 Arkansas Ritbr Packet Company. 
 
 1 .• 
 
 Classes. 
 
 
 1 
 
 2 
 
 3 
 
 4 
 
 5 
 
 A 
 
 B 
 
 
 
 D 
 
 Memphis to Pine Bluff, 200 miles- 
 Memphis to Hopedale, 164 miles... 
 
 35 
 50 
 
 28 
 40 
 
 25 
 35 
 
 22. 
 30 
 
 15 
 
 25 
 
 18i 
 40 
 
 30 
 
 8J 
 25 
 
 12 
 20 
 
 GREEN AND BARREN RIVERS. 
 
 GrREEN AND BARREN ElVBR NAVIGATION COMPANY. Fourth 
 
 Class. 
 
 Evansville to Bowling Green, 125 miles 17 ' 
 
 Evansville to Rochester, Ky., 75 miles 25 
 
 MISSOURI RIVER. 
 
 Missouri River Packet Company. Fourth 
 
 Booneville to Kansas City, 214 miles 16 
 
 Booneville to Cambridge, Mo., 40 miles 25 
 
 UPPER MISSISSIPPI RIVER. 
 
 St. Louis to St. Paul, 739 miles.. 
 St. Louis to Cassville, 468 miles.. 
 
 Classes. 
 
 1 
 
 2 
 
 3 
 
 4 
 
 30 
 35 
 
 25 
 30 
 
 20 
 25 
 
 15 
 18 
 
71 
 
 EXHIBIT C. 
 
 Table showing the number of railway stations, terminal and junction 
 points in the Southern States : 
 
 STATE. 
 
 Number of Local 
 Points at which Re- 
 lief was not asked. 
 
 Numher of Termi- 
 nal and junction 
 Points at which Re- 
 lief was asked. 
 
 Number of Termi- 
 nal and Junction 
 Points at which Re- 
 lief was not asked. 
 
 Kentucky 
 
 594 
 303 
 260 
 270 
 239 
 99 
 246 
 139 
 179 
 375 
 
 5 
 4 
 
 8 
 
 15 
 
 6 
 
 1 
 6 
 9 
 
 8 ,. 
 9 
 
 21 
 
 
 12 
 
 
 16-.- -. 
 
 Georgia 
 
 7 
 
 
 6 
 
 Tjouisiana 
 
 10 
 
 Florida 
 
 14 
 
 North Caroling 
 
 7 
 
 South Carolina 
 
 6 
 
 Virginia 
 
 15 
 
 
 
 
 2,704 
 
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BEFORE THE 
 
 |(ntcr-^tate s(|ommerte j(|^ammtssion. 
 
 PETITIONS 
 
 -OF THE— 
 
 Louisville,NewOrleans&TexasRy.Co. 
 
 -AND THE— 
 
 Newport News & Mississippi Valley Co. 
 
 -AND- 
 
 E.VIDE1NCR, 
 
 WITH 
 
 Argument and Brief 
 
 BY 
 
 X 
 
 HOLMES CUMMINS. 
 
 MEMPHIS. 
 
 S. C. TOOF t CO., PRINTERS AND LITHOGRAPHERS. 
 
 1887. 
 
To the Honorable, the Inter-State Commerce Commission 
 
 of the United States of America, sttting at Washington : 
 
 The Louisville, N"ew Orleans & Texas Railway Company, 
 a corporation organized under the laws of the States of Ten- 
 nessee, Mississippi and Louisiana, and having i^s situs and 
 principal oflBce and place of business at Memphis, in the 
 State of Tennessee, would respectfully represent and show 
 unto your honorable body as follows : 
 
 That your petitioner owns and operates a line of railway 
 from Memphis, in Tennessee, by way of Vicksburg, in Mis- 
 sissippi, and Baton Rouge, in Louisiana, to the city of l^ew 
 Orleans, in the latter State, some four hundred and fifty- 
 six (456) miles in length. 
 
 That your petitioner was organized under and by virtue 
 of a consolidation of different corporations of said States 
 of Tennessee, Mississippi and Louisiana, which corpora- 
 tions, formed under the laws of said named States respec- 
 tively, were authorized by the statutes under which they 
 were so created to construct and operate the portions of 
 ■said line of road now owned by your petitioner in said 
 several States, and to consolidate the same as has been done 
 into one corporation, to-wit : your petitioner. ° 
 
 That petitioner's said line of railway parallels the Mis- 
 sissippi River, and touches the same at Memphis, Vicks- 
 burg, Baton Rouge and N^ew Orleans, and connects also 
 with said river by virtue of the lines of other railroads con- 
 necting with your petitioner at Glendale, Greenville, Hunt- 
 ington and IS'atchez and other points in Mississippi, and at 
 Port Hudson and other points in Louisiana, while at many 
 stations and depots along petitioner's line it is distant from 
 said river many miles and separated therefrom by lagoons, 
 bayous, marshes and swamps that are virtually impassable. 
 
That your petitioner's said line of railway was begun in 
 the year 1882, when said country between Memphis and 
 Vicksburg was an almost impenetrable swamp and unpro- 
 tected from the waters of the Mississippi River, and the 
 larger portion of said territory through which your peti- 
 tioner's line runs was through much of the year covered 
 with the overflow waters of said river and of little or no 
 value. 
 
 That the projectors of petitioner's said line of railway 
 have besides the investment of large amounts of money in 
 the construction of its said line of road, also expended 
 large sums of money in. aid of levees for the protection of 
 said country from said overflow waters of the Mississippi 
 Kiver, and so by such outlays of monies have redeemed 
 said territory from said overflow so as to enable the lands 
 there to become cultivated and be again productive. 
 
 That petitioner, by reason of its position along said Mis- 
 sissippi liiver as aforesaid, is necessarily compelled to com- 
 pete with the carrier lines on said river, to-wit : Steamboats, 
 barges, flatboats, etc., in the business done between the 
 points where petitioner's said line touches said river or 
 connects therewith, and its said terminal points and other 
 places beyond the same to or from which freights are 
 shipped over the lines of connecting railroads and other 
 common carriers, of which points a list is hereto attached, 
 marked as ""Exhibit A" hereto, and made a part hereof, 
 and is in that way forced to or from these points ti) do bus- 
 iness therefor at far less than its regular or schedule rates 
 along its line for the same business, or else to do without 
 such business, and that its tarifl:" or schedule for freight 
 and passenger business at intermediate points is but rea- 
 sonable, and to do without said business at said river points 
 would be a serious loss and injury to petitioner, and cripple 
 its property and legitimate revenues. 
 
 That the cost and expense incident to the carriage of 
 freight at points along petitioner's line other than said 
 
termini and competitive points, is far greater than on the 
 like business at said termini and competitive points, by 
 reason of the fact that cars for the same go or come empty 
 one way and are freighted only in one direction, necessi- / 
 tating a double length haul for a single or half the distance \J 
 freight is carried, v^hile as to said business between said, 
 termini and competitive points by reason of the trade done 
 at said business centres, petitioner's cars are freighted in J 
 eacb direction, and its empty haul is a smaller percentage 
 of the entire haul. 
 
 That petitioner, as such railway corporation and common 
 carrier, is required by law to operate its line of road each 
 day, week and month of the year, whether the business 
 offered returns a revenue equal to the cost of. the service, 
 to say nothing of a profit on the investment, or no. while 
 petitioner's competitors, to-wit, the several craft on said 
 Mississippi River and its confluents, during the dull season, 
 which in this locality runs through half the year, lie idle 
 or seek other waters where business is remunerative. 
 
 That petitioner's line of road was completed and opened 
 to business only in the fall of A. D. 1884, and during tbe 
 two years it has operated its line of road, it has not been 
 able to earn interest on the actual money cost of the con-/ 
 struction and equipment of its road. 
 
 That petitioner's assessment for taxation for the cost and 
 maintenance of said levees for the protection of said terri- 
 tory from overflow from the Mississippi River is about one- 
 half the total assessed value of property subject to tax there- 
 for in that purt of the State of Mississippi, and to impair 
 petitiont'r's revenue-, as the enforcement of the litter of 
 the statute under which your honorable body is organized, 
 as intnrpreted by some- shippers of freiglits and certain 
 carriers, subject to said act, would inevitably accomplish, 
 unless, as petitioner is advised such water competition rend- 
 ers the circumstances dissimilar, would result in a probable y 
 loss of said levee system, and the devastation by overflow 
 
J 
 
 from said Mississippi River of the four million acres of 
 land known as the Yazoo Delta. 
 
 • That about three (lundred and twenty five miles of peti- 
 tioner's total mill age (four hundred and fifty-six miles) 
 lies in the State of Mis.-issippi, where (see Laws of Missis- 
 sippi, session of A. D. 1884, chup. 23 ; 8tone v. R. R. Co., 
 62 Miss. 607; Stone v. R. R d., 116 U. S. 307, 347 and 
 352) a commission similar in authority to your honorable 
 body lias l)een in existence and active operation since the 
 opening' of petitioner's line of roud for business; and said 
 Railroad Cnminission of the State of Mississippi to whom 
 petitioner has, from time to time, as required by the statute 
 of that State, submitied its tariffs for freight and pa-^senger 
 business, have approved petitioner's charges and rates, 
 and also have authoiized your petitioner to so alter and 
 change the same from time to time, and as to its several 
 depots and stations, as will enable petitioner to meet the 
 competition of said Mississippi River and its tributaries. 
 
 That it is the daily practice of the steamboat lines and 
 other craft plying the Mississippi River and its tributary 
 1/ streams to charge a lower rate for a long than a short car- 
 riage, especially to competitive points, and this competi- 
 tion and freedom from legal restraint thereabout your pe- 
 titioner meets at many points on its said line of road, and 
 this not alone as to business to or from points on its line 
 of road, but also as to business to and from points beyond 
 either terminus, such as seaboard cities through New Or- 
 leans, and points on the Mississiiipi River and its tribu- 
 taries north of Memphis, as well as the Arkansas, the Red, 
 the Yazoo and other rivers. 
 
 ■J 
 
 Your petitioner is advised that it may lawfully make a 
 lower charge tor freight or passage for a longer than for a 
 shorter distance, where such lower charge is necessary to 
 enaiile petitioner to meet the competition of said carriers 
 by water on said river. 
 
However, if mistaken in this position petitioner is further 
 advised that under the proviso of the fourth section of the 
 act of Congress, under which your honorable body is cre- 
 ated, authority may be granted petitioner to charge less 
 for longer than for shorter distances for the transportation 
 of passengers or property upon application to your honor- 
 able body therefor. 
 
 For that end your petitioner respectfully presents this 
 petition, and prays that the circumstances affecting said 
 freight and piissenger business to and from said competi- 
 tive points be adjudged dissimilar, and to justify petitioner 
 in charging less thereto or therefrom than to or from inter- 
 mediate points that are free from such competition, and that 
 such authority be granted 'under the provisions of said 
 statute as to such river points and competition with such 
 river craft, with permission to so alter and chunge its freight 
 and passenger tariffs, as to said competitive points as herein 
 above set forth and as shown in " Exhibit A " hereto, from 
 tifne to time as may be necessary for petitioner to meet the 
 river rates, etc. 
 
 Your petitioner would further pray that the same relief 
 be granted it, as your honorable body have already granted, 
 or may hereafter grant, the several railroads and other car- 
 rier lines composing the Southern Railway and Steamship 
 Association — namely, the Cincinnati, New Orleans and 
 Texas Pacific Railroad Company, the Louisville & Nash- 
 ville Railroad Company and others, as to interior competi- 
 tive points, so as to enable petitioner to meet such rates 
 and do business over its connections to or from same. 
 
 Petitioner prays for general relief, and as ever bound, etc. 
 
 THE LOUISVILLE, NEW ORLEANS AND 
 TEXAS RAILWAY CO. 
 
 By JAMES M. EDWARDS, Vice-President. 
 
 HOLMES CUMMINS, Attorney. 
 
EXHIBIT A. 
 
 To Petition of Louisville, New Orleans and Texas Railway 
 
 Company. 
 
 Memphis, Huntington, Greenville. 
 
 All points on Leland and Lake Washington Branch. 
 
 Vicksburg, Warrenton, Natchez, 
 
 Yokena, Glass, _ Mattingley, 
 
 Port Hickey, Port Hudson, Baton Rouge. 
 
 New Orleans and Intermediate Points to Baton Rouge. 
 
 Bayou Sara, Baker, Zachrie, 
 
 Slaughter, Echol, McVae, . 
 
 Lindsay, Bells. 
 
 To and from New York. 
 
 Texas Territory, 
 via New Orleans and Yicksburg. 
 
 Kansas City, St. Louis, Chicago, 
 
 Cincinnati, Louisville, Little Rock, 
 
 Pine Bluff, Camden, Shreveport, 
 
 Monroe, Cairo. 
 
 ■'J 
 
 The privilege to disregard the long and short haul clause 
 on business between points on the line of Louisville, New 
 Orleans & Texas Railway, and the above named points and 
 territory beyond a|S to said Louisville, New Orleans & Texas 
 Railway Company, and its connections with said points. 
 
United State- of America. I 
 
 "Western Disthicx of Wkst Tennessee, J 
 
 Personally appeared before me, J. B. Clough, Clerk of 
 the Circuit and District Courts for the Western Division of 
 the "Western District of Tennessee and TJ. S. Commissioner, 
 etc , the above named James M. Edwards, to me personally 
 known as the Vi^e President and General Manager of the 
 Louisville, Sew Orleans & 1\ xas Railway Company, and 
 ■yyho made oath that the statements in foregoing petition are 
 full and true, according to the best of his knowledge, infor- 
 mation and belief. 
 
 JAMES M. EDWARDS. 
 
 Sworn to and subscribed before me this day of 
 
 April A. D. 1887. 
 
 J. B. CLOUGH. 
 
 U. S. Clerk and Commissioner. 
 
 James M. Edwards, being duly sworn, deposes and says : 
 That he is, and from the organization of said corporation 
 has been, the vice-president and general manager of " The 
 Louisville, ISTew Orleans & Texas Railway Company," and 
 has had personal charge and control of the construction, 
 equipment and operation of said company's line of rail- 
 road between Memphis and New Orleans from its inception 
 to the present date. 
 
 That affiant personally knows that the earnings of said 
 railway are. and ever have been, insufficient to meet or pay 
 the stipulated interest, five per cent. (5%), on the actual 
 money cost of the construction and equipment of said 
 railway. 
 
 That heretofore, viz : About the 20th day of August, A. 
 D., 1886, and on divers other days, affiant with other offi- 
 cials and agents of said company, appeared before the rail- 
 road commission of the State of Mississippi, and submit- 
 ted to that commission the schedules, tarifts, classifica- 
 tions, etc., showing the rates and fares charged by said 
 
10 
 
 company, for the carriage of passengers and freiglits over 
 its railroad in the State of Mississippi. 
 
 That said rates and charges were fully considered and 
 ratified and approved by said commission ; no minute or 
 record was made by said commission of its action about 
 that. matter so far as affiant has any knowledge or infor- 
 mation, the members preferring, for reasons of their own,' 
 not to do so. They, however, announced in open session 
 to your affiant that they ajiproved said rates and charges, 
 schedules, tariffs and classifications, etc., copies of which 
 are herewith filed as ■' Exhibits" hereto and made part 
 hereof. 
 
 And said railroad commission of the State of Mississippi 
 expressly authorized said company, and affiant, as its gen- 
 eial manager, to vary and change said rates and charges 
 at, to and from points where competition with steamboats 
 and other craft on the Mississippi River and its confluents 
 was met so as to secure the business. 
 
 J AS. M. EDWARDS. 
 
 Subscribed and sworn to before me this day of 
 
 April, A. D. 1887. 
 
 J. B. CLOUGH, Clerk, etc. 
 
 W. M. Rhett, being duly sworn, deposes and says : That 
 since the 15th day of September, A. D. 1884, he has been 
 in the employ of the Louisville, ISTew Orleans & Texas 
 Railway Company as chief clerk in the office of the gen- 
 eral freight agent of that company. That he has read and 
 understands the foregoing affidavit of James M. Edwards ; 
 that affiant was presesjit with said Edwards before the rail- 
 road commission of Mississippi about the 20th day of August, 
 A. D. 1886, when said schedules, tariffs and classifications 
 and the rates and charges for freight and passage on said 
 company's railroad were considered, and affiant knows that 
 that same were ratified and approved : by said commission, 
 
11 
 
 as above set forth in the affidavit of said James M. Ed- 
 wards, and' that permission was granted said company by 
 said commission, to alter and reduce its rates and charges 
 at, to and from points where said company touched or 
 connected with the Mississippi River or its confluents, as 
 to enalile said company to meet such competition and 
 secure the business for said railway. 
 
 This was all done in affiant's presence and hearing. 
 
 W. M. RHETT. 
 
 Sworn to and subscribed before me this ._. day of 
 
 April, A. D. 1887. 
 
 J. B. CLOUGH, Clerk, etc. 
 
12 
 
 To the Honorable, the Inter-State Commerce Commission 
 
 of the United States of America, sitting at Washington : 
 
 The JSTewport IsTews and Mississippi Valley Company 
 would respectfully represent and show unto your Honor- 
 able body as follows : 
 
 That said Newport JSTews and Mississippi Valley Com- 
 pany, your petitioners, as lessees of the Chesapeake, Ohio 
 and Southwestern Eailroad, is in possession of and is opera- 
 ting a line of railroad extending from the city of Louis- 
 ville, in Kentucky, by the way of Paducah in that State, 
 to the city of Memphis, in Tennessee, three hundred and 
 ninety-two miles in length. 
 
 That petitioner's said railroad from Louisville, on the 
 Ohio river, to Memphis, on the Mississippi river, is in com- 
 petition with steamboats, barges and flatboats, etc , plying 
 said rivers, as to all business bi'tween petitioner's said 
 terminal points, as well as many intermediate stations, 
 such as West Point, Paducah, etc., on the Ohio river; Ed- 
 dyville, Kuttawa, etc., on the Cumberland ; Dyersburg, on 
 the Forked Deer river ; Rialto, on the Big Hatchie river, 
 etc., etc.; petitioner's said railroad running parallel to said 
 Ohio and Mississippi rivers its entire length, and crossing 
 said Cumberland, Forked Deer and Big Hatchie rivers 
 
 That it is the rule with steamboats, barges and other 
 crafts in the carrying trade on said rivers to charge a lower 
 rate of freight on matters to and from said points where 
 petitioner's said railroad touches said rivers than on like 
 matter carried a shorter distunce to intermediate points, as 
 well as from the same where not in competition with 
 petitioner's said railroad, and to enable petitioner to secure 
 any business at such competitive points, it is required to 
 lower its rate of charges to meet that made by said carriers 
 by water. 
 
13 
 
 That your petitioner's tariff of charges for freight and 
 passage are reasonable, or rather it should say, are low, as 
 to intermediate or non-competitive points ; in fact, its rates 
 are so low, as that its earnings have not been sufficient to 
 pay its opei:ating expenses, construction account, and fixed 
 charges; and it has incurred a floating debt above and be- 
 yond its funded or mortgage debt because of its revemies 
 from operating said road being insufiicient. 
 
 That in the State of Kentucky, where about three-fourths 
 of petitioner's said line of railway lies, by an act of the 
 Legislature of that State, approved the 6rh of April, 1882, 
 and entitled : '■ An Act to Prevent Extortion and Discrim- 
 ination in the Transportation of Freight and Passengers 
 by Railroad Corporations, and in aid of that purpose to 
 establish a Board of Railroad Commissioners, and define 
 its powers and duties," — guards and restrictions similar in 
 most of their terms to those of the statute under which 
 your honorable body was organized — have been, and are 
 in force. 
 
 That also, in the State of Tennessee, the Legislature by 
 act approved the 30tb day of March, 1883, entitled : " An 
 Act to Provide for the Regulation of Railroad Companies, 
 and Persons Operating Railroads in this State ; to prevent 
 discrimination upon railroads," etc., etc.. imposed similar 
 terms and restrictions on the business of said railway line. 
 
 That, as required by sa'.d statutes of Kentucky and 
 Tennessee, the rates of fare for passengers, and the tariff 
 for freights from time to time adopted and in force on said 
 line of railroad, have been regularly filed with the Com- 
 missioners created under said acts; and. although said 
 statute of Tennessee was repealed in A. D. 1885, and the 
 Commission created thereunder abolished, yet the rate and 
 charges for freight and passage on said railroad during the 
 existence of said Commission have substantially remained 
 the same since that time; and when changes have been 
 made, in almost every instance, they have been to a lower 
 rate. 
 
14 
 
 That neither of said State Commissions, have, at any 
 time, requested or required petitioner's said schedules and 
 tariflfs to be changed or lowered, nor have they, or either 
 of them, at any time objected to the rates made by your 
 petitioner or its lessor to said water competitive points, 
 nor have they, nr either of them, considered that such 
 rates made any unjust discrimination as against other per- 
 sons or places. 
 
 That your petitioner, as such common carrier, is required 
 by law to operate its said railway each day the year through, 
 whether the business done, or ottered to be done, yields 
 a sufficient return to pay the cost of the service, — to say 
 nothing of a profit on the investment, — while the steamboat 
 lines, and other carriers by water routes, are allowed by 
 law to withdraw during the dull season, and to save at 
 least the cost of running at a loss; or, as said water craft 
 often do, they change their route over other waters, where 
 business is found that yields them a profit. 
 
 That the cost and expense incident to the carriage of 
 freights to and from points on petitioner's said railroad, 
 other than said termini and competitive points, is far 
 greater than that of like business to and from said termini 
 and competitive points, because of the fact that cars for 
 the former go or come in almost every instance, empty 
 one way and are 'freighted only in one direction, so neces- 
 sitating for all such business a double distance haul for 
 half the distance freight is carried; while as to the busi- 
 ness to and from said termini and competitive points, by 
 reason of the larger and diversified trade, manufacture, 
 etc., done at such business centers, your petitioner is en- 
 abled to freight its cars in each direction, and its empty 
 haul, as to such business, is far less than for the business 
 at way stations. Besides above, by reason of abundance 
 and competition in labor and other facilities therefor, the 
 expenses of loading and unloading cars at said terminal 
 and competitive points is less than at intermediate or way 
 stations. And for these reasons, the cost of the service 
 
15 
 
 being less, your petitioner is enabled to do the business at 
 said terminal and competitive points, even at lower rates 
 than at said intermediate or way stations. 
 
 That in order to secure any part of the business at said 
 terminal and competitive points, your petitioner is required 
 by necessity to meet tlie rates made by said carriers by 
 water ; while to lower its rates as to all other points on its 
 line so as to coi^form thereto, and comply with the pro- 
 visions of the first clause of the fourth section of the Act 
 of Congress under which your honorable body is organ- 
 ized, would bankrupt your petitioner; and at the same 
 time to require your petitioner to adjust its rates as to said 
 termimil and competitive points up with those at its said 
 other stations will loso your petitioner the business of said 
 points, which will inevitably take the cheaper route by 
 river, etc., and so seriously cripple your petitioner and de- 
 prive it of its legitimate business and revenue, and entail 
 upon it serious loss. 
 
 Your petitioner is advised that it may lawfully make a 
 low^r charge for freight or passage for a longer than for a 
 shorter distance where such charge is necessary to enable 
 petitioner to meet the competition of said carriers by water 
 on saift rivers. Which construction of the law your peti-, 
 tioner is advised your honorable body have adopted, and 
 petitioner is desirous of obtaining your ruling in that re- 
 gard as concerns its said railway, for the reason that the 
 circumstances and conditions are not substantially similar 
 when such competition is met as when the same does not 
 exist. 
 
 However, if mistaken in this position, your petitioner is 
 further advised that under the proviso of the fourth section 
 of said Act of Congress under which your honorable body 
 is organized, authority may be granted your petitioner to 
 charge less for longer distances than for shorter distances 
 for the transportation of passengers or property upon 
 application to your honorable body therefor. 
 
16 
 
 Your petitioner would further show unto your'honorable 
 body, that the Louisville and JSTashville Railroad Company, 
 the Nashville, Chattanooga and St. Louis Railway Com- 
 pany, and the New Orleans and Texas Pacific Railway Com- 
 pany, and other railway lines, members of the Southern 
 Railway and Steamship Association, are competitors of pe- 
 titioner for business at Louisville and points North aud East 
 thereof, at Evansville, Henderson, Chicago and other points 
 in Ohio, Lidiana, Illinois aiad Northwestern points based on 
 Chicago, St. Louis and other points reached through that 
 city, as well as Mississippi, Louisiana, Arkansas, Texas 
 and the Pacific Coast points and intermediate territory, 
 and points in the Southeastern Gulf States, etc. 
 
 That your petitioner had on the day of April, inst , 
 
 readjusted its rates and charges in conformity with the act 
 of Congress known as the Inter-State Commerce Act, 
 copies of all of which rates and charges, as well as of its 
 tariffs in -force previous thereto, are herewith filed as 
 " Exhibits" to this petition. 
 
 Tljat however, since the order of your honorable body 
 of date about the 6th of April instant, suspending for 
 ninety days requirements of said act of Congress as to 
 said Louisville aud Nashville Railroad Company and other 
 lines composing the Southern Railway and Steamship, As- 
 ' sociation, those lines have so reduced their rates and'char- 
 ges, amounting, in some instances, to fifty per cent., to 
 many of said competitive points, as to shut out your peti- 
 tioner from all participation in the business ; said lines of 
 said Southern Railway and Steamship Association being 
 thus relieved frqm the requirements of the law as to the 
 long and short haul, while your petitioner, having no such 
 relief from your honorable body, is endeavoring to comply 
 with said statute, and it has for several days been unable to 
 secure any of such competitive business, shippers naturally 
 preferring^ the cheaper route and sending their freight by 
 said Louisville and Nashville Railroad and associated lines, 
 to the great loss and injury of your petitioner ; while again, 
 
17 
 
 shippers at intermediate points on your petitioner's line, 
 are paying it full rates, as per said schedules and tariff's 
 herewith filed, and other shippers on said rival lines are 
 securing far lower rates, to the great loss and damage of 
 those on petitioner's line. 
 
 In consideration of these premises, your petitioner prays 
 that under, the proviso to the said fourth section of the 
 act of Congress under which your honorable body is 
 organized, authority be granted your petitioner to charge 
 less for longer than for shorter distances for the transpor- 
 tation of freight and passengers to and from its said termi- 
 nal and competitive points, so as to enable your petitioner 
 to meet the competition of said carriers by water at those 
 places ; with authority to so alter and change the said rates 
 from time to time as may be necessary. 
 
 Your petitionfT further prays to be allowed to make the 
 same rates, to and from interior and other competitive 
 points, as your honorable body have already allowed said 
 L. & N. R. R. Co. and associate lines to do, so as to enable 
 petitioner to do business to and from said points over its 
 connections, etc. And for general relief and as ever bound, 
 
 etc 
 
 THE NEWPORT NEWS & MISSISSIPPI 
 VALLEY COMPANY. 
 
 By C. P. HUNTINGTON, President. 
 HOLMES CUMMINS, Attorney. 
 
 United States of America, 
 
 Commonwealth of Ky., 
 County of Jefferson. 
 
 Personally appeared before me, C. P. Krebs, a Notary 
 Public in and for said county of Jeff"erson, and State of 
 Ky., the said C. P. Huntington, to me personally known, 
 and being duly sworn, deposed and said that the matters 
 set forth above are full and true to the best of his knowl- 
 edge, information and belief. 
 
 [seal.] C. F. krebs, Notary Public, etc. 
 
18 
 
 John Echols, being duly sworn, said : I am sixty years 
 of age, and have been connected with the Chesapeake, 
 Ohio and Southwestern Railroad since its organization in 
 1881, as its vice-president. 
 
 This line of road running from Memphis, in Tennessee, 
 to Louisville, Kentucky, was leased to the !N"ewport News 
 and Mississippi Yalley Company in the early part of the 
 year 1886, iind. since that time has been operated by the N. 
 K & M. V. Co. 
 
 My position in the latter company is virtually the same 
 regarding the management and operation of said railroad 
 as it was prior to the lease. 
 
 In this way I have had charge of said line of railroad 
 and the management of its business since it was opened in 
 the early part of 1882. My business necessarily has called 
 me over the line of this road and at its various stations, 
 and through adjacent country frequently, and I might say 
 that for nearly six years past I have virtually lived along 
 the line of road, and in this way have become pretty thor- 
 oughly acquainted with the country between Louisville 
 and Memphis, and know what it is and what the people 
 living through that country need or can furnish in the way 
 of transportation matter to a railway line running through 
 their midst. I file herewith and make the same a part of 
 riiy deposition as an exhibit hereto, a copy of the annual 
 report of the president and directors of said C. 0. & S. W. 
 E,. E. Co. as to the business done on said line of road dur- 
 ing the year 1886, which shows pretty fully what we have 
 done, and how we have done it, as well as the classifica- 
 tions of our business, both as to tonnage and earnings. 
 The facts stated in said report are, I believe, full, and are 
 true. 
 
 The road, as operated, extends from Louisville to the 
 city of Memphis, a distance of 392 miles. It runs through 
 a sparsely settled country, and on all its line the agricul- 
 tural interest is the one which predominates. For most of 
 the distance this agricultural interest has not heretofore 
 
19 
 
 been a very prosperous one ; it has required a great deal 
 of care to foster and encourage the same and also induce 
 its further development. In addition to the agricultural 
 interests there are a number of coal mine?, distant from 
 112 to 140 miles from Louisville This coal, whilst of very- 
 good quality, yet is not reoarded as of equal quality with 
 the Pittsburg coal, which is its principal competitor at the . 
 various points our road touches navigable streams, such as 
 Louisville, West Point, Rockport, Paducah, Dyersbur^, 
 Eddyville, Kuttawa and Memphis. The road for a great 
 part of its line traverses a broken country, and conse- 
 quently has pretty high grades and sharp curves. It crosses 
 the following navigable streams, which are navigated by 
 steamboats, as follows : Salt river, twenty miles west of 
 Louisville; Green river, 117 miles from Louisville ; Cum- 
 berland river, near Kuttawa; the Tennessee river, near 
 Calvert City ; touching the Ohio again at Paducah ; the 
 Obion river at Obion station, which is 96 miles from 
 Memphis ; the.Forked Deer river at Dyersburg. 76 miles 
 from Memphis; the Big Hatchie at Rialto, 42 miles 
 from Memphis ; terminating with the Mississippi at Mem- 
 phis ; at all of which points the road of course has to 
 compete with water transportation. 
 
 By reference to the annual report, which has been here- 
 tofore filed, it will be seen that there was transported of 
 local freight — including coal — during the year 1886, 464,033 j 
 tons of freight, on which there was received an average of / 
 .01^* per ton per mile. That during the same time there y^ 
 was transported of through freight 231,539 tons, on which 
 was received .669 per ton per mile, making altogether of 
 freight carried, both local and through, 695,572 tons, upon 
 which was received an average of .01 per ton per mile. It 
 will be seen also that in carrying the 464,033 tons of local 
 freight, only 60,818,410 ton miles were run, whereas in car- 
 rying the 231,539 tons of through freight, 63,389,231 ton 
 miles were run. The revenue from local freight was 
 1818,477.43, the revenue derived from through freight was 
 
20 
 
 $423,764.73, making together the gross receipts for freight 
 $1,242,242.16. It will be further seen that the operating 
 expenses of the road were .8V^ per cent, of the gross 
 earnings, leaving a net earning of $656,525.41, which was 
 $18,095.17 less than the fixed charges of the road. By 
 operating expenses I mean the actual expenses of running 
 the road and maintaining the track and equipment, and in 
 this is included no interest upon capital cost or dividends 
 upon stock. These latter sums have no fund from which 
 to derive payment excepting out of what we call net earn- 
 ings, and, as I said above, these net earnings are insuffi- 
 cient to pay our interest account — which we call fixed 
 charges — by the sum of $18,095.17, leaving nothing for 
 dividends on stock. Our deficit for the year 1886 was 
 smaller than for any previous year this road has been op- 
 erated, and our funded debt account represents less than 
 the actual money cost of the property of the road. 
 
 If the fourth section of the Inter-State Commerce bill is 
 enforced against this road one of two things must be done : 
 Either the rates on through business must be increased, or 
 the rates on local business must be decreased. In my 
 opinion, if the rates on through business are materially 
 increased the business will be lost to the road, because that 
 business then will go by our rivals, the competitors on the 
 water lines I have mentioned, for, naturally, the business 
 will take the cheaper route. This would involve to us the 
 loss certainly of most of the $423,764.78, which have been 
 derived from this through business ; or, if the rates on 
 local business should be reduced, it could not have the 
 effect of increasing materially for a long time to come the 
 volume of this local business, and must therefore operate 
 in a reduction of the earnings from this local business. 
 . Either one of these results, it will be seen, would be ruin- 
 ous to the interests of the road. 
 
 I know that the volume of our local business cannot be 
 increased by any inducement of a reduction in the rates 
 thereon so as to compensate for the loss of revenue in the 
 
21 
 
 reduction, because I am thoroughly conversant with the 
 country that is tributary to our road, and from and to 
 which this local business is carried. I have been, as I said 
 above, in this country all my time virtually for many years, 
 and it has been my study to know what the business of the 
 country was, in what it consisted, what it needed to be 
 imported for consumption, what it produced for expoft. 
 and I know that nothing we could do by way of lowering 
 rates on local freights through that country could so build 
 it up and increase the volume of its local traffic as by any 
 possibility to make up the loss of revenue we would suffer 
 in decreasing our local rates to anything near the basis of 
 our through rates. Besides these matters, the difference 
 between our local and through rates is more apparent than 
 real, for the cost to us of carrying the through business is 
 far less than that on the same quantity or kiud local. Our 
 through business largely comes to us from connecting car- 
 riers beyond one or the other terminus, and goes to points 
 beyond our line, and the only services we render about 
 same in the main is of the mere hitching on our engines 
 to the cars in whicli the same is delivered to us loaded and 
 haul the same over the road; even where the same is de- 
 livered to us by a shipper at one of our termini, it is gen- 
 erally loaded by such shipper and unloaded by the con- 
 signee. Our through trains run day and night, take less 
 than half the same time to go over the road, are manned 
 by a fewer number of men in the crew, and so in all' these 
 ways cost far less than the local train or freight. 
 
 Again, at our terminal points we have a business to and 
 from the same because of the fact that they are large dis- 
 tributing points, doing a business in and out at all times of 
 the year, and so giving us a return load for the car that we 
 carry there loaded, and not requiring cars to be hauled to 
 them empty for the loads they wish to give us, while at our 
 intermediate or local way stations the condition of things is 
 entirely reversed. Being an agricultural community n ith 
 few manufacturing or milling interests along the line— coal 
 
22 
 
 and lumber only excepted — we carry loaded cars to them 
 with their farm supplies, merchandise, etc., during one- 
 half of the year when they have no farm produce for exr 
 port, and in the other half of the year we have to carry 
 empty cars to those way stations for hauling off their sur- 
 plus farm produce when they are not importing but living 
 upon the produce they have harvested. 
 
 It is apparent from the facts I have stated, and I repeat 
 it only for emphasis, that the making of lower rates to 
 through or competitive points is not from any caprice or 
 desire on the part of our carrier company to foster or build 
 up the one at the expense of any other, nor to give to* any 
 person or locality an advantage over any other. These 
 through rates are made at lower figures than intermediate 
 rates only because for the reasons I have above stated. We 
 can do that business at less expense than we can that at 
 way stations, and have to meet the competition there of 
 ' carriers by water. In no instance do we do business for 
 any person or locality at an actual money loss, nor do we 
 in any single case recoup or make up losses at any other 
 point or from any other person by increasing our charges 
 against another. Having our right of way, roadbed, track, 
 rails, bridges, motive power an^l rolling stock as a fixed 
 plant, whatever business we can induce that pays us in 
 revenue above its actual cost of movement reduces by so 
 much the charge we would otherwise be required to make 
 upon' the other or local traffic. The rivers I have men- 
 tioned are our principal competitors ; they are navigable 
 at the points we touch or cross them all the year round, ex- 
 cepting the Obion, Forked Deer and Big Hatchie, during 
 the summer months. 
 
 Louisville is a city of some 200,000 people, Paducah of 
 some 1-5,000, and Memphis of some 75,000. There are a 
 large number of boats plying between Cincinnati. Louis- 
 ville, Paducah and Memphis, as w^ell as between St. Louis, 
 Meniphis and Few Orleans, owned by wealthy corporations, 
 and these make formidable rivals or competitors as tp all 
 
^3 
 
 of our through business. In order to get a share of such 
 business we have to make our rates correspond with those 
 fixed by these water carriers. They are the stronger force, 
 and control the matter. 
 
 I have read over carefully the petition filed before the 
 Honorable Inter-State Commerce Commission by thelTew- 
 port News and Mississippi Valley Co. as lessee of said 
 Chesapeake. Ohio & Southwestern Railroad, vei'ified by 
 Mr. C. P. Huntington, President, and know the statement 
 of facts therein set forth to be true. 
 
 JNO. ECHOLS, Vice-President. 
 
 Subscribed and sworn to beforemethislOthday of May, 
 1887. C. F. KREB8, Notary Public. 
 
24 
 
 F'IKTH ANNUAL REPORT 
 
 OF THE 
 
 Chesapeake, Oljio and Southwestern Railroad Company, 
 
 PRESIDENT'S REPORT. 
 
 JS"bw Yoek, February, 1887. 
 
 The President and Directors submit herewith their report 
 of the operations for the year ending, December 31, 1886. 
 
 The Company controls a line of railroad from Louisville, 
 Ky., to Memphis, Tenn., 392.48 miles, und a brcinch line 
 from Elizabethtown to Cecelia Junction of 6 miles ; total 
 398.48 miles and 47.01 miles of sidings. 
 
 During the year 74.66 miles of steel rails have been put 
 in the track, leaving now but 49.76 mile.^ of the old iron 
 rails in the track, and it is contemplated to replace these 
 with steel rails during the year 1887. 
 
 The organization of the Newport News and Mississippi 
 Valley Company, which contemplated the unification in 
 interest and management of the several lines of railway 
 and other transportation interests of the Chesapeake and 
 Ohio Railway Company and its western associates, having 
 been perfected, your Board entered into a lease with that 
 Company for the operation of this property for a period of 
 50 years, commencing with February 1,1886, by the terms 
 of which, the Lessee is to keep the leased property in good 
 repair, to operate, maintain, add to and better the same as 
 the business of the road may from time to time require, 
 and to apply the remaining surplus to the payment of its 
 Equipment Trust Bonds and interest thereon, and other 
 interest obligations in the order of their priority, and to 
 make such other advances from time to time as may be 
 agreed upon between the Lessor and Lessee. Under the 
 operation of this lease, greater efficiency and economy are 
 secured in the administration of the several properties, 
 and a better service rendered the public. The results thus 
 far fully justify the wisdom of this measure. 
 
25 
 
 
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26 
 
 Compared with the operations of the year 1885, there 
 has been an increase in the Gross Earnings of $142,169.80 
 or 9.04 per cent, and a decrease in the Operating Expenses 
 of 17,241.40, and an increase in the Surplus over Opera- 
 ting Expenses of $149,411.20, or 29.73 per cent. 
 
 The earnings from coal have decreased $25,911.03, or 
 10.80 per cent., resulting from a decrease in tonnage of 
 13.90 per cent , those from local freights have increased ^4'^,- 
 697.84-, or 8.65 per cent., and those from through freight $102,- 
 197.06, or 31.78 per cent., both resulting from a proportionate 
 increase in the tonnage carried, making a net gain for the 
 year of $123,983.87, or 11.09 per cent, over 1885. The 
 total number of tons carried during the year wei-e 695,572 ; 
 of this 29.92 per cent, was coal, 36.80 per cent, local freight, 
 and 33.28 per cent, through freight. The rates received per 
 ton per mile have been somewhat less, the average receipts 
 being 1.000 cents against 1.015 cents in li85. 
 
 The passenger earnings shoyr an increase of $8,175.74, 
 or 2.18 per cent., resulting fr'om an increase of 3.02 per 
 cent, in the number of passengers carried. The average 
 rate received per passenger per mile has been 2.460 cents, 
 which is a fraction less than was received in 1885. There 
 has been a steady growth in both the freight and passenger 
 traffic since the opening of the road as will be seen from 
 the statement below, but the reduction in the rates received 
 therefor has absorbed about all the earnings derived from 
 the increased traffic. 
 
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 Expenses. 
 
 The operating expenses are $7,241.40 less than in 1885, 
 and have absorbed 61.95 per cent, of the Gross Earnings, 
 against 67.84 per cent, in the preceding year. The addi- 
 tional freight traffic from which the increased earnings 
 were principally derived, was carried with an increase of 
 only 1.113 train miles, the addition of heavier locomotives, 
 cars of greater capacity and efficient handling of cars and 
 trains have increased the average number of loaded cars 
 per. train to 13.25 cars as against 11 57 cars in 1885. and the 
 average number of tons per loaded car to 11.22 tons as 
 against 10.55 tons in 1885, the aggregate gain being 26 60 
 tons of paying freight per train, an increase of 21.89 p' r 
 cent, over 1885. 
 
 ErOm the accompanying report of the Vice-President, 
 it will be seen that the policy of steadily improving the 
 physical condition of the property has been fully main- 
 tained. 
 
 Owing to the constant demand upon the rolling stock 
 during the entire year, the Company was unable to keep 
 the locomotives and cars up to the desired standard of effi- 
 ciency, audtherefore more than the usual amount of repairs 
 will be required in the year 1887. 
 
 There has been expended also during the year the sum 
 of $311,082.29 for Construction, Improvement and Equip- 
 ment, the details whereof are shown on table No. 5, and 
 for Real Estate the sum of $13,517.70, making a total ex- 
 penditure of $324,509.09, which has been charged to the 
 Capital account of the Company. The additions to the 
 rolling stock consist of 10 ten-wheel freight, and 1 six- 
 wheel switching locomotive, 6 Passenger, 2 Baggage and 
 Express, 1 Baggage and 200 Box Cars. 
 
 Conclusion. 
 The result of the gross operations has been quite satis- 
 factory ; it closes with a deficit of only $18,095.17 in its 
 fixed charges against one of $132,120.13 in the preceding 
 year. The prospects for the year 1887 are encouraging, 
 
29 
 
 and a surplus over all fixed charges is confidently looked 
 for. It is not expected that the operation of the Inter- 
 State Commerce Act will materially reduce the rates now ,/ 
 in effect, as nearly all important stations on the road are](^ 
 accessible by water routes, and the rates had therefore to 
 be adjusted accordingly. 
 
 Our tonnage is still restricted by the inadequate number 
 of cars at our command, and 275 Box, 25 Refrigerator, 50 
 Gondola and 50 Flat cars have been ordered for delivery 
 during the spring of 1887, and it may become necessary 
 to purchase additional locomotives if the business increases, 
 as the present number will not permit them to lay oft' for 
 a sufficient length of time to have the necessary repairs 
 and renewals made thereon. 
 
 For statements showing the financial condition of the 
 Company, amount and character of its rolling stock, you • 
 are referred to the tables accompanying this report, and 
 for such as pertain to the physical operation, to the Annual 
 Report of the Lessee. 
 
 The Board desires to express its thanks to General John 
 Echols, Vice-President of the Company, who has had the 
 immediate supervision of its local management, and to the 
 other department officers who have assisted him in its ad- 
 ministration, for the gratifying results of the year's ope- 
 rations, and to the other employees for their fidelity to 
 the Company's interest. 
 
 Respectfully, C. P. HUlS'TINGTOJSr, President. 
 
 REPORT OF THE VICE-PRESIDENT. 
 
 Louisville, Ky., February, 1887. 
 Mr. C. p. Huntington, President: 
 
 Sir — I submit here\vith a condensed report of the ope- 
 rations of the road for the year ending December 31,1886, 
 covering one month's operiition by the C. 0. &S. W. R. R. 
 Co., and eleven months by the IST. IS". & M. V. Co. 
 
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 is 61.95 per cent, against 67.84 per cent, in 1885. Tkere 
 has been used in the repairs of the roadbed 155,149 cross 
 ties and 116,000 ft. B. SJl. switch ties, a consideraWe amount 
 of ditching has been done, and the annual track inspection- 
 showed a marked improvement for the year. The masonry 
 at Otter Creek and Big Clifty has been rebuilt, extensive 
 repairs have been made on combination bridges, and 6015 
 lineal feet of timber trestling have been renewed. 
 
 Included in the operating expenses of the year is the cost 
 of the labor for relaying 74.66 miles of old iron rails with 
 new steel rails. 
 
 Kew station buildings were erected at White Plains and 
 Pryor's, new water tanks have been erected at Camp Creek 
 and St. Elmo, and all the tanks on the road have been 
 repainted. In the Mechanical Department, 13 locomotives 
 have received general and 23 light repairs, and two new 
 tenders have been built. Three Passenger and three Bag- 
 gage cars have been thox'oughly repaired and repainted, 
 and the Freight equipment has received such repairs as its 
 constant use would permit. It is hoped that the new 
 rolling stock recently added, will enable us to put the older 
 in thorough order during the year 1 887, as the repairs have 
 been below the average required to maintain it in tho- 
 roughly efficient order. 
 
 ' General. 
 
 There has been also expended for Construction and Im- 
 provement, the sum of $100,701.89, the details of which 
 are shown on table N'o. 5. There was put in the track 
 1,576 cubic yards of Stone, and 5,056 cubic yards of Gravel 
 Ballast, 35,727 lineal feet of Fencing have been erected ; 
 the embankment that had been built over Wolf River 
 Trestle and which was seriously impaired by high water, 
 has been refilled. ISTew station buildings have been erected 
 at Fulton, and additions have been made at Water Valley, 
 Rives, Trimble, Curve and Ripley ; a deep well has been 
 
32 
 
 bored at Central City, and a new water tank is in progress 
 of erection at Hennings. 
 
 4,111.73 tons of 54 lb. and 3,731 54 tons of 61^ lb. steel 
 rails have been laid in the main track, and 53,022 new 
 splices, 107,168 track bolts and 52,958 nut locks have been 
 used in making this renewal. 1 .61 miles of neXv sidings 
 have been added during the year, and numerous improve- 
 ments of minor character have been made at other points 
 on the road. 
 
 The estimates for improvements that should be made 
 during 1887, will exceed the expenditures of 1886. One 
 of the principal items will be that of ballast, in which 
 greater expenditures than have been heretofore made will 
 be necessary in order to derive the fullest benefit from the 
 outlays made for steel rails. 
 
 I beg also to report that the heads of the various de- 
 partments have discharged their duties with great fidelity 
 and efficiency during the year, the result of which, I think, 
 has been shown in the statements herein submitted. 
 
 I think that the result of the year's operations are very 
 encouraging as to the future of the property, and that it 
 may be safely assumed that as the physical condition of 
 the property is improved, the results from its operation 
 may be expected to be entirely satisfactory, 
 
 I am very respectfully, 
 
 JI^O. ECHOLS, Vice-President. 
 
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 J. F. Klepper, being duly sworn, said : I live in Padu- 
 cah, Kentucky, and am master of transportation of the 
 Newport News and Mississippi Valley Company's western 
 division, known as the Chesapeake, Ohio and Southwest- 
 ern Railroad. I have been in that position and train dis- 
 patcher of that road for several years, past, and am charged 
 with the duty of handling trains upon the road, their 
 movements, distribution of cars to and from stations so as 
 to carry the business that is offered us. I know from what 
 I have seen along the line of this road for several years, 
 that we carrv a far less number of empty cars to or from 
 our lermini, Memphis and Louisville, and Paducah, than 
 we do ti), or from our local or way stations. At Memphis, 
 Paducah and Louisville we get loads both ways, — that is, 
 to those points and from those points, — and cars that we 
 carry to those points loaded, generally are loaded again to 
 come away therefrom. This rule maintains as to nearly 
 all the business we do at those points, excepting that of 
 coal, and our empty haul of these cars is the same at all 
 points; that is, we seldom get a return load of the kind 
 of freight we can carry ou coal cars, so have to haul 
 them back to the mines empty from whatever points we 
 carry them to loaded. At oun intermediate or local way 
 stations, excepting as to the matter of coal, we get a haul 
 from those places only during the harvesting season, as 
 the country through which we run is an agricultural coun- 
 try in the main, and very few manufacturing or milling 
 interests are located along our line, and our haul to those 
 points is principally during the spring and summer season, 
 when the crops are being cultivated and farm supplies and 
 general merchandise are in demand. Because of this the 
 expense incident to the local or way station business is 
 much greater in proportion to tonnage or distance carried 
 than our through business. Besides this the cost of mov- 
 ing our freight trains varies materially as between through 
 and local, for a through freight train runs day and night, 
 starts usually loaded full to go through from one end to 
 
39 
 
 the other, and makes the trip over the whole line, 392 
 miles, in about thirty-six hours. As such train has no 
 loading or unloading to do, it requires fewer men to 
 handle it than the local train does, and the actual money 
 cost of such a train in wages of employes, fuel, etc., run- 
 ning from Memphis to Louisville is only about $76.36. 
 The cars it carries, too, have in the main been loaded by 
 shippers, or come to our line from a connecting carrier 
 beyond our terminus, and are unloaded at destination by 
 consignees or delivered without breaking of bulk to a 
 connecting carrier beyond our terminus to destination. 
 Local freight — by which I mean freight to or from inter- 
 mediate way stations — is, almost without exception, loaded 
 by our own employes into the cars and unloaded by same 
 out of the cars, and this, too, 6ven though the freight has 
 come to us from some connecting line. The only excep- 
 tion possibly is where it comes in carload lots, which is 
 a seldom occurrence for way stations. Of necessity our 
 local trains run only in day time, and so make an average 
 of only about eighty-five miles per day, and, having this 
 loading and unloading to do, together with switching in 
 and out at way stations, a larger number of men is required 
 to handle and manage the train and do its work. A local 
 freight train consumes four or four and a half days in 
 passing over the entire length of the road, and usually 
 costs about $101.40 in wages of employes, fuel, etc. This 
 is an increase of wages nearly fifty per. cent, above that 
 the through train costs, and about fifteen per cent, increase 
 of cost in fqel, etc., making an average of about thirty per 
 cent, that the local freight train costs in going over the 
 entire length of our road above what the through freight 
 train costs for going the same distance. This leaves out 
 of view entirely the value of the cars in the two trains, 
 their reasonble rent, track account, etc. I have examined 
 my records carefully that I keep of my train movements, 
 for the purpose of stating exactly what our respective 
 through and local trains usually haul, and find that our 
 
 / 
 
40 
 
 average through freight train hauls eightqeu loaded cars, 
 while our average local freight train usually carries only 
 ten loaded cars. The cars in a through freight train are 
 usually loaded to their full capacity, while those of the local 
 freight are seldom so done, and, while I cannot give the 
 exact figures, yet am satisfied that counting out what the 
 local car lacks of a full load, the average train load of such 
 local train would hardly be more than seven or eight cars 
 of full loads. It is a fact, well known too^ and recognized 
 by every practical railroad operator, that the expense of 
 handling business to and from our intermediate or local 
 way stations is far greater per piece, per ton, or per car, 
 than like quantities to or from through points, and the 
 facts I have stated above show how this is and why. I 
 heard the testimony of Col. H. D. McHeury before the In- 
 terstate Commission at Memphis, and would say further 
 that the train loaded with coal that he supposed, say six- 
 teen loads from McHenry to Louisville, 112 miles, would 
 bring in freight charges to the company about $128.00, while 
 our expenses for handling said train in the wages we would 
 pay Qjir employes, purchase of fuel and supplies for run- 
 ning the train would amount to only $21.00, leaving an 
 actual net earning on that train of about $107.00, to be ap- 
 plied: to the use of the cars, track, right of way, etc. 
 
 In my statement above as to the line of our road run- 
 ning through an agricultural country with but few mills 
 or manufactories along the line, I would make this quali- 
 fication : Within a hundred miles of Memphis there are 
 a, number of saw mills cutting up the timber, through that 
 country, and this we carry to northern and eastern mar- 
 kets. Those mills are grouped at principal points, such 
 as Obion, Dyersburg, Gates and Woodstock, at each of 
 which points we are very close to, if not upon, navigable 
 rivers. These saw mills are about the only milling inter- 
 ests of any importance on our road excepting those at 
 Louisville, Paducah and Memphis. The output of these 
 saw mills is regular, uniform and large, and we are enabled 
 
41 
 
 to arrange for it with advantage, in knowing wha/t it is and 
 taking care of it regularly, which also cheapens the cost 
 to us of handling it over irregular and uncertain shippers 
 at occasional stopping points. This lumber also is always 
 loaded and unloaded by the shippers, and we have nothing 
 to do therewith except haul the cars on which they have so 
 loaded same. 
 
 J. F. KLEPPER. 
 
 Subscribed and sworn to before me by J. F. Klepper, 
 this 9th day of May, 1887. 
 
 S. B. CALDWELL, Jk., 
 
 Notary Public. 
 
 Before the Inter- State Commerce Commission of the United 
 States at Memphis, May the Sth, 1887. 
 
 James M. Edwards, being duly sworn, deposes and says, 
 as follows : 
 
 I am the Vice-President and the General Manager of 
 the Louisville, New Orleans and Texas Railway Company, 
 and have occupied that position since the organization of 
 said company in August, 1884, and during the construc- 
 tion of its line during 1882-83-84. That company was 
 formed by the consolidation of the Tennessee Southern 
 Railroad Company of the State of Tennessee, the Mem- 
 phis and Vicksburg Railroad Company, and the New 
 Orleans, Baton Rouge, Vicksburg and Memphis Railroad 
 Company of the State of Mississippi, and the New Orleans 
 and Mississippi Valley Railroad Company of the State of 
 Louisiana. These constituent corporations of said several 
 States, had constructed portions of the line of railroad 
 now owned by the consolidated corporation. The Louis- 
 ville, New'Orleans and Texas Railway Company, between 
 Memphis, in Tennessee, by way of Vicksburg, in Missis- 
 sippi, and Baton Rouge, in Louisiana, to New Orleans in 
 the latter State. The construction of this line was begun 
 
42 
 
 in the summer of the year 1882, and was completed in the 
 fall of the year 1884, and opened regularly for business 
 about January, 1885. The actual money cost of the. build- 
 ing, and equipment of this line of railroad, extending as 
 it does some four hundred and fifty -five (455) miles of 
 main line between Memphis and ITew Orleans, amounted 
 to the sum of about fifteen million dollars ($15,000,000). 
 
 The country traversed by the line of this railroad, prior 
 to its construction, was in the main without transportation 
 facilities, excepting as the same was furnished north of 
 Vicksburg, by the Mississippi river upon the west and the 
 Illinois Central Railroad Company some fifty (50) miles to 
 the east, at Vicksburg a line of railway, known as the 
 Vicksburg and Meridian Railroad, owned by the " Queen 
 and Crescent" system (C, IST. O. & T. P. Ry. Co.), was 
 crossed, and by the Mississippi river south of Vicksburg. 
 
 At the time the construction of this line was begun the 
 Mississippi river overflowed its eastern bank at various 
 points between Memphis and New Orleans, the levees hav- 
 ing become insufficient and crevasses existed, letting the 
 flood of said river through much of the country that said 
 line now traverses. Between Vicksburg and Memphis,'for 
 some one hundred and twenty-five (125) miles in length, 
 the lands were wholly unprotected from the waters of said 
 river, and south of Vicksburg or below Baton Rouge one 
 large crevasse or break in the levee had occurred, through 
 which the water of said river passed for twelve (12) or 
 fifteen (15) years into Lake Ponchartrain, east of New 
 Orleans. 
 
 Besides the work of constructing and equipping said 
 line of railway, the individuals projecting said line of road 
 found it advantageous, if not necessary, to aid in the 
 rebuilding of said levees, and contributed directly to the 
 closing of the Bonne Carre crevasse in Loui^iiina at an 
 expense of some forty thousand ($40,000) dollars, the pub- 
 lic contributing the other monies necessary for that pur- 
 pose, and advanced by way of loans to the public interested 
 
43 
 
 in the North Mississippi levee districts, known as the 
 Yazoo-Mississippi Delta, about nine hundred thousand 
 ($900,000) dollars more for the purpose of rebuilding that 
 portion of said levees. This levee wqrk has effectually 
 shut out the waters of said Mississippi river from over- 
 flowing its east bank during the seasons of 1885, 1886, 
 1887, excepting only some minor breaks in 1886 which 
 were promptly remedied. 
 
 During the two years that this line of railway has been 
 opened for business and in active operation, its earnings 
 have not been sufficient to pay interest upon its actual 
 money cost. From its terminus in Memphis to the city of 
 New Orleuns the line is in active competition with steam- 
 boats, barges and other craft upon the Mississippi and 
 Yazoo rivers, and for all business between its termini and 
 many intermediate points where it touches said river or 
 approaches so near thereto as to be affected or within the 
 reach of boats on said river, it is compelled to accept such 
 rates on the carriage of property of every class as the 
 carriers by said water routes, with insurance added, have 
 fixed, and from time to time do fix ; for these rates by our 
 competitors on the river are changeable, in that they have 
 generally no fixed tariff for points where they compete 
 with us, but take business to or from such competitive 
 points at whatever rates they can obtain the same, regard- 
 less of those that existed twenty-four hours previous. It 
 is the custom for steamboat lines to first ascertain what 
 are the railway rates as published, and then make such a 
 reduction therefrom as will enable them to take the busi- 
 ness. I know this from frequent interviews with shippers 
 who were seeking to obtain rates from water carriers and 
 ourselves. Said line of railway touches the Mississippi 
 river at Memphis, Vicksburg, Baton Eouge and New 
 Orleans, and by branches and connecting lines touches 
 said river at Glendale or Helena, Pluntington, Greenville, 
 Port Hudson, and several other stations adjoining these 
 points, which are fully set out in exhibits to the petition 
 filed by said company with the Commission. 
 
44 
 
 The schedules and tariffs of charges by steamboats and 
 other carriers along said rivers, several of v^hich have been 
 filed in this proceeding as exhibits to the petition of said 
 company, or in proof, show that it is the habit and daily 
 custom of said water craft to charge a lower rate to such 
 points along said rivers, where said water carriers come in 
 competition with the petitioner or other rail lines, than to 
 intermediate way landings. This competition said railway 
 company is compelled to meet at said points, where the 
 same exists, or to withdraw from the business of such 
 places. 
 
 The earnings of this company for the last calendar year 
 amount to the sum of one million eight hundred and 
 three thousand seven hundred and eighty-four dollars and 
 seventy-three cents (11,803,784.73.) Of this amount the 
 sum of one million one hundred and twenty-nine thousand 
 eight hundred, and forty- one dollars and fifty-seven cents, 
 (11,129,841.57) was received from the carriage of freight 
 over said line ; of this latter sum there was received from 
 the carriage of through freight the sum of five hundred 
 and twenty-two thousand six hundred and forty ($522,- 
 640.71) dollars and seventy-one cents, and from the carri- 
 age of local freight the sum of six hundred and seven 
 thousand two hundred ($607,200.86) dollars and eighty-six 
 cents. Through business comprises shipments between 
 points beyond, and passing over our line and between 
 either terminus, or Vicksburg, Baton Rouge, Huntington, 
 Greenville and Harriston for ITatchez. Local business 
 comprises shipments between points beyond, or terminals 
 and intermediate points, and between two intermediate 
 points. 
 
 The only department of a railroad which renders rev- 
 enue is in the train service, and if trains performing one 
 class of service, cost the same per mile run, as other trains 
 performing a different class of service, and the wear and 
 tear upon the track by each class is the same, each should 
 make the same gross earnings per mile run, to make the 
 
45 
 
 net earnings from each class of traffic the same in propor- 
 tion to the total amount done. If there are additional 
 charges other than for carrying, such as for terminal ex- 
 penses, insurance for extra risk, &c., which are necessary 
 for the traffic of the one class, and not necessary for the 
 traffic of another, the trains carrying the traffic for which 
 there a,re additional charges, should earn a sufficient 
 amount above the other to meet these additional charges. 
 While it would be unreasonable to expect every train run 
 during the year to earn the same per mile run, still, if for 
 a year the average earnings of one class of trains per mile 
 run, is the same as the average earnings of another class 
 of trains per mile run, all expenses per mile run being the 
 same, it is just to state that the one has netted as much in 
 proportion to the amount of its service, as the other. Now 
 in order that each class may earn the same, they must each 
 carry the same average amount at the same average ©§«, 
 or if a less average amount, then for a proportionately 
 greater «i««t. , 
 
 The freight traffic upon our road is divided into through 
 and local. The former is carried chiefly by through freight 
 trains, and likewise, the latter by local freight trains. 
 
 The local train having to stop at all stations and gather 
 up or deliver its freight, a little at the different places, 
 loading and unloading as it goes, requires more laborers 
 or train men, runs a less distance per day, and has cost us 
 an average for the year of 26% more per mile run, for J 
 engineers, firemen, conductors, and trainmen, than our 
 through freght trains. 
 
 For the yearly average by accurate data, the local trains , 
 carried 10.4 loaded cars per mile run, the through trains J 
 carrying 21.4 per mile run. 
 
 A car in transit is counted loaded as long as it has 
 any freight in it, and as the local freight'is delivered as 
 the car stops at the different stations, and although the 
 accurate data for such calculations are not kept, it is not 
 unreasonable to assert that the local cars would not average 
 
46 
 
 over two-thirds the tonnage to a car for the entire distance 
 counted as loaded, as do the through cars, which are almost 
 always fully loaded and go the entire distance without 
 lessening the weight. From this data the local freights 
 have averiiged only 2-3 of 10.4, or 7 fully loaded cars per 
 mile, run to 21.4 on the through trains ; and as the quan- 
 tity carried per train mile is as 7 to 21.4, or 1 to 3, the 
 earnings per ton per mile should be as 3 to 1, or three 
 times as much per ton per milefor local as for the through. 
 . This, if expenses were the same ; but as above stated, the 
 expenses of train crews, etc., are 26 per cent, more on 
 local than on through, and the charges should average suf- 
 ficiently higher to meet this additional expense. 
 
 In addition to the extra cost of train service, all the ex- 
 penses of local agencies are chargeable entirely to local 
 freight, and also the greater part of agencies' expenses at 
 such through points as are receiving and distributing 
 centers. Local freights, except such heavy articles as 
 coal, lumber, brick, wood, etc., are handled both by for- 
 warding and receiving stations, and even though they may 
 come from a connecting road, have to pass through the 
 warehouse to be reloaded in station order, unless when in 
 car loads. Through freight is mostly loaded by shippers, 
 compress companies or connecting lines, there generally 
 being nothing more necessary than to switch the loaded 
 car into the train. To a large extent, the same is true in 
 delivery. 
 
 While we do not keep separately the expenses of hand- 
 ling through and lotal freights at terminal aad junction 
 points, an estimate of the comparative cost can be made 
 from data in connection with the Huntington station. 
 This station handled, during the year 1886, 62,289 tons of 
 through and 2,112 tons local freight. This local freight 
 was handled entirely by the ngent and his laborers. The 
 total cost for warehousemen and laborers did not exceed 
 $750.00, or about li cents per ton for the entire freight, 
 while the cost of loading and unloading freight at Mem- 
 
47 
 
 phis and Vicksburg was 17 cents per ton. This additional 
 cost evidently is chargeable to local freight. All of the 
 expenses of local agencies and a' larger proportion of that 
 of terminal and junction agencies are chargeable to local 
 freight. 
 
 We find by accurate calculation that during the year 
 1886 our through freight earned .755 cents per ton per 
 mile, while the local earned 2.31, or just three times as 
 much as the through ; and from the above data it is safe ■/ 
 to say that the company netted proportionately as much, 
 if not more, fi'om its through business than from its local, 
 although the former was carried for one-third of the rate 
 per ton per mile as the 'latter. 
 
 The local freight train runs only by day, making during 
 the twenty-four hours only about 110 miles, while the 
 through freight runs both day and night and will make 
 over 300 miles during the twenty-four hours, thus utilizing 
 the plant and making its earnings, while the other is halt' 
 
 the time idle. 
 
 * 
 
 Should you ask if a strict enforcement of the long and 
 short haul clause was exacted of our company regardless 
 of dissimilar circumstances, whether we would raise the 
 through rates or lower the local, I would answer, we can- 
 not operate and maintain our road by doing either. By 
 the revenue of both classes of freight, we have not been 
 able to fully meet bur interest charges. If we should raise 
 the through rates to the local, we would get no through 
 business, the water lines taking it. If we should lower 
 the local rates to the through, we would transport it lor j 
 less than cost, and either would bankrupt our company. 
 
 The following statement shows the earnings and expenses 
 of said railroad for the years 1885 and 1886, respectively: 
 
48 
 
 EARNINGS. 1886. 1885. INCREASE 
 
 Passenger 577,713.59 505,247.59 72,466.00 
 
 Freight 1,129,841.57 812,335.84 317,505.73 
 
 Express 23,006 98 15,628.80. 7,378.18 
 
 Mail 43,014.43 42,224.25' 790.18 
 
 Telegraph 12,000.00 7,000.00 5,000.00 
 
 Miscellaneous 18,208.16 8,280.80 9,927.36 
 
 Total 1,803,784.73 1,390,717.28 413,067.45' 
 
 EXPENSES. 
 
 Cond. Trans .' 440,506.00 363,985.26 76,52074 
 
 Mptive Power 355,397.93 278,148.91 77,249.02 
 
 Maint. of Way. 302,451.56 274,574 30 27,877.26 
 
 Maint. of Cars 113,181.99 ' 84,669.53 28,512,46 
 
 General Expense 41,025.43 28,628.94 12,39^.49 
 
 Total 1,252,562.91 1,030,006.94 222,555.97 
 
 Earn, over Expenses 551,221.82 360,710.34 190,511.48 
 The population of Memphis is about 75,000; that of 
 Vicksbui'g aboul^ 20,000 ; that of Port Gibson about 1,500 ; 
 and that of Shaws Station about, 100, or less; that of 
 Greenville about 4,000, and that of New Orleans about 
 225,000. 
 
 Shaws Station was a wilderness with not a stick of tim- 
 ber amiss when we began to build our road through there, 
 and it has grown to its present size and shipped about 2000 
 bales of cotton this season, and our rate of $2.25 a Taale 
 for freight on cotton thence to New Orleans, does not seem 
 to have militated against the prosperity of that community. 
 The statements of facts made in the petition filed by the 
 Louisville, New Orleans and, Texas Railway Company be- 
 fore the Interstate Commerce Commission are true. In 
 no instance are the rates on freights on said road made for 
 the purpose of fostering or benefiting any one community 
 or locality or person above another, or to give any one or 
 any place pi'eference over any other, but we have so 
 shaped them as to endeavor to carry whatever business we 
 
49 
 
 could in the direction and to the place parties controlling 
 it desired it should go, and have made our rates in every 
 case as reasonable as it was possible for us to do with any 
 sort of regard to the cost of doing the services for them, 
 and where'we have made lower rates for longer than for 
 intermediate shorter hauls in the same direction, it has 
 been in every such case so made because of having to 
 meet the competition of water craft on said rivers. If we 
 did not make our rates lower at those points, we would 
 not get a share of the business there, and the road would 
 be without that much revenue that it now earns, and so 
 would be correspondingly less able to carry the local traffic 
 that is dependent upon this route alone for transportation 
 at the price we now do. JAS. M. EDWARDS. 
 
 Subscribed and sworn before me this 13th May, 1887. 
 [seal] J. M. COLEMAlSr, Notary Public, 
 
 A. A. Sharp being duly sworn, says : 
 
 I am forty-three years of age, and reside in Vicksburg, 
 Mississippi. Have been connected with railroad business 
 in the different departments for twenty-two years past. 
 Am now in charge of the transportation department of the 
 Louisville, New Orleans and Texas Railway and have so 
 been for some time past. The percentage of empty cars 
 hauled for the movement of local ft-eight on said railroad, 
 is largely in excess of such empties hauled for the move- 
 ment of through freight, and this is true because of the 
 fact that the country said railroad passes through is almost 
 exclusively agricultural, with few, if any, manufactui-ing 
 or milling interests except lumber ; and this farming peo- 
 ple import principally at one season of the year, and export 
 during the other. Their imports being of farm supplies, 
 and merchandise, and their exports being of their farm 
 products, the space and capacity required for hauling 
 
50 
 
 their imports are far less than that for hauling their ex- 
 ports. Our through points, such as Memphis and New 
 Orleans, being business centers, furnish in their larger and 
 diversified trafiic a far more regular haul, as between them- 
 selves. 
 
 I know these facts, because I have daily control, and 
 have so had for many months past of the movement of 
 cars on said road, and state this from what I know of 
 how I have to send cars from point to point. Our local 
 freight trains move only during the day time, because they 
 have day business at the way stations with the agents, and 
 people, there load and unload freights at such points, and 
 are able to make only about 112 miles per day, and because 
 ^of having this loading and unloading of freights, with 
 frequent switches and sidings, require a larger number 
 of men to work the train than is the case with our 
 through freights. 
 
 Our through freight trains run day and night, my en- 
 deavor usually being to run them all night, and we gener- 
 ally carry as much as forty -five to fifty loaded cars on such 
 trains, and they consume only thirty-six hours in passing 
 over the entire length of the road, 456 miles. Having no 
 loading or unloading, and but few sidings to make, they 
 require a fewer number of men to work the train, and so 
 are in every way less expensive to us for their cost of 
 movement than are the local freights. Cars in the local 
 freight trains are seldom loaded to their full capacity, and 
 the average of socalled loaded cars in such local train is 
 only about 10 cars, which, cut down to the average full load 
 would only be about 7 cars. 
 
 A. A. SHARP. 
 
 Sworn to and subscribed before me, this May 12, 1887. 
 [seal] TOM HOLEMAN, Notary Public. 
 
51 
 
 Deposition of E. W. How, General Freight and Passenger 
 Agent of the Louisville, l^ew Orleans and Texas Rail- 
 way, Memphis, Tenn.: 
 
 Q. — "What is your name? 
 
 Edward W. How. 
 
 Q. — What is your position ? 
 
 ■ General Freight and Passenger Agent, Louisville, New 
 Orleans and Texas Eailway. 
 
 Q. — How long have you been "in this position ? 
 
 Since August, 1886. 
 
 Q. — How long have you been in the railroad business ? 
 
 Nearly seventeen years ; most of the time in the traffic 
 department of western and southern lines. 
 
 Q.— What competition have you, if any, with water 
 craft on the Mississippi and other rivers ? 
 
 We have strong direct competition at Memphis, Hunt- 
 ington, Greenville, Vicksburg, Warrenton, Baton Eouge 
 and New Orleans ; also, at allpoints between Baton Eouge 
 and N^ew Orleans ; at points on our Lake Washington 
 Branch, and at points between Ethel and Baton Rouge. 
 
 Q. — What are the principal river lines you compete with 
 to and from these points ? 
 
 The Anchor Line of steamboats and the Mississippi 
 Valley Tran?iporta.tion Company's line of barges between 
 St. Louis and New Orleans ; the Southern Transportation 
 Company, between Cincinnati and New Orleans ; the Red 
 River and Coast Line, between New Orleans and Shreve- 
 port; the Greenville Packet Company and the Bayou Sara 
 Packet Company ; lines from Memphis to the Arkansas 
 river, and numerous independent steamboats. 
 
 Q. — Does this river competition affect your rates at other 
 points ? 
 
 Yes, greatly. Nearly all of our local rates are affected 
 by it to some extent. To illustrate : the rates from Mem- 
 phis to Greenville, Huntington, Vicksburg, Baton Rouge 
 and New Orleans have been and are the same. They are 
 
52 
 
 also the same from St. Louis and Cincinnati, while the 
 rates to Memphis are but little lower. It is evident we 
 cannot maintain anything near our charter rates to local 
 points from either terminus, as shipments would be made 
 to the river points mentioned above and re-shipped thence 
 to our local stations. We have therefore been compelled 
 to accept greatly reduced rates for long hauls to local 
 points — 65 cents being our maximum first-class rate for 
 any distance. 
 
 Q. — What is the distance from the line of your road to 
 the Mississippi river ? 
 
 Between E'ew Orleans and Baton Rouge the avei-age dis- 
 tance of the line from the river is one mile; between Baton 
 Rouge and-Vicksburg the average distance is sixteen miles, 
 the furthest distance at any point, thirty-four miles ; be- 
 tween Vicksburg and Memphis the average distance is 
 eleven miles, the furthest distance. at any point, twenty- 
 four miles ; on Lake Washington Branch, the average dis- 
 tance is three miles. 
 
 Q. — How do your local rates compare with those of other 
 lines in the south, of which you have any knowledge ? 
 
 They are much lower, for reasons given in answer to a 
 preceding question, and for distances over 100 miles, are 
 very much under our charter rates. 
 
 Q. — What does your charter, in the State of Mississippi, 
 allow you to charge ? 
 
 For first and second class freights, 65c.; for third and 
 fourth class, 45c.; for fifth and sixth class, 32c. This for 
 distance of 100 miles or under. In our present local tariff", 
 the charge for a haul of over 300 miles does not exceed 65 
 cents on first class freight, and the other classes show a 
 proportionate reduction. 
 
 Q. — Do you make any difference on the rate for com- 
 pressed and uncompressed cotton? 
 
 Yes. Compresses on this line are located at principal 
 points, where we can secure shipments in large lots for 
 distant markets. There are no compresses at local points. 
 
53 
 
 We can load fifty to sixty bales of compressed cotton in a 
 box car, while only twenty -five to thirty bales of uncom- 
 pressed cotton can be loaded in same car. 
 
 Q. — As Shaw's station, on your line, has been selected 
 as an example of a point where your rates show discrimi- 
 nation, will you state what competition you have at that 
 point, and its position on the line ? 
 
 Shaw's station is 331 miles from New Orleans ; 124 miles 
 from Memphis, and 96 miles from Vicksburg. It is over 
 20 miles distant from the Mississippi river and separated 
 from it by almost impassable bayous and swamps. Our cot- 
 ton rates are : To l^ew Orleans, $2.25 per bale ; to Memphis, 
 $2.00 per bale; to Vicksburg, |1. 75 per bale. I am of 
 opinion that if our rates were double the present figure it 
 would still be impossible to ship by any other route cheaper. 
 
 Q. — Complaint has been made of discrimination on cot- 
 ton rates at Port G-ibsou, Miss. What is the situation at 
 that point? 
 
 Port Gibson is 29 miles south of Vicksburg ; 206 miles 
 north of E'ew Orleans ;.it is eight miles from the Missis- 
 sippi river, and about the same distance from the JSTatchez, 
 Jackson & Columbus Railroad. The rate to New Orleans 
 has been, and is now, $1.75 per bale, and to Vicksburg 
 $1.00 per bale. For the year ending April 30th shipments 
 have been to New Orleans 1,435 bales ; to Vicksburg 2891 
 bales. The rate from Vicksburg to New Orleans has this 
 season been steadily mnintained at 85 cents per bale, except 
 for a few wi'eks prior to the 1st of April. Taking into 
 consideration the insurance by river, 20 cents per bale, and 
 the transfer at Vicksburg, there has been no time when 
 cotton could be profitably shipped to Vicksburg and re- 
 shipped to New Orleans, and if "there had been this route 
 was always open to shippers. The movement of cotton 
 as above noted, would indicate this. The rate of $1.75 per 
 bale is in itself just and equitable and less than the charge 
 for similar distances over other parallel lines. 
 
i 
 
 54 
 
 Q. — In what manner is your through business affected 
 by water competition ? 
 
 The greater part of the through business of this line 
 originates at or is destined to points where we find direct 
 water competition, either all or part of the way, and 
 the rates are necessarily low. To illustrate : Fully three- 
 fourths of this through business is between direct water 
 competitive points on our line, and New Orleans, St. Louis, 
 Kansas City, Atchison. Omaha and other Missouri river 
 points ; St. Paul, Cincinniiti, Pittsburg, Shreveport, Mon- 
 roe, Pine Bluff', Little Rock and Camden, all located on 
 navigable streams. The rates to interior points are also 
 based on river competition to points directly located on 
 water courses. I would further say, that so far during this 
 season, the town of Port Gibson, Miss., has only shipped 
 4,326 bales of cotton in all, of which 1,435 bales were car- 
 ried by our road to New Orleans at the $1.75 per bale rate, 
 and 2,891 bales were carried by our road to Vicksburg at 
 the $1.00 per bale rate. The rate on cotton, as I have 
 above stated, excepting for a very short period prior to 
 April 1st last, from Vicksburg to New Orleans, whether 
 by river or rail, was 85 cents, so that this 2,891 bales of 
 cotton that we carried from Port Gibson to Vicksburg, 
 came there, where the rate thence to New Orleans, added 
 to the rate from Port Gibson to Vicksburg, would be 
 higher than had it gone directly from Port Gibson to New 
 Orleans,', which would evidence a not very great desire on 
 the part of those shippers to get to New Orleans even at 
 the lower rate. Their reasons I d© not know, but simply 
 give the facts as to the rates that exist. The L., N. 0. & 
 T. Ey. has carried this season into New Orleans 352,291 
 bales of cotton, being a larger quantity than has been car- 
 ried there this season by any other rail line and more thiin 
 carried there by all the water craft plying to that town. 
 This I mention as showing that our rates to that town 
 could hardly be said to be unreasonable. We have only 
 carried to Memphis so far this season 57,795 bales, and our 
 
55 
 
 tarifi's show that our rates are as fair to the one town as to 
 the other, and that we are indiftereiit as to which direction 
 the cottoij goes, simply desiring to carry it where its owners 
 desire to send it, and the quantities carried respectively to 
 New Orleans and Memphis would seem to confii-m what I 
 stated above, that we, have not discriminated against ISCew 
 Orleans. There is virtually no Memphis cotton offered for 
 shipment to l^ew Orleans market, and though our rate on 
 such local cotton is only $1.00 per bale we have carried 
 almost none, and all the river lines together competing 
 with us have carried but 289 bales so far this season south 
 from Memphis. The rate of 85 cents a bale from Vicks- 
 burg to New Orleans was made in order to meet the rate 
 by steamboats and barges on the Mississippi River, and 
 had we not taken that low rwte then the 10,558 bales that 
 we have carried so far this season from Vicksburg to New 
 Orleans, would have been lost to our road, and have sought 
 some other route or carrier by river. The steamboats and 
 barge lines at Vicksburg, Memphis and other points along 
 the Mississippi river are our rivals in every sense, and ui- 
 less we make our rates to meet those offered by such water 
 craft we do not get a share of the business there. Of this 
 10,558 bales I have stated we carried this season to New 
 Orleans from Vicksburg, only 740 bales were for New Or- 
 leans market proper, all the remainder being for shipside 
 and export thence. The movement by river from Vicks- 
 burg for the same period showing 10,779 bales south, of 
 which only 512 bales were for New Orleans proper, the 
 balance being through shipments. Also during this sea- 
 son we have carried from Vicksburg for eastern mills, via 
 Memphis, 3,959 bales of cotton at a higher rate than we 
 received for the 9,818 bales that we carried through to New 
 Orleans, the Vicksburg shippers preferring to send it all 
 rail at a higher rate ; the boat movement north in same 
 period being 3860 bales. 
 
 8o far, this season, said railroad has carried from Green- 
 ville, Miss., 13,359 bales of cotton via Memphis to eastern 
 
56 
 
 milling points, and 10,069 bales to New Orleans for export). 
 We had to take this 13,359 bales via- Memphis, because we 
 could not then get the phips at New Orleans to .take same 
 at anything like the rate shippers could or would pay, the 
 New Orleans market at that time furnishing cargoes that 
 paid the ships better rates than this, cotton could, so that 
 in order to carry the cotton at all, we had to carry it all 
 rail. This too. was done at a loss to the company over 
 what it would have obtained out of the same rate through 
 to New Orleans, for the haul was shorter and the rate was 
 lower, per mile, and in making the rate that we did on 
 this cotton via Memphis, we had to meet the competition 
 of the Cincinnati and other steamboat packets and trunk 
 lines east of Cincinnati who ■ were ofiering to carry same 
 from Greenville, east, and it was necessary for us to meet 
 the rates offered by such water carriers, or else not get the' 
 business. In no instance have we made rates on said rail- 
 road from caprice or from any desire to benefit any one 
 individual or community or locality above another, but 
 in every case, we have made just such rates as we thought 
 were reasonable and right, and where a lower charge has 
 been made for a longer or a shorter intermediate haul, it 
 has been so made solely because of the competition we 
 met with river carriers at such places. The St. Louis 
 Anchor Line of steamboats, the Cincinnati and other Ohio 
 river lines ply the Mississippi the whole length of our road, 
 and are wealthy, formidable competitors at every point on 
 the Mississippi river, and, as above stated, affect us as to 
 all business beyond our termini. E. W. HOW. 
 
 State of Tennessee,! 
 Shelby County, j 
 
 Personally appeared before me, N. F. Lemaster, a Notary 
 Public in and for said county and State, the said E. W. 
 How, to me personally known, and made oath that the 
 matters stated by him above are full and true. 
 
 Li Witness Whereof, see my hand and notainal seal, at 
 office in Memphis, this 12th May, A. D. 1887. 
 
 [seal.] N. F. lemaster, Notary Public. ■ 
 
57 
 
 Memphi?, Tenn., Jth May, 1887. 
 Benjamin F. Mitchell appeared before the Commission, 
 and having been duly sworn, was examined as follows: 
 
 By Mr. Cummins — 
 
 Q. — Where do you live ? 
 
 A. — At Louisville, Kentucky. 
 
 Q, — What is your business? 
 
 A. — I occupy the position of General Freight Agent of 
 the Western Division of the Newport News & Mississippi 
 Valley E. R. 
 
 Q.— That is the line of road known as the Chei=apeake, 
 Ohio & Southwestern between Louisville and Memphis, is 
 it not ? 
 
 A. — Yes, sir. 
 
 Q. — State whether you are acquainted with the signa- 
 tures of the principal persons in business at the various way 
 stations along that line of railroad ? 
 
 A. — I am, yes, sir. 
 
 Q. — Do you know the principal shippers at the various 
 intermediate non-corfipetitive points tliere ? 
 
 A.— I do. 
 
 Q. — As well as those at Louisville, Paducah, Memphis, 
 and the principal competitive points? 
 
 A.. — Yes, sir. 
 
 Q — Tell the Commission whether the bundle of petitions 
 I hold in my hand contains the names of nearly all the 
 shippers of freight at your intermediate stations, as well as 
 a very fair representation of those at Louisville, Paducah 
 and Memphis ? 
 
 The witness — Is it the lot of petitions that I gave you ? 
 
 Mr. Cummins — Yes, sir. 
 
 A. — Yes, sir, they do. 
 
 Mr. Cummins: I want to present a number of petitions ; 
 they are all pretty much in the same phraseology, and come 
 from Louisville, Paducah, and from every intermediate 
 non-competitive way station along the line of that railroad 
 
58 
 
 between Louisville and Memphis. As the witness has said, 
 they contain the signatures of nearly all the shippers of 
 freight along that line of road, all asking the Commission 
 to suspend the fourth section of the law, so far as that road 
 is concerned. 
 
 By the chairman : 
 
 Q. — How were those petitions obtained? 
 
 A. — They were obtained by sending them !o agents, and 
 the iigt-nts asking the people to give us their signatures if 
 they were willing so to do. 
 
 By Mr. Cummins : 
 
 Q.— Please state to the Commission at what points, if 
 at all. your line of road meets with competition by water 
 carriers ? 
 
 A. — We are affected by water transportation from Louis- 
 ville west tilty miles, particularly at "West Point, located 
 upon the Ohio river and Salt river. We then come in 
 competition at Rockport with Green river; then at Eddy- 
 ville with the Tennessee ; at Kuttawa with the Cumber- 
 land; at Paducah, Ky., with the Ohio; at Obion, Tenn., 
 'with the streams tributary to the Mississippi; at Wood- 
 stock with the Mississippi river, and thence to Memphis. 
 
 Q. — And also at Dyersburg? 
 
 A. — At Dyersburg with the Mississippi river also. 
 
 Q. — If I understand your tarift" that you have filed with 
 the Commission, you iriake lower rates to these points than 
 you do to intermediate non-competitive points ; is that 
 true ? 
 
 A. — We do, from the fact that we are forced to make 
 our rates lower to competitive points to meet the rates 
 offered by steamboat transportation, or else not carry the 
 business. 
 
 Q. — Is that making of a lower rate at those points 
 through any desire on the part of yourself, or the manage- 
 ment of that road, to foster and build up the business of 
 
59 
 
 those places at the expense of other non-competitive or way 
 points ? 
 
 A. — K'o sir. It is simply to carry our share of the busi- 
 ness, and protect the interests of our local stations east 
 and west in either direction, giving the local people upon 
 the line of our road the benefit of the lowest rate that can 
 he made by using competition with the river, giving each 
 point east and west the local rate that belongs to it. 
 
 Q. — Have you any special Tates in favor of any person or 
 any locality, except as thus controlled by this water com- 
 petition ? 
 
 ' A. — AVe have no special rates furnished to any one. All 
 rates we make less than the tariff", are for the benefit of all 
 shippers, and are special to none. In other words, we have 
 no specials for individuals. 
 
 Q. — Please state to the Commission the respective ton- 
 nage, local and through, of your line of road during the 
 past calendar year. 
 
 A.— I would have to ask what you desire to get at. 
 
 Q. — How many tons of through freight do you carry, 
 and how many tons of local freight do you carry ? 
 
 The chairman : You can have those statistics made and 
 handed in afterwards. 
 
 Mr. Cummins : You can give us the respective amounts 
 and tell us which are the larger. 
 
 The Witness: The local business is much the largest, 
 that is, as between the local and the through, the local is 
 the largest. 
 
 Q. — How much larger ? "Was it not double your through 
 business ? 
 
 A. — More than double. 
 
 Q. — Can you tell the Commission what your average 
 local rate earns you per ton per mile ? 
 
 A. — About two and three-quarters cents. 
 
 Q. — How much were your earnings upon through freight 
 carried, per ton per mile ? 
 
 A. — 1.84 cents. 
 
60 
 
 Q. — I mean the rate per ton per mile ? 
 
 A. — Oh, I have given the wrong figures. I should have 
 said .669 of a cent. 
 
 Q. — l!^early .7 of a centV 
 
 A. — Yes, sir ; I had the wrong paper. 
 
 Q, — You say your local tonnage was more than double 
 that of your through tonnage ? 
 
 A. — Yes', sir. 
 
 Q. — You say your receipts on local freights were more 
 than double, or say treble, that of your through receipts ? 
 
 A. — Yes, sir. 
 
 Q. — Tell the Commissiou whether, if you have to grade 
 either your through I'ates up to your local, or your local 
 rates down to your through, to bring the two together, 
 which could be done and in what way you could level 
 them, practically speaking ? 
 
 A. — We would certainly be compelled to grade our 
 through business up to our loL-al. We could not afford to 
 sacrifice our local for our thr6ugh freight. We look upon 
 the through business that we gather as being so much 
 gained, irrespective of what wc'liave to do in the way of 
 local trade. We consider the work on through business 
 about one-half what it is on local, and we can afford to do 
 it for much less than we can afford to do the local business. 
 
 Q. — What you mean is, that the cost of service is about 
 one-half, in carrying the through freight, of what it is in 
 carrying the local freight ? 
 
 A. — Yes, sir. 
 
 Q. — Have you been along that line of road and through 
 that country often enough to be able to state to the Com- 
 mission whether or not you are so acquainted with the 
 volume of business in the local territory through which it 
 runs that you could, by any inducement in reducing local 
 rates to the basis of through rates, so increase the volume 
 of local business as to repay the losses in the rates by such 
 reduction ? 
 
61 
 
 A. — That would be an absolute impossibility, for the 
 business does not exist there. We could not increase the 
 local, and could not increase the through business suffi- 
 ciently to compensate us for the loss on the local if the 
 rates u-ere reduced to compare with the rates on through 
 business. 
 
 Q. — I believe your revenue from the handling of through 
 ■ freight during the past season was something over $400,- 
 000 out of a total earnings from freights of from $1,200,000 
 to Sl,400,000? 
 . A.^Yes, sir. 
 
 Q. — Suppose you advance your through rates to your 
 local, how much of that through business would your line 
 . retain ? 
 
 A. — We would not retain any of it. We would not ex- 
 pect people to ship by us at double what it would cost 
 them to ship by other routes. ' 
 
 Q. — What would be the effect on that line of road if it 
 .were to lose that through line of business ? 
 
 A. — It would simply bankrupt it, sir. 
 
 Q. — State to the Commission whether or not the larger 
 portion of your tlirough freight are not loaded by the ship- 
 pers or do not come to you in loaded cars from your con- 
 nections, and go on loaded cars to your connections be- 
 yond your line ? 
 
 A. — That is generally the case ; we rarely handle our 
 through business ; it is handled almost entirely by the 
 shipper or by our connections. We do nothing but hitch 
 on to it and haul it from one place to the other. 
 
 Q. — Is it not a fact that the trunk lines north of the 
 Ohio river are trying to enforce the long and short haul 
 rule of charging not less for any long haul than for any 
 intermediate shorter haul ? 
 
 A. — That is the information we gather from them, and 
 their tariffs demonstrate that such is the case. 
 
 Q. — Will not the effect of enforcing such a rule as that 
 
62 
 
 / be to put the weaker and shorter lines at the mercy of the 
 ' trunk lines ? 
 
 A. — Yes, sir ; and I think that is their desire. 
 
 Q. — What is the size of Paducah, Ky., as to population ? 
 
 A.— About 15,000. 
 
 Q. — As between these competing lines (your road and 
 - the river), which is the controlling factor ? 
 
 A. — The river lines make the rates at all times, and we 
 either have to follow them or come near to them, or we 
 lose the business. The water lines name the rates of trans- 
 portation. 
 
 The Chairman : It is not necessary to spend time on 
 that. 
 
 Q. — Please state whether or not, immediately upon the 
 passage or going into effect of this Act of Congress, the 
 river lines with whom you are iti competition, did not at 
 once advance their rates ? 
 
 A. — They did, sir. 
 
 Q. — As soon as you made competitive rates to those* 
 points again, what was their course ? 
 
 A. — They reduced their rates to meet us. 
 
 By Commissioner Morrison : 
 
 Q- — By through rates, you mean rates to all competitive 
 points, do you not ? 
 A. — Yes, sir. 
 
 Q — And to competitive points you haul about one- 
 fourth as much to the local points ? 
 
 A. — Our through business consists of what business we 
 haul from Louisville to Memphis, and at the same time, 
 what we receive from our connections. 
 
 Q.— You only mean on your road from one eijd to the 
 other ? 
 
 A. — On our road, from Louisville to Memphis. 
 
 Q — You do not count any of those points between 
 Memphis and Louisville ? 
 
63 
 
 A. — "We consider the river points competitive poiDts, 
 because we come in competition with the river lines. We 
 do not call that through business, though. 
 
 Q. — How do you regard that in the estimate of your 
 revenue ? 
 
 A. — That is local. 
 
 By Commissioner Walker : 
 
 Q.^If freight comes to Memphis and is not delivered to 
 any other road, do you call that local? 
 
 A. — We call that local, altliough our rates are less in 
 such cases, to meet competition by river. 
 
 Q. — It does not make any difl'erence what the rates are 
 in determining whether it is local or through, does it ? 
 
 A. — It is local to our line. i 
 
 Q. — It is local if it goes off at a station on your line or 
 comes on at a station on your line, and it is through if it 
 is delivered to some other carrier ? 
 
 A. — Yes, sir. 
 
 Said witness, B. F. Mitchell, being recalled, said : That 
 for several years past during which time he has had charge 
 and control of the freight business over the Chesapeake, 
 Ohio and Southwestern Railroad, and under its present 
 owner, the ]^ewport News and Mississippi Valley Com- 
 pany, the rates of freight, especially at local or way sta- 
 tions, have been steadily and continuously lowered, and 
 that the reduction in said railroad company's rates of freight 
 has been larger to its local or way business than upon its 
 through business, although at the same time its increase 
 of earnings have been received in larger proportion from 
 through business than from local, because of the fact of 
 increase of tonnage on through matter being in larger pro- 
 portion than the increase of tonnage in local, and in the 
 past year the volume of through business has increased 
 56,822 tons, while that of local has decreased 15,373 tons, 
 and during the past four years our through tonnage has 
 increased about 33J fo , while our local tonnage has increased 
 only about 20 % • 
 
64 
 
 I am acquainted, — prettj' thoroughly so, — with the usual 
 rates and charges upon other railroads in this portion of 
 the country for hauling like passengers or freight, as those 
 handled by the JST. N. & M. Y. Co., both through and local, 
 and know that as compared with the usual charges of other 
 railroads for like services, our rates are as low, if not lower, 
 than the usual charge about here. One of thu controlling 
 elements in determining our ability to carry through busi- 
 ness at a lower rate than local per ton per mile, is the fact 
 that at such stations as Memphis, Louisville and Paducah, 
 we get a larger volume of business lioth ways, and our 
 return empty haul of, cars to and from those through 
 points is far less in proportion than the same at interme- 
 diate way stations. The business at these latter way stations 
 is generally receiving or iu-bound during one season of the 
 year, and shipping or out-bound tlie other; that is, during 
 the spring and summer months we haul to those way sta- 
 tions general merchandise and farm supplies with no Coun- 
 try products to haul away therefrom ; and in the fall and 
 winter months we haul to those places far less of either 
 merchandise or farm supplies, but have to carry empty 
 cars there for the carriage of their produce away to dur 
 terminal points and markets beyond on our connecting 
 railway lines. In this way the haul of cars to and from 
 local stations is almost entirely empty one way, while at 
 Louisville, Paducah and Memphis, by reason of the larger 
 trade those cities give, we get a very consider.ible return 
 haul of loaded cars that we carry to them loaded, and have 
 to carry to these points a far h^ss proportion of empties to 
 be loaded. 
 
 The rule I have above stated that maintains as to loads 
 both ways, to and from Louisville, Paducah and Memphis, 
 applies with equal force to our through business to or from 
 our connections at Central City, Nortonville and Fulton, 
 Kentucky, Paducah Junction and Rives, Tennessee, at 
 which points we connect with the Louisville and Nash- 
 ville Railway, the Illinois Central R. R., the Nashville, 
 
65 
 
 Chattanooga and St. Louis R. R. and the Mobile and Ohio 
 R. R., as we not only receive from said connections at those 
 points loaded cars for our through or terminal points, but 
 also deliver to them there loaded through cars for points 
 reached by their lines.^ 
 
 I know the table of rates referred to and filed with the 
 Commission by Gen. R.F. Patterson, of the Memphis Cotton 
 Exchange, on 5th of April, 1887, as showing the probable 
 increase in freight rates between New York points and 
 Memphis, efi:ected by the long and short haul clause of the 
 Inter- State Commerce Act. That table was prepared by 
 me, and is based on the action of the Pennsylvania R. R. 
 Co. and other trunk lin&«, and the rates they have pub- 
 lished, and are enforcing from Louisville and Cincinnati 
 east. 
 
 Taking those rates as thus fixed by the trunk lines and 
 adding our lowest rate thereto, the advance of Memphis 
 rates would necessarily be 45% on first-class, and in same 
 proportion on other freight classes ; these trunk lines refuse 
 interchange of business with us except on a literal com- 
 pliance with the long and short haul rule, which advances 
 said rates as I have stated. ^.' 
 
 The Ohio, Cumberland, Tennessee and Mississip||Arivers 
 with their confluents, are our principal competitors, and 
 are navigable at the points we cross or touch them aU the 
 year round, excepting the Forked Deer, Big Hatchie ajj d 
 Obion during the summer months. Various lines of steam- 
 boats and barges ply these streams, except as I have above 
 stated, all the year round, rhost of them owned by wealthy 
 corporations or individuals, and they always fix the rates 
 at the places where we touch said streams or run close to 
 them ; and in making our rates at those points, we have 
 to come neai'ly as low as these water carriers do in order 
 togetft share of the business. B. F. MITCHELL. 
 
 Subscribed and sworn to before me this 10th day of 
 May, 1887. 
 
 [seal] COIsr. F. KREBS, Notary Public. 
 
66 
 
 James L. Frazier, being duly sworn, said: 
 
 I am thirty-eight years of age, and reside in the city of 
 Louisville, Kentucky, and am Superintendent of the New- 
 port News and Mississippi Valley Company's railroad be- 
 tween Memphis and Louisville. I have been in that posi- 
 tion on that line of road for several years past, and prior 
 to the time that I took charge of it as superintendent, was 
 in charge of its road department. Much of the country 
 this road passes through, is very .broken and hilly, ap- 
 proaching almost to mountainous, making many curves 
 and steep grades necessary ; for this reason not only was 
 the cost of the line in excess of what it would be through 
 a more level country, but the cost of operating the road 
 is also larger. 
 
 I have read the depositions given in this Inter-State 
 Commerce matter by General John Echols, and Mr. J. F. 
 Klepper, and know that the statements of facts given by 
 thobe'lgrsons regarding the business of the road, its char- 
 acterand cost of doing same, to be true We are in compe- 
 tition' with steamboats, barges, and other craft that ply the 
 Ohio and Mississippi rivers, as well as the Salt, Green, 
 Outnberland, Tennessee, Obion, Forked Deer and Hatchie, 
 a^tg all business at our termini. Paducah and other points 
 on or near those rivers, and these carriers by water are 
 constantly warring with us as to the business at points in 
 the vicinity of said rivers, and in order to secure a share 
 thereof it is at all times necessary that we meefe; the rates 
 at which said -water craft olfer to take freigh"t^ The 
 Ohio and Mississippi rivers, ns well as the Tennessee and 
 Cumberland, and the Green as far up as Hartford, are nav- 
 igable all the year round, and these streams are navigated 
 all the year round by steamboats and other craft. 
 
 The facts stated by Mr. Klepper as to the cost of doing 
 our local freight business as compared with that of our 
 
67 
 
 ttrough freight, are true. We run our local freights along 
 the road every day except Sunday, sometimes with full 
 loads, much of the time with only from a half to a third 
 of a load, or even less than that, as the husint-ss may or 
 not bo there, the expense to the company for running the 
 train being the same whether much or little is carried, 
 while our through freights on the other hand almost inva- 
 riably have full loads, and run on quicker time, and thus 
 earn regular sums, costing less than the local does. 
 
 It is also true that our local or way station business is 
 very one-sided in its movement; we having to haul goods 
 to those points through much of the year with little or no 
 return haul for the cars, and through the other portion of 
 the year having to haul empty cars to those stations for 
 their farm produce, they then desiring to get but little from 
 abroad. If we are compelled to carry freights along the 
 road at no less charge for longer haul to or from competi- 
 tive points than from intermediate way stations, there must 
 result a serious loss of revenue, for, if we take our local 
 business at the same rates that we do our through business, 
 very much thereof will be carried at an actual loss to the 
 company, and none thereof will scarcely pay as much as net 
 revenue for its carriage as the through business does. 
 While on the other hand, if we put up ihe rates on our 
 through business to the same per ton per mile as we charge 
 on local, shippers at competitive points will naturally take 
 the Water route in preference to our line ; the water car- 
 rier ofll-ring to do the service for anything less than such 
 forced rate would allow us to do. Either course would lose 
 the company almost the entire sum of its net revenue, and 
 would in. vitably result in forcing the com|any into bank- 
 ruptcy. It is a profit to the company to haul the through 
 business at the low rates it takes the same at, for otherwise 
 it could not thereby receive said freights and the revenue 
 earned therefrom, and everything hauled over the road 
 pays it some profit above the actual cost of its movement. 
 
 JAS. L. FEAZIER. 
 
Said James L. Frazier, being duly sworn, says tlaat the 
 facts stated above are true. 
 
 J AS. L. FEAZIER. 
 
 8worn to ^d subscribed before me, a notary public in 
 and for Shelby County, Tennessee, this 14th day of May, 
 A.D. 1887. 
 
 [seal] TOM HOLEMAN, Notary PuUic. 
 
\tiovt the f ntcr-^tatc ^ommew (!Kommt$$iott 
 
 OF THE UNITED STATES. 
 
 In repetition of tlie LonisTille, New Orleans & Texas Railway Comiany 
 
 AND 
 
 In re Petition of tlie Neiprt News anil lississipiii Mey Comuany 
 
 As Lessee of the Chesapeake, Ohio and Southwestcru Railroad, 
 
 KOR RBLIKK, 
 
 Against Water Competition, 
 
 UNDER THE PROVISO TO THE FOURTH CLAUSE OF THE ACT 
 TO REGULATE COMMERCE. 
 
 In submitting these cases to the Commission, it has 
 seemed to me that it would be a saving of time and atten- 
 tion, both to the Commission and myself, to present them 
 together and on one and the same argument, for the two 
 cases are quite alike in almost every important particular, 
 and what seems pertinent in the case of either road, is 
 as much so for the other. 
 
 I desire also to refer, as need may be in either case, to 
 the proofs taken on behalf of the other, as well as for both 
 companies to refer to such evidence as has been taken by 
 others relative to the questions under consideration. 
 
 The line of the Louisville, New Orleans and Texas Rail- 
 way runs parallel with the Mississippi river from Memphis 
 to New Orleans, touching the river at Vicksburg, Baton 
 Eouge, and every station between Baton Rouge and New 
 Orleans, a distance of ninety miles, and over branches and 
 other rail lines connects with said river at Helena, Hunt- 
 
70 
 
 ington, Greenville, Natchez and Port Hudson — besides all 
 the stations on the Greenville . and Lake Washington 
 branch are virtually on said river as well as on said railvsray. 
 
 While thus touching said river at these points, said rail- 
 way line at intermediate stations is, as the proof shows, 
 distant from ten to thirty-five miles therefrom and is shut 
 off from access to or from the river by lakes, bayous and 
 marshes that lie between the railway and the river, leaving 
 the country along far the greater part of the three hun- 
 dred and sixty miles between Memphis and Baton Eouge 
 dependent on this rail line for transxaortation facilities — 
 that territory for much of the year being inaccessible from 
 the river because of said marshes, etc., and for want of 
 roads and bridges. 
 
 The Newport News and Mississippi Valley Company's 
 road, between Louisville and Memphis, follows the course 
 of the Ohio and Mississippi rivers its entire length, and 
 beginning at the foot of the great falls of the former stream, 
 crosses the Salt, Green, Cumberland and Tennessee rivers, 
 meets the Ohio again at Paducah, crossing the Obion, For- 
 ked Deer and Hatchie before coming to the banks of the 
 Mississippi at Memphis. Besides connection is made again 
 with said rivers over connecting rail lines to Evansville, 
 Henderson, Owensboro, Cairo, Columbus and other points. 
 
 It is not controverted that these rivers are navigable and 
 are navigated by - steamboats and barges all the year 
 through, except, during the summer months, the Hatchie, 
 Forked Deer and Obion. 
 
 The proof shows that Louisville, Memphis and New Or- 
 leans are the principal cities and trade centers in the Missis- 
 sippi Valley, with populations ranging from 7ti,000 to 
 225,000, and a commerce ranging from $150,000,000 to 
 1200,000,000 each per annum, while Paducah with its 15,- 
 000, Vicksburg 20,000 and Greenville 4000 inhabitants, 
 also enjoy a large trade throughout their adjacent country 
 and import as well as export large quantities of freights. 
 
71 
 
 It is also plainly shown in the evidence that the steam- 
 boats and barge lines plying said Ohio and Mississippi 
 rivers are owned and operated by wealthy persons and cor- 
 porations, and that such water route carriers compete 
 earnestly and effectively with these railways for all the 
 traffic at river points, bidding lower rates from time to 
 time, according to circumstances. 
 
 The proof shows, beyond question, that the cost of the 
 service to petitioners for the carriage of through freights 
 is far less per ton per mile than is the case with local or 
 way station matter.' indeed, it is not controverted that the 
 averfige local freight train costs 25% to 50% more than 
 the through freight train per train mile — so far as train ser- 
 vice is concerned — and the average tonnage per train mile, 
 is only one-third as much on local as on through freight 
 trains. 
 
 This fact established, all the seeming difference in the 
 charge for local and through traffic disappears, for it will 
 not be contended that any rule of common or statute law 
 requires these carriers to serve either class of shippers for 
 a less charge than is exacted of the other. And the evi- 
 dence submitted shows beyond doubt that, first deducting 
 the actual outlay for haul of local traffic, there is no greater 
 sum for net earnings received by these carriers from this 
 class of their business than they derived from their through 
 freights after deducting therefrom the like actual cost of 
 haul. 
 
 The statements of business done by petitioners during 
 former years shows— and no intelligent mind will fail to 
 concur — that, if required to rigidly comply with a fixed 
 rule of charging no greater compensation for the transpor- 
 tation of property for a shorter than fox- a longer distance, 
 over the same line, in the Siime direction, they will advance 
 their charges for through traffic up to the same as is 
 charged for their local freights, and this for two reasons, 
 
 I See depositions, pp. 38-41 
 
?2 
 
 .first, that a reduction of the local rates would be the d6ing 
 that service at less than actual cost, and second, that even 
 though the advance of through rates resulted in a loss of 
 the greater part of that class of freights, yet that loss 
 would be lighter than the other, and prudence requires the 
 choice to be made of the lesser evil. 
 
 The evidence also establishes that the through freights 
 are secured to these carriers only by the lower rates of 
 charge offered by petitioners, without which inducement 
 such freights would go by the rival lines on said rivers, or 
 in many cases, not be transported — that thus petitioners 
 secure a profit not obtainable otherwise, and this too. with- 
 out thereby doing injustice or injury to other individuals 
 or localities 
 
 The petitions filed in support of these applications by 
 the hundreds of merchants and trades people of Louis- 
 ville, Paducah, Memphis, Greenville, Vicksburg, Baton 
 Rouge, and other towns, preclude any suggestion that the 
 granting the relief prayed for — that is, suspending the 
 fourth section of the Act of Congress, known as the Inter- 
 State Commerce Act — as to these railway lines, as to busi- 
 ness to and from such water competitive points, is alone 
 in the interest of these carriers by rail, and demonstrates 
 the interest of the pul)lic who are affected by these rates 
 and charges. These people speak as of one mind, and 
 with one yoice against the enforcement of a rule that 
 places an embargo on their commerce more effectual than 
 many blockades we have seen, and restricts each little ter^ 
 ritory to live within itself, shutting out all imports and 
 fencing in all surplus desired to he exported,^ and deprives 
 them of all competition between carriers. 
 
 Besides the petitions from all the local or non-competitive 
 stations of any importance on the C, 0. & S. W. R. R.,' 
 signed in most cases by every merchant and shipper at such 
 
 2 See Reports Memphis Cotton, and Merchants Exchanges, Appendix 
 
 No. I. 
 
 3 See petitions from Ripley, DyersbUrg, May field, Litchfield, etc. 
 
73 
 
 town, show that these people appreciate the advantages to 
 them of building up trade centres in the interior, and have 
 no promfitings of selfish jealousy to deprive others of nat- 
 ural advantages solely for their own benefit. These memo- 
 rials from the local or way stations prove that petitioner's 
 rates are reasonable and just, as well as that those people 
 understand and kuow that the refusal of the relief sought 
 for would be of no benefit to them in any reduction of 
 charges to or from their stations, but would result alone 
 in advances of the through rates to or from the competitive 
 points. 
 
 The evidence of Gen. R. F. Patterson, and other mer- 
 chants of M emphis,supported asit is by the statement of rep- 
 resentative business men from hundreds of towns and cities 
 throughout that broad valley, including Louisville, Evans- 
 ville, ISTashville, Paducah, Little Rock, Shreveport, Vicks- 
 burg, Jackson, Meridian, Birmingham, und others too num- 
 erous for recital, plainly shows the injurious eflfect on the 
 trade and commerce of the country that the enforcement of 
 this law will cause, in destroying these inland trade centres, 
 for the rebuilding the waste places of seaboard cities; that 
 while cities on the coast, with markets in other countries, 
 and carriers free i'rom congressional control, will profit by 
 this statute, it will be at the expense of such inland 
 markets, and to the detriment of the agricultural, manu- 
 facturing, mining and milling interests throughout the 
 interior. 
 
 The evidence of Gen. Patterson,* corroborated by that 
 of Mr. Mitchell,^ and by numbers of other witnesses," en- 
 ables the Commission to understand the heavy tax that the 
 long and short haul rule levies on the commerceofal! inte- 
 rior points, and the numbers of factories and mills already 
 closed down throughout the South, because of the advance of 
 
 4' See Appendix No. i, and Stenographer's Report of Evidence, 
 
 5 See p. 57. 
 
 6 See evidence of A. K. Ward, J. L. Wellford, Ne\<'port, Arkansas, 
 
 Goodwin, et al., Stenographer's Report of Evidence. 
 
74 
 
 rates on the trunk lines north of the Ohio and Potomac 
 under this rule, are but the first slight symptoms of what 
 will result all through that section of the Union should the 
 temporary suspension granted by the Commission not be 
 made permanent. 
 
 I ask the especial attention of the Commission to the 
 evidence of Sidney Bernheimer of Port Gibson, Miss , 
 who complains not against a suspension of the long and 
 short haul claut-e, but only of what he and the witnesses 
 Phelps, Campbell, Walhice and others of S"ew Orleans term 
 an unjust discrimination, or excessive charge. I do not 
 understand the Commission to be enquiring now into the 
 merits I'f that question, although I might with confidence 
 rest even that enquiry on the evidence filed, and which I 
 shall refer to again. Mr. Bernheimer, however, expressly 
 admits that he and his community, siiuuted at an interior 
 point off the line of the river where the rail line has no 
 competition, expect to pay more for their shorter haul to 
 New Orleans than Vicksburg, which though farther, yet 
 enjoys the natural advantage of the river route and its 
 cheaper rates. I take it the witness Bernheimer but ex- 
 pressed the general opinion of the people who live at way 
 stations ; the common sense and good judgment of the 
 country does not expect to reverse natural conditions, and 
 Bernheimer is corroborated by the hundreds of tradesfolk 
 along petitioner's lines who have memoralized the Com- 
 mission in favor of granting the relief prayed for. Mr. 
 Bernheimer testified that he expected to pay more for the j 
 206 miles haul from Port Gibson to New Orleans, than , 
 Vicksburg people did, though Vicksburg was thirty miles 
 longer haul. I quote his language : 
 
 "I claim if the railroad company can cany cotlon for 75 cents from •',. 
 
 Vicksburg to New Orleans, or 50 cents, thty certainly can carry from Port ; 
 
 Gibson for le-s than $1.75. We do not expect it to be hauled as cheap -| 
 
 as Vicksburg, but we do expect it at a lower rate than $1.75. * * We are 
 perfectly willing and expect to pay more, but not such a difference as that." 
 
75 
 
 And in reply to the question by Commissioner Walker, 
 that 
 
 " As 1 understand you, you think there should be some discrimination in 
 favor of competitive points? " 
 
 The witness further said : 
 
 " Yes, sir ; we expect that, but not such a great difference. We don't 
 expect lo receive freight at the sime price Vicksbuig does, because it is a 
 competitive point, and has the river in front of it, but we do expect the 
 difference not to be so grent as it now is, certainly." 
 
 Then replying to a question by the chairman, the witness 
 answered that he thought 25 cents a bale as much differ- 
 ence as should be allowed. 
 
 While considering this Port Gibson matter, I ask the, 
 attention nf the Commission to the evidence of Mr. E. W. 
 How,' with the statistics be gives as to the movement of 
 freights from Port Gibson during the past season when the 
 rates complained of were in force, except that Mr. How 
 states that the rate from Vicksburg to New Orleans, until 
 the latter part of March, 1887, was 85 cents, and that the 
 75 cent rate took effect recently. He admits the |1.75 rate 
 from Port Gibson to New Orleans, and the §1.00 rate Port 
 Gibson to Vicksburg. Mr. How then shows that of a total 
 export from Port Gibson of 4326 bales of cotton, only 
 1435 went direct to New Orleans, while 2891 were shipped 
 to Vii-ksburg for market, notwithstanding the higher rate 
 thence to jSTew Orleans or eastern points. 
 
 Vicksburg with its compresses is able to induce cotton 
 from adjacent country to come to its market, and it seems 
 in this case has controlled two-thirds of the Port Gibson 
 cotton notwithstanding more freight charges were paid 
 thereon than had it gone in the first instance direct to New 
 Orleans. Port Gibson could ship New Orleans direct at 
 $1.75 per bale, while to ship V"icksburg cost in freight 
 $1.00, and thence to New Orleans 85 cents additional, and 
 
 7 See p. 51. 
 
76 
 
 which cotton would further have to pay marketing chargi s 
 at Vicksburg. If Port Gibsim preferred to do this with two- 
 thirds of its cotton, rather than ship direct to New Orleans 
 at the lower rate; does it help the claim set up now by 
 Bernheimer, Phelps, Wallace and others for lower rates ? 
 
 That Vicksburg has a territory from which farm pro- 
 duce naturally flows to the Viekslmrg market, is further 
 shown by the fact appearing in Mr. How's evidence,' that 
 the L.,' N. 0. & T. Ry. Co. hauled out of that city since 
 September Ist, 1886, 14,517 bales of cotton, 9,818 going to 
 New Orleans for ship, and 3,959 going all rail east, while 
 river and rail together carried to New Orleans for marker 
 only 1,252 bales. Remembering that the Queen and Cres- 
 ent rail route also have a line direct from Cincinnati to 
 Vicksburg, and the .Mississippi and Ohio River Packet 
 Lines, passing Vicksburg in their route from Cincinnati to 
 New Orleans, and that thi se must have obtained their 
 share of Vicksburg cotton, one must admit that Vicks- 
 burg and its territory are large enough to determine their 
 own best interest, and too large to be sacrificed in the 
 interest of any rival. 
 
 The facts stated by Mr. How," as to Greenville and the 
 movement smd direction of its cotton, confirm what I have 
 said regarding Vicksburg and Port Gibson. 
 
 If, as Messrs. Phelps, Walluce and others in New Or- 
 leans claimed, the rate of |1.00 per bale Memphis to N^w 
 Orleans is excessive and discriminative, as compared with 
 the $2.25 per bale rate from Shaw's, 125 miles nearer New 
 Orleans, why is it that the river carrier's do not take the cot- 
 ton ? The statement from the Memphis Cotton Exchange 
 of the cotton movement thence during the . past eight 
 months,^" shows that the river lines have carried south only 
 289 bales against 62,031 bales taken north and east during 
 the same time. When Mr. Phelps mentioned that the 
 
 8 See p. SI. 
 
 9 See p. 52. 
 
 lo See Appendix No. \, post. . 
 
77 
 
 $1.00 rate Memphis to New Orleans on L., N. 0. & T. Ry. 
 was unjust to B'ew Orleans, as evidenced by the fact that 
 59,265 biiles of cotton had been brought by that carrier 
 for shipment by steamer from New Orleans to New York 
 at 65 cents, and that steamboats and barges had not been 
 able to secure -but 289 bales of cotton fi-om Memphis to 
 New Orleans during the same period, was it not apparent 
 that such cotton could not be marketed again in New Or- 
 le;ins, as well as that it paid 65 cents per bale more to 
 reach New York, than had it started from New Orleans 
 proper ? 
 
 I do not mention these facts for the purpose of drawing 
 any inference against the advantages or the prosperity of 
 ihe N' w Orleans market, but only to show, as it seems to 
 me, all the facts as to trade movements througli this vast 
 cotton growing area, do conclusively show, that unlike 
 water, these freights do not naturally, and should not be 
 compelled, to float down stream and pay toll as they pass 
 through New Orleans Traile and commerce make their 
 own levels, and ever shifting, ever ehanging, with each 
 new condition adapting their modes, enables the surplus 
 products of each locality to And markets at lowest cost. 
 The ability and enterprise of New Orleans may liave been 
 lulled into inactivity by the great natural advantages of 
 former decades, but I feel sure that, appreciating now the 
 need for exertion on their own part to hold the supremacy 
 in the cotton markets of the world they have so long en- 
 joyed, her people will begin anew such enterprises as will 
 secure them against the inroads of merchants from every 
 quarter. 
 
 The position, however, of the New Orleans Cotton Ex- 
 change, as presented by Mr. Phelps and others, is one ex- 
 pressly excepted from the operation of the long and short 
 haul rule. They say : 
 
 " The present rate of freight from Memphis, via Louisville, New Orleans 
 and Texas Railway and Morgan Line of steamers to New Yerk is 32 cents 
 per hundred pounds of compressed or uncompressed cotton. Out of this 
 
78 
 
 there is paid $2.00 per car for costs of transfer at New Orleans. The steam- 
 ship line receives 60 per cent, of ihe through rate, or 19.20 cents per hun- 
 dred, leaving 12.80 cents, less the cost of transfer, for the railway. This is 
 equivalent to between 60 and 65 cents per bale for the haul from Memphis to 
 New Orleans. The tariff rate of the Louisville, New Orleans ■ and Texas 
 Railway Company (as per schedule) is $r.oo per bale for ihe same service in 
 hauling a bale of cotton to New Orleans as the terminal point. In the one 
 case the railrod company received 12.80 cents per hundred pounds; in the 
 other case 20 cents per hundred pounds is charged. The service in both 
 cases is precisely the Fame. The through rate, as iixed by the railway com- 
 pany, is thus a direct discrimination against the trade of New Orleans. The 
 tariff rate by steamer from N w Orleans to New York is 25 cents per hun- 
 dred pounds; the Louisville, New Orleans and Texas Railway Company's 
 rate from Memphis to New Orleans is 20 cents per hundred. So that cotton 
 shipped to New Orleans for sale, and thence shipped to New York, pays 45 
 cents, as against a through rate of 32 cents per hundred, a discrimination of 
 13 cents per hundred pounds against New Orleans. 
 
 "The facts above presented suggest a fundamental question, to which we 
 beg to invite the attention of the Commis.«ion. Does the railway company 
 make a living profit put of the 65 cent rate on through business ? If it does, 
 then we submit that the local rates are not 'just and reasonable' within 
 the meaning of the act; because, a-i will be observed, the company charges 
 $2.25 from .Shaw's station, which is 124 miles south of Memphis. If the rail- 
 way company does not make money at the sixty-five-cent rate, then it is recoup- 
 ing its losses on the Memphis business by unduly high rates from local points. 
 That is contrary to the intent and purpose of the Inter-State Commerce Act, 
 as your petitioners understand the measure. 
 
 "In submitting this case we ask the Commission to lay down the primary 
 principle that before suspending section 4 in any particular case, in order to 
 enab'e a railway company to meet competition, they will require proof that 
 the competitive rate sought to be made will yield a living profit, and that 
 local rates be made relatively reasonable ; in other words, that railways can- 
 not take business from competitive points at cost, or at a positive loss, and 
 recoup themselves out of the business at non-competitive point". In this 
 connection we beg to call your attention to the following figures, taken from 
 the daily market reports of the Memphis Cotton Exchange : The total ship- 
 ments south by river from September 1, 1886, to April 8, 1887, were 279 
 bales, while the shipments south during the same period by rail were 59,265 
 bales by the Louisville, New Orleans and Texas Railway Company and 
 66,642 bales by the Mississippi and Tennessee Railway, which is the connec- 
 tion of the Illinois Central. These figures would indicate that the policy 
 pursued by the railways from Memphis has destroyed competition by the 
 river, and it is evident that the effect of such discrimination is to deprive New 
 Orleans of its legitimate advantage as an exporting point. All of which is 
 resj^ectfully submitted." 
 
79 
 
 This involves a construction of the words " in the aggre- 
 gate, * * * under substantially similar circumstances and 
 conditions * * * ocer the same line," as used in the fourth 
 section of the Inter-State Commerce Act. 
 
 Do the words " in the aggregate * * * over the same line" 
 allow two or more connecting carri ers forming a through 
 line between points beyond the terminus of either to make 
 through rates over such thi'ough line without thereby lim- 
 iting either to the proportion of such through rate accep- 
 ted in order to secure such through business as to its own 
 business beginning and ending on its own road? 
 
 In arriving at the proper construction to be given any 
 doubtful phrase of statute law, it is a well settled rule that 
 the evils sought to be remedied and the legislative intent 
 about the matter, should be looked to, and considered, and 
 where the intention of the framers of the statute as gath- 
 ered from their official records show their construction, 
 and the language used in the statute is not in conflict there- 
 with, that construction will be adopted." This rule is one 
 phase of the rule as to contemporaneous exposition,^^ and 
 the expression of Mr. Justice Matthews in the case of Dis- 
 trict of Columbia v. Washington Market Co.," cannot be 
 held as overruling the case of Blake v. ISTational Banks. 
 
 -'o 
 
 When this statute was under consideration by Congress, 
 we find, in examining the history of its formation, that 
 serious conflict of opinion was expressed and amendment 
 after amendment was adopted to avoid difficulty after diffi- 
 culty that arose during its discussion, and the Chairman 
 of the Senate Committee having charge of the bill is au- 
 thority for the statement that — 
 
 " The Senate, however, by a deliberate vote, placed in the bill which was 
 passed by the Senate duringlast session, these words, ' under like circumstances 
 and conditions ' and did it, the Select Committee, not having reported these 
 words to the Senate in the original bill. * ® * The Senator from Missis- 
 
 11 Blake v. National Banks, 23 Wall 307. 
 
 12 Sedgwick on Stat, and Const. Law 251. 
 
 13 District of Columbia v. Washington Market Co., 108 U. S. 254. 
 
N 
 
 go 
 
 sippi has a right to put whatever construction on those words he chooses, 
 and of course he will do so ; but I say, not as the chairman of the committee, 
 but simply as a Senator upon this floor, that those words were put in there by 
 this Senate after the Select Committee had failed to report them, and they 
 were put there because l^e original section i-eported by the committee was 
 too rigid and it was feared that it would interfere with the general commerce 
 of the country, and when they were put there they were put there to mean 
 something and they do mean something. They mean just what they say, 
 that you shall not charge more for the shorter than for the longer distance on 
 the same line in the same direction under substantially similar circumstances 
 f and conditions, and those conditions and circumstances maybe, it you please, 
 the fact that one place is a competing point and that another place is not, 
 the fact that one place furnishes a large amount of business and the way sta- 
 \tion does not furnish perhaps more than a car load, and that it incurs addi- 
 tional expense and all that sort of thing. No court, no commission, and no 
 lawyer can afford to say that those words do not mean anything when they are 
 put in there. 1* * * * The joint through rates which are made by two 
 or more railroad companies between points upon their respective roads are 
 made over an entirely different and distinct line from that over which any 
 one of the companies individually make rates. And they are also made under 
 different ' circumstances and conditions ' from those which govern and determ- 
 ine rates made over a single railroad." 
 
 The Senator then proceeding to answer some questions 
 asked by Mr. Blanchard, Commissioner of the Central 
 Traffic Association, in a published letter, uses several illus- 
 trations to show the meaning of the phrase " over the same 
 line" to be that of a combina'tion of two or more connect- 
 ing roads, and such a " line" changed as any one or more 
 of its component roads went out or another or others came 
 into the combination, and expressly says : 
 
 "Suppose there are four roads coming into Albany, and each one of 
 them does business with the Boston and Albany road. At the other end 
 of its line, if you please, each one of them has its arrangements of through 
 rates, by which from Kansas City, the Wabash, for instance, carries freight 
 to Albany, and on to Boston on that line ; another road from Chicago carries 
 freight from Chicago to Albany and on to Boston on that line ; another one 
 from Detroit carries freight to Albany and on to Boston on that line. Each 
 one of these different roads makes its own combinations, its own arrange- 
 ments with the Boston and Albany by which grain or other products are 
 transported' over its line from Albany to Boston ; and the charge that the Al. 
 bany and Boston road makes or the agreement that it makes, if you please, 
 with these different, separate lines has nothing to do with what it charges one 
 
 14 Cong. Record, vol. 18, p. 519. 
 
81 
 
 or the other of them, and it has nothing to do with its own local rates from 
 Albany to Boston. * '^ •' It does not make the slightest difference in 
 the world , it hasnothing to do with it. One is a line of railroad by itself ; 
 the other is aline of railroad in conjunction with one, two, or five others, if 
 you, please, aad the one rate does not control the others.'"'^ 
 
 The Senator had in mind, and it may be a help to the 
 Commission to consider the language of this fourth sec- 
 tion as originally presented to the Senate by its committee, 
 and the various changes made in its form and expression 
 before it assumed final shape and passed that body, for as 
 it passed the Senate it was, as I understand it, adopted by 
 the Conference Committee of the two Houses and became 
 the law. * 
 
 This fourth section originally read as follows : 
 
 "That it shall be unlawful for any common carrier to charge or receive 
 any greater compensation in the aggregate for the transportation of passengers 
 or pr perty subject to the provisions of this act for a shorter than for a longer 
 distance over the same line, in the same direction, and from the same original 
 point of departure : Provided however, that upon application to the Com- 
 mission appointed under the provisions of this act, such common carrier may, 
 in special cases, be authorized to charge less for longer than for shorter dis- 
 tances for the transportation of passengers or property; and the Commission 
 may from time to time make general rules covering exceptions to any such 
 common carrier, in cases where there is competition by river, sea, canal, or 
 lake, exempting such de>ignated common carrier in such special cases from 
 the operation of this section of this act ; and when such exceptions shall have 
 been made and published, they shall have like force and effect as though the 
 same had been speciiied in this section. Any common carrier who shall 
 violate the provisions of this section of this act shall be deemed guilty of extor- 
 tion, and shall be liable to the person or persons against whom any such 
 excessive charge was made for all damages occasioned by such violation. "^^ 
 
 After much discussion the advocates of the short haul 
 succeeded in striking out the words " and from the same orig- 
 inal point of departure."^'' 
 
 When this was done, upon the motion of Mr. Cullum, 
 the Senate adopted an amendment striking out the words, 
 " covering exceptions to any such common carrier, in cases where 
 
 15 Cong. Record, vol. 18, p. 521. 
 
 i6 Cong. Record, vol. 17, page 3552. 
 
 17 Cong. Record, vol. 17, pages 3834-4191. 
 
82 
 
 there is competition by river, sea, canal, or lake," for the pur- 
 pose, as Mr. Cullum said, " that simplifies the section, and at 
 the same time preserves all the power the Commission had before." 
 And as Mr. Harris added, " it gives a broader discretion to the 
 Commission than it had before," in which expression Mr. Cul- 
 lum concurred.^' After discussing and acting on various 
 amendments as to passes and free transportation, the Senate 
 next considered an amendment to strike out the original text 
 and insert ihe clause "for the transportation of passengers or 
 of ihe like kind of property subject to the provisions of this 
 net."" It was pending this amendment that the phrase " in 
 the. aggregate" was debated, one gentlejjian suggesting that . 
 there was some uncertain but significant meaning hidden 
 behind those words, and that they had been sm.uggled into 
 the bill by some railroad expert;^" and it was agreed that 
 the expression ■' in the aggregate " had the same meaning as 
 though the bill read " shall not charge or receive any greater 
 total compensation," and '-precluded the idea that this section 
 was to be considered or construed as a mileage provision."^^ 
 And that " iimse words were intended to mean this, that this bill 
 shall not be construed by any tribunal to mean that the railroad. 
 com.pany should be compelled to charge the sarne rate,or as low 
 a rate per mile for the short as it charges for the longer haul."^ 
 As stated by Mr. Cullum, " those words were inserted in the 
 section as a matter of fact on the suggestion of the Senator from 
 Tennessee [Mr. Harris,ywho was simply desiring to get the 
 section in such shape as that it could be construed to mean 
 what it says in contradistinction of the idea that they should not 
 be allowed to charge so much a mile. In. other loords, that it 
 should not be a pro rata provision, but it should be in the aggre- 
 gate as to the whole distance."^ Or, as stated by Mr. Call : ''Sup- 
 pose there are two companies, common carriers in inter-state 
 
 1 8 Cong. Record, vol. 17, pages 4223-4. 
 
 19 Cong. Record, vol. 17, page 4398. 
 
 20 Cong. Record, vol. 17, pages 4399-4400. 
 
 21 Cong. Record, vol. 17, 4399 — Mr. Cullum. 
 
 22 Cong. Record, vol. 17, page 4399 — Mr. Harris. 
 
83 
 
 transportation, using two lines of road, one line of road may 
 charge twice as much as the other. This bill does not prohibit it, 
 it simply requires that the aggregate on both roads, including 
 their terminal charges, shall be the same." 
 
 And after these explanations of the meaning of the 
 phrase " in the aggregate," Mr. (Jamden proposed to amend 
 by striking out the original text and inserting " of the like 
 kind of property, under substantiaily similar circumstances and. 
 conditions," which was adopted,^' and is the language of the 
 act. These words " Under substantially similar circumstances 
 and conditions," were borrowed from the second section, 
 and must be construed as intended to have the same mean- 
 ing in this fourth section as in the second. 
 
 Mr. Cullum, as Chairman of the Senate Committee on 
 Commerce, on 14 April, 1886, having previously reported 
 the Inter-State Commerce Bill from his committee to the 
 Senate for action, in calling for the consideraticm of the bill, 
 said, that before proceeding to make any remarks in regard 
 to the bill, he desired, in behalf of the committee, to ofier a 
 few amendments which were mainly formal. These amend- 
 ments were adopted. Mr. Cullum then proceeded to say 
 that he now wished to say a few words generally with 
 reference tp the bill. As his views throw light on all these 
 questions I give his words, passing over his remarks as to 
 the first and third sections. He spoke as follows regard- 
 ing the second and fourth : 
 
 "The second section strikes at the evil of which the most serious complaint 
 is -made, and made justly, by prohibiting and declaring unlawful every 
 variety of personal favoritism, or unjust discrimination between persons. Its 
 provisions are confined to that one great evil, and the object of the section 
 is to place all shippers upon an absolute equality at to the rates charged for 
 a like service under substantially similar circumstances. This section speci- 
 fically prohibits special rates, rebates, drawbacks, or other devices, for dis- 
 criminating between shippers similarly situated, and making like shipments. 
 
 " Section three, in general terms prohibits undue discrimination against 
 localities, but section four is more specifically directed against that evil, by 
 prohibiting a greater aggregate charge for a shorter than for a longer distance 
 
 23 Cong. Record, vol. 17, pages 4402-3. 
 
84 
 
 over the same line, in the same direction, and from the same original point 
 of departure. This is the general declaration made, and it is agreed that this 
 is the principle that should be observed as a general rule. The commiitee 
 found, however, that this principle was not of universal application; that 
 there were cases in which the railroads were compelled to make lower rates 
 for longer than for shorter disiances, by the great law of competition, which 
 is stronger than any law we can make, and that in some cases it would be a 
 great hardship to the public as well as to the railroads to rigidly enforce the 
 general principle. 
 
 " In order to provide for these exceptional cases it was agreed that the com- 
 mission should be authorized to make exceptions in cases where on investiga- 
 tion, it may be found necessary and proper, and by general rules cover 
 exceptions in cases where there is competition by river, sea, canal, or lake, 
 from the operation of the fourth section of the act. In the judgement of at 
 least a majority of the committee such a provision of law is necessary in 
 order to get the benefit of any short haul provision, and at the .same time do 
 no injustice to the business of the country. The public sentiment of ihe 
 country favors a provision of law prohibiting, without exceplions, a charge 
 of more for a short than for a long haul on the same line of road, in ihe 
 same direction, and from the same poini of dei^arture. 
 
 " As a general proposition, common carriers should not be allowed to do 
 so, and in hundreds and thousands of instances great injustice is done to 
 localities by such a mode of unjust discrimination, and the committee have 
 attempted to provide against such discrimination by prohibiting it except in 
 such cases as a wiseCommission may determine that the interests of the com- 
 merce of the country and common fairness to the common carrier require 
 that exceptions shall be made. 
 
 "The interest of both the producer and consumer of this country require 
 that the food- and fuel, which make up half of the property transported, 
 shall be brought as nearly together as possible, so that the producer .shall be 
 able to produce and live, and that the consumer shall be able to buy, and eat 
 and live. Distance must be as nearly as possible overcome, so that the grain 
 and produce of the far west and north may be put down at as cheap rates as 
 may be by the side of the manufacturer, the consumer, in the east. 
 
 "So, Mr. President, looking at the question in its effect upon the business 
 and prosperity of the whole country, the committee did not and do not now 
 believe that such a provision of law as would prohibit the greater charge for 
 the shorter distance in all cases would be a wise one ; hence the qualificaicn 
 in the bill. 
 
 " Those who favor an absolute short haul provision assert that the provision 
 of the bill will amount to nothing ; while those against any law touching the 
 short haul question assert that it is too strong, and should be further mod- 
 ified, or go out of the bill. 
 
 "As it stands it is largely in the discretion of the Commission, and as 
 the whole scheme of national control is new in this country, in my judgment 
 it is wisest to go no fitrlher than the committee proposes on so doubtful a 
 
85 
 
 point, until we see tiie operation nf the law, if it shall become one, and get 
 a report from the Commission on the question, if one shall be established." ^^ 
 
 These debates with the several amendments adopted, 
 show, it seems, too plain for iieeil of argument thereon, 
 that the legislative intent was not, because of anything in 
 the fourth section, to limit a railroad company in its rates 
 over its own road to such proportion of a through rate as 
 it might under agreement with connecting lines consent 
 to receive on through business passing over its road to or 
 from such connections. 
 
 It is not contended by the protestants of New Orleans 
 that the through rate from Memphis via New Orleans to 
 New York is less than the rate from Memphis to New Or- 
 leans, and so long as that is the case, I submit with confi- 
 dence that, there is nothing in the statute nor otherwise 
 that would put the carrier to need of making defense or 
 showing justification. 
 
 I should perhaps call the attention of the Commission 
 to the fact that the one dollar rate from Memphis to New 
 Orleans complained of is, as shown on the tarifi:' sheet sub- 
 mitted by the New Orleans Exchanges, on uncompressed 
 cotton, while, according to all the evidence taken, the 32 
 cents per cwt. rate to New York via New Orleans, out of 
 which the rail line, as stated, received only 65 cents per 
 bale for its part of the liaul from Memphis to New Or- 
 leans, was on compressed, cotton. 
 
 The dissimilarity of the circumstances between the haul 
 of compressed and uncompressed cotton is fully proven — 
 in the compressed state more tiian double the quantity can 
 be put into a car than when in the uncompressed condition. 
 
 The dissimilarity of the circumstances and conditions 
 attending the haul of 1.435 bales of cotton from Port Gib- 
 son to New Orleans scattered through eight months, an 
 average of six bales per day, or conceding that the bulk 
 thereof was. carried during four mouths, then an average 
 
 24 Cong. Record vol. 17, part4, pp. 3470, et'seq. 
 
86 
 
 of twelve bales per day, not compressed and in local trains 
 that can average only 110 miles per day,^' and a haul of 
 206 miles, when compared with that of hauling 10,558 
 bales from Vicksburg, compressed, in through trains that 
 make the run within twenty hours, at the rate of 44 bales 
 per day through eight months, or 88 bales per day in four 
 months— one or two car loads per day — is too plain to need 
 further comment. 
 
 The same comparison is to be made of the 2,000 bales 
 from Shaw's Station, at the $2 2.") rate, and the 65,672 
 bales from Memphis at the 65 cents (32 cents per cwt. to 
 ]!few York) rate. 
 
 As to what are not such " substantially similar circum- 
 stance-"! and conditions," as will justify the commission in 
 granting relief under the proviso to the fourth section of 
 the act of Congress, I suppose that whai ever doubt, if any, 
 may exist as to other cases, there can be none as to the 
 cases made out by these petitioners. 
 
 Hore we have the unuoutroverted fact of water compe- 
 tition, pure and simple these cases being in a large meas- 
 ure free from the question of competition of other rail 
 lines, or that of rival markets — except only as one locality 
 clamors for the penally of the bond, bec^iuse as they testify 
 the result of such competition between rail and water lines 
 is that " it helps to make Memphis, artificially, a better cotton 
 market, relatively, than she. should be. A bale of cotton at 
 Memphis is practically placed in the same position as a bale of 
 cotton at New Orleans on the seaboard,"'^ or, as again stated, 
 " if the commission rule that they ought to equalize their rates, 
 those cheap through rates from Memphis would, not last very 
 long."'' 
 
 Does then water competiti,on make such dissimilar cir- 
 cumstance? 
 
 25 See evidence of Jas. M. Edwards, p. 47. 
 
 26 See evidence of Ashton Phelps. Stenograph, p. 22. 
 
 27 See evidence of Ashton Phelps. Stenograph, p. 24. 
 
87 
 
 In submitting these cases, on motions for temporary 
 suspending orders, before ttie Commission at Washington, 
 in April, I said that it was a settled rule of the common 
 law to foster and encourage competition between common 
 carriers, and to prohibit contracts between them that 
 tended to siTppress competition ;^ and I suggested that this 
 act of Congress "to regulate commerce," was not intended 
 to have the effect of annulling that rule of the common 
 law, but on the other hand bore on its lace every evidence 
 of the legislative intent, to preserve and promote that rule 
 or policy. In support of this 1 referred to the provision 
 of the fifth section, prohibiting, in express terms and un- 
 der severest penalties, such common carriers as were made 
 subject to the statute from making any contracts for the 
 pooling of either their freights or their gross or net earni- 
 ings, or any portion thereof — then to the sixth section, pro- 
 hibiting any advance in the published rates of charge by 
 common carriers by rail^who alone are subject to the statute, 
 yet allowing them to reduce their rates without notice — and' 
 then, further, to the significant fact that while Con- 
 gress, by this statute, sought to remedy such abuses of 
 duty as had grown up among these carriers by rail, as 
 set forth in this act, yet it had expressly refused to 
 bring carriers by water under the terms of the statute,^' 
 and thus leaving them free from the long and short haul 
 and all other clauses of the act, and of whose daily viola- 
 tion of every requirement of the proposed law Congress 
 was fully advised,'" it was in plainest language said that 
 such water route carriers should be free to compete with 
 the rail lines and competition be fostered. Thus the rail 
 carriers were prohibited from making contracts tending to 
 suppress competition among themselves, and to further 
 such competition were allowed to reduce rates at will ; and 
 water route carriers were left free of all statutory restraint, 
 
 28 Hooker v. Vanderwater, 4 Denio p. 349. 
 
 29 Cong. Record, vol. 17, p. 4240. 
 
 30 Cong. Record, vol. 17, p. 4233. 
 
88 
 
 so that competition as between them and carriers by rail 
 might be untrammeled. 
 
 Congress could not have spoken more emphatically its 
 intention that competition should be encouraged, and that 
 nothing done by it should have the effect of lessening the 
 benefit to the public of such rivalry amongor between 
 the common carriers of the country. " 
 
 It is reasonable, also, to suppose that Congress was ad- 
 vised of the construction placed by American and Eng- 
 lish courts on the words, " substantially similar circumstances 
 and conditions," and adopted those words in view of their 
 known meaning. 
 
 Judge Deady, of the Federal Circuit Court, had, years 
 before, said,^^ in construing a statuie of the State of Ore- 
 gon, containing a clause of similar purport with the fourth 
 section, that — 
 
 " As to tli'e matter of long and short hauls, the question, although frima 
 facie one of discrimination, directly involves the right to a reasonable com- 
 pensation. I assume that the State has the power to prevent a railway com- 
 pany from discriminating between persons and places for the sake of putting 
 one up or another down, or .any other reason than the real exigencies of its 
 business. Such discrimination, it seems to me, is a wanton injustice, and 
 may therefore be prohibited. It violates the fundamental maxim which, in 
 effect, forbids any one to so use his property as to injure another — sic utere 
 tuo ui alienum -non laedas. The provisions of the Act that I have condensed 
 in paragraphs 3, 4 and 6 aforesaid, are intended to prevent this practice. 
 
 " But where the discrimination is between places only, and is the result of 
 competition with other lines or means of transportation, the case, I think, is 
 different. For instance, the Act prescribes a reasonable rate for carrying 
 freight between Corvallis and Portland, or from either, to points intermediate 
 thereto. But Corvallis is on the river, and has the advantage of water trans- 
 portation for some months in the year. The carriage of goods by water 
 usually costs less than by land, and as water craft are allowed to carry at a 
 rate less than the maximum fixed for the railway, they will get all the freight 
 from this point unless the latter is allowed to compete for it. But if, to do 
 this, it must adopt the water rate for all the points intermediate between 
 Portland and Corvallis, where there is no such competition, it is in effect 
 required to carry freight to and from such points at a fess rate than that 
 which the Legislature has declared to be reasonable, or else give up the 
 business of Corvallis altogether. And the same result would follow as to 
 
 31 Exparte Koehler, 23 Fed. Rep. 529. 
 
89 
 
 Salem and other points on the east and west side lines, where there is con- 
 venient access to water transportation. 
 
 " If the Legislature cannot require a railway corporation formed under the 
 laws of the State to carry freight for nothing, or at a less rate than a reason- 
 alile one, then it necessarily follows that this provision of the Act cannot 
 be enforced so far as to prevent the railway from cotiipe ing with the wattr 
 craft at Corvallis and other similarly situated points, even if in so doing 
 they are compelled to charge less for a long haul than for a short one in the 
 same direction. It is not the fault or contrivance of the railway that com- 
 pels this discrimination, but it is the necessary result of circumstances alto- 
 gether beyond iis control. - It is not d me wantonly, for the purpose of put- 
 ting the one place up or the other down, but only to maintain its business 
 against rival or competing lines of transportation. In other words, the mat- 
 ter, so far as the railway is concerned, resolves itself into a choice of evils. 
 It must either compete with the boats during the season of water transport- 
 ation, and carry freight below what the Legislature has declared to be a 
 reasonable rate, or abandon the field and let its road go to rust. 
 
 " Nor can the shipper at the non-competing point or over the short haul 
 complain so long as his goods are carried at a reasonable rate. It is not the 
 fault of the railway that the shipper who does business at a competing point 
 has the advantage of him. It is a natural advantage which he must submit 
 to, unless the Legislature will undertake to equalize the matter by prohibit- 
 ing the carriage of goods by water for a less rate than by rail. And when 
 this is done, the inequalities of distance, as well as place, may also be over- 
 come by requiring goods to pay the same rate over a short haul as a long one, 
 and then the shipper at Ashland will be as near the market as any one." 
 
 And in this decision that learned judge was, following 
 the rule adopted by the English courts where it was held 
 that the Eailway and Canal Traffic Act of 1854 does not 
 prevent a railroad company from making special rates or 
 charges to a terminus to which freights can be carried by 
 other lines of carriers with which the railroad is in com- 
 petition.^^ While other cases in English courts may qual- 
 ify this rule,^^ yet, as the Federal Courts through Judge 
 Deady had adopted the earlier ruling, it is not unfair to 
 say that Congress used the words in the sense they had been 
 received and treated by our courts. 
 
 This view is, it seems, confirmed when the uniform con- 
 
 32 Foreman v. Ry. Co , 2 Nev. & Mac. 202. 
 
 Harris v. Ry. Co., 3 C. B. (N. S ) 693. ' 
 
 33 Ry. Co, V. Evershed, 24 Eng. Moak 625, and other cases. 
 
90 
 
 struction placed by theframers of the statute upon this sec- 
 tion is considered. 
 
 I have above stated their construction at length, showing 
 hnw competition by water, whether by " river, sea, canal or 
 lake " was expressly stated as entitling a carrier by rail to 
 exemption from this fourth section, and that these words 
 were struck out from the section only lest the discretion 
 of the Commission would be limited by their expression.^ 
 
 On another ground, however, the cases of these peti- 
 tioners come within a rule of the English courts entitling 
 them to make the lower charge for the longer than for in- 
 termediate hauls over the same line and in the same direc- 
 tion, and that is, that, as fully shown by the evidence of 
 numbers of witnesses^^ and which is not controverted, this 
 through traffic is carried at a smaller cost to the carrier, 
 and to the carrier's direct and immediate advantage and 
 profit, as well as thereby securing a business that returns 
 a profit for the service that otherwise would be lost to it 
 and go by the rival line.*' In England it seems established 
 that a carrier may make differences in its rates for larger 
 quantities, or for longer distances than for smaller quantitie>^ 
 for shorter distances, so as to derive an equal profit to itself. 
 and that in determining whether such course constitutes 
 an unjust preference " the courts may take into consideration 
 the fair interests of the raihvay itself," and that it will justify 
 such a' discrimination where it is shown that the pecuniary 
 interests of the company are thereby affected.^ 
 
 This rule finds strong support in the opinion of the 
 Tennessee Supreme Court, holding it no unjust discrim- 
 ination for a carrier to charge shippers at a certain point 
 
 34 Cong. Record, vol. 17, pages 4223-4. 
 
 35 See testimony Mr. Edwards, p. 45 ; Sharp, p. 49; Klepper, p. 39; 
 Frazier, p. 66. 
 
 36 Evershed v. Ry. Co., 20 Eng. Moak 323. 
 Ransome v. Ry. Co., 4 C. B. (N. S.) 135. 
 Gurton v. Ry. Co., i B. &S. 112, and other cases. 
 
 37 See Wood's Railway Law, sees. 197-198, and references. 
 
91 
 
 on its road different rates for like and cotemporane- 
 ous service, the lower rate being given to those living 
 at a distance from the station, and who had to haul over- 
 land be.vond tlie station, and who were by such lower 
 rates induced to ship by this carrier rather than another,^ 
 
 And the Ne\/Hampshire Court of Appeals illustrates 
 another phase of the same rule in holding that a discrimi- 
 nation in favor of a larger dealer is not inequality but reas- 
 onable equality.^' This was perhaps mor>i strongly ex- 
 pressed by Mr. Justice Willes cf the English bench when 
 he -said that — 
 
 "Tdkhig i-nto account the lessened ex|)ense, pro rata, fo ■ transporting the 
 greater amount of piope-'ty in a single bo.iy, or in a given time, the carrier 
 wouM, by absolute equality of rates for all cases, re.eive a greater price 
 rate for carrying the larger quantity than the smaller, and thereby make an 
 unjust discrimination against ihe person transporting the larger quantity of 
 gcrotls."'!" 
 
 This opinion w.is adopted by Circuit Judge Wallace of 
 the Federal Coiirt,*'and may be said to be pretty well 
 adopted as our rule." 
 
 One marked difference in the circumstances and thf law 
 in the English cases with those under this statute, and for 
 that matter with our State statutes on this subject as well, 
 will be remembered by the commission, and which must 
 be kept in mind whe I determining how far we should be 
 influenced here by tliose Knglish rules, and that is the 
 " equality clause," or rather the English statutes on this 
 subject of control or regulation of carriers and commerce, 
 apply both to carriers by water and rail — railway ani canal 
 — while in America only the rail line is affected by the 
 statute. 
 
 38 Raigan v. Aiken, 9 Lea 609. 
 
 39 R. R. Co. V. Korsaith, 59 N. H. 122. 
 
 40 Ry. Co. V. Sutton, L. R. 4 H. L. 226. 
 
 41 Menacho v. Ward, 27 Fed. Rep. 529. 
 
 42 C. & A. Ry. Co. V. People, 67 111. 23. 
 Munhall v. R. R. Co., 92 Penn. Stat. 150. 
 
92 •* 
 
 It is not claimed that the rates of charge for freight 
 or passage on petitioners' roads are in excess of their char 
 ter limit, nor that their rates are not sanctioned by the 
 commissions of the States through which these I'oads pass. 
 The petitions aver that such State commissions,where estab- 
 lished, have approved the rates of petitioners, and the 
 proof shovs^s those avermen's to be true. 
 
 Again the proof conclusively shows, and it is not con- 
 troverted, that, only by means of such through or compet- 
 itive business, at its lower rate, are petitioners enabled to 
 earn any income above actual operating expenses — and, 
 even with such busin,ess, do not earn as much as six per 
 cent, annually on the actual money cost of their roads and 
 equipment. 
 
 I submit that the evidence --shows clearly that petition- 
 ers' cases come within one or more, or, indeed, all of these 
 rules, entitling them to relief as prayed, and whether the 
 Commission will follow, what seems the more restricted 
 doctrine announced by some English judges, or the broader 
 opinion held by American courts, and, which, as the debates 
 in Congress I have referred to, clearly show; was the mind 
 of the fraraers of this statute, in either case the petitioners 
 are entitled to the relief prayed for, which is a permanent 
 order suspending the operation of the fourth section of the 
 act to regulate commerce as to all freight business from or 
 to the points shown as water competitive points, and 
 including connections as to such business. 
 
 HOLMES CUMMmS, 
 
 Counsel for Petitioners. 
 
 At the suggestion of a member of the Commission I 
 print, in Appendix No. 2, the syllabi of all of the English 
 cases on this subject, that I have at hand, for your conven- 
 ience for reference. 
 
APPENDIX No. 1, 
 
PETITION 
 
 -OI" -A.- 
 
 JOINT COMMITTEE, 
 
 APPOINTED BY THE 
 
 COTTON /ND MERCHANTS' ECHAfES 
 
 TO "Tiais 
 
 fflTERSTATE COMMERCE COMMISSION 
 
 OF THE UNITED STATES. 
 
 Tracy & Gibson, Printers, 297 Main St., Memphis, Tenn, 
 
PETITION 
 
 OF -A- 
 
 Joint Committee Appointed by the Cotton 
 and mercliants' Exchanges 
 
 -TO THE 
 
 INTERSTATE COMMERCE COMMISSION 
 
 OF THE UNITED STATES. 
 
 Memphis, Tenn., May 2, 1887. 
 
 To the Honorable Interstate Commerce Commission of the 
 United States ; 
 
 In the city of Memphis, in Tennessee, there are two organizations, 
 one known as the Cotton Exchange, the other as the Merchants' 
 Exchange, and in one or the other of these associations nearly every 
 business man of the city is a member. 
 
 On the 22nd day of April, 1887, these organizations, in view of 
 your session in our city, appointed the undersigned a joint committee 
 to lay before you such information as to the trade and commerce of 
 this section of our country, and the effect of the long and short haul 
 clause of the law under which you are organized on this trade and 
 commerce, as will enable you to appreciate fully the condition of this 
 Section, and adjudge understandingly whether this provision of the 
 law be enforced or suspended. 
 
 The city of Memphis, situated on the border line of three States, 
 does almost exclusively an Interstate commerce ; and was located in 
 view of its great natural advantages for the collecting and distributing 
 central market of a great area. Kansas City, St. Louis and Louis- 
 
— 4 — 
 
 ville, each some four hundred miles to the north, northwest and 
 northeast, and New Orleans, the same distance to the south, are the 
 nearest rivals we have ; nearly half of Tennessee and Alabama, more 
 than half each of Arkansas and Mississippi, together with large por- 
 tions of other States beyond these, depend on our market lor the sale 
 of their produpt^ and the purchase of their supplies of every kind. 
 These people are interested equally with the merchants of Memphis 
 in maintaining here a great market town where their farm products, as 
 well as their minerals and manufactures will command the best prices, 
 and too, where in return they can buy near to their places for use, ajl 
 the necessaries, and, indeed, luxuries of life, in return. 
 
 As evidencing thp character of oqr trade as well a.s showing its vol- 
 ume, we append hereto as Exhibits A, B, C and D, statements from 
 the records of our Exchanges of what business we have done during 
 the past year, and we make same a part of this petition. 
 
 Exhibit D comprises not more than one-fifth of the aggregate bus- 
 iness outside of cotton, according to the estimate of the Secretary of 
 the Merchants' Exchange, estimating our total commerce, including 
 cotton, at $150,000,000. 
 
 This is the largest interior distributing fnarket of groceries and pro- 
 visions in the Union, in proportion to population. We sell yearly : 
 
 Of cotton $30,000,000 
 
 Ofprovisions 3,494,046 
 
 Of grain 1,073,499 
 
 Of dry goods 6,207,200 
 
 Of boots and shoes 2 406,845 
 
 Of cotton seed and oil products 1,664,185 
 
 Of lumber 248,779 
 
 Of fruits 83,772 
 
 Of miscellanous articles 104,921,674 
 
 Before railway lines were thought of, Memphis enjoyed transporta- 
 tion facilities second to no interior city in the Union. That great 
 arm of the sea, which we call the Mississippi river, reaching with 
 its confluents through the heart of every State within five hundred 
 miles and more around our bluffs, bore on its bosom craft of every 
 -kind, carrying merchandise and produce from and to every other 
 market of the world. 
 
 Inland towns then hauled overland to and from our market, and 
 enjoyed the advantages our position afforded them. It was a benefit 
 to them to have such a market so near. The great river ran by our 
 doors, not theirs, yet conferred on them advantages and benefits 
 liardly inferior to those we enjoyed. Our trade then, as now, was 
 wholesale, buying and selling in large quantities and on a small mar- 
 gin of profit, while our country neighbors, who then hauled to and 
 
— 5 — 
 
 from us were then, as now, retail dealers of smaller quantities, though 
 at larger profit, and the cost of transportation between our market 
 and the other great trade centres of the world was also then on a 
 small profit, the carriers by water competing between themselves for 
 our exports and imports, offerine; for our full cargoes lower rates than 
 they could afford for intermediate or way landings and a piece-meal 
 shipment ; besides the expense to our country neighbors, who traded 
 with us, of hauling their produce here and their purchases of sup- 
 plies back to their stores, was far greater in proportion to the distance 
 carried than we paid to the water carriers on the same articles when 
 brought to or carried from Memphis by the boat load. It was natural 
 advantages such as these that made our market, apd when the era of 
 railroads began, in order to preserve these conditions in the more 
 rapid transit of the rail, this community expended about two mil- 
 lions of dollars in aid of railways connecting this city with other prin- 
 cipal markets. 
 
 As we understand the charges of the railway lines here, they now 
 and for all time have been based on the simple idea of all wholesale 
 trade. Influenced by the competition of the carriers by water, these 
 railways were compelled to carry freights to and from Meinphis at 
 the lowest charge they could afford, and unless their charges, consid- 
 ering the advantage of time and insurance, were as low as those of the 
 water carriers, our freights came and went by water. However, we 
 fully understood how a railway carrying one or more full train loads 
 to or from our market, shipped in bulk over long distances, could well 
 afford to charge for same lower rates, than on the small parcels gath- 
 ered by frequent stops from many way stations ; the same rule that 
 governs all wholesale trade applies, as we understand it, with equal 
 force to railways, steamboats, etc. 
 
 As said by one of England's great jurists, "that custom, in all 
 branches of business, always has been, and is, to move, care for, and 
 sell a large amount of a given commodity in one parcel or in a given 
 time, at a less price rate per pound, yard, or ton, than a smaller 
 quantity of« the same commodity distributed in many and smaller par- 
 cels, at different times. The expense of handling, carrying and stor- 
 ing the smaller amount is much greater, pro rata, than that of the 
 same operations upon the larger amount in one body ; and a discrimi- 
 nation in favor of the larger dealers is not ineqijality, but reasonable 
 equality. By any other construction the statute would defeat itself; 
 for taking into account the lessened expense, pro rata, for transport- 
 ing the greater amount of property in a single body or in a given 
 
— 6 — 
 
 time, the carrier would, by absolute equality of rates for all cases, 
 receive a greater price rate for carrying the larger quantity than the 
 smaller, and thereby make an unjust discrimination against the person 
 transporting the larger quantity of goods." 
 
 Since our Exchanges charged us with this duty, we have been in 
 daily session, learning the views of every business interest in our city 
 and of many tradespeople from the country dealing with Memphis, 
 and we have not found one single person who believed that it was to 
 the interest of this section of the country to have the long and short 
 haul clause of the law enforced. 
 
 No complaint has come to our attention, although through our 
 daily papers we have asked every one interested to assist us in pre- 
 senting the needs of this community to you, of injury from non-en- 
 forcement of the long and short haul clause, nor has anyone request'- 
 ed to be heard against its suspension, accepting carriers by water, 
 whose motive or interest we need not mention. We are informed 
 that about the sth of April, ultimo, when it was not known that the 
 long and short haul rule would be suspended, one of the largest car- 
 riers by water on the Mississippi river, advanced their rates to double 
 their former charge, only to drop back when the wire advised of your 
 action in suspending the law. This is proof conclusive of the benefit 
 of competition. 
 
 We submit herewith as exhibits hereto, and part of this petition, 
 reports of various branches of trade showing the injurious effect of 
 this long and short haul rule on each separate interest, to which we 
 ask your earnest attention, and such representatives of these interests 
 as you may desire are ready to appear before you to substantiate 
 these statements. 
 
 The table of rates adopted by such of the railway'lines as were pre- 
 parmg for compliance with the long and short haul clause prior to its 
 temporary suspension by your Honorable Body, submitted to us, show 
 that the enforcement of that rule, literally, will result in an advance 
 of freight rates between Memphis and Eastern cities of about forty 
 per cent, without any reduction of the local rates to way. stations in 
 our vicinity, and for the reason that heretofore such way stations have 
 enjoyed the benefit of our through competitive rate. The railways, 
 for the ascertaining of such way station rate, taking the Memphis 
 rate as a basis, and^ adding thereto the local rate from Memphis, 
 while a strict enforcement of the long and short haul rule, as con- 
 strued by many, will grade each successive station reached, up one 
 step higher than the one last passed, destroy all interior markets and 
 
fasten each locality down by legal clamps to its own distance from 
 the seaboard. Such " unreasonable equality is inequality" forces 
 each little territory to live within itself, shuts oflf the interchange of 
 products of distant climates and relegates us to the condition of ages 
 long past. 
 
 We are assured by the evidence we have taken that the earnings of 
 nearly, if indeed, not every carrier line from way or local stations, are 
 larger than from through or competitive points, and is, in fact, so 
 much larger that a moment's thought is unnecessary to determine 
 whether the one shall go up or the other come down, and 
 unless your Honorable Body continue the suspension you have 
 granted such railway lines will be compelled to advance their through 
 rates and withdraw from competitive business with the result of so ad- 
 vancing their rates to and from Memphis without advantage to way 
 stations. This will throw our freights back on the water routes, and 
 seriously cripple our entire trade. Should it result in forcing our 
 patrons throughout adjacent territory to distant cities and over trunk 
 lines, who seem to clamor for this rule of law, credits established 
 here will necessarially be broken up, our friends compelled to trade 
 abroad at whatever disadvantage, and serious disturbances to every 
 interest in this section result. 
 
 If the sales of cotton should be diverted from Memphis to interior 
 points and shipped from these interior towns to the seaboard cities and 
 mills, the rates of freight would be more than the amounts now paid 
 to Memphis, and from Memphis to the seaboard cities and mills. In 
 addition to this, the interior points could not possibly attract buyers 
 from all parts of the world as Memphis now does, thereby making a 
 difference of half a cent to one cent in price, which would come out 
 of the pocket of the producers. 
 
 The trade of Memphis is based and dependent upon cotton, of 
 which we handle from 600,000 to 700,000 bales annually, being the 
 second cotton market of the Union. This large amount of cotton is 
 drawn here by advances of money to country merchants and planters 
 to raise and gather the crop, and to this, the largest inland market in 
 the world, buyers from England, European continent, as well as our 
 Eastern mills, are attracted. The large amount of cotton sold and 
 shipped from here, according to every known rule of trade, entitles 
 shippers; to the low rate of freights heretofore obtained through 
 the sharp competition of river and rail. Since the year i860, when 
 cotton worth 10^ cents per pound, was charged $4.10 per bale 
 from Memphis to Boston, increased quantities shipped with competi" 
 
— 8 — 
 
 tion have enabled the carriers to grant us on cotton now worth loj^ 
 cents per pound a rate of $2.50 per bale to same destination, which 
 makes a difference saved to the producers of cotton sold in this 
 market of about $1,000,000 per annum. 
 
 " The trains that come to Memphis loaded with merchandise from 
 other markets return with full loads. Duringthe present season, one 
 rail line carried at one time from this place for the Eastern seaboard 
 five full trains of cars loaded with more than 6,000 bales of this cot- 
 ton, and even then we needed more transportation. 
 
 Therefore, on behalf of the commerce of Memphis aild adjacent 
 territory, we respectfully petition your Honorable Body to grant a 
 permanent order suspending the long and short haul clause of the 
 statute, as to the several railway lines entering our city, and for gen- 
 eral relief. 
 
 J. T. PETTIT, Chairman, 
 
 E. F. PATTERSON, 
 
 F. M. NOEFLEET, 
 
 W. W. SOHOOLFIELD, 
 JNO. W. DILLAED, 
 NAPOLEON HILL, 
 W. J. CRAWFOED, 
 JNO. K. SPEED, 
 Z. N. ESTES, 
 JNO. W. COCHRAN, 
 HENRY HOTTER, Joint Committee. 
 
 Secretary. 
 
■9 — 
 
 EacliiToit .A.. 
 
 COMPARATIVE STATEMENT 
 
 OE" 
 
 fotton ^ ReceiYed * at * Mempliis, * Tenn., 
 
 WITH VALUE OF SAME FOB PAST TWESTY-TWO YEAES. 
 
 [OfBuial figures of Memphis Ootton Exchange.] 
 
 Year. 
 
 1865-66 
 
 1866-67 
 
 1867-68 
 
 1868-69 
 
 1869-70 
 
 1870-71 
 
 1871-72 
 
 1872-73 
 
 1873-74.... 
 
 1874-75 
 
 1875-76 
 
 1876:77 
 
 1877-78 
 
 1878-79 
 
 1879-80 
 
 1880-81 
 
 1881-82 
 
 1882-83 
 
 1883-84 
 
 1884-85 
 
 1885-86 
 
 *1886-87 
 
 •To April 30th 
 
 Receipts. 
 
 112,296 bales 
 
 218,226 • 
 
 253,207 
 
 247,698 
 
 290,731 
 
 511,432 
 
 380,233 
 
 415,255 
 
 429,327 
 
 323,004 
 
 487,376 
 
 384,358 
 
 412,393 
 
 386,129 
 
 409,809 
 
 470,267 
 
 339,240 
 
 510,789 
 
 450,077 
 
 430,127 
 
 545,566 
 
 653,013 
 
 "Value. 
 
 ! 23,000,000 
 29,000,000 
 25,000,000 
 31,000,000 
 29,588,500 
 39,552,356 
 36,550,fil7 
 37,500,000 
 32,864,981 
 22,540,808 
 27,070,615 
 20,040,426 
 20,887,705 
 17,456,892 
 23,752,529 
 23,090,109 
 18,825,888 
 25,069,524 
 23,917,920 
 21,441,831 
 23,623,007 
 29,385,585 
 
■10- 
 
 E3slJ.iTDit B. 
 
 ANNUAL COTTON STATEMENT. 
 
 RECEIPTS AT MEMPHIS. 
 {Official figures of Memphis Cotton Exchange.^ 
 
 WHENCE EEOEIVED. 
 
 Memphis & Charleston Eailroad 
 
 Mississippi & Tennessee Eailroad 
 
 Louisville & Nashville Eailroad 
 
 Memphis & Little Eock Eailroad 
 
 Chesapeake, Ohio & Southwestern Eailroad 
 
 Louisville, New Orleans & Texas Eailroad 
 
 Kansas City, Springfield & Memphis Eailroad.. 
 Kansas City, Memphis & Birmingham Eailroad 
 
 Mississippi Eiver 
 
 White Eiver 
 
 St. Francis Eiver 
 
 Arkansas Eiver 
 
 Wagons and Other Sources •■ 
 
 Total 
 
 1885—86 
 
 1884r-85 
 
 77,646 
 58,941 
 43,860 
 82,548 
 24,449 
 38,267 
 19,671 
 17,442 
 89,989 
 20,857 
 7,332 
 11,673 
 52,991 
 
 79.142 
 
 46,094 
 
 46,333 
 
 73,731 
 
 25,256 
 
 13,482 
 
 19,858 
 
 139 
 
 64,951 
 
 16,649 
 
 3,201 
 
 4,488 
 
 36,803 
 
 545,666 430,127 
 
 SHIPMENTS EEOM MEMPHIS. 
 
 EOUTE. 
 
 1885—86 
 
 Memphis & Charleston Eailroad 
 
 Mississippi & Tennessee Eailroad 
 
 Louisville & Nashville Eailroad 
 
 Chesajjeake, Ohio & Southwestern Eailroad.... 
 
 Louisville, New Orleans & Texas Eailroad 
 
 Kansas City, Memphis & Birmingham Eailroad 
 
 Steamers North 
 
 Steamers South 
 
 Total 
 
 1884—85 
 
 107,190 
 38,731 
 
 112,698 
 97,284 
 51,208 
 11,524 
 
 105,006 
 18,819 
 
 68,660 
 54,614 
 86,226 
 56,620 
 42,573 
 
 ' 93,9ii 
 40,085 
 
 542,460 
 
 432,689 
 
—11 — 
 
 ElxiliiToit C 
 
 COTTON RECEIPTS AT MEMPHIS 
 
 For Eight Months Ending April 30. 
 
 LQffioial figures of Memphis Cotton Exchange.] 
 
 WHENCE RECEIVED. 
 
 Memphis & Charleston Railroad 
 
 Mississippi & Tennessee Railroad 
 
 Louisville & Nashville Railroad 
 
 Memphis & Little Rock Railroad 
 
 Chesapeake, Ohio & Southwestern Railroad 
 
 Louisville, New Orleans & Texas Railroad 
 
 Kansas City, Springfield & Memphis Railroad. . . 
 Kansas City, Memphis & Birmingham Railroad. 
 
 Mississippi River 
 
 White River 
 
 St. Francis River 
 
 Arkansas River 
 
 Wagons and Other Sources 
 
 Total r. 652,191 528,749 
 
 Since Sept. 1st. 
 
 1886-87. 1885-86, 
 
 88,805 
 57,904 
 49,564 
 136,504 
 41,482 
 57,795 
 30,205 
 21,473 
 83,068 
 21,286 
 4,8" 
 10,738 
 48,518 
 
 75,113 
 58,189 
 42,605 
 78,464 
 23,945 
 35,411 
 19,145 
 17,187 
 88,314 
 20,594 
 7,288 
 10,985 
 51,559 
 
 SHIPMENTS FROM MEMPHIS 
 
 For Eight Months Ending April 30. 
 
 ROUTE. 
 
 Memphis & Charleston Railroad 
 
 Mississippi & Tennessee Railroad 
 
 Louisville & Nashville Railroad 
 
 Chesapeake, Ohio & Western Railroad. 
 
 Louisville, New Orleans & Texas Railroad .. . . . . 
 
 Kansas City, Memphis & Birmingham Railroad 
 
 Steamers North 
 
 Steamers South 
 
 Total 
 
 Since Sept. Ist. 
 
 1886-87. 1885-86, 
 
 110,296 
 
 66,642 
 
 156,329 
 
 157,629 
 
 65,672 
 
 4,119 
 
 62,031 
 
 289 
 
 623.007 
 
 95,335 
 29,584 
 81,779 
 90,570 
 47,925 
 11,523 
 88,098 
 '18,794 . 
 
 463,608 
 
— 12 — 
 
 ANNUAL STATEMENT 
 
 — o^ 
 
 Receipts at Memphis and Shipments From Memphis 
 
 OF LEADD^fi ARTICLES FOR 1886, TOGETHER WITH VALUE OF SAME. 
 
 ( Official figures of Memphis Merchants' Exchange.) 
 
 Apples bbls -33,509 
 
 Bran sks 35,935 
 
 Beani! and Peas bbls 5,612 
 
 Butter pkgs 11,872 
 
 Bagging rolls 131,498 
 
 Bacon pl^gs 31,544 
 
 Boots and Shoes pkes 68,767 
 
 Corn bu 1,109,811 
 
 Cheese pkgs 26,970 
 
 CoflFee sks 56,075 
 
 Cotton Seed sks 1,301,512 
 
 Cotton Seed Oil bbls 12,338 
 
 Cotton Seed Oil Cake sks 370 
 
 Cotton Ties bdls 150,336 
 
 Dry Goods pkgs 31,036 
 
 Eggs- pkgs 12,422 
 
 Flour bbls 269,117 
 
 Hay bales 142,278 
 
 Hats pkgs 8,209 
 
 oa^fHogs head 10,721 
 
 g- El Sheep head 7,446 
 
 g,^] Cattle head 9,759 
 
 [Horses and Mules. .head 9,059 
 
 Lard pkgs 72,110 
 
 Lumber M. feet 17,b98j 
 
 Liquors pkgs 15,588 
 
 Meal .T)bls 29,246 
 
 Molasses bbls 15,469 
 
 Nails kegs 89,293 
 
 Oats bu 809,361 
 
 Onions bbls 9,327 
 
 Potatoes bbls 53,245 
 
 Pork bbls 4,365 
 
 Pork Sides lbs 36,857,500 
 
 Eice pkgs 1,954 
 
 Sugar hhds 1,376 
 
 Sugar bbls 52,765 
 
 Tobacco pkgs 67,822 
 
 Wheat bu 262,583 
 
 Receipts, 
 
 Estimated 
 Value, 
 
 $ 83,772 50 
 
 42,042 00 
 
 9,259 80 
 
 118,968 00 
 
 492,117 10 
 
 1,230,216 00 
 
 2,406,845 00 
 
 546,905 50 
 
 161,820 00 
 
 947,667 50 
 
 795,366 00 
 
 185,070 00 
 
 13175 
 
 165,369 60 
 
 6,207,200 00 
 
 63,352 20' 
 
 1,143,967 75 
 
 99,554 00 
 
 492,540 00 
 
 85,768 00 
 
 22,338 00 
 
 195,180 00 
 
 1,177,280 00 
 
 201.908 00 
 248,779 00 
 
 1,347,040 00 
 
 67,027 90 
 
 229,774 65 
 
 200.909 25 
 291,369 96 
 
 23,327 50 
 
 83,178 75 
 
 52,380 00 
 
 2,211,450 00 
 
 78,160 00 
 
 82,560 00 
 
 1,016,726 00' 
 
 678,220 00' 
 
 236,224 00 
 
 Shipm'ts 
 
 22,087 
 
 36,074 
 
 5,714 
 
 4,275 
 
 134,973 
 26,318 
 59,663 
 
 609,653 
 23,045 
 50,795 
 
 70,235 
 638,328 
 154,677 
 32,079 
 1,805 
 264,845 
 114,583 
 6,170 
 1,683 
 1,233 
 3,327 
 8,554 
 49,893 
 10,201J 
 13,643 
 94,116 
 23,6/9 
 69,035 
 592,805 
 7,348 
 72,120 
 6,212 
 35,406,283 
 2,405 
 1,240 
 44,120 
 60,989 
 9,110 
 
 Estimated 
 Value. 
 
 f 55,217 50 
 
 42,661 58 
 
 9,142 40 
 
 42,750 00 
 
 506,148 00 
 
 1.026,502 00 
 
 2,088,205 00 
 
 304,826 00 
 
 165,808 00 
 
 858,435 50 
 
 1,053,525 00 
 
 510,660 00 
 
 170,144 70 
 
 6,415,800 00 
 
 11,913 00 
 
 1,125,191 00 
 
 80,210 00 
 
 370,200 00 
 
 13,464 00 
 
 3,699 00 
 
 66,540 00 
 
 1,112,020 00 
 
 139,899 40 
 
 153,015 00 
 
 1,091,440 00 
 
 211,761 00 
 
 351,499 50 
 
 172,587 50 
 
 213,409 80 
 
 18,370 00 
 
 126,210 00 
 
 72,544 00 
 
 2,124,376 98 
 
 72,150 00 
 
 76,260 00 
 
 1,455,960 00 
 
 609,890 00 
 
 8,199 00 
 
 Total value Eeceipts $23,720,705 51 
 
 Total vaiue Shipments 23,940,634 86 
 
APPENDIX No. 2 
 
APPENDIX. 
 
 In the Matter of the Complaint of Frederick Ransome against 
 Tlie Ea&t-ern Counties Railway Company. May 29. 
 
 By tfeeir scale or tariff a railway company divided the 
 'pliafces thrnugh which their lines passed into districts, and 
 ■ehwegeA at a redaced rate per ton for coals carried a given 
 distance from Petersburgh or Ipswich respectively, when 
 'Cowsigii«d in full train loads of 200 tons or 35 trucks. The 
 advantage of this reduced rate was given to persons con- 
 signing coals from Petersburgh to one of these districts in 
 fall train loads, though on their arrival at Cambridge the 
 company for their own convenience thought lit to break 
 up t-^e train, and carry about one-third of it forward by 
 tire ordinary goods trains, the whole consignment, how- 
 ever, ultimately finding its way into the district to which 
 It was addressed by the consignor. 
 
 Held, fhat this "was not giving any undue preference to 
 the Petersburgh coal dealers, or imposing any undue preju- 
 3ice on the Ipswich dealers, although the latter were unable 
 to avail themselves of the lower rate of charge for coals 
 eonsigned by them to the same district, by reason of the 
 insufficiency of the demand for sea-borne coals at the places 
 comprised therein. 
 
 C. B. 'Eep., ^. S., vol. 8, p. 709. 
 (Eng. Com.' Law Rep., vol. 98, p. 708.) 
 
In the Matter of: the Complaint of William Gorton and Moses 
 
 Stone ar/ainst -The Bristol and Exeter Railway Company. 
 
 June IS. 
 
 A railway company has no right to impose a charge for 
 the conveyance of goods to or from their station where 
 the customer does not require such service to be performed 
 by them. 
 
 The B. and E Railway Company closed their goods sta- 
 tion at B at f).l!"> P.M. against all persons except their agent 
 W., who had a receiving house about a mile distant from 
 the station, and from whom the company received goods 
 up to 8 P.M. For the conveyance of goods from the receiv- 
 ing house to the station W. charged Is. 8d. per ton on all 
 goods above 3 cwt., and 3d. for each package below that 
 weight. 
 
 Held, upon the complaint of a rival carrier, that the 
 refusal to receive goods sent by him to the station after 
 5.15, unless sent through the receiving house of "W., was 
 imposing upon him an undue prejudice, within the 17 and 
 18 Vict., c. 31, 8. 2. although it was sworn oa the part of 
 the company that the goods so brought to the station by 
 W. came there properly classified, weighed and prepared 
 for loading. 
 
 The general rate of charge for the carriage of goods 
 from Bristol to Bridgewater and vice versa was 6s. 8d. per 
 ton for first-class, 8s. 4d. per ton for second-class, 12s. 6d. 
 per ton for third class, and 16s. 8d per ton for fourth-class 
 goods. 
 
 The company had special contracts with certain grocers 
 and ironmongers at Bridgewater, under, which they agreed 
 to carry all their grocei'y and ironmongery goods at a uni- 
 form rate of 6s. per ton, including delivery. 
 
 Held, an undue preference, it not appearing that this 
 diminished charge was justified by any special circum- . 
 stances of advantage to the company, or to meet competi- 
 tion from another railway or any other mode of carriage. 
 Com. Bench Reps., N. S., vol. 6, p. 639. 
 . (E. C. L., vol: 95, p. 638). 
 
In the Matter of the Complaint of Thomas Nicholson, the 
 younger, and Isaiah Birt Nicholson against the Great West- 
 ern Railway Company. Nov. 9. 
 
 It is competent to a railway company- to enter into spe- 
 cial agreements whereby advantages maybe secured to indi- 
 viduals in the carriage of goods upon the railway, where 
 it is made clearly to appear, that, in entering into such 
 agreements, the company have only the interests of the 
 proprietors, and the legitimate increase of the profits of 
 the railway in view, and the consideration given to the 
 company in return for the advantages afforded by them be 
 adequate, and the company are willing to afford the same 
 facilities to all others upon the same terms. ISTor is the 
 second section of the Railway Traffic Act, 17 and 18 Vict. 
 c. 31, contravened by a railway company carrying at a 
 lower rate, in consideration of a guarantee of large quan- 
 tities and full train loads at regular periods, provided the 
 real object of the company be to obtain thereby a greater 
 remunerative profit, by the diminished cost of carriage, 
 although the effect may be to exclude from the lower rate 
 those persons who cannot give such a guarantee. 
 
 Com. Bench Reps. vol. 5, p. 366. 
 
 (E. C. L. vol. 94, p. 366.) 
 
Pickford and another v. The Grand Junction Railioay Com- 
 pany. July 7. 
 
 The Grand Junction Railway Company were autkorized 
 by their act of Parliament, 3 and 4 W. 4, c. xxxiv, s. 156, 
 to carry and convey upon the railway all such paissengerr^^ 
 goodi=, merchnndise, &c., as should be offered to them for 
 that purpose, and to make auch reasonable charges for sueh 
 carriage and conveyance, as they might from time in time? 
 determine on. Section 159 also authorized the company 
 to fix the sums to be charged in respect of small pareels> 
 not exceeding 500 lbs weight each. By the 4 W. 4, c. iv. 
 s. 19, they were empowered to carry passengers an<i goods 
 on other railways, and to make such reasonable ebarges 
 for such carriages as they should determine on. And by 
 another act, the 3 Vict. e. xlix, s. 26, it was enacted that 
 the charges by the former acts authorized to be made ft>p 
 the carriage of passengers or goods should be at all tinaes 
 charged equally, and after the same rate in respect of all 
 passengers, goods, &c., conveyed or propelled by a like 
 carnage or engine, passing on the same portion of the line, 
 and under the same circumstances. 
 
 The company published a list of rates for the carnage; 
 of merchandise, divided into sevm classes, of which the 
 lowest was 16s. and the highest 60s. per ton ; and for 
 " boxes, bales, hampers, or other packages, when they con- 
 tained parcels or other packages or things under 112 lbs. 
 weight each, directed, consigned, or intended for different 
 persons, or for more than one person," they imposed a 
 charge of Id. per lb. weight. 
 
 Held, that this last was not a reasonable charge in the 
 case of a package above 500 lbs. weight, made up by a car- 
 rier and directed to one person, although containing a 
 number of parcels under 112 lbs. weight each, consigned 
 or directed to different persons. 
 
The company also became carriers on the London and 
 Birmingham line, and published a list of charges for the 
 carriage of goods from Manchester to London, among 
 which " Manchester packs" were charged 3s. 3d. per cwt.„ 
 or 65s. per ton. At the foot of this list was a notice, that 
 "goods were brought to the station at Camden Town 
 without extra charge," and that there was " no charge for 
 booking or delivery in London." The company made an 
 agreement with C. & H. that the latter should carry from 
 the station at Camden Town and deliver in London all 
 such goods carried by the railway, and for so doing should 
 receive 10s per ton out of the entire charge of 65s. per 
 ton. 
 
 Held, that under these circumstances the charge of 65s. 
 per ton, when made to any other persons, who were ready 
 to receive their goods at the station at Camden Town, was 
 both unreasonable and unequal. 
 Exchequer p. 399. 
 (Meeson'a & Wellby's Eeps. vol. 10, p. 399.) 
 
Grouch V. The Great Northern Railway Company. Feb. 2. 
 
 The 14th section of the special act of the Great North- 
 ern Eailway Company, 13 and 14 Vict c. Ixi., empowers 
 the company to charge for the carriage of small parcels 
 any sum which they may think fit. And by the 90th sec- 
 tion of the Railway's Clauses Consolidation Act, 8 and 9 
 Vict. c. 20, which is incorporated in the special act, after 
 reciting that it is expedient that the company should be 
 enaliled to vary the tolls upon the railway, so as to accopi- 
 mgdate them to the circumstances of the traffic, but that 
 such power of varying should not be used for the purpose 
 of prejudicing or favoring particular parties, &c., empow- 
 ers the company to vary the tolls, provided that all such 
 tolls be at all times charged equally to all persons, and 
 after the same rate in resiect of all passenger?, and of all 
 goods, &c., conveyed or pi*opi']led by a like carriage or 
 engine, passing only over the same portion of the line of 
 railway under the same circumstances; and no reduction 
 or advance in any such tolls shall be made, either directly 
 or indirectly, in favor of or against- any particular com- 
 pany or person traveling upon or using the railway. 
 
 Held, that the company were bound to charge the public 
 alike; and, therefore, thiit the fact of a party using their 
 line, being a common carrier, did not justify the company 
 in charging him more than the rest of the public. 
 
 Wellsby, Hurlstone & Gordon, p. 556. 
 
 (Exchequer Repts. vol. 9, p. 556.) 
 
Bravley v. The Southeastern Raihoay Company. May 12. 
 
 The legality of a contract is determined by the lex loci 
 contractus. 
 
 A railway company incorporated for the conveyance of 
 passengers and goods .from London to Folkstone under 
 acts of Parliament, which prohibited them from making 
 unequal charges, obtained another act enabling them to 
 establish a communicationby steam vessels with "Boulogne, 
 which last mentioned act contained no provision as to 
 equality of rates for the carriage ot goods. There was 
 nothing in the law of France which disabled the company 
 as public carriers, from making such contracts for that 
 purpose as they might think most for their own interest. 
 The company by their tariif rate charged certain rates for 
 small parcels, with a double charge for " packed parcels." 
 
 Held, that so far as regarded the contract for the carriage 
 of such parcels /rom Boulogne to London, there was noth- 
 ing illegal in this increased charge. 
 
 C. B. Repts. N. S. vol. 12, p. 63. 
 
 (E. C. L. Reps., vol. 104, p. 63.) 
 
Parker v. The (freat Western Railway Company. Nov. I4, 
 
 2. By the 175th section of the 5 and 6 W. 4, c cvii, it 
 was enacted that the rates and tolls should be charged 
 equally, and after the same rate per ton per mile in respect 
 of the same articles, and that no reduction or advance in 
 the said rates and tolls should, either directly or indirectly, 
 be made partially or in favor of or against any partfcular 
 person or company, &c., but that every such reductaoa or 
 advance apon any particular kind or descriptio'n of articles 
 should take place throughout the whole of the railway 
 upon and in respect of the same description of artkles, and 
 should extend to all persons using the same or carrying the 
 same description of articles. 
 
 ' By the 50th section of th-e 7 and 8 Vict, a iii, the oosa- 
 pany were empowered., whenever they should act as car- 
 riers, or should provide locomotive or steam power or car- 
 riages for the conveyance of passei^ers, goods, etc., to 
 charge for such locomotive or steam power and carriages, 
 such sums (not exceeding the sumslimitedhy former acts), 
 and that either per ton OT per mile, or by biilk measure, 
 number or admeasurement, or by fixed charges as they 
 should think expedient ; provided, that in whatever way 
 the charges were made they should be made equally to all 
 passengers and to all persons in respect of all goods, etc., 
 and things of a like description and quality and conveyed 
 in and propelled by a like carriage, or engine, passing only 
 over the same portion of, and over the same distance, along 
 the railway and M?ider the like circumstances; and that no 
 reduction or advance in any of such charges should be 
 made partially, either directly or indirectly, in favor of or 
 against any particular company or person. The company 
 required carriers who brought goods to them for convey- 
 ance on the railway, to deliver with them a printed note. 
 
9 
 
 filled up with the description, contents and weight of the 
 several packages to be carried, without which the eomfany 
 refused to-receive them. In consideration of this additional 
 trouble the company formerly allowed the carriers a dis- 
 count of ten per cent, on the sums paid by them for car- 
 riage. 
 
 Held, that the discontinuance of this charge did not con- 
 stitute an equality of charge as between carriers and the 
 rest of the public, so as to give the carrier a claim for 
 money had and received, whatever other remedy he might 
 have against the company. 
 
 C. B. Repts. vol. 11, p. 545. 
 
 (E. C. L. Repts. vol. 73, p. 545.) 
 
10 
 
 Edwards and another, assignees of Richard Parker, a bank- 
 rupt, V. The Great Western Railway Company. Nov. IS. 
 
 1. The Great Western Railway Company, by its act of 
 incorporation, 5 and 6 W. 4, c. cvii, was empowered to 
 charge certain rates and tolls for the use of their railway 
 and the carriage of passengers and goods thereon. Byasub- 
 sequent act, 2 Vict. e. xxvii, s. 24, it was provided that 
 those rates and tolls should be at all times charged equally 
 to all persons, and after the same rate per mile, or per ton 
 per mile, in respect of all passengers, and of all goods, &c., 
 of a like description, and conveyed or propelled by a like 
 carriage or engine, passing on the same portion of the line ; 
 and that no reduction or advance should be made, either 
 directly or indirectly, in favor of or against any particular 
 company or person traveling upon or using the same por- 
 tion of the railway. 
 
 By the 7 and 8 Vict. c. iii. s. 48, the last mentioned pro- 
 vision was repealed, and in terms re-enacted by s. 49 ; and 
 by s. 50 it was enacted that it should be lawful for the com- 
 pany, whenever they should act as carriers, or should pro- 
 vide power or carriages for the conveyance of passengers, 
 goods, &c., to charge for such power and carriages such 
 sum (not exceeding certain limits), and that either per ton, 
 or per mile, or by bulk, measure, number, or admeasure- 
 ment, or by fixed charges, as they should think expedient ; 
 provided, that in whatever way the charges were made, 
 they should be made equally to all passengers, and to all 
 persons, in respect of all goods, &c., of a like description 
 and quality, and conveyed in or propelled by a like car- 
 riage or engine, passing only over the same portion of, and 
 over the same distance along the railway, and under the like 
 circumstances ; and that no reduction or advance in any of 
 such charges should be made partially, either directly or 
 indirectly, in favor of or against any particular company 
 or person. 
 
11 
 
 Meld, that the fact of the person sending the goods to be 
 conveyed along the railway, being a carrier, did not con- 
 stitute such a dissimilarity of circumstances, as to justify 
 a difference of charge as between him and the rest of the 
 public. 
 
 2. By the 171st section of the 5 and 6 W. 4, c. cvii, the 
 company were authorized to fix the sum to be charged in 
 respect of small parcels, (not exceeding 500 lbs. weight), as 
 to them should seem proper; provided, that that provision 
 should not extend to articles, matters, or things sent in 
 large aggregate quantities, although made up of separate and 
 distinct parcels, such as bags of sugar, coffee, &c., but only 
 to single parcels, unconnected with parcels of a like nature, 
 which might be sent upon the railway at the same time. 
 
 The company issued "scale bills," specifying in classes 
 the charges to be made for carriages, — each class contain- 
 ing various kinds of goods ; and at the end a " miscellan- 
 eous class," comprising goods " not being aggregate of one 
 class or kind," for which a higher tonnage-rate was exacted, 
 and also an additional charge of 2d. per package. 
 
 Held, that the company were not justified in charging 
 under the " miscellaneous class" goods which were aggre- 
 gate of several kinds, but all contained in one class. 
 
 3. Held, also, that the carrier who brought the goods to, 
 and received them from the company at the end of the 
 journey, was to be treated as the consignee, without refer- 
 ence to the ultimate destination of the goods. 
 
 4. Held, also, that the carrier was not entitled to any 
 allowance in respect of assistance in the loading, unload- 
 ing, or weighing, given by his men to the company, vol- 
 untarily, or for the carrier's own convenience. 
 
 5. The company being under an agreement with one 
 Kent to make him an allowance of 10 per cent, upon the 
 sums paid by him for carriage of goods, in consideration 
 of services rendered by him, and having discontinued that 
 allowance in consequence of a former decision of this court, 
 Kent sued them for their breach of contract, and they 
 
12 
 
 cpmpromiaed that action and paid him £500 to oancei the 
 agreement. 
 
 Held, that this did not constitute an inequality of charge 
 as between Kent and other carriers. 
 
 6. The plaintiff having, after notice of action, served the 
 company with a written demand of interest under the stat- 
 ute 3 and 4 W. 4, c. xlii, s. 28. 
 
 Held, that the arbitrator, under a submission of " all mat- 
 ters in difference," might award the plaintiff' interest, not- 
 withstanding the notice of action .did not contain a demand 
 of interest; and, further, that, assuming a notice of action 
 to have been necessary, the want of such notice could not 
 be taken advantage of, since the 5 and 6 Vict. c. xcvii, s. 3, 
 unless pleaded specially. 
 
 C. B. Kepts. vol. 11, p. 588. 
 (E. C. L. Repts. vol. 73, p. 588.) 
 
18 
 
 In the Matter of the Complaint of John Painter against Thfi 
 London,. Brighton and South Coast Railway Company. 
 June 9. 
 
 A- railway company granted exclusive permission to & 
 limited number of fly-proprietors to ply for hire within 
 their station : — The court refused to grant a writ of injunc- 
 tion against the company, under the Railway and Canal 
 Traffic act, 1854, (17 and 18 Vict. c. 31), at the instance of 
 a fly-proprietor who was excluded from participation in 
 this advantage, — although it was sworn by the complain- 
 ant and by several other fly-proprietors, who were likewise 
 excluded, that occasional delay and inconvenience resulted 
 to the public from the course pursued. 
 
 Lust moved for a writ of injunction against the London, 
 Brighton and South Coast 'Railway Company, under the 
 Railway and Canal Traffic act, 17 and 18 Vict. c..31, s. 2, 
 to restrain them from giving an undue preference to cer- 
 tain persons named, and imposing an undue and unreason- 
 able prejudice on the complainant. Refused. 
 
 C. B. Repts. N. S. vol. 2, p. 702. 
 
 (E..C. L. vol. 89, p. 701.) 
 
14 
 
 In the Matter of the Complaint of Thomas Beadell v. The East- 
 ern Counties Railway Company. June 1. 
 
 A railway company agreed with a cab proprietor, in con- 
 sideration of his paying them £600 per annum, to allow 
 him the exclu^ve liberty of plj'ing for hire within their 
 station :— The court refused to grant a writ of injunction 
 against the company under the Railway and Canal Traffic 
 act, 1854, (17 and 18 Vict. c. 31), at the instance of another 
 cab proprietor, — no inconvenience to the public hemg shown 
 to have arisen from the arrangement. 
 
 C. B. Reports, N. S. vol. 2, p. 509. 
 
 (E. C. L. vol. 89, p. 509.) 
 
15 
 
 In re Jones and The Eastern Counties Railway Company. 
 January 27. 
 
 The court refused to grant a rule for an injunction 
 against the Eastern Counties Railway Company, under the 
 Railway Traffic Act, 1854, to compel them to issue season 
 tickets between Colchester and London, on the same terms 
 as they issued them between Harwich and London, upon 
 a mere suggestion that the granting the latter (the dis- 
 ta,nGe being considerably greater) at a much lower rate 
 than the former, was an undue and unreasonable preference 
 of the inhabitants of Harwich over those of Colchester. 
 
 C. B. Kepts. N. S. vol. 3, p. 718. 
 
 (E. C. L. vol. 91, p. 716.) 
 
18 
 
 In the Matter of Joseph Harris and another and The Cocker- 
 mouth and Workington Railway Company. January 15. 
 
 A railway company agreed with the lessees of certain 
 collieries to carry their coals at a somewhat lower rate of 
 tonnage than they carried for others, in consideration of 
 the owner of those collieries having laid out a large sum 
 in constructing tramways to connect them with the rail- 
 way; they also made a further reduction, under the influ- 
 ence of a threat, that, unless they acceded to the terms 
 proposed by the lessees, the owner would construct another 
 line of railway direct from the collieries to the place of 
 shipment, for the use of his tenants, and so would divert 
 from the company a very considerable and essential portion 
 of their traffic. 
 
 Held, that neither of these was a justifiable reason for 
 the " undue preference " thus given. 
 C. B. Repts. I^f. S. vol. 3, p. 693. 
 (E. C. L. vol. 91, p. 692.) 
 
17 
 
 In the Matter of the Complaint of William Adolphus Mar- 
 riott V. The London and Southwestern Railway Company. 
 January 30. 
 
 A railway company made arrangements, at one of their 
 stations, with A., the proprietor of an omnibus running 
 between the station and K., to provide omnibus accommo- 
 dation for all passengers by any of their trains to and from 
 K., and allowed A. the exdusioe -privilege of driving his 
 vehicle into the station yard for the purpose of taking up 
 and setting down passengers at the door of the booking 
 office. 
 
 Held, that, in the absence of special circumstances show- 
 ing it to be reasonable, the granting of such exclusive 
 privilege to one proprietor, and refusing to grant the like 
 facilities to another who also brought passengers from K. 
 as well as from other places beyond, was a breach of the 
 prohibition against the granting of undue and unreason- 
 able preferences contained in the 17 and 18 Yict., c. 31, s. 2. 
 C. B. Reps. N. S. vol. l,p. 499. 
 (E. C. L. vol. 87, p. 498). 
 
18 
 
 In the Matter of the Complaint of Frederick Bansome and 
 John Bradly Geard against The Eastern Counties Railway 
 Company. January 29. 
 
 In dealing with the first branch of the 17 and 18 Vict., 
 c. 31, s. 2, which prohibits railway companies from giving 
 any undue or unreasonable preference or advantage to or 
 in favor of any particular person or any particular descrip- 
 tion of traffic to any undue or unreasonable prejudice or 
 disadvantage, the fair interests of the company are to be 
 taken into the account. 
 
 A railway company made an agreement with A. to carry 
 for him a large quantify of coals during three years from 
 Peterborough to various places on their lines of railway, 
 at certain rates. 
 
 B., a coal merchant at Ipswich, sent coals (which had 
 been brought to that port by sea) to various places on the 
 same lines of railway ; and the company charged him a 
 much larger sum per ton in proportion to the distance 
 over which his coals were carried, than they charged to A., 
 the professed object of the diff"erence being to enable A. 
 (whose coal came to Peterborough by railway) to compete 
 in the coal trade of the district with B., who had the ad- 
 vantage of having his coals brought to Ipswich by sea. 
 
 Held, that this was giving an " undue preference " to A. 
 
 Quaere, whether a railway company may not charge 
 difi"erent rates, where coals are carried in large and small 
 quantities, and where they are carried long and short dis- 
 tances, and where the ditterence is for the purpose of com- 
 peting with another line, and where one party provides 
 his own wagons and the other uses those of the company? 
 See In re Oxlade, post p. 454. 
 C. B. Reps. N. S. vol. 1, p. 437. 
 (E. 0. L. vol. 87, p. 437). 
 
19 
 
 In the Matter of the Complaint of WiUiam Oxlade v. The 
 North Eastern Railway Co. Jan. SO. 
 
 U]ion a motion for aa injunction against a railwiiy com- 
 pany under the 17 and 18 Vict, e 31, enjoining them, — jirst, 
 to cari'j upon their railway for the complainant such coal 
 and coke as might be offered to them by him for that pur- 
 pose ;s€conr%,to charge for the carriage thereof respectively, 
 tolls not hifjher than the tolls charged by them for carrying 
 coiil and coke to persons for whom the same coal and coke 
 were also carried on another railway, forming a continuous 
 line with theirs, and tolls not highej' than the tolls charged 
 by them tu persons with whom they had private agree- 
 ments for the carriage of coal or coke ; thirdly, to provide 
 for the complainant depots for depositing and receiving his 
 coal and coke on the stations of the railway similar to 
 those provided at sucli stations for persons with whom 
 they had private agreements for the carriage of coals along 
 their railway, and S'iiuilar to those provided at such sta- 
 tions for persons who consigned their coal and coke to the 
 company ; fourthly, to aiford to the complainant the same 
 facilities for the receiving, forwarding and delivery of his 
 coals and coke upon and from the railway, as the company 
 afforded to persons who consigned their coal or coke to 
 the company ; fifthly, to provide for the complainant wag- 
 ons, carriages and trucks for the conveyance and carriage 
 of his coal and coke, and forwarding the same upon the 
 railway ; sixthly, to afford to the complainant all reasona- 
 ble and proper facilities and accommodations for the un- 
 loading of his coals and coke at the various stations of the 
 railway, and to afford to the complainant at the said sta- 
 tions the same facilities and accommodations for the un- 
 loading of his coals and coke as the company afforded to 
 colliery owners, or lessees of collieries, or to any other 
 
20 
 
 person, on cause being shown, it was referred to one of the 
 masters to inquire and report upon the following questions : 
 
 " First, whether any, and what accommodation iind facil- 
 ities were provided, or aftbrded at any, and what stations 
 on the line of railway for the unloading of cOiil and coke, 
 and for what persons and under what circumstances ; see- 
 ondly, whether the company carried coals or coke for per- 
 sons other than the complainant, on any, and what terms 
 different from the terms on which the company had car- 
 ried, or had offered to carry, coals and coke for the com- 
 plainant ; thirdly, whether there was any, and what differ- 
 ence between the circumstances under which the com- 
 pany had so carried coals and coke for such other persons, 
 and the circumstances under which the company had car- 
 ried, or had offered to Ciirry, dials and coke for the com- 
 plainant; fourthly, whether, and in what manner, and how, 
 the company were enabled by reason of such difference of 
 circumstances, so to carry coals and coke for such other 
 persons at a cost to the company less than the cost to the 
 company of carrying ooals and coke for the complainant.!' 
 
 Upon the first point the master reported as to the ac- 
 commodation afforded by the company for unloading coals 
 and coke at their different stations, that they ascertained 
 as nearly as possible the consumption in the neighborhood 
 of each station, and the sort of coal required, and entered 
 into terms with collieries having the particular description 
 of coal, to supply the required quantity ; that they ap- 
 pointed a depot agent to manage the sale of the coals so 
 supplied, through whom the orders were transmitted to 
 the colliery, and who accounted to the colliery owners for 
 the proceeds ; that all the depots were allotted to such 
 agent ; that all coal dealers were treated alike ; and that 
 this course was adopted by the company for the purpose 
 of preventing any obstruction of the general traffic of the 
 railway. 
 
 Held, disposing of the fourth and sixth branches of the 
 rule, — that this was not giving an undue or unreasonable 
 
21 
 
 preference or advantage to, or, in favor of any particular 
 person or cornpany, or subjecting any particular person or 
 company, or any particular description of traffic, to any 
 undue or unreasonable prejudice or disadvantage. 
 
 Upon the sec"ud point the master found that the com- 
 pany charged for throuf/h rales |d. per ton per mile for 
 coal and coke going south, unless their wagons were used, 
 in whicli case they charged oue-iighth of a penny per ton 
 per mile more for the first 100 miles, and one-sixteenth for 
 any distance beyond, and 3s per day for demurrage on 
 every wagon detained more than four days off the line ; 
 that there was no variation made in the charge to any one, 
 except in the case of coals carried by the Northeastern 
 Kaiiway Company, in conjunction with the Great Morth- 
 ern Kaiiway Company, through from the collieries to Lon- 
 don, the Northeastern Railway Company's haulage ceas- 
 ing at York, where their railway joiied the Great North- 
 ern; such coal being made up into full trains, and the 
 wagons for the entire distance being provided by the Great 
 Northern Railway Company, for which the charge was ^d. 
 per ton per mile for the whole distance, — the circumstances 
 of the coals so carried being carried in entire trains, and 
 at regular times, and without stoppages, enabling the com- 
 pany to carry them at such lower rate. 
 
 Held, that it was sufficiently made out that the circum- 
 stances stated enabled the company to carry such coals at 
 a cost less to them than the cost of carrying coals and coke 
 for the complainant, and that by carrying them, under the 
 circumstances stated, at such, lower rate, no undue or un- 
 reasonable preference was given, or any undue and unieas- 
 onable disadvantage imposed. 
 
 The master also found thai a similar arrangement was 
 made with the Midland Hallway Company, but not under 
 the same circumstances, the inducement on the part of the 
 company being a desire to introduce the northern coke into 
 Staffordshire. 
 
 Held, that lowering their rates for that purpose was giving 
 
22 
 
 an undue preference to that particular traffic,^there being 
 no special circumstances affecting the pecuniary interests 
 of the company to justify the course pursued. 
 
 As to the fifth branch of the rule (which was not referred 
 to the master), viz, the complainant's demand to have 
 wagons or trucks provided by the company for the carriage 
 of his C'lal and coke — 
 
 Hell, that the company were justified in refusing to fur- 
 nish tliem, by the comphiinant's refus il to pay demurrage 
 for the detention of the wagons beyond the time allowed by 
 the regulations of the company. 
 
 Held, also, that the company could not be called upon to 
 carry coals to the extremity of their line (where it joined 
 the Midland Railway), and there shift them into other 
 trucks or wagons, they having no convenience at that place 
 for that purpose, and not affording such facility to any 
 other person. 
 
 And, as to the first branch of the rule. 
 
 Held, that the company were not common carriers of 
 coal. And the complainant having asked by the rule more 
 than he was entitled to, and the company having been par- 
 tially in the wrong, the court refused to allow costs to 
 either. 
 
 C. B. Reps. N. S., vol. 1. p. 454. 
 (E. C. L.. vol. 87, p. 453 ) 
 
28 
 
 Evirshed v. The London and Northwestern Railway Com- 
 pany. Feb., '57. 
 
 Railway Company — Undue Preference — Gratuitous Carting — Loading and 
 Unloading of Customer's Goods, in order to prevent traffic from passing 
 over other railvpay — Railways— Clauses — Consolidation Act, 1845 (^ ^^^ 9 
 Vict. c. 20), s. 90 — Railway and Canal Traffic Act, 1854 (17 and l8 Vict. 
 c. 31) s. 2. 
 
 The plaintiff was a brewer carrying on business at B., 
 where the defendants, a railway company, and the M. 
 Company, another railwHy company, had stations. Three 
 firms of brewers also carried on business at B., and their 
 premises respectively were connected with the M. Railway. 
 The plaintiff's premises were not connected with the M. 
 Eailway. In order to prevent the trafiic of three firms 
 from passing wholly over the M. Railway, and to divert 
 some portion of it to their own lijie, the defendants carted 
 goods gratuitously between their station at B. and the 
 premises of the three firms respectively, and they also 
 allowed certain deductions from the rates charged to the 
 three firms for the carriage of their goods, the effect of 
 which was that their goods were loaded and unloaded by 
 the defendants gratuitously. The defendants did not cart 
 goods gratuitously for the plaintiff between his premises 
 and their station, and they did not allow to him deductions 
 similar to those allowed to the three firms. After carting 
 the goods for the three firms gratuitously, and allowing 
 them the deductions before mentioned, the defendants de- 
 rived a profit from the traffic, and they had not any inten- 
 tion to prejudice the plaintiff : 
 
 Held, that the gratuitous carting, loading, and unloading 
 of the goods for the three firms was an undue preference 
 
24 
 
 granted to them by the defendants, and was in contraven- 
 tion of 8 and 9 Vict., c. 20, s. 90, and 17 and 18 Vict., c. 31, 
 s. 2, and that the plaintiff was entitled to naaintain an action 
 to recover the amounts paid by him to the defendants which 
 represented the cost of carting his goods between his prem- 
 ises and their station at B., and of loading and unloading 
 the same. 
 
 L. R. Q. B. D. vol. 2, p. 254. 1876-77. 
 
25 
 
 Strick and Others v. The Swansea Canal Company. April £5. 
 
 By a canal act, the company of proprietors were entitled 
 to demand a fixed sum for goods carried upon any part of 
 the canal, '• which said respective rates should be equal 
 throughout the whole length of the said intended canal." , 
 By a subsequent public act, 8 and 9 Vict., c. 28, proprietors 
 of canals were empowered from time to time to alter or 
 vary the tolls granted to them, " either upon the whole or 
 for any particular portion or portions of such canals, ac- 
 cording to local circumstances, or the quantity of traffic, 
 or otherwise, as they should think fit," with a proviso that 
 such tolls were to be charged equally to all persons, and 
 after the, same rate, whether per mile, or per ton per mile, 
 in respect of all boats, &c., of the like description passing 
 along or using the same portion of the canal, and all goods, 
 4&C., of the like description conveyed or propelled in a like 
 boat, &c., passing along or using the same portion of said 
 canal, &c., under the like circumstances, &c. : 
 
 Held, that it was competent to the company to take a 
 proportionably less toll per ton per mile for goods carried 
 a given distance (five miles) along any part of the canal, 
 than for goods carried less than that distance. 
 
 Also, that it was competent to the company to agree to 
 carry at a lower rate for a particular individual, in consid- 
 eration of a large guaranteed minimum toll, in order to 
 enable them to enter into a successful competition with a 
 rival line of railway. 
 
 C. B. R., K S., vol. 16, p. 245. 
 (E. C. L., vol. Ill, p. 243.) 
 
26 
 
 (House op Lokds.) 
 
 The Directors, ^c, of the London i H. L. (E) 
 
 and J^orth- Western JRailway \ Appellants; 1878 
 
 Company J ' — ^— ' 
 
 and July 5. 
 
 Sydney Eoershed Respondent. 
 
 Railway — Inequality of Charges — Undue Preference — Toll — Money had and 
 received. 
 
 The 90th section of the 8 and 9 Vict. c. 20 {Railways 
 Ciaii^rs Consolidation Act, l^J/S), requires equality of tolls 
 for similar services rendered by railway companies to all 
 persons ; and s. 2 of the 17 and 18 Vict. c. 31 {Railway and 
 Canal Traffic Act, 1854), foi'bids the 'giving of any undue 
 or unreasonable preference or advantage to any particular 
 person or company. A charge made by a railway against 
 A. for services rendered by that company to him must 
 not therefore be greater than the cliarge made by the same 
 company against B. for rendering him services of the like 
 nature. 
 
 E. was a brewer at the town of B., where three railways 
 had their stations. With one of these railways, M., a cer- 
 tain brewer in the town, had direct communication by 
 sidings, which enabled goods to be sent to the trains, and 
 taken from the trains of Railway M. with greater ease and 
 lees loss of time than by the way of ordinary cartage. M. 
 charged them nothing for cartage, and made a rebate in 
 the charge for station to station conveyance. These brew- 
 ers had no such communications with Railway ET. W., but 
 it was often convenient for them to send by that railway ; 
 and the directors "of that railway, in order to compete with 
 Railway M., allowed these particular brewers the same 
 advantages as to cartage and rebate as Railway M. did. 
 As to all others in the same trade (E. among the rest) the 
 
2? 
 
 directors of Railway N,. W. made the ordinitj'y charge for 
 cartage, and allowed no rebate on the charge for convey- 
 ance on the line. 
 
 Held, that this was an inequality and an undue prefer- 
 ence within the meaning of the statutes. 
 
 Where E., one of the persons thus paying the higher 
 rate, had for some time paid it in ignorance of the facts, 
 but afterwards, on finding that he was subjected to this 
 higher charge, paid it under protest — 
 
 Held, that he was entitled to recover back, in an action 
 for money had and received, the difference he had so paid 
 under protest. 
 
 Appeal Cases, vol. 3, p. 1029, 1877-78. 
 
In re : 
 
 The Southern Railway and 
 Steamship Assdciation. 
 
 Argument of MILTON H. SMITH, 
 
 ■On hehalf of the Association for reUeftoMiAmemb&r^^ 
 of said Association, from the dpemtion vf the 
 Fourth Section of the 
 
 " Act to Regulate Commeree." 
 
 Submitted April 3, 18S7, 
 
 WASHINGTON, D. £; ' ■, ' 
 
 JUDD & DbTWKILER, I'RINtERS. ■ 
 
Mr. Chairman and Gentlemen of the Commission.: 
 
 We appear before you as a committee representing the 
 Southern Railway and Steamship Association. 
 
 The Southern Eailway and Steamship Association is one 
 of a number of similar organizations existing throughout 
 the country that owe their origin to the rapid development 
 of the transportation systems and methods that has taken 
 place in this country during the past twenty years. 
 
 For nearly thirty years from the beginning of the con- 
 struction of railroads in the United States little or no at- 
 tempt was made at federation. Nearly all the railroads 
 constructed during that period were local ; and even where 
 two or more companies constructed railroads that connected, 
 and together formed a continuous line, they continued to 
 be operated as local railroads, each company issuing bills 
 of lading to points on its own line at local rates only, both 
 freight and passengers being transferred at termini. 
 
 For many years forwarding and commission merchants 
 continued to transact business in the same manner as when 
 the transportation of the country was by water — that is, a 
 shipment from an interior point in Ohio, say Springfield, 
 destined to a point south, say Bowling Green, Ky., was 
 shipped locally to Cincinnati, consigned to a forwarding and 
 commission merchant, who received the same, paid the 
 freight, transferred the shipment through the city, and de- 
 livered it to the Mail-line boats plying between Cincinnati 
 and Louisville, shipped it to another forwarding and com- 
 mission merchant at Louisville, who in turn receipted for 
 the property, paid charges accruing thereon up to that 
 
point, attended to the transfer to the depot of the Louisville 
 and Nashville Railroad Company, and shipped the property 
 to destination, collecting from the railroad company as ad- 
 vances the accrued charges, including a liberal compensa- 
 tion for receiving and forwarding, with a fair margin of 
 profit in the item of drayage. 
 
 These conditions resulted in the formation of fast-freight 
 line organizations . by enterprising persons who saw the 
 necessity for through arrangements, whereby shippers could 
 forward property to distant points over the lines of a num- 
 ber of carriers under a contract for a through rate and con- 
 tinuous carriage. These fast-freight lines entered into agree- 
 ments with the different carriers, whereby, in consideration 
 of assumingthe responsibilities of through contracts, through 
 carriage, and furnishing through cars, they secured reduced 
 rates of transportation on car-load quantities, occupying the 
 position of middle men between the various carriers and 
 the shippers. As this system developed, and the rates of 
 transportation declined, the profits of the fast-freight lines 
 were found to be excessive; and as it became apparent that 
 the carriers could by combination furnish facilities nearly or 
 quite equal to those of the fast-freight lines, complaint 
 arose that such organizations were an unnecessary tax upon 
 the revenue of the carriers. No such organization has ever 
 existed in the territory served by the carriers — members of 
 the Southern Railway and Steamship Association. 
 
 In time it became apparent that the carriers could elimi- 
 nate some of. the charges imposed upon traffic under the 
 methods just described by agreeing to become parties to 
 through arrangements, and, by one carrier receiving the 
 property from the shipper and consigning it directly to a 
 
connecting carrier to be carried to destination, or to be de- 
 livered to another connecting carrier, could perform the serv- 
 ice theretofore performed by the forwarding and commis- 
 sion merchant or by the fast-freight lines. This could be 
 done with little or no increased expense to the carrier, since 
 the same facilities that were necessary for the carrier to do 
 business with the forwarding and commission merchants 
 could be used in receiving property from and delivering it 
 to connecting carriers. Even after these methods were to 
 some extent adopted, carriers in many instances, while guar- 
 anteeing through rates which were the sums of the locals, 
 only receipted for property to the ends of their railroads, and 
 still continued to transfer property from car to car, or by 
 drays at termini, each company receiving its local rates. 
 
 This, for a time, created a class of middle-men, which 
 may be correctly described as " freight brokers." They 
 were generally enterprising men, who familiarized them- 
 selves with the rates of the various carriers, and by manipu- 
 lating them were able to contract with shippers at lower rates 
 than the shippers, without the special knowledge of rates, 
 could secure for themselves. By reshipping at less rates they 
 secured a margin that would remunerate them for their 
 time and enterprise. As an illustration, a person such as 
 we have described, located at Cincinnati, would contract 
 with manufacturers in the interior of Ohio, guaranteeing a 
 through rate from the manufactory to destination ; have the 
 property consigned to him at Cincinnati, pay charges, reship 
 at rates he had secured, and collect from the carrier the 
 difiFerence between rates thus secured and the contract rate 
 made between himself and the manufacturer. As the methods 
 of the carrier rapidly improved, this class of middle-men 
 soon became extinct. 
 
As two or more carriers entered into arrangements for 
 continuous carriage over their various railroads, the joint 
 business rendered frequent communication and personal 
 conferences necessary. This developed traffic agents, who 
 devoted much or most of their time to what became known 
 as " through traffic," in contradistinction to " local traffic," 
 or traffic between stations on the line of a single carrier. As 
 the system gradually extended, and the number of carriers 
 parties to through arrangements increased, the necessity for 
 some organization for the transaction of the joint business 
 was developed, and this resulted in the formation of associa- 
 tions. 
 
 The Southern Kailway and Steamship Association may 
 be said to have come into existence in 1875, although it was 
 the successor of similar organizations less comprehensive. 
 The objects of the Association are partially set forth bj' the 
 following extract from the preamble of the agreement sub- 
 mitted herewith : 
 
 "That whereas the establishment and maintenance of 
 tariffs of uniform rates and the prevention of unjust dis- 
 crimination, such as necessarily arises from the irregular 
 and fluctuating rates which inevitably attend the separate 
 and independent action of transportation lines, is important 
 for the protection of the public; and 
 
 " Whereas it is deenied to be to the mutual advantage of 
 the public and the transportation companies that business 
 in which they have a common interest should be so con- 
 ducted as to secure a proper correlation of rates such as will 
 protect the interest of competing markets without unjust 
 discriminations in favor of or against any city or section ; 
 and 
 
 " Whereas these objects can be attained only by co-opera- 
 tion on the part of the various transportation lines engaged 
 
in the traffic of the territorj' south of the Potomac and Ohio 
 rivers and east of the Mississippi river ; and 
 
 "Whereas such co-operation is absolutely necessary to a 
 strict compliance with the requirements of the act of Con- 
 gress entitled 'An Act to Eegulate Commerce.' 
 
 " Now, therefore, in order to secure such co-operation 
 among the said transportation lines, by providing means for 
 the prompt adjustment of the differences which may arise 
 between them ; by placing all of their traffic, common to 
 two or more companies, under the control of officers jointly 
 elected, and by the general conduct of the same under well- 
 defined rules and regulations which will insure the main- 
 tenance of rates, it is mutually agreed," etc. 
 
 It will be seen that the agreement submitted herewith is 
 to take effect on the 1st of April. It is, however, simply a 
 modification of an agreement which has been in effect for 
 several years, the principal change being the elimination of 
 such portions as provided for the allotment or division of 
 traflBc which is specifically prohibited in section 5 of "An 
 Act to Regulate Commerce." 
 
 Most of the common carriers in the territory south of the 
 Potomac and Ohio and east of the Mississippi rivers are 
 parties to the agreement, the most important exception being 
 the Chesapeake and Ohio Railway Company, which, though 
 located south of the Ohio and Potomac rivers, takes traffic 
 in competition with the trunk lines and their connections. 
 The terms and conditions upon which it interchanges traffic 
 with members of the Southern Railway and Steamship 
 Association are similar to those upon which the trunk lines 
 and their connections interchange traffic with them. 
 
 From the foregoing it will be seen that we represent the 
 carriers that furnish transportation facilities for a large part 
 
6 
 
 of the State of Virginia, practically all of North Carolina, 
 South Carolina, Georgia, Alabama, and Tennessee, and a 
 part of Kentucky, Mississippi, Louisiana, and Florida, and 
 the traffic interchanged between those States and other parts 
 of the country. 
 
 The results obtained by the Southern Railway and Steam- 
 ship Association, like those of most other similar associa- 
 tions, are mainly the simplification of negotiations between 
 the numerous parties to the arrangements for interchanging 
 traffic. As will be seen by reading the agreement, the par- 
 ties thereto delegate but little authority to the Association, 
 and where this is done it is of small moment in practice, for 
 the reason that such voluntary agreements, like those of 
 nearly all similar commercial organizations, cannot be legally 
 enforced, and are complied with only in so far as the repre- 
 sentatives of the various corporations deem that the interests 
 they represent will be promoted thereby, or as their personal 
 whims or inclinations may dictate. These associations are 
 of like nature with the various trade organizations, such as 
 boards of trade, chambers of commerce, manufacturers' asso- 
 ciations, and so on. 
 
 An examination of a map of the Qnited States shows that 
 the traffic conditions of the territory served by the carriers 
 here represented differ materially from those of the larger por- 
 tion of the remainder of the United States. Commencing at 
 Cumberland, Md., thence down the Potomac and Chesapeake 
 to the Atlantic, thence following the coast to New Orleans, and 
 the Mississippi and Ohio rivers to Pittsburgh, Pa., the entire 
 territory is practically surrounded by navigable waters. In 
 addition to being thus surrounded the territory is penetrated 
 by navigable rivers emptying into the ocean and the gulf, and 
 
by the various tributaries of the Ohio and the Mississippi. 
 There are numerous points that are competitive between 
 rail and water carriers along and near the Atlantic coast. 
 The James River is navigable to Richmond, Va. Boats 
 ply the Savannah river with more or less regularity as 
 far inward as Augusta, Ga. They ply the Chattahoochee 
 as far as Columbus, Ga. The Alabama and its tributaries 
 are navigable from Mobile to Montgomery, Ala., and to 
 Aberdeen, Miss. The Tennessee is navigable from Paducah, 
 Ky., to Florence, Ala., and from Decatur, Ala., to Chattanooga 
 Tenn., and during certain seasons of the year above Chatta- 
 nooga as far as Knoxville. The Government has for years 
 been engaged in constructing a canal around Muscle Shoals. 
 The work is nearly completed, and the Tennessee will soon be 
 navigable between Paducah and Chattanooga. The Cumber- 
 land is navigable for a large portion of the year between Smith- 
 land, Ky., and Somerset, Ky., the crossing of the Cincinnati 
 Southern railroad. The Green and Barren rivers are navi- 
 gable between Evansville and Bowling Green. The Ken- 
 tucky river is navigable between Carrollton; at its mouth, 
 and Oregon, Ky. There are a number of smaller streams 
 which are navigable for small craft during a portion 
 of the year. 
 
 For many years the Government has been spending 
 large sums of money to improve the navigability of 
 these streams by building locks and dams, wing-dams, 
 deepening channels, and erecting and maintaining lights 
 and signals, thus cheapening the cost, lessening the risk, 
 and otherwise increasing the facilities for navigating all the 
 inland waters of this territory. Nearly or quite all of the 
 carriers navigating these streams are engaged to a greater 
 or less extent in interstate commerce. 
 
8 
 
 . The more important cities of this territory, such as Cin- 
 cinnati, Ohio ; Louisville, Ky. ; St. Louis, Mo. ; Nashville, 
 Tenn.; Memphis, Tenn.; MontgomerJ^ Ala.; Selma, Ala.; 
 Mobile, Ala. ; New Orleans, La.; Pensacola, Fla.; Savannah, 
 Ga. ; Charleston, S. C. ; Augusta, Ga.; Wilmington, N. C; 
 Richmond, Va.; Vicksburg, Miss., were commercial centers, 
 where traffic with the surrounding country was inter- 
 changed, before railroads were built to them. They be- 
 came commercial centers by virtue of natural location and 
 of the facilities they enjoyed", and do still enjoy, from water 
 transportation. When the railroads reached these points 
 they found the circumstances and conditions, by reason of 
 meeting with water competition, entirely dissimilar, the 
 volume of traffic concentrating at such points being many 
 times greater than at intermediate stations, and the value of 
 the transportation to the shipper already fixed by the water 
 carriers. 
 
 • As would be expected, the attempt to construct railroads 
 throughout this territory started from points on existing 
 water-transportation lines. Among the first to be built was 
 the South Carolina railroad, Charleston to. Augusta; soon 
 after the road from Vicksburg to Jackson, Miss.; then from 
 Savannah to Macon ; Augusta to Atlanta; Atlanta to Chatta- 
 nooga; Memphis to Chattanooga; Chattanooga to Nashville; 
 Louisville to Nashville; Memphis in the direction of Louis-' 
 ville; New Orleansto Jackson, Miss.; Atlanta to West Point; 
 West Point to Montgomery ; Montgomery in the direction of 
 Pensacola ; Pensacola in the direction of Montgomery ; Mobile 
 northward ; Dalton to Knoxville ; Norfolk in the direction of 
 Lynchburg, etc. As the railroads were constructed from 
 M'ater lines towards the interior, tariffs for the transporta- 
 
9 
 
 tion of property were, at first, based mainly upon the dis- 
 tance. By this is not meant that in any case was the same 
 rate per ton per mile basis adopted for the transportation 
 of property for different distances, but that, as the distance 
 increased, the rates were gradually increased. The long and ■ 
 short haul problem, which has for some years past vexed 
 legislators and taxed the ingenuity of traffic managers, had 
 not then arisen. In those daj's it was not supposed that 
 railroads could, under any circumstances, compete with 
 water transportation. Less than thirty years ago, some 
 time after the completion of the several railroads which 
 together form a continuous rail line from Nashville, Tenn., 
 to Savannah, Ga., an enterprising young man, then and 
 now a citizen of Tennessee, with a slight practical experience 
 in river transportation, went to Savannah and presented to 
 the president of the great Central Railroad of Georgia — a 
 road 190 miles long — a plan to secure the transportation of 
 wheat from Tennessee to New York via Savannah. The 
 great magnate, while good-naturedly assenting to the pro- 
 posed arrangement, bluntly said that he never expected to 
 see or hear of him or the wheat again. He and the chief 
 officers of the other railroads and the steamship lines over 
 which the property was carried were greatly surprised when 
 the effi)rt resulted in what was then deemed a large move- 
 ment of the product of Tennessee. 
 
 It was also about this time that the superintendent of the 
 Western and Atlantic road, a road constructed, owned, and 
 operated by the State of Georgia, in his annual report to 
 the Governor, referred to the fact that during the preceding 
 year, when there had been almost a total failure of the corn 
 crop throughout the State, a large quantity of corn had 
 2 
 
10 
 
 been transported from Tennessee, and had thus been the 
 means of preventing much suffering and loss to the citi- 
 zens of Georgia; offering this as a remarkable fact to prove 
 the wisdom of the State in investing a large sum of money 
 in what had before that proved to be an unprofitable enter- 
 prise. 
 
 The construction of railroads to interior points has greatly 
 facilitated interchange of commodities between dififerent 
 sections of the country, and has added to the comfort and 
 luxury of the people. Before the construction of railroads, 
 communities located in the interior produced but compara- 
 tively few articles that would bear the excessive cost of 
 transportation by the facilities then in use. Such articles 
 as wool and feathers, of which the relative value as com- 
 pared with weight is great, would bear transportation for 
 quite long distances to the nearest point favored with water 
 transportation. Corn and such like articles could only be 
 disposed of for consumption in the neighborhood, or be 
 converted into a product that would increase its value as 
 compared with its bulk and weight, such as whiskey, live 
 stock, etc. The quantity of merchandise used in such com- 
 munities was also greatly restricted by the cost of transpor- 
 tation. The result was that these communities lived mainly 
 within themselves-rthat is, they produced much of what 
 they consumed and consumed most of what they produced. 
 
 When railroad companies began to extend their lines into 
 the interior, their rates of transportation were adjusted within 
 their charter limits to meet the existing condition of things. 
 For the first few miles they were unable to compete with the 
 transportation by animal power. But as lines were extended 
 the limits prescribed by charters produced rates that were 
 
11 
 
 less than tlie cost of animal transportation. And as lines were 
 still farther extended it became evident that the maximum 
 charter rates, if insisted upon, would prohibit the transpor- 
 tation of some articles. In other words, rates so fixed were 
 morethan thetrafficwouldbear. If the rate on corn was made 
 as great as the rate on wheat the corn could not be shipped, 
 and was therefore converted by feeding to stock or by manu- 
 facturing whiskey. The natural consequence was that to en- 
 courage the shipment of corn the rate was reduced. In the 
 same way the limit of the rate for the transportation of wheat 
 was reached. So in the case of other articles of which the 
 value as compared with the bulk and weight is relatively 
 small. Thus railroad managers learned their first lesson in 
 promoting traffic. Many articles the value of which as 
 compared with the bulk is relatively great, such as dry- 
 goods, boots and shoes, drugs, etc., have seldom or never 
 been charged what such traffic will bear. 
 
 From the limitations herein described managers of rail- 
 roads first discovered the fact which involves a paradox — 
 that traffic can be transported and yield a profit at a rate 
 that is less than the average cost: that additional traffic 
 secured at a rate that yields revenue in excess of the ad- » 
 ditional cost of carriage, though less than the average cost, 
 produces a profit. 
 
 I have said that managers learned this, and it is true, so 
 far as adopting in practice rates so based ; although, with a 
 few exceptions, it is too much to say that they clearly com- 
 prehended the fact. Many of them still do not so clearly 
 comprehend it as to enable them to make an intelligent ex- 
 planation of it. Only when rail lines undertook to compete 
 with water lines was this important economic fact exten- 
 sively put in practice. 
 
12 
 
 As the railroads starting from opposite points on the water- 
 bound territory were extended into the interior, the adoption 
 of rates of transportation that were not less for the longer 
 than for the shorter distance resulted in an increase in the 
 rates of transportation. One line starting from Charleston 
 .and extending in the direction of Memphis, and another 
 starting from Memphis and extending via Chattanooga in 
 the direction of Charleston, the maximum rates from the 
 basing points, Charleston and Memphis, were reached at the 
 meeting point, say, somewhere in the State of Georgia. 
 This basis of adjusting rates was and is still beyond criti- 
 cism so long as the principle obtains that the rate for the 
 longer distance shall not, under any circumstances, be less 
 than for the shorter distance, and it was acquiesced in by 
 all concerned until the various railroads entered into the 
 arrangements heretofore referred to, whereby the}' under- 
 took to contract for continuous carriage between distant 
 points, over a number of railroads, at a specific rate, and to 
 compete with water carriers. 
 
 When railroads undertook to transport property from 
 Charleston to Memphis it was found that it could be done 
 only under limitations not theretofore encountered; that 
 the compensation for transporting property was limited to 
 its value to the owner, and that the value was not in this 
 case what the traffic could bear, but what competing carriers 
 would transport it for. 
 
 Evidently, at this stage, the net revenue derived from the 
 transportation of property to and from intermediate points, 
 was many times greater tiian could possibly be obtained for 
 the transportation of like property between Charleston and 
 Memphis, Therefore the interests of the carrier demanded 
 
13 
 
 that the transportation of property between Charleston and 
 Mem phis be not undertaken, or that- a less rate for the longer 
 than for the shorter distance should be accepted. This prin- 
 ciple also had to be applied to a certain extent to a limited 
 number of intermediate points. The maximum rate that 
 could be secured for the transportation of property from 
 Charleston to intermediate local stations near Memphis was 
 limited to the value of transportation from Charleston to 
 Memphis plus the rate from Memphis to those stations, which, 
 on many classes of freight, would be less than to stations a 
 greater distance from Memphis. From such conditions was 
 evolved the basis upon which rates for the transportation of 
 property in the territory represented are, with few excep- 
 tions, now fixed. 
 
 For the Louisville and Nashville Railroad Company I claim 
 that the present rates for the transportation of property are 
 not only just and reasonable, but are adjusted, with possible 
 exceptions, in accordance with the requirements of the "Act 
 to Regulate Commerce." 
 
 I believe that the "Act to Regulate Commerce," in pro- 
 hibiting carriers from charging or receiving " any greater 
 compensation, in the aggregate, for the transportation of pas- 
 sengers, or of like kind of property, under substantially similar 
 circuTnstances and conditions, for a shorter than for a longer 
 distance," authorizes, carriers to charge or receive greater 
 compensation for the transportation of passengers or of like 
 kind of property for a shorter than for a longer distance^ 
 under circumstances and conditions that are substantially 
 dissimilar, and that your Commission can only authorize car- 
 riers to charge less for longer than for shorter distances, for 
 the transportation of passengers or of like kind of property 
 
14 
 
 upon application of carriers who may desire so to do, where 
 the circumstances and conditions are substantially similar. 
 Other representatives of large corporations who are asso- 
 ciated with me in this committee hold similar views. Our 
 views are more clearly stated by Mr. Albert Fink, from 
 whom I take the liberty to quote: 
 
 " Section Four. 
 
 " I shall first deal with section four, regulating the charges 
 for long and short hauls. While sections 1, 2, and 3 lay 
 down the general principles upon which tariffs are to be es- 
 tablished, section 4 is the only one in which it is attempted 
 to lay down a specific rule; but it is so indefinite that it 
 admits of different constructions. The first part of this sec- 
 tion reads as follows, omitting the clause ' under substan- 
 tially similar circumstances and conditions:' 
 
 " ' That it shall be unlawful for any common carrier sub- 
 ject to the provisions of this act to charge or receive any 
 greater compensation in the aggregate for the transportation 
 of passengers or of like kind of property for a shorter than for 
 a longer distance over the same line in the same direction, 
 the shorter being included within the longer distance.' 
 
 " There could be no misconstruction put upon this part 
 of the section, as it is an absolute prohibition of charging 
 more for a shorter than for a longer distance; but, by intro- 
 ducing the clause ' under substantially similar circumstances 
 and conditions,' this prohibition is qualified, and it may be 
 lawful under dissimilar circumstances and dissimilar con- 
 ditions to charge more for a shorter than for a longer dis- 
 tance. The law does not specify what circumstances and 
 conditions would justify a greater charge for a shorter than 
 for a longer haul, and we must, therefore, inquire what are 
 the different circumstances and conditions referred to which 
 justify an exception to the general rule. 
 
15 
 
 " These circumstances and conditions must necessarily be 
 such as to legitimately influence the relative charges for 
 long and short hauls. The law cannot mean any other cir- 
 cumtances and conditions. It cannot refer to extraneous 
 inatters, as, for example, to the conditions of the weatherj 
 whether it rains or snows, or whether it is hot or cold 
 but it [must refer to the conditions and circumstances 
 which, from the very nature of the case, control transporta- 
 tion charges ; and the principal elements that control trans- 
 portation charges are the cost of the service and competi- 
 tion, using the word ' competition ' in its widest sense — 
 competition with water routes, competition with rail routes, 
 competition between markets, &c. These are the main fac- 
 tors regulating transportation charges, and have done so at 
 all times, in this and all other countries. It must, there- 
 fore, be these conditions and circumstances to which refer- 
 ence is had in this clause. 
 
 " If it can be shown, for example, that it costs a railroad 
 more to carry freight for fifty miles over its road than it 
 costs to carry the same kind and quantity of freight one 
 hundred miles, this clause would be an authorization for 
 charging more for the fifty-mile service than for the one- 
 hundred-mile service; or, if it can be shown that the rate to 
 the end of the one hundred miles of road is fixed by water 
 transportation, hardly sufficient to pay the railroad the cost 
 of doing the work, without any or without an average profit 
 in the capital invested in the road, the railroad company 
 would be justified in making a lower rate to the station one 
 hundred miles distant than it does to the station fifty miles 
 distant, provided, however, that the rate to the fifty-mile 
 station is reasonable in itself — not as low as the cost of water 
 transportation would be, but not higher than the cost of 
 railroad operation and a reasonable interest on the cost of 
 the road. The shippers at the one-huudred-mile station 
 enjoy the natural advantages of their location on a navi- 
 gable river, while those who live in the interior are neces- 
 
16 
 
 sarily under disadvantages. This diBcrimination exists in 
 the nature of things; it is not unjust ; it is not the result of 
 the arbitrarj' action of the railroad transportation com- 
 panies, who are compelled to regulate their charges in ac- 
 cordance with the circumstances and conditions of the situa- 
 tion as they find them. The railroad company would prefer 
 not to make the lower charge for the long haul, but to as- 
 sess the people along the line of the road ratably, according 
 to the distance which freight is carried ; but this is rendered 
 impossible by the very nature of the case when railroads 
 compete with water routes, because of the cheaper cost of 
 transportation by water than by rail. 
 
 "In all cases, therefore, where the cost of the service and 
 legitimate competition justify a higher charge for a shorter 
 haul than for a longer, section 4 does not prohibit it ; but 
 the charge for a short haul must, of course, come within the 
 restriction laid down in section 1, viz., it must be reasona- 
 ble and just. 
 
 " Assuming that this interpretation of the fii-st clause of 
 section 4, down to the proviso, is correct, the question will 
 be asked, what meaning is to be attached to the proviso, 
 which reads : 
 
 " 'Provided, however, That upon application to the Commis- 
 sion appointed under the provisions of this act, such com- 
 mon carrier may, in special cases, after investigation by the 
 Commission, be authorized to charge lessfor longer than for 
 shorter distances for the transportation of passengers or 
 property, and the Commission may, from time to time, pre- 
 scribe the extent to which such designated common carrier 
 may be relieved from the operation of this section of this 
 act.' 
 
 "In order to properly interpret the meaning of the pro- 
 viso, which does not seem quite in harmony with the first 
 part of the section, it is necessary to bear in mind that the 
 original bill as reported by the Senate committee to the 
 Senate did not contain in the first part of the fourth section 
 
17 
 
 the qualifying clause 'under substantially similar circum- 
 stances and conditions.' It made the prohibition of charg- 
 ing more for a short haul than for a long haul absolute ; but it 
 is obvious that the enforcement of such a rule would result 
 in great injury to the commerce of the country. Discretion 
 was, therefore, given to the Commission, in the proviso, to 
 suspend itn operation ; but it is evident that, after the quali- 
 fying clause 'under substantially similar circumstances and 
 conditions' had been inserted by the Senate in section 4, 
 there was no longer any necessity for the proviso, as no fur- 
 ther exemption is needed from the operation of the first part 
 of the section as amended by the Senate. Bearing this in 
 mind, and reading the proviso in connection with the first 
 part of the section, it can only mean that in cases where the 
 circumstances and conditions are similar the Commission 
 may relieve the carriers from the operation of the rule when 
 application for such relief is made. Should no such applica- 
 tion be made the Commission have no cause for action 
 under the proviso. 
 
 " The qualifying clause in the fourth section 'under substan- 
 tially similar circumstances and conditions,' therefore, leaves 
 the determination of whether a greater charge can justly 
 be made for a shorter haul than for a longer under different 
 circumstances and conditions to the judgment of the car- 
 riers in the first place to be finally passed upon by the 
 courts. Section 4, therefore, does not prescribe a more defi- 
 nite rule than section 1, by which the carriers could be 
 guided in determining in all cases what are reasonable and 
 just charges. That section might, therefore, have been 
 omitted altogether, as it conveys no other meaning than that 
 which is already expressed in section 1, viz., that the rail- 
 road charges shall be reasonable and just. 
 
 " There can be no doubt that the above is the correct in- 
 terpretation of section 4 ; it fully carries out the intent and 
 object of the law. If the long and short haul rule had been 
 made absolute it is obvious that the very object of the law 
 3 
 
18 
 
 Gould not have been attained ; instead 6f regulating com- 
 merce the law would have obstructed it ; instead of prevent- 
 ing unjust discrimination it would have created it ; it would 
 have stifled competition with water lines and increased the 
 transportation rates ; it would have deprived the people of 
 facilities to ship to distant markets. These evils could not 
 have been prevented by the exercise of the Commission's 
 power to exempt the carrier from the operation of the long 
 and short haul rule, because it would have been an impos- 
 sible task for the Commission to investigate and decide the 
 numerous cases that would come before them. The Com- 
 mission could not exempt any one railroad or line from the 
 operation of the long and short haul rule without at the 
 same time giving relief to all the other railroads whose 
 tariffs are affected thereby ; otherwise great injustice would 
 be done both to the railroads and to business communities. 
 It certainly was not the intention of the law to, throw the 
 transportation business of the whole country into confusion, 
 which would be the result if section 4 were interpreted to 
 make the long and short haul rule absolute and only sub- 
 ject to suspension by the Commission. 
 
 " In case of a doubt as to the proper construction and 
 meaning of the law, it must be construed by the carriers in 
 accordance with the avowed and clearly expressed purpose 
 of the law, and not in opposition to it ; otherwise the car- 
 riers would lay themselves open to the imputation that they 
 did so for the purpose of making the law obnoxious. Be- 
 tween the two alternatives — either to fail to construe the 
 law as it may finally be construed by the courts, or to con- 
 strue it in a way that would avoid this risk but result in 
 the obstruction of commerce — the right course to pursue it 
 seems to me would be to construe it with a view to carrying 
 out the object and intent of the law, trusting that such 
 construction will finally be sustained by the courts." 
 
19 
 
 Personally I am confident that the foregoing is the correct 
 interpretation of the fourth section of the act, and that it 
 will be finally so decided. 
 
 It is not necessary for me to call your attention to the fact 
 that if your Commission should so construe the law it would 
 not only give instant relief to the commerce of the country, 
 which, owing to the unwise, unjustifiable, and, under the 
 circumstances, indefensible construction of section four of 
 the act by the managers of a large proportion of the rail- 
 roads throughout the country, is practically suspended ; but 
 you would relieve yourselves of innumerable complications 
 and of great responsibilities that, in my opinion, you are 
 not called upon to assume. Under the "Act to Eegulate Com- 
 merce," as representing common carriers, we are not author- 
 ized to bring any matter to the attention of your Commis- 
 sion except to ask authority to charge less for the longer 
 than for the shorter distance for the transportiou of property 
 under substantially similar circumstances and conditions. 
 We are, therefore, debarred from applying to you for your 
 construction of the fourth section of the act, and possibly we 
 are not justified under the circumstances in bringing the 
 matter to your attention. 
 
 Others, also representing large corporations, hold opposite 
 views, construing the act to absolutely prohibit " any 
 common carrier subject to the provisions of this act to 
 charge or receive any greater compensation in the aggre- 
 gate for the transportation of property * . * * for a 
 shorter than for a longer distance over the same line, in the 
 same direction, the shorter being included within the longer 
 distance," under any and all conditions, unless specially 
 authorized by your Commission. 
 
20 
 
 While I, as representing the Louisville and Nashville 
 Eailroad Company, firmly believe that the act does not re- 
 quire the abandonment of the present basis of adjusting 
 rates for the transportation of property throughout the 
 territory now under consideration, which has been, in effect 
 for years, and upon which the business in this territory and 
 with other parts of the country is based, and which may be 
 said to have given general satisfaction, and which has con- 
 stantly furnished increased facilities at a constantly decreas- 
 ing cost to the various communities, yet I am practically 
 forced, by what I deem the unwise and unwarranted action 
 of connecting carriers, to adopt the same course as those 
 holding opposite views. 
 
 I have been connected with Southern railroads since 1860. 
 For twenty years I have been engaged in formulating the 
 sj'stem whereby through rates for the transportation of prop- 
 erty were made between points on the Louisville and Nash- 
 ville railroad and all parts of the country. It has been a 
 source of pride with me that shippers of nearly all classes of 
 property could secure through bills of lading between any 
 point on the Louisville and Nashville railroad and nearly 
 every point in the United States, and on some classes of 
 freight to some points in Europe. Many years ago, after 
 much labor, I succeeded in securing data that enabled the 
 Louisville and Nashville Railroad Company to guarantee 
 the rates on cotton from all f5oints on or reached via its 
 lines to nearly every cotton mill in New York, New Eng- 
 land, and Canada. Every transportation line in the South- 
 ern territory has for years past been guaranteeing rates in 
 the same way. 
 
 This is a business matter and does not call for any exhiT 
 
21 
 
 bition of feeling, yet I confess to a feeling of discouragement 
 and annoyance when I see the labor of j^ears thrust aside, 
 as it has been, by connecting carriers withdrawing all rates 
 for the interchange of traffic. I contend that connecting 
 carriers were not justified in taking such action. 
 
 We are aware that the trunk lines and most of their 
 Western connections have prepared and put in effect an 
 adjustment of rates from the first of April, based on not 
 charging less for the longer than for the shorter distance. 
 Managers of railroads ai'e human, and in this instance 
 they have been prompted to take uniform action from dif- 
 ferent motives. Many of them believe that a strict con- 
 struction of the law in this regard will on the whole pro- 
 mote the interests they represent. Others are in fear of 
 a multiplicity of lawsuits with corresponding penalties. 
 Others are compelled to do so by the action of competing 
 lines. Others, comparatively few it is to be hoped, believe 
 such a construction will seriously cripple competing lines 
 without greatly injuring the interests they represent. This 
 is an uncharitable view, but there is evidence going to 
 show that long and continued strife for traffic engenders 
 a feeling of animosity in some characters that causes the 
 individual to lose sight of nearly everything except that 
 that will injure a rival corporation. 
 
 However, the competitive conditions north of the Ohio 
 and Potomac rivers are wholly different from those in the 
 territory represented by your petitioners." 
 
 The practice of adjusting rates so as to not charge more 
 for the longer than for the shorter distance has been in 
 effect upon the trunk lines for many years. The New York 
 Central Railroad, paralleling the Hudson River, the Erie 
 
22 
 
 Canal, and with its connections west of Buffalo the lakes, has 
 water competition the whole length of its line. Evidently 
 these carriers could not well exact a higher rate for the 
 shorter than ior the longer distance, because the competitive 
 circumstances and conditions are substantially similar at 
 most if not all the points on the entire line. A higher rate 
 from Toledo or from Sandusky, or from Cleveland, to the 
 seaboard, than from Chicago to the seaboard, could not well 
 be charged, as the value of the transportation, or the charge 
 by the water lines, is not greater for the shorter than for the 
 longer distance. The Pennsylvania Railroad Company 
 adopted this basis at least twenty-five years ago, and its 
 action forced competing lines to the same course. There- 
 fore, revising the rates of these lines to adjust them in 
 accordance with the prohibition against charging more 
 for the shorter than for the longer distance involves little 
 or no change, so far as their lines and immediate connections 
 are concerned. It will be readily seen that a corporation 
 like the Pennsylvania Railroad Company, operating nearly 
 five thousand miles of railroad in the State of Pennsylva- 
 nia, the distance from the nearest seaboard point to the 
 extreme western limit of the State being not less than 350 
 miles, and over which nearly all trafl&c from the West 
 must pass, can with its immense traffic afford to adopt a 
 basis, that secures to it the long haul upon nearly all com- 
 petitive traffic. But when small independent companies 
 with short roads and light traffic are forced to adopt the same 
 basis the result must necessarily be disastrous. 
 
 A retrospective view proves this to have been the result 
 in many cases. I venture to say that, with but one or two 
 exceptions, not a railroad in the States of Ohio, Indiana, 
 
or Illinois has been able to escape bankruptcy, except it 
 has been carried by or become part of one of the trunk 
 lines, or some great Western railroad corporation. Several 
 of these small railroads have been through bankruptcy more 
 than once. 
 
 Theannual reports of the Pennsylvania Railroad Company 
 for a number of years showed that the operations of 
 the roads west of Pittsburgh and Erie controlled by that 
 corporation resulted in a loss ; while the traffic secured from 
 those roads to the lines east of Pittsburgh and Erie, may 
 have, and doubtless did, yield a revenue that has rendered 
 the operation of those roads as a whole, profitable to that 
 corporation. 
 
 What is known as the Bee Line, running from Cleveland 
 to Columbus, Cincinnati, Indianapolis, and St. Louis, which 
 was forced by its competitors to adopt the policy of the 
 trunk lines, although running through a magnificent and 
 thickly-populated countryj yielding an immense traffic, has, 
 because debarred from securing local rates upon any of its 
 traffic, avoided bankruptcy with the greatest difficulty, and 
 it is to-day struggling to meet a large debt. The average 
 rate per ton per mile received by that company for the 
 transportation of property has been less than that of any 
 other railroad in the country — less than that of any of 
 the trunk lines who have so selfishly thrust this policy 
 upon their Western connections, and by so doing have in- 
 flicted losses amounting to millions of dollars upon the 
 original investors in Western railroads. The control of 
 this road is believed to be held by the interests that con- 
 trol the New York Central. Very likely, the interest 
 which may have been acquired at a price less than it 
 
24 
 
 cost the original investors, is indirectly remunerative ; 
 since by the adjustment of rates the traffic originating at 
 stations on this line, which ought in justice to yield a local 
 revenue to the C. C. C. & I. Co. is secured to the controlling 
 line. This adjustment of rates amounts to a practical prohibi- 
 tion against the movement of all articles produced at interme- 
 diate stations on the east and west lines to the south. From 
 the foregoing, I think, it will be seen how the policy of ad- 
 justing rates so that the charge for a longer distance to and 
 from competitive points shall in no case be less than to and. 
 from intermediate local stations, may promote the interests 
 of the great trunk lines, and at the same time be disastrous 
 to the interests of the smaller corporations ; and how such 
 a policy may tend to concentrate the commerce of the 
 country at eastern seaboard cities, while at the same time 
 it has a tendency to retard the prosperity of the West and 
 the South. 
 
 As representing the Louisville and Nashville Railroad 
 Company, I can speak with confidence as to the disastrous 
 results from the enforced adjustment of rates upon the basis 
 of not less for the longer than for the shorter distance. The 
 Louisville and Nashville Railroad Company is the owner of 
 a railroad extending across the State of Illinois from East 
 St. Louis, 111., to Evansville, Ind., with a branch from 
 McLeansboro to Shawneetown, 111. This property was ac^ 
 quired by purchase at a bankrupt sale. During the fiscal 
 year ending June, 1886, the results on this railroad were as 
 follows : 
 
 Gross earnings $837,104 71 
 
 Operating expenses, interest, and taxes 1,019,517 08 
 
 Loss ..|182,412 37 
 
25 
 
 This result is wholly due to the low rates which circum- 
 stances and conditions compel the management to accept for 
 the transportation of local traffic, such rates being partly due 
 to the action of competing lines in adjusting rates, as herein- 
 before described, and partly due to the regulation of rates by 
 the State of Illinois through its railroad commission, which 
 absolutely prohibits charging or receiving less for the longer 
 than for the shorter distance under any circumstances. As 
 an illustration of the ill effects of the prohibition bj^ the 
 State of Illinois, the railroad compaay makes no attempt to 
 compete with the water lines for the transportation of prop- 
 erty between Shawneetown, 111. and East St. Louis and St. 
 Louis. Consequently, the traffic over forty miles of railroad, 
 from Shawneetown to McLeansboro', is so light that one 
 mixed passenger and freight train each way, six days in the 
 week, is all that is operated, and is really more than the 
 traffic requires. Were the restrictions against charging more 
 for the shorter than for the longer distance removed it is 
 probable that a traffic in lumber and other heavy articles 
 might be developed that would enable the company to fur- 
 nish increased facilities and add something to the net earn- 
 ings. 
 
 Fortunately, perhaps, the earnings of the Southern roads 
 from local traffic are so many times greater than from com- 
 petitive traffic, and the competitive points are so widely sep- 
 arated, that the effort of the trunk lines and their Western 
 connections to force their adjustment of rates upon the 
 Southern roads must necessarily fail.. 
 
 I do not believe there is any necessity for disturbing the 
 commerce of that portion of the country at least which lies 
 south of the Ohio and Potomac rivers and east of the Mis- 
 4 
 
26 
 
 sissippi. I do believe that the law was enacted to secure just 
 and reasonable rates and to prevent unjust discrimination. 
 I do not believe that it was intended to disturb the existing 
 friendly and mutually favorable and just conamercial con- 
 ditions that exist between the carriers and the shippers, or 
 thjiat it was intended to financially embarrass either carriers 
 or commercial communities ; and I do not believe that it 
 will so result, if the carriers of the country intelligently 
 construe its provisions and make an earnest and honest 
 endeavor to comply therewith. If they do this I believe 
 they will receive the support of your Commission and of 
 the courts. If any of the requirements of the act are of 
 doubtful meaning no action should be taken until the mean- 
 ing is made clear, avoiding sudden and radical changes 
 which tend to disturb the commerce of the country. 
 
 Ours is not a despotic Government. If our legislators 
 under our cumbersome methods of legislation, in endeavor- 
 ing to legislate upon a wholly new subject — for I believe this 
 is the fii'st attempt of Congress to legislate on this subject — 
 have enacted a law which is evidently a piece of patchwork, 
 incoherent in its terms, and subject to different interpreta- 
 tions, and providing for its becoming effective simultaneously 
 with the time when your Commission, created to administer 
 it, is authorized to act, the carriers were not justified in plac- 
 ing an illiberal construction upon it, and arbitrarily taking 
 action that creates a disturbance in the commerce of , the 
 country and threatens a general commercial disaster. As- 
 suredly there is not, and there never has been, any danger 
 of carriers being punished for violating a law whose provis- 
 ions are not clearly understood. They will not b^ punished 
 except they wilfully violate the law after its provisions have 
 been construed by the proper authorities. 
 
27 
 
 As heretofore stated, the views of some of the members of 
 this committee do not coincide with mine ; but for the rea- 
 sons given we are all agreed upon the necessity of asking 
 your Commission to exercise the authority delegated to you 
 by section 4 of the act, in that we " be authorized to charge 
 less for longer than for shorter distances for the transporta- 
 tion of * * * property." 
 
 For convenience, to lighten the labor, and to facilitate 
 progress, we will divide the questions to be submitted into 
 six classes. 
 
 First. That we " be authorized to charge less for longer 
 than for shorter distances for the transportation of * * * 
 property" where the property transported between the 
 longer distances is secured in competition with the water 
 carriers not subject to the provisions of the act. 
 
 There are many instances of this class of competition. It 
 exists between Boston, New York, Philadelphia, Baltimore, 
 and Richmond, Wilmington, Savannah, Mobile, New Or- 
 leans, Montgomery, Selma, Memphis, etc. Between Louis- 
 ville and Cincinnati, between Cincinnati, Louisville, and 
 Owensboro, Ky. ; Evansville, Ind. ; Memphis, Tenn. ; New 
 Orleans, La. ; Mobile, Ala. ; Montgomery, Ala. ; Selma, Ala., 
 etc. 
 
 Second. That we " be authorized to charge less for longer 
 than for shorter distances for the transportation of * * * 
 property " where the traffic for the longer distance is taken 
 in competition between rail lines and rail and water lines 
 which may or may not be subject to the provisions of the 
 act. 
 
 There are numerous instances of this kind of competition. 
 
28 . 
 
 For example, between Baltimore and Richmond ; New 
 York and Nashville, Tenn. ; Memphis, Tenn.; Montgomery, 
 Ala. ; Selma, Ala. ; between St. Louis and Nashville, Tenn. ; 
 Montgomery, Ala. ; Selma, Ala. ; Atlanta, Ga., etc. 
 
 Third. That we " be authorized to charge less for longer 
 than for shorter distances for the transportation of * * * 
 property " where the property moved between the more dis- 
 tant points is taken in competition between i-ail and water 
 lines and rail and water lines subject to the provisions of 
 the act. 
 
 Instances of this kind of competition are shown in the 
 case of traflSc between eastern cities and Atlanta, Ga.; Macon, 
 Ga. ; Augusta, Ga. ; Chattanooga. Tenn., etc. 
 
 Fourth. That we " be authorized to charge less for longer 
 than for shorter distances for the transportation of * * * 
 property" when the property moved between the more dis- 
 tant points is taken in competition between rail lines and 
 rail lines. 
 
 This class of competition occurs in the case of traffic be- 
 tween Cincinnati, Ohio, and Chattanooga, Tenn. ; between. 
 Louisville, Ky., and Chattanooga, Tenn. ; Atlanta, Ga ; 
 Montgomery, Ala., etc. 
 
 Fifth. That we " be authorized to charge less for longer 
 than for shorter distances for the transportation of * * * 
 property" when the property is moved between competitive 
 points connected only by a single direct rail line; the rates be- 
 tween such competitive points being fixed or controlled by 
 competition of other carriers competing for the traffic be- 
 tween one of the points and other points, or between other 
 points and other points. 
 
29 
 
 Sixth. That we "be authorized to charge less for longer 
 than for shorter distances for the transportation of * . * * 
 property" when the property is moved to and from points 
 "under circumstances arid conditions" which are believed- 
 to be " substantially similar." 
 
 While the six classes described do not embrace all the 
 different conditions of competition, and while the different 
 classes shade or blend into one another, still it is believed 
 that your decision upon one case in each class will practi- 
 cally be a decision upon the larger portion of the applica- 
 tions which the carriers, members of this Association, may 
 submit fdr your decision in the future. 
 
 First. Application is hereby made to charge less for the 
 transportation of property between Louisville, Ky., and 
 Memphis, Tenn., than for shorter distances on the same line, 
 to the extent that the rail carriers may be enabled to adjust 
 their rates of transportation so as to enable them to success- 
 fully compete with water carriers between the same points, 
 without making any reduction from present rates to and 
 from or between intermediate local stations. 
 
 The roads now forming the Louisville and Memphis line 
 of the Louisville and Nashville Railroad Company were not 
 primarily constructed with a view of competing for through 
 traffic. As the Louisville and Nashville railroad was ex- 
 tended from Louisville in a southerly direction, traffic 
 shipped from Memphis destined to points like Elizabeth- 
 town, Ky., were shipped to Louisville, by water, thence to 
 destination by rail, the aggregate charge being that to Louis- 
 ville plus the rate from Louisville to destination. Property 
 shipped from Louisville, Ky., to Brownsville, Tenn., was 
 
30 
 
 shipped to Memphis by water, thence to Brownsville by rail, 
 the aggregate charge being that to Memphis plus the rate 
 from Memphis to destination. 
 
 When the rail line was completed rates of transportation 
 by the rail line from Memphis to Elizabethtown were ma- 
 terially reduced and the facilities and character of service 
 greatly improved. The same is true in the case of .Louis- 
 ville, Kj^, and Brownsville, Tenn. Yet the rates received 
 were in excess of the charges by the water carriers for the 
 transportation of like kind of property between Louisville, 
 Ky., and Memphis, Tenn. 
 
 Your attention is invited to the following comparative 
 table, showing tonnage, ton miles, revenue, and rate per ton 
 per mile received for the transportatioii of property to and 
 from local stations between Louisville and Memphis; and tons, 
 ton miles, revenue, and rate per ton per mile received for the 
 transportation of property passing between Louisville and 
 Memphis, and the total tons, ton miles, revenue, and aver- 
 age rate per ton per mile received from local and competitive 
 traffic on the line between Louisville and Memphis for the 
 fiscal year ending June, 1886 : 
 
 Traffic. 
 
 Tons. 
 
 Ton miles. 
 
 Revenue. 
 
 Rate per ton 
 per mile. 
 
 Percent- 
 age. 
 
 Local 
 
 Competitive . 
 
 518,949 
 26,595 
 
 47,037,878 
 10,026,315 
 
 $767,155.93 
 94,669.27 
 
 1.6306c. 
 .9940 
 
 89.1 
 10.9 
 
 Total .— 
 
 545,544 
 
 57,064,193 
 
 861,825.20 
 
 1.6153 
 
 100 
 
 Note — Only one-half of the traffic passing between stations on main 
 stem from Memphis to Louisville is included. 
 
31 
 
 The cost to the Louisville and Nashville Eailroad Com- 
 pany of its road between Memphis Junction and Memphis 
 and one-half the cost of the road between Memphis Junc- 
 tion and Louisville, with average equipment, has been 
 $16,500,000, on which the interest charge, at six per cent, 
 per annum, is $990,000. The earnings from local and 
 through traffic over tliat portion of the line between Mem- 
 phis Junction and Memphis added to the earnings derived 
 from triinsportation of traffic passing between Louisville 
 and Memphis added to one-half the earnings from the trans- 
 portation of traffic between stations, Louisville to Memphis 
 Junction included, have not in any year been sufficient to 
 pay operating expenses and the interest charge. This is 
 conclusive evidence that the charges are not unjust nor 
 unreasonable. 
 
 It only requires a glance at the foregoing figures to show 
 that, if the company is to choose between reducing the rates 
 for transportation of property to, from, and between interme- 
 diate stations so that the charge shall not in any case exceed 
 that received for the transportation of property between 
 Louisville and Memphis and abandoning the competitive 
 traffic, it will, in justice to all parties, choose the latter. 
 "Financial embarrassments might and probably wOUld result 
 to the company from the adoption of either course. Never- 
 theless, it would plainly be the duty of the management to 
 choose the course that would involve much the smaller loss, 
 and endeavor, by reducing facilities and expenses, to avoid 
 bankruptcy. 
 
 Second. Application is hereby made for authority to 
 charge less for the transportation of property between New 
 
32 
 
 York and Nashville, Tenn., than for shorter distances to 
 the extent that the rail and water carriers may be enabled 
 to adjust their rates so as to successfully compete with the 
 rates established by the all-rail lines, without making any 
 reduction in present rates to and from or between interme- 
 diate points. 
 
 In this instance the maximum rate that can be charged 
 from New York to Nashville is the rate from New York to 
 Louisville plus the rate from Louisville to Nashville. 
 
 We have here tHe paradox of water and rail lines asking 
 for authority to make the same relative rates between th,e 
 points named as are made by the all-rail lines, the rates by 
 the all-rail lines being fixed by water competition. By an 
 arrangement that has been in effect for many years the rates 
 from New York to Louisville are ijaade relative to the rates 
 from New York to Chicago, the rates between the two last- 
 named points being fixed during a large portion of the year 
 by the rates charged by the canal and lake and the rail and 
 lake carriers. The rate from Louisville to Nashville is fixed 
 by competition with the river carriers between those points. 
 
 Practically, therefore, the rail line. New York to Nashville, 
 becomes the shorter line, or the line by which the rates be- 
 tween the two points are fixed. It follows that the compet- 
 ing ocean and rail lines via Norfolk, Savannah, Charleston, 
 etc., must make corresponding rates if they are to compete 
 for the traffic. Again, it has been the custom to make the 
 rates from New York to Nashville relative to the rates from 
 New York to Memphis. The rates between the two last- 
 named points, on many classes of freight, are fixed by 
 competition of the water line and the rail and water lines 
 from New York via New Orleans to Memphis. The rate 
 
33 
 
 from New York to Murfreesboro', Wartrace, Shelby ville, 
 and other stations between Nashville and Chattanooga are 
 made by adding to the rate from New York to Nashville 
 the rate from Nashville to those stations. The rates from 
 New York and other Eastern cities to Nashville, fixed as 
 hereinbefore described, are upon a much lower basis than 
 the Southern lines, members of this Association, can 
 afford to adopt between intermediate points. The territory 
 served by the lines in this Association, as compared with 
 that served by the trunk lines north of the Ohio river, is 
 much more thinly inhabited, and relatively the tonnage 
 moved is much less. 
 
 Third. Application is hereby made for authority to charge 
 less for the transportation of property between New York 
 and Macon, Ga., than for shorter distances. 
 
 The maximum rates that can be secured for the transpor- 
 tation of property from New York to Macon are made by 
 adding to the steamer rate from New York to Savannah the 
 rail rate from Savannah to Macon. Practically this becomes 
 the short line, or the line that fixes the rate. 
 
 There are two lines competing for the trafl&ce via 
 Savannah, viz., the steamships and the Central railroad of 
 Georgia, and the steamships and the Savannah, Florida and 
 Western, and the East Tennessee, Virginia, and Georgia 
 roads via Jessup. 
 
 There are several lines via other routes competing for the 
 traffic between the same points, viz., the line via Brunswick, 
 the line via Charleston, the line via Port Royal, the Coast 
 Line via Norfolk, the East Tennessee, Virginia and Georgia 
 
34 
 
 via Norfolk, and the Richmond and Danville road via West 
 Point. 
 
 All these lines compete for traffic from New York to 
 Chattanooga, Atlanta, and all points between Chattanooga 
 and Macon. As rates are at present adjusted, the rates from 
 New York via Savannah to all points north of Macon are 
 greater than to Macon. It will at once be seen that unless 
 authority be given to the lines approaching Macon from 
 the North to accept less rates on shipments from New York 
 to Macon than to intermediate points, those lines will be 
 prevented from competing for shipments to Macon, though a 
 point on their own lines. On the other hand, unless authority- 
 be given to the lines working via Savannah and Brunswick, 
 and approaching Macon from the south, to accept less for 
 the longer than for the shorter distance, they will be pro- 
 hibited from competing for traffic to points on their own 
 lines north of Macon. 
 
 Fourth. Application is hereby made for authority to 
 charge less for the transportation of property between Cin- 
 cinnati, Ohio, and Chattanooga, Tenn., than for shorter dis- 
 tances on the same line. 
 
 The rates from Cincinnati to Chattanooga are nominally 
 made by competition between two rail lines, to wit, the Cin- 
 cinnati Southern railway, 336 miles, and the Louisville and 
 Nashville railroad, 446 miles. In practice the rates are 
 made relative to rates from other points to Chattanooga, and 
 relative to rates from Cincinnati and other points to other 
 competitive points south of Chattanooga and the Memphis 
 and Charleston railroad, viz., Montgomery, Selma, Birming- 
 ham, Ala., Atlanta, Ga., etc. ; also on some classes of freight 
 
35 
 
 relative to rates from Baltimore, Philadelphia, New York, 
 etc., to Chattanooga and other competitive points in the 
 territory of the Association. 
 
 For some years the custom has been, whenever the rates 
 were reduced or advanced from Eastern cities to Chattanooga, 
 Atlanta, Montgomery, and Selma, corresponding changes 
 were made in rates on some classes of property from Cin- 
 cinnati to Chattanooga. Again, the custom has been that 
 whenever, for any cause, tlie rates were reduced or advanced 
 from Louisville, St. Louis, Chicago, etc., to Chattanooga and 
 other competitive points in the territory, corresponding 
 changes were made in rates from Cincinnati to Chattanooga. 
 In this way water competition does affect indirectly rates from 
 Cincinnati to Chattanooga. For instance, rates from St. 
 Louis to Chattanooga, Montgomery, Selma, Birmingham, 
 etc., may and often are reduced by the water and rail lines 
 via Cairo, 111.; Columbus, Miss.; Memphis, Tenn.; Vicks- 
 burg. Miss., and New Orleans, La. Rates from Eastern cities 
 to Montgomery and Selma may be, and often are, affected 
 by water and rail competition via New Orleans and Pensa- 
 cola, and by water competition by ocean to Mobile, and by 
 river thence to Selma and Montgomery. 
 
 If the Louisville and Nashville Railroad Company cannot 
 have the right to make rates between Cincinnati and Chatta- 
 nooga as low at least as those made by the Cincinnati South- 
 ern Railroad Company between the same points, without 
 reducing its rates from Cincinnati to intermediate stations, 
 and from intermediate stations to intermediate stations, it 
 must necessarily surrender all the traffic to the shorter line. 
 
 Fifth. Application is hereby made for authority to charge 
 less for the transportation of property between Nashville, 
 
36 
 
 ,Tenn., and Birmingham, Ala., than for shorter distances on 
 the same line. 
 
 The direct rail line from Nashville to Birmingham is 208 
 miles long. There is a less- direct line via Chattanooga, but 
 owing to its indirectness and other conditions the direct line 
 has no competition. In this case the competition is purely 
 that of market with market and product with product, " the 
 most potent factor of competition." 
 
 In adjusting the rates between the numerous points 
 reached by the carriers, members of this Association, con- 
 tinuous and persistent efforts have been made to secure and 
 always maintain a fair and equitable relative adjustment. 
 If the rates from Cincinnati to Chattanooga, Atlanta, Mont- 
 gomery, Birmingham, etc., were reduced, corresponding re- 
 ductions were made from all other points, including Nash- 
 ville, to the same points. If competition between rail lines 
 and rail and water lines from St. Louis to Selma, Mont- 
 gomery, Birmingham, etc., caused a reduction in rates, cor- 
 responding reductions were made from other points, includ- 
 ing Nashville. The same is true on some classes of freight 
 from eastern cities. If the rates for any reason, from New 
 York to Atlanta, Ga., Chattanooga, Tenn., etc., were re- 
 duced, corresponding reductions were made from points in 
 the West, including Nashville, to the .same points. 
 
 Sixth. Application is hereby made for authority to charge 
 less for the transportation of property between New York 
 and. Knox ville, Tenn., than for shorter distances on the same 
 line. 
 
 Knoxville, Tenn., is located on the East Tennessee, Vir- 
 ginia and Georgia railroad, nearly midway between Bristol 
 
87 
 
 and Chattanooga. Since the settlement of that part of the 
 country it has been the largest and most important business 
 point in East Tennessee. Many years ago the managers of 
 the East Tennessee, Virginia and Georgia railroad inaugu- 
 rated the policy of adjusting rates with a view of making 
 Knoxville the point for the interchange of commodities for 
 all the surrounding country. In pursuing this policy rela- 
 tively low rates were made from Eastern cities and other 
 points to Knoxville. Encouraged by this, a large number 
 of persons engaged in business in Knoxville and invested 
 a large amount of capital in trade. A sudden change in 
 the adjustment of rates to and from Knoxville would be 
 disastrous to some interests. While the present method of 
 adjusting the rates in this case may be indefensible, and 
 whil'e it is believed to be the only instance where a discrim- 
 ination of the kind exists that is not forced by competi- 
 tion, yet it would be manifestly unjust to suddenly disturb 
 the commercial relations between Knoxville and its sur- 
 rounding communities, which would involve many in dis- 
 tress without benefit to any. If rates of transportation to 
 Knoxville are advanced, no material advantages accrue to 
 the surrounding communities, for in that case they would 
 continue to pay the same rates as before. This seems to be 
 a case where your Commission may justlj' authorize an ad- 
 justment of rates, temporarily at least, the same as has been 
 in efi'ect for so long a time past. 
 
 In considering the foregoing applications it is essential 
 that your Commission do not lose sight of the important 
 fact that the basis now and heretofore used keeps the relative 
 adjustment of rates the same, not only between competitive 
 
38 
 
 points, but between competitive points and local stations. 
 Keeping in mind that the competitive points in this terri- 
 tory are the basing points upon which rates to and from 
 local stations are fixed, the system upon which rates are ad- 
 justed becomes comparatively simple and produces rates 
 ■throughout the entire territory that are just and reasonable. 
 The rates to and from intermediate stations apply mainly 
 to small shipments of a miscellaneous character. Rates 
 upon property of low value, as compared with the weight 
 and bulk, when shipped in large quantities to and from 
 local stations, are in all cases made relatively low. The 
 strong incentive to trafl&c agents to do everything in their 
 power to promote traffic may be relied upon to develop the 
 resources of the country at local stations to the fullest ex- 
 tent. In fact, the acts of the traffic agents must be closely 
 scrutinized by the management of the various carriers to 
 prevent the making of such rates relatively too low, thereby 
 creating unjust discrimination. 
 
BEFORE THE INTER-STATE COMMERCE COM- 
 MISSION. 
 
 I 
 
 In re 
 
 Petitions of East Tenn., Va. & Ga. Railway Co. & 
 Leased Lines. 
 
 Argument of Wm. M. Baxter. 
 
 Mr. Chairman and Gentlemen : 
 
 Under the 4th Section of the Act unlimited discretion is 
 given to your honorable body to suspend the operation of 
 that section, as to any particular common carrier subject to 
 the provisions of the Act, upon the application of the carrier, 
 and after investigation by the Commission. An application 
 for the suspension of that section is now pending, so far as 
 the East Tennessee, Virginia & Georgia system of roads is 
 concerned. While it is conceded that the justice or propriety 
 .of the general provisions of the Act cannot be inquired into, 
 it is respectfully submitted that this is not so with reference 
 to the 4th Section of the Act, upon the present application. 
 If it can be shown that it would be unjust to apply the pro- 
 visions of the 4th Section to petitioner's system of roads, 
 that would certainly be a most material consideration that 
 should move the Commission to exercise the discretion 
 committed to it by the proviso of the 4th Section. There is 
 no limitation upon the considerations that shall influence 
 the Commission in reaching a decision upon the suspension 
 
of the 4th Section. If after investigation they conclude, for 
 any good and sufficient reason, that said section should be 
 suspended as to any common-carrier subject to the provis- 
 ions of the Act, the discretion to make that suspension is 
 absolutely committed to them. 
 
 Charges for Short Hauls may be Higher than 
 
 Charges for Long Hauls and Still be 
 
 Just and Reasonable. 
 
 When a railroad is built between two points ; for instance, 
 between Bristol and Chattanooga, the common-carrier is 
 entitled, within the limits of reasonable charges for services 
 performed, to receive, as earnings, sueh sums as will defray 
 the cost of operating and maintaining its road and equip- 
 ment, and, in addition thereto, a fair return upon its invest- 
 ment of capital ; and it is entitled to receive this compensa- 
 tion out of the business of the local territory through which 
 the road runs. Any business naturally forces competition, 
 and the basis of charges very naturally adapts itself to the 
 idea of charging more for a long than a short haul. If a 
 shipment of goods were offered from Bristol to Cleveland, 
 Tenn., the carrier, without competition, is in a position to 
 ask, demand and receive whatever the service is worth ; and 
 this without reference to the volume of traffic. If such 
 charges are reasonable, there is no just ground of complaint. 
 When, however, the natural laws of competition come into 
 play, by the opening of water-routes, or the building of other 
 competing railroads, on said supposed line of railroad ; as 
 for instance, at Chattanooga, Tenn., the business to and from 
 that point is done upon a competitive basis. Such a place, 
 because of such competition, at once grows up as a manufac- 
 turing, trading and distributing center ; and the volume of 
 
business or traffic is correspondingly increased; and the 
 competition for such business becomes sharper and sharper 
 every day. Business to and from that point must be done 
 at competitive rates, or not done at all. It is no longer 
 within the power of the carrier to charge a rate that would 
 be greater than the competitive rate ; and, therefore, if a 
 greater amount were charged for a long haul to that point 
 than was charged to a non-competitive point upon a short 
 haul going in the direction of the competitive point, other 
 carriers doing business into and out of that place by cheaper 
 or shorter routes, would get the traffic. Arising out of this ■ 
 state of things, there are therefore several obvious consid- 
 erations that justify the carrier in doing business at the 
 competitive rate, without reference to whether it may be 
 more or less than rates to intermediate or " short-haul " 
 points : lat, The making of a rate to competitive points is 
 a matter over which the carrier has no control. The rate is 
 made by the carrier having the greatest advantages, either 
 by shortness of route or cheapness in the method or manner 
 of transporting. 2nd, The volume of traffic is so much 
 greater at the competitive point, that a smaller margin of 
 earnings upon business done there would produce more 
 revenue than a much larger margin of profit would produce 
 on business done at an intermediate or "short-haul" jjoint; 
 as for instance the report of the Receiver of the East Tenn., 
 Va. & Ga. Railroad for the year ending June 30th, 1886, 
 shows that the amount earned at Chattanooga, Tennessee, 
 for freight forwarded, was $387,805.07, and for freight 
 received, $277,311.28, aggregating $665,116.35; whereas, for 
 the same period, at Tyner's Station on said road, a point 
 seven miles nearer the Eastern cities than Chattanooga, the 
 amount of freight forwarded was $255.62, and for freight 
 
received, $312.28, aggregating $567.90, barely enough to pay- 
 station expenses. A simple calculation will demonstrate 
 that a margin of one per cent, profit upon the business done 
 at Chattanooga would produce more than a hundred times 
 as much revenue, as ten per cent, profit upon the business 
 done at Tyner's. 3rd, The cost of handling the business at 
 Chattanooga, a terminal and competitive point, can be done 
 for proportionately much less money per ton than it can be 
 done at Tyner's. 
 
 It is entirely improper and unfair to make any compari- 
 son between the rate that may be charged to Tyner's, and the 
 rate that may be charged to Chattanooga. The only con- 
 sideration that should be looked at in reference to the rate 
 to Tyner's Station, is whether or not such rate is in itself 
 reasonable or unreasonable for the service performed. If 
 there is no ground of complaint upon that score, none can 
 be justified upon the ground that some competitive point 
 near by has all the advantages that naturally flow from com- 
 petition and location. The question is frequently asked, if a 
 carrier can afford to do business from Eastern points into Chat- 
 tanooga, for say $1.H per hundred, 1st class, why it canH just 
 as loell offord to give the same or a less rate to Tyner's Station, 
 which is seven miles less in distance. The answer is obvious, 
 if proper weight is gi.ven to the considerations which have 
 already been mentioned. The fallacy of the idea lies prin- 
 cipally in the fact of instituting a comparison of charges as 
 between a competitive and non-competitive point ; and the 
 injustice of the application of any such comparison of 
 rates, or the application of any such principle, is made 
 manifest by giving due weight to competitive forces, volume 
 of traffic, etc. Again, the question is frequently asked, does 
 it COST the carrier any more to haul a car-load of goods from 
 
Bristol to Tyner's, than it does from Bristol to Chattanooga, 
 seven miles further? It seems to me that this question is 
 easily answered. In the first place, the question assumes 
 that goods go to Tyner's Station in car-load lots. This is 
 probably never the case ; but if it were, the proposition con- 
 tained in the question is fallacious, for the reason that it 
 assumes that the charge is based solely upon the coat of the 
 haul. According to the best estimate that can be made, 
 based upon a long series of statistics, the cost of the haul 
 does not amount to more than thirty-five per cent, of the cost 
 of service ; as, in the cost of service is included the cost of 
 transportation, the cost of maintenance of way, and fixed 
 charges, which represent a partial return upon the cost of 
 investment. When these facts are considered in connection 
 with those already stated in reference to the volume of 
 traffic, it would seem that the question is satisfactorily 
 answered. Another consideration which controls rates into 
 and out of competitive points, aside from those already 
 mentioned, is that the carrier gets a second haul upon the 
 re-distribution of commerce from these trading centers ; 
 while at local or intermediate points, such is not the fact. 
 
 Is it Practicable to Average Rates by Raising tlie 
 
 Rates to Competitive Points and Reducing 
 
 the Rates to Intermediate Points? 
 
 During the session of the Commission at Atlanta, a 
 question was asked one witness, which was in substance : 
 "Would it not be practicable to give all points between 
 Atlanta and Chattanooga, the Atlanta rate ?" The first 
 ohiection to such a basis of rate-making would be, that such 
 a basis itself would be in violation of the spirit of the "long 
 and short haul " provisions of the Act ; the second, that points 
 
nearest to Chattanooga would demand that they be allowed 
 the Chattanooga rate, which is less than the Atlanta rate, for 
 the reason that they are located nearer the Eastern markets ; 
 the third, that the raising of the rate to Atlanta by any longer 
 line in order to hold its local business, without violating the 
 law, would enable the shorter line to make a less rate, and 
 thereby monopolize the Atlanta business; the fourth, that 
 such a policy would have the inevitable effect of either divert- 
 ing to Eastern trade-centers all the present distributive trade 
 of Atlanta to its local territory, or, if this local territory was 
 still, for any reason, compelled to trade with Atlanta, would 
 increase the rate by the addition of local rates to the Atlanta 
 rate; in the one event, the trade of Atlanta would be 
 destroyed; in the other, intermediate points would pay 
 higher rates than at present. It would seem, therefore, that 
 such a basis of rate-making is impracticable. Before the 
 days of railroads, no such principle as is now contended for, 
 was ever applied or advocated. All trade centers were 
 located with reference to water-transportation, and by reason 
 of that location, had the benefit of the widest competition 
 between carriers. Places inland with reference to such 
 trade-centers, necessarily, and not unjustly, suffered the 
 disadvantage of their location. They had the benefit of the 
 competition between carriers to water-points, but from those 
 points they had to pay such rate of overland-transportation, 
 in addition, as competition between overland-carriers estab- 
 lished. Relatively, they occupy precisely the same situation 
 to-day. The fact that a railroad may pass through such an 
 inland town, in order to reach a competitive water-point, or 
 competitive rail-point, it would seem, ought not to alter the 
 principle. This one single fact, however, seems to have 
 given rise to all the complaints on this subject. An illus- 
 
tration of this is aptly furnished by the testimony of Mr. L. 
 Johnson, who was examined in Atlanta on the 26th of April, 
 1887. He resides and does business at Graham, Ga., a 
 station on the Brunswick Division of the East Tenn., Va. & 
 Ga. R'y. He buys his produce in the West, upon quotations, 
 " delivered in the Port of Brunswick, Ga." The rate from 
 the West to Brunswick, Ga., is made by the water-routes. 
 The charges of water-carriers enable the trunk lines to make 
 a rate to Baltimore and Philadelphia, which, in connetion 
 with the water-rate, is less than the all rail-rate from West- 
 ern markets to Brunswick. Now, if this produce reaches 
 Graham, Ga., by any other route than over the line of the 
 East Tenn., Va. & Ga. R'y-, Mr. Johnson pays a rate to 
 Brunswick by other lines, and in addition thereto, a local 
 rate from Brunswick to Graham, over the East Tenn., Va. 
 & Ga. R'y. By reason of the fact, however, that the East 
 Tenn., Va. & Ga. R'y, upon its way to Brunswick, passes 
 through Graham, it is insisted that the Railway Company 
 should haul this produce for a less rate to Graham, Ga., than 
 to Brunswick, Ga. If such a principle is applied, one of 
 two things must result : 1st, the East Tenn., Va. & Ga. R'y 
 Co. and its connections must go out of competition for 
 Brunswick business, no matter what its volume may be ; or 
 ^nd, it must reduce all of its intermediate rates, so that they 
 shall be less than the Brunswick rate, no matter how small 
 the volume of traffic may be to such intermediate points. 
 In either event, the East Tenn., Va. & Ga. Railway Company 
 would be deprived of both business and revenue, and the 
 people, directly and indirectly, deprived of the benefits 
 naturally flowing from competition. Whether the goods go 
 by other routes than that of the East Tenn., Va. & Ga. Rail- 
 way or by that route, under the present basis of rate-making, 
 
Mr. Johnson gets precisely the same rate to Graham, which 
 is a less rate than if there was no competition ^r business 
 to Brunswick. Upon the proposed basis, the Ea^ Tenn., Va. 
 & Ga. Railway Company would be compelled, in order to 
 preserve its local territory to itself, to withdraw from Bruns- 
 wick ; and in proportion as the competition from Brunswick 
 was lessened, the rates of carriers doing that business would 
 be increased, and the inevitable result would be that Mr. 
 Johnson, and all those similarily situated, would have to 
 pay higher rates than at present. 
 
 The Enforcement of the "Long and Short Haul" 
 Clause would bring about a Division of Territory. 
 
 This would necessarily result for two or three reasons : 
 1st, It would enable the shortest line or cheapest route to ' 
 make the lowest rate ; and if longer lines were not allowed 
 to meet it, without reference to their i:ates to intermediate 
 points, the short line or cheap route would have a monopoly 
 of the business originating in territory contiguous thereto, 
 or destined therefor. 2nd, If forced to abandon either 
 through or local business, the Railroad Companies would 
 abandon the through business. In the report of the Receiver 
 of the East Tenn., Va. & Ga, Railroad heretofore referred to, 
 for the year ending June 30th, 1886, the revenue received from 
 through business (280,812 tons) was $501,574.14, and from . 
 local business (1,254,114 tons) $2,074,918.44. A similar con- 
 dition of things exists as to passenger earnings. (See Report, 
 pp. 51 and 63.) Comment upon these figures is unneces- 
 sary. There could be no hesitation in the choice of business 
 that Company would surrender. It would rely wholly upon 
 its own territory ; and being deprived of the revenue flowing 
 from through business, it would have to make good this loss 
 
by an increase of rates, which it would have the right to so 
 make good, within the limitation of reasonable charges 
 There would then be*no longer any occasion for making 
 comparisons between rates to competitive and non-competi- 
 tive points. Revenues would have to be raised from local 
 business, or the Company go into bankruptcy ; and upon 
 foreclosure, its road would become a part of some consolida- 
 tion. This process would be continued until all competition 
 would be destroyed, except as between rail and water-lines. 
 Certainly the Congress of the United States did not intend 
 to accomplish any such result. It is evident from other 
 provisions of the Act, that they intended to foster competi- 
 tion, and give it the widest possible scope. It is not believed 
 that they intended to bankrupt railroad corporations, or 
 unnecessarily embarrass or destroy the business of any sec- 
 tion of the country, or any of its cities. All the develop- 
 ment of the South has been brought about by the policy of 
 Southern railroads, which is indicated in the tariffs that are 
 now in existence. These tariffs have been made after years 
 of struggle and contest, as between themselves and water- 
 routes, and as between markets and trade-centers. They 
 seem to be as nearly satisfactory to the people as it is pos- 
 sible to make them, and there appears to be no good reason 
 why the whole method and system of rate-making in this 
 country should be suddenly revolutionized. If it is done, 
 commerce will be thrown into utter confusion, and inesti- 
 mable damage will be done, and no appreciable benefits will 
 be derived. It is merely the same old struggle that has 
 existed from time immemorial (with unvarying failures) to 
 try to control, by legislation, the laws of trade and com- 
 mei"ce and to remove, by statute, the disadvantages of 
 "•eographical position. The Congress of the United States, 
 
- — 10-^ 
 
 very wisely, has vested in your Honorable Body the discre- 
 tion of correcting the mistake ; and we believe enough has 
 been shown by evidence, and the natural reason of the 
 thing, to persuade you to grant the relief asked for in these 
 petitions. 
 
 Respectfully submitted. 
 
 WM. M. BAXTER, 
 
 Solicitor for Petitioners.