INTERSTATE COMMERCE COURSE
EXPRESS SERVICE
AND
WATER
TRANSPORTATION
BY
WILLIAM J. JACKMAN, B. A., LL. B.
ASSISTED BY
MARK H. SALT
AND A STAFF OF TRANSPORTATION EXPERTS
VOLUME IV
UNIVERSITY EXTENSION SOCIETY
MINNEAPOLIS, MINN.
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Copyright, 1912,
By the University Extension Society
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AUTHORITIES CONSULTED.
Darius Miller, President Chicago, Burlington & Quincy
Railroad Company.
W. C. Brown, President New York Central Lines.
W. H. Williams, Third Vice President the Delaware and Hud¬
son Company.
L. G. McPherson, Director of the Bureau of Railway Eco¬
nomics, Washington, D. C.
W. W. Finley, President Southern Railway Company.
Daniel Willard, President Baltimore & Ohio Railroad Com¬
pany.
L. D. Smith, Vice President Lehigh Valley Railroad Company.
W. A. Gardner, President Chicago & North Western Railway
Company.
Luis Jackson, Industrial Commissioner Erie Railroad Com¬
pany.
W. H. Canniff, President New York, Chicago & St. Louis
Railroad Company (Nickel Plate.)
E. P. Ripley, President Atchison, Topeka and Santa Fe Rail¬
way System.
Julius Kruttschnitt, Director of Maintenance and Opera¬
tion, Union Pacific System.
W. A. Worthington, Assistant Director of Maintenance and
Operation, Union Pacific System.
J. W. Lee, Jr., Pennsylvania Railroad Company.
W. L. Park, Vice President and General Manager Illinois
Central Railroad Company.
George W. Perkins, New York City.
George Gerard Tunell, of the United States Railway Mail
Service.
3
4
AUTHORITIES CONSULTED.
Prof. Henry C. Adams, Statistician Interstate Commerce
Commission.
O. P. Austin, Chief of Bureau of Statistics, Department of
Commerce and Labor.
Charles Nagel, Secretary of Department of Commerce and
Labor.
Herbert Knox Smith, former United States Commissioner
of Corporations.
Emory R. Johnson, Ph. D., author of 4'American Railway
Transportation. ' '
Hon. J. P. B. Casgrain, Quebec; author of "The Problems of
Transportation in Canada.''
Hon. J. L. Payne, Comptroller of Statistics, Department of
Railways and Canals, Canada.
Thomas E. Sands, General Freight Agent, "Soo" Line.
J. W. Healey, Agent American Express Company, Minneapo¬
lis, Minn.
TABLE OF CONTENTS
Authorities Consulted
3
Introduction
15
CHAPTER I.
Origin of the Express Business
19
Pioneer in the Industry—General Nature of Business;—
Ownership of Express Companies—How Railroads are Inter¬
ested—Harnden's System of Accommodation—Rapid Growth
of the Original Enterprise—First Exclusive Express Cars—
Start of Wells, Fargo Company—The Southern Express—
Great Mileage Covered by Express Service—Business In¬
creases Every Year—Gradual Enlargement of Express Func¬
tions—Various Classes of People Benefited—The Adams
Express Bonanza—Immense Amounts of Money Handled—
Express Companies as Bankers—Territory Covered by the
Service.
General Terms of Contracts—Express Right an Exclusive
One—Mutual Responsibilities and Privileges—Use of Rail¬
way Employees—How the Railroads are Paid—Percentage
of Gross Receipts—Revenues in 1911—Nearly $74,000,000
CHAPTER II.
Contracts With Railroad Companies
39
5
6
CONTENTS.
Paid to Railroads—High Rates Forced by Contracts—Per¬
centages Reported by Leading Companies—Other Features of
Contracts—Why Public is Interested—Feats in High Finance
—Advances Made in Sixteen Contracts—The C. 0. D. Check
Proposition—Express Companies Barred from Serving Com¬
peting Roads—Nub of the Express Contract.
CHAPTER III.
Railroad Control of Express Companies 55
Majority Interest Largely Held by Railway Men—Control of
Adams Company—Four of the Seven Directors Heavy Holders
of Railway Stock—New York Central and Other Roads Prom¬
inent in Control of American Express—The Globe Company
Owned Outright by Gould Roads—James J. Hill Interests
Own Great Northern and Northern Express Companies—
Pacific Company, Previous to Dissolution, Held by Union
Pacific System—Harriman Estate and American Express
Control Wells, Fargo Company—Western Express the Prop¬
erty of the "Soo" Line—Ownership of United States Express.
CHAPTER IV.
Classification of Traffic 65
System of Classification Somewhat Like That of Rail Carriers
—Main Points of Difference—Official Grouping of Express
Matter—Designation of Various Classes and Grades—In¬
creased Charges Secured by Classification—How Higher
Rates are Obtained—Some Instances of Decrease in Charges
—Averages of Selected Rates—The Graduate Scale—How
Used—Yearly Issue of Official Classification—Base Rates and
Distances—Special Graduates and Rates—Marked Decrease
in Charges for Carrying Money—Mysteries of Express Classi¬
fication—Simpler Method Suggested by Interstate Commerce
Commission—Evils of the Present System.
CONTENTS.
7
CHAPTER V.
Computation of Express Rates 79
Basis of Computation—Its Main Features—Six Main Divi¬
sions—Elements Entering Into the Fixing of Charges—Weight
and Value the Chief Factors—"General Special" Freight—
Sections A, D and E—Single and Double Graduate Charges—
Queer Things in Money Charges—Low Rates on Newspapers
—Merchandise Pays Four Times the Newspaper Rate—Work¬
ing of the Minimum Rate Clause—Some Inconsistencies in
Charges—The Heavier the Package the Larger the Rate Per
Pound—Illustrations Given in Government Tables—How the
Double Graduate Works—Facts Presented in Boise Case.
CHAPTER VI.
Profits of Express Business 99
Wonderful Returns Made on Small Capital—Case of Northern
Express Company—Earnings of $433,441 a Year Without
Investment—Showing of Adams Express—Earnings of 25
Percent on all Stock Including $10,800,000 Issued as Divi¬
dends—American Pays Dividends of 21 Percent, and Accum¬
ulates an Enormous Surplus—Globe Express Paid 706 Percent
in 1910—Divisions of the Surplus Would Give Shareholders
1,600 Percent—Great Northern Another Profitable Enterprise
—Finances of National Company—Last Earnings of the De¬
funct Pacific—Southern Express Stockholders Well Repaid.
CHAPTER VII.
Method of Keeping Accounts 109
New System Prescribed by Interstate Commerce Commission
—Special Features Insisted Upon—Uniformity Secured—
One Former Cause of Trouble—Many Radical Changes Made
—Classification of Operating Expenses—Items Properly
CONTENTS.
Chargeable as Operating Expenses—Accepted Unit of Express
Service—Details of Operating Revenue Account—What
Operating Expense Account Should Show—The General
Balance Sheet—How It is Made Up—Record of Financial
Paper Issued—Cost of Realty and Equipment—Items Re¬
quired in This Statement—Income and Profit and Loss—
Sample of Properly Kept Account.
CHAPTER VIII.
Division of Territory by Roads 127
Competition for Traffic in the Various States, but None as
Between the Railroads on Which Express Companies Operate
—Real Monopoly in Only Six States—Constant Tendency
Toward Expansion—Wells, Fargo Company's Field—Sphere
of Adams and American—Operations of Southern—Territory
of the Great Northern—Where the Northern Finds Its Busi¬
ness—Pacific Company Formerly Had a Large Field—Where
the Globe and National Operate—The Canadian Companies
—Western is Active in Both East and West.
CHAPTER IX.
Money Orders and C. O. D. Business 141
Enormous Amount of Financial Paper Issued Yearly—
American Company Alone Puts Out Nearly $300,000,000
Worth in 1910—Many Millions in Checks and Orders—Wells,
Fargo Second—Business of the Minor Companies—Varied
Use of Money Orders—Queer Experience of an Actor—For¬
eigners Partial to American System—C. O. D. Business—
Details of Its Operation—Profits Immense in the Aggregate,
But Small in Each Instance—What It Is.
CONTENTS.
9
CHAPTER X.
Block System of Stating Rates 155
New Method of Rate Making Proposed by Interstate Com¬
merce Commission—Details of System—Purpose Is to Sim¬
plify Rate Sheets—Great Reduction in Number of Rates—
Method of Ascertaining Charges—How to Use the Scale
Card—Minimum and Maximum Charges—Short-Haul
Charges Provided For—Each Block Subdivided Into Squares
—Operation of the Square System—Location of Towns by
Blocks and Squares—How Rates are Ascertained—Use of
the Express Directory—Finding the Block and Square Num¬
bers—Large Reduction in Charges Proposed—Horizontal Cut
in Prices Amounting in Some Instances to 25 Percent.
CHAPTER XI.
Fruitful Causes of Complaint 175
Why the Public Believes There Is Concerted Action by Express
Companies—Some of the Things Complained Of—Express
Officials Admit Necessity for a Change—Double Collection
of Charges—How it is Worked—Remedy Proposed by Com¬
mission—Overcharges and Undercharges Lead to Discrim¬
ination—Tariffs Too Involved—Precautions Against Errors
Suggested—Circuitous Routing of Shipments—What It Re¬
sults In—Plan of Definite Short-haul Routing Outlined—
Arbitrary Free Delivery Limits.
CHAPTER XII.
Duties and Salaries of Employees 195
Large Opportunities for Advancement—General Nature of
the Service—High Order of Intelligence Required—Why the
Companies Insist Upon Having High-Class Help—Courtesy
to the Public an Important Item—Collection of Express
Shipments—Method of Handling—Routine from Collection
10
CONTENTS.
to Delivery—Wagon Service—Making Out of Way-bills—
Train Service and Delivery to Local Agent at Destination—
What the Local Agent Does—Many Checks to Ensure Accu¬
racy—Hiring of Employees— The Qualifications—Men Only
Engaged—Bonds Required for Every Employee—The Range
of Salaries—Where Best Men are Trained.
CHAPTER XIII.
Rules Governing Express Service 209
Receipting for Shipments—Routing Shipments—Aggregating
Weights—Returned Shipments—Prohibited Traffic—Delivery
Limits—Graduated Charges and Pound Rates—Valuation
Charges—Methods of Ascertaining Charges—C. O. D. Ship¬
ments—Partial Delivery—Carload and Bulky Shipments—
Division of Charges—Commodity Rates—Change of Des¬
tination in Transit—Prepayment of Charges—Undelivered
Packages—Application of Joint Rates—Various Ways of
Packing Goods.
CHAPTER XIV.
Changes Ordered by Commission 221
Radical Reforms in Express Business Instituted—Result of
Exhaustive Hearing—Eighteen Plaintiffs Attack Practices
and Rates—Finding of the Commission—Many Drastic
Changes Outlined—Tariffs Must Be Simple and Readily
Understandable—New Classification and Rates Ordered—
Rules Too Involved—Direct Through Routes Compulsory-
—Precautions Against Overcharges—Merchandise Rates Dis¬
criminatory—Evils in Graduated Scale—Arbitrary and Un¬
reasonable—Burden on Small Package Business—What Ex¬
press Records Show—Blanket Rates Impracticable.
CONTENTS.
11
WATER TRANSPORTATION.
CHAPTER I.
Freight Traffic by Water
237
Influence on Railway Rates—Cheapness of Water Trans¬
portation—The Factor of Speed—Liability of Carriers—High
Cost of Marine Insurance—Traffic on Great Lakes—Cargoes
of Coal and Ore the Most Important—Low Lake Rates on
Coal—Flour Rates by Lake and Rail—Immense Traffic on
the Lakes—Tonnage Enormous—Heavy Movement Through
the Various Canals—Ohio and Mississippi River Trade—
Water Routes on the Pacific Coast—Trade From Portland
and Seattle—Panama Canal Prospects—Atlantic Coast
Traffic—New England Coast Traffic.
Well-Defined Routes of Travel by Water—Ocean Highways
Sharply Marked—Accepted Paths of Traffic—Why Certain
Routes Are Favored—Ocean Winds and Currents as Factors
—Influence of Panama Canal—Objective Points on the At¬
lantic—Great Diversity in Mileage—Short Course From In¬
terior Canada to England—Differences in Distance Caused
by Shrinkage in Longitude—Long Routes on the Atlantic—
From New York to Cape of Good Hope—New Orleans in
Communication by Vessel With Entire Civilized World.
CHAPTER II.
Established Routes and Distances
251
CHAPTER III.
Defects of Present System
263
Steady Decline of Water Transportation—Increase in Coast¬
wise and Great Lakes Tonnage—Water Transportation in
12
CONTENTS.
Europe—Vast Sums Expended on Waterways—Why European
Waterways Prosper—Business a Family and Hereditary
Affair—High Freight Rates on European Railroads—American
Waterways Generally Off Established' Trade Currents—In¬
dustries Built With Reference to the Railroads—Waterway
Traffic Mostly Local in Character—Lack of a Standard Type
of Vessel—Services to the Shipper Restricted—Transportation
on the Columbia River—Special Type of Vessels on the Great
Lakes—Control of Great Lakes Navigation in a Few Hands.
CHAPTER IV.
Shipping Contracts and Documents 279
How the Cargo Capacity of Vessels Is Secured—The "Tramp"
Vessel—Terms of a Charter—What a Charter Means—Services
of a Vessel Broker—His Methods of Operation—Fluctuation
of Charter Quotations—Difference Between Water and Rail
Rates—Wording of a One-Journey Charter—Time Charter
on Great Lakes—Time Charter on the Pacific—Typical Bill
of Lading—A Ship's Manifest—Purpose and Contents of the
Various Documents—Necessary in Protection of Both Vessel
Owner and Person Who Engages Craft—Difference in Lake and
Ocean Charters.
CHAPTER V.
Official Regulation of Liability 307
Liability of Carriers by Water Defined by Congress—Water
Carriers Rarely Insurers of Goods—Transportation of Nitro-
Glycerine Forbidden on Passenger Vessels—Liability of
Masters, etc., as Carriers—In Case of Loss by Fire on Vessels
—Liability of Owner Not to Exceed his Interest—When
Charterer is Deemed the Owner—Limitation of Liability of
Owners—Certain Clauses Forbidden to be Inserted in Bills
of Lading—What is Required in a Bill of Lading—The "Flag
Clause" in Bills of Lading—General Policy of the Harter Act.
CONTENTS
13
CHAPTER VI.
What Constitutes Navigable Water?
319
No Established Standard in This Country—Wide Range in
Definition—How Millions of Public Money are Wasted—Much
Better Conditions in England—Ebb and Flow of Tide the
Test of Navigability—Term Too Elastic in the United States
—Effect of Local Industries—Many Streams on Which it
is Barely Possible to Pole Logs Classed as Navigable—Rulings
of the Courts—What Constitutes a 4 4 Highway of Commerce" ?
Reasons Why Exactitude in Tonnage Measurements is Im¬
portant—Two Kinds of Tonnage—Displacement and Cargo
Capacity—Why Both Methods are Used—Former Applied
to Naval and Pleasure Craft—Latter to Vessels Carrying
Freights—How Displacement Tonnage is Figured—Means
of Fixing Upon Cargo Tonnage—System of Measurement
Employed—What Exact Measurement Means to the Person
Who Charters a Vessel—Shortage in Cargo Capacity.
Striking Variety of Forms and Types in Water Carriers—
Methods of Propulsion—Grouped by Character of Occupation
—-Regular Line Boats-—Freight and Passenger Steamers on
the Great Lakes—Bulk Freighters on the Great Lakes—Pecul¬
iar Models of Great Lakes Freighters—Double Bottoms and
Their Use—Passing of the Whalebacks in Lake Trade—Self-
Trimming Steam Colliers of the Atlantic—Tugs and Schooner
Barges—Bulk Freighters on the Ocean.
CHAPTER VII.
Tonnage and Classification of Vessels
331
CHAPTER VIII.
Types of Vessels in Service
345
CHAPTER IX.
Marine Insurance—Its Features 355
Why Marine Insurance is Essential—Protection for Shipper
14
CONTENTS.
by Water—Liability of Water Carriers Limited—Every
Nation Has Its Own Form of Marine Policy—The English
Lloyd's Policy—Difference Between the Open and Value
Policy—"Floating" and " Named" Policies—Voyage and Time
Policies—Expressed or Implied Warranties in Marine Insurance
— Perils Against Which Protection is Granted—Perils of the
Sea, Fire, jettison and Barratry—Grades of Losses.
CHAPTER X.
Port Facilities and Rules 369
Waterways of Little Use Without Terminal Facilities—Ter¬
minals of Greater Importance to Water Carriers Than to Rail¬
roads— Harbors are Not Enough—Effect of Terminals on
the Commercial Prosperity of Ports—Wharves, Warehouses,
and Mechanical Loading and Unloading Devices—American
Seaports vs. European Ports—Fixing Wharfage Fees by
Law or Local Ordinance—Importance of Reasonable Termi¬
nal Charges—Official Rules Governing the Loading and
Unloading of Vessels—"Lay Days" and the Meaning of
the Term.
CHAPTER XI.
Policy of Federal Improvement , 377
Weil-Defined Plan Lacking—Politicians Mainly in Control—
Enormous Appropriations Without Suitable Results—Nearly
$10,000,000 Expended in 1910—Over $560,000,000 Spent
Since 1890—Details of the Expenditures—Wasteful Nature
of the Work—Mistakes Made on the Missouri and Mississippi
Rivers—Costly Improvements Destroyed by Floods—Protests
of Government Engineers Unheeded—Defects of the System.
Questions for Review 381
Index
427
INTRODUCTION
Under the direction of the Interstate Commerce
Commission radical changes are being made in the
express service in the United States. It is not put¬
ting the situation too strongly to say that the service
is being revolutionized. Rates are to be largely
reduced, a new system of classification adopted, and
a much different method of computing charges from
that now in use instituted.
Some idea of the importance of these changes may
be had when we stop to consider the magnitude of
the express business. Official figures for last year
show that the thirteen companies reporting to the
Interstate Commerce Commission had a total gross
income of $149,311,485. Of this they paid to the
railways $73,956,455 for the privilege of conducting
business, laid out $67,996,759 in operating expenses,
and had a net operating revenue (profit) of $7,358,-
271.
Service was given over 270,664 miles of railway,
steamer, electric and stage coach routes. Cash
dividends amounting to $5,848,043 were paid to
stockholders direct from the income, and $8,496,960
from the surplus fund, making a total of $14,345,003
distributed in the form of dividends during the year,
with a credit of $59,401,759 left in the surplus fund.
Even at the reduced rates ordered by the Com-
15
16
INTRODUCTION
mission the express business will remain attractive
from the investor's viewpoint, and as it is constantly
expanding will offer more and more inducements to
ambitious young men. It is a subject which should
be studied carefully, not only by those desiring to
embark in the business, but by the great army of
people who from time to time become patrons of the
various companies. The changes proposed by the
Commission make this study of more importance
than ever.
Under the new program it will be possible for the
layman to ascertain definitely what the charge for
service between any two given points should be, pro¬
vided he understands the new system. The plan
is fully explained in this volume. It has the merit
of simplicity, if nothing more.
Those conversant with the conditions which the
Commission has undertaken to reconstruct freely
admit that the proposed changes will bring about a
much-needed reform. Hitherto express rates, classi¬
fications and rules have been a sort of mystic lore
intelligible only to the most advanced of experts in
the express business, a large proportion of the clerks
working blindly under instructions which they did
not understand.
In the presentation of the situation the author
has not been actuated by motives of hostility toward
the express companies. It is unfortunate that the
companies themselves, taking advantage of condi¬
tions which made such a course possible, have
encouraged practices which have brought the service
into disrepute. It is this which has made necessary
INTRODUCTION. 17
the interference of the Interstate Commerce Com¬
mission, and presentation of the facts is essential in
showing why official regulation was undertaken.
Few people understand the intricacies of the
express business, and the methods employed by the
managers in the past have tended to still further
befog and confuse the public mind. If the new
system works as intended abuses will not only be
corrected, but the general conduct of the business
simplified so that any person of average intelligence
may readily understand its important features.
Transportation by water is important mainly to
producers, shippers and consumers. It does not
affect employees to the same extent as railway and
express transportation as the opportunities for ex¬
perts, either in clerical or mechanical operative lines,
are more limited. In the first place there is less
help needed in proportion to the volume of traffic
moved, and the nature of the occupations, the skill
required, is much different. As a study transpor¬
tation by water is of interest mainly in its relation
to transportation by rail, its effect upon the latter,
and its bearing upon the trade of the country at
large, and in this volume the subject is treated mainly
from this viewpoint, rather than as an individual
industry.
CHAPTER I.
ORIGIN OF THE EXPRESS BUSINESS.
Like many other enterprises that have reached
gigantic proportions, the express business of the
United States had its origin in the most humble way.
It was an experiment at the start, and while its
projector, William Harnden, undoubtedly had faith
in his idea, he nor any of those who adopted and
imitated his methods, could have had any concep¬
tion of the magnitude to which the industry was
destined to grow.
The express business, as conducted in the United
States and Canada, is purely an American idea.
No other countries have anything of a similar char¬
acter. Great Britain has the parcels post, which
performs a somewhat similar service to that of the
American express companies. There is a limit,
however, to the size and weight of packages that
may be sent by the parcels post, while with the
American express companies there is no limit. The
latter will undertake to transport and deliver a lock
of hair or an elephant; a rose or $10,000,000 in gold.
On the continent of Europe some of the nations have
a counterpart of the British parcels post, but these
are the exceptions. The continental railroads, how¬
ever, run what are known as "parcels vans" in con-
19
20 . ORIGIN OF THE EXPRESS BUSINESS.
nection with their passenger trains, and these carry-
packages such as would go by express in the United
States or Canada. The European railroads maintain
a collection and delivery service for this class of
business, and exact a higher toll for its transaction.
This is also the case with the British railroads. It
is purely a railroad proposition, however. There is
no express company to be reckoned with, and the
entire receipts find a lodging place in the railroad
companies' treasuries.
Ownership of Express Companies.
The American express companies are separate
corporations, which operate over the various lines
of railroads, pay the railroads a fixed sum for the
privilege, or a percentage of their receipts, and by
charging the public higher than freight tolls for
collection, delivery, and speed of service, have in
some cases grown into monster corporations which
vie in magnitude with the roads over which they
operate. The Canadian express companies are
owned outright by the railroad systems, but have a
separate corporate existence. None of the American
express companies is, owned outright by the rail¬
roads, but a scrutiny of the list of stockholders of the
express companies will show that the big stock¬
holders are also influential in the ownership and
management of the railroad lines over which the
express companies operate. In a way, this may be
called a good thing for the latter. It makes for
their stability. It assures them that over certain
ORIGIN OF THE EXPRESS BUSINESS. 21
railroads and in certain territory they may reason¬
ably be considered fixtures, and will have no compe¬
tition.
Harnden's advent in the express business was in
1839. Railroads were then in their infancy, were
hardly factors in the transportation of freight, and
their chief value was considered to lie in the speedy
movement of passengers from one point to another.
The country was barely out of its stage coach days,
and such occasional packages as were sent from one
point to another up to that time had been sent by
the stage coaches. As a matter of fact, there were
comparatively few packages to be sent at any time.
Communities were largely self supporting; they pro¬
duced about all that they required, and such com¬
merce as there was mostly sought water lines. The
costs of land carriage were almost prohibitive, while
the water carriage was always cheap.
Friendly Accommodation of Patrons.
With the coming of the railroads a change in con¬
ditions was almost immediately manifest. The
people of New England found there were many things
produced in New York which New England desired,
and which the new mode of travel enabled them to
get in an incredibly short space of time as compared
with the water routes. Similarly New York devel¬
oped a demand for certain New England productions.
Especially was this the case with certain food sup¬
plies. Harnden, who was a man of keen perception,
had noticed in traveling that almost every passenger
was laden with bundles or baskets that friends in
22 ORIGIN OF THE EXPRESS BUSINESS.
one city were sending to friends in the other. He
also noticed that the conductors and baggage men
always carried numerous packages which they left
at the various stations along the route to be called
for by the parties to whom they were addressed.
This was not a source of revenue to the railroads.
It was carried on by the conductors and baggage
men solely as an accommodation to the patrons of
the road, many of whom were their personal friends.
There was no fixed schedule of charges. If the
sender of a package wanted to give the conductor or
baggage man 50 cents or a dollar for his trouble it
was thankfully received, and the aggregate of the
sums they so obtained became in time a most impor¬
tant part of their income and far exceeded the salaries
they were paid. The traffic was wholly unorganized.
No receipts were given, and if a package was lost
or stolen or so badly damaged in transmission as to
be worthless, there was no redress to be obtained
by either sender or consignee.
Harnden's Belief in System.
Naturally such conditions were productive of
many complaints. Valuable packages were some¬
times lost and valuable goods ruined. If a package
went astray there were no means of tracing it.
Harnden figured that if the service was systematized
it could be greatly extended, and he started a regular
express route between New York and Boston, with
a fixed scale of charges. He gave his patrons a
receipt for their packages and assumed responsi-
ORIGIN OP THE EXPRESS BUSINESS. 23
bility for their safe transmission. The service was a
crude one at first. The messengers traveled in the
ordinary passenger coaches carrying their packages
with them.
Perhaps Mr. Harnden's action in starting the
express business was based upon more than obser¬
vation. He had been a railroad man himself and it
is more than likely his venture was prompted by his
personal experience. Harnden was a Massachusetts
Yankee, born at Reading, in that state in 1812, his
family having been among the original settlers of
that town. After leaving school young Harnden
learned the trade of a cabinet maker, at which he
worked until 1834, when he obtained a position on
the Boston and Worcester Railroad where he was
employed as a conductor for a few years. Undoubt¬
edly while occupying this position he was constantly
besought to take charge of packages between the
two cities, as well as other points along the line of
the road, and it is quite reasonable to assume that
the income he derived from this source lodged the
germ of the express business in his brain. He was a
slight, delicate man, and the rigors of the railroad
business proving too much for him, he was finally
obliged to relinquish his position. The establish¬
ment of an express business promised him an ade¬
quate income with a minimum of effort, and in the
early part of 1839 he announced, in a modest adver¬
tisement in a Boston newspaper, the beginning of the
business between Boston and New York.
At the start he was the whole business himself.
He carried a couple of large valises in which he would
24 ORIGIN OP THE EXPRESS BUSINESS.
place packages of value, and traveled on the trains
in the regular passenger coaches. Patronage came
to him and he established a reputation for reliability.
In a few months time he began to expand and hired
two men to assist him, at the same time opening
offices at No. 9 Court Street, Boston, and No. 1
Wall Street, New York. He now devoted himself
to the enlargement of the business and let his assist¬
ants act as the traveling messengers. One of these
assistants was his brother, Adolphus, who lost his
life on the steamer Lexington off Long Island in 1840.
Rapid expansion of the business took place. In
1840 Mr. Harnden extended his express service to
Philadelphia, so that he then embraced the three
principal cities of the country in his service. In the
same year he formed a partnership with a man named
Brigham and started a transatlantic service, at first
opening offices in England, and later extending his
operations to Scotland, Ireland and Germany. It
was a period of great activity in immigration, and
in this Mr. Harnden saw another field for his activi¬
ties at a profit. Immigrants who had been in this
country a few years were sending great sums of
money abroad every year to pay the expenses of
their relatives to this country, and the firm of Harn¬
den & Brigham undertook the safe transmission of
this money to the other side. The firm obtained a
practical monopoly of this business and handled
many millions of dollars in the next few years. It
also made arrangements with the vessel lines plying
on the Hudson river, the packet boats on the Erie
canal and great lake vessels for cheap transportation
ORIGIN OF THE EXPRESS BUSINESS. 25
for arriving immigrants to the west, and the firm was
credited within five years of having been directly
instrumental in the transportation of 100,000 immi¬
grants from the countries of Europe to the American
west.
First of Exclusive Express Cars.
In the meantime the express service was being
rapidly extended over the country. The express
messengers no longer traveled in passenger coaches,
but arrangements had been made with the railroad
companies by which they obtained accommodations
in the baggage cars. There are no records to show
when the first exclusive car for express service was
put in operation, but it was probably in the late '40s.
There is an old saying that runs to the effect that
the sincerest flattery is in imitation. Assuming
its truthfulness, Mr. Harnden must have been a
highly flattered man. His business had not yet
been fairly started when a host of imitators and
competitors were in the field. Alvin Adams in 1840
invaded the New England field, and shortly after¬
wards Thompson & Co., Kinsley & Co., and several
other firms were also operating in the same territory.
In 1850 the American Express Company was
founded by the consolidation of the Livingston and
Wells companies, which had been in operation for
some years and were competing in practically the
same territory. In 1868 the Merchants Union Ex¬
press Company was merged with the American
Express Company, which in 1891 purchased the
26 OBIGIN OP THE EXPBESS BUSINESS.
New England Despatch Company. In 1854 Harn-
den & Co., Adams & Co., Thompson & Co. and
Kinsley & Co. united under the name of the Adams
Express Company. In the same year—1854—the
United States Express Company came into existence.
Origin of Wells, Fargo Company.
The discovery of gold in California in '49 brought
a rush of new settlers into the far western country,
and a number of express companies sprang up to
cater to the trade of this section. One of the most
famous of these was the Holladay Overland Mail
and Express Company, which was a conspicuous
factor in the stirring mining times of the west. Other
companies that also operated in the western country
were the Pioneer Stage Company, the Overland
Mail and Express Company, and Wells, Fargo & Co.
These four concerns were merged into a corporation
under the laws of the then territory of Colorado in
February, 1866, under the name of the Holladay
Overland Mail and Express Company, which in
November of the same year was changed to Wells,
Fargo Company, under which name the company
has since operated.
Prior to the outbreak of the Civil War the Adams
Express Company did a large business in the South¬
ern states, and being a northern enterprise its prop¬
erty and business interests were placed in jeopardy
of confiscation by the Confederate slates. I o pro¬
tect its interests in the South the Adams Express
Company caused to be formed an association the
ORIGIN OF THE EXPRESS BUSINESS. 27
membership of which was composed of its principal
southern agents and managers, who were created a
body politic by the State of Georgia in April, 1861,
under the name of the Adams-Southern Express
Company. The name was changed in July of the
same year to Southern Express Company, under
which title it is still being operated.
Mileage of the Express Companies.
At various times other companies besides those
which have been mentioned were formed to engage
in the express business, until there are now thirteen
companies engaged in the occupation of forwarding
goods and valuables by express. The business of
most of these companies is restricted to the United
States, but some transact an international business
and have agencies in nearly every country of the
world. For the year ending June 30, 1911, these
thirteen companies operated over 243,721 miles of
steam railroad, 7,291 miles of electric road, 18,939
miles of steamboat mileage, and 713 miles of stage
line, the total mileage covered being 270,664. Of
the total mileage on steam railroads covered by these
companies 225,178 miles, or over 94 percent, were
in the United States, the remainder being in Canada
and Mexico.
The names of the thirteen companies and the
number of states in which they operate are as follows :
Adams Express Company, thirty-one states; Amer¬
ican Express Company, thirty-five states and Canada;
Canadian Express Company, five states and Canada;
28 ORIGIN OF THE EXPRESS BUSINESS.
Canadian Northern Express Company, one state
and Canada; Globe Express Company, two states;
Great Northern Express Company, nine states and
Canada; National Express Company, five states and
Canada; Northern Express Company, seven states;
Pacific Express Company, nineteen states and
Canada; Southern Express Company, eighteen states;
United States Express Company, twenty-eight states
and Canada; Wells, Fargo Company, thirty states;
Hawaii and Mexico; Western Express Company, nine
states. The interstate character of the express busi¬
ness is strongly emphasized by noting the large num¬
ber of states through which the large express com¬
panies operate. Not only do all the large companies
do business in many states, but with the exception
of Arizona, California, Florida, Nevada, Rhode
Island and South Carolina, every state in the union
is served by more than one express company. In
Illinois, for example, will be found six companies, in
Indiana six, in Iowa six, and in New York seven.
There are other express companies, some of them
of considerable magnitude, but they are local con¬
cerns.
Business Grows Larger Every Year.
For many years there has been no change in the
express business. The same companies remain in
the field, yearly growing larger and stronger as the
lines of railway on which they operate expand. As
each company has exclusive contracts with the rail¬
roads over which it operates, there is little or no
chance for competition on way business, except as
ORIGIN OF THE EXPRESS BUSINESS. 29
two lines of road may parallel one another. Each
company has its well-defined territory, and there is
a concert of action among them which prevents
harmful competition even at the big competitive
points. Several companies, for instance, have en¬
trance to New York city and Chicago over different
lines of railroad, but the rate for shipping goods
from a given point to New York or to Chicago is
the same in all instances.
Contracts made between express companies and
railroad or steamship lines stipulate that the express
company is to have the exclusive right to handle all
the express business conducted over the transpor¬
tation line, for a definite term of years, and that it
shall pay a certain portion of its receipts, or some¬
times a fixed sum—but this is rare—for the privilege
of doing business over the line. Usually the railroad
company is expected to provide the cars for the
express business, and generally it does. Not in all
cases, however. The express companies, as in the
case of the fast freight lines, sometimes find it a
distinct advantage to own their own cars. This is
most unusual. Out of the thirteen express com¬
panies operating in the United States but two own
any express cars, and these, according to their state¬
ments to the Interstate Commerce Commission for
the year ending June 30, 1910, only owned 138 cars,
which they valued at $401,188.50. Of these 138
cars the Wells, Fargo Company alone owned 124,
valued at $380,168, while the remaining fourteen
were owned by the Pacific Express Company and
were valued at $21,020.
30 ORIGIN OF THE EXPRESS BUSINESS.
Enlargement of Express Company Functions.
Originally formed for the speedy and safe trans¬
mission of valuable goods, the express companies
have since greatly enlarged their functions. When
first put in operation their sole duty consisted in
collecting shipments at points of origin, in safe¬
guarding such shipments in transit, and in delivering
them to the consignees at destination. In addition
to this service the express companies now perform
a variety of other services which have been added
from time to time, and which have been made possible
by their organization and their close relation to
transportation lines. They will act as their custom¬
er's agent in almost any legitimate business trans¬
action. Among the more important of the incidental
services performed may be mentioned the following:
Custom-house brokerage, in which the express
company acts as agent for the clearing of baggage
and imports of all kinds; the order and commission
business, in which the company's employees make
purchases, file papers, secure theater tickets, redeem
pawned articles, etc.; the issuance of C. 0. D. checks,
money orders, travelers' checks, and letters of cred¬
it, which are payable through the company's corre¬
spondents all over the world; the exchange of foreign
moneys, and the telegraphic transfer of money.
Benefit of Garden Truck Producers.
The order and commission departments of the
express companies have unquestionably been of very
considerable service to growers and producers of
ORIGIN OP THE EXPRESS BUSINESS. 31
berries, fruits, melons, vegetables, poultry, and other
perishable commodities which demand prompt
marketing. Traveling agents and solicitors of vari¬
ous companies visit growers, instruct them how to
handle and pack their shipments, assist them in
finding markets, and through the companies' agents
scattered over thousands of miles of territory, keep
the grower or shipper in touch with market condi¬
tions. Standing orders are solicited from dealers
and placed with shippers, and every effort is made to
move commodities from the localities where they are
produced to markets. Growers and shippers have
materially benefited by this effort on the part of
express companies to increase their business.
The express companies of today have grown to be
giant corporations. Many of them—it may almost
be said all of them—have accumulated millions of
assets while at the same time paying handsome divi¬
dends to their shareholders. As illustrative of this
growth it will be sufficient to briefly give one specific
instance—that of the Adams Express Company—
which is not exceptional in its nature, but is fairly
typical of most of the other great companies.
Growth of an Express Bonanza.
When the Adams Express Company was formed,
as has been before stated, by a consolidation of four
concerns in 1854, 12,000 shares were issued to the
various owners to represent their interest in the new
association. There was no value placed upon these
shares, but they were supposed to represent a joint,
32 ORIGIN OF THE EXPRESS BUSINESS.
or partnership interest in the business and the prop¬
erty then owned. Some years later the company,
all the time paying good dividends to its shareholders,
had accumulated so much surplus from earnings,
that it issued 108,000 more shares as a stock dividend
to its shareholders. The company still kept on
making money and paying dividends on its 120,000
shares, and in the course of a few more years had
accumulated so much more money that it declared
another dividend or "melon, " as the financial jargon
has it, this time to the extent of two bond issues, the
aggregate of which was $36,000,000 of 4 per cents.
Assuming that the 120,000 shares of stock outstand¬
ing have a par value of $100 a share—they are quoted
in the market at over $200—this will give the com¬
pany a total capital liability of $48,000,000, and if
it is also assumed that the original share issue of
12,000 shares represented actual par value for the
equipment, good will, etc., of the merged companies,
there has been a capital obligation created of $46,-
800,000, for which not one cent of new capital has
been paid in, but which is wholly represented by
capitalization of earnings from the business and
investments of surplus funds.
Gigantic Business of Express Companies.
In its statement to the Interstate Commerce
Commission for the year ending June 30, 1911, the
Adams Express Company gives its total income as
$34,945,598. Its statement of assets was $69,124,-
869.02, of which stocks owned comprised $23,194,-
746.39, and bonds owned totaled $34,075,936.77.
ORIGIN OF THE EXPRESS BUSINESS. 33
The cash on hand and current assets with the securi¬
ties owned, amounted to $62,076,211.59, and the
total cost of real estate and equipment amounted to
$6,461,407.70. The profit and loss account stood at
$24,175,087.05. In its statement of liabilities no
account was taken of the outstanding stock.
The total income of all the express companies
operating in the United States for the fiscal year
ending June 30, 1911, was reported to the Interstate
Commerce Commission as $159,128,058, which
includes income from investments of $5,319,426. A
total of $73,956,450, was paid to the railroads for
express privileges, the expenses of operation amounted
to $67,070,637, and the net income to $17,850,907.
Dividends from current income amounted to $5,-
848,083, and the balance carried forward to profit
and loss was $9,488,548. Dividends declared out of
surplus during the year amounted to $8,496,960, and
the total balance carried to profit and loss was $59,-
401,759.
Some of the items in the inventory report filed
with the Interstate Commerce Commission are of
general interest and are herewith given: The com¬
panies owned 28,265 four-wheel trucks; office furni¬
ture and fixtures amounted in value to $1,041,772.91 ;
they owned 11,165 office safes; the number of homes
and other draft animals in service was 18,648; auto¬
mobiles numbered 318; double wagons 3,671; single
wagons, 9,036; sleighs, 3,016; stable equipment,
including harness, was valued at $433,308.68; car
safes, stationary, numbered 1,361; messenger safes
numbered 13,996, and messenger's packing trunks
numbered 26,131.
34 ORIGIN OF THE EXPRESS BUSINESS
Express Companies as Bankers.
The. express companies, besides the business of
transportation, are also in a way bankers, and in
this line come in competition not only with the banks
of the country but also with the United States post-
office department. The money orders issued by the
express companies are accepted anywhere at their
face value, so well established is the confidence of
the public in the financial soundness of the com¬
panies. This branch of the express business shows
tremendous gains every year. It commends itself
to all classes of people—to the man with a bank
account on which he can check and to the man with¬
out a bank account who may wish to transmit money
to some distant point. A check must pass through
a certain banking routine for collection, and for this
the banks charge. An express order issued in New
York or any other place east and sent to a man in
San Francisco, say, can be deposited by the receiver
in his bank and will be taken as so much actual
currency. Many people even use the express com¬
panies as savings banks. People who do much
traveling, salesmen, actors, etc., who object to carry¬
ing large sums of currency around with them, buy
express orders and mail them to themselves at their
home address. It may be months before they return
home and cash the orders, but they rest secure in the
knowledge that their money is safe. In the panic
of 1907 millions were withdrawn from the banks by
people who were doubtful of the solvency of the
latter, and invested in express money orders, to be
ORIGIN OF THE EXPRESS BUSINESS. 35
again converted into cash when confidence had been
restored.
All the express companies issue money orders, but
the largest business done in this line is by the Ameri¬
can Express Company, the Wells Fargo Company
being second and the United States Express Com¬
pany third. The business of all the companies in
this line is now close to $500,000,000 a year. In 1909
the total number of money orders issued reported
to the Interstate Commerce Commission was 18,525,-
085 and their value was $374,312,924.06. In 1910
the number issued was 19,836,252, and their value
was $423,331,964.84, an increase in value over those
of the preceding year of $49,019,040.78.
Territory Reached By Companies.
The following table shows the states, territories
or other countries reached by the principal express
companies, with their mileage in each:
State or Terri¬
tory.
Grand
Total
Adams
Express
Co.
American
Ex¬
press
Co.
Great
North¬
ern Ex¬
press Co.
Southern
Express
Co.
United
States
Express
Wells.
Fargo
& Co.
1910
1910
1910
1910
1910
1910
1910
Total
Alabama
258,128.77
4,503.44
1,870.55
4,190,65
7,951.72
5,343.96
1,167,09
363.45
23.80
4,083.00
6,671.00
2,077.11
12,844.35
$,430.56
36,495.00
55,577.84
114.00
8,215.37
32,213.00
4,283.00
32,771.46
106.44
51,522.84
Arizona
1,870.55
620.32
7,951.72
1,025.30
Arkansas........
4.00
70.00
1,186.81
California
Colorado
1,679.00
1,006.00
267.00
9.00
488.61
161.09
301.43
Connecticut
Delaware........
96.45
11.80
Dist. of Columbia
Florida
3.00
4,083.00
6,455.00
Georgia
216.00
Idaho
1,349.31
5,226.27
3,280.98
144.91
98.30
1,305.65
249.74
Illinois
2,540.00
1,504.00
308.00
243.00
2,394.86
2,563.52
Indiana
36 ORIGIN OF THE EXPRESS BUSINESS.
CONTINUED.
State or Terri¬
tory.
Grand
Total
Adams
Express
Co.
American
Ex¬
press
Co.
Great
North¬
ern Ex¬
press Co.
Southern
Express
Co.
United
States
Express
Wells,
Fargo
& Co.
1910
1910
1910
1910
1910
1910
1910
Iowa
10,355.63
9,211.71
3,284.22
4.327.16
2,195.04
1,629.15
2,380.99
8.537.66
8,020.46
3.849.38
8,277.55
4,155.42
6,069.18
1,788.06
1,200.30
2,156.74
2.819.39
9,129.14
4,098.00
4.070.37
11,294.63
5,914.69
2,260.25
10.004.24
262.00
3,007.00
3.921.17
3.517.38
14,180.08
1,589.37
1,135.44
4,382.34
5,412.82
2,947.21
6,747.08
1.536.67
12.511.25
71.00
1,105.48
9,252.44
2,345.00
260.00
2,007.00
2,783.24
1,807.23
601.78
378.11
1,873.64
77.86
2,111.73
1,763.80
2,829.40
2,975.90
Kansas
Kentucky
675.00
753.00
Louisiana
538.06
1,385.84
Maine
Maryland
1,145.00
1,111.00
535.00
426.00
17.00
467.15
Massachusetts...
Michigan
1,262.32
4,089.96
1,427.70
1,684.30
999.51
168.80
2,479.68
2,451.97
423.39
142.79
2,285.07
336.40
1,646.91
M innesota........
2,116.86
Mississippi
2,020.00
2.00
Missouri
1,401.00
193.00
2,840.00
1,062.60
836.20
118.90
1,788.06
.Montana,
1,500.11
Nebraska
250.25
Nevada
New Hampshire..
New Jersey
1,147.30
24.10
796.00
81.00
1,072.00
12.00
941.74
152.96
1,388.48
370.80
2,367.01
1,132.70
Hew Mexico
New York
4,280.24
North Carolina ..
North Dakota ...
Ohio
4,086.00
14.28
2,725.74
1,375.20
964.46
1,526,64
1,563.59
243.90
1,237.27
1,362.90
1,029.69
909.83
2,245.00
268.00
3,619.41
2,825.29
Oklahoma
Oregon
131.41
Pennsylvania
Rhode Island
South Carolina...
South Dakota
Tennessee
4,460.00
262.00
2,953.97
3,007.00
2,747.00
514.00
345.00
711.00
1,403.79
405.77
2,274.12
285.07
850.84
262.36
82.72
18.03
1,124.64
1,626.60
Texas...........
6,797.17
1,304.30
Utah
Vermont
Virginia
1,675.00
2,615.00
92.34
Washington......
751.77
1,724.15
441.20
West Virginia....
Wisconsin
1,312.00
223.00
601.00
402.00
1,225.11
388.36
3,634.59
921.47
1,199.93
43.35
1,856.51
14.20
Wyoming.
Canada
620.77
223.94
Hawaii
71.00
1.105.48
3.550.49
Mexico
Mileage not assign¬
able
2,702.00
) 1,612.00
30.00
176.00
638,95
The states or countries reached by the other
express companies, and their mileage in each, are
as follows :
Canadian Express Company—Maine, 89 miles;
ORIGIN OP THE EXPRESS BUSINESS. 37
Michigan, 57.02 miles; New Hampshire, 53 miles;
New York, 26 miles; Vermont, 32 miles; Canada,
6,871 miles.
Canadian Northern Express Company—Minne¬
sota, 43.7 miles; Canada, 3,270.8 miles.
Globe Express Company—Colorado, 1,697.23
miles; New Mexico, 218.42 miles.
National Express Company—Massachusetts, 7.67
miles; New Jersey, 24.1 miles; New York, 1,191.62
miles; Pennsylvania, 98.4 miles; Vermont, 238.3
miles; Canada, 80.16 miles.
Northern Express Company—Idaho, 321.64 miles;
Minnesota, 1,191.78 miles; Montana, 1,457.31 miles;
North Dakota, 1,163 miles; Oregon, 134.69 miles;
Washington, 2,418.56 miles; Wisconsin, 135.49 miles.
Western Express Company—Idaho, 162.95 miles;
Maine, 232.4 miles; Michigan, 695.7 miles; Minne¬
sota, 744.12 miles; North Dakota, 1,085.6 miles;
South Dakota, 31.7 miles; Vermont, 14.3 miles;
Washington, 77.14 miles; Wisconsin, 465.78 miles.
A reasonable express rate is one which gives reason¬
able compensation to the rail carrier for carrying a
small package upon a passenger train, or a train go¬
ing at passenger speed, plus a reasonable compensation
for the service of gathering, care, and delivering which
the express company as such renders. Manifestly,
under this definition, there should be a higher return
to the railroad for the carriage of express matter than
it receives upon its freight traffic. This should be so
because of the superior character of the service given
as well as to prevent the movement of ordinary
freight upon passenger trains under express rates.
CHAPTER II.
CONTRACTS WITH RAILROAD COMPANIES.
Contracts between express companies and railroad
companies—the business operation agreements—
usually provide that the express company shall have
the exclusive right to operate upon a certain line for
a definite term of years. Provision is made that
all matter carried on passenger trains, except per¬
sonal baggage, corpses, milk cans, dogs, and a few
other articles, shall be turned over by the railroad
to the express company. In one instance the con¬
tract goes further than this. It states explicitly
that all packages or freight carried upon any train
at passenger train speed shall be considered as
express matter and turned over to the express com¬
pany. This form of contract is, however, exceptional,
and, so far as known, exists in this one case only.
Usual Conditions of Contract.
»
As a general thing the contract in universal use
provides :—
That the railroad shall transport to and from all
points on its lines all express matter in charge of the
express company.
That special or exclusive express trains shall be
39
40 CONTRACTS WITH RAILROAD COMPANIES.
furnished by the railroad when warranted by the
volume of express traffic.
That the railroad shall furnish the necessary cars,
keep them in good repair, furnish heat and light,
and carry the express messengers, as well as the safes,
packing trunks, and all necessary equipment.
That horses, wagons and supplies required by the
express company may be transported in express cars
or shipped as freight.
The contract further provides that the officers and
employees of the express company, when traveling
upon the business of the company, shall be carried
free by the railway; that the railway company shall
furnish such rooms in all its depots, stations and
buildings as may be necessary for the loading,
unloading and transferring and storage of express
matter, provided the furnishing of such facilities
shall not interfere with the business of the railway
company.
Railway Employees as Agents.
It is further provided, in order to reduce expenses,
that the express company may, with the Consent of
the railroad, employ any of the station agents of the
latter as express agents, and train baggagemen as
express messengers, so long as such extra employ¬
ment does not interfere with their duties to the rail¬
road.
On all important routes the express company has
its own employees who devote their time exclusively
to its service. On many of the minor runs, however,
CONTRACTS WITH RAILROAD COMPANIES. 41
and at thousands of small stations, there is not
enough of either railroad or express work to occupy
a man's time exclusively in either line so, as a matter
of economy, one person is engaged to serve in both
capacities, the wage being paid partly by the railroad
and partly by the express company. As the railroad
and express interests are to large degree mutual, the
same capitalists being heavily interested in both
enterprises, there is little or no friction as regards one
set of employees serving both companies.
Where such dual employment exists the railroad
assumes no liability for dishonesty or misconduct
on the part of the employees, such losses as may
occur being borne entirely by the express company.
How the Railroads are Paid.
For the service extended to express companies the
railroads receive a fixed percentage of the receipts
from the handling of express matter. There is no
uniformity in this percentage, but as a general thing
it runs from 40 to 60 percent of the gross receipts.
Thus we find that for the year ending June 30,1911,
the gross receipts of the thirteen express companies
doing business in the United States were $152,555,522.
Against this is charged off as "express privileges,"
meaning the amount paid to railroad companies for
the privilege of transacting express business, $73,-
956,450, or nearly 50 percent.
Computation of the operating revenues and ex¬
penses begins, not with the gross income, but from
the amount left after the railroads have been paid.
This, in the case cited, is $78,599,072. The operating
42 CONTRACTS WITH RAILROAD COMPANIES.
expenses were $67,070,637, leaving a net operating
revenue of $11,528,435.
In some instances, especially in the case of the
large railroads, a fixed minimum is guaranteed, an
assurance given that the railroad's percentage will
not fall below a certain amount. The express com¬
pany also binds itself to maintain a certain schedule
of charges for its service to the public, usually 150
percent of what the railroad would charge for handling
the same commodities as freight.
The railroads, apparently dominating as they do
all the express companies either through stock owner¬
ship or through interlocking directors, have the ex¬
press companies absolutely helpless whenever the
latter desire to renew an expired contract or to make
a new one. The result may readily be seen when
the contracts between the companies which are now
effective are compared with those made 30 years ago.
Such a comparison will show that the important rail¬
roads now receive an increased remuneration of
about 373^ percent, due to an increase in basis of
payment in addition to sharing in the receipts from
an enormously increased volume of business.
Exact Figures of Percentages Paid.
June 30, 1911, nine of the principal express com¬
panies in the United States, operating on 218,000
miles of railway, reported their contract terms as
given in the accompanying table, the companies
being the Adams, American, Globe, Great Northern,
Northern, Southern, United States, Western and
Wells Fargo companies.
CONTRACTS WITH RAILROAD COMPANIES. 43
Basis of Payment for Express Privileges.
No compensation paid
Tonnage
Fixed amounts
Percentage of gross receipts:
15 or less
20 to 35
40
40
10 on gross business at stations
40 ,
10 on good will
40 on merchandise
50 on perishable traffic
42
42.5
43
45
45 on local business
40 on through business
45 on local business
48 on through business
45 on local business
50 on through business
47
47.5
Steam
railway
mileage
covered.
Miles.
6.12
4,544.34
119.26
63.44
3,570.68
22,817.92
44.40
31.90
1,790.00
577.71
126.40
72.70
14,912.56
1,919.73
939.63
129.50
66.00
9,845.65
Percentage of gross receipts—Cont.
47.5 on merchandise
50 on perishable traffic
48
50
50 on local business
40 on through busiess
50 on local business
45 on through business
51
52
52.5
55
55 on local business
50 on tnrough business
56
56 on local business
50 on through business
57.5
60
70
All earnings less operating expenses
Operated for railway company....
Total
Steam
railway
mileage
covered.
Miles.
}
2,850.00
2,219.92
46,493.78
730.70
1,789.40
9,147.50
78.01
203.06
58,145.91
4,46829
9,200.64
235.00
11,087.76
7,344.01
861.74
1,328.45
246.70
218,008.51
Other Features of Contracts.
There are other features of interest in the con¬
tracts. An express company, as a rule, handles
free of charge all money, bonds, valuables, and ordi¬
nary express matter belonging to the railroad;
indemnifies the railroad for damages resulting from
the death or injury of express employees; assumes
full liability for loss or damage to express matter
other than that belonging to the railroad, and pays
an agreed proportion of the salaries of such railway
employees as render service to the express company.
44 CONTRACTS WITH RAILROAD COMPANIES.
The railroad company has the right to examine
the books, records, and accounts of the express com¬
pany so far as they relate to the business done under
the contract, and may require reasonable safeguards
and checks for the purpose of securing correctness
in accounting to it for the business done over its
lines.
The express company keeps the account between
itself and the railway company and settles with the
railway company on the basis of the amount shown
in its accounts. The revenue earned on a given line
of road when a shipment is carried over two or more
lines is arrived at by the use of a mileage prorate or
of a rate prorate. Where the rate prorate is used,
the local rates per 100 pounds from point of origin
to the junction point and from the junction point
to destination are ascertained, and either line's
proportion of the revenue from a through shipment
at a through rate is determined by dividing the
revenue in the ratio of the local rates.
Why the Public is Interested.
The amount of revenue accruing on a, given line
having been determined by an express company, the
amount due the railroad company is computed by
applying the percentages agreed upon in the con¬
tract. With some of the smaller railroad companies,
electric lines, and steamboat lines there is still used
the tonnage basis of contract—that is, an agreed
rate per 100 pounds—but, generally speaking, the
percentage basis is the one used.
The interest of the public in the percentage con-
CONTRACTS WITH RAILROAD COMPANIES. 45
tract lies in the fact that an increase in the compen¬
sation received by the express company carries with
it a relative increase to the other party. This may
be illustrated by a specific case: On May 1, 1909,
the Wells, Fargo Co. succeeded the United States
Express Company on the lines of the Chicago, Mil¬
waukee & St. Paul Railway Company, paying the
railway company a higher percentage than was paid
by the United States Express Company. In order
to retain its usual'compensation, it became necessary
for Wells, Fargo Co. to increase the express rates
by a number of points. It thus appears that the
basis of contract between railway and express com¬
panies may be of direct interest to the public. In
the case cited, the express company first [raised
the percentage payable to the railway company, as
express privileges, thereby ousting a competitor, and
then, in order to reimburse itself, raised its rates,
thereby again arbitrarily increasing the compensa¬
tion of the railway company.
Feats in High Finance.
Thus, while the railroad got more money for the
express privilege from the Wells, Fargo Co. than
the United States Co. had been paying, the increase
was not a charge on the treasury of the Wells, Fargo
Co. It recouped the extra outlay by the simple,
but very questionable, device of raising its rates for
service. There was no claim that the former rates
were unprofitable, even though the privilege of
doing business over the Chicago, Milwaukee & St.
46 CONTRACTS WITH RAILROAD COMPANIES.
Paul lines cost the Wells, Fargo people more than it
did the United States Co. The express service was
being well paid for under the old schedule, but, in
order to dislodge the company rendering that service
the Wells, Fargo people had to bid up the privilege,
to offer the railroad more money in the form of a
larger percent than the United States Co. was pay¬
ing. Then, having thus secured the privilege, having
bound themselves to increase the earnings of the
railroad, the successful bidders turned around and
said to the public:
"We have obtained a very profitable contract, but
it has cost us more money than it did our competi¬
tors. You must make good the difference; otherwise
we will not be able to make as large profits as the
old company did."
Marked Advances in Percentages.
Just how this advancing of the contract price
works is shown in the table on page 53. We
have here sixteen instances in which advances were
made in the percentages paid by the express com¬
panies. In five cases the advances were made by
companies which succeeded in outbidding those
which had previously held the contract. These
were :
Chicago, Milwaukee & St. Paul Ry.—Contract
obtained by Wells, Fargo Co. by paying 55 percent
as against 50 formerly paid by United States.
Chicago, Rock Island & Pacific—United States
now has contract, paying 55 percent where Wells,
Fargo formerly paid 50.
CONTRACTS WITH RAILROAD COMPANIES. 47
Colorado Southern—Adams now pays 57.5 per¬
cent. The Wells, Fargo used to run the business
at 50.
San Pedro, Los Angeles & Salt Lake—American
now conducts the express service at 55 percent. It
was formerly run by Wells, Fargo at 50.
Union Pacific System—Pacific Express paid 50
percent. American now has the business at 55.
What this advance in percentage means to the
railroads may be learned from the fact that on eight
roads alone, representing 17,000 miles of express
operations, the receipts of the railroads for express
privileges in 1911 showed an increase of $1,673,699,
of which $896,000 was directly due to the increased
percentage.
Getting Ahead of the Railroads.
While it is the intention of all contracts of this
nature that the railroad shall receive its percentage
on all the express business transacted there is one
feature at least from which the railroads derive little
or no revenue, and the importance of this feature is
increasing right along. This concerns the return
of proceeds from C. O. D. collections. In former
days when a C. O. D. package was delivered the pro¬
ceeds were remitted to the original consignor by
express. This swelled the revenue of the express
companies on which a percentage must be paid to
the railroads.
Nowadays a new system cuts into this feature of
the railroad percentage materially. Returns of C.
48 CONTRACTS WITH RAILROAD COMPANIES.
0. D. collections are made by check and forwarded
by mail. The express company charges the same
fee as it did for forwarding the actual money, but is
under only a fraction of the expense. It avoids
the risk of loss in transmission, saves the labor of
handling the business en route, and pockets the 40
or 50 percent of the fee which would otherwise go to
the railroads.
Say the fee for returning a certain collection is
25 cents. Of this the railroad, at the lowest estimate,
would get 10 cents, leaving 15 cents for the express
company out of which to pay expense of handling,
insurance, etc., at a cost of about 3 cents, leaving
12 cents as profit. Now, by mailing a check to the
consignor instead of delivering the actual money,
the expense, postage included, is not over 3 cents,
but the express company has 22 cents profit instead
of only 10 cents. The issue of C. 0. D. checks by
the thirteen express companies in 1910 amounted to
$55,878,805.
This may appear strange considering the fact that
the express companies are largely owned by railway
operators, but we must remember that the profits
of the express business are shared by a few men,
while those of the railroads are divided among a
large number. It is better for a man to get one-fifth
of the profits than an insignificant part.
Must Avoid Competing Roads.
Under most contracts the express company agrees
not to operate over a competing line of road, and in
one contract examined it was found that the railway
CONTRACTS WITH RAILROAD COMPANIES. 49
company required that the express company "shall
not fix its rates for transportation and other services
connected with the express business via the railroad
company at any less than the rates fixed by other
express carriers between the same points, except
that in case of disability or deficiency of routes via
the railroad by reason of greater distance, longer
time in transit," or other reasons to the prejudice
of the routes via the lines of the railway company,
the express company has the right to make a suffi¬
cient reduction in the rate to retain a proper share
of the competitive traffic.
In small towns it is customary for the railroad
agent to act as the express agent also, being paid
by the express company an agreed percentage of the
revenue from the business done. Generally speak¬
ing the commission allowed such agents is 10 percent
on both inbound and outbound business and a com¬
mission of one-third the charges on money-order-
sales. The amounts paid to these agents by express
companies are taken into consideration by the rail¬
way companies in fixing the salaries of their station
employees, and the salaries paid by the railway
companies are adjusted accordingly.
Nub of the Express Contract.
In brief the railroad says to the express company:
"Give us 50 percent of your gross receipts and we
will give you the exclusive privilege of handling
express matter on this line of road for — years
from date. We are to furnish and equip the cars
and haul them, and, so far as possible will allow our
50 CONTRACTS WITH RAILROAD COMPANIES.
employees to assist you for a proper consideration.
On your part you are to charge a certain tariff for
your service so as to protect our percentage, per¬
form certain service for us without charge, and
assume all liability for losses by theft, etc."
Express Rates are Compulsory.
Railways control the rates charged by express
companies. Examination of the contracts shows
that the express companies are, as a rule, not per¬
mitted to file tariffs of rates for noncompetitive traffic
at less than a certain multiple of the railway compan¬
ies' freight rates on similar commodities. This multi¬
ple is usually one and one-half times the freight rate,
but in a number of instances is as high as two times
and in one instance two and one-quarter times the
freight rate. Inasmuch as the railway company
receives its percentage on any charges which the
express company may make, it should be noted that
it is especially of interest to the railway company
that the express company maintain its rates as high
as possible. As a general statement, it is also true
that no tariff of rates may be made effective by the
express company before it has received the approval
of the railway companies interested. Through their
power to approve rates the railway companies are
enabled, in so far as competitive conditions permit,
to require the express companies to make such rates
that the amount received as their percentage will not
at any time be less than is acceptable to the railway
companies.
CONTRACTS WITH RAILROAD COMPANIES. 51
How Railroads Control Express Rates.
In all cases the railroad reserves the right to
supervise and regulate the charges for express serv¬
ice, even though such service is conducted by an
independent company. The following clause taken
from the contract made by the United States Express
and the Philadelphia & Reading Railway companies
is fairly illustrative of this point:
It is further agreed that the rates on express traffic, and the
rules and regulations applied thereto, established by the express
company from time to time, shall be subject to the approval of
the railway company, and that the express company shall furnish
to the railway company, when requested, copies of tariffs in force
on the lines of the railway company during the term of this agree¬
ment; it being understood that no express rate shall be made
which shall be less than two and one-quarter times the freight
tariff rates on such traffic, and that, unless compelled by law,
no less rate shall be charged on any article carried by the express
company without the approval of the freight traffic department
of the railway company first having been obtained. It is further
understood and agreed, however, that in the event that an express
company in competition with the United States Express Com¬
pany for business between given points shall make a lower rate
than is charged by the United States Express Company, and in
the further event that the express company, with the cooperation
and assistance of the railway company, shall fail, within a rea¬
sonable time, to induce such competing express company to es¬
tablish and maintain the reasonable rate desired by the railway
company, that then, and in such event, the express company
shall have the right hereunder to make the same rate or rates as
shall have been made and charged by such competing express
company.
Many of the contracts contain a provision whereby
the express company pledges itself, in so far as it
52 CONTRACTS WITH RAILROAD COMPANIES.
legally may, to conduct its business in such a manner
that both parties to the contract shall derive as great
benefit from the business as possible. In a few cases,
however, the duty imposed upon the express com¬
pany by the contract relative to the protection and
fostering of the railway's interest is more clearly
defined. Typical of such provisions is the following,
from the contract between the Norfolk & Western
Railway and Southern Express Company:
The express company agrees to route its freight to and from
exclusive points on the lines of the railway company so as to
give said railroad company its longest haul, except and only
where such delay ensues by this action as will jeopardize the
business. The express company also further agrees that at such
terminal or other points where its business may be handled by
another company, the latter will be required to carry out the
meaning and intent of this provision.
There are few contracts which are exactly alike
as to terms of payment, and conditions on which
the business may be done. These vary considerably.
CONTRACTS WITH BAILROAD COMPANIES. 53
STATEMENT SHOWING CHANGES IN THE BASES OF PAYMENTS FOR EXPRESS PRIVILEGES FOR
CERTAIN RAILWAY COMPANIES
Name of road"
Central Railroad of New Jersey :
Local
Through
Local
Through
Chicago & North Western sys¬
tem (money)
Chicago Great Western Rail¬
road
Chicago, Milwaukee & St. Paul
Railway
Chicago, Rock Island & Pacific
system*
Colorado & Southern Lines.. .
Great Northern Railway
Minneapolis, St. Paul & Sault
Ste. Marie Railway
Wisconsin Central Railway.. ..
Mobile & Ohio Railroad
New York Central lines
Norfolk Southern Railroad:
Perishable
Merchandise.
Philadelphia & Reading Rail¬
way:
Local
Through
San Pedro, Los Angeles & Salt
Lake Railroad
Southern Railway
Spokane, Portland & Seattle
Railway
Union Pacific system
Percent
of gross
receipts
June 30,
1908.
43
40
50
45
30
40
50
50
50
40
45
50
47.5
45
50
47.5
45
40
50
47.5
50
50
Name of express
company mak¬
ing payment.
/United States.
J
> American
Wells, Fargo & Co
United States
Wells, Fargo & Co
do
Great Northern . .
Western
American
Southern
American
| Southern
I
United States
Wells, Fargo & Co
Southern
Northern
Pacific
Percent
of gross
receipts
June 30,
1911.
48
55
55
55
55
57.5
60
55
51
50
50
48
55
51
(t)
55
Name of express
company mak¬
ing payment.
United State»
American
Wells, Fargo & Co.
do.
United States
Adams
Great Northern
Western
Southern
American
Southern
United State»
American
Southern
Northern and
Great Northern
American
*Represents portion of system only.
fAll net earnings.
The railroads are sellers and the express com¬
panies are buyers of transportation, which they must
obtain or cease business. As in other lines of busi¬
ness where necessities are sold, the seller has con¬
stantly increased his price, and the express company,
being the middleman, in order to obtain its profit
must pass the amount on to the public.
CHAPTER III.
HOW RAILROADS CONTROL EXPRESS CO'S.
"Scratch an express company and you will find
a railroad company concealed beneath it." This
paraphrase of an old-time saying appears to be fully
justified by the record. The official history of the
organization of the various express companies doing
business in this country now on file with the Inter¬
state Commerce Commission at Washington, bears
out this statement.
In almost every instance—there is practically no
exception—the controlling shareholders in all the
large express companies are men identified in some
way with the operation or ownership of some rail¬
road. As a rule the stronger and more direct this
connection is the greater is the probability that the
express companies concerned will be found opera¬
ting over the lines of railroad with which the same
men are connected.
Control of the Adams Company.
As an illustration of this railroad ownership or
interest the following facts showing how the two
industries are bound together are significant. The
directors are those who were in office June 30, 1911.
55
56 HOW RAILROADS CONTROL EXPRESS Co's.
Adams Express—Managers (or directors), Wm. M.
Barrett, Charles Steele, Basil W. Rowe, Wm. D.
Guthrie, George F. Baker, Wm. H. Damsel and
Joseph Zimmerman.
When alive Levi C. Weir was always a director
in the company, and his estate is still a large share¬
holder. Mr. Weir was interested in the Des Moines
and Fort Dodge Railroad, Iowa Central & Western
Railway, Iowa Central, Minneapolis & St. Louis,
and Norfolk & Western roads, and the United States
Express.
Mr. Steele is concerned in some seventeen railways,
including the Atchison, Topeka & Santa Fe, Central
Railroad of New Jersey, Cincinnati, Hamilton &
Dayton, Erie, Lehigh Valley, Northern Pacific and
Southern roads.
Mr. Baker is a director in the Central of New
Jersey, Chicago, Burlington & Quincy, Cincinnati,
Hamilton & Dayton, Colorado & Southern, Dela¬
ware, Lackawanna & Western, Erie, Lake Shore &
Michigan Southern, Lehigh Valley, Michigan Cen¬
tral, New York Central, Northern Pacific and Pere
Marquette roads.
Mr. Rowe is interested as a director in the sub¬
sidiary companies of the Adams Express, and in the
Standard Trust Company.
Four of the seven directors are directly interested
in the management of railroad lines.
American Express—At the time the last record
was prepared by the Interstate Commerce Com¬
mission (1911) the directors of this company were:
James C. Fargo, Lewis Cass Ledyard, Francis F.
HOW RAILROADS CONTROL EXPRESS Co's. 57
Flagg, Wm. H. Seward, Cornelius Vanderbilt, C. M.
Pratt, J. H. Harding, J. H. Bradley.
Mr. Fargo was a director of the Chicago & North¬
western Railway, the National Express and the
Westcott Express.
Mr. Ledyard was a director in the New York,
New Haven & Hartford and Northern Pacific roads,
and New York Central lines.
Mr. Pratt was interested in the Long Island, and
New York, New Haven & Hartford roads, and was
treasurer and director of the Standard Oil Co. (of
New Jersey).
Mr. Vanderbilt's interests as a railway man are
too well known to require explanation.
The New York Central road owns outright $3,000,-
000, of the American Express stock, being the largest
permanent individual holder of record. The next
largest interest is that of Charles Pratt & Co.,
amounting (at par value) to $440,000.
Globe a Gould Enterprise.
Globe Express—This company is controlled by
the Denver & Rio Grande and the Rio Grande
Western roads through stock ownership. It is strictly
a Gould enterprise. There are nine stockholders
and seven directors. These latter, at the time of the
last report to the Interstate Commerce Commission
in 1911, were: George J. Gould, E. T. Jeffery, Jesse
White, Charles H. Schlacks, J. F. Yaile, J. W.
Gilluly and J. B. Andrews.
Mr. Gould is the head of the Gould System of
railroads.
58 HOW RAILROADS CONTROL EXPRESS CO's.
Mr. Jeffery was president of the Denver & Rio
Grande, and is now chairman of the board of directors
of that road.
Messrs. Schlacks, Vaile, Gilluly and Andrews are
all officers of the Denver & Rio Grande road.
The Globe has a monopoly of the express business
on the lines of the Denver & Rio Grande road.
Two Exclusive Hill Enterprises.
The Great Northern and the Northern Express
companies are Hill enterprises. Each company has
just six stockholders.
Great Northern Express—Directors, Louis W.
Hill, R. A. Jackson, J. M. Gruber, W. W. Broughton,
and D. S. Elliott. All of these, with the exception
of Mr. Elliott, are officers of the Great Northern
railway. The operations of this company are con¬
fined principally to the lines of the Great Northern
road.
Northern Express—This is owned and controlled
by the Northern Pacific Express, but the latter is
not an operating company—merely a holding cor¬
poration. The directors are: Howard Elliott, J. M.
Hannaford, C. W. Bunn, J. N. Hill and George H.
Earl, all of whom are identified with the Northern
Pacific road.
The Northern Express operates mainly over the
lines of the Northern Pacific with which it has a
fifty-year contract dating from 1906.
Pacific Express—This company discontinued busi¬
ness in 1911, being succeeded by the American. Its
last directors were: James Eggleston, C. S. Clarke,
HOW RAILROADS CONTROL EXPRESS CO's. 59
S. B. Schuyler, E. B. Pryor, F. A. Delano, J. Krutt-
schnitt, and Erastus Young.
Mr. Clarke and Mr. Schuyler represented the
Missouri Pacific, Mr. Pryor and Mr. Delano the
Wabash, Mr. Young and Mr. Kruttschnitt the
Union Pacific system. Mr. Kruttschnitt was also a
director in the Wells, Fargo Express.
All the stock of the Pacific Express, amounting
to 60,000 shares, was held by three railroads as fol¬
lows: Missouri Pacific, 40 percent; Union Pacific
System (including Southern Pacific) 40 percent;
Wabash 20 percent. There were twelve stockholders
of record.
Harriman Interests in Wells-Fargo.
Wells, Fargo Co.—This company is controlled by
the estate of E. H. Harriman and the American
Express Co. Directors, Richard Delafield, H. W.
De Forest, Wm. F. Herin, H. E. Huntington, Wm.
Mahl, John J. McCook, L. F. Loree, Charles A.
Peabody, E. A. Stedman, W. Y. S. Thome, P. M.
Warburg, F. D. Underwood.
Messrs. Herrin, Mahl, Thome and Peabody are
all connected with the Southern Pacific road in high
official capacities. Mr. Peabody is also identified
with the management of the Union Pacific, Illinois
Central and Pittsburgh, Ft. Wayne & Chicago roads.
Mr. Loree is president of the Delaware & Hudson,
and director in eight other companies.
Mr. Underwood is president of the Erie.
Mr. De Forest is a director of the Southern Pacific.
60 HOW RAILROADS CONTROL EXPRESS CO's.
"Soo" Road in Express Business.
Western Express—Directors: E. Pennington, W. F.
Fitch, W. L. Martin, H. B. Dike, C. W. Gardner and
W. S. Stout.
Messrs. Pennington, Martin, Dike and Gardner
are officers of the Minneapolis, St. Paul & Sault Ste.
Marie road.
Mr. Stout is a stockholder in the same road.
Mr. Fitch was president of the Duluth, South Shore
& Atlantic road.
The men named constitute the total number of
stockholders, they holding the shares in trust for the
Minneapolis, St. Paul & Sault Ste. Marie road,
which is the exclusive owner of the express company.
Interests in United States Company.
United States—Directors, Francis Lynde Stetson,
Frank H. Piatt, Chauncey H. Crosby, Edward T.
Piatt and Albert B. Boardman.
So far as the number of stockholders is concerned
this company makes an exceptional showing (Wells-
Fargo standing next) having 1,600 stockholders of
record in 1911, when detailed report of this nature
was made to the Interstate Commerce Commission.
The board of directors is a self-perpetuating body,
having power to fill such vacancies as occur. No
meeting of stockholders for the election of directors
has been held for fifty years, the last being in 1862.
The United States is what is known as "the Piatt
company." It is controlled by the Piatt family,
HOW RAILROADS CONTROL EXPRESS CO's. 61
but is closely allied with other express and railroad
interests.
Mr. Stetson, for instance, is general counsel for
the Northern Pacific, Southern, Erie, Cincinnati,
New Orleans & Texas, Southern Railway in Ken¬
tucky, and Southern Railway in Mississippi. Through
his connection with the Morgan, Hill and Harriman
interests a large number of railways are identified,
directly or indirectly with the United States com¬
pany.
Reports made by the National and Southern com¬
panies contain few facts tending to show railroad
influence was their managements beyond the state¬
ments that Lewis Cass Ledyard and M. F. Plant, both
railway men, are identified as directors.
Mr. Ledyard's name is given as that of a director
in the National, and that of Mr. Plant as a director
in the Southern.
Control of the Canadian Companies.
Both the Canadian companies doing business in
this country, the Canadian and the Canadian North¬
ern, are owned outright by railroads. The Canadian
is controlled by the Grand Trunk railway through
eight trustees, viz.: Sir Rivers-Wilson, Charles M.
Hays (now dead) E. H. Fitzhugh, W. Wainwright,
M. M. Reynolds, F. Scott, H. Paton and E. J.
Çhamberlin. There are only eight stockholders.
The Canadian Northern Express is the property
of the Canadian Northern railway, operating through
Mackenzie, Mann & Co. There are only five stock-
62 HOW RAILROADS" CONTROL EXPRESS CO's.
holders. The directors are: Wm. Mackenzie, D. D.
Mackenzie, R. J. Mackenzie and Z. A. Lash. All of
these, with the exception of R. J. Mackenzie, are
officers of the Canadian Northern railway.
Valuable Stock Given to Railroads.
In a number of instances express companies have
made liberal advance payments in their stock to
railroads companies in order to secure express con¬
tracts. The stock interests, of course, tend to in¬
crease the control which the railroads have over the
express business. The stock payments bear no
relation to the percentage payments; they are made
merely as a bonus to secure certain rights.
An illustration of this system is to be had in the
transactions between the Wells, Fargo Company
and the Southern Pacific. In 1878 the Wells, Fargo
capital was $5,000,000. This was increased to
$6,250,000, and the entire increase of $1,250,000
handed over to the Southern Pacific in consideration
of a fifteen year contract. In 1893, the old contract
having expired, another contract was made, the
express company handing over $688,750 in cash
and 16,625 shares of stock valued at $130 a share,
or $2,161,250. This stock was obtained by increas¬
ing the express company's capital from $6,250,000,
to $8,000,000 (par value).
In this way the Wells, Fargo people have given
«
the Southern Pacific since 1879, exclusive of the per¬
centage payments which now average $2,000,000 a
year, and counting stock and dividends alone,
HOW RAILROADS CONTROL EXPRESS CO's. 63
$17,423,750, including two extra dividends of 300
percent. In addition to this the Southern Pacific
as a stockholder, availed itself of the privilege to
subscribe for additional stock which increased its
holdings to the par value of $4,590,000 which it
later sold for $9,180,000.
Nearly 50 cents of each dollar received by the
express companies goes to transportation lines, about
42 cents is required to pay the expenses of operation,
and about three quarters of a cent goes for taxes.
The remainder is the profit from operation, and is
available for the payment of dividends and other
purposes.
CHAPTER IV.
CLASSIFICATION OF TRAFFIC.
Express companies classify their traffic on the
same general plan as the railroads. There is no
similarity as to the classes in which the articles are
placed, but the main principles of railroad classifica¬
tion are adhered to. Bulk, weight and value are the
ruling factors. A light article, occupying consider¬
able space, and of large value, will be rated higher
than a cheaper one taking up less space and weighing
more. Unlike railroad tariffs, however, express
charges vary according to the weight of the package.
For railroad transportation the shipper pays so
much per 100 pounds for a given commodity regard¬
less of whether he ships 50 pounds, or 500 pounds.
For express transportation the lighter the package
(as a rule) the greater will be the charge per pound.
Instead of classifying the traffic by groups, such
as Class 1, Class 2, etc., as is done by railroads, ex¬
press companies designate the classes by names
indicating the rate they take. There is a Merchan¬
dise rate, a Double Merchandise rate, a One-and-
one-half Merchandise rate, a Three-times Merchan¬
dise rate, a Currency rate, a Gold-coin rate, a General
Special rate, Sections A, D, and E, Scale K, etc.
65
66
CLASSIFICATION OF TRAFFIC.
Official Classification of Express Matter.
The Official Express Classification contains all the
rules, regulations, and conditions which in any way
affect the rates named in the tariff. Under the clas¬
sification are enumerated certain commodities, the
circumstances and conditions under which they
move being different from those pertaining to com¬
modities that move at regular merchandise rates.
The service performed, the risk involved, the volume
of traffic handled, the space occupied, and the degree
of care required to be exercised, among other reasons,
are supposed to account for the variations in charges.
The following excerpts from the official list will serve
to show the nature of the classification.
[Bold-face type indicates items having increases. Roman type indicates items having
decreases.]
COMMODITY.
RATE.
Almanacs and pamphlets of simi¬
lar form to almanacs devoted to
advertising medicines.
Animals, live:
Cats a
Cats b
Deer a.
Dogs, in crates or kennels ..
Dogs, in crates or kennels b
Dogs, in crates or kennels. .
Dogs, in carload lots, 10,000
pounds per car
Merchandise pound rates,
minimum 35 cents.
Merchandise,
Double Merchandise.
Merchandise.
1^ merchandise
do....
do....
Merchandise.
REMARKS.
When the merchandise rate
per 100 pounds is $2 or
more.
When the merchandise rate
is less than $2 per 100
pounds.
When the merchandise rate
per 100 pounds is $2 or
more.
Under the Classification for
1909 dogs returned from
field trials at one-half the
rate going, but not less
than single merchandise.
Under the Classification for
1909 1 attendant allowed
to ride in car free; under
the Classification for 1896
2 attendants.
CLASSIFICATION OF TRAFFIC.
67
Ferrets fl.
Guinea pigs
Opossums a
Rabbits
Birds, live a
Boats, metallic, folding.
Book cases, boxed or crated.
Burial cases, not boxed
Catsup ;
Cereal foods: Oatmeal, cracked
wheat, flour, and other manu¬
factured cereal foods
Cigar boxes, empty, not boxed or
crated.
Crabs, live, from points east of
Ohio and Pennsylvania state
line to points west thereof, and
between points west of the Ohio
and Pennsylvania state line.
Dress forms, boxed or crated
Empties:
Bags and sacks, for news com¬
panies.
Beer empties
Bread baskets or boxes
Burlaps, used for covering ship¬
ments by express.
Butter refrigerators
Butter empties, not exceeding 20
pounds each.
Chicken coops (folding), Knock¬
ed down.
Demijohns, in boxes or kegs .. .
Egg cases
Fish boxes
Flower boxes or crates, not in¬
cluding refrigerator boxes.
Flower boxes or crates, not in¬
cluding refrigerator boxes
Fruit and vegetable empties
(not refrigerators), returned
to original shipper.
Merchandise, pound rates
minimum 35 cents.
.do.
.do.
.do.
, do.
do.
Double merchandise.
.... do
Merchandise
Merchandise, pound rates;
minimum, 35 cents;
when carried by two or
more companies, min¬
imum 30 cents for each
company carrying.
1^ merchandise
Merchandise, pound rates;
minimum, 35 cents.
Merchandise.
One-half merchandise;
minimum, 10 cents.
One-half scale K; mini¬
mum, 15 cents.
10 cents each
One-half merchandise;
minimum, 10 cents.
20 cents each
10 cents each
do.
15 cents each
10 cents each
One-half merchandise;
minimum, 15 cents.
10 cents each
15 cents each.
When the merchandise rate
per 100 pounds is $2 or
more.
Do.
Do.
Other than sectional book
cases, where rate is less
than $1.25 per 100 pounds.
36 quarts capacity or less,
10 cents each; over 36
quarts capacity, 15 cents
each.
General special rates are
about 20 percent less than
the merchandise rate.
Scale K is the scale of rates
on ale, beer, etc., and is
from 20 to 40 percent less
than the merchandise rate.
Weighing 15 pounds or less.
Weighing over 15 pounds.
The rates under the Classifi¬
cation for 1896 applied
only to shipments originat¬
ing at points east of the
Ohio and Pennsylvania
state line destined to
points west of said line.
68
CLASSIFICATION OF TRAFFIC.
Fruit and vegetable empties
(not refrigerators), returned
to original shipper.
36 quarts capacity or less,
10 cents each; over 36
quarts capacity; 15 cents
each.
Ice cream freezers, not exceed¬
ing 5-gallon capacity.
Ice cream freezers, exceeding
5-gallon capacity.
Jugs, in boxes or kegs
Meat boxes
15 cents each
25 cents each
15 cents each
10 cents each
Under the Classification for
1896, fruit and vegetable
empties returned from
points east of the Ohio and
Pennsylvania state line to
points west of the Ohio
and Pennsylvania state
line, and between points
east of the Ohio and Penn¬
sylvania state line were
carried free.
a Under 1896 Classification, between points where the merchandise rate is $2 or more
per 100 pounds, double merchandise rate. Under 1909 Classification, merchandise rate
minimum charge $1, unless the charge at double merchandise is less, in which case the double
merchandise rate must be charged.
b Under 1909 Classification, when charged these rates to fairs or exhibitions, returned
to original point of shipment at one-half the above rates, but not less than single merchandise.
Under 1896 Classification, when double merchandise rate was paid to fairs or exhibitions,
returned free.
Increases Made by Classification.
None of these commodities are embraced in Sec¬
tions A, D, and E. Of recent years express com¬
panies have greatly increased their charges on
empties. Their classification for 1896 showed 50
different classes of empties, and they have increased
their charges on over 50 percent of them, the in¬
creases ranging from 33.3 percent to 200 percent,
and such increases are on empties that move daily
to and from nearly every shipping point of an express
company. It is needless to say that the gross re¬
ceipts of express companies have been materially
increased in the past few years by these increases
in charges on empties. It should be stated, however,
that in 1896 wagon service, such as is now provided,
CLASSIFICATION OF TRAFFIC.
69
was not furnished unless special arrangements were
made.
In 1896 shipments of a number of commodities
were charged at merchandise pound rates for actual
weight, with designated minimum charges varying
from 25 cents on "patent insides" (for newspapers)
to 35 cents on wall paper, linoleum, and oilcloth.
The rates quoted came under "Section B," which
has been entirely eliminated from the latest classifica¬
tion. The commodities named, with the exception
of auxiliary newspapers and "patent insides," now
take higher charges than formerly, because of an in¬
crease in minimum charges. These commodities are:
Cereal Foods
Cracked Wheat
Flour
Linoleum
Oatmeal
Oilcloth
Packages of clothing
to or from public
laundries
Samples of brick or
terra cotta
Soap (samples)
Wall paper
There are other changes in the classification which
produce increases in charges as compared with the
classification for 1896. For instance, under the old
classification, ice cream was charged at gross weights
with an allowance of 25 percent off for ice, while
under the present classification estimated weights
are used according to the capacity of the cans and
charged on the basis of the full capacity of the cans,
whether shipped full or partly filled. It is impossible
to illustrate the increase in charges on account of
inability to state the weights of shipments in cans
of different capacities. There are other instances
where gross weights were used under the classifica¬
tion for 1896 and estimated weights are used under
the classification now in force.
70
CLASSIFICATION OF TRAFFIC
Decreases Made by Classification.
In a number of instances changes have been made
in the official classification which have resulted in
decreased charges. Of the total number of changes
7.4 percent represents decreases in charges on com¬
modities by changing the classification either from
more than merchandise rate to merchandise rate or
from merchandise rate to general special rate. These
affect such articles as bicycle wheels, metallic
boats, children's carriages, dogs (boxed), dress forms,
compressed feathers, guns, honey, thermometers
and velocipedes.
Bicycle wheels, for instance, are now classed as
"merchandise," when formerly they took double
merchandise rates. Honey, which was formerly
carried as "merchandise," is now in the "general
special" class.
The remainder of the changes, amounting to 4.1
percent, represents decreases on such items as empty
baskets returned from dye works, decreased from
merchandise rate to 25 cents each; empty crates and
kennels, decreased from one-half merchandise rate
—minimum 50 cents—to a minimum of 10 cents
when weight is not over 10 pounds, a minimum of
15 cents when not over 20 pounds, and a minimum of
25 cents when not over 40 pounds. For general
special matter, when carried by more than one com¬
pany and either the point of origin or the point of
destination is served by only one express company,
under the classification for 1896 the minimum charge
was 35 cents for each company, while under the new
CLASSIFICATION OF TRAFFIC. 71
classification the minimum charge is 25 cents for
each company. This change affects the charge on
small shipments of general special matter. Blue¬
prints and hop samples under the classification for
1896 were carried at merchandise rates, while now
they are carried at "Section D" rates, x/i cen^ an
ounce, minimum 10 cents.
*
Averages of Selected Rates.
Express companies have used the graduate scale
for many years, and for a long time but few changes
were made in the charges under the several base rates.
Within comparatively recent years, however, material
changes have been effected. For instance, under the
40-cent base rate, the charges on all packages from
6 to 50 pounds, inclusive, have been increased—in
some cases 40 percent. Many other changes were
also made, affecting practically the entire scale.
The official classification is issued yearly and is
adopted by all the companies whose returns are
embodied in the Interstate Commerce Commission's
report. Each classification issued contains changes
either in the graduate scale, in the rules, or in the
classification of commodities. Since the passage of
the Hepburn Act, which classed express companies
as common carriers and made them subject to the
jurisdiction of the Interstate Commerce Commission,
these classifications have been filed with the Com¬
mission by an agent who acts for all companies.
Returns to the express companies from graduated
72 CLASSIFICATION OF TRAFFIC.
charges on shipments at certain rates per 100 pounds
are illustrated by the accompanying tables. For
these averages it was assumed that 50 separate pack¬
ages were shipped at the named rates per 100 pounds,
the first package weighing 1 pound, the second 2
pounds, the third 3 pounds, and so on, the last pack¬
age in the series being a 50-pound shipment.
Average
RATE.
Average
Average
rate per
weight.
charge.
pound.
Pounds.
Cents.
Cents.
$0.40 per hundred pounds
25.50
34.50
1.35
$2.50 per hundred pounds
25.50
102.70
4.03
$5 per hundred pounds
25.50
167.80
6.58
$8.50 per hundred pounds
25.50
262.70
10.30
$9 per hundred pounds
25.50
265.90
10.43
$13 per hundred pounds
25.50
347.90
13.64
$13.50 per hundred pounds
25.50
362.30
14.21
$18.25 per hundred pounds*
10.50
209.50
19.95
*Only shipments of 20 pounds and less have been included for the
reason that on shipments in excess of 20 pounds in weight pound rates
apply when the rate per 100 pounds is $15 or more.
It' will be observed that at the 40-cent rate the
average revenue per 100 pounds would be $1.35; at
$2.50 it would be $4.03; at $5 it would be $6.58; at
$8.50 it would be $10.30; at $9 it would be $10.43;
at $13 it would be $13.64; at $13.50 it would be
$14.21, and so on. The point intended to be shown
in this table is that the patrons of the express com¬
panies do not receive the benefit of the rate per
hundred (or pound rates, as they are termed) on
shipments of merchandise unless the rate per 100
pounds equals or exceeds $2 and the weight of the
shipment equals or exceeds 50 pounds until a rate
CLASSIFICATION OF TRAFFIC.
73
of $15 per 100 pounds is reached, in which case ship¬
ments exceeding 20 pounds in weight are charged for
at pound rates. It thus appears, that the base rates
give no correct indication of the revenues accruing
to express companies from shipments to which grad¬
uated charges are applied.
Base Rates and Distances.
There follow a few illustrations showing the base
rates and the distances between certain points, from
which it appears that express movements under 1,500
miles come under the base rates of $6 and less per
hundred pounds.
From-
Cleveland, Ohio..
New York, N. Y..
Chicago, 111
Cleveland, Ohio..
New York, N. Y.
Chicago, 111
Do
St. Louis, Mo
Washington, D. C
Washington, D. C
Chicago, 111
New York, N. Y..
Kansas City, Mo.
Washington, D. C
New York, N. Y..
Do
Do
To-
Berea, Ohio
Trenton, N. J
Laporte, Ind
Milbury, Ohio.
lAlbany, N. Y
Kingsland, Ind
Terre Haute, Ind. ...
Hammond, Ind
Boston, Mass
Lima, Ohio
Hillsboro, Ga
Chicago, 111
Albuquerque, N. Mex.
Memphis, Tenn
St. Louis, Mo
Kansas City, Mo
Salina, Kans
Dis¬
Base
tance.
rate.
Miles.
12
$0.50
57
.60
59
.50
99
.75
145
.75
159
1.00
178
1.25
279
1.75
463
1.75
562
2.00
897
5.00
912
2.50
916
5.50
929
3.75
1,065
3.00
1,342
4.50
1,528
6.00
Approximately 65 percent of the mileage operated
74 CLASSIFICATION OF TRAFFIC.
by express companies lies east of Omaha and Kansas
City, and it is fair to assume that the largest volume
of express traffic moves between points included in
this mileage. Such movements are covered by base
rates less than $6 per 100 pounds and a very large
proportion of shipments comes under these rates.
Special Graduates and Rates.
There are special graduates used on business
between certain offices in New York state, between
certain offices in the New England states, and also
between New York city and certain offices in the
New England states. These special graduates are
cheaper, as a rule, than those used in other parts of
the country. On packages weighing between 75 and
100 pounds there are no differences in the charges
under the several graduates.
Various points in Massachusetts, Connecticut, and
Rhode Island have been classified into groups and on
local shipments between offices in the various groups
a separate scale is used. There are also other grad¬
uate scales applying between certain New England
points under which, broadly speaking, the charges
are less than those given in the general scale.
Express companies have a scale of rates per $1,000
on shipments of gold coin and currency and a grad¬
uate or minimum scale of charges for shipments of
amounts less than $1,000.
Merchandise rates are used as a basis for com¬
puting the charges per $1,000. For example, when
the merchandise rate between two points is $1 per
CLASSIFICATION OF TRAFFIC.
75
100 pounds, the rate per $1,000 is 65 cents on gold
coin and 40 cents on currency.
The graduate scale is used in ascertaining the
charges on shipments of amounts less than $1,000,
the same as the graduate scale is used for freight
packages weighing less than 100 pounds, the appli¬
cation of which results in higher rates per $100, than
if figured on the basis of the rate per $1,000.
Decrease in the Money Rate.
There has been a marked decrease in the charge
for transporting money by express in the last sixteen
years. In 1896 it cost $4.50 to send $1,000 in money
a certain distance. In 1912 the charge for the same
service is $1.50.
When the merchandise rate per 100
pounds is—
$0.75 and under.
Over $0.75 and not over $1.50
Over $1.50 and not over $2.. .
Over $2 and not over $2.50.. .
Over $2.50 and not over $3.. .
Over $3 and not over $3. 50...
Over $3.50 and not over $4.. .
Over $4 and not over $4.50.. .
Over $4.50 and not over $5...
Over $5 and not over $5.50.. .
Over $5.50 and not over $6.. .
Over $6 and not over $6.50,..
Over $6.50 and not over $7.. .
Over $7 and not over $7.50.. .
Over $7.50 and not over $8.. .
Over $8 and not over $8.50.. .
Over $8.50 and not over $9.. .
Rate Per $1,000 of Currency.
1896.
Present.
Decrease.
Dollars.
Dollars.
Percent.
0.50
0.40
20.0
.75
.40
46.7
1.00
.50
50.0
1.25
.60
52.0
1.50
.75
50.0
1.75
.90
48.6
2.00
1.00
50.0
2.25
1.00
55.6
2.50
1.25
50.0
2.75
1.25
54.5
3.00
1.25
58.3
3.25
1.25
61.5
3.50
1.25
64.3
3.75
1.25
66.7
4.00
1.50
62.5
4.25
1.50
64.7
4.50
1.50
66.7
76
CLASSIFICATION OF TKAFFIC.
Mysteries of Express Classification.
While the express classification presents com¬
plicated features, it is nevertheless much simpler
than the official freight classifications of the rail
carriers. Generally speaking, it is a classification
of exceptions in that merchandise rates apply to all
articles not specifically named therein as taking a
higher or lower rate. The articles named in the
classification as taking higher than merchandise
rates are described by name and the conditions of
packing and shipment are included. The rates are
stated in some multiple of the merchandise rate.
Arrangement of the classification is frequently
such as to lead to the mystification of the rate seeker.
The articles classified are ostensibly in alphabetical
order but not really so. If one sought to find "butter"
in the list he would seek in vain under B for it, but
if he consulted an index would find therein reference
to a page and an item number and at the page
designated would find under the letter G the desig¬
nation "general specials," and under this heading
"butter and imitations of butter." He would not
find pianos under P nor violins under Y, but both
under M—"musical instruments." This arrange¬
ment is excellent for the man who knows, but some¬
what mystifying to one who does not know.
Simpler Classification Suggested.
For the simplification of this classification, it is
suggested by the Interstate Commerce Commission
that instead of the present form, all articles taking
CLASSIFICATION OF TKAFFIC. 77
higher than merchandise rates shall be grouped
under the rate prescribed, as, for example: (a) Under
the heading "13^ times merchandise," there should
appear an alphabetical list of all the articles taking
that rate; (b) under the head of "double merchandise"
an alphabetical list of all the articles taking that rate.
Like provision should be made for each rate higher
than merchandise, and the entire list of articles
should also be arranged alphabetically, with a state¬
ment of the rate applying to each. Thus at a glance
one could consult a list showing all articles that are
charged for at a specified rate, or could determine
at what rate any specific article would be charged.
Likewise,1 it is suggested that the classification
should be simplified by abolishing the contradictory
term "general specials," and similarly grouping the
articles taking lower than merchandise rates under
headings, defining the proportion of the merchandise
rate which shall apply, as, for example, three-quarters
merchandise, one-half merchandise, etc. By this
method of stating the rates the present complicated
and obscure system would be so simplified that all
could understand. There would be but one base
rate—the merchandise rate. All others would be
stated in some multiple or some fraction of this rate.
Evils of the Present System.
The express service bears a very intimate personal
relation to the needs of every householder. The
citizen who seldom or never ships freight by railroad
is a frequent patron of the express. He knows
78 CLASSIFICATION OF TRAFFIC.
nothing of classifications or of rates, but he is keenly-
alive to discriminations and to unfair treatment.
When he learns from a merchant whom he patronizes
that it will be to his advantage to let the merchant
pay the express charges, and when he finds that the
parcel is carried for less than he can secure its trans¬
portation, he does not know that an obscure provi¬
sion of a cryptic classification makes this possible;
he only knows that he is somehow discriminated
against. In the development of large commercial
enterprises the traffic managers who control a heavy
tonnage have a keen eye to the framing of such docu¬
ments. They are almost always present when they
are constructed or revised, each intent upon securing
some provision that will work to the advantage of
his particular line. But the ordinary citizen knows
nothing of the nature or necessity of the classification.
So there gradually creep into such documents provi¬
sions favorable to this or that interest which, stand¬
ing undisputed and unnoticed, in time come to be
considered as vested rights.
CHAPTER Y.
COMPUTATION OF EXPRESS RATES.
Computations of express charges are here con¬
sidered under the following heads: (a) Classification
of Express Matter ; (b) Explanation of the Graduate ;
and (c) Consideration of Results.
In the express business, as in that of the railways,
the first step toward applying the rate is the classifica¬
tion of the commodity. Speaking broadly, this
classification involves two elements—the character
of the shipment and its value—this latter element
being of especial significance. The somewhat com¬
plicated system of express charges now in use seems
to be a development from the old merchandise rate
computed on a hundred-pound basis, and most of
the present charges, whether on valuables or on
packages, are referable to this merchandise rate.
To a considerable extent, also, the classification of
express matter and the rules for applying the rate are
influenced by the fact that the service performed by
an express company touches the service of the post-
office and banks on the one side and of the freight
service of railways on the other. Competition among
express companies seems to exert little influence upon
express rates.
79
80 COMPUTATION OF EXPRESS RATES
Classification of Express Matter.
All commodities moved by express are broadly
classified into "Money" and "Freight." Under
"Money" are included not only shipments of actual
money, but of stocks, bonds, and valuable papers of
all kinds, bullion, and other articles of unusual value.
"Freight" shipments are subclassified as "Mer¬
chandise," "General Special," and "Sections A,
D, and E."
As already stated, merchandise shipments are the
kind of shipments from which the general system of
express charges seems to have developed, and mer¬
chandise freight includes all shipments for which no
specific provision is made in the classification; that
is to say, it includes all shipments other than of
"Money," "General Special," and "Sections A, D,
and E."
The application of rates to merchandise shipments
is equivalent to the further classification of merchan¬
dise freight, and for that reason the general rules
may be stated in this connection.
How Rates are Based on Weight.
When the basal rate (or rate per 100 pounds) given
in the tariff is less than $2, graduated charges are
assessed on all shipments weighing less than 100
pounds. When the basal rate is $2 or more per 100
pounds, graduated charges are assessed on shipments
not exceeding 50 pounds in weight.
When the weight is in excess of 50 pounds and the
rate is $2 or more per 100 pounds, pound rates are
COMPUTATION OF EXPRESS RATES. 81
applied. Further, when the basal rate per 100
pounds is $15 or more, shipments of 20 pounds or more
are also charged at the pound rates.
Merchandise rates are based upon a value of not
exceeding $50 per shipment and no further liability
is assumed by the express company unless the shipper
declares at time of shipment a higher value.
When the declared value of any shipment exceeds
$50 the following additional charges are made on the
value in excess of $50 :
When the merchandise rate is $3 or less per 100 pounds, 10
cents for each $100 value or fraction thereof;
When the merchandise rate exceeds $3 and is not more than
$8 per 100 pounds, 15 cents for each $100 value or fraction
thereof ;
When the merchandise rate exceeds $8 per 100 pounds, 20
cents for each $100 value or fraction thereof.
Nature of "General Special" Freight.
"General Special" freight covers most shipments
of perishable matter, such as bread, butter, cheese,
cream, eggs, fish, fruit, meat, poultry, vegetables and
the like, Commodities of this class are given a
lower rate per 100 pounds than is charged on mer¬
chandise shipments, the charge being computed on a
base basis, that is to say, the charge is made by multi¬
plying the weight of the commodity by the rate, with
a minimum rate of 35 cents. When such a commodity
is carried by more than one company, a 25-cent
minimum is charged by each carrying company.
"Section A" shipments comprise articles represent¬
ing advertising matter distributed gratuitously.
Charges on this class of shipments must be prepaid or
82 COMPUTATION OF EXPRESS RATES.
guaranteed, and merchandise pound rates are
charged, with a minimum of 35 cents. Such articles
as advertising signs, almanacs, calendars, catalogues,
printing blotters, etc., take these rates.
"Section D" rates are applicable to such consign¬
ments as printed books, circulars, handbills, litho¬
graphs, magazines, periodicals, pamphlets, etc., the
value of which must not exceed $10, and the charges
on which must be prepaid. Packages shipped under
the required conditions are charged for at 1 cent for
each 2 ounces or fraction thereof, minimum 10 cents,
except that unless otherwise provided, packages
weighing 50 ounces or more each are charged 2 cents
less than the charge at the rate of 1 cent for each
2 ounces.
Provisions of "Section E."
"Section E" applies on packages of merchandise
or samples thereof, except valuable packages. No
package valued in excess of $10 can take "Section E"
rates, and the charges must be prepaid. Under the
conditions named packages will be charged at 1
cent per ounce minimum 15 cents, except that on
packages between points in the eastern, central or
southern states, and points in the far west and north¬
west where there is no company represented at the
originating point that is also represented at the
destination point, the minimum charge is 25 cents,
and between points in the northern and western states
and points in the far west and northwest the 15-
cent minimum is charged for each company carrying
COMPUTATION OF EXPRESS RATES. 83
unless there is a company represented at the point
of origin which is also represented at the destination
point.
The Graduate—What It Is.
The amounts paid on a large proportion of the
shipments offered to express companies for transpor¬
tation are computed from graduate tables of weights
and charges. Such charges are commonly known
as "graduated charges," and because of the impor¬
tance of these tables in explaining the system of ex¬
press rates, the subject of graduates calls for some
extended attention.
The first step necessary to ascertain the charge on
a package is to find the rate per 100 pounds from point
of origin to point of destination. This will be found
by consulting the printed tariff which is supplied each
office, and which shows the rate per 100 pounds
from originating office to all other offices. It is then
necessary, if the shipment is of little weight, to con¬
sult the graduate table in order to find the actual
charge upon the actual weight. In this table the rates
per 100 pounds, which are recognized as the base
rates, are given at the heads of columns, the weights
being shown at the left. Opposite the weights,
under the respective base rates, are given the amounts
of the charges on shipments.
Single and Double Graduate Charges.
On shipments of seven pounds or less a "single
graduate" is used between any of the offices of the
84 COMPUTATION OF EXPRESS RATES.
thirteen companies which make returns to the
Commission. When a single graduate is used the rate
from point of origin to destination is ascertained,
and the charge is graduated under that rate whether
it be an established through rate or a combination of
local rates. In case of a shipment which exceeds
seven pounds in weight, and which is. destined to an
"exclusive office" of some company not represented
at the point of origin (that is to say, an office in a town
in which only one company does business), or in case
the point of origin is an exclusive office and the des¬
tination is a town in which the originating company
is not represented, a "double graduate" charge is
made, the company with which the shipment origi¬
nated graduating once under its rate from point of
origin to the transfer point nearest or most con¬
venient to destination, and the delivering company
once under the rate from point of transfer to desti¬
nation. The result of this practice is to increase the
amount paid by the shipper over what he would
have paid if his shipment had been between points
calling for the use of a single graduate.
It should be stated, however, that the single grad¬
uate only is used between offices of the Adams Express
Company and those of the Southern Express Com¬
pany, regardless of whether they are common points
or exclusive offices.
Queer Things in Money Tariffs.
As further explaining the rules for computing ex¬
press charges on the various classes of commodities
offered for shipment under the various conditions
COMPUTATION OF EXPRESS RATES. 85
recognized by the rules, attention is called to certain
apparent inconsistencies in the results of the applica¬
tion of these rules.
There seems to be no close relation between the
transportation of valuable merchandise and a com¬
modity of equal value classified as "money." An
illustration will make this clear. Under the applica¬
tion of the rules for charges for merchandise on which
a high value is declared, the charges on a shipment
weighing 40 pounds, and valued at $1,000, from
Chicago to Minneapolis (the merchandise basal rate
being $2 per 100 pounds) would be computed as fol¬
lows:
Graduated charge on 40 pounds $1.00
Valuation charge on $1,000 value 1.00
Total charge 2.00
The corresponding charge on a shipment of $1,000
in currency from Chicago to Minneapolis is 50 cents.
Another comparison may be drawn from the case
recited. Two shipments, one a 40-pound box, valued
at $50, and the other a package of $1,000 in money,
can be made for charges 25 percent less than a single
merchandise shipment of the same weight and value.
In this case, two separate services, not only en
route but at the points of origin and destination,
can be had for a smaller charge than for a single
merchandise shipment. The probable explanation
of these apparent inconsistencies is found in the fact
that charges for the transportation of currency are
exposed to competition with the post-office as well
as with banks and other agencies of commercial
exchange, whereas the shipment of valuable mer-
86 COMPUTATION OF EXPRESS RATES.
chandise is a service in which the express companies
are without competitors.
Low Rates on Newspapers.
The transportation of daily newspapers by express
companies also is subject to peculiar rules affecting
the rates. Daily newspapers, if shipped by pub¬
lishers or news companies and forwarded on the day
of issue, are carried for one-half cent per pound for
each carrying company between all points where
the merchandise rate does not exceed $4.50 per
100 pounds, when no wagon service is rendered
either in receipt or in delivery, and when special
mail or newspaper trains are not used. When wagon
service is rendered, or when special mail or news¬
paper trains are used, 1 cent per pound is charged
for each company. Under the application of this
rule, the charge on a 50-pound package of daily
papers from New York to Kansas City, if collection
and delivery service were rendered, would be 50
cents. If no wagon service were rendered, the
charge would be 25 cents. The charge on a package
of merchandise of the same weight between the same
two points would be $2.25.
Charges on newspapers other than those published
daily, magazines, and similar publications which are
registered in the post-office as second-class matter,
if shipped by publishers or news companies, must be
prepaid, except that returned shipments may be
forwarded "collect" when guaranteed by consignee.
Between points in what may be called the Atlantic
states, where the merchandise rates do not exceed
COMPUTATION OF EXPRESS RATES. 87
$4.50 per 100 pounds, the rate is 1 cent per
pound, minimum 10 cents a package for each carrying
company, except between points where a single
graduate is authorized. Between points, both of
which are in the states called in the official express
classification "Territorial Group No. 2," and which
comprise 31 states, including Alabama, Arizona,
Louisiana, Michigan, Nebraska, Ohio, Oklahoma,
Texas, Utah, and Wyoming, this rate also applies
between all points where the merchandise rate does
not exceed $4.50 per 100 pounds. Between points
in the Atlantic states and those in Group No. 2, or
between all points where the merchandise rates
exceed $4.50, merchandise pound rates apply, with
a minimum charge of 25 cents. The working of this
rule may be illustrated by a comparison. The
charge on a 50-pound package of magazines from
New York to Atlanta, Ga., with both collection and
delivery service furnished, would be 50 cents. On
a package of merchandise of the same weight between
the same points the charge will be $2. The express
rules for rates on newspapers, magazines, and the
like may be due to the competition existing between
the post-office and the express companies for this
class of freight.
Some Inconsistencies in Rates.
There are also apparent inconsistencies or ine¬
qualities resulting from the application of the grad¬
uate tables. An examination of these tables and
of their application to the classes of shipments to
88 COMPUTATION OF EXPRESS RATES.
which they pertain shows that the patron of the
express companies does not receive the benefit of
the rates per 100 pounds, or pound rates, as they are
termed, on shipments of merchandise unless the rate
per 100 pounds is $2, or more and the weight equals
or exceeds 50 pounds, until a rate of $15 per 100
pounds is reached, in which case a shipment of 20
pounds or more will be charged at pound rates.
Summary No. 1, accompanying, gives specific
illustrations of the rates per pound charged under
the graduate scale on 50 packages ranging from 1
pound to 50 pounds. The base rate selected is
$2.50, being the rate from New York to Chicago.
A number of inconsistencies in the rates per pound
may be noted. For instance the rate per pound on
15-pound shipments is 5.67 cents, while on 16-pound
shipments it is 6.25 cents—more than one-half cent
per pound higher despite the fact that the rate per
pound is supposed to decrease as the weight increases.
COMPUTATION OF EXPRESS RATES. 89
Summary No. 1—Graduated Charge and Rate per Pound on 50
Shipments from 1 to 50 Pounds in Weight at Base Rate of
$2.50 per 100 Pounds.
Weight.
Charges
Rate
per
pound.
Wei
Dollars
Cents
1 pound
0.25
25.00
26 pounds
2 nounds
.35
17.50
27 pounds.
3 pounds
.45
15.00
28 pounds
4 pounds.
.55
13.75
29 pounds
5 pounds
.60
12.00
30 pounds
6 pounds
.70
11.67
31 pounds
7 pounds
.70
10.00
32 pounds
8 pounds
.75
9.38
33 pounds
9 pounds
.75
8.33
34 pounds
10 pounds
.75
7.50
35 pounds
11 pounds
.85
7.73
36 pounds
12 pounds
.85
7.08
37 pounds
13 pounds
.85
6.54
38 pounds
14 pounds
.85
6.07
39 pounds
15 pounds
.85
5.67
40 pounds
16 pounds
1.00
6.25
41 pounds
17 pounds
1.00
5.88
42 pounds
18 pounds
1.00
5.56
43 pounds
19 pounds
1.00
5.26
44 pounds
20 pounds
1.00
5.00
45 pounds
21 pounds
1.10
5.24
46 pounds
22 pounds
1.10
5.00
47 pounds
23 pounds
1.10
4.78
48 pounds
24 pounds
1.10
4.58
49 pounds
25 pounds
1.10
4.40
50 pounds
Rate
Charges
per
pound.
Dollars
Cents
1.15
4.42
1.15
4.26
1.15
4.11
1.15
3.97
1.15
3.83
1.25
4.03
1.25
3.91
1.25
3.79
1.25
3.68
1.25
3.57
1.25
3.47
1.25
3.38
1.25
3.29
1.25
3.21
1.25
3.12
1.25
3.05
1.25
2.98
1.25
2.91
1.25
2.84
1.25
2.78
1.25
2.72
1.25
2.66
1.25
2.60
1.25
2.55
1.25
2.50
Average weight per package pounds 25.50
Average charge per package $1.03
Average rate per pound cents 4.03
The difference in charges caused by the application
of the double graduate is shown in the accompanying
table (Summary No. 2.) :
CO
o
Summary No. 2.—COMPARISON OF CHARGES UNDER A SINGLE GRADUATE, $1.10 BASE RATE, AND DOUBLE
GRADUATE 60-CENT AND 50-CENT BASE RATES.
Weight.
1
2
3
4
5
6
7
pound.,
pounds,
pounds.
pounds.
pounds.
pounds,
pounds.
8 pounds.
9 pounds.
10 pounds.
11 pounds.
12 pounds.
13 pounds.
14 pounds.
15 pounds.
16 pounds.
17 pounds.
18 pounds.
19 pounds.
20 pounds.
21 pounds.
22 pounds.
23 pounds.
24 pounds.
25 pounds.
CHARGES.
RATE PER POUND.
CHARGES.
RATE PER POUND.
Single
Double
Single
Double
Weight.
Single
Double
Single
Double
graduate.
graduate.
graduate.
graduate.
graduate.
graduate.
graduate.
graduate.
Dollars.
Dollars.
Cents.
Cents.
Dollars.
Dollars.
Cents.
Cents.
0.25
(a)
25.00
(a)
26 pounds
.70
.85
2.69
3.27
.30
(a)
15.00
(a)
27 pounds
.70
.85
2.59
3.15
.35
(a)
11.67
(a)
28 pounds
.70
.85
2.50
3.04
.35
(a)
8.75
(a)
29 pounds
.70
.85
2.41
2.93
.40
(a)
8.00
(a)
30 pounds
.70
.85
2.33
2.83
.45
(a)
7.50
(a)
31 pounds
.75
.85
2.42
2.74
.45
(a)
6.43
(a)
32 pounds
.75
.85
2.34
2.66
.50
0.65
6.25
8.12
33 pounds
.75
.85
2.27
2.58
.50
.65
5.56
7.22
34 pounds
.75
.85
2.21
2.50
.50
.65
5.00
6.50
35 pounds
.75
.85
2.14
2.43
.55
.65
5.00
5.91
36 pounds
.80
.90
2.22
2.50
.55
.65
4.58
5.42
37 pounds
.80
.90
2.16
2.43
.55
.65
4.23
5.00
38 pounds
.80
.90
2.11
2.37
.55
.65
3.93
4.64
39 pounds
.80
.90
2.05
2.31
.55
.65
3.67
4.33
40 pounds
.80
.90
2.00
2.25
.60
.65
3.75
4.06
41 pounds
.90
.90
2.20
2.20
.60
.65
3.53
3.82
42 pounds
.90
.90
2.14
2.14
.60
.65
3.33
3.61
43 pounds
.90
.90
2.09
2.09
.60
.65
3.16
3.42
44 pounds
.90
.90
2.05
2.05
.60
.65
3.00
3.25
45 pounds
.90
.90
2.00
2.00
.65
.75
3.10
3.57
46 pounds
1.00
1.00
2.17
2.17
.65
.75
2.95
3.41
47 pounds
1.00
1.00
2.13
2.13
.65
.75
2.83
3.26
48 pounds
1.00
1.00
2.08
2.08
.65
.75
2.71
3.12
49 pounds
1.00
1.00
2.04
2.04
.65
.75
2.60
3.00
50 pounds
1.00
1.00
2.00
2.00
O
o
g
d
h
î>
h
HH
O
2
o
tel
tel
X
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w
tel
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tel
Tïl
Average charge per shipment:
Single graduate cents. .67.6
Double graduate do... 74.5
Average rate per pound:
Single graduate cents ..2.65
Double graduate do 2.92
(a) The double graduate is not used until the shipment exceeds 7 pounds in weight, and the charges on packages weighing from 1
7 pounds, inclusive, would be the same as under a single graduate.
to
COMPUTATION OF EXPRESS RATES. 91
How the Double Graduate Works.
As a specific illustration of the application of the
double graduate, a shipment originating with the
American Express Company at Syracuse, N. Y.,
and destined to Avon, N. Y., an exclusive office of
Wells, Fargo & Company, may be taken. The
Syracuse office would way-bill the shipment to
Rochester, graduating under a base rate of 60 cents.
At Rochester the American Express Company would
transfer it to Wells, Fargo & Company, which latter
company would rebill and graduate under a 50-cent
base rate. The amount paid by the customer would
be the sum of the graduated charges, Syracuse to
Rochester, and Rochester to Avon, whereas if more
than one company were represented at Avon, or if
the American Express Company reached Avon also
a single graduate under a $1.10 base rate would be
used. The American Express Company receives
as much for transferring the shipment to Wells,
Fargo & Company as it would for making delivery
perhaps requiring a wagon haul of several miles,
and Wells, Fargo & Company receive as much for
rebilling as they would if required to call at the cus¬
tomer's residence or place of business to pick up
the shipment. The effect of the use of the double
graduate is that, as is shown in the table, each pack¬
age costs the patron of the express company an
average of over one-quarter cent per pound more
than if the single graduate were used. The result in
making rates from points where the delivery company
is not represented is shown in the Boise case.
92 COMPUTATION OF EXPRESS RATES.
Facts Presented in Boise Case.
Inequalities resulting from the application of the
double graduate were involved in the case of the
Boise Commercial Club vs. the Adams Express Co.,
et al. The evidence in this case showed the following
charges on 8-pound packages:
Buffalo, N. Y., to Boise, 2,437 miles $1.20
Corfu, N. Y. (22 miles east of Buffalo), to Boise, 2,459
miles 2.20
Cleveland, Ohio, to Boise, 2,295 miles 1.10
North Eaton, Ohio, to Boise, 2,274 miles 2.10
The inequalities here pointed out arise from the
fact that the Pacific Express Company was not repre¬
sented at the points of origin from which the higher
charges are assessed and that no other express com¬
pany than the Pacific Express Company was repre¬
sented at Boise. Under such conditions the com¬
panies handling the shipments graduate under their
base rates from point of origin to transfer point and
from transfer point to destination.
How the Shipper is Affected.
The same rule would be applied if it should be
necessary for more than two companies to handle
a shipment. For example, if a package originating
at an exclusive office of either the Great Northern
or the Western Express Company were destined to
an exclusive office of the Globe Express Company,
the originating company would graduate under its
rate to the transfer point, at which place the ship-
COMPUTATION OF EXPRESS RATES. 93
ment would be delivered to the Adams or some other
company. This intermediate company would, in
turn, graduate under its rate to Denver, and the
Globe (the delivering company) would graduate
under its rate from Denver to destination. Thus,
the cost to the patron would be the sum of the three
graduates.
Further light is thrown upon the express tariff
situation by comparing the cost to the patron of
sending freight by express and by the railway, and
also by comparing the amount accruing to the rail¬
way from a shipment as railway freight on the one
hand and as express freight on the other. There
are, of course, differences in the conditions and in
the value of the service in the two cases which may
justify the difference in charges.
The most significant fact respecting the use of the
table of graduate charges is that the amounts paid
by shippers for express service may be raised or
lowered by changes in the graduate scale without
any change in the basal rate per 100 pounds and that
a comparatively recent change in the graduate scale
has resulted in an increase in actual charges.
Working of Three-Graduate Rule.
As a specific example of the working of the rule
applying to three graduates, the following illustra¬
tion may be given : An 8-pound package of ordinary
merchandise originating at Litchfield, Minn., an
exclusive office of the Great Northern Express Com¬
pany, destined to Telluride, Colo., an exclusive office
94 COMPUTATION OF EXPRESS RATES.
of the Globe Express Company, would take three
graduates. The Great Northern would way-bill the
shipment to Sioux City, Iowa, its transfer point
nearest to destination, graduating under a base rate
of $1.50, which would make its charges 55 cents.
At Sioux City the shipment would be transferred to
some intermediate company which has direct con¬
nection with the delivering company. This inter¬
mediate company, say the American, would way-bill
the package to Denver, its office nearest to destina¬
tion, and would graduate under a base rate of $4,
that being the rate per 100 pounds from Sioux City
to Denver, which would make the American's charge
$1. The package would be transferred to the Globe
Express Company, which would graduate under its
base rate to Telluride, $4.50, making its charge $1.
The cost to the patron would be $2.55, the sum of
the three graduates. If any one company could
have handled the package through from point of
origin to destination, or if both the point of origin
and the point of destination were common points,
the charges would have been $1.20. If one company
had handled it from Litchfield to Denver, and
another company from Denver to Telluride, the
charge would have been $2.15.
Overcoming the Graduate Rule.
In this connection it may be pointed out that if
the shipper would divide the 8-pound package into
two 4-pound packages, the two would be delivered
for $1.20. If divided into a 1-pound package and
COMPUTATION OF EXPRESS RATES. 95
a 7-pound package, the charges on the two would
be $1.30. If divided into a 3-pound package and a
5-pound package, the charges would be $1.25. If
divided into eight separate packages weighing
1 pound each, the charges would be $2.40. These
apparent inconsistencies are caused by the fact that
on packages not exceeding 7 pounds in weight only
one graduate under the through rate is used, as has
previously been explained.
It may also be noted that if the value of the pack¬
age did not exceed $10, and the charges were prepaid,
the shipment would be entitled to take the "Section
E" rate of 16 cents per pound, making the prepaid
charge $1.28; whereas if the consignee should pay
the charges, the shipment would be charged for at
the graduated charge, $2.55. It thus appears that
there would be a difference of $1.27 between the
"collect" and "prepaid" charges on the same con¬
signment.
It is hard for the shipper to discover that there is
a lower rate available on the same articles if he
knows how to get it. The so-called section-A rate
makes a distinction in favor of the man who is ship¬
ping the same articles for free distribution, as adver¬
tisements, which under section D are charged at 8
cents a pound. If a shipper of catalogues or blotters,
books, cards, chromos, circulars, etc., is willing to
declare that they are for "free distribution," mer¬
chandise pound rates are applied, which for any rate
of less than $8 per 100 pounds is cheaper than the
section-D rate when the package weighs over 4
pounds. With these two schedules and the mer-
96 COMPUTATION OF EXPRESS RATES.
chandise graduated scale provided in the body of
the classification to cover the same general classes
of articles, it is not surprising that three different
shippers of the same identical article may be charged
three different rates between the same points, accord¬
ing to their knowledge or lack of knowledge of the
requirements with respect to marking, prepayment,
or description of contents.
Various Scale Rates.
In addition to section A, D, and E rates, a series
of scale rates providing lower charges on a variety
of products are published. Cheese, for example,
(under scale Z), is rated at from 60 to 80 percent
of merchandise pound rates with a minimum of 25
cents for each company carrying. Live poultry and
fowl in crates are charged, under scale 0, at from
74 to 80 percent of the merchandise rates. Eggs,
under scale M, command from 60 to 80 per cent of
the merchandise rate; minimum charge, 35 cents.
"General specials" take the so-called scale-N rate,
which varies in relation to the merchandise rate,
from 60 to 80 percent thereof. A minimum of 35
cents is charged on this class.
Scale-K rates provide for the transportation of
temperance beverages generally, and beer. Charges
vary from 60 to 80 percent of the merchandise rate,
the minimum charge being 30 cents.
Scale L covers the shipment of berries in crates,
providing package charges for various sizes of crates,
with a minimum of 35 cents per shipment. The 100-
COMPUTATION OF EXPRESS RATES. 97
pound rate on berries varies from 60 to 80 percent
of the merchandise rate and the package rate varies
from 5 cents on a 24-pint crate to $12 on a refrigerator
box containing eight 24-quart crates, dependent
upon the length of the haul.
Scale M provides a case rate on eggs, which varies
from 14 cents for a case of 30 dozen to $3.30 for a
case of 36 dozen, according to the distance carried.
Scale J provides a carload rate on horses. The
maximum number of horses carried in a car under
this rate is 28, and the rules provide that the charges
must be made on an estimated weight of 10,000
pounds per car. This applies, although the shipment
may weigh considerably more than 10,000 pounds,
if loaded to the limit above named. The carload
rate varies from $350 per car between points, where
the merchandise rate is over $3.50 and not over $4
per 100 pounds, to $1,100 per car for distances where
the merchandise rate is over $13.25 and not over
$13.50 per 100 pounds. On shipments moving to
points where the rate is less than $3.50 per 100
pounds, carloads of horses are charged for at the
merchandise pound rate on the basis of 10,000
pounds per car.
It is fundamental that there can be but one lawful
rate between two points, and the law takes no
cognizance whatever of the distinction made by the
express companies between prepaid and collect ship¬
ments. It is a carrier's right as a public-service
corporation to demand prepayment on all shipments
and it may not distinguish between persons who
pay in advance and those who do not.
CHAPTER VI.
PROFITS OF EXPRESS BUSINESS.
There is probably no line of business industry,
certainly no branch of transportation service, in
which such large profits are obtained as in the car¬
riage of express matter. Some of the returns shown
by the official statements are phenomenally large.
Take the case of the Northern Express Company.
This corporation was organized in 1906 with a paper
capital of $5,000,000. No money was secured by
the issue of the stock, the entire amount being turned
over to the Northern Pacific railway for exclusive
express privileges for fifty years. In 1911 the net
earnings were $433,441, or nearly 9 percent on the
entire paper capital.
-#
Earnings of Northern Express Co.
In 1910, $600,000, or exactly 12 percent was paid
out in dividends, and $135,969.27 carried to the
credit of the profit and loss account, making the
undivided surplus on hand June 30th, 1910, $660,-
160.52, or enough for another 13 percent dividend
if this surplus should be distributed. And the
Northern, it should be remembered, is not one of the
"Big Six." It is a company of respectable propor-
99
100 PROFITS OF EXPRESS BUSINESS.
tions, but it is young, and its volume of business as
yet comparatively insignificant in comparison with
that of the older and larger companies.
In 1910 the gross operating receipts of the Northern
were $3,469,964.88, on which it cleared $1,696,841.31
after paying the railways $1,773,123.57. The operat¬
ing expenses were $952,417.89, which deducted from
$1,696,841.31 left $744,423.42. From this taxes
amounting to $51,340.24 were paid, leaving $693,-
083.18. An income of $42,886.09 from " other
sources" brought the total net income up to $735,-
909.27.
Financial Showing For 1911.
In 1911 the conditions were somewhat different.
The net earnings were only $433,441, a decline of
$300,000 from 1910, and the amount distributed as
a regular dividend was only $350,000, or $250,000
less than the year before. Despite this the share¬
holders got $600,000, (12 percent) the same as they
did in 1910. How? By declaring dividends of
$250,000 payable from surplus.
And this withdrawal of $250,000 from the surplus
fund left it within $160,610 as strong as it was in
1910, additions of $89,390 having been made during
the year. June 30, 1910, the surplus was $660,161.
June 30, 1911, after distributing $250,000, it was
$499,551.
After the railways have been paid for the privilege
of conducting an express business the main expenses
are those for labor, (messenger and clerk hire)
PROFITS OF EXPRESS BUSINESS. 101
superintendence, cost and maintenance of equipment
(horses, wagons, safes, etc.) supplies and advertising.
There is an interesting study in the following
official figures showing the gross earnings, profits
and dividends of the various companies.
Adams Express Company.
Gross operating receipts (1911) $32,855,185. Paid
for express privileges $17,083,832. Operating ex¬
penses $14,271,042. Net operating revenue $1,500,312.
Out of this taxes to the amount of $245,480 were
paid, leaving $1,254,832. There was a loss of
$14,284 on outside operations, and an income of
$2,590,413 from other sources, making the net
income $2,825,489. Of this $1,211,280 was used for
dividends, and $1,614,209 placed to the credit of the
profit-and-loss account, making the total undivided
surplus $25,941,419.
It is impracticable to compute the rate of dividend
accurately in this case as the stock has no par value,
being merely representative of membership in an
association. There are 120,000 shares. Allowing
that these were issued at the customary valuation
of $100 each the capital would be $12,000,000, and
the $1,213,680 distributed in dividends in 1910 would
represent a little over 10 percent. But in this con¬
nection it is well to remember that 108,000 shares
(par value at least $10,800,000) were issued in the
form of dividends, and further that $36,000,000 in
bonds were also issued to shareholders as a distribu¬
tion of assets.
102 PROFITS OF EXPRESS BUSINESS.
With the $1,614,209 placed in the surplus fund in
1911 the actual earnings for that year were practi¬
cally 25 percent.
American Express Company.
Gross operating receipts (1911) $41,683,196. Ex¬
press privileges $19,372,526. Operating expenses
$18,996,798. Taxes, $353,358. Other income,
$1,505,562. Net income, after deducting $50,068 for
miscellaneous expenditures, $4,416,008. This was
all carried to the credit of profit and loss. Divi¬
dends amounting to $2,119,200 were paid out of this
fund, leaving a surplus of $20,758,072.
The capital of the American is nominally $18,000,-
000, but only a small fraction of this amount was
ever paid in. The earnings in 1911 would be suffi¬
cient to pay over 11 percent on $18,000,000, and the
surplus fund if divided would give over 110 percent.
The total amount of cash received for the 180,000
shares at the time of consolidation was only $900,-
000, or $5 each. On this basis the earnings of 1911
were equivalent to 420 per cent.
Globe Express Company.
Gross operating réceipts (1910) $604,112.70. Ex¬
press privileges $304,458.98. Operating expenses
$216,537.78. Net operating revenue $87,921.20.
Taxes, $8,930.83. Operating income, $78,990.37.
Other income $219,269.73. Total income, $298,-
260.10. Dividends $180,042.00, or 706 percent on
PROFITS OF EXPRESS BUSINESS. 103
the $25,485 actually paid in as capital. The author¬
ized capital of the Globe is $5,000,000, divided
into 50,000 shares of $100 each. Only 30,007 shares
have been issued, however, and these were sold to
the Denver & Rio Grande, and the Rio Grande
Western railways for $25,485. The Globe, in 1910,
also carried to the credit of profit and loss $118,218.10,
making the surplus fund $403,979.13. If the entire
net earnings of $298,260.10 had been divided as divi¬
dends in 1910 the rate would have been approximately
1,200 percent. Division of the surplus fund would
give 1,600 percent additional.
Great Northern Express Company.
Gross operating receipts in 1910, $2,524,064.28.
Express privileges, $1,056,082.42. Operating ex¬
penses, $699,553.92. Net operating revenue, $768,-
427.94. Taxes, $43,549.97. Total income, $724,-
877.97. Dividends, $700,000. Carried to credit of
profit and loss, $24,877.99. Total surplus, $182,-
810.90.
The actual paid-in cash capital of the Great North¬
ern is $100,000. There are 9,000 other shares which
were issued in return for contract privileges. On the
money actually paid in the dividends amounted to
700 percent, but, counting all the stock, which
amounts to $1,000,000, the earnings were 70 percent.
While all the stock shares in the earnings it should
be borne in mind that the net income of $724,877.97
was made from an investment of $100,000 in cash.
In 1911 the Great Northern payments to the rail-
104 PROFITS OF EXPRESS BUSINESS.
roads increased $499,901, and its operating expenses
increased $79,324. At the same time its receipts
were only $78,084 larger than in 1910. Consequently
its net operating revenue fell off $501,141. The
dividend amounted to $100,000, or $600,000 less than
the preceding year, but the amount carried to the
credit of profit and loss was $128,791, as against
only $24,878 in 1910.
National Express Company.
Gross operating receipts (1910) $1,185,180.53.
Express privileges, $457,193.67. Operating expenses
$583,736.00. Net operating revenue $144,250.86.
Taxes, $5,366.67. Net income, $138,844.19. This
entire amount was credited to profit and loss, and a
dividend of $56,527 paid out of the surplus fund,
leaving a deficit of $8,753. In 1911 the amount
placed in the surplus fund was $139,659, and a divi¬
dend of $127,739 was distributed.
The National has a nominal capital of $500,000,
but only $75,500 was ever paid in. On this the divi¬
dend of 1911 was equivalent to about 170 percent.
Pacific Express Company.
Gross operating receipts (1910) $7,743,819.21. Ex¬
press privileges, $3,724,950.48. Operating expenses,
$2,783,859.75. Taxes, $71,585.04. Net operating
income, $1,163,423.94. Other income, $27,421.54.
Total net income, $1,190,845.48. Dividends paid,
$360,000.00. Carried to credit of profit and loss,
PKOFITS OF EXPKESS BUSINESS. 105
$830,845.48. Dividends declared out of surplus,
$600,000.00. Balance to credit surplus fund, $1,478,-
120.17.
The capital of the Pacific (which is now out of
business) consisted of 60,000 shares of a par value of
$100 each, a total of $6,000,000. No money was ever
paid in on this stock. It was all issued in return for
express contracts and franchises, and was held by the
Missouri Pacific, the Wabash, and Union Pacific
systems. The net earnings of 1910, if all distributed,
were sufficient to pay about 20 percent on the entire
capitalization, despite the fact that no cash was in¬
vested aside from that provided out of the revenues
and charged to operating expenses. There was
enough money left in the surplus fund, after the dis¬
tribution of $600,000, to pay an additional 25 per¬
cent.
Southern Express Company.
Gross operating receipts (1910) $13,880,441.52.
Express privileges, $6,610,497.66. Operating expenses
$5,279,605.93. Losses outside operations, $4,851.29.
Taxes, $140,513.22. Income from other sources,
$293,137.72. Total gross income, $2,138,111.54.
Deductions, $26,561.71. Total net income $2,111,-
549.83. Dividends, $400,000. Carried to credit
profit and loss, $1,676,090.76. Balance in surplus
fund, $8,336,215.95.
Only 50,000 of the 60,000 shares authorized have
been issued, Allowing that these have a par value
of $100 each the capital is $5,000,000. On this basis
106 PROFITS OF EXPRESS BUSINESS.
the net income in 1910 was sufficient to pay about
4234 percent. As it was, only 8 percent was paid,
the policy of the company being to increase the sur¬
plus fund by large additions yearly.
In 1911, the surplus fund being $8,336,216, a
dividend of $5,300,000 was distributed in addition
to the regular dividend of $500,000, making the actual
return 106 percent.
United States Express Company.
Gross operating receipts (1910) $17,689,887.73.
Express privileges, $8,308,220.19. Operating ex¬
penses, $8,841,420,16. Taxes, $92,215.93. Net oper¬
ating revenue, $448,031.45. Other income, $385,-
028.94. Deductions, $29,131.08. Total net income,
$803,929.31. Dividends, $600,000. Carried to credit
of profit and loss, $203,929.31. Balance now in sur¬
plus fund, $1,486,674.83.
Shares in the United States company are represen¬
tative of "interest," and have no par value. There
are 100,000 of these "interests." For the purpose
of computation a par value of $100 has been arbi¬
trarily placed on each "interest." This would make
the capital $10,000,000. The earnings in 1910 were
sufficient to pay 8 percent on this amount, but only
6 percent was paid, the remainder being carried to
surplus.
Wells, Fargo Company.
Gross operating receipts (1910) $27,178,651.94.
Express privileges, $12,866,364.39. Operating ex-
PROFITS OF EXPRESS BUSINESS. 107
penses, $10,949,561.02. Revenue from outside oper¬
ations, $8,365.86. Taxes, $187,617.83. Operating
income, $3,183,474.56. Income from other sources,
$1,641,066.61. Net income, $4,824,514.17. Divi¬
dends, $1,598,370.00. Carried to credit of profit and
loss, $3,226,171.17. Dividends paid out of surplus,
$24,000,000. Balance in surplus fund, $3,657,054.77.
There is now outstanding, $8,000,000 in stock. Of
this $5,000,000 was issued, and, as the directors state
under oath, fully paid up. There is no record, how¬
ever, as to how it was paid, whether in cash or other¬
wise. Shares to the value of $3,000,000 were also
issued as advance payments on express privilege
contracts. The net earnings of $4,824,514.17 in
1910 were sufficient to pay more than 60 percent on
the entire $8,000,000. As it was the dividends were
at the rate of close to 20 percent.
In 1911 the company distributed $2,396,740 in
dividends, or more than 29 percent. There is $4,673,-
791 left in the surplus fund. This is equivalent
to over 58 percent additional.
Western Express Company.
*
Gross operating receipts (1910) $733,388.77. Ex¬
press privileges, $340,209.15. Operating expenses,
$284,573.24. Taxes, $5,478.03. Net income, $103,-
068.35. Dividends, $50,000. Appropriations to re¬
serves, $50,000. Carried to credit of profit and loss,
$3,068.35. Balance now in surplus fund, $67,259.90.
While the Western has an authorized stock capital
of $100,000, only 500 shares of $100 each have been
108 PROFITS OF EXPRESS BUSINESS.
issued. These were paid for at full par value, making
$50,000 invested in the business. In 1910 the divi¬
dends were $50,000, or 100 percent on the invest¬
ment. The net earnings were considerably over 200
percent.
The year 1911 showed a much different condition.
There was an increase of over 1,300 miles in the mile¬
age, and, as much of this was in new territory the
service was doubtless unprofitable. Where there
was a net income of $103,068 in 1910, the business of
1911 showed a deficit of $37,218. As there was
$67,260 in the surplus fund at the beginning of the
fiscal year, and $12,021 was added, the company was
enabled to pay a $10,000 dividend (20 percent),
take care of the $37,218 deficit, and still have a sur¬
plus of $32,063 left.
Dividends declared from current income by all the
companies increased from $4,326,939 in 1909 to
$5,928,103 in 1910, an increase of $1,601,164, or over
37 percent. Dividends declared from surplus in
1909 amounted to $2,223,089 and in 1910 to $26,775,-
726, an increase of $24,552,637, or over 1,104 percent,
of which amount Wells Fargo & Co. contributed
$24,000,000. The net amount of undivided surplus
remaining to the credit of profit and loss in 1910 was
$59,215,600, compared with $50,525,228 in 1909, an
increase of $8,690,372, or over 17 percent.
CHAPTER VII.
METHOD OF KEEPING ACCOUNTS.
Under orders from the Interstate Commerce Com¬
mission express companies must keep their accounts
in such systematic form as to be able to submit
accurate reports yearly showing the expenditures
for Real Property, Expenditures for Equipment,
Operating Revenues and Operating Expenses.
Previous to the issuance of these orders there had
been a great lack of uniform system in the book¬
keeping methods of the various express companies.
All of the accounts were accurate enough so far as
meeting the needs of the corporation directly inter¬
ested was concerned, but few of them met the require¬
ments of the Commission. There was a wide range
of opinion among the men in charge of the accounting
departments of the various companies, each having
his own ideas as to the proper method of procedure.
The result was confusion and uncertainty. All the
accounts were individually correct, but when the
experts at Washington tried to incorporate the con¬
tents of these accounts into one summarized har¬
monious whole there was trouble.
It was found that some of the companies took up
a very large portion of their expenses a month later
than the month to which they properly pertained.
For example, expenses incurred in the month of
109
110 METHOD OF KEEPING ACCOUNTS.
June were charged against the revenues of the month
of July, while payments to railways and other trans¬
portation lines were not infrequently taken into the
accounts several months after the one in which the
transportation services were actually performed.
With regard to very many other items, also, the
accounts of express companies were kept on a cash
basis rather than on the basis of accruals. The
effect of this practice was that expenses incurred
in a month when expenses were heavy might be set
against the revenues of a month in which revenues
were light. It was not possible, under such practice,
to arrive at a correct statement of the net revenue
for any specific period.
Many Changes in Accounting Methods.
In order to adjust the accounts to the principle
of accruals which underlies the accounting systems
prescribed by the Commission for other transpor¬
tation agencies, it was found necessary to extend
the time within which monthly reports were to be
filed to a date ninety days following the close of the
month to which such reports pertained. It was
further found necessary to issue instructions to the
effect that June, 1908, expenses should be charged
against the accumulated surplus in order to enable
the July expenses to be set against the July revenues.
Most of the companies conformed to these instruc¬
tions and adjusted their accounts in this regard to
an accrual basis.
Examination of accounting practices also disclosed
the fact that no clear line of separation was observed
METHOD OP KEEPING ACCOUNTS. Ill
between capital charges and operating expenses, it
being the custom of many companies to charge all
purchases of equipment to operating expenses, regard¬
less of whether such equipment took the place of
existing equipment or not. Thus, if an express com¬
pany equipped a new line, all purchases of horses,
harnesses, wagons, office furniture, etc., necessary
to equip the offices along the new line were charged
to current operating expenses. This practice has
been corrected by the prescribed classifications.
Money Paid to Railroads.
Another important point in which the prescribed
classifications change the former practices of express
companies is that the amounts paid to railways and
other transportation agencies for express privileges
are now charged to revenues rather than to expenses.
By express privileges" are meant the privileges
acquired by an express company of conducting an
express business over transportation lines. The
amounts paid to transportation lines for these priv¬
ileges were formerly charged to operating expenses,
but it was decided that such payments were more
properly a division of receipts than an operating
expense, and a revenue debit account was therefore
provided to which these amounts are charged. This
was done in order to arrive at the true revenues col¬
lected and the expenses incurred for the service
performed by the express companies, which business
consists of collecting, safeguarding, and delivering
freight and valuables, and of incidental services.
112
METHOD OP KEEPING ACCOUNTS.
Classification of Operating Expenses.
The prescribed Classification of Operating Expenses
makes two important concessions to the practice of
express companies by permitting charges for rent
to operating expenses, and the use of an annual
inventory in arriving at charges to the maintenance
accounts. It is a recognized accounting rule that
rent is a proper charge to income, but it seemed
wise, in the case of express companies, to permit the
accounts to develop in the light of experience.
From examinations made in the offices of some of
the companies it was further disclosed that, in addi¬
tion to charges to operating expenses for repairs,
renewals, and other maintenance expenses, charges
were made for rent of buildings owned by the com¬
panies. The accounting rules of the Commission
do not countenance such a practice. Under these
rules only such rents as are actually paid can be
charged. Under the previous practice it was pos¬
sible for a company to show a loss from operation
and yet pay dividends out of the profits of its busi¬
ness.
The use made of the annual inventory is peculiar
to this classification, and was adopted with a view
of relieving the companies of the necessity of keeping
a record of each of the many items making up the
equipment of express companies. By this method
it is permitted to charge to operating expenses all
purchases of equipment (with the exception of cars)
except such as are known to add to the capital assets
of the company; in case, however, this is done^itjs
METHOD OF KEEPING ACCOUNTS. 113
necessary at the end of the year, when an inventory
has been taken, to credit to operating expenses any
increase in the value of equipment over the previous
year's inventory, and to charge the increase to
"Additions and Betterments."
What Constitutes Express Expense?
Express service in and of itself is not a transpor¬
tation service, although it is closely related to trans¬
portation, and the question of express rates involves
the question of transportation rates. As already
explained, the chief service rendered by express
companies consists in collecting shipments intrusted
to their care at points of origin, in safeguarding such
shipments in transit, and in delivering them to con¬
signees at destination. Transportation proper is
furnished by the railway and other carriers over
whose lines the express companies conduct opera¬
tions, and the expense of such transportation is
included in the operating expenses of those carriers.
In considering the operating expenses of an express
company, therefore, the cost of transportation may
be largely eliminated, this being covered, so far as
the express company is concerned, by the amounts
which it pays to the carriers under its contracts.
The operating expenses of an express company are
the expenses of collection and delivery, the salaries
and expenses of train employees who safeguard the
goods in transit and handle them en route, the cost
of reloading at transfer points, the payments for
loss and damage, the expense of maintenance, and
114 METHOD OP KEEPING ACCOUNTS.
general expenses. A moment's consideration of these
items makes it evident that the expense incurred by
an express company does not materially increase in
proportion to the distance a consignment is carried.
Accepted Unit of Express Service.
There is no recognized unit of service for the express
business corresponding to the ton-mile for commercial
railways, or the car moved for switching railways.
Some unit, however, is essential for a statistical pres¬
entation of the service performed. After careful
consideration of the nature of the business and after
conference with the accounting representatives of
the companies, selection was made of the "piece
handled" as the unit best suited to statistical pur¬
poses, and the express companies were required to
render a special statement showing the number of
pieces handled (exclusive of money and valuables)
the weight, and the amount of revenue accruing
therefrom during the months of April, August, and
December. In the form issued for procuring these
statements express freight was classified as : (a)
Pieces of 100 pounds or less in weight; (6) Pieces over
100 pounds in weight; (c) Extraordinary shipments.
In "extraordinary shipments" were included such
consignments as corpses, horses, single shipments
of heavy machinery, automobiles, and the like.
Carload shipments if composed of a number of small
pieces, such as boxes of fruit, were -not classed as
"extraordinary," but if composed of a few pieces
only, they were so classed.
The months of April, August, and December were
METHOD OF KEEPING ACCOUNTS. 115
selected as being representative of the traffic move¬
ment throughout the year. In April there is no
preponderance of any particular class of business;
in August a considerable portion of shipments, such
as fruit, vegetables, and the like, takes low rates;
in December a relatively large number of shipments
are packages of merchandise which take high grad¬
uated charges. The figures contained in the sum¬
mary compiled from these special reports on traffic
movement seem to justify the selection of the months
named. The average revenue per piece and the
average revenue per pound are lowest in August and
highest in December, the month of April being about
a mean between the other two.
The real asset of an express company is the con¬
tract which it enjoys with the railroad company.
It has a monopoly in the carrying of small packages
on the passenger trains of the railroad, but it has no
more of a monopoly than the railroad itself has. It
has no right to impose unreasonable rates by reason
of the exclusive contract which it enjoys with the
railroads. It is an arm of the railroad ; it is the rail¬
road itself reaching out to the door and taking the
package and delivering it again personally to the
consignee.
Details of Operating Revenue Account.
Properly kept the Operating Revenue account will
show the gross revenue of the company in detail,
designating each branch of service from which an
income is obtained, and the amount. To this end
116 METHOD OF KEEPING ACCOUNTS.
there will be fourteen distinct accounts under the
general heading of Operating Revenue, as follows:
I. Revenue from transportation
1. Express revenue
2. Miscellaneous transportation revenue.
Total revenue from transportation..
II. Revenue from operations other than transportation:
3. Customhouse brokerage fees
4. Order and commission department
5. Rents of buildings and other property
6. Money orders—Domestic
7. Money orders—Foreign
8. Traveler's checks—Domestic
9 Traveler's checks—Foreign
10. "C. O. D." checks
11. Telegraphic transfers
12. Letters of credit
13. Other revenue—Financial department
14. Miscellaneous revenue
Total revenue from operations other than
transportation
Gross receipts from operation
Express privileges—Dr
Total operating revenues.
$17,433,839.06
17,433,839.06
13,121.58
14,582.35
73,778.59
1,357.50
1,039.94
1,129.03
132,811.18
945.77
273.41
17,009.32
256,048.67
17,689,887.73
8,308,220.19
9,381,667.54
Express privileges" is the term used to denote
the privilege granted by railroads of conducting an
express business over their lines, and the moneys paid
out to the railroads in return for this privilege are
entered on the books in this way.
Details of Operating Expense Account.
When we take up Operating Expenses we encounter
the most formidable of all express accounts. While
METHOD OP KEEPING ACCOUNTS. 117
nothing like as minute in detail as the operating
expense record of a railroad it is fully as complete,
the nature and demands of the business considered.
There are just four divisions, embracing fifty sub¬
accounts. The divisions are: Maintenance, Traffic
Expenses, Transportation Expenses, and General
Expenses. Properly arranged these will show:
I. Maintenance:
1. Superintendence
2. Buildings, fixtures, and grounds.
3. Office Equipment
4. Cars—Repairs
5. Cars—Renewals
6. Cars—Depreciation
7. Horses
8. Vehicles—Repairs
9. Vehicles—Renewals
10. Stable equipment
11. Transportation equipment
12. Other expenses
13. Maintaining joint facilities—Dr.
14. Maintaining joint facilities—Cr.
T otal
II. Traffic Expenses:
15. Superintendence
16. Outside agencies
17. Advertising
18. Traffic associations
19. Stationery and printing
20. Other expenses
Total,
III. Transportation Expenses:
21. Superintendence.
22. Office employees
23. Commissions
24. Wagon employees
25. Office supplies and expenses
26. Rent of local offices
1,075.24
1,825.00
8,765.56
715.36
1,520.53
768.34
14,670.03
3,510.00
3,752.40
1,492.02
1,015.26
2,260.35
12,030.03
35,210.34
202,584.85
267,135.93
100,274.57
17,738.86
29,630.43
118
METHOD OF KEEPING ACCOUNTS.
27. Stable employees
28. Stable supplies and expenses.
29. Train employees
30. Train supplies and expenses..
31. Transfer employees
32. Transfer expenses
33. Stationery and printing
34. Loss and damage—Freight...
35. Loss and damage—Money...
36. Damage to property
37. Injuries to persons
38. Other expenses
39. Operating joint facilities—Dr.
40. Operating joint facilities—Cr.
Total
IV. General Expenses:
41. Salaries and expenses of general officers.. . .
42. Salaries and expenses of clerks and attendants
43. General office supplies and expenses
44. Law expenses
45. Insurance
46. Pensions
47. Stationery and printing
48. Other expenses
49. General administration joint facilities—Dr..
50. General administration joint facilities—Cr..
Total
Total operating expenses
8,164.36
67,034.28
105,542.63
714.08
22,761,92
18,007.39
11,715.51
13,302.64
26.24
763.69
900,607.72
22,978.33
37,398.87
13,291.03
2,209.91
3,956.67
6,374.82
910.00
87,119.63
,014,427.41
What Operating Expense Account Shows.
These are not presented as actual figures—they
are merely illustrative. Most companies will have
a charge against all of the sub-accounts. In the
sample here given many of these charges are omitted.
There are, for instance, no charges under the head of
Superintendence in the Maintenance account, or of
Buildings, Fixtures, and Grounds. The same is
true of Car Repairs, etc. If a company does not
METHOD OF KEEPING ACCOUNTS. 119
own cars there will, of course, be no charges for
repairs, renewals or depreciation. If it does not
own buildings or grounds, merely renting them,
there will be no charge for maintenance under this
heading.
In the illustration given the total operating ex¬
penses for the year were $1,014,427.41. By the
system of bookkeeping employed it is easy to ascer¬
tain just how this money was expended. A glance
shows that Maintenance cost $14,670.03; Traffic
Expenses were $12,030,003; Transportation Expenses
$900,607.72, and General Expenses $87,119.63. It
may become necessary to know how the money
charged to Operating Expenses is being paid out.
If so, it will be seen that the two largest items of
expenditure were Commissions, $267,135.93, and
Office Employees, $202,584.85. The smallest ac¬
count is that of Damage to Property, $26.24.
Under the entry of other "assets" will be found
many items, especially those covering equipment,
which it was formerly the practice to charge to
operating expenses.
General Balance Sheet.
Next comes the General Balance Sheet showing
the financial condition of the company at the close
of the fiscal year. This must contain an exhibit of
the assets and liabilities; it must show the amount
and character of both, and the condition of the profit-
and-loss account. In the accompanying statement,
which is in the form prescribed by the Interstate
120 METHOD or KEEPING ACCOUNTS
Commerce Commission, the financial condition of all
the thirteen express companies doing business in the
United States is shown:
Assets
Expenditures for real property
Expenditures for equipment
Stocks owned
Funded debt owned
Other permanent investments
Cash and current assets
Materials and supplies
Sinking, insurance, and other funds
Advance payments on contracts
Franchises, good will, etc
Other assets
Profit and loss
Total assets
$15,890,048.77
9,435,620.17
50,598,202.90
51,513,022.08
14,220,092.90
45,421,184.34
332,494.76
140,384.34
5,685,833.34
10,916,445.46
547,955.22
8,752.63
204,710,036.91
Liabilities
Capital stock
Funded debt
Current liabilities
Accrued interest on funded debt not yet payable
Other liabilities
Profit and .loss
Total liabilities
$69,523,300.00
36,000,000.00
37,953,220.58
153,959.33
1,855,203.81
59,224,353.19
204,710,036.91
Record of Financial Paper Issued.
It is also obligatory for each company to keep a
record of its transactions in financial paper. It
must report the number and monetary value of the
various money orders, travelers' checks, C. O. D.
checks, telegraphic orders and letters of credit issued
during the year. The combined statement (thirteen
companies) here given shows how this record is kept.
METHOD OF KEEPING ACCOUNTS. 121
Record of Financial Paper.
T otal :
Number
Amount
Money orders sold:
Number
Amount
Traveler's checks sold:
Number
Amount
"C. O. D." checks issued:
Number
Amount
Telegraphic transfers:
Number
Amount
Letters of credit issued:
Number
Amount
Miscellaneous:
Number
Amount
19,836,252
$423,331,964.84
12,516,722
$124,960,284.74
1,262,276
$30,213,900.00
5,182,875
$55,878,805.32
12,584
$1,542,924.95
856
$2,320,073.70
860,939
$208,415,976.13
Cost of Realty and Equipment.
In order that the Commission may know definitely
just what proportion of an express company's rev¬
enue is being used for the purpose of increasing its
assets each company is compelled to keep a detailed
account of the cost of real property and equipment.
Before this was done the charging of many items of
equipment to the expense of operation afforded an
easy means of concealing large profits. The expense
of cars, horses and vehicles, for instance, while
defrayed out of the revenues, was charged to operat¬
ing expense, and in this way the volume of net income
122 METHOD OF KEEPING ACCOUNTS.
was reduced, while at the same time the actual
assets were increased. The showing now required is:
Accounts
American Express Co.
Total cost
to June 30,
1910.
Total cost
to June 30,
1909.
I. Real estate used in operation.
II. Buildings and fixtures used in operation
III. Equipment:
1. Cars
$7,448,571.20
$7,352,373.13
2. Horses
870,341.94
601,790.55
1,020,273.69
\
► 1,000,000.00
■J
3. Vehicles
4. Other equipment
T otal
9,940,977.38
8,352,373.13
Each company must also keep a detailed account
showing an inventory and inventory value of its
equipments. The nature of this is shown in the
accompanying statement submitted by Wells, Fargo
Company :
Class of Equipment
Cars:
Number
Inventory value
Office equipment:
4-wheel trucks—
Number
Inventory value
Office furniture and fixtures—
Inventory value
Office safes—
Number
Inventory value
Horses and other draft animals:
Number
Inventory value
Wells Fargo
Company.
124
$380,168.50
5,829
$137,662.18
$214,813.52
2,083
$138,606.88
3,079
$558,047.80
METHOD OF KEEPING ACCOUNTS.
123
Vehicles:
Automobiles—
Number
Inventory value
Double wagons—
Number
Inventory value
Single wagons—
Number
Inventory value
Sleighs—
Number
Inventory value
Stable equipment (including harness) :
Inventory value
Transportation equipment:
Car safes (stationary)—
Number
Inventory value
Messenger's safes—
Number
Inventory value
Messenger's packing trunks—
Number
Inventory value
All other equipment:
Inventory value
Grand Total
$15,900.00
746
$212,949.98
1,499
$246,359.70
318
$10,357.51
$85,685.55
142
$27,653.25
2,179
$39,347.66
10,962
$57,139.12
$184,874.62
$2,300,566.27
Income and Profit and Loss.
Finally the companies are required to submit an
Income and Profit-and-Loss statement. The nature
of this is shown in the accompanying report made by
the Interstate Commerce Commission, and covering
all the companies. Each company submits a similar
report of its own affairs to the Commission.
124 METHOD OF KEEPING ACCOUNTS.
Income Account
Operating income:
Gross receipts from operation.
Express privileges—Dr
Operating revenues
Operating expenses.
Net operating revenue
Outside operations:
Revenues
Expenses.
Net revenue from outside oper¬
ations
Total net revenue
Taxes accrued
Operating income
Other income:
Separately operated properties—
Profit
Dividends declared on stocks
owned or controlled
Interest accrued on funded debt
owned or controlled
Income from other permanent in¬
vestments and miscellaneous in¬
come
Total other income
Gross income
Deductions from gross income:
Separately operated properties—
Loss
Interest accrued on funded debt. .
Other interest
Other deductions
Total deductions
Net corporate income
$146,116,315.66
69,917,561.83
151,275.25
140,748.17
146,646.61
2,037,733.59
1,515,014.57
1,934,397.29
860,580.54
89,827.09
86,908.78
$76,198,753.83
61,690,472.98
14,508,280.85
10,527.08
14,518,807.93
1,126,726.38
13,392,081.55
5,633,792.06
19,025,873.61
1,037,316.41
17,988,557.20
METHOD OP KEEPING ACCOUNTS. 125
Disposition of net corporate income:
Dividends declared from current
income
Additions and betterments charged
to income
Appropriations to reserves
Miscellaneous appropriations
Balance of year carried forward
to credit of profit and loss
Profit and Loss Account
Credit balance on June 30, previous
year
Credit balance brought forward from
income account
Additions for year
Deductions for year
Dividends declared out of surplus
Balance, credit, carried to balance
sheet
5,928,103.95
47,561.93
50,000.00
5,000.00
11,959,891.32
50,525,228.95
11,959,891.32
24,192,007.29
685,800.34
26,775,726.66
59,215,600.56
Ratios of Increase and Decrease.
Interesting figures are also found in the record of
ratio of increases and decreases in gross receipts,
operating expenses, taxes, net operating income, etc.
These, as shown for 1910, in comparison with the
preceeding year, were :
(See next page for table).
126 METHOD OF KEEPING ACCOUNTS.
Differ¬
Ratios of increase
or decrease.
ences in
ratios of
operating
expenses
to opera¬
Gross
Express
Oper¬
Oper¬
ting
Names of Companies
receipts
privi¬
ating
Taxes
ating
revenues,
leges
ex¬
income
1910 as
penses
com¬
pared
with
1909
Per
Per
Per
Per
Per
Per
cent.
cent.
cent.
cent.
cent.
cent.
Adams Express Co. . .
10.2
10.4
8.3
39.3
19.4
1.32
American Express Co.
14.3
14.7
13.2
11.4
20.5
.67
Canadian Express Co.
12.0
9.7
12.0
11.9
29.4
1.51
Canadian Northern Ex¬
press Co.
30.1
29.5
12.5
15.2
66.6
8.97
Globe Express Co,....
10.1
10.9
5.1
142.4
14.6
2.81
Gt. Northern Ex. Co. .
16.6
15.9
18.1
38.9
15.2
.37
National Express Co.
7.4
8.3
1.5
328.1
31.5
4.16
Northern Express Co.
11.8
11.6
12.0
26.1
11.2
.02
Pacific Express Co. . .
.1
18.7
2.2
20.6
200.9
16.66
Southern Express Co..
9.0
7.8
5.5
47.8
22.9
3.19
United States Ex. Co..
4.9
6.7
5.4
9.9
23.1
1.79
Wells Fargo Co
11.1
13.2
12.9
41.3
2.4
2.43
Western Express Co...
15.5
10.4
23.8
2.4
13.1
2.00
Total, 13 companies
10.2
9.2
9.6
24.3
17.6
1.11
Note:-—Italic figures denote decreases.
CHAPTER VIII.
DIVISION OF TERRITORY BY ROADS.
In the division of the territory of the United States
in which the thirteen express companies operate,
one thing is very notable, especially in view of
the fact that the express companies are so closely
related, and that is there is little monopoly, as re¬
gards service, though there is no competition in
rates. There are only six states in the entire Union
in which only one express company operates. In
all the others there is a form of competition, any¬
where from two to seven companies operating- in
the balance of the states. The six states in which
there is a monopoly are Arizona, California, Florida,
Nevada, Rhode Island and South Carolina. In
addition to these states, the territories of Alaska
and Hawaii have only one express company operat¬
ing in them.
The Wells, Fargo Company has a monopoly in
three states—Arizona, California and Nevada.
In these three states it operates over 11,610 miles
of railroad, California leading with 7,951 miles of
line, while Arizona and Nevada have respectively
1,870 and 1,788 miles. In addition to these the
Wells, Fargo Company has a monopoly of the
express business in Alaska and Hawaii, and is the
127
128 DIVISION OF TERRITORY BY ROADS.
only American company operating in Mexico, where
it does the express business over 1,105 miles of
railroad.
In Florida and South Carolina the Southern
Express Company monopolizes the business, oper¬
ating over 4,083 miles of line in Florida and 3,007
miles in South Carolina, a total of 7,090 miles. In
Rhode Island the Adams Express Company has a
monopoly, operating over 262 miles of road.
Constant Tendency Toward Expansion.
As a rule each of the express companies has its
particular field of operation in which it is preeminent.
The constant tendency is toward expansion, however,
and the time will probably come before many years
when a few of the larger companies will conduct
operations in every state of the Union. Without
doubt some of them would have already done so if
they could have made the necessary contracts with
the railroads. The inability to do so has formed the
only barrier to their growth. Contracts between
the railroad companies and the express companies
usually run for a long period, and no matter how
anxious a railroad may be to oust the company doing
business over its line in order to favor a rival com¬
pany, it is powerlesss to do so. Neither can the
railroad company admit another express company
to do business over its line in competition with the
company that is operating, because almost invariably
the contract between the railroad and the express
company specifies an exclusive right to do express
business over that railroad's lines. Therefore the
DIVISION OP TERRITORY BY ROADS. 129
only chance an express company has to expand its
field of operations and to enter new territory is to
wait for the expiration of contracts, or the construc¬
tion of a new line of railroad. Then the matter
resolves itself into which express company will offer
the best terms to the railroad company for the priv¬
ilege of doing business.
Wells, Fargo Company's Field.
While there has never been an actual division of
territory among the express companies or even a
tacit understanding among them that any one com¬
pany has exclusive rights in any particular section,
the fact remains that most of the companies have a
certain field in which they are recognized as the
leaders. Take the Wells, Fargo Company as an
illustration. It is recognized as a great western
company, because its origin was in the west and for
a long time was confined to that section. But the
Wells, Fargo Company is also a great southwestern
company. It operates almost half of the express
mileage in the state of Texas, and while it has four
other competitors in that state, it operates over
more miles of railroad than any two of its competitors
combined. Its closest competitor up to 1911 was
the Pacific Express Company, with 3,273 miles of
road, while the Wells, Fargo operates over 6,797
miles. It is a vigorous competitor for express busi¬
ness in Oklahoma, where it operates over 1,362 miles
of line. It operates in practically every state of the
west and middle west. It has gained a foothold in
130 DIVISION OF TERRITORY BY ROADS.
many of the southern states, especially in Louisiana,
where it operates over 1,385 miles of road, more than
any one of its four competitors. The only section
of the country where it does not operate is New
England, and in none of the six states composing
this territory has it been able to obtain a foothold.
In all, the Wells, Fargo Company operates in thirty-
two states, Alaska, Hawaii and Mexico, and con¬
ducts operations over 51,522 miles of railroad and
waterways.
Sphere of Adams and American.
The Adams and the American Express are usually
classed as controlling the eastern and middle west
territory in which they are especially strong, yet
both companies have made incursions into the
southern, western and southwestern field. The
Adams operates in thirty-one states and the American
in thirty-six. Neither company has invaded Arizona,
California, Florida, Nevada, or South Carolina and
the Adams is shut out of Alabama, Arkansas, Idaho,
Louisiana, Maine, Mississippi, New Hampshire, North
Dakota, Oklahoma, Oregon, Utah, Vermont and
Washington. In addition to those enumerated the
American Express Company is shut out of Delaware,
the District of Columbia, Georgia, Maryland, New
Mexico, North Carolina, Rhode Island, Virginia and
West Virginia.
The Adams Express Company does not operate
in either Canada or Mexico, while the American
operates over 1,199 miles of Canadian railroad. The
total mileage of the Adams Company is 36,495, and
DIVISION OF TERRITORY BY ROADS. 131
its greatest mileage is in the state of Pennsylvania,
4,460, Nebraska, Illinois, Iowa, Ohio, Colorado,
Virginia and Indiana following Pennsylvania in the
order named. The total mileage of the American
Express Company is 55,577, its greatest mileage
being in the state of Illinois, where it operates over
5,226 miles of road, New York being second with
4,280 miles, Michigan third with 4,089 miles, and
Wisconsin and Indiana fourth and fifth with 3,634
and 3,280 miles respectively.
Home of the Southern Company.
The Southern Express Company lives up to its
name in the territory in which it operates—with the
exception of a few hundred miles of line in the north¬
ern states of Illinois, Indiana and Ohio, its operations
over 32,213 miles of railroad are confined exclusively
to the southern states. Its greatest mileage is in
the state of Georgia, where it does business over
6,455 miles of line, while in Alabama, Florida and
North Carolina it has over 4,000 miles in each.
Its smallest mileage is in Missouri, where it has only
two miles of line. In all, it operates in eighteen
southern states, but singularly enough does no busi¬
ness in the largest state of all, Texas.
In the extent of its mileage and the number of
states in which it operates, the United States Express
Company ranks fourth in magnitude, being excelled
only by the American, Wells, Fargo, and Adams
companies. The United States Company has its
main territory in the east and middle west. It does
132 DIVISION OF TERRITORY BY ROADS.
not touch Pacific Coast points, but has reached out
into a number of the southern states, having mileage
in Alabama, Arkansas, Louisiana, Maryland, Missis¬
sippi, Missouri, Tennessee, Texas and Virginia.
It has also 223 miles of line in Canada. In all, the
United States Express Company operates in twenty-
eight states and territories, and the Dominion of
Canada. Its mileage is 32,771, its greatest mileage
being in the state of Ohio, where it operates over
3,619 miles of road, Pennsylvania, Oklahoma, Indiana,
Michigan, Illinois and Iowa following in extent of
mileage in the order named.
Territory of the Great Northern.
It is no trouble to define the territory of the Great
Northern Express Company. This operates over
the Great Northern Railroad in the northwest,
traversing the country from Wisconsin to the Pacific
Coast. It operates over 8,215 miles of railroad, of
which 620 miles are in Canada. The states traversed
are Wisconsin, Washington, South and North Dakota,
Minnesota, Montana, Oregon, Iowa and Idaho. Its
greatest mileage is in the state of Minnesota, 2,116,
Washington being second with 1,724 miles, North
Dakota third with 1,563 miles, and Montana fourth
with 1,500 miles.
Like the Great Northern Express Company, the
Northern Express Company has a well-defined field
in the northwest, operating over the lines of the
Northern Pacific Railroad Company from Wisconsin
to Washington and Oregon. The other states it
DIVISION OF TERRITORY BY ROADS. 133
traverses are Idaho, Minnesota, Montana and North
Dakota. Its total mileage is 6,862, Washington
leading with 2,418 miles, Montana, Minnesota and
North Dakota following in mileage in the order
named.
From its title one would gain the impression that
the Pacific Express Company (now out of business)
had its principal field of operations on the Pacific
Coast. As a matter of fact it did not reach any
Pacific Coast point in 1911, but it formerly did so
over the Oregon Railroad and Navigation Com¬
pany's lines, on which it was succeeded in 1910 by
the American Express Company. The principal
field of the Pacific Express Company was in the
middle west, but it also reached the south in Arkan¬
sas, Kentucky, Louisiana, Mississippi, Missouri,
Tennessee, Texas and West Virginia. In all it
operated in nineteen states and Canada. Of its
16,962 miles of line, the greatest number, 3,273, was
in Texas, Missouri, Kansas and Arkansas following
in the order named. The only eastern states where
the Pacific Company operated were New York and
Pennsylvania, and it had only 93.5 miles in these
two states. In Canada it operated 244 miles.
Confined to Two States.
The Globe Express Company operates only over
the lines of the Gould railway system in Colorado
and New Mexico. Its total mileage is 1,915, of
which, 1,697 miles are in the state of Colorado.
The National Express Company is exclusively an
134 DIVISION OF TERRITORY BY ROADS.
eastern concern, operating 1,640 miles of line in the
states of Massachusetts, New Jersey, New York,
Pennsylvania and Vermont. Its greatest mileage
is in New York, 1,191, and Vermont, 238. The
company also operates 80 miles of line in Canada.
Two Canadian companies do an express business
in the United States, one being the Canadian Express
Company, which is owned by the Grand Trunk Rail¬
road Company, and which operates 257 miles of
express lines in the states of Maine, Michigan, New
Hampshire, New York and Vermont. Its greatest
American mileage is in Maine, where it has 89 miles
of line. The company operates 6,871 miles of line
in Canada.
The other is the Canadian Northern Express Com¬
pany, an adjunct of the Canadian Northern Railroad
Company, which operates 43.7 miles of line in the
state of Minnesota. This company also operates
3,270 miles of express lines in Canada.
A name is not necessarily indicative of the field
of operations of an express company, as is evident
in the name of the Western Express Company. The
Western Company operates in the east, in the middle
west and as far west as the Pacific Coast. It operates
over the railroad lines of the " Soo " system, and
these traverse the states of Maine, Vermont, Michi¬
gan, Wisconsin, Minnesota, North and South Dakota,
Idaho and Washington. In all the Westera Company
gives service over 3,509 miles of line, of which the
greatest mileage, 1,085 is in the state of North
Dakota, Minnesota ranking second with 744 miles,
Michigan third with 695 miles, and Wisconsin fourth
DIVISION OF TEKRITORY BY ROADS. 135
with 465 miles. The company maintains an office
in Toronto, but its Canadian business is conducted
through the Dominion Express Company operating
over the Canadian Pacific Railroad, with which it
has a close connection.
Electric Line Mileage Gaining.
Not all the mileage of the express companies is
over railroads. There is a large steamboat, elec¬
tric road, and stage line mileage, although the latter
is rapidly diminishing. Steamboat mileage is also
falling off, while electric line mileage is gaining
steadily. For the year 1910 the total of steamboat
mileage for all the express companies was 12,820,
of electric line mileage 6,608, and of stage line mile¬
age 831. Of the total stage line mileage 708 miles
was operated by the Wells, Fargo Company.
In its report on the operations of the express com¬
panies the Interstate Commerce Commission does
not attempt to include any ocean-going mileage or
any mileage in foreign countries, with the exception
of Canada and Mexico. If this was ascertainable
there would be a large addition, as the principal
companies conduct business on both the Atlantic
and Pacific oceans, and in many of the countries of
Europe and the Orient. As this service is conducted
on foreign-owned lines, however, the authority of
the Interstate Commerce Commission does not extend
to them.
Most of the large express companies operate over
many different lines of railroad. The Adams Express
Company operates over about 100 steam roads,
136 DIVISION OF TERRITORY BY ROADS.
besides electric lines, steamboat and stage lines.
The more important of the steam roads over which
it furnishes the express service are the Chicago,
Burlington & Quincy, the Louisville & Nashville,
the New York, New Haven & Hartford, the Penn¬
sylvania, and the Chesapeake & Ohio.
The American Express Company operates over the
lines of more than 140 steam roads, besides electric,
steamboat and stage lines. The principal roads over
which it conducts express service are the Bangor &
Aroostook; Boston & Albany; Boston & Maine;
Buffalo, Rochester & Pittsburg; Central Vermont;
Monon; Chicago, St. Paul, Minneapolis & Omaha;
Alton; Chicago & North-Western; Big Four; Hocking
Valley; Illinois Central; Lake Shore & Michigan
Southern; Maine Central; Michigan Central; Mis¬
souri, Kansas & Texas; New York Central; Oregon
Short Line; Pittsburg & Lake Erie; San Pedro, Los
Angeles & Salt Lake; Union Pacific and Western
Maryland.
The Southern Express Company operates over
about seventy-five steam roads, besides electric
¥
and steamboat lines. Among the most important
railway systems over which it provides express serv¬
ice are the Atlantic Coast Line Railroad; Florida
East Coast Railway; Louisville êc Nashville Railway;
Norfolk & Western Railway; Southern Railway;
Seaboard Air Line Railway; Central of Georgia;
Alabama Central and Tennessee Central.
Among the principal railroads over which the
United States Express Company operates are the
Baltimore & Ohio; Baltimore & Ohio Southwestern;
DIVISION OF TERRITORY BY ROADS. 137
Chicago, Rock Island & Pacific; Philadelphia &
Reading; Lehigh Valley; Pere Marquette; Cincinnati,
Hamilton & Dayton; Delaware, Lackawanna &
Western and the St. Louis San Francisco.
Wells, Fargo Company operate over more than
150 steam roads, among the more important being
the Atchison, Topeka & Santa Fe; the Erie; Bessemer
& Lake Erie; Butte, Anaconda & Pacific; Chicago
Great Western; Chicago, Milwaukee & St. Paul;
Chicago, Peoria & St. Louis; Gulf, Colorado & Santa
Fe; Houston & Texas Central; International &
Great Northern; Kansas City Southern; Missouri,
Oklahoma & Gulf; Missouri Pacific; New York,
Susquehanna & Western; Rock Island Southern;
San Antonio & Aransas Pass; Southern Pacific;
Iron Mountain; Texas Central; Wabash; Wheeling
& Lake Erie; White Pass & Yukon.
Zones of Express Influence.
Conditions were not always like this. In earlier
days there was something approaching monopoly.
For many years the country was parceled out
between these great companies into zones not unlike
those zones of influence which characterize inter¬
national politics in Asia at the present time. There
was, for instance, an understanding that the Wells,
Fargo Company should not press into eastern
territory—that is, that it should not extend its
operations east of the Mississippi river—while the
eastern companies should abandon the great west
to that carrier. The New England states are,
mainly, the territory to-day of the Adams and
138 DIVISION OF TERRITORY BY ROADS.
American. In the central states there is an active
competition between the four large companies—
Wells, Fargo Company, Adams, American, and the
United States. The south from Washington to
New Orleans is dominated by the Southern Express
Company, but incursions into this field have been
lately made on some trunk lines of railroad by the
American and United States. The great northwest
is supplied by the Great Northern, serving the Great
Northern Railway, the Northern as the agency of
the Northern Pacific, and Wells, Fargo Company
for the Chicago, Milwaukee & Puget Sound. The
Dominion Express Company of Canada has a branch
in this country known as the Western, which operates
over the Soo line. The Chicago, Burlington &
Quincy is cared for by the Adams as far as Billings,
Mont. The Union Pacific, which until recently was
given express service by the Pacific Express Company,
has lately entered into a contract with the American
which now does through business from the Atlantic
to the Pacific. Wells, Fargo Company operate
in the west over the Milwaukee & Puget Sound, the
Santa Fe, and the Southern Pacific lines. The Globe
Express Company operates over the Denver & Rio
Grande and the Western Pacific. The southwest is
competitive territory, between all of the larger
express companies excepting the Southern and the
lines of the northwestern railroads.
Companies are Closely Related.
While these companies are separate legal entities
it is of interest to regard the fact that, by stock
DIVISION OF TERRITORY BY ROADS. 139
ownership and otherwise, they are so interlaced,
intertwined, and interlocked that it is with difficulty
we can trace any one of the greater companies as
either wholly independent in its management or the
agency of a single railroad or system. The Adams
and the Southern are closely affiliated (the name
of the latter was formerly the Adams-Southern).
The American Express Company is the second largest
stockholder in Wells, Fargo Company. The largest
stockholder in the United States Express Company
is also the largest stockholder in the Wells, Fargo
Company. So that while these companies operate
separately and compete with each other for traffic,
the express business may be said to be almost a
family affair. An interesting genealogical tree, in
fact, might be drawn showing a common ancestry in
all of the larger companies. And while many names
may be used to designate these companies, it is within
the fact to say that aside from the operations of the
minor and distinctively railroad express companies
the express business of the United States is managed
by not more than three groups of interest.
Under the existing system of contracts it is quite
evident that an express company might grow ex¬
tremely wealthy and accumulate a great volume of
property under rates that were in all ways reason¬
able, for the volume of its accumulations year by
year depends not alone upon the rates that it charges,
or its own expenditures as an operating company,
but upon the contracts which it makes with the
railroads which carry the express traffic.
CHAPTER IX
MONEY ORDERS AND C. O. D. BUSINESS.
Financial paper issued by the express companies
of the United States during the year ending June 30,
1910, aggregated the tremendous total of $423,331-
964.84. Under the head of "financial paper" the
Interstate Commerce Commission groups money
orders, traveler's checks, C. O. D. checks, telegraphic
transfers of money and letters of credit issued.
During the year 19,836,252 pieces of paper of this
character were issued, of which the money orders
and C. O. D. checks furnished by far the larger por¬
tion, the number of each being 12,516,722 and 5,182,
875 respectively.
Some surprising facts are revealed in the reports
furnished the Commission by the express companies
relative to their business. The American Express
Company, for instance, is shown to be far in the lead
in every item grouped under "financial paper."
Its business for the year was more than double that
of all the other express companies combined. It
issued financial paper to the amount of $295,190,-
322.48, equivalent to about 70 percent of the total,
business transacted, yet it only issued 7,851,498
pieces of paper, or about 40 percent of all issued by
all the companies. The average amount represented
141
142 MONEY ORDERS AND C. O. D. BUSINESS.
by each piece of paper issued by the American Express
Company, however, was $37.59, while for the 11,984,-
754 pieces issued by all the other companies the
average amount was $10.69. As compared with
the preceding year the American Express Company 's
financial paper business increased about $45,000,000.
Millions in Checks and Orders.
During the year the total amount involved in all
the money orders issued by all the companies was
$124,960,284.74, of which the American Express
Company issued $42,959,767.62. Traveler's checks
issued by all the companies amounted to $30,213,900,
of which the American issued $25,886,000. C. O. D.
checks issued by all companies amounted to $55,878,-
805.32, the American's share being $16,706,361.97.
Telegraphic transfers of money by all companies
amounted to $1,542,924.95, the American's share
being $718,916.38. Letters of credit issued by all
companies amounted to $2,320,073.70, of which the
American's share was $2,239,549.45. The miscel¬
laneous financial transactions of all the companies
amounted to $208,415,976.13, of which the American's
proportion was $206,679,727.06.
The nearest competitor of the American Express
Company in the amount of business transacted was
Wells, Fargo Company, which did $40,269,939.43.
The business of Wells, Fargo Company, however,
was restricted to four kinds of paper—money orders,
traveler's checks, C. O. D. checks and telegraphic
transfers of money. The United States Express
MONEY ORDERS AND C. O. D. BUSINESS. 143
Company is third on the list with a total business
of $24,721,069.02. The Adams Express Company
is fourth with a total of $18,100,379.47, made up of
money orders and C. 0. D. checks only. The South¬
ern Express Company is fifth with a total of $16,606,-
973.07, restricted to the same two classes of paper
as the Adams. The Canadian Express Company
ranks sixth with a total of $11,058,403.69, but this
company issues no letters of credit.
Business of Minor Companies.
Transactions of the other companies were com¬
paratively unimportant as compared with those
named. The Northern Express Company did a
total of $4,050,379.38 in money orders and C. O. D.
checks only, which was about $156,000 less than it
did the preceding year. The Great Northern Ex¬
press Company did a total of $2,316,838.23, a gain
of about $3,000 over the preceding year. The
Western Express Company issued paper to the
amount of $1,463,365.29, but no letters of credit or
telegraphic transfers of money. The Canadian
Northern Express Company made no returns for the
year, but for the preceding year reported a total
business of $2,369,777.05. The Globe Express Com¬
pany issued $730,267.40 of money orders alone. The
National Express Company makes no returns, as all
financial paper issued by it is for the account of the
American Express Company and is included in the
latter's totals.
Aside from the business of transporting goods,
144 MONEY ORDERS AND C. O. D. BUSINESS.
the most important field of the express companies
is in the issuing of money orders and in the trans¬
action of the C. O. D. or "cash on delivery" business.
The express companies act as bankers for many
thousands of people every year. Their orders are
of such good reputation that they pass current any¬
where, and this business is increasing in volume
every year. For the payment of small bills or the
remittance of small sums of money they are much
more desirable than a bank check. There may be
doubt about the worth of a check; the holder must
be identified; there is usually a charge made for
its collection by the bank it is deposited in. With
the express money order all this trouble is avoided.
There is no doubt of its value, there is no necessity
for exact identification and there are no charges to
pay for collection.
Varied Use of Money Orders.
This surety—the sense of security which pertains
to express money orders—has led to their use for
many purposes never thought of when they were
first introduced. Traveling men, actors, people
whose occupation takes them to many different places
for months at a time, find the express money order
the most convenient kind of a savings bank. It is a
common occurrence with thousands of such people
to buy a money order as they accumulate funds and
mail it to their home address. They know that with
money in their pockets they are liable to lose or spend
it. When they have bought a money order it is
MONEY ORDERS AND C. O. D. BUSINESS. 145
just the same as putting money in the bank, and
when they reach home after an absence of some
months they find the orders awaiting them there and
ready to be cashed.
That is, the orders will be there unless something
has happened to them. The cashier of one of the
big companies in Chicago tells of a gentleman coming
into his office one day with a large book under his
arm, which he wanted cashed. It seemed that the
gentleman was an actor and had been on the road
for eight or nine months. Every week after drawing
his salary he would go to an express office, buy a
good-sized money order, and mail it to his wife.
The latter was a very illiterate woman, totally
unversed in business methods, and had never seen
a money order in her life. In some way she got the
impression that the money orders were souvenirs
her husband was sending her, and after having
received quite a number of them from various parts
of the country, she went out and bought a scrap
book and pasted the orders neatly in it. When her
husband reached home she exhibited her scrap book
to him with much pride, and this was the book he
brought down to the express office to have cashed.
He got the money.
Foreigners Partial to Money Orders.
In many parts of the country there is an utter
absence of banking facilities, and then the express
company order becomes a real boon. The small
merchant finds the money order a most convenient
method of remitting money in payment of his bills.
146 MONEY ORDERS AND C. O. D. BUSINESS.
The laboring man and the working girl invest their
small savings in express money orders. The immi¬
grant, who desires to bring a wife, brother or sister
from the old country, will buy a money order from
the express company and send it abroad to pay the
expenses of the trip. With the foreigners, who
usually have a deep-seated distrust of American
banks, the express money order holds a high rank.
In times of panic many of these foreigners will draw
their savings from the banks and buy money orders.
During the panic of 1907 the banks of the country
lost millions of dollars in deposits in this way. The
foreigners simply bought money orders with their
savings and held them. They were willing to lose
the interest for the sake of security. After the panic
was over the money gradually drifted back to the
banks.
Express Vital to C. O. D. Trade.
One of the most important services of the express
companies to the business interests of the country is
the C. O. D. or "cash on delivery" business. It
would be impossible to transact a C. O. D. trade
without the express companies to act as trustees in
forwarding the goods and collecting and returning
the money to the shippers. There are thousands of
firms scattered all over the country which do business
solely on this basis. There are two Chicago firms
whose C. O. D. business each week will probably
exceed $500,000. There are many other concerns
in Chicago doing the same kind of business, and they
thrive in every large city.
MONEY ORDERS AND C. O. D. BUSINESS. 147
If it were possible to abolish the express business
the C. O. D. trade, great as it is, would be compelled
to suspend, because there would be no means of
establishing the relationship of trustee between
buyer and seller—somebody to assure that the money
would be paid and transmitted to the merchant.
A Chicago concern, for instance, advertises to sell
a first-class watch for $10. A Montana farmer sees
the advertisement, likes the description of the watch,
is satisfied with the price, and wants the watch, but
he doesn't know the Chicago concern and is averse
to entrusting his $10 to strangers. On the other
hand, the Chicago concern does not know the
Montana farmer, and is not going to send the watch
to him without good assurance that the money will
be paid. How are they going to do business to¬
gether?
The Chicago concern delivers the watch to the
express company addressed to the farmer at his
Montana home, with a bill for $10. The express
company sends the watch to its agent in the Montana
town, who notifies the farmer of its receipt. The
latter goes to the express office, pays the agent $10
and gets the watch.
Working of the C. O. D. Business.
By this plan the seller does not trust the buyer
neither does the buyer trust the seller. There is no
payment of money until the article ordered is actually
in the possession of the buyer. When goods are sent
C. O. D. an invoice accompanies the shipment, and
148 MONEY ORDEKS AND C. O. D. BUSINESS.
the express company collects the price of the goods
from the consignee and returns the money to the
consignor. It was formerly the custom to place the
money in an envelope specially provided for that
purpose and way-bill it to the consignor. A charge
for returning the money was made additional to the
charge for the package outbound.
Within the last ten years, however, the practice
of returning the actual money has been discontinued
by nearly all companies, and in lieu thereof C. 0. D.
checks, or "cashier's money orders," as they are
sometimes called, are issued. These checks, differing
slightly in form from ordinary money orders, are
made payable to the consignor of the package and
are placed in an envelope addressed to him sent by
mail, or delivered by messenger. The cost to the
express company is thus confined to the expense
of printing the C. O. D. check, furnishing the envel¬
ope, and the 2-cent stamp which is placed upon it.
The same charge is made for issuing the C. 0. D.
check as was made when the money itself was trans¬
ported, although in the latter case the express com¬
pany assumed the risk of loss in handling the money
en route besides paying something to the railway
line over which it was transported.
Profit to the Express Company.
What does the express company get for this serv¬
ice? The charge for a double haul. Instead of
getting paid for the carriage of the watch to desti¬
nation only, as would be the case if the buyer had
MONEY ORDERS AND C. O. D. BUSINESS. 149
remitted in advance, it collects a second charge for
the return of the money. If the regular charge for
the carriage of the watch from Chicago to Montana
is 25 cents there would be a similar charge for the
return of the money, thus virtually doubling the
revenue of the express company from its C. 0. D.
business. This is not always the case, however.
In many instances, where a business house is a large
C. O. D. shipper, a special rate is made for the return
of the money, which is much less than it would be
for the casual shipper.
What proportion of its revenue does an express
company derive from its business in money orders,
C. O. D.'s, etc.? The proportion is very small.
Taking again the American Express Company for
the purpose of illustration because of the magnitude
of its operations, we find by the Interstate Commerce
Commission's figures that for the year 1910 its
"total revenue from operations other than trans¬
portation" were $1,300,885.86. But part of this
sum came from custom house brokerage fees, part
from rent of buildings and other property, and part
from the financial department and miscellaneous
revenue, the nature of which is not clearly indicated.
Taking the revenue from money orders, traveler's
checks, C. O. D. checks, telegraphic transfers of
money and letters of credit issued, the total income
from these sources is found to be $540,258.56 for the
year. The total amount involved in these various
transactions amounted to $88,510,595.42 cents. The
revenue derived from this vast business was equal to
about six-tenths of 1 percent. To transact this
150 MONEY ORDERS AND C. O. D. BUSINESS.
business 7,019,894 pieces of paper were issued, and
the average charge per piece was 7.69 cents.
Charges on Financial Paper.
It is of interest to know just what revenue is
derived from each one of these various forms of
financial paper, and how much of each is issued. In
1910 the American Express Company issued 4,524,148
money orders, calling for $42,959,767.62, an average
of $9.27 an order, on which its revenue was $228,-
742.98, an average charge per order of a fraction over
5 cents. Of traveler's checks 1,081,925 were sold
representing $25,886,000, from which the revenue
was $52,960.58, an average charge of a trifle less
than 21 cents a check. The average amount of each
check was $23.92. The number of C. O. D. checks
issued was 1,407,837, representing a total of $16,706,-
361.97, the revenue from which was $250,471.55.
The average check amounted to $11.87, -and the
average revenue per check to 17 cents. Telegraphic
transfers of money in number were 5,153, repre¬
senting a total of $718,916.38, and the revenue
derived was $3,731.59. The average amount of the
transfers was $139.53, and the average charge 72.4
cents. Letters of credit issued numbered only 831,
but they represented $2,239,549.45 in value, and
brought a revenue to the company of $4,351.86. The
average of the letters was $2,695, and the average
charge per letter was $5.23.
Under the heading of "miscellaneous" it is shown
that the company during the same year issued
MONEY ORDERS AND C. O. D. BUSINESS. 151
831,604 pieces of financial paper representing $206,-
679,727.06 in value, from which it derived a revenue
of $632,122.97. What the nature of this paper was
is not shown, but the revenue derived from it exceeded
that derived from money orders, traveler's checks,
C. O. D. checks, telegraphic transfers and letters
of credit combined by $91,864.41, these five forms
of paper having only brought in a revenue of $540,-
258.56. The average amount represented by the
"miscellaneous" paper was $248.53, while the aver¬
age income per piece was 76 cents.
Heavy Dealer in Exchange.
The greater part of the "miscellaneous" income of
the company undoubtedly comes from exchange,
both domestic and foreign, in which it is a very heavy
dealer, buying bills of lading, etc. In all the large
cities of the country it carries on heavy dealings
with the banks in exchange. If a Minneapolis mill
has a shipment of fifty carloads of flour to New York
or to Europe it can obtain its money instantly from
the express company by presenting a bill of lading.
It does this kind of business on the same basis as a
bank will do it. The mill will be charged 4 percent
interest for the time the flour is in transit, and a very
small commission. So closely is this business con¬
ducted that not infrequently the commission will
not amount to over l-64th of 1 percent. That does
not seem much, and it is not, but it is in the mul¬
tiplicity of such transactions that the company makes
money. Let us see just what the company will
152 MONEY ORDERS AND C. O. D. BUSINESS.
make on such a transaction as buying a bill of lading
on fifty carloads of flour, Minneapolis to New York:
Assuming that each car contains 150 barrels of
flour worth $5 a barrel, the entire shipment will
amount to 7,500 barrels and be worth 137,500. It
will take say ten days for the flour to reach New York,
during which time the express company will be
earning 4 percent on $37,500, and this will amount
to $41.09. It will also get l-64th of 1 percent com¬
mission on the value of the flour, and this will amount
to $5.85, so that on the whole transaction the express
company earns $46.94. It is not likely that the com¬
pany often deals in such large bills of lading, as this
business is usually transacted by the banks, but it
does in many smaller bills, and in 1911 such trans¬
actions numbered almost 3,000 a day for every
business day in the year.
Convenience of Traveler's Checks.
Traveler's checks are an invention of the American
Express Company. They were first issued in 1891
in exactly the same form and on the same scale of
charges that exist today. The checks are issued in
denominations of $10, $20, $50, $100 and $200.
The express company's charge for them is one-half
of 1 percent. Their convenience to the traveler
abroad consists in the fact that they can be cashed
in any part of the world, and that he knows exactly
how much of the money of the country he is going to
receive. He does not have to pay any discount or
commission, and the fluctuations of exchange do not
MONEY ORDERS AND C. O. D. BUSINESS. 153
worry him. Across the face of each check is printed
the amount he will receive for it in the money of the
country where it is presented. Thus, on a $20 check
which has cost the traveler $20.10, he knows it is
worth £ 4, Is. 8d. in Great Britain, 102 francs, 50
centimes in France, 83 marks, 30 pfennigs in Ger¬
many, 102 lire, 50 centimes in Italy, 73 kroner, 39
ore in Norway, 49 florins, 8 centimes in Holland,
98 crowns in Austria-Hungary and 38 rubles, 46
kopecks in Russia.
These checks also possess another important ele¬
ment of recommendation. If lost or stolen the owner
loses nothing and the finder or thief cannot use them.
Each check is numbered, and all the loser has to do
is to notify the company of the numbers and they
will be replaced without charge. When the checks
are purchased the purchaser is required to sign his
name on each check in a space provided for that
purpose. When he wants money abroad, or goes to
pay his hotel bill, he again signs his name in another
space. That is all the identification that is necessary.
If the two signatures agree, the checks will pass the
same as gold.
AMERICAN EXPRESS COMPANY.
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Traveler's Check.
CHAPTER X.
BLOCK SYSTEM OF STATING RATES.
Efforts are being made by the Interstate Commerce
Commission to introduce a new and simpler system of
stating express rates so the general public may
readily understand them. Simplicity is the ultimate
essential in express matters. Upon this principle the
postal service has been developed. Instead of be¬
coming more and more involved in classification,
rules, and rates, as has been the tendency, the
Commission holds there must be a complete reversal
of policy in this regard if the express company is to
availitself of its opportunities. And it may further and
no less emphatically be said that upon no other
principle can there be an avoidance of constant con¬
flict with the law, for it is manifest that neither ship¬
pers nor expressmen know the express rates of the
country, nor can experts be certain that the rates
they quote are certainly the lawful rates, so many are
the conflicting rules, routes, and scales.
Immense Number of Rates.
There are some thirty-five thousand express sta¬
tions in the United States. To separately state the
rates from each one of these stations to each of the
155
156 BLOCK SYSTEM OF STATING RATES.
others requires the statement of over 600,000,000
rates. The ordinary express agent is lost in the at¬
tempt to find a rate. With files of all the tariffs of
all the express companies at their command, the rate
clerks of the Commission find it difficult and uncer¬
tain work to locate the lowest legal rates applicable
to shipments moving between two points, particularly
when there are many possible routes and transfer
points via which the shipment may move. It is
small wonder, therefore, that so many overcharges
and undercharges result. The loss of time, loss of
revenue and lack of efficiency resulting from this
system of rates are incalculable.
It is purposed to substitute for these six hundred
million rates, a rate system, based upon the division
of the country into 950 blocks, each of which is out¬
lined on every schoolboy's map—the square formed
by one degree of latitude and longitude. These
blocks have an unvarying length of 69 miles and a
variable width of from 62 to 45 miles, according to
their location, and may be considered as embracing
an average of 3,500 square miles each.
Details of New System.
These blocks are numbered in series beginning at
the extreme northwest boundary of the state of
Washington with the number 101. This tier of
blocks is numbered consecutively eastward so far
as they lie within the United States. The block 101
is bounded on the north by the forty-ninth parallel
of north latitude, on the west by the one hundred
and twenty-fifth meridian.
BLOCK SYSTEM OF STATING RATES. 157
£
The second tier of blocks begins with No. 201,
located directly under No. 101. Each block in each
tier is numbered consecutively and falls directly
under the same numbered block in the first tier.
Thus the tier in which each block is located is in¬
dicated by the number of hundreds with which it is
initialed and the row in which it is located is indicated
by the number of tens with which it terminates.
Thus No. 1724 is in the seventeenth tier and twenty-
fourth row.
All blocks whose numbers terminate in 15, for
example, will be found directly under one another
from No. 115 to No. 1815. Each block having as
a terminal the number 35 will be found in one row,
beginning with No. 135 at the northern border of the
United States and ending at No. 2035 on the Gulf
of Mexico.
Reduction in Number of Rates.
By stating rates as applying from block to block
instead of from point to point simplicity will result
and the actual number of express rates in existence
will be reduced from over 600,000,000 to less than
345,000. But even 345,000 separate rates would
be an intricate structure for a local agent to handle,
and so it is proposed to still further reduce this volume
by requiring these carriers to publish a separate and
distinct tariff to apply from each block to all other
blocks.
There being 120 blocks in which there are no rail¬
roads or express stations, the total number of blocks
158 BLOCK SYSTEM OF STATING BATES.
between which rates are to be made is 830. It is
manifestly unnecessary that the rates between all
blocks shall be published in one tariff and in the
hands of each express agent. It is sufficient that
the express agent at every station shall know what
rates apply between his block and each one of the
other blocks. There being but 830 blocks, a single
sheet of paper will give reference to every block
number in the United States, and alongside of this
block number will be published the number of the
scale of rates applying between the block of origin
and the block of destination.
All of the stations within each of these blocks are
grouped as one point, and thus the rates are stated
from one small group of common points known as
a block to each of the other small groups of common
points known as a block. Manifestly, however, it
would not be practicable to publish the rate appli¬
cable upon each package between such blocks without
producing a tariff of great size and leading to infinite
confusion. To avoid these difficulties, and to fur¬
nish the shipper an easy method of discovering what
his rate may be upon a package of a given weight,
rates have been determined with respect to each pack¬
age and stated in a set of scales.
Method of Ascertaining Rates.
Let us now see, then, the method by which the rates
will be stated in the tariff. At the head of the tariff
sheet will appear the number of the initial block.
Assume that this is block No. 952 in which is the city
BLOCK SYSTEM OF STATING RATES. 159
of New York. Below will be published the numbers
of all the other blocks, and opposite each block
number will be the scale of rates applicable between
Block No. 952 and each of the other blocks in the
country. A shipper, then, wishing to know the rate
on a 10-pound package from New York to San Fran¬
cisco, would first turn to San Francisco in the Direc¬
tory of Stations and find the number of the block in
which San Francisco is located (No. 1203). Turn¬
ing, then, to the single-sheet tariff which shows the
rate between Block No. 952 and all other blocks in
the country, he would find Block 1203, and opposite
1203 would be the scale number applicable to pack¬
ages of all sizes up to 100 pounds between New York
and San Francisco. Scale 198, let us assume, is
the scale applicable between these points. Then by
looking at this scale, he would find that the rate upon
a 10-pound package, New York to San Francisco,
is $1.22. This would be the rate by all routes by
all express companies. It would be the rate from all
stations within the Block No. 952. It would be the
rate to all stations in Block No. 1203. The rate,
might be made to change by the carriers themselves
or through the orders of the Commission, but the
block number would not change. The only tariff
that it would be necessary to reprint would be that
which stated the scale number applying between the
two blocks, for with the change in a rate a new scale
number would be substituted. Thus there would
be a permanent basis established for stating rates
from which it would be unnecessary to deviate so
long as the block system itself was adhered to.
160 BLOCK SYSTEM OF STATING RATES.
One Rate Sheet Is Enough.
A single sheet, stating the block numbers and the
scale rates applicable thereto, together with the reg¬
ular printed set of scales, will furnish all the rates
between all the points in the United States, and
these it would not be expensive to produce, nor would
they be cumbersome to handle. To illustrate again,
the shipper in New Orleans wishing to have trans¬
ported a package to Portland, Me., first learns what
the number of the block is in which Portland is situ¬
ated. Then, turning to his tariff sheet, finds that
that block carries a certain scale number. This
scale gives him the rate applicable on whatever
weight of package he wishes to have transported.
It is recognized that such a system of stating rates
between blocks will not be equitable as between points
situated near to each other in adjoining blocks. For
this purpose a method of stating rates between points
in adj oining blocks has been devised. It is unnecessary
here to go into the detail of this method further than
to say that each one of the blocks, approximately 50
miles square, has been divided into 16 sub-blocks or
squares. These have been lettered from A to Q
(omitting J to prevent confusion).
That is to say, each one of these large blocks in
turn is subdivided into 16 smaller blocks which are
called sub-blocks or squares. This is done so that
points near each other within adjoining blocks shall
not bear the full measure of the rates between the
two most distant points in those blocks. Rates are
stated from each of these sub-blocks to each of the
BLOCK SYSTEM OF STATING RATES. 161
sub-blocks within a radius of two blocks, or approxi¬
mately 100 miles.
Recapitulation of the System.
To recapitulate—
(1) The United States is divided into blocks ap¬
proximately 50 miles square.
(2) Points within each block are common points,
excepting as to adjacent blocks.
(3) Rates shall be stated in scales giving a rate
applicable to packages weighing from 1 to 100 pounds.
(4) The scale applicable between two blocks is
found by reference to the single-sheet tariff posted in
each express office.
(5) A similar sheet gives the scale applicable to
all points in sub-blocks located within a radius of
two blocks or approximately 100 miles.
How to Use the Scale Card.
Having located the number of the block to which
he wishes to forward goods the shipper turns to the
tariff sheet and finds, for instance, that the rate
applicable to the point he desires to reach is given
in Scale No. 20. The scale sheet will show him at
a glance that the charges to this block range from 22
cents for packages not over one pound in weight,
up to $1.50 for 100 pounds.
Rates are quoted for every pound of weight, but
in very many instances there is no increase in
charge until several pounds have been added. This
162 BLOCK SYSTEM OF STATING RATES.
is especially noticeable in Scale No. 1, which governs
rates to nearby points, and consequently is the low¬
est. In this all packages up to four pounds take a
21-cent rate; packages from four to seven pounds a
22-cent rate; those from seven to ten pounds a 23-
cent rate, and so on up to 100 pounds, all packages
ranging from 98 to 100 pounds being carried at 65
cents, those from 95 to 98 at 54 cents, etc.
Scale No. 20 contains the rates covering charges
to more distant blocks, and consequently the tariff
is higher, and there is an increase for nearly every
additional pound of weight. Thus, packages of
from two to three pounds take a 23-cent rate; those
of from three to four pounds a 24-cent rate, etc.
There are a number of cases in which increases of 2
cents a pound are made. A package of from 20 to
21 pounds calls for a charge of 47 cents, while one of
from 21 to 22 pounds pays 49 cents.
Minimum and Maximum Charges.
There are 294 separate scales, No. 1 covering the
charges for the shortest distance, and No. 294 the
greatest. The minimum rate under No. 1 is 22
cents, and the maximum (for 100 pounds) $1.50.
Under No. 294 the minimum is 35 cents, and the
maximum $15.20. The graduations in charge in
No. 294, while based on the pound unit, are quoted
in multiples of 15 cents. A package of from five
to six pounds carries a charge of $1.10, while one of
from six to seven pounds pays $1.25, an additional
fifteen cents being added for every extra pound.
This system appears to combine the features of
BLOCK SYSTEM OF STATING RATES. 163
simplicity, and fairness to both shipper and carrier.
Charges are based on the distance haulage, starting
with an arbitrary rate for expenses in all instances,
regardless of distance. It would be manifestly un¬
fair, for instance, to say that, because the charge for
carrying a certain package 1,000 miles is 50 cents,
the charge for carrying the same package 100 miles
should be only 5 cents. There are terminal and other
expenses, such as messenger service, etc. which are
alike in both instances, regardless of the amount paid
by the shipper. Consequently we find that, while
the charge on a minimum-weight package carried the
maximum distance is only 35 cents, the charge on
the same package carried the shortest recognized
distance is 21 cents.
Short-Haul Charges Provided For.
As explained by the Interstate Commerce Com¬
mission the plan of charging for service by an arbi¬
trary block rate would not be fair in all instances.
The blocks contain an average area of 3,500 square
miles each. In the case of a package going from one
limit of Block 1148 to the opposite extreme limit
of Block 1147, the full block charge would be equi¬
table. But what about a package shipped from the
near limit of Block 1148 just over the line to a close-
by station in 1147? If the full block rate were to be
enforced the charges on the one package carried a
few miles would be just as much as those on the
package carried from the extreme of one block to the
opposite extreme of another, a much greater distance.
164 BLOCK SYSTEM OP STATING RATES.
This is guarded against by dividing the blocks
into sixteen squares each designated by a letter.
Block 1, for instance is cut up into squares A, B, C,
D, E, F, G, H, I, K, L, M, N, 0, P, and Q. This
arrangement, it should be understood, is to provide
for express traffic passing solely between adjacent
blocks. The letter J is omitted to avoid confusion.
Details of the Square Plan.
In considering this square plan the reader should
bear in mind the arrangement of the blocks. These
are so planned that the numbers in hundreds come
directly under one another. Washington, D. C.,
is located in Block 1148. Directly south of this,
and adjoining it, is Block 1248. Block 1048 adjoins
on the north, 1147 on the west, and 1149 on the east.
Consequently people patronizing express companies
in any of these five blocks are interested in the square
system. The man who wants to ship goods from
1148 to 1248, to 1048, 1147 or 1149, or from any one
of them to any adjoining block, is directly concerned.
In the same manner every block in the country
is co-related. What is said of Block 1148 holds good
as to any other block in the United States. But the
advantages of the square plan only apply as between
adjoining blocks.
The following diagrams will show the general
character of both the block and square systems, the
lettered diagram representing a block divided into
squares, and the numbered diagram six complete
blocks.
BLOCK SYSTEM OF STATING RATES. 165
1047
1048
1O40
1147
1148
1140
1247
1248
1249
*
Diagram of Block System.
166 BLOCK SYSTEM OF STATING RATES.
A
B
C
D
E
F
G
H
I
K
L
M
N
0
P
a
Diagram of Square System.
BLOCK SYSTEM OF STATING BATES. 167
Location of Stations by Blocks.
Suppose, for instance, a shipper wishes to send a
package from Square A, Block 532, to Square A,
Block 432. He consults the guide and finds that the
rate between these points is governed by Scale 13.
Turning to this he finds that the charge for a 10-
pound package is 29 cents; for 25 pounds 44 cents,
50 pounds 67 cents, 100 pounds $1.15.
But how shall the shipper ascertain in what block
or square the place he wishes to reach is located?
There is an express directory showing alphabetically
the location, by block and square, of every express
station in the United States, arranged as follows:
SAMPLE PAGE OF DIRECTORY.
A.
Aberdeen, S. Dak., 427 G.
Aitkin, Minn., 329 F.
Akinsville, Mo., 1133 E.
Alamagordo, Tex., 1720 A.
Albany, Ga., 1841 I.
Albany, N. Y., 752 E.
Albany, Oreg., 502 H.
Albuquerque, N. M., 1419 O.
Aldrich, Mo., 1232 F.
Alma, Mo., 1032 O.
Alpine, Tex., 1922 K.
Amity, Oreg., 402 Q.
Anabel, Mo., 1033 G.
Arcade, N. Y., 747 G.
Ardmore, Mo., 1033 F.
Argyle, Mo., 1133 M.
Arlington, Mo., 1234 A.
Armstrong, Mo., 1033 K.
Ash Fork, Ariz., 1413 K.
Ash Grove, Mo., 1232 K.
Ashburn, Mo., 1033 H.
Ashland, Oreg., 703 O.
Ashland, Wis., 335 E.
Ashtabula, Ohio, 845 A.
Astoria, Oreg., 302 N.
Atlanta, Ga., 1641 C.
Atlanta, Mo., 1033 C.
Atlantic City, N. J., 1051 L.
Bosworth, Mo., 1032 L.
Bottineau, N. Dak., 125 C.
Bourbon, Mo., 1134 Q.
Bowen, Mo., 1132 F.
Bowling Green, Mo., 1034
M.
Bowman, N. D., 322 P.
Brainerd, Minn., 331 M.
Brandon, Mo., 1132 G.
Braymer, Mo., 1032 E.
Breckenridge, Mo., 1032 A.
Briscoe, Mo., 1034 Q.
Brookfield, Mo., 1032 D.
Brookline, Mo., 1232 P.
Brooklyn, N. Y., 952 E.
Brookville, Pa., 846 Q.
Brownington, Mo., 1132 K.
Browns Station, Mo., 1033
P.
Brownsville, Oreg., 503 1.
Brownsville, Tex., 2428 C.
Brunswick, Mo., 1032 M.
Brush Creek, Mo., 1232 F.
Bucklin, Mo., 1033 A.
Buell, Mo., 1034 P.
Buffalo, N. Y., 747 A.
Burton, Mo., 1033 O.
Busch, Mo., 1034 H.
Butte, Mont., 313 O.
Cliquot, Mo., 1232 G.
Coffeyton, Mo., 1134 P.
Cole Camp, Mo., 1132 M.
Colfax, Wash.? 308 C.
Columbia, Ga., 1741 I.
Columbia, Mo., 1133 C.
Columbia, S. C., 1645 A.
Columbus, Ohio., 1043 A.
Colville, Wash., 108 E.
Concordia, Mo., 1132 B.
Conway Morgan, Mo., 1233
I.
Cook Station, Mo., 1234 C.
Coopertown, N. Dak., 227 L.
Corder, Mo., 1032 O.
Corpus Christi, Tex., 2228 C.
Corvallis, Oreg., 502 H.
Cowgill, Mo., 1032 E.
Crocker, Mo., 1233 C.
Crookston, Minn 229 C.
Cuba, Mo., 1134 P.
Curryville, Mo., 1034 L.
Cyrene, Mo., 1034 M.
D.
Dallas, Tex., 1729 A.
Dalton, Mo., 1033 I.
Danville, Ind., 1039 B.
Davis, Mo., 1034 Q.
Decatur, 111., 1037 A.
168 BLOCK SYSTEM OF STATING RATES.
Attica, N. Y., 747 B.
Augusta, Ga., 1644 I.
Aulville. Mo., 1032 O.
Aurora Springs, Mo., 1133 K.
Austin, Tex., 1928 K.
Auxvasse, Mo., 1033 N.
Axtell, Mo., 1033 C.
B.
Bagnelle, Mo. 1133 O.
Bakersfield, Cal., 1406 M.
Belmont, N. Y., 747 Q.
Baltimore, Md., 1049rK.
Bangert, Mo., 1234 B.
Barnesville, Minn., 329 G.
Barnett, Mo., 1133 K.
Barnstable, Mass., 855 G.
Barstow, Cal., 1508 D.
Bartlett, Mo., 1234 P.
Baton Rouge, La., 1934 M.
Beaman, Mo., 1132 D.
Beaufort, Mo., 1134 M.
Belle, Mo., 1134 K.
Bellflower, Mo., 1034 P.
Bellingham, Wash., 103 C.
Benton City, Mo. 1034 N.
Berger, Mo., 1134 G.
Bernheitner, Mo., 1134 G.
Billings, Mo., 1232 O.
Billingsville, Mo., 1133 A.
Birmingham, Ala., 1639 I.
Bisbee, Ariz., 1861 I.
Bismark, N. Dak., 325 A.
Blackburn, Mo., 1032 P.
Bland, Mo., 1134 K.
Blairstown, Mo., 1132 E.
Bloomîagton, Mo., 1033 B.
Bluffton, Mo., 1134 P.
Bogard, Mo., 1032 K.
Bolivar, Mo., 1232 G.
Bonnots Mill, Mo., 1134 E.
Boonviile, Mo., 1133 B.
Boston, Mass., 754 M.
C.
Cabool, Mo., 1233 Q.
Cairo, Mo., 1033 G.
Calhoun, Mo., 1132 K.
California, Mo., 1133 F.
Callao, Mo., 1033 B.
Canaan, Mo., 1134 K.
Carlow, Mo., 1032 A.
Carrington, Mo., 1133 D.
Carrington, N. Dak., 226 L,
Carrolton, Mo., 1032 K.
Case, Mo., 1134 G.
Castleton, N. Dak., 328 D.
Cattaragus, N. Y., 747 I.
Cedar City, Mo., 1133 H.
Cedar Gap, Mo., 1233 N.
Center, Mo., 1034 F.
Centerview, Mo., 1132 E.
Centralia, Mo., 1033 Q.
Chamois, Mo., 1134 E.
Charleston, S. C., 1746 A.
Charleston, W. Va., 1144 I.
Chattanooga, Tenn., 1440 P.
Chehalis, Wash., 303 E.
Cheyenne, Wyo., 821 N.
Chicago, 111., 838 B.
Chîckasha, Okla., 1428 N.
Chtco, Cal., 1004 E.
Chilhowee, Mo., 1132 E.
Chillicothe, Mo., 1032 B.
Chula, Mo., 1032 C.
Cincinnati, Ohio, 1041 O.
Clarence, Mo., 1033 G.
Clark, Mo., 1033 L.
Clarksburg, Mo., 1133 F.
Claysville, Mo., 1133 G.
Clayton, 1530 G.
Cleveland, Ohio, 844 F.
Clever, Mo., 1232 P.
Clifton, Ariz., 1616 Q.
Clinton Hill, Mo., 1033 K.
Clinton, Mo., 1132 I.
Deepwater, Mo., 1132 I.
Deming, N. Mex., 1718 O.
Denton, Mo., 1132 E.
Denver, Colo., 1021 E.
Depew, N. Y., 747 B.
Detroit, Mich., 742 M.
Detroit, Minn., 330 A.
Devils Lake, N. Dak., 127 N.
De Witt, Mo., 1032 M.
Diggins, Mo., 1233 N.
Dillon, Mo., 1234 B.
Dover, Del., 1050 O.
Duluth, Minn., 333 D.
Dunnegan, Mo., 1232 F.
Durham, Mo., 1034 B.
Durham, N. C., 1347 N.
E.
Eagle Pass, Tex., 2125 F.
Easly, Mo., 1133 C.
Easton, Pa., 950 D.
Edgewood, Mo., 1034 M.
El Centro, Cal., 1710 C.
Eldon, Mo., 1133 K.
Elliott, Mo., 1033 L.
Elmer, Mo., 1033 B.
El Paso, Tex., 1819 C.
Elston, Mo., 1133 G.
El wood, Mo., 1232 P.
Emma, Mo., 1132 C.
Enon, Mo., 1133 L.
Estell, Mo., 1033 O.
Ethel, Mo., 1033 A.
Etlah, Mo., 1134 G.
Etterville, Mo., 1133 L.
Eudora, Mo., 1232 K.
Eugene, Mo., 1133 L.
Eureka, Cal., 901 D.
Evansville, Mo., 1033 L.
Evelyn, Mo., 1033 A.
Everton, Mo., 1232 K.
Excello, Mo., 1033 G.
By consulting this directory it is found, for in¬
stance, that Aberdeen, S. D., is in Square G, Block
427, and Butte, Montana, in Square O, Block 313.
Finding the Scale Number.
To find the scale number applying from any square in Block 532 to
any square in any other block find the letter by which the square in Block
532 is designated in the heading of the table. Follow the perpendicular
line down to where it intersects the horizontal line on which is located
BLOCK SYSTEM OF STATING RATES. 169
the number and the letter indicating the square in which the destination
is located. At the intersection will be found the number of the rate
scale to be used.
To-
From Block No. 532, square letter-
Block
No.
Square
letter
A
B
C
D
E
F
G
H
I
K
L
M
N
0
P
Q
431
A
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
431
B
8
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
431
C
8
8
13
13
8
13
13
13
13
13
13
13
13
13
13
13
431
D
8
8
8
13
8
8
13
13
8
13
13
13
13
13
13
13
431
E
8
13
13
13
13
13
13
13
13
13
13
13
13
13
13
13
431
F
8
8
13
13
8
13
13
13
13
13
13
13
13
13
13
13
431
G
8
8
8
13
8
13
13
13
8
13
13
13
13
13
13
13
431
H
8
8
8
8
8
8
8
13
8
8
13
13
8
13
13
13
431
I
8
8
13
13
8
13
13
13
13
13
13
13
13
13
13
13
431
K
8
8
8
13
8
8
13
13
8
13
13
13
13
13
13
13
431
L
8
8
8
8
8
8
8
13
8
8
13
13
8
13
13
13
431
M
4
8
8
8
8
8
8
8
8
8
8
13
S
8
13
13
431
N
8
8
4
13
8
8
13
13
8
13
13
13
13
13
13
13
431
0
8
8
8
8
8
8
8
13
8
8
13
13
8
13
13
13
431
P
4
8
8
8
8
8
8
8
8
8
8
13
8
8
13
13
431
Q
4
4
8
8
4
8
8
8
8
8
8
8
8
8
8
13
531
A
8
8
8
8
8
8
8
13
8
8
13
13
8
13
13
13
531
B
4
8
8
8
8
8
8
8
8
8
8
13
8
8
13
13
531
C
4
4
8
8
4
8
8
8
8
8
8
8
8
8
8
13
531
D
4
4
4
8
4
4
8
8
4
8
8
8
8
8
8
8
531
E
8
8
8
13
8
8
8
8
8
8
8
13
8
8
13
13
531
F
8
8
8
8
4
8
8
8
8
8
8
8
8
8
8
13
531
G
4
8
8
8
4
4
8
8
4
8
8
8
8
8
8
8
531
H
4
4
8
8
4
4
4
8
4
4
8
8
4
8
8
8
531
I
8
8
13
13
8
8
8
13
8
8
8
8
8
8
8
13
531
K
8
8
8
13
8
8
8
8
4
4
8
8
8
8
8
8
531
L
8
8
8
8
4
8
8
8
4
4
8
8
4
8
8
8
531
M
4
8
8
8
4
4
8
8
4
4
4
8
4
4
8
8
531
N
8
13
13
13
8
8
13
13
- 8
8
8
13
8
. 8
8
8
531
0
8
• 8
13
13
8
8
8
13
8
4
8
8
4
8
8
8
531
P
8
8
8
13
8
8
8
8
4
4
8
8
4
4
8
8
531
Q
8
8
8
8
4
8
8
8
4
4
8
8
4
4
4
8
Handy Means of Locating Scale Number.
SCALE Ko.
Packages not over 1 pound..
Over 1 and not over 2 pounds
2
M 3
" 4
" 5
•• «
m 7
" 8
• 9
" 10
" 11
H 12
" 13
" 14
15
18
17
18
19
20
21
22
23
24
25
26
27
28
29
" 30
'• 31
» 32
" 33
•• 34
35
36
37
38
39
" 40
" 41
•• 42
" 43
"44
" 45
'• 46
.. 47
" 48
" 49
3
4
5
" 6
7
» 8
m 9
" 10
44
44
44
44
44
44
11
12
13
14
15
44
• 4
44
4»
" 18
«. 17
•• ia
•• id
" 20
" 21
" 22
« 23
» 24
" 25
" 26
" 27
" 28
" 29
M 30
31
32
33
34
35
44
41
" 36
" 37
" 38
" 39
M 40
» 41
" 42
" 43
" 44
" 45
43
47
48
49
50
1
2
3
4l
5
6
7
8
.9
10
11
12
13
14
15
ie
tr
18
19
$0.21
«0.21
SO. 21
«0.21
$0.21
$0.21
$0.21
«0. 21
$0. 21
«0. 21
SO. 21
SO. 21
SO. 21
SO. 2l
«0.22
SO. 22
«0.22
$0.22
to. a
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.46
.47
.49
.50
.52
.54
.55
.57
58
.60
.32
.33
,35
.36
.38
.40
.41
.43
.45
.46
.48
.50
.51
.63
.55
.56
.58
.60
.61
.32
.32
.34
.35
.37.
.39
.40
.42
.44
.45
.47
.49
.51
.52
.54
: 56
.57
.59
.61
.62
.34
.38
.37
.39
.41
.43
.44
.46
.48
.50
.51
.53
.65
.57
.58
.60
.82
.64
.33
.34
.36
.38
.40
.42
.*3.
.45
.47
.49
.51
.52
.54
.56
.58
.60
.61
.63
.65
.33
.35
.37
.38
.40
.42
.44
.46
.48
.50
.51
.53
.55
.57
.59
.61
.63
.64
.66.
.33
.35
.37
.39
.41
.43
.45
.47
.48
.50
.52
.54
.56
.58
.60
.62
.64
.66
.67
.34
.36
.38
.39
.41
.43
.45
.47
.49
.51
.53
.55
.57
.59
.61
.63
.65
.67
.69
.76
; 34
.36
.38
.40
.42
.44
.46
.48
.50
.52
.54
.56
.58
.60
.62
.64
.66
.68
. 34
.36
.38
.40
.43
.45
.47
.49
.51
.53
.55
.57
.59
v 61
.63'
.65
.67
.69
.71
.35
.37
.39
.41
.43
.45
.47
.49
.61
.54
.56
.58
.60
.62
.64
.66
.68
.70
.72
.35
.37
.39
.41
.44
.46
.48
.50
.52
.54
.57
.59
.61
.63
.65
.67
.69
.72
.74
.35
.38
.40
.42
.44
46
.49
.51
.53
.55
.57
.60
.62
.64
.66
.68
.71
.73
.75
.36
.38
.40
.42
.45
.47
.49
.51
.54
.56
.58
.60
.63
.65
.67
.69
.72
.74
.76
.36
.38
.41
.43
.45
.48
.50
.62
.54
.57
.59
.61
• -64
.66
.68
.71
.73
.75
.77
.36
.39
.41
.43
.46"
.48
.51
.53
.55
.58
.60
.62
.65
.67
.69
.72
.74
.76
.79
.37
.39
• .42
.44
.46
.49
.51
.54
.56
.58
.61
.63
.66
.68
.70
.73
.75
.78
.80
.37
.40
.42
.44
.47
.49
.52
.54
.57
.59
.62
.64
.67
.69.
.71
.74
:76
79
.81'
.37
.40
.42
.46
.47
.50
.52
.55
.57
.60
.62
.65
: 67
.70
.72
.75
.77
.80
.82,
20
$0.23.
. 23"
.24
.25
.2«
m
.52
.73
.73
.7&
.77
.79
.80
.81
82
.84
.83
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BLOCK SYSTEM OF STATING RATES. 171
On the opposite page (170) is given the system
for finding the rate for various sized packages under
the different scales. Thus, we can see at a glance
that the rate for packages of one pound or less under
Scale No. 1 is 21 cents, while the rate for packages
of 50 pounds under the same scale is 37 cents. Under
Scale No. 22 the one-pound rate is 22 cents, while
that for 50 pounds is 85 cents.
Reduction in Rates Proposed.
An idea of what the Commission expects to accom¬
plish in the way of reducing rates by means of the
block plan may be had from the following official
statement as given on page 172:
172 BLOCK SYSTEM OF STATING RATES.
Rates between St. Paul-Minneapolis, Minn., Block
532, and—
Colum¬
biana, Ohio.
Block 945.
Pittsburgh,
Pa.
Block 946.
■
Altoona,
Pa.
Block 947.
New York,
N. Y.
Block 952.
Present.
Proposed.
Present.
Proposed.
Present.
Proposed.
Present.
Proposed.
!
Packages not over 1 pound
$0.25
$0.23
$0.25
$0.23
$0.25
$0.23
$0.30
$0.24
Over 1 and not over 2 pounds..
.35
.25
.35
.25
.35
.25
.35
.26
Over 2 and not over 3 pounds..
.45
.27
.45
.27
.45
.28
.45
.30
Over 3 and not over 4 pounds..
.60
.30
.60
.30
.60
.30
.60
.33
Over 4 and not over 5 pounds..
.70
.32
.70
.3,2
.70
.33
.75
.36
Over 5 and not over 6 pounds..
.85
.35
.85
.35
.85
.36
.90
.39
Over 6 and not over 7 pounds..
.85
.37
.85
.37
.85
.38
.90
.42
Over 7 and not over 8 pounds..
1.00
.40
1.00
.40
1.00
.41
1.00
.46
Over 8 and not over 9 pounds..
1.00
.42
1.00
.42
1.00
.43
1.00
.49
Over 9 and not over 10 pounds.
1.00
.44
1.00
.45
1.00
.46
1.00
. 52
Over 10 and not over 11 pounds
1.10
.47
1.10
.47
1.10
.49
1.15
.55
Over 11 and not over 12 pounds
1.10
.49
1.10
.50
1.10
.51
1.15
.58
Over 12 and not over 13 pounds
1.10
.52
1.10
.52
1.10
.54
1.15
.62
Over 13 and not over 14 pounds
1.10
.54
1.10
.55
1.10
.56
1.15
.65
Over 14 and not over 15 pounds
1.10
.57
1.10
.57
1.10
.59
1.15
.68
Over 15 and not over 16 pounds
1.25
.59
1.25
.60
1.25
.62
1.30
.71
Over 16 and not over Impounds
1.25
.62
1.25
.62
1.25
.64
1.30
.74
Over 17 and not over 18 pounds
1.25
.64
1.25
.65
1.25
.67
1.30
.78
Over 18 and not over 19 pounds
1.25
.67
1.25
.67
1.25
.69
1.30
.81
Over 19 and not over 20 pounds
1.25
.69
1.25
.70
1.25
.72
1.30
.84
Over 20 and not over 21 pounds
1.40
.71
1.40
.72
1.40
.75
1.50
.87
Over 21 and not over 22 pounds
1.40
.74
1.40
.75
1.40
.77
1.50
.90
Over 22 and not over 23 pounds
1.40
.76
1.40
.77
1.40
.80
1.50
.94
Over 23 and not over 24 pounds
1.40
.79
1.40
.80
1.40
.82
1.50
.97
Over 24 and not over 25 pounds
1.40
.81
1.40
.82
1.40
.85
1.50
1.00
Over 25 and not over 26 pounds
1.60
.84
1.60
.85
1.60
.88
1.70
1.03
Over 26 and not over 27 pounds
1.60
.86
1.60
.87
1.60
.90
1.70
1.06
Over 27 and not over 28 pounds
1.60
.89
1.60
.90
1.60
.93
1.70
1.10
Over 28 and not over 29 pounds
1.60
.91
1.60
.92
1.60
.95
1.70
1.13
Over 29 and not over 30 pounds
1.60
.93
1.60
.95
1.60
.98
1.70
1.16
Over 30 and not over 31 pounds
1.70
.96
1.70
.97
1.70
1.01
1.90
1.19
Over 31 and not over 32 pounds
1.70
.98
1.70
1.00
1.70
1.03
1.90
1.22
Over 32 and not over 33 pounds
1.70
1.01
1.70
1.02
1.70
1.06
1.90
1.26
Over 33 and not over 34 pounds
1.70
1.03
1.70
1.05
1.70
1.08
1.90
1.29
Over 34 and not over 35 pounds
1.70
1.06
1.70
1.07
1.70
1.11
1.90
1.32
Continued on page 173.
BLOCK SYSTEM OF STATING RATES. 173
Continued from page 172.
Over 35 and not over 36 pounds
1.85
1.08
1.85
1.10
1.85
1.14
2.00
1.35
Over 36 and not over 37 pounds
1.85
1.11
1.85
1.12
1.85
1.16
2.00
1.38
Over 37 and not over 38 pounds
1.85
1.13
1.85
1.15
1.85
1.19
2.00
1.42
Over 38 and not over 39 pounds
1.85
1.16
1.85
1.17
1.85
1.21
2.00
1.45
Over 39 and not over 40 pounds
1.85
1.18
1.85
1.20
1.85
1.24
2.00
1.48
Over 40 and not over 41 pounds
1.88
1.20
2.00
1.22
2.00
1.27
2.25
1.51
Over 41 and not over 42 pounds
1.88
1.23
2.00
1.25
2.00
1.29
2.25
1.54
Over 42 and not over 43 pounds
1.88
1.25
2.00
1.27
2.00
1.32
2.25
1.58
Over 43 and not over 44 pounds
1.88
1.28
2.00
1.30
2.00
1.34
2.25
1.61
Over 44 and not over 45 pounds
1.88
1.30
2.00
1.32
2.00
1.37
2.25
1.64
Over 45 and not over 46 pounds
1.88
1.33
2.00
1.35
2.00
1.40
2.25
1.67
Over 46 and not over 47 pounds
1.88
1.35
2.00
1.37
2.00
1.42
2.25
1.70
Over 47 and not over 48 pounds
1.88
1.38
2.00
1.40
2.00
1.45
2.25
1.74
Over 48 and not over 49 pounds
1.88
1.40
2.00
1.42
2.00
1.47
2.25
1.77
Over 49 and not over 50 pounds
1.88
1.42
2.00
1.45
2.00
1.50
2.25
1.80
For the better protection both of the shipper and
of the carrier, it is believed that this rule (proposed
by the Interstate Commerce Commission) should be
further amended so as to require that shipments
must be packed in a manner to insure safe transpor¬
tation with ordinary care on the part of the express
companies, and that packages containing fragile
articles or articles consisting wholly or in part of, or
contained in, glass must be plainly marked to indi¬
cate the nature of the contents.
CHAPTER XI.
FRUITFUL CAUSES OF COMPLAINT.
Complaints of abuses in the express service are
more numerous, and in most instances apparently
more justifiable, than in any other branch of trans¬
portation. It is not probable that the managing
officials of the companies deliberately encourage the
practices which lead to these complaints by concerted
action, but, at the same time, there can be no denial
of the fact that "the abuses complained of are not
confined to any one or two companies. They are
general, pertaining to all express companies alike
to greater or lesser degree, and for this reason the
general public has formed the opinion that the abuses
are part of a deliberately laid plan to mulct it.
General Nature of Complaints.
Some of the abuses complained of are:
Double collection of lawful charges.
Overcharges and undercharges effecting discrim¬
ination between shippers arising out of an obscure
rate system and ineffective revision and supervision
of accounts.
Indirect routing of shipments by the express car¬
rier, resulting in unreasonable delays and defeating
175
176 FRUITFUL CAUSES OF COMPLAINT.
the reason for the existence of an express service as
distinguished from ordinary freight service.
Failure or refusal to deliver parcels to consignees
located outside of arbitrarily established free-delivery
limits without notice being given either to the con¬
signor or consignee as to the extent of free-delivery
territory.
Unreasonableness of the terms of shipment im¬
posed by the receipt given by the carrier.
Delays in the settlement of claims for loss and
damage.
Excessive insurance charges when shipments are
valued at more than $50.
Delays in the return of C. 0. D. collections to
consignors.
The obscure statement of rates making the public
dependent almost entirely upon the information
furnished them by express agents.
Position of the Expfess Companies.
All of the express companies have had a full hearing
upon these matters of complaint before the Inter¬
state Commerce Commission, and have given
throughout the inquiry expression to a consciousness
on their own part of the necessity for a change in
their practices and rules which will bring them into
stricter conformity with the requirements of the act
to regulate commerce and will make the service more
satisfactory. There has been practically no attempt
at evasion or excuse.
In this connection it should be borne in mind that
FBUITFUL CAUSES OF COMPLAINT. 177
express carriers remained for twenty years entirely
without regulation as to interstate traffic after the
railroads had become subjects of control, and it is
therefore not surprising that abuses in the system were
not checked. Individual carriers have attempted
it, but have failed because of lack of uniformity
in action, and the inability of the government, until
recently, to compel the universal adoption of prac¬
tices that are just and fair.
Double Collection of Charges.
Complaints of this practice are widespread. They
come from all parts of the country and affect all
express carriers. The managing officials ascribe
them to carelessness and clerical errors, but the uni¬
formity with which they occur, the delays and
obstacles thrown in the way of those who attempt
to collect claims of this nature, and the failure of the
companies to discipline the offending employees or
improve the service, lends color to the suspicion that
this feature is not entirely the result of accident or
carelessness.
It has been the practice of the express company
to receive a prepaid package and stamp it as prepaid.
Upon delivery, however, the carrier's wagon driver
would be given a book, which showed upon what
packages collection should be made, and by this
book he was to be guided rather than by any marking
upon the package. In many cases the package
when prepaid was not marked as prepaid, and in
other cases by the oversight of the agent at the point
178 FRUITFUL CAUSES OF COMPLAINT.
of delivery the wagon driver's delivery record did
not state the fact of prepayment; and at many inter¬
mediate stages between the point of origin and the
door of the consignee there was opportunity through
slipshod methods of bookkeeping and checking for
the record to misstate the fact, causing a lot of
aggravating annoyance, and the extortion of double
charges. Shippers will prepay charges, and the
receivers be called upon to pay again, although in
many cases the packages are plainly stamped "pre¬
paid." It is a question of submitting to the extor¬
tion, or having the driver refuse to deliver the goods.
Remedy Proposed by Commission.
To remedy this objectionable condition the Com¬
mission proposes the establishment of a uniform
system of billing and the adoption of a uniform rule
regarding the delivery of packages. The Commis¬
sion holds that whenever a package which does not
bear a label is presented to a consignee it shall be
delivered without charges to the consignee. This
rule should be based upon another, which is that to
every package should be attached at the point of
origin by the driver or receiving clerk one of the
following labels :
(See next page).
FRUITFUL CAUSES OF COMPLAINT. 179
To Be Printed on White Paper.
Express Company
no. From
[loMft point of origin.]
Dept. No Tally No.- Route No.
Express Charges on
this shipment are
Tf express charges appear as collect on delivery sheet, deliver free,
entering all numbers shown hereon and on the waybill label, oppo-
Value
Weight
Charges
$
$
-
-
Pieces
To Be Printed on Yellow Paper.
Accompanying each shipment is a way-bill like the
following :
{See next page).
00
Express Co. COLLECT FREIGHT W. 8.
(1) Messengers and
>4) «81 stamp la
and «fin these spaces are
(21 toaster points wfth
(5* these spaces ta
afl accepted, messragm
Notation
(3) Connecting companies
16 ' consecutive order.
«81 stamp on the hack.
Rati and Rev. Verified av
Rjtc. Office
Dcuvikt Record
FROM
Clerk No
No.
Date
[Insert point of origin.)
To
State
Consignee
Destination or Local Address
Article
Weight sniffer
Rati
$
Value
$
Routino Via
Advances
to Collect
Exf. Charges
to Collect
Total Collect
Paid in Part
Way-bill for "Collect" Shipment.
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Express Co. ffiEPâlO FREIGHT W. 8.
(1) Messengers and
(2) transfer points with
(3) connecting campa aies
(4) wffl stamp ta
Mod when these spaces are
(5) these spaces La
all occupied* messengers
(6) consecutive order,
will stamp on the back.
Wotation
Rate and Rev. Verified by
REC. OFFICE
Delivery Record
prom ^PREPAID
FROM
Clerk No.
no
Date
(Insert point of origin^
To
State
Consignee
Destination or Local Address
Article:
Weight
Sttivrcit
ROQflNG vfa
express fl
charges 1
REPAID
to whom paid
Prepaid
Beyond
Ado Under- j
charge *
.
Rate
Value
S
$
Way-bill for "Prepaid" Shipment.
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00
182 FRUITFUL CAUSES OF COMPLAINT.
.. Express Co.
from Clerk No.
no.
Date
[Insert point of ©rtgin.l
To State
Consignee
Destination or Local Address
article
Weight
Shipper
Routing Via
Advances
to Collect
Exp. Charges
to Collect
Total Collect
Paid in Part
Rate
Value
If this shipment »rrit«9 without a regular waybill, Agent will nmk® a
substitute copy of the original waybill from information given hereon, and
deliver shipmeuf to consignee, or transfer to connecting company with
substitute waybill.
«
$
Way-bill to be Pasted on Package.
This gives to the express agent at the forwarding
office a record showing whether the package has been
prepaid or not. He in turn is to attach to the pack¬
age a copy of a way-bill printed on the same colored
paper as the label originally attached to the package
at the door of the consignor.
The express company is to make out these way¬
bills in triplicate, one being attached to the pack¬
age, one being reserved by the office of the carrier
at point of origin, and one being forwarded to the
point of destination, so that a check at destination
can be kept by the carrier's agent upon each package.
When, therefore, a package bearing a yellow label
reaches the consignee, it shows that such package has
been prepaid. Where it bears a white label it shows
that it has been sent collect. If it bears no label
the burden is upon the express company to deliver
the package, and if upon examination of its records
FRUITFUL CAUSES OF COMPLAINT. 183
it finds that through its mistake or otherwise the
delivered package has not been prepaid it must look
in the first instance to the consignee for payment
of the lawful charges.
Overcharges and Undercharges.
In the aggregate, the amount of charges collected
in excess of legal rates from some shippers has been
large. It is equally true, however, that these over-
collections have in the greater part been counter¬
balanced by failure to collect full legal rates from
others. The assessment and collection of greater
than legal charges and the failure to collect the full
legal charge appears to have resulted chiefly from the
system of rates which was obscure and open to mis¬
construction and misinterpretation, and while there
may have been no intention to discriminate the
effect was the same. With at least one of the express
companies it appears to have been the practice to
offset the overcharges against the undercharges when
discovered; for the individual amounts involved were
usually so small as (in the mind of the express
manager) not to justify the expense of making the
necessary refunds and collections in order to comply
with legal requirements.
More Simple System Necessary.
The prime requisite for the elimination of these
overcharges and undercharges is a simplified system
of rates. A new scheme of rate making must take
the place of the present complicated rate structure.
184 FRUITFUL CAUSES OF COMPLAINT.
A system of through rates must be substituted for
the present plan of making rates by way of transfer
points, a scheme whereby it will be possible for the
agent at the point of origin to obtain the proper
through charges by reference to a simple schedule
which will give the same rate from point of origin
to destination, no matter by what route the ship¬
ment may travel and without reference to the num¬
ber of carriers that may participate in the haul. As
a preliminary to the adoption of such a system it
should be required of the carriers that they jointly
establish and publish through rates between all points
reached by the lines of the various companies. The
performance of this task appears to be made possible
only by the adoption of a system of blocks and zones,
such as has been described.
Present Tariffs Too Involved.
As present express tariffs are constituted the seeker
for a through rate between points widely removed
must first find the local rates applying between the
points of origin and the many transfer points by
which the shipment may possibly move before he
can determine which combination will produce the
lowest through rate. It is manifest, therefore, that
the opportunity for error in the assessment of rates
is multiplied by the number of possible combinations
that may be made. In many instances from 5 to 15
different combinations may be found, and the ship¬
per, even though an expert, can never be certain
that he has found the lowest combination. With
FRUITFUL CAUSES OF COMPLAINT. 185
the block plan suggested there can be only one rate
between two points, and thus by the elimination of
combinations of locals the opportunity for error is
reduced to a minimum.
As a further precaution against erroneous charges
the rule should be that the agent at the receiving
station shall in every instance revise the charges
upon receipt of the way-bill before making collections
on collect shipments, and that the agent at point of
origin shall cause all prepaid way-bills to be revised
as to weights and charges, and refund of overcharges
be made within 24 hours in event of overcollections
having been erroneously made. This system of
revision of way-bills is one which, with a proper inter¬
nal organization and a simplified rate system, will
entail little if any, additional expense upon the express
companies, as has been proved by their efforts at
revision since their attention has been called to the
defects in the present system. It is admitted by the
express companies that revision of their business
within 24 hours may be done at a minimum of
expense, and for the more effective provision of
such a system it is recommended to these carriers
that they organize a clearing-house association, or
association of accounting officers, for the purpose of
devising a proper system to carry out these require¬
ments.
Circuitous Routing of Shipments.
Expedition is the very soul of the express business.
We find, however, that it has been the custom of the
express carriers when shipments have been intrusted
186 FRUITFUL CAUSES OF COMPLAINT.
to them for delivery at points not on the lines of
railroad over which they operate to retain possession
of the shipment so as to receive the longest possible
haul before being delivered to the final carrier. In
many cases this delay has been accompanied by the
assessment of excessive charges based upon the long
routing instead of the route over which the shipment
should have traveled. It does not appear that the
making of the indirect route the basis of the charge
has been a systematic or intentional misapplication
thereof by the agent at the point of origin, who, in
routing the business, has been following the instruc¬
tions of his superiors and who^ from lack of time or
from lack of interest in the matter, is satisfied to
assess the rate via the route which the shipment
travels rather than to trace out the most direct
route and apply the charge which should have been
applied under the tariffs.
Plan Suggested by Commission.
For the cure of this most annoying, and one of the
most frequent, causes of complaint against the
express companies, the Commission says they should
be required forthwith to establish and jointly publish
through routes between the principal points in the
United States, which routes shall follow the main
routes of travel the most direct in point of time
measured by the schedule of those passenger trains
by which normal schedules are observed. These
joint through routes should be known and desig¬
nated by number and should be filed With the Inter¬
state Commerce Commission. The tariffs in which
FRUITFUL CAUSES OF COMPLAINT. 187
these through rates are named should, as a matter
of information, state the usual time occupied in the
transportation of express traffic between the termini
of these routes, but this should not be construed as
a guaranty of delivery within that time. The
naming of these through routes should be binding
upon the carriers as to the rates that are to be
applied and should constitute an index to the shipper
of the probable time to be consumed between the
point of origin and destination. The carriers should
be required to add to such through routes as rapidly
as possible and to change them as often as may be
necessary for the better accommodation of the
traffic.
How Information Should Be Given.
The publication in which these through routes are
named should contain a description of such through
routes to consist of—
(1) The names of the termini and the number
of the route, as, for instance, "New York to New
Orleans; through route No. —. "
(2) The gateways via which such carriers operate
between points of origin and destination, as, for
instance, "New York, New Orleans, Adams Express
Company via Washington, D. C.; Southern Express
Company via Atlanta."
(3) The names in alphabetical order of all the
principal stations on the through routes so estab¬
lished.
(4) An alphabetical index of stations, showing
188 FRUITFUL CAUSES OF COMPLAINT.
the route number or numbers by which each may be
reached.
The consignor shall have the right to designate in
writing the joint through route thus established and
published, by which the specific shipment shall
move; provided, however, that in an emergency the
originating or any intermediate express company
shall have the right, in the interest of expedition, to
send the shipment by some other route than the one
designated by the shipper, if delivery is not delayed
by such action or the rate increased. The express
companies have undertaken to establish a joint
routing committee for the purpose of immediately
putting into effect this method of stating routes,
and to continue such joint-routing committee for
the purpose of extending wherever necessary and as
rapidly as practicable such method between all
points.
Arbitrary Free-Delivery Limits.
Another fruitful source of dissatisfaction with
express carriers has been their neglect or refusal to
deliver shipments outside of arbitrarily established
free-delivery limits, of which the shipper has had no
previous notice or information. In many instances
these delivery limits are not named in any publica¬
tion of the carrier, and appear to be entirely within
the control of the whim or inclination of the local
agent. The popular conception of express service
is that it includes the free delivery of the package
at the consignee's address. This conception has
FRUITFUL CAUSES OF COMPLAINT. 189
been fostered and encouraged by the express com¬
panies themselves, so that when a consignee is
required either to call for his package or submit to
an extra charge for its delivery, complaint and dis¬
satisfaction follow. The Commission has, therefore,
ordered that the express carriers publish a joint
general directory, alphabetically arranged by cities,
of all express offices in the United States, the name
of each office to be followed by a statement as to
whether a free-delivery service is maintained at such
office or not. Where a free-delivery service is
maintained, unless the publication shall circumscribe
the delivery limits, it shall be understood that the
delivery service comprehends the corporate limits
of the place named.
Regulations For Free Delivery.
At each of such offices where restricted free-delivery
limits have been established, the boundaries of the
free-delivery zones should be shown in a condensed
and abbreviated form sufficient to give notice to the
shipper and consignee of the outline of the limits
thereof, by streets, as for instance:
San Diego, Cal.—Bay ave., from the beach east to 32d st.; north on
32d st. to Horton ave. ; west on Horton ave. to City park; north on Arizona
ave. from City park to Adams ave.; west on Adams ave. to city line;
west on city line to Ingals st.; south on Ingals st. to Vine st.; west on Vine
st. to the beach.
At each point where delivery is made by local
express companies beyond the established delivery
limits a footnote should be shown reading as follows :
Note.—Shipments delivered by local express companies to points out¬
side of the defined delivery limits as shown herein will be subject to the
additional charge of such local express companies.
190 FRUITFUL CAUSES OF COMPLAINT.
The charge for this service is usually—cents per package, but the com¬
pany does not guarantee delivery at this rate, which is subject to change
without notice. Prepayment of such charges may be made by consignor
at point of origin, subject to the collection from consignee of any defi¬
ciency in the amount so prepaid.
This directory should be filed with the Commission
and conform to the express tariff regulations of the
Commission, subject to such modifications as the
Commission may find necessary or desirable, and
copies should be posted at all express offices in the
United States. Copies of this and all similar publi¬
cations thus suggested should be furnished to all
shippers upon payment of a reasonable charge there¬
for, which charge should not exceed the actual cost
of printing such extra copies as may be required to
meet the demands of shippers. The carriers have
expressed themselves as agreeable to the course
here outlined as to all of the matters here dealt
with.
Unreasonable Limitations in Receipt.
The law requires that the carrier shall give a
receipt for the package it receives. The receipt
now given is not satisfactory, chiefly because of
the conditions thereto attached. These conditions,
it is said, have been so worded as to improperly limit
the rights of the shippers thereunder and to dis¬
courage the presentation of claims by shippers whose
consignments have been lost or damaged in transit.
The rates of the express carriers have heretofore
been based upon a limitation of value of $50 per ship¬
ment, and the receipts given by the express carrier
have contained a provision which limited recovery
FBUITFUL CAUSES OF COMPLAINT. 191
in case of loss to this amount. The validity of this
provision has been challenged and has been the
subject of judicial interpretation with the result
that various constructions have been given to the
receipt, which has been upheld in some courts and
not sustained in others, and is now before the Supreme
Court for final adjudication. The representatives
of some shippers have urged the elimination of this
limitation as the basis of express rates, whereas
other shippers have contended for the retention of
this limitation of value,' and for the abolition of the
arbitrary charge which the carrier has heretofore
assessed upon shipments valued in excess of $50,
contending for their right to independently insure
values in excess of $50, wherever such insurance
could be procured most cheaply. Associations are
maintained in various commercial centers for the
insurance of express shipments, and these insurers
have usually made a lower charge for the risk than
that imposed by the carriers' tariffs. It is argued
on behalf of the carrier that the increased charge for
shipments valued in excess of $50 was made neces¬
sary, not only by extra risk in case of loss, but by the
necessity for greater care in the handling.
Rule in Parcel Post Systems.
In all the parcel-post systems examined the low
rates of carriage have been invariably accompanied
by correspondingly low limitations of value, and
while numerous complaints have been made, based
192 FRUITFUL CAUSES OF COMPLAINT.
upon the carrier's declination to pay losses in excess
of $50 (in the absence of a greater declared value
and payment of the extra charges based thereon,)
it does not appear to be wise to establish a small
parcel rate based upon unlimited values.
The Commission has therefore deemed it for the
best interest of the shipper, for the time being at
least, to permit the $50 valuation clause to remain
in the receipt. This liability, however, with respect
to shipments in excess of 100 pounds, it thinks should
be increased in ratio to the increase of weight. The
Commission and a committee representing shippers
and carriers is engaged upon the consideration of
a proposed express receipt which it is hoped may be
adopted by the companies.
Delays in Settlement of Claims.
Thousands of complaints have been received by
the Commission alleging many apparently un¬
necessary and indefensible delays in the settle¬
ment of claims for losses resulting from the alleged
negligence of the carriers. The Commission's ex¬
aminers, who made an exhaustive review of the
claim bureaus of two of these carriers, have reported
a condition existing therein which indicated a policy
of delay in the investigation and settlement of claims
of which the management of the express companies
appeared to be unaware. It has been the policy
of one of these carriers at least never to conduct any
of the negotiations for the settlement of claims by
correspondence, never to commit the company in
FRUITFUL CAUSES OF COMPLAINT. 193
writing to any policy with respect to the disposition
of claims, but to reply upon personal visitation of
the special agents of the company to the claimant for
the proper disposal of such claims. The result of
this policy has been to develop antagonism on the
part of the shippers, who view this policy as one
intended to discourage the prosecution of claims.
It has been freely asserted that the express com¬
panies will seldom settle with claimants until threat¬
ened with legal proceedings.
Measure of Relief Proposed.
The Commission says it has been assured by the
management of the carriers represented in these
proceedings of their earnest desire to reform these
claims bureau in such a manner as to give prompt
handling and disposition to all claims. It has there¬
fore been suggested that the rule should be that, in
the event of the non-delivery or loss or destruction
of a shipment, a notice shall immediately be mailed
by the agent of the carrier at destination to both
the consignor and consignee, if known; and in the
event of claim made in writing the company shall
immediately acknowledge its receipt and shall,
within six months from the date of filing such claim,
notify the claimant in writing of the disposition
made thereof.
Excessive Insurance Charges.
It is claimed on behalf of shippers that the charges
which the carriers have heretofore assessed on values
194 FRUITFUL CAUSES OF COMPLAINT.
declared in excess of $50 are excessive. For each
$100 or fraction thereof in excess of $50 the charge
has heretofore been 10 cents when the through mer¬
chandise rate was $3 or less, 15 cents when the mer¬
chandise rate was more than $3 and less than $8,
and 20 cents when the merchandise rate was over $8.
The insurance charges almost universally prevail¬
ing on shipments conveyed by parcel post or other
parcel-carrying systems in other countries are sub¬
stantially one-tenth of 1 percent—that is to say, 10
cents for each $100 or fraction thereof. This also is
a customary rate with private insurers. Therefore,
it would seem to be a reasonable rule, says the Com¬
mission, that the charges of express carriers in the
United States based upon valuation in excess of
$50 should not exceed this general standard, and that
hereafter the valuation charge shall be 10 cents for
each $100 or fraction thereof in excess of $50, and
this irrespective of the rate of carriage.
Relief is also promised in regard to expediting
the delivery of C. O. D. payments, and the stating of
rates in plain terms.
CHAPTER XII.
DUTIES AND SALARIES OF EMPLOYEES.
In many respects the railroad employee and the
express employee have the same interests. Both
work for great corporations. Both have much the
same hours of labor. Both have to do with trans¬
portation. Both occupy positions of responsibility
in their relations to the public. Both have the op¬
portunity of rising to the highest positions in their
respective services. After having traced these points
of similarity the analogy between the employees may
be said to end.
In the express business there are not so many
classes of employees as in the railroad service. This
statement only applies to the mechanical force,
however. The railroads employ the engineers, fire¬
men, brakemen, etc., who are essential to train oper¬
ation, but these employees work for the railroad and
the express service at the same time. On the clerical
side of the force there is not so much divergence.
The express business has to have its rating and rout¬
ing clerks just the same as the railroads do, it has
its receiving clerks just as the railroads do, it has
its auditors, agents, solicitors, collectors, superin¬
tendents and general managers, and then it has quite
a number of employees whose counterpart is not
found in the railroad business.
195
196 DUTIES AND SALARIES OF EMPLOYEES.
High Grade of Employees.
Express companies demand and employ only the
highest grade of help. Every man must be intelli¬
gent, possess a certain degree of education, and be
capable of filling higher and still higher positions.
There are no positions that call for purely manual
labor with the great express companies, except
those of attendants at the barns in the large
cities. Aside from these, the work is largely clerical
—even the drivers on the wagon are clerks, and clerks
with great responsibilities, and are liable at any time
in the large cities to be called off the wagon and told
to take a desk in the general office. And, as a rule,
when the driver is called in he proves himself just
as proficient at his desk as he did when on the wagon.
The greatest express company in the United States
—and that means the world—is the American. It
transacts business in nearly all the states of the Union,
has its agents and employees in every part of the
globe, operates over more miles of railroads and
steamboats than any other company, and the total
of its yearly business exceeds that of any of the
other companies. In its methods of conducting
its business it is closely watched and imitated by its
competitors, even to its method of selecting and
training its employees, and therefore the system and
methods of this company are chosen as illustrative
of all the express companies :
Like the railroad, the express company has to
seek its business. A certain amount of business will
always come to it without solicitation, but other
business has to be gone after. The big department
DUTIES AND SALARIES OF EMPLOYEES. 197
stores in the large cities, manufactories and whole¬
sale houses, banks, etc., furnish the greater part of
the business to the express companies. In the great
majority of cases it is possible for these large shippers
to take their choice between two or more express
companies, and as the rates of the various companies
to competitive points are usually the same, the qual¬
ity of the service furnished and the personality of
the solicitor are generally the determining factors.
Where the express company has a monopoly in a
certain territory the traffic will naturally come to
it without effort on its part, but the company solic¬
itor will be just as assiduous about obtaining this
business as if there were keen competition for it.
The aim of the express company is to make the public
its friends. It is drilled into its employees that they
must be accommodating and courteous in their deal¬
ings with the public. The uncouth and boorish
man has no place in an express company, and if he
should happen to gain employment there will not
last long.
Collection of Express Shipments.
As it is from the large shippers that the express
company makes the most of its money every effort
is made to facilitate their business. A wholesale
house in Chicago is perhaps sending out a thousand
packages a day by express to a thousand different
addresses. A house such as this will have its own
shipping clerks, who will see that the packages are
properly marked, the weight and value of each one
198 DUTIES AND SALABIES OF EMPLOYEES.
placed upon it, and if they are to be prepaid, the
amount due also marked upon it. At a certain time
each day one of the express company's wagons will
call for these packages. The driver will probably
have a helper with him, and as each package is loaded
into the wagon it will be called off and checked on the
receipt book the shipping department of the house
has prepared. The tally having been found correct,
and the packages having all been found to be in
good order, the express driver will sign the receipt
book and drive away. He will not attempt to collect
for the express charges. That is something the
office force will attend to later.
The wagon now goes to the office of the company,
where the packages are unloaded, each one weighed,
and the declaration of value examined. This latter
is a very important part of the business, as it has an
effect on the company's revenue. If the value is
marked $50 or less the regular rate to destination
will be the charge. If the value is put at $100 or
$500 or more, then a much greater charge must be
collected. If an express company loses a package
it is only liable for $50 unless greater value has been
declared at the time it was accepted, and when the
higher value has been declared the company charges
a higher rate as an insurance premium.
Making Out the Way-bills.
As each package is examined and weighed the rate
clerk will place a colored sticker on it. He will also
at the same time enter on a way-bill the address of
DUTIES AND SALARIES OF EMPLOYEES. 199
the consignee, the weight of the package; if prepaid,
so marked; if collect, the amount of the charges,
and the name and address of the consignor. The
way-bills are made out in duplicate, and there is a
way-bill for every package. The colored sticker
will denote the route the package is to be shipped by.
For instance, a green sticker may mean the Pennsyl¬
vania, a blue the North Western, a yellow the St.
Paul and a red the Burlington. The duplicate way¬
bills will go to the bookkeeping department, where
they will be copied into the books, each one forming
a charge against the agent at the point of destination.
In the case of a thousand-package shipment the
consignor is prepaying the charges, so after the way¬
bills have been charged against the respective agents
they are again charged against the shipper. Accord¬
ing to the arrangement the express company may
have made with him the shipper may receive his
bills every day, once a week or once a month.
Wagon and Train Service.
The packages are now ready for carriage to the
trains, and are loaded on the wagons for the various
depots. As they are loaded on the wagons they are
again called off and checked against the way-bills,
and as each wagon receives its load the way-bills for
that particular load are given to the driver. When
the latter reaches the depot and the packages are
loaded into the car they are again called off and
checked by the messenger in charge of the car, the
driver obtains a receipt for the load and delivers his
200 DUTIES AND SALARIES OF EMPLOYEES.
way-bills to the messenger. The messenger may be
alone or he may have an assistant—that depends
upon the importance of his run. He will go through
his way-bills and arrange them in the order in which
the various stations are reached, and then dispose
his packages in the car so that those to be first put
off will be the most readily accessible.
As the train approaches the various stations where
packages are to be put off the messenger prepares
them and picks out the way-bills covering them.
These he delivers to the local agent, taking the latter's
receipt for the numbers of the way-bills, and con¬
tinues the same process until he has reached the end
of his run. At the same time, the messenger, while
delivering packages to the various stations, will be
receiving other packages at them. These will be
delivered to him with way-bills covering them, and
these he will have to check up, see that they corre¬
spond to the way-bills, and give the various local
agents a receipt. The receipts the messenger re¬
ceives en route will be turned into headquarters,
where they will be checked against the way-bills
delivered to him, and these being found correct,
the responsibility for the packages is now shifted
from the shoulders of the messenger to the various
local agents.
Duties of the Local Agents.
The first duty of the local agent will be to compare
his packages with the way-bills delivered to him, to
see that he has received the right packages. He
will also examine the packages closely, to see that
they are in good condition and that they have not
DUTIES AND SALARIES OF EMPLOYEES. 201
been tampered with. If they are "collect" packages,
he will verify the weights and charges. Assuming
that everything is found to be right, the local agent
will then copy all the way-bills on a blank form. If
it is a town where there is a delivery service the
way-bills will also be copied into a receipt book,
which is given to the wagon driver when he starts out
to deliver the packages. As the driver goes his
rounds and delivers the packages he will get the
receipt of the consignee in this book opposite the
description of the package. If there are charges
marked against the package the driver will collect
them, and on his return to the agent will deliver over
his book and the money collected.
The agent will then check the driver's book against
his copy of the way-bills to make sure that all pack¬
ages have been delivered and the proper amount of
money collected. Perhaps there is a package which
the consignee has refused to receive. This the local
agent must at once report to headquarters and ask
for instructions. Every day the agent must turn
in a report to headquarters covering the number of
packages he has received, enclose the amount of
money he has collected, and give this report and the
money to the messenger on the express car, taking
the latter's receipt. The agent's report must also
cover the business that has originated at his station,
the trains and messengers to whom delivered, and
this serves as a check at headquarters on the train
messengers. From the time a package is received
until the time it is delivered, no matter how many
hands it may pass through, there is a check and a
202 DUTIES AND SALARIES OP EMPLOYEES.
record kept so that in case a package is lost, damaged
or rifled, the responsibility can be accurately located.
In small towns where no delivery service is main¬
tained the agent will notify consignees by postal
card of the arrival of packages and request them
to call for them. The same thing will be done in towns
where a delivery service is maintained, if the consignee
lives outside the delivery limits. In all cities there
is a limit beyond which the express companies will
not deliver, even when packages have been prepaid
to their destination.
The Hiring of Employees.
In hiring employees the American Express Com¬
pany exercises the utmost precaution. Except in
the country towns, the employee must be 21 years
old. The applicant for a position must account for
his life for the preceding ten years, tell what his
occupation has been, the names of his employers, if
he has held more than one position, how long he
worked in each position, and his reasons for leaving
it. He must also furnish references as to his character
and habits. Before the applicant is put to work all
these matters will be thoroughly investigated. The
company takes the attitude that every employee is
in a position of trust; that he is exceptionally
tempted every day; that every employee must be
capable of advancement to higher positions, and that
it must be reasonably assured of the applicant's
steadfastness, honesty, good habits and capacity
before he is placed on the payroll. Only men are
DUTIES AND SALARIES OF EMPLOYEES. 203
employed, even as stenographers and typewriters,
though women could be secured for the work much
cheaper. But the company wants men who will
stay with it, who will learn the business and who can
be placed in any position at a moment's notice. The
male stenographer never remains a stenographer
long. How long depends solely on himself. If he
shows an aptitude for the business he may be pro¬
moted after a couple of months' work. Many of the
best paid men in the service began work as stenog¬
raphers.
Bonds for Every Employee.
All employees must be bonded, no matter how in¬
significant the position may be. The usual bond
is $500 for the beginner, and as he is advanced to
higher positions the amount of the bond will be in¬
creased. The employee will not be required to go
to a bonding company and pay a large premium for
his bond, however. The company bonds all its own
employees and they pay at the rate of 50 cents a
year for each $500. In a bonding company they
would be; required to pay at the rate of 2 or 3 percent
a year.
Salaries in the express business rank about the
same as in the railroad service. In the large cities
the beginner generally starts in at $50 a month; in
the small towns and in the country places he will
probably get $35. The age requirement of 21 is not
adhered to so closely in the country, and a lad of
eighteen may enter the service there, but his ante¬
cedents will be looked up as carefully as those of an
older person.
204 DUTIES AND SALARIES OF EMPLOYEES.
It is from the country that the express business
drafts its best employees. Managers and superin¬
tendents say that the country boy ranks much higher
than the city lad. His habits are apt to be better,
he is used to a more simple life, is not extravagant
in his tastes and is not afraid of work. It is also in
the country office that the beginner in the express
business gains the best training. His work will em¬
brace every phase of the business, while the city
employee will necessarily be restricted to a particular
branch. Thus the lad in the country office will
solicit business, deliver packages, make out way-bills,
route shipments, sell money orders, and gain a thor¬
ough training in all branches of the service. If he
enters the business at eighteen by the time he has
reached twenty-one he knows his work, will have
had his salary raised several times, and will usually
then be transferred to a higher and better paid
position in a city office.
Express Employees in Demand.
The thoroughly trained express company employee
is a very valuable man. Managers of the large city
offices appreciate this fact, as they are constantly
losing some of their best men. Business houses,
concerns that ship large quantities of goods, bankers,
when they want men in responsible positions, draft
them from the express companies, or from the rail¬
roads. Usually it is the express company that
suffers, because of the high grade of its employees.
The business houses or the bankers will pay them
DUTIES AND SALARIES OF EMPLOYEES. 205
two or three times as much as the express company
will, and consider them cheap at that.
Every express office is in charge of an agent. In
the country town he may be the whole office force.
In the city he will have a large force under him, and
his duties will be of a purely supervisory nature.
Ranking next to the agent in the city office will be
the cashier, the assistant cashier, the rate clerks,
solicitors, messengers and wagon men. Salaries will
range from $50 a month for the beginner up to $150
and $200. The messengers on the express cars are
men with high responsibilities and are well paid.
These positions are considered among the most
desirable in the service, and men once installed in
them rarely ever quit, unless retired on account
of age. While the express companies do not main¬
tain pension departments, as some of the railroad
companies and great industrial corporations do,
yet men who are injured in the service or who are
incapacitated by age, are retired on a pension that
is generally equivalent to half a salary. The Ameri¬
can Express Company today has over 400 pensioners
on its roll, and each month they receive their checks
the same as if they were in active service.
Regular Inspection of Officers.
The superior of the agent is the superintendent,
whose territory may embrace a wide stretch of
country. Over the superintendents is the manager,
and every manager will have three or four superin¬
tendents under him. Usually the manager holds
206 DUTIES AND SALARIES OF EMPLOYEES.
an official position with the company. The manager
in Chicago, for instance, is vice-president and man¬
ager. The superintendents visit the various offices
regularly to inspect the workings, and are assisted
in this work by traveling auditors, whose sole busi¬
ness is to go from office to office and check up its
accounts. Every office is supposed to be visited and
checked up at least once in three months. The
auditors are something like national bank examiners.
The office can not foretell their coming, but when
they do walk in they are in full possession until the
examination is completed.
The young man who is seeking a position with an
express company should make his application to the
agent in charge of the office. The agent is entrusted
with the authority to hire such employees as he needs,
as this tends to the maintenance of the necessary
discipline. If an agent is unable to find the help he
needs he will apply to the superintendent of his
division, and the probability is that the latter will
promote an employee of one of the small country
offices. The first work of the new employee will
probably be calling off addresses of packages to
another clerk for way-billing, or perhaps he may be
put on a wagon to collect and deliver packages. If
he is put on a wagon an older employee will accom¬
pany him until he has learned his route, after which
he will manage it alone. As time goes on he will
be placed in various positions of the service, so that
in a couple of years he will have filled all the positions
in the office, with the possible exception of cashier.
The aim of the express companies is to so train their
DUTIES AND SALARIES OF EMPLOYEES. 207
men that they can fill any position at a moment's no¬
tice. They also believe in civil service, and pro¬
motions in the service are made solely on the basis
of merit and length of service. It is an exceedingly
rare occurrence when an outsider is brought into an
office to occupy a responsible position, or when an
employee is jumped over the heads of others.
Many Opportunities for Advancement.
Once in the service, it is solely up to the young
man as to how high he will rise. In the course of a
few years he may be placed as agent in charge of
some important office. From the post of agent to
that of superintendent or manager is but a step, and
then the presidency of the company is all that re¬
mains. He may never reach this position, but if
he never does he will know that he has a life time
place with a comfortable salary, and the certainty
that if incapacitated by age or illness he will be taken
care of.
Mrs. Harriman is the holder of 64,655 shares of
Wells, Fargo Company stock, nearly 27 percent
of the entire number of shares. Another woman,
Ida C. Potts, of Livingston, New York, is also a
stockholder in the United States Express Company,
the Wells, Fargo Company, and the Adams and
American Express companies, owning 1,500 shares
in Wells, Fargo Company, 1,015 shares in the
United States Express Company, 510 shares in the
American Express Company, and 900 shares of the
Adams Express Company.
CHAPTER XIII
RULES GOVERNING EXPRESS SERVICE.
Following are the principal rules governing ex¬
press service as published in the Official Express
Classification; the conditions on which business will
be transacted for the public, and all employees must
be governed by them. These rules apply to all
express companies doing business within the United
states, including three—the Long Island, Newfound¬
land, and New York & Boston—which do not report
to the Interstate Commerce Commission. They are
also observed by the Dominion company, and the
express department of the Halifax & Southwestern
railway.
Receipting for Shipments.
(a.) A receipt of the prescribed form must be given for all
matter received. Shippers must be requested to state the na¬
ture of the shipment and to declare the value thereof, which
value, when given, must be inserted in the receipt, marked on
the package and entered on the way-bill. If shippers refuse to
state value, "Value asked and not given" must be written or
stamped on the receipt.
( b.) Receipts for matter received at owner's risk must have
written or stamped on the face thereof "at owner's risk."
(c.) Shipments destined to points in the United States and
adjacent foreign countries must not be accepted when consigned
"To order of," or "To Notify" a bank, or any person.
209
210 RULES GOVERNING EXPRESS SERVICE.
(d.) Express receipts are not negotiable and shipments must
not be accepted, the delivery of which is conditioned upon sur¬
render of the original receipt at time of delivery.
Routing of Shipments.
The rates of the companies, parties to this Classification,
are conditioned upon their right to route business as they may
elect, which right is expressly reserved.
Prepayment of Charges.
(a.) Charges must be prepaid—
On passengers baggage which is to be delivered at railroad
stations or steamship piers.
On all matter addressed to persons restrained of their liberty
in prisons, penitentiaries and insane asylums.
On packages consigned to the Commissioner of Patents or to
the Interstate Commerce Commission at. Washington, D. C.;
to the Bureau of Standards, Washington, D. C.; to the Com¬
missioner of Patents or to the Canadian Railway Commission
at Ottawa, Ont., and the name and address of the shipper must
be marked thereon. Any customs charges or entry fees on such
shipments must also be prepaid or guaranteed.
On personal packages for officers or men belonging to the
regular army or militia when to be delivered in the field or in
camp ; for officers, sailors and marines in the navy on sea duty ;
for cadets at military or naval academies and for students at
military schools.
ib.) When charges are prepaid, the package and way-bill
must be marked 4'Prepaid $ when so marked or
way-billed, the package must be delivered without collection of
charges from consignee, excepting advance charges or customs
charges, and any undercharge must be expensed on or charged
against the forwarding agent, to be collected from the shipper,
in accordance with the instructions of each Company; if charges
are paid in part, notation to that effect must appear on the pack¬
age and on the way-bill.
RULES GOVERNING EXPRESS SERVICE. 211
(c.) The charges on all shipments evidently not worth charges
must be prepaid or guaranteed and so way-billed.
(d.) When transfers are made of shipments for which pre¬
payment or guarantee of charges is required by the classification,
the originating company is responsible for such prepayment or
guarantee to its connections whether or not the shipment may be
way-billed or transferred as prepaid or guaranteed, such guarantee
being limited to 60 days; agents receiving such shipments
must report to billing office within sixty days of date of way-bill
any failure to collect charges on same.
Prohibited Shipments.
(a.) Explosives and dangerous inflammable oils, acids, or
materials must be refused, except that certain explosives and
inflammable materials, oils and acids may be accepted when
shipped in strict compliance with "Rules and Regulations issued
to secure compliance with the United States Laws, and the Reg¬
ulations prescribed by the Interstate Commerce Commission
for the Transportation of Explosives, Inflammables and other
Hazardous Articles by Express. "
Delivery Limits.
The established rates and charges of the companies, parties to
this classification, include free collection or delivery only at
points where wagon service is maintained and within the estab¬
lished collection and delivery limits at such points.
Agreements as to time of delivery of express matter must not
be made.
Graduated Charges and Pound Rates.
(a.) Merchandise rates apply on all commodities classified as
" Mdse.," and to any article not specifically classified herein,
unless it is analogous to an article classified higher than mer¬
chandise, when it shall be charged for at such higher rate.
212 RULES GOVERNING EXPRESS SERVICE.
(6.) Except as shown in Paragraphs (e.), (g.) and (h.) of
this Rule, graduated charges, based upon the local, joint or
through merchandise rate, are applicable under the following
conditions :
When the merchandise rate is less than $2.00 per 100 pounds,
merchandise shipments weighing less than 100 pounds are sub¬
ject to graduated charges shown on Pages 1 and 2; when the
merchandise rate is $2.00 and less than $15.00 per 100 pounds,
merchandise shipments weighing not to exceed 50 pounds are
subject to graduated charges shown on Pages 3, 4 and 5; and
when the merchandise rate is $15.00 and not over $20.00 per
100 pounds, merchandise shipments weighing not to exceed 20
pounds are subject to graduated charges on Page 5.
(c.) Where the merchandise rate applicable to a shipment is
not shown in the graduated table, the next higher rate must be
used for ascertaining the charge, which must not be more than
for 100 pounds at the actual rate.
Pound Rates.
Where the merchandise rate is $2.00 or more per 100 pounds,
pound rates must be charged on merchandise shipments weigh¬
ing over 50 pounds, but the charge for 50 pounds or less must not
be more than the charge for 50 pounds at pound rates; where
the merchandise rate is $15.00 or more per 100 pounds, pound
rates must be charged on merchandise shipments weighing over
20 pounds, but the charge for 20 pounds or less must be not
more than the charge for 20 pounds at pound rates ; and where the
merchandise rate is more than $20.00 per 100 pounds, pound rates
must be charged on merchandise shipments, minimum charge
50 cents.
Charges at pound rates on shipments subject thereto as au¬
thorized in this rule, or elsewhere in the classification, must be
ascertained by multiplying the number of pounds by the rate
per 100 pounds, and dividing by 100. When fractions occur
either in the weight or the charges, the next higher whole number
must be used. Whenever the graduated charge under the
RULES GOVERNING EXPRESS SERVICE. 213
merchandise rate is less than the minimum charge provided for
matter classified at merchandise pound rates, the graduated
charge must be assessed.
(f.) The charge on a shipment classified at higher than mer¬
chandise rate must be the charge at the merchandise rate multi¬
plied by the number indicating the higher classification. If
classified at V/2 Mdse., multiply the charge at merchandise rate
by \l/2\ if classified at "D. Mdse.," multiply the charge at
merchandise rate by 2, etc. EXAMPLE :—-If a package weighs
30 pounds and is chargeable at double rate, and the rate to des¬
tination is $1.00 per 100 pounds, the charge for 30 pounds is
60 cents, double this—$1.20—is the proper amount.
Unless otherwise provided in individual items, on shipments
classified at one-half merchandise, the charge shall be one-half
of the charge at the regular merchandise rate.
Shipments to and from Canada.
When shipments pass over the lines of two or more com¬
panies, between two points, one of which is located in the United
States and the other in Canada or Newfoundland, and the
shipping point or destination is an exclusive office, they must be
classified separately for each company carrying, and each com¬
pany 's charge must be separately assessed; the through rate
must not be made by combining the local rates of each company
except that on shipments subject to graduated charges, weighing
each 7 pounds or less, one graduate under the through rate will
apply, but the through charge must not be less than the graduated
charge under the rate of $2.00 per 100 pounds, except that the
sum of the local graduate charges must be assessed when less.
Charges on such shipments will be divided in accordance with
Rule 16.
Aggregating Weights.
(a.) Two or more packages forwarded by one shipper at
the same time to one consignee at one local address, must be
214 RULES GOVERNING EXPRESS SERVICE.
charged for on the aggregate weight, provided that any of the
packages weighing less than 20 pounds each shall be estimated
and charged for as weighing 20 pounds each and provided further
that a lower charge is made by such aggregation. Actual weight
of each package must be entered on the way-bill.
(6.) Exceptions. Where the merchandise rate per 100
pounds is $1.50 or more, two or more packages forwarded with
charges to collect, by the same company, from the same city or
town, on the same date, to one consignee at one local address,
whether from one or more than one shipper, or two or more
packages forwarded with charges prepaid by the same express
company on the same date by the same shipper to one consignee
at one local address, must be charged for on the aggregate
weight, provided that any of the packages weighing less than 20
pounds each shall be estimated and charged for as weighing
20 pounds each, if a lower charge is made thereby. Where the
rate is less than $1.50 per 100 pounds, the aggregate charge on
shipments from more than one shipper to one consignee, for¬
warded from the same point on the same date, must not be more
than where the rate is $1.50 per 100 pounds.
(ic.) When articles carried at merchandise pound rates are
aggregated in accordance with (a.), the minimum charge applies
to the entire shipment.
(<d.) If articles of different classes are aggregated the charge
must be made at the rate applying to the highest class.
Returned Shipments.
(6.) After delivery of a shipment and collection of charges
thereon, if it is to be returned to the original shipper, a refund
of the charges must not be made except on authority from the
original shipper, who becomes the consignee on the return ; such
authority must not be recognized unless endorsed by the agent
at the original shipping point, and the charges thus refunded
must be shown as an advance charge on the way-bill covering
the returned shipment.
(c.) Orders from shippers to return by mail, shipments that
were originally forwarded by express, must not be accepted.
RULES GOVERNING EXPRESS SERVICE. 215
(d.) Undelivered packages originally forwarded by express
may, by shipper's order, approved by agent at shipping point
be returned by freight; the charge for re-shipping by freight will
be 25 cents per 100 pounds; with a minimum charge of 50 cents
for each consignment. Two or more packages returned from one
place at the same time to the original shipper must be charged
for on the total weight as one consignment. Shipper's orders
to return such packages by freight must not be approved, un¬
less the outward charge by express, together with the charge for
re-shipping by freight is paid or guaranteed. The bill of lading
obtained from the freight line must be returned way-billed to
original shipper, in care of agent at original shipping point ; the
way-bill must show the charge for re-shipping by freight, and
when carried by two companies, the company delivering the bill
of lading will receive 25 cents as its proportion ; any other un¬
collected charges must be shown as "advance" on the way-bill.
Valuation Charges.
(a.) The rates governed by this classification are based upon
a value of not exceeding $50.00 on each shipment of 100 pounds
or less, and not exceeding 50 cents per pound, actual weight, on
each shipment weighing more than 100 pounds, and the liability
of the express company is limited to the value above stated un¬
less a greater value is declared at time of shipment, and the
declared value in excess of the value above specified is paid for,
or agreed to be paid for, under the schedule of charges for excess
value in paragraph (c.) of this rule.
(c.) When the value declared by the shipper, or indicated
by an invoice, exceeds the value of $50.00 on a shipment weighing
100 pounds or less, or 50 cents per pound on a shipment weigh¬
ing more than 100 pounds, a charge for the excess value must
be made according to the following schedule of charges :
When merchandise rate is $3.00*or less per 100 pounds, 10
cents for each $100 excess value or fraction thereof.
When merchandise rate exceeds $3.00 and not more than $8.00
per 100 pounds, 15 cents for each $100 excess value or fraction
thereof.
216 RULES GOVERNING EXPRESS SERVICE.
When merchandise rate exceeds $8.00 per 100 pounds, 20
cents for each $100 excess value, or fraction thereof:
(e.) When the weights of separate packages are aggregated
under Rule 9, the declared or invoice values of the separate
packages must also be aggregated and if the value so ascertained
exceeds $50.00 for 100 pounds weight or less, or 50 cents per
pound when the weight exceeds 100 pounds, additional charge
for the excess value must be assessed as provided in paragraphs
(a.) and (c.). In arriving at the excess value provided for
herein, packages weighing less than 20 pounds must be estimated
at 20 pounds.
Application of Joint Rate.
0h.) When a shipment is carried by two or more companies
the charges for valuation provided in this rule must be computed
as follows:
If there is a joint merchandise rate in effect it must be used as
the basis.
If there is no joint merchandise rate in effect the sum of the
local merchandise rates used in computing the charges for
transportation must be used as the basis for the valuation charge.
When the classification provides rules for the division of the
transportation charges the same rules must be used in the divi¬
sion of the through charges for valuation.
When no rule is provided in the classification for the division
of the transportation charges the valuation charge must be
prorated on the basis of the local merchandise rates of each com¬
pany to and from the actual transfer point.
(i.) The charges for value must in all cases be based on the
regular merchandise rate per 100 pounds, and not upon any
reduced rate made for more than 100 pounds.
C. O. D. Shipments.
(a.) The letters "C. O. D." and amount to be collected must
be plainly marked upon each package with which a bill is sent
RULES GOVERNING EXPRESS SERVICE. 217
to be collected on delivery, and a similar entry must be made on
the way-bill. If shipper requires collection of charges for return
of money, the C. 0. D. envelope and package must be plainly
marked "C. 0. D. $.... and return charges," and be so way-
billed.
(b.) When two or more packages are sent to same consignee
at the same time, with separate C. O. D.'s, or when one of the
packages is C. O. D. and the other or others are not, they must
not be aggregated ; but if one C. O. D. covers two or more pack¬
ages, they must be aggregated as provided in Rule 9. When
one C. 0. D. covers two or more packages, the amount of C. 0. D.
must be marked on each, thus : "C. O. D. $ on 2" or "3,'
as the case may be.
Examination of C. O. D. Packages.
(c.) Examination or partial delivery of C. O. D. shipments
must be allowed only when instructions to do so are written
or printed on, or enclosed in the C. O. D. envelope accompany¬
ing the shipment, or upon subsequent written authority from
the shipper endorsed by the agent at shipping point. Agents
at shipping points must decline to accept C O. D. shipments
with instructions to allow examination or partial delivery, or
to subsequently approve shippers9 instructions to such effect
until shippers execute a release in legal form, exempting the for¬
warding company and its connections, to which the matter may
be transferred to complete transportation, from all loss incident
to such examination or partial delivery.
(/.) A C. O. D. shipment, when originally forwarded, may
bear shipper's instructions to the effect that if consignee refuses
the shipment on account of the C. O. D., it may be delivered
without collecting the C. O. D. In such cases either the original
mark on the package or the original C. O. D. wrapper bearing
shipper's instructions must be retained by delivering agent as
authority for releasing C. 0. D and a duplicate C. 0. D. wrapper,
bearing copy of shipper's instructions, must be returned way-
billed with charges 10 cents to collect.
218 RULES GOVERNING EXPRESS SERVICE.
Carload or Bulky Shipments.
(a.) Property which, by reason of its great bulk, length or
weight, cannot be loaded or carried in the ordinary express car
and for which a special car must be provided, must not be
accepted for shipment until the dimensions, the weight and a
complete description of the property have been reported to the
Superintendent and arrangements have been made by him for
handling and forwarding the shipment through to destination,
if such arrangements can be made.
(6.) The charge on such a shipment must be computed ac¬
cording to the classification, but if weighing less than 10,000
pounds the charge must not be more than the charge for 10,000
pounds at merchandise rates; if weighing more than 10,000
pounds the charge shall be for the actual gross weight at mer¬
chandise rate.
The charge on less than a carload shipment carried in regular
express car must not be greater than the charge on a carload
shipment in a special car.
(c.) Carload shipments for race tracks, exposition grounds,
fair grounds or sidings, must be receipted for as destined to the
ultimate destination and* so way-billed, only when agent at
shipping point has been furnished with a specific rate to such
race track, exposition or fair grounds or siding. In the ab¬
sence of a specific rate, the shipment must be receipted for as
destined to the express company's nearest office for which rates
are given and way-billed accordingly.
Division of Charges.
(a.) When shipments pass over the lines of two or more com¬
panies, and the shipping point or destination is an exclusive
office, the through merchandise rate must be made by combin¬
ing the local rates via the transfer point as shown in originating
company's tariff which produces the lowest through rate and
unless otherwise specifically provided the through merchandise
rate so computed must be used as the basis for ascertaining the
classification charge.
RULES GOVERNING EXPRESS SERVICE. 219
(b.) Unless specific arrangements to the contrary have been
made by the companies interested, charges on all traffic carried
by two or more companies shall be apportioned between the
companies carrying as follows :
(ic.) When a shipment is carried by two companies and the
charge thereon does not exceed 50 cents, or when necessarily
carried by three companies and the charge does not exceed 75
cents, the charge will be divided equally between the companies
carrying. Charges exceeding those named above will be pro¬
rated on basis of each company's local merchandise rate to and
from actual transfer points; no company to receive less than 25
cents.
(d.) When three companies perform transportation which
could be performed by two companies, and the through charge
is 50 cents or less, the delivering company shall receive one-half
of such through charge and the originating and intermediate
companies shall divide equally the remaining one-half. When
the through charge exceeds 50 cents, the delivering company
shall receive a prorate of the through charge based upon the local
merchandise rates to and from £he transfer point nearest destina¬
tion at which the originating company could have made direct
transfer, but not less than its prorate oî the through charge on
basis of rates to and from actual transfer point and never less
than 25 cents. The remainder of the through charge shall be
prorated between the originating and intermediate companies on
basis of the merchandise rates between the points where each
carried the shipment.
Commodity Rates.
Wherever commodity rates are named they remove the appli¬
cation of the Classification Scale or rating on the same commodity
and between the same points.
Any package containing articles of more than one class must
be charged at the rate applicable to the highest classed article
contained therein unless specially provided to the contrary.
"Boxed," or "completely boxed," as appearing in the classifi-
220 RULES GOVERNING EXPRESS SERVICE
cation means completely enclosed by a wooden box or a wooden
case with tight sides, ends, top and bottom, dovetailed together,
or fastened together by nails or screws; shipments must not be
boxed after being placed in a car.
"Crated," as appearing in the classification, except as pro¬
vided in Rule 14, means that all sides and ends of any article
or machine so packed must be protected by wooden slats, nailed,
screwed or dovetailed together, and of sufficient strength to hold
the article so packed and to protect it from abrasion or damage
when the same is handled and transported with the ordinary
and usual care; when applied to live animals, live stock, live
birds, means that they must be completely enclosed in a crate
of sufficient strength to prevent the escape of animals or birds
and to ensure handling without damage to crate, contents or
attendants, before being placed in the car.
"Trussed," as appearing in the classification, means secured
by wire or cord to a board projecting beyond the sides and ends
of the article attached thereto.
"Nested solid," as appearing in the classification, means a
series of similar articles nested in such a way that the outside
and bottom surfaces rest against the inside and bottom of the
article below, without any intervening space between the out¬
side and inside surfaces.
"Nested," a series of similar articles nested or enclosed one
within the other and fitting closely together, but not solid as
prescribed above.
Change of Destination in Transit.
(a.) When by order of owner, the destination of a shipment in
transit is changed to a point beyond the original destination, or
to an intermediate point which the shipment has not passed,
charges must be assessed at the through rate from point of
origin to final destination.
(6.) If the order to change destination in transit requires
the return of the shipment to some intermediate point, charges
must be assessed at the sum of the local rates to and from the
point of return.
CHAPTER XIV
CHANGES ORDERED BY COMMISSION.
In opinion No. 1967, dealing with the practices
and rates of express companies, the Interstate
Commerce Commission has spoken in no uncertain
tones regarding the necessity for radical changes.
This opinion was handed down in a hearing had on
charges made by the California Commercial Associa¬
tion, M. S. Kohlberg Co., Bengt. E. Sundberg,
and the Memphis Freight Bureau, et al., against
the Wells, Fargo Co., Great Northern, American
and Adams Express Companies, et al. While these
were the main plaintiffs and respondents directly
named nearly every commercial association and
express company in the country was represented at
the hearing by counsel and took part in the proceed¬
ings.
Eighteen Plaintiffs Represented.
There were, for instance, eighteen plaintiffs at
the trial. These were:
Chicago Association of Commerce.
Traffic Bureau, Nashville, Tenn.
State of New Hampshire.
Boston Chamber of Commerce.
State of Iowa.
221
222 CHANGES ORDERED BY COMMISSION.
Charles A. Stickney Company.
National League of Commission Merchants.
Sears, Roebuck & Co.
Iowa Railroad Commission.
Merchants Association of New York.
Chamber of Commerce, Manchester, N. H.
Atlanta Freight Bureau.
Bengt. E. Sundberg.
California Commercial Association.
M. S. Kohlberg & Co.
Merchants & Manufacturers Association, Los
Angeles, Calif.
Pacific Coast Jobbers & Manufacturers Associa¬
tion.
Memphis Freight Bureau.
The express and railway companies directly rep¬
resented were :
American Express Company.
Adams Express Company.
Southern Express Company.
Chicago, Burlington & Quincy Railroad.
Wells, Fargo Co.
United States Express Company.
Great Northern Express Company.
Atchison, Topeka & Santa Fe Railway.
Fifty prominent attorneys took part in the presen¬
tation of evidence and arguments, the hearing
lasting from March 1, 1912, to the 8th of the fol¬
lowing June, when the Commission's decision was
given. This was probably the most exhaustive
hearing ever had before that body.
CHANGES ORDERED BY COMMISSION. 223
Synopsis of the Decision,
In its decision the Commission said:
1. Express rates should be made primarily to meet the need
of the great body of our people and should therefore be stated
in terms that represent the small packages which the express
company is intended to carry, rather than by the 100 pounds, as
freight rates are stated.
2. In the fixing of its rates an express company should not be
allowed to charge more than a railroad company if the latter
undertook to, and did, give the same service.
3. It is proper for the government to treat the express com¬
pany as a freight forwarder by passenger train, giving supple¬
mental service at each terminus and intermediate care.
4. An express rate may not be based upon the monopoly
right of the express company to be the exclusive freight forwarder
over one or more lines of railroad.
5. The rate should not include more than a reasonable com¬
pensation for the service given, even though such compensation
falls below that which the railroad exacts as a minimum for the
carriage of 100 pounds of freight.
6. It is unreasonable to fix as rapid a decline in express rates
for long distances as is made by the railroads in their freight
rates, express service in this respect being more analogous to
passenger than to freight service.
7. In compounding the express rate the railroads should be
allowed a compensation for bulked freight moved upon a pas¬
senger train as to which it is relieved by contract for all liability
for loss or damage and is without expense for the furnishing of
a receipt, the billing, the bookkeeping, and a great number of
other general expenses.
8. The rate should include a return to the express company
which will compensate it with profit for the expense of the service
which it gives, there being added thereto in the formation of the
total rate the proper charge which it may reasonably make for
the service which the railroad gives, as stated in the preceding
paragraph.
224 CHANGES ORDERED BY COMMISSION.
Many Drastic Changes Ordered.
9. This Commission will require the following things of the
express companies :
(a) A new and simple method of stating rates by which one
who is not an expert in the reading of tariffs may know what
rate he should be charged, (b) The tariffs must present but
one rate upon the same class of traffic between any two points
in the United States served by the same carrier. The rebates
by indirection concealed in the tariffs must be removed, (c)
There must be a new classification of traffic in which the standard
or first-class rate shall be that on merchandise, and to which
there shall be one great class of exceptions—a second class as
it were—consisting of articles of food and drink now carried
under the meaningless term of " general specials. " The rate
for this latter class should bear a relation in percentage to the
former. Our conclusion is that 75 per cent of merchandise
would yield a fair and reasonable rate. Other rates may be
made to meet traffic needs and develop industry, but all such
rates shall be based on conditions of service and should, for
convenience, likewise be stated in percentage of the merchandise
scale, (d) The rules of the «express companies are too many
and too involved. They need even more drastic revision than
is herein suggested, (e) The express carriers must unite in
direct through routes, reaching all cities and towns accessible
to each other by the shortest route measured in time. The
Commission will leave this matter in the hands of the carriers
for the present, but will undertake to see that this principle is
recognized in the routing of express traffic. ( f) There should
be a precise statement published and filed showing the terminal
service that is given at local stations.
Precaution Against Overcharges.
(g) To avoid prosecutions for illegal overcharges it is essential
that double collections shall cease, and to this end a system of
labels is herein prescribed—a yellow label, which shows that the
charges have been paid; a white label, when the charges have
CHANGES ORDERED BY COMMISSION. 225
not been paid; and if no label is carried on the package, it must
be delivered without charges and the error later corrected.
(h) The standard merchandise rates have been found to be
discriminatory as between localities and unreasonable in them¬
selves with respect to the points dealt with in our order. They
have been the product of an unregulated growth, in which cer¬
tain of the larger cities have gained an undue advantage and
preference. A burden that is excessive and unjustifiable has
rested upon the packages of smaller weight which the express
carrier was especially created to transport. The railroad com¬
pany in "farming out" this branch of its service upon a per¬
centage contract basis has created an inevitable tendency to
increase parcel rates. There has been no uniformity in the
application of any system or basis or scale of rates with reference
to points similarly situated even within the same territory, and
no reasonable relation is suggested in the rates fixed between
the service given by the railroad in the carriage of a parcel and
that given by the express company in its terminal service.
10. In order that the shippers and the carriers may have
abundant opportunity to analyze the rates and rules proposed
herein and present their views to the Commission before they
go into effect, the order herein will require the carriers to show
cause on October 9, 1912, why the proposed rates should not
be put into effect.
Hearing an Exhaustive One.
In submitting its report, which was written by
Commissioner Lane, and contained a lengthy review
of the existing conditions, the Commission said:
The Commission has made an exhaustive inves¬
tigation into the rates, rules, and practices of the
express companies which were brought under our
jurisdiction by the Hepburn Act of 1906. So num¬
erous were the complaints made to us informally as
well as formally of the unreasonableness of express
226 CHANGES ORDERED BY COMMISSION.
practices and rates that we found it impracticable
to deal with express conditions over the line of a single
carrier or within narrow territorial limits. The
criticisms and petitions upon which this inquiry
was based made it obvious that conditions in one
section and by one line were like those obtaining
in all other sections and over other lines. Therefore
we have attempted to deal with this problem
nationally.
The record in this matter has been so extensive
as to forbid a review of the many questions involved
and the character of the evidence introduced. It
may be said in general, however, that we have given
consideration to the financial affairs of these com¬
panies; the character of their organizations; the
relationship which they enjoy with the railroads; the
extent and nature of the property which they own;
the character of their service; the basis of their rate
systems; the cost of their operations; the manner
in which their rates are stated; the relation of the
service which they give to that extended by the rail¬
roads in the carriage of freight by freight trains;
the relationship between the rates established in
different sections of the country for the same service
by express; the similarities and dissimilarities ob¬
taining as between the express service in the United
States and similar service in foreign countries, to¬
gether with a comparison of the rates in foreign
countries with those extended in this country; and
other questions analogous or related to these. Some
of this data is matter of common knowledge; much
of it relates to matters of internal economy; while
CHANGES ORDERED BY COMMISSION. 227
very much, for reasons that are given elsewhere,
casts no light upon the fundamental questions that
are here involved.
The Scale of Graduated Charges.
No one thing has been so fruitful a cause of com¬
plaint and criticism throughout this investigation as
the so-called scale of graduated charges. This is a
scale by which is determined the rate that shall be ap¬
plied to a package of a given weight. The express
company fixes the rate between two points upon a 100-
pound basis. Having ascertained this 100-pound
rate, one turns to the graduated scale to see the rate
applicable under that rate per 100 pounds upon a
package of less weight. To illustrate, the rate be¬
tween New York and Chicago is found from the tariffs
to be $2.50 per 100 pounds. The shipper having a
shipment of 10 pounds, turns to the graduated scale,
where under the heading of $2.50 per 100 pounds
he finds a statement of the rates applicable upon
packages of various weights, and running down this
column to 10 pounds he finds that the rate for 10
pounds under the $2.50 rate is not, as he might
surmise, approximately one-tenth of the $2.50, or
a little more, but is 75 cents. The rate under the
same scale for 5 pounds is 60 cents, and for 30 pounds
$1.15.
Denounces Scale as Unreasonable.
This scale is unreasonable, discriminatory, and
arbitrary. It is the product of years of shrewd
228 CHANGES ORDERED BY COMMISSION.
manipulation, and has no justification in the minds
of the express men themselves. It is the richest
example yet brought to our attention of a tariff
based exclusively upon the theory that the charge
should be what the traffic will bear.
Under this scale there is no determinable relation
between the rates fixed for the carriage of parcels
of different weights. The amount added to the
proportionate pound rate to make up the package
charge under the graduated scale varies from 2
cents per package to 78 cents per package, according
to the weight of the package and the 100-pound
rate under which it moves. For example, between
two points where the rate is $7 per 100 pounds an
11-pound package is charged for at $1.50. The
proportionate pound rate is 77 cents. Therefore the
addition to that rate to make up the package charge
is 73 cents. Where the rate is $1.50, an 11-pound
package is charged for at 60 cents, which is 433^
cents in addition to the proportionate pound rate.
Where the rate is $1 per 100 pounds, the charge for
an 11-pound package is 45 cents, the addition to the
pound rate being 34 cents. Where the rate is $13.50,
the package charge is $1.65, which is 16J^ cents in
addition to the pound rate.
Effect of Extortionate Charges.
The effect of this scale is to impose an unjustifiable
burden upon the small package and thereby destroy
the usefulness of the express company in filling the
functions for which it was provided, in that it dis¬
courages the movement of small packages and tends
changes ordered by commission. 229
to erect the express company into a competitor with
the railroad as a carrier of large shipments. No one
can analyze these tables, and arrive at any other
conclusion than that they are the product of a cun¬
ning effort to impose upon the general public by the
exaction of exorbitant charges for those small pack¬
ages which the mail can not carry and the railroad
does not wish to carry.
An interesting side light is thrown upon this whole
matter of the rate applicable to small packages by
the most cursory glance at the rates charged in
England for similar service, from which it appears
that where the rate per hundred pounds in England
is f 1 and the rate in the United States is likewise $1,
the English charge for the carriage of a 10-pound
package at carrier's risk is 16 cents, while in the
United States it is 45 cents, and for a 20 pound
package it is 22 cents in England and 50 cents in the
United States.
What the Express Records Show.
We have found by most extensive examination
of express records that approximately one-half of
the express business consists of packages under 20
pounds in weight; and the average shipment, in¬
cluding carloads of horses and of fruit and vegetables,
is but 34 pounds. These figures clearly indicate the
use made of the express company; and, trafficking
upon this use, the graduated scale has been so made
as to impose a cruel burden upon the smaller parcels.
If proof of this is needed, examination should b«
230 CHANGES ORDERED BY COMMISSION.
had into the growth of the graduated charges since
1885. It appears, for instance, that under the 50-
cent per 100-pound scale in 1887 the charge was 25
cents for a 6-pound package; in 1912 the charge is
30 cents. Under the 60-cent scale the charge was
25 cents; to-day it is 35 cents. Under the $1 scale
the charge was 30 cents; it is now 40 cents. Under
the $1.10 scale the charge was 35 cents; it is now
45 cents. Under the $1.50 scale it was then 40 cents;
it is now 50 cents. Under the $2 scale it was 50
cents; it is now 60 cents. Under the $3 scale the
rate has jumped from 60 cents to 75 cents, and so on.
When it is recalled that the average package carried
under 11 pounds weighs approximately 5 pounds, the
magnitude of such increase, and the reason for it,
may be appreciated. And this is emphasized when
we have in mind the fact that an increase of 5 cents
upon each package carried by the express companies
of the United States would yield but little less than
$15,000,000. Without raising their standard 100-
pound rates the express companies by a change in
their graduated scale have increased their annual
charges by millions of dollars.
Blanket Rates Impracticable.
An effort was made to construct a tariff of rates
upon packages that would blanket the country after
the fashion of the postage stamp. But these objec¬
tions appeared: A rate on 10 pounds for a 10-mile
haul would be so low as to be absurd for a 3,000-
mile haul. And if the 10-pound rate were made an
average of the reasonable rates for both long and
CHANGES ORDEKED BY COMMISSION. 231
short hauls the inevitable result would be to raise
many of the short-haul rates most frequently used
by shippers. To meet this condition a further
effort was made to divide the country into three
great zones of a thousand miles in width within and
between which low small-parcel rates would be
given. The first difficulty that here presented itself
was in the stating of the rates from and to each
point in the United States, for this would manifestly
necessitate the measuring of the distance from each
of the 35,000 express offices to every one of the other
stations. This meant nothing more than a certain
amount of labor and was not regarded as insuperable,
especially in view of the block system (see chapter X)
for the stating of rates. But it appeared that if
small-parcel rates were made upon this basis the
whole scale of rates would have to be brought down
to this level, else by the shipment of 10 packages of
10 pounds each the rate on 100 pounds could be
controlled.
Basis of Distance and Weight.
The average distance which a package of any
size is now hauled by the express company is about
200 miles, and the average rate paid is 50 cents.
As we know that the greater volume of express traffic
is done for short distances and that one-half the
business moved is of packages under 20 pounds in
weight, it has been suggested thp,t no loss would
follow by the establishment of a rate of 50 cents for
the carriage of a 20-pound package for a very broad
zone. This, however, would be an unreasonable
232 CHANGES ORDERED BY COMMISSION.
rate for the shorter distances and for the smaller
packages, and its imposition would probably be
justifiably resisted by the shipping public. And if
50 cents were fixed as the charge for the hauling of a
20-pound package for, let us say, a thousand miles,
it would necessarily follow that $2.50 would be the
maximum rate for the carriage of 100 pounds for
the same distance. There is but one section of this
country, namely, that known as official classification
territory, in which we have thought such a rate to
be approximately reasonable.
But there is a broader view to take of this matter,
one of public policy and of a wise, far-sighted rail¬
road and express policy. It would doubtless greatly
stimulate express traffic if rates were made on a
flat basis per package for a broad sweep of territory,
and a low rate for the longer hauls would find its
compensating and complementary advantages to the
carriers in the greater volume of the business and
the ease and saving in many directions with which
it could be conducted. This, however, is a matter
to which we are not free to substitute our own
judgment as to policy for that of the carriers them¬
selves. We may not order such an experiment to
be made, even if we thought it would in time prove
a profitable one to the carriers and gratifying to the
public.
Zone System of Making Rates.
We have therefore felt that it was necessary for
us to recognize the variation in the density of traffic
and of population and in the expense of operating
CHANGES ORDERED BY COMMISSION. 233
railroads in the different sections of the country.
With this in mind as a basis for the formation of
rates, the country has been divided into five grand
subdivisions. These subdivisions conform generally
to those recognized by the rail carriers and which
this Commission has in the consideration of freight
rates been led to believe were based upon actual
differences in operating and traffic conditions.
Division of Territory by Zones.
Included in Zone I, as it is called, is all
the territory north of the Ohio and the Potomac,
and east of the Mississippi, in which there generally
obtains a lower grade of freight rates and passenger
rates and express rates than elsewhere throughout
the United States, and in which the population is
most dense and traffic most abundant. Below this
zone lies Zone II. To the west of the Mississippi
lies Zone III, which generally takes slightly higher
rates than the southern territory. This zone also
includes the peninsula of Michigan, as well as a por¬
tion of Wisconsin, because the conditions in these
territories more nearly meet those immediately west
of the Mississippi river than the conditions obtaining
in the territory immediately adjacent in Zone I.
To the west of Zone III, which extends as far as
Denver, lies the great intermountain country, which
as yet is but sparsely populated and as to which rates
distinctly higher than rates obtaining in any of the
eastern territories should be made. The belt of
•tates running along the Pacific coast has been set
234 CHANGES ORDERED BY COMMISSION.
apart as Zone V, conditions therein being different
from those found in any of the other zones, their
population being more dense and their conditions of
transportation, all things considered, less expensive
than in the zone immediately to the east.
TRANSPORTATION
BY WATER.
CHAPTER I.
FREIGHT TRAFFIC BY WATER.
Water routes have an important part in the trans¬
portation business of the United States. As one
general freight agent expressed it: "Water routes
determine the freight rates of almost every railroad
system in the country. Makers of rates from the
Atlantic seaboard to the Pacific coast, as an illus¬
tration, have to take a variety of water routes into
consideration. First, there is the long water haul
by the great lakes to Duluth. Second, there is the
water-and-rail route down the Atlantic to New
Orleans or Galveston, and thence by rail to all
Pacific coast points. Third, there is the water route
down the Atlantic to the Isthmus of Tehauntepec
or Panama, the short rail routes over the Isthmuses
and then water transportation to Pacific coast points.
Fourth, and lastly, there is the voyage by steamer
or sailing vessel around Cape Horn, and when the
Panama canal is completed there will be a fifth route
which will probably make necessary a revision of rates
all over the country. "
Cheapness of Water Transportation.
It is a well understood fact that transportation
can be much more cheaply conducted by water lines
237
238 FREIGHT TRAFFIC BY WATER.
than by rail lines. A vessel of 6,000 tons burthen
will carry the contents of 200 railroad cars of thirty
tons capacity each. Its operating expenses are
comparatively light, and the fixed capital in the
vessel will not much exceed that invested in 200
cars, with the necessary engines to haul them.
The railroad has to run over an expensive roadbed;
the steamer sails over an element which represents
no investment and that costs nothing for upkeep.
The railroad has to have costly terminal facilities
at scores of cities along its line. The steamer has
to have terminal facilities at its various ports of
call, but these are comparatively inexpensive when
compared with those of the railroad. A steamer
can load and discharge cargo much cheaper than a
railroad can the same quantity. With all these
points in favor of the water route one would expect
the vessel lines to drive the railroads out of business
between points where they come into competition.
As a matter of fact, the railroads are enabled to
hold their own against the water lines and in most
cases to excel them. There are a number of reasons
why this is so. Cheapness of transportation is
not the only thing the shipper is looking for—the
element of speed is a very vital consideration in a
large class of shipments. Among the heaviest ship¬
pers in the country are the packing houses at Chicago,
yet their shipments by water routes form a negligible
part of their business in the United States. They
send trainloads of meat every day to the east in
refrigerator cars. A refrigerator compartment on
a lake steamer could care for this product much
FREIGHT TRAFFIC BY WATER. 239
cheaper than the railroads, but the packers are willing
to pay more for the greater speed. For preserved
meats, lard, etc., where speed is not so essential,
water routes are frequently used, but even then not
to the same extent as the railroads.
Liability of Land and Water Lines.
There is still one other consideration that enables
the railroads to hold their own as against the water
lines, and this is the fact that they are responsible
for loss or damage to goods entrusted to them for
transport. The water line is not. If a vessel is
wrecked and its cargo lost, the shipper can not
recover from the vessel owners, unless gross care¬
lessness on the part of officers or crew is proved.
Therefore for his own protection the shipper by the
water route must insure his goods, and marine
insurance is much more expensive than land insur¬
ance. This adds to the cost of the shipment, and
helps to offset the saving seemingly apparent on
the lower freight rates.
Traffic on Great Lakes.
By far the greatest system of inland water trans¬
portation in the United States is found on the great
lakes, and despite the shortness of the navigation
season, the tonnage carried in the seven or eight
months they are open mounts into the millions of
tons. There is a general impression that only the
bulkier classes of freight, such as lumber, coal,
cement, stone, lime, salt, ore, etc., seek the lake lines.
240 FREIGHT TRAFFIC BY WATER.
This was true a few years ago, but now some of the
lake vessels carry every kind of freight, even perish¬
able commodities such as butter, fruit and vegetables,
being especially equipped with refrigerating facilities
for this business. It must be remembered, however,
that many of the vessel lines operating on the lakes
are owned by railroads, and are really a part of the
railroad systems. In nearly all cases it will be found
that the freight carried on the lake vessels pays tolls
to the railroads at one end of the route, and fre¬
quently at both ends.
Cargoes of Coal and Ore.
The two greatest commodities carried on the great
lakes are iron ore and coal. Ore moves to the east¬
ward, coal to the west. The fleet of one company
engaged in the transportation of ore numbers over
one hundred steamers, some of them capable of
carrying 10,000 tons. The facilities for loading
these vessels are so perfect that a 10,000 ton steamer
has come into the port of Duluth, taken on its ore
cargo and started on its voyage down the lakes with¬
in three hours. Besides this fleet there are a number
of smaller lines that compete for the ore business,
and may charter their vessels for that trade for the
season, according to the conditions in the iron and
steel business. Rates on ore may fluctuate from
65 cents to $1 a ton from Duluth-Superior to Lake
Erie ports, shipments being made to Cleveland,
Ashtabula, Lorain, Conneaut, Sandusky and Erie
principally.
FREIGHT TRAFFIC BY WATER. 241
Having discharged their ore cargoes there is prac¬
tically only one cargo the ore vessels can get for the
return trip to Duluth, and that is coal. During the
season of navigation the great coal companies will
store some millions of tons of coal at Duluth and
Superior, while additional millions of tons will be
stored at Two Harbors, Milwaukee, Chicago, and
other lake ports. If the ore season is an unusually
brisk one the vessels of the ore transportation fleet
will not bother with return cargoes of coal, but will
return to Duluth with all possible speed in water
ballast. If the ore season is not very brisk they are
glad to get coal cargoes.
Low Lake Rates on Coal.
Here is furnished a conspicuous illustration of the
cheapness of water transportation as compared with
rail. Lake steamers will take coal cargoes from
Lake Erie ports to Duluth-Superior, a voyage of
approximately 1,000 miles, for 30 to 35 cents a ton.
The consequence is that the great coal fields of Iowa,
Illinois and Indiana, are practically shut out of a
large portion of the Minnesota and Wisconsin mar¬
kets, although much nearer than the Ohio and
Pennsylvania fields which ship from Lake Erie ports.
At the low rate of one-half cent per ton per mile it
would cost about $3 per ton to move coal from the
Illinois and Indiana fields by rail even as far as Minne¬
apolis, and it is not moved except at times of unusual
scarcity. But if the railroads lose this large traffic
they benefit in another way. Being the largest users
242 FREIGHT TRAFFIC BY "WATER.
of coal they store up for themselves huge supplies at
the lake ports, on which they save money because
of the cheapness of the water transportation.
Transportation of coal is an isolated instance of
very low rates on the lakes, and is explained by the
peculiar conditions which exist. Not that there is
a scarcity of freight -moving both ways on the
lakes, but it is handled by the railroad-owned or
controlled vessel lines. The great railroad systems
like the Pennsylvania, New York Central, Lehigh .
Valley, Lackawanna and others will take freight
shipments originating on their lines for the west,
haul them to Buffalo, Erie, Cleveland or some other
lake port, and there load them on their steamers.
A New York merchant makes a shipment by the
Lackawanna to a point in Oregon. The Lackawanna
will haul the shipment to Buffalo, load it on its
steamer, take it to Duluth and deliver it to the Great
Northern or Northern Pacific to finish the haul.
The rate for the shipment will show very little dif¬
ference from that of an all-rail shipment.
Flour Rates, Lake and Rail.
Flour is one of the bulky commodities that moves
from the west to the east, and wheat and other grains
supply a large tonnage. Flour, shipped all rail
from Minneapolis to New York is charged 25 cents
a hundred pounds; shipped from Minneapolis to
Duluth, 150 miles by rail, thence down the great
lakes to Buffalo, and thence by rail to New York,
the charge is 23 cents a hundred. Here is a saving
FREIGHT TRAFFIC BY WATER. 243
of only 2 cents a hundredweight, but there has been
600 miles of rail transportation and two extra hand¬
lings of the shipment—once at Duluth and once at
Buffalo, besides the long trip through the lakes.
On shipments of wheat there is a much greater
difference. The all-rail route from Duluth to Buffalo
is about 9 cents a hundredweight. By lake to Buffalo
the rate is only a fraction over 2 cents a hundred¬
weight. These rates are not affected by the fact
that the lakes are closed to navigation in the winter.
The rail rates remain the same winter and summer,
but the lake rates are subject to fluctuation, depend¬
ent upon the amount of cargo room that is available
and the quantity of grain that is seeking shipment.
There is a good reason why grain rates should be
cheaper by the water route than by rail, aside from
the lower transportation costs. It takes only a few
hours to load a vessel with 150,000 bushels of grain
and not much longer to unload it. The same quan¬
tity of grain would take at least 150 cars, and these
could not be handled with anything like the celerity
that attaches to the vessel.
Immense Traffic on Lakes.
Some idea of the magnitude of the traffic on the
great lakes may be gathered from a study of the re¬
port of the Department of Commerce and Labor for
the year 1911. The receipts of the principal com¬
modities at the various lake ports were as follows:
Iron ore, 31,118,610 tons; hard coal, 4,365,470
tons; soft coal, 17,080,184 tons; salt, 450,870 tons;
244 FREIGHT TRAFFIC BY WATER.
copper, 142,075 tons; lumber, 1,163,925 thousand
feet; flour, 1,150,497 tons; grain, 119,305,294 bushels;
unclassified, 8,340,178 tons. The total freight re¬
ceipts for the year were 72,320,544 tons, and the
total shipments were 74,311,019 tons.
At first sight it would seem as if this enormous
tonnage was conducted at the expense of the railroads
—that they were being deprived of just that much
business. As a matter of fact, if the railroads had
to transport this great tonnage the entire distance
from west to east or vice versa, they would be unable
to handle it. They would not have the requisite
equipment of cars and engines to haul it; their
tracks would be so congested that their trnais
would have to proceed at a snail's pace, while their
terminal facilities would be overtaxed. On the
contrary, the water routes on the great lakes form a
most valuable auxiliary to the railroads. It should
be remembered that the vast majority of the freight
handled on the great lakes must pass through the
railroads. It is either delivered by the latter to the
port of shipment, or it is received at the port of ar¬
rival for transportation to destination. The traffic
is thus split up among many roads, which carry
it to various points of the compass, and most of which
will get a haul of a few hundred miles which they are
able to handle promptly and without embarrass¬
ment.
In the number of vessels that pass through the
canals at the Soo, their tonnage and the value of the
freight carried, these highways rank as the greatest
transportation routes in the world, far surpassing
FREIGHT TRAFFIC BY WATER. 245
the famous Suez Canal in the magnitude of their
operations. Not all the commerce of the lakes
passes through the Soo canals, but only that des¬
tined to points on Lake Superior from the lower
lakes, or to the lower lake points from Lake Superior.
For the year 1910, 20,899 vessels passed through
the canals, with a registered tonnage of 49,856,123.
They carried a total of 62,363,218 tons of freight,
valued at $654,010,844. The average distance this
freight was carried was 840 miles, and the total ton
miles were 52,405,535,136. The cost of carrying
per ton mile was .74 mills, and the total amount
paid for transportation was $38,710,904. The value
of the American craft engaged in this service was
$123,061,500. The canal was opened to navigation
223 days, and the vessels passing through it in that
time averaged ninety-three a day, or an average of
one every sixteen minutes the canals were opened.
Another important artificial water route in con¬
nection with Lake Superior is the Portage Lake
ship canal, which cuts through the long arm of the
peninsula and thus enables vessels to cut off some
hundreds of miles of travel. During the season of
1911, the value of the freight passing through this
canal aggregated $79,012,209, 2,839 vessels with a
net tonnage of 2,293,133 using it.
Canals of New York State.
The movement of traffic over the canals of New
York state, while it has shown a notable falling off
from that of former years, is still a most important
246 FREIGHT TRAFFIC BY WATER.
element in the commerce of the state. The heaviest
freight movement in the history of the Erie canal
was in 1880, when it amounted to 4,608,651 tons.
For 1911 the movement amounted to 2,031,735
tons. The other principal canals of the state are
the Champlain, Oswego, and Cayuga and Seneca.
All the state canals in 1911 transported 3,097,068
tons of freight valued at $49,577,629. The greatest
quantity of freight ever moved on the canals was in
1880, when it amounted to 6,437,656 tons, the loss
in movement having been over one-half.
Movement of freight on the Ohio and Mississippi
rivers is still a factor of importance, but shows no
signs of increase. If it were not for the movement
of coal south from the Pittsburg field the traffic would
be exceedingly light. Of the entire number of
vessels passing Cairo, 111., in 1911, considerably more
than half were thus laden. Coal is loaded in barges
and made up in tows at Pittsburg, and then sent down
the Ohio and Mississippi in tows containing millions
of bushels. The barges containing the coal are con¬
structed lightly for the purpose and are never brought
back. After having been emptied of their contents
they are broken up and sold for the lumber they con¬
tain. In 1911, of the vessels and barges reported
passing Cairo, 2,307 were laden with coal, 362 with
lumber of various sorts, and of the other 899 reported
corn, wheat, brick, iron and steel, rock, oil, and
general merchandise composed the freights. The
total tonnage engaged in the Mississippi river trade
is placed at 3,947,337, which includes arrivals and
departures at all ports, but as the most of these
FREIGHT TRAFFIC BY WATER. 247
craft are reported several times during the year the
actual tonnage is very much less. The water traffic
is essentially in coarse and bulky freight, generally
of low value, and which is forced to the water route
because of its inability to bear even a low railroad
tariff.
Water Routes on the Pacific.
Water routes form a most important part in the
freight movement of the Pacific coast. San Fran¬
cisco, Portland, Seattle and Tacoma not only main¬
tain well-established vessel lines along the Pacific
coast, but there is also a heavy freight movement
by water on the Columbia and Willamette rivers
and along Puget Sound. Much of this traffic is
destined to foreign ports in the east and Europe, and
there is also a heavy movement to Alaska and the
Hawaiian Islands, but the greater portion is coast¬
wise trade. The total vessel movement at the port
of San Francisco in 1911 amounted to 6,338,980
tons, of which 4,220,432 tons was exclusively coast¬
wise. The principal articles transported by water
were: Oil, 6,568,511 barrels; potatoes, 1,386,825
sacks; salmon, 1,230,302 cases; sugar, 8,384,059
centals; wine, 16,700,460 gallons and 17,641,552
dozens of eggs. Lumber in various forms, railroad
ties, agricultural products, fruits, etc., make up the
balance of the products transported by water.
Practically the whole movement is that of. coarse and
bulky products, seeking the lowest transportation
rates to a market. Grain shipments, which include
wheat, corn, oats, barley, rye, and flour as wheat,
amounted to 11,063,278 bushels.
248
FREIGHT TRAFFIC BY WATER.
Trade From Portland and Seattle.
The greater part of the water trade of Portland
is with the Orient and European ports, and its prin¬
cipal items of shipments to these countries are lum¬
ber, wheat, flour, and fruit. Seattle conducts the
briskest movement of traffic by water of any of the
Pacific coast cities, its vessel tonnage in 1911 amount¬
ing to 6,374,318 tons. Its greatest trade is with
Alaska, the Hawaiian Islands and the Philippines.
Foodstuffs of various kinds, lumber, coal, machinery
and liquors are among the principal articles of ship¬
ment. Tacoma, with a commerce of about the
proportions of Seattle, leads the latter city in ship¬
ments of grain, flour and lumber, about one-half of
its trade being coastwise and the rest foreign.
Much of the traffic that now moves overland from
the Pacific coast will undoubtedly seek the water¬
ways after the completion of the Panama canal.
There is a vast movement of lumber by rail, for in¬
stance, that will be able to move by water much
cheaper. There is also a movement of fruit that is
now entirely by rail and which pays high rates for
transportation because of refrigeration. It costs
$30 a ton to ship a car of refrigerated fruit from Cal¬
ifornia to New York, and the Pacific coast con¬
fidently expects to see this rate cut in half or even
more by the canal.
Atlantic-Gulf Water Traffic.
Between the various Atlantic coast and Gulf sea¬
ports there is a heavy movement of freight traffic
FREIGHT TRAFFIC BY WATER. 249
the year around. Many of the vessel lines are owned
or controlled by railroad systems and merely relieve
the latter of a part of a long land haul. Thus freight
between New York city and New England points
that moves by the various Long Island Sound lines
of vessels is merely being moved by the water adjunct
of the New York, New Haven & Hartford Railroad,
and there is no competition for business between
the water and land lines, each serving the other.
Almost a similar condition exists in the trade with
the Gulf, the lines that ply between New York and
the Gulf ports usually acting as feeders to their
railroad owners. The heaviest water traffic that is
conducted along the Atlantic coast is in the ship¬
ment of coal, there being regular lines of vessels that
ply between New York, Philadelphia, Baltimore,
Newport News and Norfolk, where practically all
the coal shipments originate. The fleets of vessels
in this coal trade ply up and down the coast and to
the Gulf, and the trade is a most extensive one.
New York-New England Water Traffic.
New England ports that maintain vessel communi¬
cation with New York are Boston, New Haven,
New Bedford, Providence, Fall River, Newport,
New London and Bridgeport. The interchange of
traffic between these ports and New York for 1911
amounted to 4,050,000 tons by water.
Between New York and a number of the Southern
Atlantic and Gulf ports there is a heavy trade in
lumber, conducted in both sail and steaming vessels.
250 FREIGHT TRAFFIC BY WATER. .
This lumber is all subjected to a more or less long land
haul before delivery to vessels, and constitutes a big
item of the water traffic, the amount transported to
New York in 1911 amounting to 395,635,625 feet.
There is a movement of the same kind between New
England ports and New York, the traffic in 1911
amounting to about 400 cargoes. The south ships
southern pine mainly, while New England ships
chiefly spruce.
Coastwise trade between the ports of the Atlantic
and those of the Gulf far exceeds in volume and value
that with foreign countries, but the latter is a most
important item at certain of the Atlantic and Gulf
ports.
Commanding Position of Philadelphia.
Philadelphia's position in the foreign trade is
due to its splendid position on the Delaware river,
which affords adequate water depth for the largest
ocean-going craft with splendid dockage facilities.
Regular steamer lines are maintained between this
port and Hamburg, Glasgow, Antwerp and London,
while occasional shipments are made to other Euro¬
pean ports. There are also regular steamer lines
with New England and southern ports.
Baltimore, although much farther inland than
Philadelphia, is enabled to maintain its position as
a great shipping and commercial port solely because
of the excellent water route to the city furnished by
Chesapeake bay and the Patapsco river, on one of the
arms of which Baltimore is located.
CHAPTER II.
ESTABLISHED ROUTES AND DISTANCES.
When a merchant ships a consignment of mer¬
chandise from New York to San Francisco he never
bothers to find out how many miles the goods will
have to travel-. He may bother about the route,
however. He has the choice of several overland
routes, or he can ship via the Isthmus of Panama,
the Isthmus of Tehauntepec or by Cape Horn.
There was a time when the Panama route and Cape
Horn were the only practicable routes, and all freight
from the east destined for Pacific coast points moved
by either one of them. A large quantity still moves
that way, but it is mostly the heavier and bulky
freight for which there is no particular demand for
speed. The great bulk of the freight traffic of the
country between the east and west moves on the over¬
land lines of rail, not because it is the cheapest way,
but because it is the quickest.
What is true of the United States is true of all
other civilized countries. There are certain well-
defined routes of travel and trade movement. The
railroads usually mark the routes. Where there is
a lack of railways the waterways of a country gen¬
erally set the route, because a waterway usually
follows the line of least resistance, and even if it is
251
252 ESTABLISHED ROUTES AND DISTANCES.
not possible to use it for trade purposes, the country
in its immediate vicinity is generally found the best
adapted for travel by man. So in whatever country
of the world man wanders he will find a preeminent
trade route—whether it is by rail, water, or by
caravan, and while the routes of trade have been
frequently changed in the most arbitrary manner by
the railroads, those by water and caravan remain
fixed and immutable.
Ocean Routes of Traffic.
When one takes an atlas on which the various
oceans of the world are shown, he is immediately im¬
pressed by the fact that here, as on the land, there
are certain well-defined routes of trade. In fact,
on looking at one of the great modern atlases, the
impression it conveys is that the oceans were created
for the purposes of trade routes and incidentally
to hold here and there an island. Long lines radiate
over the map from one country to another, making
the vast ocean expanses look remarkably like a
spider's web, and each one of these lines is a route
of trade. The lines represent the routes which
vessels follow in carrying the commerce of the world
between the various countries, and usually they run
in as direct a line as it is possible to make them go.
There is one notable exception to this rule, and that
is the steamship route from the British Isles or from
European points to Yokohama, Japan, via Cape
Horn. From Liverpool to the Cape the course is
about as straight as a ruler.
ESTABLISHED ROUTES AND DISTANCES. 253
After the Horn is doubled however, the line takes
a direct northwest course until it strikes the Hawaiian
Islands, after which it takes an almost direct course
west. There is a reason for this divergence. A
steamship might lay its course direct from the Cape
to Yokohama without touching the Hawaiian Islands,
but the probabilities are that no steamship could
carry a sufficient coal supply for such a long trip,
and therefore the Hawaiian Islands furnish a most
advantageous place to replenish the bunkers, as
well as to take on supplies of fresh food and water.
This line is not followed exclusively by vessels
plying between the British Isles and Yokohama,
however. It is followed by all vessels sailing from
European ports for Pacific points, and is followed
by American vessels after they reach the coast of
Brazil.
Ocean Winds and Currents.
In the main, the lines of trade on the atlas are those
followed by vessels propelled by steam, and yet a
large part of the commerce of the world is still carried
in sailing vessels. These latter do not adhere closely
to established routes. Their course is frequently
modified by influences to which the steamship is
indifferent. For instance, the oceans have their
currents, and these are as sharply defined as the
current of a river. Also in certain parts of the oceans
there are prevailing winds—that is, winds that blow
steadily in a certain direction during certain seasons.
The master of the sailing vessel has to reckon with
254 ESTABLISHED ROUTES AND DISTANCES.
these influences. In order to gain the advantage of
currents and winds it may be necessary for him to
diverge sharply from the most direct line, and by so
doing he will save money and time for his employers.
He may sail over a longer course, but his journey will
be accelerated by the favorable winds and currents.
The cartographer in a few years from now will
have to reconstruct his lines of trade, and the change
will be a marvelous one. When the Panama canal
is opened the navigation of the world will have to
adjust itself to new conditions. The commerce of
Europe, of eastern North America and of eastern
South America with the Orient and with the west
coasts of North and South America, that now has
to go around the Horn, will then enter the Pacific
Ocean through the canal. Many new trade routes
will be formed, and many of the old ones will be
abandoned.
Objective Points on the Atlantic.
It is in the Atlantic Ocean that the greatest num¬
ber of trade routes exist, as this is the most exten¬
sively navigated of all the oceans. There are two
great objective points on this ocean, and from these
two points almost all the lines of trade will be found
to radiate—Liverpool and New York. A vessel sail¬
ing from New York to Gibraltar, for instance, would
have almost a straight course east and west to steer—
but not quite, as Gibraltar is a trifle south of the
latitude of New York. It is impossible for a vessel
to take this straight course, for the reason that the
ESTABLISHED ROUTES AND DISTANCES. 255
Azores happen to be in the way. It must go either
to the north or south of them, and the established
route is to the south. This makes the number of
miles the vessel has to traverse 3,211, but in the entire
trip it encounters no land and will not sight any
unless it lays its course far enough north to sight
the Azores or far enough south to sight the Madeira
Islands. Following the established route the first
land sighted after leaving New York will be the coast
of Spain and the rock of Gibraltar.
Great Diversity in Mileage.
The North Atlantic Ocean is full of established
routes between Europe and America, and one of the
astonishing things about them is the great diversity
of mileage. Take the case of a traveler who wishes
to go to Liverpool. If he sails from the port of New
York he has a journey of 3,168 miles ahead of him.
If he sails from Quebec he has a journey of only
2,000 miles. On the Quebec trip he will not only
cross the Atlantic, but in addition the Gulf of St.
Lawrence and a considerable stretch of the St.
Lawrence river. Yet there are only three degrees
of longitude difference between the two places,
NeAV York being on the 74th parallel and Quebec
on the 71st. To account for the difference in mileage
one must look further, and it will be found partly in
the longitude. The further north or south from the
equator one goes the fewer miles are in a degree of
longitude. At the equator there are 69.16 miles in
a degree. At the poles there are none at all, and so,
256 ESTABLISHED ROUTES AND DISTANCES.
in the latitude of Quebec, which is almost on a par¬
allel with Liverpool, the decreased mileage is largely
due to the shrinkage in the degrees of longitude. At
the same time the eastward projection of the conti¬
nent reduces the ocean distance.
Going still further north the same curious feature
is even more prominently brought out. One of the
established routes is that from York Factory to
Liverpool, a distance of 2,666 miles. That is exactly
502 miles less than the distance from New York to
Liverpool. The route from Liverpool is north¬
westerly until the northern coast of Labrador is
reached and Hudson Strait is passed through, after
which the route takes a southwestern dip and passes
through Hudson's Bay to York Factory.
Position of York Factory.
The route is an established one, without a doubt,
but cannot be called a familiar one, although it has
been traversed for considerably more than a century.
It is a line of travel that probably was first established
by the Hudson's Bay Company and is still used by
them to transport their furs to England and to bring
in supplies for their widely scattered trading posts.
York Factory is north and a trifle east of Winnipeg,
and Winnipeg is northwest of Minneapolis, Minn.,
the latter city being on the 93d parallel of longitude
while Winnipeg is on the 97th, or four degrees further
west. The distance from Minneapolis to New York
in an air line—not by railroad—is just 1,000 miles,
so that to go from Minneapolis to Liverpool via New
ESTABLISHED ROUTES AND DISTANCES. 257
York one would have to travel 4,168 miles. Yet
from York Factory, four degrees farther west than
Minneapolis, the distance to Liverpool is only
2,666 miles. Again the explanation is found in the
eastward projection of the continent and the shrink¬
age in the degrees of longitude, which on the York
Factory route are even more attenuated than at
Quebec.
Long Routes on the Atlantic.
One of the longest established routes on the Atlan¬
tic from an American port is that from New York to
the Cape of Good Hope. It runs straight as an arrow
southeast for 6,640 miles. If this course is adhered
to closely by sailing masters they will only sight land
twice in the entire distance. The first land will be
the lonely island of Ascension in the South Atlantic,
famous for its turtles, and about 800 miles further
south the island of St. Helena, memorable as the
prison of the first Napoleon. The next longest route
is that from New York to Cape Horn, 6,460 miles.
Cape Horn is directly south of New York and on
almost the same degree of longitude, but to reach it
a vessel sailing from New York would have to move
in the segment of a circle, making about forty degrees
to the east in order to overcome the easterly pro¬
jection of South America, after which the course is
laid southwest to the Cape. But no vessel ever sails
from New York to the Cape—the Cape is only an
incident of the journey to some other place, and it
must either be sailed around or the course laid
258 ESTABLISHED ROUTES AND DISTANCES.
through the Straits of Magellan. This is the course
usually followed by all steamships nowadays, as it
not only cuts off several hundreds of miles, but avoids
the perilous navigation and boisterous weather of
the Horn. Following this route and up the west
coast of South America to Valparaiso, which is one
of the established ocean routes, makes a trip of
8 460 miles. The opening of the Panama canal will
lop off over one-half of this distance, and will bring
Valparaiso within 4,000 miles of New York.
Few people have any conception of the importance
of New Orleans as a port unless they happen to be
interested in transportation matters, yet New Orleans
is one of the great shipping centers of the country,
and when the Panama canal is opened this im¬
portance is destined to be greatly augmented. When
one comes to look on the map for established ocean
routes it is amazing to find how many of them con¬
verge at New Orleans, and especially is this true of
Central America and Mexican ports, many of which
appear to have no other means of communication
in the way of trade except by New Orleans. Aside
from these ports, which are within the natural trade
territory of the city, there is hardly a country in the
civilized world which does not maintain direct vessel
communication with that city. Oddly enough, the
maps do not show any established route from New
Orleans to the west coast of the United States by
way of the Horn. For this traffic New Orleans would
have little, if any advantage, over the eastern At¬
lantic coast ports. It is much further south, to be
sure, but it is also much further west, and what it
ESTABLISHED ROUTES AND DISTANCES. 259
gains in one direction is lost in the other, so that New
York and Philadelphia, as an illustration, are practi¬
cally as near the Horn, as far as navigation goes, as
New Orleans.
Long Routes of the Pacific.
Established routes on the Pacific Ocean do not
appear to be as numerous as those of the Atlantic,
and possibly are not, but whatever they lack in
numbers they make up in length. Between the
United States and Alaska there are three established
routes, two of which are to western Alaska direct.
The shortest of these is the one from Seattle, 1,635
miles, that from San Francisco being 400 miles
longer, the objective of both lines being Unalaska
Island, at which point vessels are enabled to get
around the long out jut ting arm of the Alaska Penin¬
sula and pursue their way northward to St. Michaels,
which is 450 miles nearer the polar regions. The
third route is that from San Francisco to Sitka,
1,352 miles northwesterly, following the coast line
pretty closely all the way. From Sitka the course
is southwesterly to Unalaska Island, 1,130 miles.
It is in the Oriental and South Pacific trade, how¬
ever, that the long routes are encountered, and there
are two established routes from the North American .
continent which traverse the distance without ever
sighting land on the way. Yokohama is one of
the great objective points in the East, and the
route from Victoria, British Columbia, lands one
there after 4,202 miles of travel, while the direct
route from San Francisco is 4,791 miles long. Two
260 ESTABLISHED BOUTES AND DISTANCES.
causes contribute to make the Victoria route the
shortest. One is its northern situation, which shortens
the mileage in the degrees of longitude, and the other
is the fact that it is further west than San Francisco.
The San Francisco route is almost straight across
the Pacific, while the Victoria route runs in a south¬
westerly direction.
Long Routes from Panama.
Established routes radiate from Panama in addi¬
tion to the Honolulu line and the lines to the North
American continent and to South America. The
longest of these is that to Sydney, New South
Wales, 7,692 miles. This is not direct, however,
as vessels taking it usually stop at Auckland, New
Zealand, 6,593 miles from Panama, and then con¬
tinue their journey. The longest direct route from
Panama is that to Wellington, New Zealand, which
traverses 6,650 miles of ocean without a stop, and if
the course is closely followed, without once sighting
land. There is also an established line from Welling¬
ton to Valparaiso Chile, but as this route is only
5,039 miles long, it is short in comparison with
some of the vast distances of the Pacific Ocean
travel.
The longest established route solely within the
waters of the Pacific is that from Hongkong to
Punta Arenas, 10,070 miles long. From Punta
Arenas the course is in an almost straight line north¬
west, seventy-five degrees of latitude being crossed
in the journey, which is usually broken at the island
of Upolu, 4,963 miles from Hongkong.
ESTABLISHED BOUTES AND DISTANCES. 261
Honolulu a Focus for Routes.
From Honolulu there are established lines of travel
to Tutuila, one of the Samoan group of islands,
which is 2,700 miles south of Hawaii, and to the
Fiji Islands, about 3,000 miles south of Hawaii.
From the Fiji Islands there is a line to Auckland,
New Zealand, 1,150 miles further south; to Sydney
New South Wales, 1,710 miles southwest; to Hong¬
kong, 4,573 miles northwest. From Honolulu is also
the established line to Manila in the Philippine
Islands, which runs west as straight as a ruler until
it enters the China Sea, when it dips abruptly to
the south to Manila. This route is 4,700 miles
long, and the total distance from San Francisco is
6,789 miles.
These are the main routes of ocean travel followed
by the commerce of the world. Not all of them,
but the principal ones. On all of them the ships are
sailing back and forth, bearing the produce of one
country in exchange for that of another. These
vessels are performing the same function on the
waters that the railroads do on the land. Without
them there would be no commerce between nations,
except where they happened to be neighbors on the
same continent. The great cargoes these vessels
can carry and the cheapness with which they can
be operated make them most important factors in
commerce, and all students of transportation matters
should know and be interested in the ocean paths
they follow.
CHAPTER III.
DEFECTS OF THE PRESENT SYSTEM.
Aside from traffic on the great lakes and the coast¬
wise commerce of the United States, water trans¬
portation of the nation has been steadily declining
for years. The matter has been a source of great
concern in some quarters, and many remedies have
been proposed to rehabilitate the neglected water¬
ways. The days are recalled when the Ohio and
the Mississippi rivers were great thoroughfares of
commerce; when the Erie canal was taxed to take
care of the traffic offered ; when the steamboat was
the only thing, and the railroad yet a creation of
more or less dubious usefulness.
Decline of American Shipping.
It is a statement often made and seldom denied,
that the American merchant marine is declining, if
not dead. The statement should be qualified. With
out question the tonnage of American vessels en¬
gaged in foreign commerce has dwindled perilously
close to the vanishing point. The report of the
Census Bureau on this subject showed that in 1909
the tonnage of American vessels engaged in the
foreign trade had declined to 878,523 tons. This
263
264 DEFECTS OF THE PRESENT SYSTEM.
was a decrease of 30 percent from the figures of 1883.
Meantime, however, the tonnage of vessels engaged
in coastwise traffic had increased from 2,838,354
tons to 6,451,042 tons, or 127 percent. But the
coastwise tonnage is only a part of the story. The
tonnage engaged on the great lakes and the St.
Lawrence river is a very important one. In 1889
this amounted to 920,294 tons. In 1906, according
to the census report, it had increased to 2,392,863
tons an increase of 160 percent. The same report
showed that the total tonnage of all American ship¬
ping amounted to 12,893,429 tons.
Water Carriage in Europe.
The American who goes abroad is astonished to
see the importance that water carriage attains on
the continent of Europe. In France, Germany,
Belgium and Holland the waterways rank with the
railroads as means of transportation. Instead of
declining, as they have in the United States, they are
constantly gaining in the amount of business they
transact. Naturally the American is surprised at this,
and wonders why, if the European waterways are so
busily engaged, the American waterways should
be almost neglected. All these European nations
have expended sums running into the hundreds of
millions on the improvement of their rivers and the
construction of canals. France has about 7,500
miles of navigable waterways; Germany has about
8,500 miles; Belgium has a little over 1,000 miles.
In all these countries the railroads are owned by the
DEFECTS OF THE PRESENT SYSTEM. 265
governments and it would naturally be expected
that they would do everything in their power to
foster traffic on the railroads to the exclusion of the
waterways. Yet the official figures show that while
the railroads in a given space of time have increased
their traffic 100 percent the waterways have increased
their traffic about 200 percent.
Reasons for Success Abroad.
There are a number of reasons why European water¬
ways should prosper and those of the United States
decline. One, and a very important reason, is that
freight rates are so high in Europe on the railroads
that the shipper will always patronize the waterways
when possible, as these carry freight at much lower
charges than the railroads. Another reason is that
the European waterways are on the established cur¬
rents of trade. The waterways are an old institu¬
tion there. They were established and prosperous
long before railroads were dreamed of, and naturally
the manufacturing industries of the countries were
established along them. As railroads were con¬
structed they tapped as many of these industries as
was possible, but property values are high in Europe
and the railroads naturally sought the cheapest
routes.
Marine Carriage a Family Affair.
Another reason is that the commerce of the Euro¬
pean waterways is conducted along peculiar lines.
266 DEFECTS OF THE PRESENT SYSTEM.
There are no corporations or big firms engaged in the
water transportation business, with fixed and definite
tariffs. Instead, the business there is a family and
hereditary affair. The business descends from father
to son, and has done so for generations. Of the many
thousands engaged in the business there are few that
own more than one vessel. This vessel is also the
home. The owner marries and rears his family on
his boat. He has no other domicile. He is not in
the business merely to make money, but to make a
living. Consequently his charges are low, and are
kept low because he has the competition of his fellows
to meet. He has no tolls to pay for the use of the
canals or improved waterways, and his expenses are
restricted simply to a living for himself and family
and occasional repairs on his vessel.
Apply the same reasons to the waterways of the
United States and see what effect they have. Here
the waterways have to compete with the cheapest
railroad rates in the world. At that, this is not an
insuperable obstacle, as it is well known that water
transportation can be conducted cheaper than rail¬
road carriage, but it lessens the incentive for indi¬
vidual action and for investment of capital.
Trade Currents in United States.
Again, the American waterways are not on the es¬
tablished currents of trade, with rare exceptions.
The trade currents in the United States run mainly
from east to west, and the only waterway we possess
that follows that direction is the great lakes—the
DEFECTS OF THE PRESENT SYSTEM. 267
one American waterway where commerce does not
languish. The industries of the country have been
built in reference to the railroads and rarely, except
on the ocean frontages, with reference to the water¬
ways. The only important waterways of the
country, aside from the great lakes and the Columbia
river, run north and south. Shipments by water
must be restricted in their area. They must go to
points on the river or canal to move with the greatest
economy. If they are destined to points off the river
or canal another handling is necessary and that means
expense. On the railroad, however, a shipment can
move to any point of the compass, and usually with
only one handling.
Uneven Distribution of Channels.
A glance at a map of the waterways of the United
States will show a very uneven distribution of chan¬
nels. The Atlantic coast and the south have scores
of natural channels which are navigable for a hundred
or more miles, and which connect either with the
Atlantic Ocean or the Gulf of Mexico. On most of
thèse there is some attempt at navigation, but the
commerce is mainly local in character, and their
greatest usefulness seems to be in the line of excur¬
sion and recreation purposes. West of the Missis¬
sippi there is practically no navigation, although the
Missouri stretches its length north and westward
some thousands of miles until it reaches Fort Benton
in Montana. There are a few branches of the Mis¬
sissippi in the south—the Red river, the Arkansas,
268 DEFECTS OF THE PBESENT SYSTEM.
and a few others, which afford navigation for a short
distance westward. On the Pacific coast there are
but three streams which are classed as navigable,
the Columbia, the Willamette, and Sacramento,
although the Snake river is navigable for a short
distance beyond the Columbia, into which it
empties. Puget Sound supplies a large extent of
territory with waterway facilities and is the scene
of a large water commerce.
Many Types of Vessels Used.
One of the greatest obstacles to the development of
commerce on the waterways of the United States is
a lack of unity—the absence of a standard type of
vessel, one which is capable of carrying a large ton¬
nage with a minimum draught. On almost every
stream will be found a different type of vessel. This
type usually reverts back to the early days, when the
streams were extensively used for transportation,
and when it appeared adequate for the purpose.
But while inventive genius has been busy with other
means of transportation, it does not seem to have
found the waterways an attractive field of effort.
Thus the inventors have revolutionized the railways
within a comparatively short time, and are still at it.
Locomotives have been perfected to such a degree
that they will easily haul ten times the load that the
first locomotive did. Larger cars, innumerable de¬
vices that contribute to the speed and safety of rail¬
road operation have been perfected, and of recent
years the application of electricity to land transpor-
DEFECTS OF THE PRESENT SYSTEM. 269
tation has made possible an enormous addition to the
railroad mileage of the country.
Lack of Uniformity Fatal.
This lack of uniformity in water transportation
has been fatal to the water lines. It restricts the
service they can offer to the shipper to a few hundred
miles only, and this reduces them to practically a
local business for existence. The railroad line that
was confined to local business for its existence
would soon go out of operation. The Columbia
river in the northwest offers a good illustration of this.
From the Pacific to The Cascades it is navi¬
gated by a fair-sized type of vessels, both sidewheelers
and propellers, and for about 160 miles carries a
heavy commerce. East of The Cascades there is
another stretch of some hundreds of miles on which
a considerable commerce is carried on, but here
another type of vessel is employed—the old stern
wheeler. Freight seeking water transportation on
the Columbia is therefore restricted to a few hundred
miles, and naturally the commerce of the river east
of The Cascades is almost entirely local. Westward
from The Cascades, however, the river is used as an
adjunct of a railroad system, which maintains a fine
fleet of vessels and tranships a vast amount of freight
to and from the Pacific.
Vessels of the Great Lakes.
On the great lakes there is still another type of
vessel, many much larger than some ocean-going
270 DEFECTS OF THE PRESENT SYSTEM.
craft, but it is doubtful, in the opinion of marine
engineers, if they could stand the strain of an ocean
voyage. Here again the vessels are built and equipped
for a definite purpose. The great majority of them
are designed to carry heavy bulk freight such as ore,
coal, grain, lumber, etc. High speed is not an es¬
sential so much as cargo room, and facilities for speedy
loading and unloading. Hence engine space is re¬
stricted to the smallest possible minimum and cargo
space enlarged to its greatest maximum. Decks
are perforated with as high as thirty or more hatch¬
ways for celerity in loading and unloading, and special
devices have been perfected for this purpose that
minimize the use of human labor. The commerce
of the great lakes is the only one to which the skill
of the engineer and inventor appears to have been
applied, and it is this which has enabled the com¬
merce of the great lakes to grow and flourish as it
has.
Similarity to Ocean Conditions.
There is no analogy between the navigation of the
lakes and that of the rivers, however. There is a
great resemblance between the lakes and the ocean.
In all the lakes there is practically an unlimited
depth of water, and the only limitation that is placed
upon the draught of a vessel is that imposed by
artificial connecting channels and the depth of water
in harbors. Then the lakes are lined with important
cities, at all of which there is a large amount of freight
seeking the cheapest means of carriage, so that the
DEFECTS OF THE PRESENT SYSTEM. 271
conditions in this respect are again different from
those on any of the river systems, with the possible
exception of the Mississippi. Yet the navigation of
the lakes is in the control of a comparatively few
hands. The ore, grain, coal, etc., are generally
transported in vessels that are owned by corpora¬
tions, while the package freight is entirely carried
in the vessels that are an adjunct of the railroad
corporations. These concerns monopolize the cream
of the transportation business, and the few inde¬
pendent boats that are left have to be content with
the skimmings.
Takes Capital for Lake Trade.
If it were possible to conduct transportation over
American waterways under the same conditions
that it is conducted in Europe, there might be hope
for its resuscitation from the lethargy into which
it has fallen, but this appears impossible. In the
first place there is no counterpart in American life
of the small boat owner, a waterman by heredity,
content to live on his vessel with his family and make
only a fair living. Such conditions would be intoler¬
able to the American, who is never content with a
bare living, and does not embark his capital and labor
with such a purpose in view. There must be a chance
for betterment in the American's scheme of activities
—for the making of money and the enlargement of
business. In the commerce of the great lakes there
is no room for the man of small means. It takes
large capital for the construction of the vessels
272 DEFECTS OF THE PRESENT SYSTEM.
employed and this capital has to lie idle at least five
months of the year when weather conditions are
unfavorable. Large capital can stand this; the small
boat owner would starve to death.
Conditions on Inland Rivers.
On the rivers the conditions are somewhat differ¬
ent, but only slightly so. It must be remembered
as has been explained, that all water transporta¬
tion has to meet the competition of the lowest rail¬
road freight rates in the world. On the lakes many
of the large vessel lines are owned or controlled by
the railroad systems, and are virtually a part of the
lines, so that the railroads get all the money that is
paid for freight transportation. If it were profitable
to do so on the rivers, they would undoubtedly
install lines of vessels for that purpose. The differ¬
ence is that the great lakes are not competitors of
the railroads. They are auxiliaries. The rivers
are competitors, and the railroads have an effectual
method of checking competition. Let a vessel line
on the Mississippi, for instance, develop a large and
profitable business between New Orleans and St.
Louis, and a rival line would soon appear that would
carry freight at such low figures as to make the
business a losing one. The railroad interest might
not be apparent in the rival line, but it would be
there, just the same. After the older line had been
forced out of business the new line would advance
its rates to a point where the shippers would prefer
DEFECTS OF THE PRESENT SYSTEM. 273
the rail routes to the waterway. Such conditions
are deterrent to capital and are not inviting to
individual effort.
European Conditions Much Different.
If it is so easy to kill off waterway competition,
it may be asked, why have not the European rail¬
roads done so instead of letting the waterway busi¬
ness grow, especially when they are getting double
or more the rates for freight transportation received
by American railroads? There are a number of
reasons, but two will be sufficient. The European
railroads are owned by the governments, and it
would be poor policy on their part to deprive the
thousands of people dependent upon the waterways
of their means of livelihood.
The other reason is that if the governments under¬
took to transport by rail the commerce that now
moves by water they would practically have to
duplicate the existing lines. This would entail an
enormous expense, much greater than the existing
lines have cost, because property values are much
higher than when the railroads were first constructed,
and the cost of labor and all material is also much
higher. It is doubtful if any of the governments
previously named could raise the money necessary
for such a purpose without paying a ruinous discount.
Again, the existing railroad lines are taxed almost
to their capacity now to handle the business offered,
and they are very glad to have the waterways carry
the heavier and bulkier material they do, and which
274 DEFECTS OF THE PRESENT SYSTEM.
would move over the rail lines at lower rates than
the business now handled.
Europe Lags in Transportation.
The European government-owned railroads are
averse to spending money for improvements and
extensions, because the revenue derived from them
forms a very important part of the state budgets.
Hence they lag behind in the art of transportation.
The engines and cars in use would be considered a
joke by any second-class American railroad system,
The American railroad manager, however, has to
compete with the waterways, and he does it by
making his railroad as efficient as human ingenuity
is able to accomplish.
There is considerable talk of the construction of
a deep waterway from the great lakes to the Gulf
in order to utilize to the fullest extent the oppor¬
tunities for commerce that will follow the opening
of the Panama canal, and there is little doubt that
in time this will be accomplished. There are no
insuperable obstacles in the way of the project, from
an engineering standpoint, and it is purely one of
expense. Before such a channel can be used to its
fullest advantage, however, it will be necessary for
the ship designers to invent a new style of craft.
The present vessels plying on the great lakes will be
unable to use the channel, because their draught is
too great. In order that the channel may be used
at a profit in competition with the railroads the
vessels engaged must be of small draught and great
cargo carrying capacity.
DEFECTS OF THE PRESENT SYSTEM. 275
Handicaps of Water Service.
Many other reasons might be cited to explain the
decline of the American waterways, aside from those
given. Two worthy of consideration are safety and
speed. When a merchant ships goods by the rail¬
roads he knows that if they are lost or damaged the
railroads will reimburse him. The bill of lading he
receives is an insurance policy, in effect. When the
merchant ships by water, however, he only gets a
receipt for his goods. There is no insurance in this
receipt, nor is the vessel owner liable for loss or
damage to the goods, save under exceptional
circumstances. This being the case, the prudent
merchant, will insure his goods when shipping by
water. Marine insurance is costly; there is not only
the danger from fire, but the danger from storms
and collisions, and therefore the premium that has
to be paid to the underwriters wipes out much of the
apparent saving effected by the freight bill.
Uncertain Speed and Sailing Dates.
On the coast, Gulf and great lakes there is little
9
trouble as regards speed. There are numerous vessel
lines with fixed days for sailing, and their service is
about as speedy as by rail. On the inland waterways
this is not the case. Vessels defer sailing until they
have a cargo. Once having sailed they stop at
every landing to take on or receive cargo. Then
they have the river current to contend with. On
276 DEFECTS OF THE PRESENT SYSTEM.
the Mississippi, for instance, it takes a vessel four
days to make the trip from St. Paul to St. Louis.
Coming back against the current it will take the
same vessel six to seven days.
One other, although a minor, objection to vessel
transportation is the instability of rates. The
Interstate Commerce Act does not apply to marine
navigation, except when the vessels are operated
as part of a railroad system. The independent
vessel line is at liberty to alter its rates at will, and
usually does. The merchant selling goods on a
close margin can seldom figure with accuracy what
it will cost him to ship by water; he can always do
so by railroad, and make his prices accordingly.
The One Main Disadvantage.
Transportation by water in the United States
now suffers from one far-reaching disadvantage which
we can largely remedy, namely, the lack of organi¬
zation of our waterway system as a whole. At
present we can hardly be said to have a general
waterway system. Our great total mileage of water¬
ways is split up by certain physical characteristics
into a number of largely unrelated parts. Part of
the waterways consists of ocean routes of unre¬
stricted depth and width. Part consists of lake
routes of unrestricted depth except in certain very
important connecting channels. The rest consists
of river and canal channels of varying and always
restricted depth, of narrow width, devious courses,
DEFECTS OF THE PRESENT SYSTEM. 277
and with more or less current and obstructions.
Most of the rivers are navigable at present only for
light-draft boats.
Conditions Susceptible of Improvement.
Under a general plan, our inland wateways can
be made much more of a commercial unit. They
must be placed in such a position that they can
secure, even against rail competition, a far greater
proportion than now of the country's traffic. River
and canal traffic is now insignificant as compared
with rail traffic.
We must, of course, recognize that no reasonable
expenditure will wholly remove the difficulties. For
instance, it is probable that transhipment from rail
to water, or from one water carrier to another, will
continue to be necessary on most long inland or
partly inland hauls. Transhipment means termi¬
nals. This is a subject which has had far too little
attention in the past. It is sufficient to say now that
terminal improvement is greatly needed and is
entirely possible.
CHAPTER IV.
SHIPPING CONTRACTS AND DOCUMENTS.
Aside from the vessels employed on regular routes
most of the transportation by water is done in craft
which are chartered ' for the particular service in
view. This applies to both ocean- and inland-
marine traffic. The firm of Johnson & Co. own a
freight steamer of 5,000 tons burthen, the White
Eagle, plying on the great lakes, but not connected
with any regular run, being in marine parlance "a
tramp." The Taylor Iron Works has a large quan¬
tity of iron ore at Duluth or Superior which it desires
to have transported to Cleveland, or some other
port. The Taylor people accordingly "charter"
(rent the use of) the White Eagle from the Johnson
Co., and during the life of the charter the vessel is
employed exclusively in handling freight for the
Taylors.
How Vessels are Chartered.
The charter may be for one trip, or more, or it
may be for the season. It depends upon how much
traffic is to be handled. When a vessel is chartered
the owners furnish the crew and navigate the boat,
assuming all the ordinary risks, and the parties
279
280 SHIPPING CONTRACTS AND DOCUMENTS.
chartering it have exclusive use of the cargo capacity.
This is the plan usually adopted by people who have
a large amount of freight to transport, and do not
care to tie up funds in vessels of their own. They
simply rent or lease them, generally on a tonnage
basis, paying so much per ton of cargo for each trip.
It is virtually the same as the leasing or rental of
property for residence or business purposes^ the
lessee having exclusive use of the property during
the period for which he pays rent.
Charters are seldom made except when a full
cargo or more is to be moved. Smaller quantities
are forwarded by some regular line which makes a
specialty of freight, or some "tramp" vessel which
is not under charter. All vessels which have no
regular route, and move between any ports where
there is a possibility of obtaining business, are
"tramps." If they enter into a regular service
between definite ports, or are chartered for some
definite use, they cease, for the time being, to be
"tramps."
Duties of the Vessel Broker.
Most of the charters are placed by men known as
"vessel brokers." People who have large quantities
of freight to move go to a broker and say:
"We are in the market for 50,000 tonnage, Superior
to Cleveland," or "Baltimore to Liverpool," as the
case may be.
The broker has a list of available vessels and rates.
If none of these are satisfactory he makes a hunt for
others, but, as a rule, every up-to-date broker has
SHIPPING CONTRACTS AND DOCUMENTS. 281
a complete list always on hand. He knows every
vessel that is idle, where it is tied up, its capacity,
the kind of traffic it is best adapted for, and the
terms upon which it may be chartered. If he succeeds
in bringing the vessel owner and the party seek¬
ing transportation together he receives a commis¬
sion upon the amount of the charter money. In this
respect he is in identically the same position as the
real estate agent who makes a business of leasing
property, and the insurance agent who secures
business for his company.
Price of Charters Fluctuates.
There is no fixed rate for charters. The price
fluctuates according to the supply of vessels and the
demand for them. If there are many idle craft, and
cargoes are scarce, the rate will decline; if, on the
contrary, there is a lot of freight offering, and vessels
are in demand, the rate will advance.
In most of the large brokerage offices regular
charter quotations are posted, changes being made
frequently when the market is a fluctuating one.
Grain, iron and lumber are the principal freights
moved on charters on the inland waters. The rate
for grain is fixed by the 100-weight, that for iron
by the ton, and for lumber by the 1,000 feet, accord¬
ing to the distance it is to be transported. While
as explained, the charter rate is far from being a
settled one, it is always much lower than the rate
for rail transportation, generally about one-quarter
or less. Wheat, for instance, (at the time of this
282 SHIPPING CONTRACTS AND DOCUMENTS.
writing) is now being taken from Duluth to Buffalo
by water at 2 1-8 cents per 100. By rail the rate is
9 cents.
Wording of One-Journey Charter.
Having agreed upon the terms of charter the
next thing in order is the preparation and signing
of the document. If the contract is for a single
voyage of a sailing craft the charter will read as
follows:
The charter party, made and concluded upon in the city of
, the .... day of , 191 .. between
of the of of the burthen of ....
tons or thereabouts, register measurement, now lying in the har¬
bor of , of the first part, and of the second part,
witnesseth, that the said party of the first part agrees in the
freighting and chartering of the whole of the said vessel, includ¬
ing deck (with the exception of the cabin and necessary
room for the crew and storage of provisions and sails), unto said
party of the second part, for the voyage from on the
terms following : The said vessel shall be tight, staunch, strong,
and in every way fitted for such a voyage, and receive on board
during the aforesaid voyage the merchandise hereinafter men¬
tioned, including specie, and no goods or merchandise shall
be laden on board otherwise than from said parties of the second
part, or their agents. The said party of the second part doth
engage to provide and furnish to the said vessel , the
bills of lading to be signed without prejudice to this charter,
and to pay to said party of the first part, or agent, for the use of
said vessel during the voyage aforesaid
It is agreed that the lay days for loading and discharging shall
be as follows (if not sooner despatched), commencing from the
time the vessel is ready to receive or discharge cargo : and
that for each and every day's detention by default of the said
party of the second part, or agent, dollars per day, day
SHIPPING CONTRACTS AND DOCUMENTS. 283
by day, shall be paid by said party of the second part, or agent,
to the said party of the first part or agent. The cargo or cargoes
to be received and delivered alongside, within reach of the vessel's
tackles . ., the dangers of the seas and navigation of
every nature and kinds always mutually excepted.
A commission of percent upon gross amount of this charter,
payable by the vessel, due , on the signing thereof.
To the true and faithful performance of all and every of the
foregoing agreements we, the said parties, do hereby bind our¬
selves, our heirs, executors, administrators, and assigns, and also
the said vessel's freight, tackle, and appurtenances, and the
merchandise to be laden on board, each to the other in the
penal sum of
In witness whereof, we hereunto set our hands the day and
year first above written.
[Blank spaces for signatures.]
Time Charter Party for Great Lakes.
Chicago, -, 191—.
Charter party made and entered into this day of
by and between of , owners of the
steamer and tow barges and , of
, their agents, parties of the first part, and ,
0f , party of the second part, witnesseth:
First. That for and in consideration of the money to be
paid as hereinafter provided, and in consideration of the per¬
formance of the conditions hereinafter named to be kept and
performed by the parties hereto, the said party of the first part
charters and lets the steamer and tow barges —
to the party of the second part for the season of navigation of
the year 19—, beginning with April 10th, 19—, or as soon as
navigation is opened, and ending November 30th, 19—, on the
barges , or as soon as possible thereafter provided
boats are on an unfinished voyage, and ending when navigation
is closed and it is unsafe on account of ice and weather to further
operate said steamer .
284 SHIPPING CONTRACTS AND DOCUMENTS.
Second. The party of the first part agrees to fit out properly
and prepare said steamer and tow barges for said season of
navigation and warrant the same to be in good condition and
seaworthy for the period of said term, and to deliver the said
boats to party of the second part at , about April
10th, 191—, or as soon as navigation is opened.
Third. The party of the first part agrees, at its own expense,
to insure the said vessels against marine perils and fire and also
including the damages by collision caused by said vessels or
either of them, and the party of the second part shall bear one-
half the cost of all repairs to the engine, boiler, machinery, and
hull of the said steamer and the barges that
are not covered or insured under the best and most favorable
form of marine and fire insurance policies that can be obtained
upon said vessels. In all cases the money obtained from the
insurance companies shall be applied on said repairs covered
by such insurance.
Fourth. The party of the first part shall not be compelled
to insure the said vessels, but in case they do not they shall
assume the same liability as any insurance company would
have assumed under the best and most favorable policy that
the party of the first part could have obtained upon the said
steamer and barges.
Fifth. The party of the second part hereby agrees to run
and navigate the said vessels, man and victual them at their
own proper expense, and keep them at all times in good condi¬
tion, and promptly pay such bills of expenses and operating and
repairing said boats as are proper for them to pay under this
charter party.
Sixth. The party of the second part shall be entitled to
receive and collect all the said steamer's and tow barges' freights
and earnings and profits of every kind during the term of this
charter party, and shall at the end of the term return the said
steamer and tow barges to the said party of the first part at
, free and clear of all debts and incumbrances incurred
by them under this charter party and in as good order and
condition as when received, ordinary wear and tear only excepted.
Seventh. The party of the second part agrees to pay to the
SHIPPING CONTRACTS AND DOCUMENTS. 285
party of the first part, through , their agents, the sum
of dollars for the use of the said steamer and tow
barges as follows: dollars on the first days of May,
June, July, August, September, October, and November, and
the further sum of dollars at the end of the term of
this charter party.
Eighth. It is further agreed that the party of the first part,
with the consent of the party of the second part, shall nominate
and appoint the masters and engineers of said vessel.
Ninth. It is further agreed that in case of disaster to said
steamer or either one of said barges, which will take the said
steamer or either one of said barges out of commission for a
period of time longer than five days, then and in that case for
the period beyond said five days there shall be a reduction of
the charter price pro rata for the time thus used, until said boat
or boats shall again go into commission.
Tenth. In case of the total or constructively total loss of
the said steamer this charter party shall be at an end,
and compensation to be paid upon such proportion of the time
as the boats actually navigate.
Eleventh. For the purpose of fixing compensation in case
of loss of one or both barges, the dollars to be paid
under this charter party is to be considered as paying —
dollars for the steamer ; dollars for the barge
, and dollars for the barge . In
case of loss of either or both barges ( or )
proportion of the above sums is to be paid as the boat or boats
actually navigate under the conditions of this charter party.
And the remaining boats are to be continued in the service of
the party of the second part, as if no accident had happened.
In witness whereof the parties have hereunto set their hands
this day and year first above written.
[Blank spaces for signatures.]
286 SHIPPING CONTRACTS AND DOCUMENTS
Memorandum of Pacific Charter.
Seattle, Washington, April 23, 191—.
Vessel: American steamer .
Tonnage: register.
Present location: Seattle, Washington.
Duration: One voyage from Puget Sound to San Francisco
with option of two (2) voyages, said option to be declared before
vessel sails from Puget Sound on the first voyage.
Basis: Government form charter. Operators paying for
usual insurance, upkeep, wages, and subsistence of crew, char¬
terers to pay cost for port charges including stevedoring and
trimming of cargo and customary overtime for crew working
cargo, extra insurance, and extra crew required over and above
ship's regular certificate.
Delivery and redelivery to be made at Seattle, Washington.
Rate: dollars daily.
Charter money payable at Seattle on completion of each round
voyage.
Miscellaneous: Operators guarantee steamer's fuel consump¬
tion will not exceed twenty-two tons daily Black Diamond under
ordinary conditions, and that ship will carry three thousand three
hundred gross tons (3,300) cargo coal if same is properly stowed.
The owners shall not be liable for loss or damage occasioned by
fire from any cause, or wherever occurring; by barratry of the
master or crew; by robbers or thieves, by arrest and restraint
of princes, rulers, or people, riots, strikes, or stoppage of labor;
by explosion, bursting of boilers, leakage of steam or water pipes,
breakage of shafts, or any latent defect in hull, machinery, or
appurtenances; or unseaworthiness of the vessel, even existing
at the time of shipment, or sailing on the voyage, providing the
owners have exercised due diligence to make the vessel seaworthy.
[Blank spaces for signatures.]
[Here insert charter party.]
SHIPPING CONTRACTS AND DOCUMENTS. 287
Time Charter on the Pacific.
San Francisco, —, 191—.
It is this day mutually agreed between , agents for
owners of the steamship or vessel called the , of ——
tons gross register, and tons net register, classed
— , and guaranteed to carry — tons dead weight
of cargo and fuel, inclusive, on Lloyd's summer freeboard, and
• , and , of San Francisco, merchants and
charterers, for the term of — calendar months certain,
the charterers having the option of continuing the charter for
a further period of — calendar months, more or less, at
the option of the charterers, they giving the owners one month's
notice previous to redelivery of the vessel. The hire to com¬
mence from the day on which she is delivered or placed at the
disposal of the charterers (but not before , if required),
at Nanaimo, B. C., in such dock or such safe wharf or place
(where she may always safely lie afloat), as charterers may
direct, she being then ready with clear holds, tight, staunch,
strong, and every way fitted for the service (and with full com¬
plement of officers, seamen, engineers, and firemen for a vessel
of her tonnage) ; to be employed to carry coal between British
Columbia and San Francisco, on the following conditions:
That the owners shall provide and pay for all provisions and
consular, shipping, and discharging fees of the captain, officers,
engineers, firemen, and crew, and shall pay all wages of the
captain, officers, engineers, firemen, and crew; shall pay for the
insurance on the vessel ; also for all deck, galley, and engine-
room stores, bunker coal excepted, and maintain her in a thor¬
oughly efficient state in hull and machinery for the service.
That the charterers shall provide and pay for all bunker
coal, port, light and dock charges, pilotages, agencies, consular
charges (except those pertaining to the captain, officers, or
crew), commissions, labourage, Suez and other canal dues when
incurred, also all charges appertaining to the cargoes they may
put on board.
That the charterers shall accept and pay for all coal in ship's
288 SHIPPING CONTRACTS AND DOCUMENTS.
bunkers upon commencement of hire; and the owners shall on
expiry of this charter party, pay for all coal then left in the
bunkers at current market prices of the port where the hire
begins and ends.
That the charterers shall furnish all coal cargo that may be
required by captain, and shall pay for the use and hire of the
said vessel at and after the rate of sterling per ton of
2,240 lbs. per calendar month on actual outturn of coal cargo
as ascertained by United States customs weights.
Payments to be made in cash in advance monthly, com¬
mencing on the day of delivery as aforesaid ; hire to continue
from the time specified for terminating the charter until her
redelivery to owners (unless lost) at San Francisco and to be
payable in San Francisco or at owner's option by telegraphic
transfer on London at their expense.
The monthly settlements to be on basis of —— tons
cargo delivery and an adjustment to be made quarterly on
average outturn of cargo.
Captain to take on board at loading port sufficient bunker
coal for the round voyage between British Columbia and San
Francisco.
Charterers have the option of employing vessel in other law¬
ful trades, in which event the monthly rate of freight payment
to be made as if she was employed between British Columbia
and San Francisco, it being calculated on D. W. capacity less
bunkers required on a voyage from Nanaimo to San Francisco
and return, computed as usual hitherto; if employed north of
51° on west coast of North America or north of 46 on Siberian
coast, charterers to pay extra insurance on vessel.
Should the vessel be on a voyage occupying more time than
herein stipulated, the rate of hire for such additional period to
be in the same proportion as above, and if redelivered with
owner's consent before the expiration of the time stipulated a
corresponding rebate of hire to be allowed.
[Blank spaces for signatures.]
SHIPPING CONTRACTS AND DOCUMENTS. 289
Typical Bill of Lading.
Received, in apparent good order and condition, by S. S.
from , to be transported by the good steam¬
ship now lying in the port of and bound for
} gallons crude petroleum in bulk, being
marked and numbered as per margin (weight, quality, contents,
and value unknown), and to be delivered in like good order and
condition at the port of unto or to his or
their assigns, he or they paying freight on the said goods on
discharge in accordance with charter party made abroad and
observing all other conditions as mentioned therein. General
average payable according to York-Antwerp rules.
It is mutually agreed that the ship shall have liberty to sail
without pilots; to tow and assist vessels in distress; to deviate
for the purpose of saving life or property; that the carrier shall
have liberty to convey goods in lighters to and from the ship
at the risk of the owners of the goods; and, in case the ship
shall put into a port of refuge, or be prevented from any cause
from proceeding in the ordinary course of her voyage, to tranship
the goods to their destination by any other steamship.
It is also mutually agreed that the carrier shall not be liable
for loss or damage occasioned by causes beyond his control, by
the perils of the sea, or other waters, by fire from any cause
or wheresoever occurring; by barratry of the master or crew,
by enemies, pirates, or robbers, by arrest and restraint of princes,
rulers, or people, riots, strikes, or stoppage of labor; by explo¬
sion, bursting of boilers, breakage of shafts, or any latent defect
in hull, machinery, or appurtenances; by collisions, stranding,
or other accidents of navigation of whatsoever kind (even when
occasioned by the negligence, default, or error in judgment of
the pilot, master, mariners, or other servants of the shipowner
not resulting, however, in any case, from want of due diligence
by the owners of the ship or any of them, or by the ship's husband
or manager); nor for heating, decay, putrefaction, rust, sweat,
change of character, drainage, leakage, breakage, or any loss or
damage arising from the nature of the goods or the insufficiency
290 SHIPPING CONTRACTS AND DOCUMENTS.
of packages; nor for land damage; nor for the obliteration,
errors, insufficiency or absence of marks, numbers, address or
description; nor for risk of craft, hulk, or transhipment ; nor
for any loss or damage caused by the prolongation of the voyage.
1. It is also mutually agreed that the carrier shall not be
liable for gold, silver, bullion, specie, documents, jewelry,
pictures, embroideries, works of art, silks, furs, china, porcelain,
watches, clocks, or for goods of any description which are above
the value of $500 per package, unless bills of lading are signed
therefor, with the value therein expressed, and a special agree¬
ment is made.
2. Also, that shippers shall be liable for any loss or damage
to ship or cargo caused by inflammable, explosive, or dangerous
goods shipped without full disclosure of their nature, whether
such shipper be principal or agent ; and such goods may be
thrown overboard or destroyed at any time without compen¬
sation.
3. Also, that the carrier shall have a lien on the goods for
all fines or damages which the ship or cargo may incur or suffer
by reason of the incorrect or insufficient marking of packages
or description of their contents.
4. Also, that in case the ship shall be prevented from reach¬
ing her destination by quarantine, the carrier may discharge
the goods into any depot or lazaretto, and such discharge shall
be deemed a final delivery under this contract, and all the
expenses thereby incurred on the goods shall be a lien thereon.
5. Also, that if the goods be not taken by the consignee,
within such time as is provided by the regulations of the port of
discharge, they may be stored by the carrier at the expense and
risk of their owners.
6. Also, that full freight is payable on damaged goods ; but
no freight is due on any increase in bulk or weight caused by
the absorption of water during the voyage.
7. Also, that if on a sale of the goods at destination, for
freight and charges, the proceeds fail to cover said freight and
charges, the carrier shall be entitled to recover the difference
from the shipper.
8. Also, that in the event of claims for short delivery when
SHIPPING CONTRACTS AND DOCUMENTS. 291
the ship reaches her destination, the price shall be the market
price at the port of destination on the day of the ship's entry
at the customs-house, less all charges saved.
And finally, in accepting this bill of lading, the shipper,
owner, and consignee of the goods and the holder of the bill of
lading agree to be bound by all of its stipulations, exceptions,
and conditions, whether written or printed, as fully as if they
were all signed by such shipper, owner, consignee, or holder.
In witness whereof, the master or agent of the said ship hath
affirmed to bills of lading, all of this tenor
and date, numbered consecutively, one of which being accom¬
plished, and given up to the carrier, the others to stand void.
Hours occupied in loading, .
Dated in this day of , 19—.
Specimen of Ship's Manifest.
Cleared by . Manifest of the whole cargo on board
the , master. Burthen, tons.
Navigated by men, boys. Bound from the
port of for .
Marks
and Nos.
No. of
Entries
Packages and
contents
Ship¬
per.
Resi¬
dence.
Con¬
signee.
Resi¬
dence
[On back of manifest.]
I, , master of the , do solemnly swear to
the truth of the annexed manifest, and that, to the best of my
knowledge and belief, all the goods, wares, and merchandise of
foreign growth and manufacture therein contained were legally
imported, and the duties thereon paid or secured. So help me
God.
Sworn to this day of , 191—.
? Deputy Collector.
292 SHIPPING CONTRACTS AND DOCUMENTS
District and port of .
, master of the , of —, having sworn
as the law directs to the annexed manifest, consisting of
articles of entry, and delivered duplicates thereof, permission
is hereby granted to the said to proceed to the port of
in the State of .
Given under my hand, at , this day of
, 191—.
y Deputy Collector.
f Naval Officer.
Charter Party Used by Sailing Vessels Engaged in the Atlantic
Coastwise Trade.
This charter party, made and concluded upon in the city of
, the day of , 18—, between
, of the , of , of the burthen of
tons or thereabouts, register measurement, now lying
in the harbor of , of the first part, and , of
the second part, witnesseth, that the said party of the first part
agrees in the freighting and chartering of the whole of the said
vessel, including deck (with the exception of the cabin
and necessary room for the crew and storage of provisions and
sails), unto said party of the second part, for the voyage from
, on the terms following: The said vessel shall be
tight, staunch, strong and in every way fitted for such a voyage,
and receive on board during the aforesaid voyage the mer¬
chandise hereinafter mentioned, including specie, and no goods
or merchandise shall be laden on board otherwise than from
said parties of the second part, or their agents. The said party
of the second part doth engage to provide and furnish to the
said vessel —, the bills of lading to be signed without
prejudice to this charter, and to pay to said party of the first
part, or agent, for the use of said vessel during the voyage
aforesaid .
It is agreed that the lay days for loading and discharging
SHIPPING CONTRACTS AND DOCUMENTS. 293
shall be as follows (if not sooner despatched), commencing from
the time the vessel is ready to receive or discharge cargo:
, and that for each and every day's detention by default
of the said party of the second part, or agent, —— dollars
per day, day by day, shall be paid by said party of the second
part, or agent, to the said party of the first part or agent. The
cargo or cargoes to be received and delivered alongside, within
reach of the vessel's tackles. , the dangers of the seas
and navigation of every nature and kind always mutually
excepted.
A commission of percent upon gross amount of this
charter, payable by the vessel, due , on the signing hereof.
To the true and faithful performance of all and every of the
foregoing agreements we, the said parties, do hereby bind our¬
selves, our heirs, executors, administrators, and assigns, and
also the said vessel's freight, tackle, and appurtenances, and
the merchandise to be laden on board, each to the other in the
penal sum of .
In witness whereof, we hereunto set our hands the day and
year first above written.
[Blank spaces for signatures.]
Boston Grain Charter Party.
Boston, — , 191 .
It is this day mutually agreed between — , agents for
the owners of the steamship , of ,
built at of net tons register, or
thereabouts, and guaranteed qrs. of 480 lbs. of heavy
grain, 5 percent more or less capacity, or qrs.
of 320 lbs. of oats, 10 percent more or less capacity, classed
jn now , and , that the
said steamship being tight, staunch, and strong, and in every
way fitted for the voyage, with liberty to take outward cargo
to , for owner's benefit, shall with all convenient speed
sail and proceed to and there load, always afloat,
294 SHIPPING CONTRACTS AND DOCUMENTS.
from said charterers, or their agents, a full and complete cargo,
subject to limits above guaranteed of wheat, Indian corn, rye,
and oats. Orders as to loading port to be given within 24 hours
after receipt of notice of arrival at port of call in the United
States, if in ballast; or before 12 o'clock noon on the day of
completion of discharge at a port in the United States, if with
cargo, except on Saturdays, when orders shall be given before
11 o'clock a. m. If not discharged on the day on which demand
for loading port is made, vessel to ask again for orders. Vessel
to load under inspection of underwriter's agents, at her expense
and to comply with their rules, not exceeding what she can
reasonably stow and carry over and above her cabin, tackle,
apparel, provisions, fuel, and furniture, and being so loaded
shall therewith proceed to Liverpool, Glasgow, Belfast, Dublin,
Avonmouth, London (excluding Tilbury Docks), Hull, New¬
castle, Leith, , Antwerp, Amsterdam, or Rotterdam,
one port only, as ordered on signing bills of lading, and deliver
the same, agreeable to bills of lading, on being paid freight in
British sterling, or its equivalent, as follows (but free of extra
freight in bills of lading if ordered to London) : shillings
an(j pence ( ) per quarter of 480 lbs. of heavy
grain, shillings and pence ( ) per
quarter of 320 lbs. of oats, all English weights, delivered. Chart¬
erers having the privilege of ordering vessel to , in
which case rate of freight shall be pence per quarter
more than the above rate.
It is also mutually agreed that the carrier shall not be liable
for loss or damage occasioned by causes beyond his control,
by the perils of the seas or other waters, by fire from any cause
or wheresoever occurring, by barratry of the master or crew, by
enemies, pirates or robbers, by arrest and restraint of princes,
rulers or people, by explosion, bursting of boilers, breakage of
shafts or any latent defect in hull, machinery, or appurtenances,
by collisions, stranding, or other accidents of navigation of
whatsoever kind (even when occasioned by the negligence,
default, or error in judgment of the pilot, master, mariners, or
other servants of the shipowner, not resulting, however, in any
SHIPPING CONTRACTS AND DOCUMENTS. 295
case, from want of due diligence by the owners of the ship or
any of them, or by the ship's husband or manager).
It is also mutually agreed that this contract is subject to all
the terms and provisions of, and all the exemptions from liability
contained in, the act of Congress of the United States approved
on the 13th day of February, 1893, and entitled "An act relating
to navigation of vessels, etc."
Captain to call at broker's office, as requested, and sign bills
of lading, as presented, without prejudice to this charter party,
any deficiency to be paid at port of loading in cash, less insur¬
ance, and any surplus over and above estimated freight to be
settled there before the vessel clears at the customs-house by
captain's draft, in charterer's favor, upon consignee, payable
five days after arrival at post of discharge.
Stevedore employed by vëssel to be approved by charterers.
Steamer to be loaded according to berth terms, with custo¬
mary berth despatch, and if held longer than five days, Sundays
and holidays excepted, charterers to pay demurrage at the rate
of four pence (4d.) British sterling, or its equivalent, per net
register ton per day, payable day by day, provided such deten¬
tion shall occur by default of charterers or their agents.
Time for loading, if required by charterers, not to commence
before the day of , 191—.
Should the steamer not be passed by board of underwriter's
surveyor as ready for cargo at her loading port before 12 o'clock
noon on the day of , 191—, followed by the
presentation of said surveyor's pass to the charterers or their
agents at their office before said hour, the charterers or their
agents shall at said hour and at any time after, not later than
the presentation of the surveyor's pass at said office, have the
option of cancelling this charter party.
It is also mutually agreed that this contract shall be com¬
pleted and be superseded by the signing of bills of lading on the
same form as in use by regular line steamers from loading port
to port of destination; or, if port of destination be one to which
there is no regular line of steamers from loading port, this con¬
tract shall be superseded by the signing of bills of lading in the
296 SHIPPING CONTRACTS AND DOCUMENTS.
form customary for such voyages for grain cargoes, which bills
of lading shall, however, contain a clause providing for dis¬
charging as fast as vessel can deliver during ordinary working
hours, any custom of the port to the contrary notwithstanding.
Receivers of the cargo are in no case obliged to take delivery
at night without their consent, and in any event the steamer
must bear all extra expenses incurred by working at night.
This clause to be expressly stipulated in all bills of lading.
Charterers' liability under this charter to cease on cargo
being shipped, but the vessel to have a lien thereon for all freight,
dead freight, demurrage, or average.
Cash for vessel's ordinary disbursements at port of loading to
be advanced by charterers, if required by master, at current
rate of exchange, subject to insurance and two and a half per
cent commission.
A commission of five percent and the customary freight
brokerage is due by owners on signing this charter party to
, vessel lost or not lost, whose agents at port of loading
are to attend to ship's business on customary terms.
This charter party is made subject to the rules of the Boston
Chamber of Commerce, and all disputes arising at the port of
loading shall be subject to arbitration at Boston as provided in
the by-laws of that organization.
[Blank spaces for signatures.]
Difference in Various Papers.
The charter documents, as self-evidenced, are of
value solely as showing the terms on which the vessel
is hired, the contract between the parties. The
manifest is of use mainly in customs house proceed¬
ings; it shows the nature of the cargo, and whether
it is subject to duty. The bill of lading is the receipt
acknowledging custody of goods committed to the
care of a transportation line. Bills of lading are not
SHIPPING CONTRACTS AND DOCUMENTS. 297
issued when a vessel is chartered as the party charter¬
ing becomes the custodian of the goods. Exception
is made, of course, when the party who charters
a vessel engages in transportation business for the
general public. In such case the chartering party
issues bills of lading to its patrons.
An important shipping document is the ship's man¬
ifest. Several specimen copies of manifests show
that this instrument corresponds to the way-bill
employed by railroads. Ordinarily a manifest con¬
tains the name of the vessel's owner, date of shipment,
port of departure and of destination, and the route.
Separate columns indicate the entry number, way¬
bill number, initial point of shipment and the desti¬
nation, date of receipt, name of shipper or consignee,
number of packages, description of freight, marks
and numbers, weight, class, through rate, division
of rate beyond port, freight charges advanced, ter¬
minal delivery, total collected, prepaid, etc.
A manifest is a declaration of the entire cargo ; a bill of lading
is a declaration of a specific part of the cargo. A manifest is
essentially a summary of all the bills of lading.
CHAPTER Y
OFFICIAL REGULATION OF LIABILITY.
*
Congress has from time to time enacted laws
specifically defining the liability of carriers by water.
This has been made necessary by the fact that the
carrier by water, owing to the unusual risks and haz¬
ards of the service, is rarely an insurer of goods
committed to its care, to the same extent as applies
to a carrier by rail. Among the main provisions
thus made are the following:
Transportation of Nitro-Glycerine.
It shall not be lawful to transport, carry, or convey,
ship, deliver on board, or cause to be delivered on
board, the substance or article known or designated
as nitro-glycerine, or glynoin oil, nitroleum or blast¬
ing oil, or nitrated oil, or powder mixed with any such
oil, or fibre saturated with any such article or sub¬
stance, upon or in any vessel or vehicle used or em¬
ployed in transporting passengers by land or water
between a place in any foreign country and a place
within the limits of any state, territory, or district of
the United States, or between a place in one state,
territory, or district of the United States, and a place
in any other state, territory, or district thereof.
(Rev. Stat., sec. 4278; act July 3, 1866, ch. 162.
299
300 OFFICIAL BEGULATION OF LIABILITY.
Liability of Masters, etc., as Carriers.
If any shipper of platina, gold, gold dust, silver,
bullion, or other precious metals, coins, jewelry,
bills of any bank or public body, diamonds, or other
precious stones, or any gold or silver in a manu¬
factured or unmanufactured state, watches, clocks,
or time-pieces of any description, trinkets, orders,
notes, or securities for payment of money, stamps,
maps, writings, title-deeds, printings, engravings,
pictures, gold or silver plate or plated articles, glass,
china, silks in a manufactured or unmanufactured
state, and whether wrought up or not wrought up
with any other material, furs, or lace, or any of them,
contained in any parcel, or package, or trunk, shall
lade the same as freight or baggage, on any vessel,
without at the time of such lading giving to the mas¬
ter, clerk, agent, or owner of such vessel receiving
the same a written notice of the true character and
value thereof, and having the same entered on the
bill of lading therefor, the master and owner of such
vessel shall not be liable as carriers thereof in any
form or manner; nor shall any such master or owner
be liable for any such goods beyond the value and
according to the character thereof so notified and
entered. (Rev. Stat., sec. 4281; act Feb. 28, 1871,
ch. 100.)
Loss by Fire on Vessels.
No owner of any vessel shall be liable to answer
for or make good to any person any loss or damage
OFFICIAL REGULATION OF LIABILITY. 301
which may happen to any merchandise whatsoever,
which shall be shipped, taken in, or put on board
any such vessel, by reason or by means of any fire
happening to or on board the vessel, unless such fire
is caused by the design or neglect of such owner.
(Rev. Stat., sec. 4282; act Mar. 3, 1851, ch. 43.)
[The provisions of this section and of Revised
Statutes, sees. 4283-4288, are made applicable to
all seagoing vessels, and all vessels used on lakes or
rivers or in inland navigation, including canal boats,
barges, and lighters, by Revised Statutes, sec. 4289,
as amended by act June 19, 1886, ch. 421, sec. 4.]
Liability of Owner Not to Exceed Interest.
The liability of the owner of any vessel, for any
embezzlement, loss, or destruction, by any person,
of any property, goods, or merchandise, shipped or
put on board of such vessel, or for any loss, damage,
or injury by collision, or for any act, matter, or
thing, loss, damage, or forfeiture, done, occasioned,
or incurred, without the privity, or knowledge of
such owner or owners, shall in no case exceed the
amount or value of the interest of such owner in such
vessel, and her freight then pending. (Rev. Stat.,
sec. 4283; act Mar. 3, 1851, ch. 43.)
[The individual liability of a shipowner is limited
to the proportion of any or all debts and liabilities
that his individual share of the vessel bears to the
whole, and the aggregate liabilities of all the owners
are not to exceed the value of the vessel and freight
pending. Act June 26, 1884, ch. 121.]
302 OFFICIAL REGULATION OF LIABILITY.
General Average of Losses.
Whenever any such embezzlement, loss, or des¬
truction is suffered by several freighters or owners
of goods, wares, merchandise, or any property what¬
ever, on the same voyage, and the whole value of the
vessel, and her freight for the voyage, is not sufficient
to make compensation to each of them, they shall
receive compensation from the owner of the vessel
in proportion to their respective losses; and for that
purpose the freighters and owners of the property,
and the owner of the vessel, or any of them, may
take the appropriate proceedings in any court, for
the purpose of apportioning the sum for which the
owner of the vessel may be liable among the parties
entitled thereto. (Rev. Stat., sec. 4284, as amended
1877; acts Mar. 3, 1851, ch. 43; Feb. 27, 1877, ch. 69.)
[This section is amended by act February 27,
1877, ch. 69, cited above, by striking out, after the
words "and for that purpose the freighters and,"
the word "owner," and substituting therefor the
word "owners."]
When Charterer is Deemed Owner.
The charterer of any vessel, in case he shall man,
victual, and navigate such vessel at his own expense,
or by his own procurement, shall be deemed the owner
of such vessel within the meaning of the provisions
of this title relating to the limitations of the liability
of the owners of vessels; and such vessel, when so
chartered, shall be liable in the same manner as if
navigated by the owner thereof. (Rev. Stat., sec.
4286; act Mar. 3, 1851, ch. 43.)
OFFICIAL REGULATION OF LIABILITY. 303
General Remedies Reserved.
Nothing in the five preceding sections shall be
construed to take away or affect the remedy to which
any party may be entitled, against the master,
officers, or seamen, for or on account of any embezzle¬
ment, injury, loss, or destruction of merchandise,
or property, put on board any vessel, or on account
of any negligence, fraud, or other malversation of
such master, officers, or seamen, respectively, nor to
lessen or take away any responsibility to which any
master or seaman of any vessel may by law be liable,
notwithstanding such master or seaman may be an
owner or part owner of the vessel. (Rev. Stat., sec.
4287; act Mar. 3, 1851, ch. 43.)
[Act June 26, 1884, ch. 121, sec. 18.]
Liability for Debts Limited.
That the individual liability of a ship-owner, shall
be limited to the proportion of any or all debts and
liabilities that his individual share of the vessel
bears to the whole; and the aggregate liabilities of
all the owners of a vessel on account of the same shall
not exceed the value of such vessels and freight
pending: Provided, That this provision shall not
affect the liability of any owner incurred previous
to the passage of this act, nor prevent any claimant
from joining all the owners in one action; nor shall
the same apply to wages due to persons employed by
said ship-owners.
[This section is part of "An Act to remove certain
burdens on the American merchant marine and
encourage the American foreign carrying trade,"
304 OFFICIAL REGULATION OF LIABILITY.
etc. The provisions of this section are made appli¬
cable to all seagoing vessels and all vessels used on
lakes or rivers or in inland navigation, including
canal boats, barges, and lighters, by Revised Statutes,
sec. 4289, as amended by act June 19, 1886, ch. 421,
sec. 4. Other provisions relating to the liability of
vessels, their owners, agents, or charterers, are con¬
tained in act February 13, 1893, ch. 105, set forth
below.)
[Act February 13, 1893, ch. 105 (Harter Act.)]
Certain Clauses in Bills of Lading.
That it shall not be lawful for the manager, agent,
master, or owner of any vessel transporting mer¬
chandise or property from or between ports of the
United States and foreign ports to insert in any bill
of lading or shipping document any clause, cove¬
nant, or agreement whereby it, he, or they shall be
relieved from liability for loss or damage arising from
negligence, fault, or failure in proper loading, stow¬
age, custody, care, or proper delivery of any and all
lawful merchandise or property committed to its
or their charge. Any and all words or clauses of
of such import inserted in bills of lading or shipping
receipts shall be null and void and of no effect. [The
provisions of this section are not applicable to the
transportation of live animals, by section 7 of this
act.]
That it shall not be lawful for any vessel trans¬
porting merchandise or property from or between
ports of the United States of America and foreign
OFFICIAL REGULATION OF LIABILITY. 305
ports, her owner, master, agent, or manager, to
insert in any bill of lading or shipping document
any covenant or agreement whereby the obligations
of the owner or owners of said vessel to exercise due
diligence, properly equip, man, provision, and out¬
fit said vessel, and to make said vessel seaworthy
and capable of performing her intended voyage, or
whereby the obligations of the master, officers,
agents, or servants to carefully handle and stow her
cargo and to care for and properly deliver same,
shall in any wise be lessened, weakened, or avoided.
General Limitation of Liability.
That if the owner of any vessel transporting mer¬
chandise or property to or from any port in the United
States of America shall exercise due diligence to make
the said vessel in all respects seaworthy and properly
manned, equipped, and supplied, neither the vessel,
her owner or owners, agent, or charterers shall be¬
come or be held responsible for damage or loss
resulting from faults or errors in navigation or in
the management of said vessel nor shall the vessel,
her owner or owners, charterers, agents, or master
be held liable for losses arising from dangers of the
sea or other navigable waters, acts of God, or public
enemies, or the inherent defect, quality, or vice of
the thing carried, or from insufficiency of package,
or seizure under legal process, or for loss resulting
from any act or omission of the shipper or owner of
the goods, his agent or representative, or from sav¬
ing or attempting to save life or property at sea,
306 OFFICIAL REGULATION OF LIABILITY.
or from any deviation in rendering such service.
(Sec. 3, act of 1893.)
Contents of Bills of Lading.
That it shall be the duty of the owners or owner,
masters, or agent of any vessel transporting mer¬
chandise or property from or between ports of the
United States and foreign ports to issue to shippers
of any lawful merchandise a bill of lading, or shipping
document, stating, among other things, the marks
necessary for identification, number of packages, or
quantity, stating whether it be carrier's or shipper's
weight, and apparent order or condition of such mer¬
chandise or property delivered to and received by
the owner, master, or agent of the vessel for trans¬
portation, and such document shall be prima facie
evidence of the receipt of the merchandise therein
described. [The provisions of this section are not
applicable to the transportation of live animals, by
section 7 of this act.] Section 4, act of 1893.
Penalty for Violations of Act.
That for a violation of any of the provisions of this
act the agent, owner, or master of the vessel guilty
of such violation, and who refuses to issue on demand
the bill of lading herein provided for, shall be liable
to a fine not exceeding $2,000. The amount of the
fine and costs for such violation shall be a lien upon
the vessel, whose agent, owner, or master is guilty
of such violation, and such vessel may be libeled
therefor in any district court of the United States,
OFFICIAL REGULATION OF LIABILITY. 307"
within whose jurisdiction the vessel may be found.
One-half of such penalty shall go to the party injured
by such violation and the remainder to the Govern¬
ment of the United States. (Sec. 5, act of 1893.)
What Led to Changes.
Responsibility of carriers by water for loss or dam¬
age to property during its transportation has been
the subject of much dispute and definition by stipu¬
lations in bills of lading, by judicial decisions, and
by various statutes. Originally bills of lading em¬
ployed in shipping do not seem to have exempted
the carrier from responsibility unless for damage
resulting from unavoidable causes. Later, stipu¬
lations were inserted in bills of lading providing
against responsibility for loss resulting from neg¬
ligence and other causes. As judicial decisions in
this country held some of these stipulations invalid,
as against public policy, new provisions were intro¬
duced to reduce the responsibility of the carriers.
Resort to "Flag Clause."
Under the decisions of the courts in Great Britain,
France, Germany, and in some states a carrier might
stipulate in the bill of lading for exemptions for dam¬
age due to negligence; but, after long contention,
the Supreme Court of the United States held that it
was against public policy to allow carriers to exon¬
erate themselves from liability for the negligence
of their agents, and that a stipulation for such ex-
308 OFFICIAL REGULATION OF LIABILITY.
emption was invalid. This difference between the
rule of law as determined for the United States and
foreign countries led ship-owners to insert in their
bills of lading what was known as the "flag clause,"
which stipulated that the contracts of carriage should
be governed by the law of the vessel's flag, and as
most of the foreign carrying trade is carried on in
English vessels, this provision worked to the ad¬
vantage of such vessels as against both shippers and
the owners of American vessels. This situation led
to the demand for further legislation to protect
American interests, which resulted in the passage
in 1893 of the Harter Act.
This act was a compromise between the shipping
and carrying interests. It exempts vessel owners
from liability for many acts of negligence for which
they were formerly responsible and against which
they could not stipulate; it at the same time works
in favor of the shipper by forbidding many stipula¬
tions which under the English law were valid.
General Policy of Act.
The general policy of the law is that the vessel
owner must take the care required of experts in that
business in all matters relating to the loading, stow¬
age, custody, care, and proper delivery of the goods
intrusted to it, and must exercise due diligence to
make the vessel seaworthy in all the particulars which
have been held to constitute seaworthiness; and that
if these requirements are met entirely, neither the
vessel nor her owners shall be responsible for faults
OFFICIAL REGULATION OF LIABILITY. 309
or errors in navigation, nor for such accidents (such
as perils of the sea) as had been held by the American
decisions could be validly stipulated against in bills
of lading.
In cases arising before the passage of the Harter
Act the rule had been laid down by the Supreme
Court of the United States that—
In every contract for the carriage of goods by sea, unless
otherwise expressly stipulated, there is a warranty on the part
of the shipowner that the ship is seaworthy at the time of begin¬
ning her voyage, and not merely that he does not know her to
be unseaworthy, or that he has used his best effort to make her
seaworthy. The warranty is absolute that the ship is or shall
be in fact seaworthy at that time and does not depend on his
knowledge or ignorance, his care or negligence.
In the case of the Carib Prince the Supreme Court
held that neither sections 2 nor 3 of the Harter Act
operated to reduce this liability to the measure of
due diligence, except by specific stipulations.
Specific Instance of Liability.
In the case of Knott v. Botany Mills a cargo of
wool was injured by drainage from wet sugar. The
wool was loaded at Buenos Ayres in a British vessel,
under a bill of lading purporting to exempt the carrier
from liability for negligence and from all damage
arising from stowage, and further providing that
the contract should be governed by the law of the
flag of the ship. At a subsequent port wet sugar
was stowed aft of the wool; and at a third port cargo
aft was discharged, so that the ship was two feet
down by the head, causing the drainage from the
310 OFFICIAL REGULATION OF LIABILITY.
sugar to flow forward and damage the wool. It was
held that the damage arose from negligence in load¬
ing or stowage of the cargo, and not from fault or
error in the navigation or management of the ship ;
and that the provisions of the Harter Act nullified
the stipulations in the bill of lading intended to secure
exemption from liability for such damage.
It was also held that the first section of the Harter
Act applied to a foreign vessel on a voyage from a
foreign port to a port in the United States. Justice
Gray in discussing this point stated further that the
phrase (which appears in sections 1, 2, and 4) "from
or between ports of the United States and foreign
ports" included also all voyages which begin in the
United States, whether they end in a domestic or a
foreign port.
CHAPTER VI.
WHAT CONSTITUTES NAVIGABLE WATER?
There is no standard, no one uniform rule, defin¬
ing navigable waters in this country. " Navigable
water" is a term the interpretation of which depends
upon the use to which the water is put. If a stream
or body of water of any kind, no matter how insignifi¬
cant, is used for the purpose of navigation in any
manner it becomes "navigable water," according to
the decisions of our courts.
This appears to be a popular view with the in¬
habitants of the interested localities, and the national
Congress, in response to this local demand, has
expended many millions of dollars in the so-called
improvement of so-called navigable streams on which
it would be impossible to float any real craft larger
than a skiff or rowboat. And this is done in the
"interest of navigation."
Different Conditions in England.
A much different rule obtains in England. There,
under the common law, only such streams as are
affected by the ebb and flow of the tides are recog¬
nized as navigable. Here, owing to the fact that
we have many inland bodies of water of considerable
311
312 WHAT CONSTITUTES NAVIGABLE WATER.
size which are in no manner affected by tides, the
ebb and flow rule does not obtain.
In England there are no streams of any commer¬
cial significance which are not connected with tide
water. The conduct of traffic on such streams as
do not connect with tide water is not thought of. In
this country "navigation" has an elastic meaning.
It does not necessarily infer the movement of traffic-
carrying boats or similar water craft. It is largely
a matter of local application and interest. Thus,
in localities where lumbering is carried on a stream
on which logs may be floated singly has been held to
be navigable because it serves to promote a local
industry; it facilitates the marketing of the local
product.
There are many streams on which it is impossible
to even float logs until they have been "improved,"
and yet these streams, when the improvements are
made, are classed as navigable. The improvements
may consist merely of the removal of sunken snags,
or the construction of by-passes around rapids and
falls, but this kind of work brings many streams
hitherto unheard of, and unknown to transporta¬
tion interests, into prominence as "navigable" bodies
of water. Lumberman Jones may have his logs
poled down to some convenient sawmill, and this is
enough.
Judicial Opinion and Practice.
Our courts, as a rule, hold to the opinion that a
stream to be classed as navigable, must be suscep-
WHAT CONSTITUTES NAVIGABLE WATER. 313
tible of use as a highway to commerce. This is a
sound opinion but it is badly strained in its applica¬
tion. Judges differ as to what constitutes a highway
of commerce. Some do not require that a stream
should be thus used. That it may be utilized as a
highway, even to a woefully limited extent, is suffi¬
cient.
Consequently there are numberless bodies of water
in the United States which, while called "navigable,"
offer no facilities for commercial navigation and never
will. So far as meeting the real demands of water
transportation are concerned, the offering of com¬
petition to rail routes, and the keeping down of rail
rates, they are not worthy of serious attention.
Even considered as furnishing primitive means of
access to localities not served by railroads they are
insignificant. Most of them are merely dumping
holes for the public money, expenditures being made
solely with the view of benefiting the local congress¬
men politically, or assisting some friends of the con¬
gressmen to develop minor private enterprises.
Fortunately there is not so much of this kind of
work being done now as in former years. In times
past, in the "good old days," the mere fact that Con¬
gressman McSwat thought an expenditure of $150,000
necessary for the improvement of Dogberry creek
in the interest of commerce, was enough to assure a
liberal appropriation. McSwat might not get the
entire $150,000. It is not likely that he expected
to, but he would get about $100,000, and this,
judiciously expended in "improvement work,"
would assist materially in his re-election. The fact
314 WHAT CONSTITUTES NAVIGABLE WATER.
that Dogberry creek was no better adapted to
the transportation of commerce than before the
expenditure did not worry McSwat. In fact he rather
liked it. It made an excuse for a request for another
appropriation.
Waters That Are Really Navigable.
There are enough really navigable bodies of water
within the limits of the United States without
wasting time and money on those which are not
actually navigable. The most important of these
bodies of water are: the great lakes, Puget Sound,
the Willamette and Columbia rivers, and the Hudson
the East, Mississippi, • Missouri, Ohio, Susque¬
hanna, the Patapsco, Deleware and Potomac rivers.
There are others of considerable magnitude, but these
are the principal ones. All of them are capable of
carrying a large traffic, and enter, either directly
or indirectly, into competition with rail routes to
greater or lesser extent, with the result that the
rates for transportation by rail, ' especially for slow,
heavy freights, are affected, the tendency being down¬
ward.
If it were not for the competition thus made pos¬
sible by navigable bodies of water there can be no
question but that rail rates on the class of freight
mentioned would be higher than they are, perhaps
so high that it might be difficult to move some articles
with a reasonable profit to the producers.
Improvements on these really navigable bodies of
water, when properly made, are to be encouraged.
WHAT CONSTITUTES NAVIGABLE WATER. 315
They benefit the entire country, and particularly the
producers and consumers. The former is enabled
to get a better net price for his products, and the latter
to obtain these products for less money than would
be possible if they all had to move by rail.
Our Navigable Canal System.
In naming the navigable bodies of water no mention
has thus far been made of our important canal sys¬
tems. The various works composing these systems
are almost entirely artificial and, being constructed
expressly for transportation purposes, are necessarily
wholly navigable. Of these the Erie canal, running
«
across New York state from Buffalo to Albany,
and connecting Lake Erie with the Hudson river, is
one of the most important. As originally con¬
structed in 1825 it was 387 miles long, had a surface
width of 70 feet, a bottom width of 42 feet, and a
depth of 7 feet. Up to 1904 the work had cost
$52,540,800. Since then a work of reconstruction
has been under way, the canal being widened and
deepened at an estimated expense of $100,000,000.
While the Erie canal is solely a local work, the
expense of construction, improvement, operation
and maintenance being borne entirely by the state
of New York, it is of immense service to the entire
country as far west as the Rocky Mountains. The
grower of grain in the west is enabled to send his
product to Duluth by rail, then tranship it by lake
steamer to Buffalo, there reload it into canal boats
in which it is transported across the state of New
316 WHAT CONSTITUTES NAVIGABLE WATER.
York to Albany, and thence down the Hudson river
to tidewater where it. may be transferred to ocean
vessels for export.
The Sault Ste. Marie canal in northeastern Michi¬
gan, connecting Lakes Superior and Huron, is another
of our important inland waterways. The main
part is a little less than one mile in length, and the
original cost was under $1,000,000. Despite the
seeming insignificance of size and cost the Sault
Ste. Marie handles an immense traffic, all vessels
sailing between Duluth and other Lake Superior
ports and Lake Huron taking this route.
In the northern part of Michigan, well toward the
west, an arm of the state projects into Lake Superior,
forming a peninsula of considerable size. To lessen
the journey for vessels using the Lake Superior route
a canal has been constructed across the peninsula
via Portage lake, and known as the Portage Lake
canal. This route is largely used, the traffic in 1911
amounting to $79,000,000.
Immensity of Inland Traffic.
Some idea of the immensity of the carrying trade
on our inland waters may be had from the following
official figures of tonnage supplied by the Depart¬
ment of Commerce and Labor at Washington, D. C.
These figures are for January, 1912, this month
being one of the worst in the year for inland water
traffic, especially on the great lakes.
Route Arriving Departing Total Tonnage
Great Lakes 1,051,791 1,063,425 2,115,216
Similar figures for the other routes of inland water
WHAT CONSTITUTES NAVIGABLE WATER. 317
transportation are not available. Of cotton alone
there was carried on the Southern routes in 1912
over 11,000,000 bales averaging 500 pounds to the
bale.
It is contended by the advocates of a lakes-to-the
gulf waterway that commerce will be greatly stim¬
ulated by the completion of such a route, not only
to the extent of cheapening transportation to markets
already served, but in opening up new territories
which are now practically inaccessible owing to the
high cost of transportation. The route proposed is
via the lakes to Chicago, thence via the enlarged
Drainage Canal and Illinois river to the Mississippi,
and down this latter river to the Gulf of Mexico.
Protection of Navigable Waters.
Congress has from time to time adopted legisla¬
tion with a view to protecting navigable waterways
and commerce moved thereon.
The act of February 3,1893, entitled " Raft Towing
on the Great Lakes," authorizes the appointment by
the Secretary of War of a board of three officers of
the engineer corps to investigate the subject of raft
towing on the great lakes, and report to Congress
what restrictions, if any, should be placed upon the
size and manner of constructing and towing such
rafts. (27 Stat. L., p. 754.)
Section 4 of the river and harbor act of August 18,
1894 [as amended by section 11 of the river and har¬
bor act of June 13, 1902], makes it the duty of the
Secretary of War to prescribe such rules and regula¬
tions for the use, administration, and navigation of
318 WHAT CONSTITUTES NAVIGABLE WATER.
any or all canals and similar works of navigation
owned, operated, or maintained by the United States
as in his judgment the public necessity may require.
He is also authorized to prescribe regulations to
govern the speed and movement of vessels and other
water craft in any public navigable channel which
has been improved under authority of Congress
whenever in his judgment such regulations are neces¬
sary to protect such channels from injury, or to pre¬
vent interference with the operations of the United
States in improving navigable waters or injury to
any plant that may be employed in such operation.
These rules and regulations are required to be posted
in conspicuous and appropriate places for the infor¬
mation of the public, and every person or corpora¬
tion violating such rules and regulations is deemed
guilty of a misdemeanor and subject to a fine not
exceeding $500 or by imprisonment not exceeding
six months. In pursuance of this authority such
rules and regulations have been adopted in connection
with various Government canals and other water¬
ways subject to the jurisdiction of the United States.
Extension of Piers and Bulkheads.
The river and harbor act of March 3, 1899, further
authorizes the Secretary of War to establish harbor
lines whenever manifest to him that such lines are
essential to the preservation and protection of har¬
bors, and declares that no pier, wharf, bulkhead, or
other works shall be extended or deposits made ex¬
cept under such regulations as may be prescribed
WHAT CONSTITUTES NAVIGABLE WATER. 319
by the Secretary of War. Any person or corpora¬
tion violating the aforesaid provisions of the act of
March 3, 1899, are declared to be guilty of a misde¬
meanor. On conviction thereof punishment is by a
fine not exceeding $2,500, nor less than $500, or by
imprisonment (in the case of a natural person) not
exceeding one year, or by both such punishments,
in the discretion of the court.
Section 13 of the river and harbor act of March 3,
1899, declares that it shall not be lawful to throw,
discharge, or deposit from or out of any ship, barge,
or other floating craft, or from the shore, wharf,
manufacturing establishment, or mill of any kind,
any refuse matter, other than that flowing from
streets and sewers and passing therefrom in a liquid
state, into any navigable waterway of the United
States or into any tributary of any navigable water¬
way.
Section 14 of this act prohibits any person from
taking possession of or making use of or building upon,
altering, defacing, injuring, obstructing by fastening
vessels thereto, or otherwise or in any manner what¬
ever impairing the usefulness of any sea wall, bulk¬
head, jetty, dike, levee, wharf, pier, or other work
built by the United States.
Anchoring or Sinking Obstructions.
Section 15 of the river and harbor act of March 3,
1899, prohibits the anchoring or sinking of vessels
in navigable channels in such a manner as to prevent
or obstruct the passage of other vessels or craft or
320 WHAT CONSTITUTES NAVIGABLE WATER.
to voluntarily or carelessly sink or permit or cause to
be sunk vessels in navigable channels or to float
loose timber and logs, or to float what is known as
sack rafts of timber and logs in streams or channels
actually navigated by steamboats in such manner as
to obstruct, impede, or endanger the navigation.
And whenever a vessel, raft, or other craft is wrecked
and sunk in a navigable channel, accidentally or
otherwise, it is made the duty of the owner of such
sunken craft to immediately mark it with a buoy
or beacon during the day and a lighted lantern at
night, and to maintain such marks until the sunken
craft is removed or abandoned.
Section 16 of this act makes it the duty of every
master, pilot, engineer, or other person acting in
such a capacity and engaged in towing any scow,
boat, or vessel loaded with any refuse matter specified
in section 13 of this act, to deposit the same only
within the limits defined and permitted by the
Secretary of War. The Department of Justice is
empowered to enforce the law and United States
attorneys to prosecute offenders against the same
whenever requested to do so by the Secretary of War.
Officers and employees of the United States, includ¬
ing those in charge of river and harbor improvements
and collectors of customs and other revenue officers,
are empowered to swear out process and to arrest
with or without process any person committing any
of the acts or offenses prohibited by the provisions
of the river and harbor act of March 3, 1899.
Under the act of May 9, 1900, the Secretary of
War, is authorized to make regulations governing
WHAT CONSTITUTES NAVIGABLE WATER. 321
the running of loose logs, steamboats and rafts on
certain navigable streams.
Dumping of Dredgings and Refuse.
The river and harbor act of March 3, 1905, em¬
powers the Secretary of War to prescribe regulations
to govern the transportation and dumping into any
navigable waterway of dredgings, earth, garbage,
and other refuse material whenever in his judgment
such regulations are required in the interest of nav¬
igation. Such regulations are required to be posted
in conspicuous and appropriate places for the in¬
formation of the public, and every person or corpora¬
tion who shall violate such regulations is deemed
to be guilty of a misdemeanor.
The act of Congress approved June 11, 1906,
empowers the Secretary of War under certain re¬
strictions to authorize the construction, extension,
and maintenance of wharves, piers, and other struc¬
tures on lands underlying harbor areas and navigable
streams in Porto Rico and the islands adjacent
thereto.
In pursuance of the foregoing legislation the Secre¬
tary of War has from time to time authorized the
establishment of harbor lines in various parts of the
country, adopted rules and regulations governing
the opening of drawbridges over various navigable
waterways, and promulgated rules regarding the
speed of vessels, the rafting of logs, etc., in navigable
waterways.
The Secretary of War has also under the authority
322 WHAT CONSTITUTES NAVIGABLE WATER.
of special acts of Congress approved the construc¬
tion of numerous bridges over various navigable
streams.
Diversion of Niagara River.
Finally, by act of Congress approved June 29,
1906, the diversion of water from the Niagara river
or its tributaries in the state of New York is pro¬
hibited except with the consent of the Secretary of
War. The act provides that this prohibition shall
not be interpreted as forbidding the diversion of the
waters of the great lakes or of Niagara river for sani¬
tary or domestic purposes or for navigation, the
amount of which may be fixed from time to time by
the Congress of the United States, or by the Secretary
of War under its direction. (Annual Report, Chief
of Engineers, 1906, p. 798.)
CHAPTER VII.
TONNAGE AND CLASSIFICATION OF VESSELS.
There are several reasons why exact tonnage
measurement is of vital importance in marine circles.
One is that tonnage is a vital feature of identification;
another that it is on tonnage capacity the amount of
hire money is usually based; another that a tonnage
tax allowance is made for vessels of American regis¬
try; and still another that when a vessel is sold or
transferred there must be an accurate record of
tonnage as a feature of legal registry.
Tonnage of Vessel Displacement.
What is tonnage? The term is used in two ways.
In the case of pleasure craft, naval vessels, etc.,
it denotes size—displacement of water which a cer¬
tain weight effects. Thus, a vessel is of 10,000 tons
displacement when, in settling into the water, it
displaces a quantity of the fluid equal to 10,000 tons
in weight. This is ascertained by exact measure¬
ments. It is known, for instance, that a given
quantity of water weighs so much. The hull of
the vessel is measured, and when it is finally settled
in the water a line is drawn at the bow and stern.
From these bow and stern lines it is comparatively
easy to compute the area of the hull under water.
323
324 TONNAGE AND CLASSIFICATION OF VESSELS.
Then it is a simple matter of multiplication to as¬
certain the weight of water displaced, and in this
way to get the tonnage displacement. A ton of
water (fresh) will measure 35.943 cubic feet. Con¬
sequently a vessel, the hull of which measures 1,000
times 35.943 cubic feet will be of 1,000 tons displace¬
ment.
The heavier the vessel is loaded the greater will
be the displacement. Accordingly it is the usual
practice to measure pleasure and naval craft in both
light and thoroughly equipped form. A naval craft
of 10,000 tons displacement when measured light,
will take on considerably more weight, will sink
deeper into the water, when equipped with its en¬
gines, guns, etc.
The Matter of Tonnage Capacity.
It is with tonnage capacity, however, that we are
mostly concerned, the ability of a vessel to carry a
certain amount of cargo. This is determined by a
system of internal measurements, and so accurate
are the results that the difference between the ton¬
nage shown by these measurements, and the actual
weight of the cargo carried is hardly worth speaking
of. The man who charters a vessel to carry 100,000
bushels of wheat doesn't care what the displacement
of the vessel is ; what he wants to know definitely
is the exact amount of cargo the vessel will hold.
The process of measurement for tonnage capacity
is fully explained on pages 243, 244, 245, 246, of
Volume I, and it is useless to repeat it here. It is
an interesting process, apparently intricate and in-
TONNAGE AND CLASSIFICATION OF VESSELS. 325
volved, and yet very plain and simple when once
understood. By this system 100 cubic feet of space
represent a cargo capacity of one ton, so that if the
internal measurement of a vessel shows 100,000
cubic feet of clear cargo space the vessel will carry
1,000 tons of cargo, will be of 1,000 tons burthen,
not displacement. The rules for measurement are
virtually the same in all civilized countries. A vessel
which is of 3,000 tons burthen according to English
rules is of 3,000 tons burthen in America.
Accurate Measurement Demanded.
One hundred thousand bushels of wheat weigh
6,000,000 pounds, or 3,000 tons. It is a serious
matter to the shipper who has chartered a vessel on
a 3,000-ton basis, to find it can carry only 2,500
tons, or about 17,000 bushels short of the desired
amount. It is to his interest to know exactly what
the boat will hold, and hence the measurement must
be accurate. This is assured by having the measure¬
ments taken by competent officials, and entered on
the official records.
Proper registry and classification is also important
in establishing the identity of a vessel and its value
for the purpose of insurance. (See chapter on Marine
Insurance.) If the Alice King should be insured as
a craft of 3,000 tons burthen and be reported lost,
inspection of the registry records showing that the
real Alice King was of only 2,000 tons burthen,
there would be good grounds for suspicion that
substitution, or some other fraud had been employed.
326 TONNAGE AND CLASSIFICATION OF VESSELS.
British System of Classification.
In the British system of classification ships are
divided into three classes, according to the degree of
confidence to be placed in their seaworthiness. Ac¬
cording to Prof. Raffael Gambaro, a vessel recently
and strongly built, well rigged and equipped, is
"assigned for a number of years to the first class,
and may therefore during such period be employed
with full confidence in any voyage for the conveyance
of any kind of merchandise ; provided, of course, that
she suffer no deterioration or damage as may render
her unserviceable and be maintained in a good state
of repair, which is ascertained by periodical surveys.
A second term of the same class is often granted to
ships proving still strong and in good state of preser¬
vation after the first period. A special distinction,
over and above the highest classification, may be
obtained for a ship, provided such materials be used
in her build as directed by the committee. Vessels
which have gone through their first-class term are
assigned to the second, and, lastly, to the third class,
the latter embracing vessels in very poor condition,
considered fit only for short and easy voyages, to
carry cargoes not to be damaged by sea water, such
as timber, salt, etc."
Registers for Each Marine Nation.
%
In order to keep the shipping trade acquainted
with such variations as must, of course, take place
in the classification of ships, books are annually
published by the different committees wherein the
TONNAGE AND CLASSIFICATION OF VESSELS. 327
particulars of ships classed and the cargo assigned to
each of them are clearly stated. The first of such
books published was the Register of Shipping, which
originally appeared in London for the years 1764 and
1765, and the name of which has since been adopted
for nearly all similar publications appearing elsewhere.
The Register of Shipping experienced various vicis¬
situdes, owing chiefly to the contending interests
and consequent opposition between underwriters and
vessel owners, each of the two classes keeping up a
register and a mode of classification of its own, to
the great disadvantage of shipping. This state of
things was brought to an end and a settled form given
to the rules of classification with the establishment of
"Lloyd's Register of British and Foreign Shipping,"
which took place in 1834 under the auspices of Lloyd's
Association. In addition to this publication, the
following publications represent the principal regis¬
ters of other countries now in use : Register of Ameri¬
can Shipping, American Lloyds, and Inland Lloyds,
which three registers are for the United* States,
Inland Lloyds being a classification of American
and Canadian hulls navigating the great lakes and
tributaries; Bureau Veritas for France, the Stettiner
Register for Germany, Registro Italiano for Italy,
Austro-Hungarian Veritas for Austria, Nederland-
ische Wereenigung for Holland, Norske Veritas for
Scandinavia, Veritas Hellenique for Greece.
While these several registers contain the names of
the vessels of the country in which they respectively
appear, they also contain the names and other infor¬
mation respecting vessels of all nations.
328 TONNAGE AND CLASSIFICATION OF VESSELS.
Record in American Register.
The American Lloyds is officially entitled "Record
of American and Foreign Shipping." It is published
by the American Bureau of Shipping, with the ap¬
proval of the Board of Underwriters of New York,
the Board of Marine Underwriters of Boston, and the
Board of Marine Underwriters at San Francisco, and
provides a standard American classification of vessels.
No vessels are classed except such as have been sub¬
mitted to survey according to the prescribed rules
and the class approved by the committee at New
York. The Record contains the names of several
thousand American and foreign vessels, steam and
sail, arranged in alphabetical order, stating for each
of them certain information which is set forth in a
series of columns as follows:
The official number of the ship and the signal letters of the
International Code whereby she is distinguished.
Name of vessel and master. Material, detail of decks, etc.
Rig, nationality, and hailing port; registered dimensions—
length, breadth, and depth.
Tonnage, decks, draft.
Place and date of her build, and builder's name.
Name of her owners.
Remarks (details of construction and repairs, engines and
boilers).
Insurance classification (years and class).
Place and date of last survey or repair.
Meaning of the Grade Marks.
The character assigned to a ship in the Record
of American and Foreign Shipping is expressed by
TONNAGE AND CLASSIFICATION OF VESSELS. 329
numbers from 1 to 3, A1 standing for the highest and
A3 for the lowest grade. The intermediate numbers
(1 Yz, l/4> 2, 23^) are assigned to vessels the degree
of competence in which ranges between those num¬
bers.
Vessels classifying A1 and A13^ are regarded as
fit for the carriage of all kinds of cargo on all voyages,
Those classifying Al% and A2 are fit to carry cargoes
not sensitive to damage by sea water on Atlantic
voyages, and, in exceptional cases, on long voyages,
Those classifying A23^ and A3 are regarded as suit¬
able only for coasting voyages with wood or coal.
The American classification is different from that
of the English and French, which in turn are dis¬
similar, as will be seen by the following table of com¬
parative classification.
Record, of
American
and Foreign
Shipping.
Lloyds Reg¬
ister of Brit¬
ish and For¬
eign Ship¬
ping.
Bureau
Veritas
(French).
A1
A1
3-3—1.1
Ali
A1
5-6—1.1
Alf
A1 Red
5-6—2.1
A2
A1 Red
5-6—2.1
A2J
AE1
3-4—2.1
A3
AE1
1-2—3.2
American Bureau of Shipping.
The American Bureau of Shipping was incorporated
by act of the legislature of New York in 1862, under
the name of the "American Shipmasters' Associa¬
tion." The name was changed in 1898 to the Ameri-
330 TONNAGE AND CLASSIFICATION OF VESSELS.
can Bureau of Shipping. The purposes for which
the corporation was chartered are stated to be "col¬
lecting and disseminating information upon subjects
of marine or commercial interest, of encouraging and
advancing worthy and well-qualified commanders
and other officers of vessels in the merchant service,
of ascertaining and certifying the qualifications of
such persons as shall apply to be recognized as such
commanders and officers, and of promoting the secu¬
rity of life and property on the seas."
There is a finance and auditing committee and a
committee of record, and in addition an advisory
council of engineering and marine architecture and a
consulting committee of shipowners, as well as a
council, shipmasters' department. Finally, there is
a classification committee and surveyors at New York
as well as agents and surveyors at various other ports
of the United States and of foreign countries.
Vessels built under the supervision of the associa¬
tion or classed under special survey have a number
prefixed to their name. It is one of the rules of the
Bureau of Shipping that no vessel will be classed or
rated unless surveyed and "opened" according to
rule. Besides rules for the construction and classi¬
fication of steam vessels and of oil-tank vessels,
there are also rules for the construction, survey, and
classification of machinery and boilers, refrigerator
apparatus, and electrical installation of steam vessels.
Other information set forth includes vessel names
which have been changed, owners of vessels classed
in the Record, and the names of representatives of
marine underwriters in ports and places throughout
TONNAGE AND CLASSIFICATION OF VESSELS. 331
the world, representing various important boards or
organizations of marine underwriters.
Registry on the Great Lakes.
The Great Lakes Register is an incorporated
society for the classification and registration of vessels
built on or navigating the great lakes. Its main
office is at Cleveland, Ohio, and the organization is
managed by a board of control composed of five
members. The rules and tables regulating the con¬
struction and surveys of vessels are compiled and
established by a technical committee, whose members
are appointed by the board of control. The classifi¬
cation of a vessel is based upon these rules, taken in
conjunction with the report of inspection by an
established surveyor of the society. The class so
determined is entered upon the classification certifi¬
cate and is inserted in the Register, which is published
annually about March 1 and sent to each member.
In addition to the Register, another annual publica¬
tion issued under the auspices of the Great Lakes
Register is entitled "Rules and Regulations for the
Classification and Building of Metal and Wooden
Vessels." The Great Lakes Register rules and tables
for the construction and classification of steel, iron,
and wooden vessels navigating the Great Lakes
have the approval of Bureau Veritas, of France, and
it is stated that "the existing alliance of Bureau
Veritas with the Great Lakes Register enables the
committee to issue certificates of classification for
oversea navigation to lake-built vessels whose con-
332 TONNAGE AND CLASSIFICATION OF VESSELS.
struction and equipment are suitable for ocean navi¬
gation, and are approved and accepted by the com¬
mittee."
The Great Lakes Register society was established
in 1896. Its annual publications are combined and
issued in connection with Bureau Veritas Interna¬
tional Register of Shipping. The Great Lakes Regis¬
ter publishes a list of lake steam and sailing vessels,
alphabetically arranged, separate columns indicat¬
ing the official number of such vessels, their type,
flag, material, dimensions, owners, etc., including
a symbol column indicating that a given vessel has
been built under the supervision of a surveyor of the
Register. The same publication also contains the
rules and conditions established by Great Lakes
Register for the stowage of grain cargoes in bulk.
Other American Registers.
In addition to the Record of American and Foreign
Shipping (American Lloyds) and the Great Lakes
Register, two less important registers, relating more
especially to American vessels engaged in domestic
commerce, are the United States Standard Register
of Shipping, issued at irregular intervals by the
United States Standard Steamship Owners,' Builders'
and Underwriters' Association (Limited), and the
Inland Lloyds, an annual publication devoted to the
classification and listing of vessels operating on the
great lakes.
Vessels operating on western rivers appear as a rule
to be omitted from any of the foregoing registers.
TONNAGE AND CLASSIFICATION OF VESSELS. 333
The Tariff Sheet of River Premiums adopted by the
Board of Underwriters of New Orleans states that no
risk will be covered on any steam vessel that does
not hold a proper certificate from an authorized in¬
spector of hulls for the Board of Underwriters of
Galveston or New Orleans in certain cases, which
would appear to indicate that such local boards take
the place of larger organizations which supervise
vessels engaged in lake, coastwise, or foreign com¬
merce.
It was stated by a witness before the Industrial
Commission that American vessels are built according
to American rules and insurance rates based on such
rules. The same witness added: "Our ships do not
come under Lloyd's rules at all, but under the Ameri¬
can standard, which is accepted by the foreign com¬
panies." He explained, however, that if one of his
ships was loaded for offshore the foreign insurance
company would not accept the American standard.
Federal Registry Also Necessary.
Vessels engaged in foreign or coastwise trade must
also be registered with the customs officials at the reg¬
ular ports of sailing. The facts required for registry
are largely the same as those necessary to secure
classification for insurance, but the purpose of
recording these facts is different. In the first place
it fixes the identity of the vessel for the collection
of customs duties, and in the second place it estab¬
lishes the right of the craft to fly the American flag,
and seek American protection in case of trouble.
334 TONNAGE AND CLASSIFICATION OF VESSELS.
Laws Relating to Shipping.
Included in the navigation laws of the United States
are various acts in regard to vessels and their equip¬
ment and prohibiting foreign vessels from engaging
in the coastwise trade. The first Congress under the
constitution established a system of documenting
vessels, with a limitation of United States registry
to vessels built in this country, and imposed dis¬
criminating tonnage duties, directed toward the en¬
couragement of shipbuilding and shipping interests.
On September 1, 1789, Congress passed "An act for
registering and clearing vessels, and for regulating
the coastwise trade." This provided for the registry
of vessels built or owned in the United States and
those owned by citizens of the United States May 1,
1789; for the enrollment of vessels over 20 tons,
under the same conditions, for the coasting trade
between collection districts, and for issuing licenses
to vessels from 5 to 20 tons. This act was revised by
acts of December 31, 1792, and February 18, 1793,
the former dealing with the registry of vessels engaged
in the coasting trade and in the fisheries. The latter
of these acts provided that registered, enrolled, and
licensed vessels of the United States, "and no others,"
should be entitled to the privileges of the coasting
trade.
Various Steps in Legislation.
An act of 1817 prohibited the importation of goods
except in American vessels or vessels of the country
from which the goods came, unless there was no such
TONNAGE AND CLASSIFICATION OF VESSELS. 335
discrimination against American vessels by the
country to which the foreign vessel belonged. This
aimed to compel reciprocity. This act also made
more explicit the exclusion of foreign vessels from the
domestic coasting trade, by providing specifically
that no merchandise should be ' imported" from one
port of the United States to another port in the
United States in a vessel belonging in whole or in
part to the subject of any foreign power.
The act of 1817 further imposed a duty of 50 cents
a ton on American vessels going from one port to
another (with certain exceptions), unless three-
fourths of the crew were Americans, when the duty
should be only 6 cents a ton. In 1830 the tonnage
duties were repealed on American vessels of which
two-thirds of the officers and crew were citizens of
the United States, and the tonnage duties on foreign
vessels were repealed as to those countries which
abolished their discriminating duties against Amer¬
ican vessels.
Some Notable Exceptions Made.
By the act of May 27, 1848, any vessel registered
in the United States to engage in trade between
ports of the United States was given the privilege
to touch at any one or more foreign ports, customs
duties to be levied only on the dutiable merchandise
brought from a foreign port to the United States.
An act of June 17, 1864, provided for the enroll¬
ment and license of vessels navigating the waters
of the northern, northeastern, and northwestern
336 TONNAGE AND CLASSIFICATION OF VESSELS.
frontiers, and authorized vessels so enrolled and
licensed to engage in the foreign trade on the frontier
without registry.
In 1873 the prohibition on foreign vessels in the
domestic trade was slightly relaxed by an act per¬
mitting British vessels to carry goods from one port
of the United States to another on the great lakes
and the St. Lawrence river, in accordance with
reciprocal privileges for American vessels agreed
to in the treaty of Washington (1871), but this
privilege was subject to suspension by the President
if the citizens of the United States should be deprived
of the use of the Canadian canals on equal terms
with Canadians.
More recent legislation has increased the strict¬
ness of the prohibition against foreign vessels.
In 1898 the transportation of passengers from one
port of the United States to another in foreign
vessels was made subject to a fine of $200 for each
passenger.
CHAPTER VIII.
TYPES OF VESSELS IN SERVICE.
Floating equipment presents a striking contrast
to the rolling stock of railroads in the great variety
of forms and types that have developed in trans¬
portation by water, and the adaptation of particular
types to local conditions and to special classes of
traffic. This adjustment of vessel types is an impor¬
tant factor in the development of water transpor¬
tation; but it also reduces the mobility of the float¬
ing equipment, since vessels adapted for one route
or one class of traffic may not be so economically
used for others.
Vessels may be classified according to method of
propulsion into sailing vessels, self-propelling vessels,
and unrigged craft. They may also be considered
with reference to the materials of construction, as
wooden, iron, steel, or composite vessels. They
may be grouped according to the character of occu¬
pation, as freight and passenger boats, tugs and
towing vessels, ferries, etc., or as regular-line boats,
bulk cargo vessels, and "tramps." Within each
of these classes there are special types with refer¬
ence to the character of the water route and the
nature of the traffic, as, for instance, stern wheelers
on narrow crooked rivers.
337
338 TYPES OF VESSELS IN SERVICE.
Boats of Regular Lines.
Regular-line boats are those which operate over
definite routes between specified ports and main¬
tain regular schedules as to time of departure and
arrival. Practically all regular-line boats are now
steam vessels, carrying miscellaneous package freight
and often passengers.
A modern example of such vessels in the Atlantic
coasting trade is the steamship Creole of the South¬
ern Pacific Company's Atlantic Fleet, built in 1907.
This vessel is 407 feet in length, 53 feet beam, 26
feet deep, of 6,387 gross tons. She has 10 water-
tube boilers and 2 reversing turbines of the Curtis
type, furnishing a speed of about 18 knots per hour.
She has accommodations for 150 first-class, 60
second-class, and 250 steerage passengers, and 4,500
tons of cargo.
One of the most recent regular-line freight and
passenger steamships in the Pacific coasting trade
is the President, operated by the Pacific Coast
Steamship Company. This vessel is 417 feet in
length, 443^ feet beam, 29 feet deep, and of 5,500
gross tons. She has 3 decks, 9 water-tight bulk¬
heads, a double bottom, and a triple-expansion
engine of 5,000 indicated horsepower. There are
accommodations for 294 first-class and 140 second-
class passengers, besides cargo space.
On the great lakes regular freight and passenger
steamers have been built up to 400 feet in length,
and a new steamer just built for the Cleveland and
Buffalo line is 402 feet in length and 97 feet wide,
TYPES OF VESSELS IN SEKVICE. 339
over all. This and other large vessels operating
on the lower lakes have side paddle wheels, but those
engaged on the longer routes to the upper lakes
have screw propellers. Some bulk freighters are
600 feet in length.
These are vessels which carry cargo lots of a
single commodity. They maintain no regular sched¬
ule, and, while they usually operate within a limited
district over a small number of routes, their terminal
ports are not always the same. The season con¬
tracts of bulk carriers sometimes approximate' to
the ordinary charter contracts of tramps.
Steam bulk carriers are of great and increasing
importance in the movement of grain, iron ore, coal,
and lumber on the great lakes and in the movement
of lumber and oil in the Pacific coastwise trade.
They are also coming into use in the coal, lumber,
and oil trade on the Atlantic and Gulf coasts, although
hitherto this movement has been carried mainly
in sailing vessels and steam-towed barges. On the
Ohio and Mississippi rivers there is a large bulk
movement of coal, and on the inland routes along
the Atlantic coast of coal and lumber in. steam-
towed barges.
Bulk Freighters on the Lakes
The conditions of traffic on the great lakes have
developed a peculiar type of vessel for carrying bulk
cargoes of iron ore, coal, and grain, and these form
the most important class of vessels on the Lakes.
These vessels are described in the following language
340 TYPES OF VESSELS IN SERVICE.
by Mr. W. I. Babcoek, a naval architect familiar
with lake conditions :
Perhaps the first thing that would impress a marine man going
from salt water to the lakes is the very full model of these ships.
They are only square boxes whittled off a little at the ends, and
not much at the forward end at that. The reason for this is of
course the limited draft of water available and the desire to
carry as much as possible on that draft. This midship section
coefficient is frequently as high as .98, the usual dead rise being
but 3 inches at the extreme breadth and the bilge being a sec¬
tion of a circle of about 4 feet radius. Another universal char¬
acteristic, which might well be imitated in salt-water freighters,
is that about two-thirds of the entire length is absolutely straight
and made off of one mold, except for the sheer of the decks.
All these result in a high block coefficient, frequently up to 87.
As it is not desired to make a better loaded speed than 11 to 12
miles (not knots), this full model is not objectionable, and the
usual performance coefficients are good.
One of the largest vessels on the great lakes is the
bulk freighter Thomas F. Cole, built in 1907 for the
fleet of the Pittsburg Steamship Company. This
boat is 605 feet 5 inches over all, 58 feet beam, and
32 feet deep, of 7,268 gross tons, with a capacity
for 12,000 tons of iron ore.
Whaleback Type Not Popular.
In the ten or twelve years succeeding 1888 about
40 " whalebacks "— steamers and barges—were built
for the lake trade. Shortly after the formation of
the United States Steel Corporation the whale-
backs were bought up by its subsidiary concern,
the Pittsburg Steamship Company, but as they
were able to carry only from 2,000 to 2,500 tons
they were for the most part replaced by larger
TYPES OF VESSELS IN SERVICE. 341
vessels. Some of the whalebacks were sent to the
Atlantic coast for the coast trade. The Pittsburg
Steamship Company has about 12 of these boats
left—8 steamers and 4 barges. These are all the
whalebacks now on the lakes, except the steamer
Pathfinder, owned by Pickands, Mather & Co., of
Cleveland.
Steam Freighters on the Atlantic.
Twenty years ago steam colliers played an impor¬
tant part in the coal-carrying trade on the Atlantic
coast, but the older type of vessels of this class has
been outclassed by the barge lines and improved
types of sailing vessels. A number of new and
modern self-trimming steam colliers are, however,
now successfully engaged in the coastwise coal
movement, and this type will probably become of
considerable importance.
The largest fleet of the older type of steam colliers
was that of the Philadelphia and Reading Railway
Company. This was inaugurated in 1869 by the
launching of two iron vessels, the Rattlesnake and
the Centiped. In 1870 four new vessels were added
to the fleet, and in 1874 eight others were placed on
this line, which consisted at one time of 15 vessels,
aggregating a total of 15,600 tons.
With the development of other types of vessels,
the time consumed in receiving and discharging
cargo and the expense of the larger crew continu¬
ously maintained placed these steam colliers at a
disadvantage. They were for the most part sold
342 TYPES OF VESSELS IN SERVICE.
or converted into schooner barges, while their place
has been taken by a large fleet of tugs and schooner
barges.
Lake Craft Sent to Atlantic.
Some steamers originally built for and operated
on the great lakes have been transferred to the
Atlantic coast coal trade. The Boutell Steel Barge
Company and F. B. Chesbrough, shipowner, of
Boston, use vessels of this class, the latter having a
fleet of 4 vessels of from 1,532 to 2,183 gross tons,
which were too small for the great lakes traffic.
The special features which enable such vessels to
compete with sailing vessels and barge lines are
said to be, first, due to custom, a steamer having
preference in loading and discharging cargo; second,
having only main decks they can discharge cargo
more rapidly than vessels or barges constructed with
between decks; third, the steamer can make better
time than either the sailing vessel or barges.
The Self-Trimming System.
The self-trimming system consists in sloping the
hatchways, from their side coamings to the side of
the ship, at an angle of about 45 degrees. The
triangular prism so formed permits of certain space
being used as topside ballast tanks, to be filled with
water when the vessel is running light; and in addi¬
tion a deep inner bottom will provide space for an
unusual amount of water ballast. This will insure
a good immersion of the vessel when running light,
TYPES OF VESSELS IN SERVICE. 343
provides greater stability, and guards against emerg¬
ing of the propeller.
These ships are subdivided by transverse water¬
tight bulkheads into five large cargo holds, each
about 48 feet in length, specially constructed for
the stowage of coal or mineral cargoes. These
cargo holds provide for 7,000 tons of coal, in addi¬
tion to the bunker coal carried for steam purposes.
The hatch covers are of steel and of special con¬
struction, so as to insure absolute water-tightness
and quick handling in opening and closing.
As will be seen, the aggregate carrying capacity
of three steamers is 21,000 tons, or about one and
one-half times that of fifteen steam colliers of the
older type (15,600 tons). When loaded, these
vessels will have a continuous sea speed of 11 knots
an hour.
Bulk Freighters on the Ocean.
Four steel freight steamers of the great lakes type
of bulk carrier have lately been built for the Bruns¬
wick Steamship Company to operate in the lumber,
naval stores, and other trade from the South Atlantic
coast and Cuba. These ships are 313 feet in length,
40 feet in breadth, and 25*/£ feet deep, of 2,667 gross
tons each, and a displacement tonnage of about
5,000 tons. The engines and machinery and quart¬
ers for the officers and crew are all placed at the
extreme after end of the vessel. To trim the vessels
when steaming light, deep ballast tanks are pro¬
vided forward, and bulkheads are built so as to
make seven water-tight compartments. There are
344 TYPES OF VESSELS IN SERVICE.
three spacious cargo holds, with eight large side
ports and four deck hatches, so as to permit the
rapid handling of cargo.
The efficiency of such steam bulk freighters is
dependent primarily on large carrying capacity,
the regularity of their voyages, and the dispatch
with which they can be loaded and discharged. For
their economic operation there must be a large
demand, fairly constant, for the transportation of
commodities which they are suited to carry, termi¬
nals located in harbors affording sufficient depth
of water to accommodate their draft, and suitable
equipment at such termini for the rapid handling
of cargoes.
It is quite probable that the method of transporting
bulk commodities on the great lakes will be followed
to some extent on the Atlantic coast, particularly,
as to lumber and coal; that is to say, for such trans¬
portation between ports affording sufficient depth
of water the schooners, barges towed by tugs, and
barges towed by steamers may be supplemented by
the large steam freighter carrying her entire cargo
within her own hold.
Steamers in the Fruit Trade.
Special features are connected with the vessels
employed by the United Fruit Company in carrying
cargoes of bananas from Central and South America
to New Orleans, Mobile, New York, Boston, and
other Atlantic ports. One of the latest vessels of
the fleet is the San Jose, a screw steel steamer,
TYPES OF VESSELS IN SERVICE. 345
343 feet in length, especially designed and equipped
for the transportation of fruit in bulk. She has
three steel decks extending fore and aft, and the
cargo space is divided into separate compartments
by steel bulkheads, which extend to the upper deck.
Refrigerating machinery is installed, with ducts for
distributing cool air to every compartment for the
preservation of the fruit. All the refrigerating ma¬
chinery is in duplicate. Each hold is fitted with a
large hatch supplied with appliances for the expe¬
ditious and careful handling of the fruit cargoes,
which are loaded and unloaded by special apparatus.
The vessel has a capacity of about 45,000 bunches
of bananas. The dining saloon and staterooms are
forward. She has triple-expansion engines, with
three steel cylindrical multitubular boilers. The
sister ships of the San Jose are the Limon and
Esparta, constructed on the same plan.
Steam Schooners on the Pacific.
These are the most distinctive type of vessel on
the Pacific coast, where they are engaged almost
exclusively in the lumber-carrying trade. The first
steam schooner was built in 1875 and the next in
1879; after 1886 the number increased steadily, and
more rapidly since 1900. Hundreds of these vessels
are in operation on the western coast, and a list
prepared by Mr. H. L. Stoddard, secretary of the
Shipowners' Association of San Francisco, shows
no less than 134 steam schooners owned in San
Francisco alone, with an aggregate of 61,105 net
tons, 65,897 indicated horsepower, and a carrying
346 TYPES OF VESSELS IN SERVICE.
capacity of 89,765,000 square feet of lumber. Most
of these vessels are from 200 to 1,000 gross tons,
but there are a number built up to 1,600 and 1,700
tons, and several of over 2,000 tons are under con¬
struction. The greater use of these vessels is said
to be due to the rise in sailors' wages, beginning
about 1900, and alleged excessive demands on the
part of the seamen. No new sailing vessels are now
being built on the Pacific coast, and all that are on
the coast between San Francisco and Honolulu are
in the lumber trade.
Little Change in River Boats.
Little change has been made in the stern-wheel,
light-draft steamers on the western rivers in the past
twenty years, but within a few years a new type of
light-draft steamer has been developed, with screw
propeller built in a tunnel in the after part of the
vessel. A number of these boats have been built
in England for use on shallow rivers in Africa and
South America. A somewhat similar "screw-in-
tunnel" steamer is the A. M. Scott, a towboat built
at Charleston, W. Va., for the Ohio river trade.
This vessel has a steel hull, is 150 feet long and 26
feet beam, and has a draft of 3 feet, with twin screws
5 feet in diameter, built in tunnels. There are
rudders both forward and aft of the propellers,
giving wheel water on the rudders when the boat is
either backing or going ahead.
CHAPTER IX
MARINE INSURANCE—ITS FEATURES.
An important feature of transportation by water
is the system of marine insurance, or contracts of
indemnity. Such contracts are regularly made by
vessel owners to secure their vessel property, and
are also regularly made by both vessel owners and
shippers to cover their respective liabilities in case
of loss or damage to the cargo.
The special features of marine insurance are
brought about in part by the greater risk of loss or
damage to which property afloat is deemed to be
subject as compared with property transported by
land, but in part also by differences in the business
organization of the two forms of transportation,
and still more, as regards the damage to freight, to
the difference in the legal liability of the carrier by
water as compared to the carrier by land.
Why Marine Insurance is Essential.
So far as loss to the property owned by the carrier
is concerned, or loss to goods in transit for which
the carrier is liable, the practice on the part of rail¬
road companies is to assume this as part of the
operating expenses. Carriers by water, however,
347
348 MARINE INSURANCE—ITS FEATURES.
for the most part, find it necessary to take out insur¬
ance on such property. This difference in the
practice of the two classes of carriers may be ascribed
in part to the greater importance and financial
strength of railroad corporations as compared to
navigation lines, and in part to the difference in
the relative importance of a single unit of equipment
in the two methods of transportation and the corre¬
sponding danger of extensive losses at one time.
A railroad company's loss of cars and locomotives
is likely to approximate some degree of uniformity
from year to year, and this expense can be borne
directly as easily as to pay for insurance. The loss
of a single vessel, however, may easily mean the
failure of the navigation line. The need for insur¬
ance on freight on the part of the shipper arises
from the difference in the liability of carriers by
water as compared with the rail carriers. Under
usual conditions railroads and other common car¬
riers by land are liable as insurers for loss or damage
to goods in transit, but, as has been pointed out, the
liability of carriers by water in regard to goods in
transit is much more limited. To protect the
shipper by water marine insurance must be taken
out on the freight, thus adding a further charge
above the freight rate.
Form of Marine Policies.
Every maritime nation has its own particular
form of marine policy, agreed upon by the community
of insurers, the conditions whereof form the basis
MARINE INSURANCE—ITS FEATURES. 349
of almost every contract of insurance. Some mari¬
time communities—as, for example, the United
States—-have adopted a different policy for insurance
either on hulls or on goods, but English insurers
generally abide by Lloyd's policy, the wording of
which is adapted to both cases. This form of policy
was adopted by Lloyd's in 1779, and is still the
standard form of the contract of private under¬
writing, and Lloyd's clauses are often included in
other policies and transactions relating to shipping.
The clause usually inserted in such cases is ''Practice
of Lloyds. "
The following enumeration will indicate the gen¬
eral character and the range of property to which
the several kinds of marine-insurance policies apply:
River-hull policies, ferry-boat, vessel, lake vessel,
towboat, towboat hull, hull, lake hull, inland hull,
blanket, Atlantic barge, schooner, blanket policies
on hulls, hull marine policies, steamboat only, tug,
lighterage, yacht, whaling and fishing, canal hull,
cargo on wharf boat, hull and cargo, cotton, coal,
lake cargo, vessel and cargo, cargo vessel, blanket
policies on hull and cargo, river cargo policies,
builders', and stranding or collision policies only.
In spite of variations in detail, however, it is
apparent that all such policies are in their nature
and contents fundamentally identical, and adapted
from a few common forms.
Conditions of Marine Policies.
As regards the sum insured, a policy may be either
open or valued. Where the agreement expresses
350 MARINE INSURANCE—ITS FEATURES.
on its face that the subject of insurance shall be
valued at a stipulated sum—not necessarily its
actual value—as, for example, "the ship Argus, valued
at $10,000," it is known as a valued policy. On the
other hand, an open policy is one wherein the value
of the property insured is not expressed, but is left
to be ascertained in the case of loss.
As regards the vessel on which the insured inter¬
est is placed,policies are either "floating" or "named."
They are called "floating" when the ship's name is
not mentioned therein; "named" or "special" when
it is. The floating policy is purposely intended to
effect insurance on goods to be shipped from a distant
port, the insurer not knowing as yet the name of
the ship or ships which will convey them. The
name of such ship or ships is, however, stated after¬
ward, and within certain limits of time, by special
declaration. When the whole sum insured is thus
accounted for, the policy is said to be fully declared
or written off. When both the sum and the ship
are specified in the policy, the policy is also called
"named" or "special," and is also called "open"
when neither the one nor the other is stated therein.
As regards the duration of the risk insured, there
are voyage and time policies, the former for a par¬
ticular voyage, the latter for a specified period.
Among the expressed or implied warranties in
marine-insurance policies are: (a) That the vessel
must be seaworthy in all respects for the intended
voyage at the time of starting; (6) that the vessel
shall proceed in the usual way, directly and without
deviation or unnecessary delay, from the port of
MARINE INSURANCE—ITS FEATURES. 351
departure to the port of destination, and (c) that
the adventure shall be legal in all particulars.
Nature of Insurable Perils.
After the general description of the adventure,
the marine-insurance policy usually mentions the
perils against which protection is granted. Some
American policies still retain the old enumeration
of Lloyd's namely:
Touching the adventures and perils which the said
Insurance Company is contented to bear, they are of the seas,
men-of-war, fires, enemies, pirates, rovers, thieves, jettisons,
letters of mart and countermart, reprisals, takings at sea,
arrests, restraints and detainment of all kings, princes, or people
of what nation, condition or qualify soever, barratry of the
master and mariners, and all other perils, losses, and misfortunes
that have or shall come to the hurt, detriment, or damage of
the said vessel [or goods] or any part thereof.
While retaining the language of the above clause
in other respects, most American companies omit
in their policies the specifications of all perils except
those of the sea, fire, and barratry, and assume
liability for all losses to which the insurers are liable
by the rules and customs of insurance in a particular
port, subject to the conditions and provisions con¬
tained or referred to by clauses in said policies.
Other companies, especially those insuring inland
risks, grant in their policies "protection against the
perils of the lakes, rivers, canals, railroads, and all
other losses or misfortunes, except those arising
from carelessness or lack of skill in loading or stow¬
ing the cargo, or in navigating the vessel, or from
other legally excluded causes."
352 MARINE INSURANCE—ITS FEATURES
Four of the Main Risks.
Four perils merit a brief discussion, namely,
"perils of the sea," fire, jettison, and barratry:
The term "perils of the sea" appears not to
include all casualties that may happen to a ship
or cargo on the sea. Not only must the loss be
incurred "in consequence of some peril which is
the sea," but even where this is the case it must
ordinarily be the result of an unforeseen occurrence;
that is to say, an accident. One writer has com¬
prehended under the term "perils of the sea" those
of "the winds, waves, lightning, rocks, shoals,
collisions, and, in general, all causes of loss or dam¬
age to the property insured arising from the elements
and unavoidable accidents. "
Similarly, in the case of fire, the underwriter is
said to be liable for all losses arising from it, "pro¬
vided only that the cause was accidental and not
brought about by any action of the insured for which
he is considered responsible." Among the many
causes of fire covered by the policy are lightning,
spontaneous combustion, and a damaged state of
the cargo.
Jettison has been defined to be "the throwing
overboard of a part of the cargo, or any article on
board of a ship, or the cutting and casting away of
the masts, spars, rigging, sails, or other furniture
for the purpose of lightening or relieving the ship
in case of necessity or emergency."
Barratry is said to comprehend not only every
species of "fraud and knavery covinously committed
MARINE INSURANCE—ITS FEATURES. 353
by the master with the intention of benefiting him¬
self at the expense of its owners, but every willful
act on his part of known illegality, gross malversa¬
tion, or criminal negligence, by whatever motive
induced, whereby the owners or charterers of the
ship are in fact damnified."
Various Grades of Losses.
The insured is protected against losses in many
forms. The principal kinds of liability appear
repeatedly in marine-insurance policies, namely: (a)
"Total loss," which may be either "actual total
loss" or "constructive total loss," which involves
a discussion of "abandonment;" (6) general aver¬
age; (c) particular average; (d) salvage.
When the property insured is totally destroyed
or so badly damaged as to be of no particular value
to the insured, there is said to be an "actual total
loss." It often happens, however, that the subject-
matter of insurance, although slightly damaged,
is so placed as to be of no further value to the insured.
For example, a vessel that is stranded may be but
slightly damaged, but the cost of freeing her from
her position may be so large than when compared
with her value afterwards the attempt can only be
characterized as a commercial failure. Hence it is
that this and similar cases are technically termed
"constructive total losses," and if the facts of the
case warrant it the interests of the insured demand
that he should give the underwriter what is called
"a notice of abandonment." By this is meant that
354 MARINE INSURANCE—ITS FEATURES.
the insured claims payment for a total loss, and is
willing to deliver to the underwriter all that remains
of the property insured.
Liability Under Collision Clause.
One of the most important clauses in general use
is the collision clause, which appears to have first
come into general use after 1836, in which year it
was decided by a British court that an underwriter
was not liable under the ordinary wording of the
marine policy for damages caused by the insured
vessel to another vessel through collision, even
though the insured vessel was at fault. Hence,
although the damage suffered by the insured vessel
through collision is covered by the marine policy,
it became necessary, in view of this decision, to
make a separate contract whereby the underwriter
would agree to assume the liability for the damage
caused to the other vessel. It became common,
therefore, to insert a clause which made the insurer
liable for all or a portion of the damage thus incurred,
and to-day the use of the so-called "collision clause"
has become well-nigh universal. Its ordinary form
is substantially as follows:
Collision Clause.— It is agreed, that if the vessel hereby
insured shall, in consequence of collision with another vessel,
become liable to pay, and shall pay, any sum or sums for damages
resulting therefrom to said other vessel, her freight or her cargo,
in such cases this company will contribute toward the pay¬
ment of three-fourths of the total amount of said damages in
the proportion that the sum insured under this policy bears to
the total valuation of the vessel as stated herein, provided that
MARINE INSURANCE—ITS FEATURES. 355
this company shall not, in any event, be held liable under this
agreement for a greater sum than three-fourths of the amount
insured under this policy.
And it is also agreed that this company will bear a like pro¬
portionate share of the costs and expenses that may be incurred
in contesting the liability resulting from said collision, provided
the written consent of the company to such contest be first
obtained.
No Uniformity in Cargo Insurance.
In respect to cargo insurance there is a lack of
uniformity. In some cases cargo insurance is looked
after by the vessel owner acting for the shipper or
consignee. Frequently, however, cargo insurance
is effected on each shipment by the shipper, and
continues until the vessel reaches the port of desti¬
nation or for a certain number of hours thereafter.
Again, the vessel owner or owner of cargo may take
out a blanket policy covering all shipments for a
given period. Insurance on vessels is usually by
the year, often with lay-up clauses applicable to
the period during which navigation is suspended, as,
for example, on the great lakes. Sometimes one
policy covers both vessel and cargo.
Many companies leave cargo insurance to shippers
and consignees. Some Hudson river lines carry
cargo insurance and fire and marine insurance on
each vessel for one year. One of the largest Atlantic
coast lines reports that—
Insurance on cargoes begins when the freight is received at
ship's side, and terminates on delivery to a connecting carrier.
If consigned to a party at one of the termini of the line, insur¬
ance continues for five days after freight's arrival. Shippers
356 MARINE INSURANCE—ITS FEATURES.
carry insurance on their cargoes, but it is the common practice
of the steamship line to place insurance for account of shippers
or consignees, as the case may be. Steamships are insured on
an annual policy.
Another important Atlantic coastwise line states:
To certain competitive southeastern points the cost of insur¬
ance is included in the rate of freight to equalize the risk of water
transportation. To all other points insurance is effected by
the shippers.
The American-Hawaiian Steamship Company
states that when requested to do so it will effect
insurance against total loss and general average at
three-eighths of a cent and total loss and particular
average at three-fourths of a cent. These rates
include marine insurance also while the goods are
on the dock at South Brooklyn, and will also cover
the dock risk for ten days after arrival of steamer
at points of destination.
Atlantic Coastwise Trade Risks.
In the case of bulk carriers engaged in the Atlantic
coastwise trade, the conditions are not always
similar to those affecting line boats, It is stated,
for example, that the rate of insurance on barges is
practically prohibitive, except on coal and lumber,
and that when a barge carries perishable goods or
any cargo that can be damaged by water it can get
no insurance. In this connection the statement
is made that—
There is no regular rule as to who insures the cargo—it is
done by contract; the shipper tries to make the vessel owner
pay it and the vessel owner tries to make the shipper pay it.
Another bulk carrier states that the shipper
MARINE INSURANCE—ITS FEATURES. 357
generally insures the cargo. He contends that it is
more difficult to obtain insurance on barges than on
sailing vessels, and especially so on the barges oper¬
ated by his company, because they are converted
barges and the rate of insurance is prohibitory.
Insurance on Great Lakes.
In one or two respects insurance contracts on the
great lakes are different from those existing in other
parts of the country. This is attributable to sev¬
eral causes, including the nature of traffic conditions,
the character of the routes, special types of vessels
developed, and the comparatively limited period of
navigation on these inland waterways. One lake
form of vessel policy shows that the vessel is "war¬
ranted by the assured to navigate only the waters,
bays, harbors, rivers, canals, and other tributaries
of the great lakes, and the river St. Lawrence to the
city of Montreal." Another warranty in the same
policy stipulates that "the vessel shall not be
engaged in navigation from December 5, 191-, to
April 11, 191-, but in the event of the vessel being
on a voyage at noon on the 5th day of December,
191- (Chicago time), this policy to continue at pro
rata of the season rate until arrival at port of des¬
tination. "
In most cases vessel insurance begins at the open¬
ing of navigation and terminates at its close. Many
instances are encountered of vessel owners having
on the same boat a policy of marine insurance begin¬
ning with opening and terminating with the closing
358 MARINE INSURANCE—ITS FEATURES.
of navigation, a port-insurance policy applicable
to the vessel while in port and out of commission,
and a fire policy running throughout the year.
Condition of Vessel a Factor.
Shippers, insurers, consignees, passengers, as well
as all other persons connected with transportation
by water, have so much interest in the safety of the
vessel to which they intrust their property or their
lives that the necessity was early felt for ascertain¬
ing in some way whether and to what extent a given
vessel was possessed of such requisites as were
necessary to enable her to stand her own against
the risks and perils of the sea. It thus appears that
as far back as the early part of the 17th century
experts were appointed by London merchants and
underwriters to report on the soundness and solidity
of vessels, and public notice of such surveys was
given by private associations of such merchants and
underwriters and even by shipowners anxious to get
good offers for the charter of their vessels. The
institution was suggested of a public office which
should provide for the regular survey of vessels and
publish the result of the inquiry held by experts.
The credit of having carried this plan into execu¬
tion is given to a body of London business men who
at first appointed a committee for classing vessels
—that, is assigning to ships such character as should
result from the report of a special survey held by
experts for the account and under the control of the
committee—and publishing the result of the clas¬
sification.
MARINE INSURANCE—ITS FEATURES. 359
This new institution met with such success that
it soon became an important feature of British
shipping, and the system has been successively
adopted by all maritime nations, including our own,
and to such an extent that it is said no vessel of a
considerable tonnage now sails under any flag with¬
out a regular certificate of classification, bearing
witness of her worth in any part of the world.
The classification of a vessel for the purposes
herein described, it must be understood, although not
compulsory either then or now, is prompted by the
interest of shipowners. Naturally they would expe¬
rience considerable difficulty in chartering or insuring
any of their ships unless charterer and insured were
able to form a correct opinion as to her seaworthi¬
ness, which would of course require repeated surveys
by experts specially appointed, a method involving
delay, trouble, and expense. The opinion expressed
by a body of experts possessing the amplest means
of ascertaining the condition of a ship and enjoying
in the highest degree the confidence of all persons
engaged in shipping is therefore regarded as the
best and most desirable evidence of the true state
of a vessel, so that shipowners, generally speaking,
submit to the conditions imposed by the committees
of classification or organization corresponding thereto
in order to obtain their testimonials.
CHAPTER X.
PORT FACILITIES AND RULES.
Water routes differ from railroads in ordinarily
offering free passage to any suitable vessel, so
encouraging competition for traffic; but a free water¬
way is of little avail in that respect without termi¬
nals also acessible freely or on reasonable terms to
any independent boat line that may seek to enter
the field. The terminal facilities of any transpor¬
tation system are the keys giving it access alike to
sources of supply, to markets, and to connecting
lines of transportation. Convenient terminals are
of even greater importance to water transportation
than to railroads, because many shipments go partly
by water and partly by land, and since the rail¬
roads reach all important points in the country,
railroad connections are of far greater importance
to water lines than water connections are to rail¬
roads. It is therefore not too much to say that
terminal facilities, including harbors, docks, and
warehouses, form the key to the important question
of the practical availability of free waterways, and
that upon the control of these terminals depends in
great measure the possibility of effective competi¬
tion on the part of water lines. It is not enough
that modern vessels should have harbors or ports
361
362 PORT FACILITIES AND RULES.
from which to operate. Harbors are not enough.
There must be adequate port terminal facilities,
especially in the way of easily accessible wharves
and warehouses.
Influence of Facilities on Trade.
From another point of view, terminal facilities are
an important factor in determining the commercial
prosperity of different ports. This may be strik¬
ingly demonstrated in the case of the principal
Atlantic seaports, where differential freight rates
counterbalance any advantages particular ports may
have in ocean freight rates, leaving the harbor,
docking, and warehouse facilities to determine the
route which traffic will take. In lesser degree the
same thing is true of other competing ports, and
hence it is to the advantage of local communities
to provide the most convenient terminal facilities
possible, not only commodious wharves and ware¬
houses, but also such important auxiliary agencies
as mechanical loading and unloading devices and
tramways connecting the various wharves and ware¬
houses. Grain elevators on land and water, lighters,
and harbor towboats also supplement the dock
facilities to a greater or less extent at different ports,
but these agencies are provided by private enter¬
prise, while the construction and equipment of
wharves is often undertaken by municipalities or
by the state, and sometimes again by private indi¬
viduals or corporations.
The character of the terminal facilities provided
varies greatly from place to place. At American
PORT FACILITIES AND RULES, 363
seaports vessels usually load and unload at wharves
alongside or projecting into the harbor; and there
are none of the inclosed docks such as are used at
European ports. Along the Ohio and Mississippi
rivers the rise and fall of the water is too great to
admit of the use of fixed wharves, and their place is
therefore taken by floating wharfboats which rise
and fall with the water. To the inconvenience of
this kind of landing is added the difficulty of hauling
freight up the steep banks of the river. At New
Orleans, however, the unloading of vessels in the
fruit trade is expedited to a considerable extent by
mechanical appliances in the form of endless chains.
On the Ohio river and its tributaries in the coal
regions and at the coal-shipping ports of the Atlantic
coast, there are coal tipples from which coal is loaded
on the water craft directly from the mine cars mainly
by gravity, while at New Orleans floating elevators
or coaling machines are used to lift the coal from
the river craft into the coal bunkers of steamships.
At New York and elsewhere somewhat similar
floating elevators are used for transferring grain.
Mechanical Loading and Unloading.
Mechanical loading and unloading appliances can
be used to best advantage where the traffic is most
specialized. Probably no other traffic in the world
has arrangements for handling so perfect as the
iron-ore traffic on the great lakes and the connecting
railroads. The ore is first scooped up from the ore
beds or stock piles by steam shovels, which deposit
364 PORT FACILITIES AND RULES.
it in the railroad cars. On their arrival at lake
ports trains of these cars are run out on high trestles
built out over the water, and unloaded by gravity
into pockets from which the ore flows into the lake
freighters alongside the trestle. At the ports of
discharge on Lake Erie the ore is lifted from the
holds of the vessels by electric unloading machines,
and the return cargoes of coal are also loaded by
machinery. Thus the loss of time in loading and
unloading is reduced to a minimum. Correspond¬
ing provision for the transfer of grain from the rail¬
roads to the lake vessels and to the Erie canal or
eastern railroads and for the temporary storage of
grain is made by means of elevators at Duluth,
Chicago, and Buffalo.
What Lack of Facilities Means.
At several of the most important ports of the
United States local shippers are handicapped by
lack of convenient access to rail and water trans¬
portation facilities, owing to the haphazard dis¬
tribution of terminals and the lack of coordination
between them. Such disadvantages may more than
offset the advantages of nearness to the place of
production or sale. Indianapolis, Kansas City, Chi¬
cago, and other cities have belt railways connecting
the principal rail terminals. New Orleans has built,
at public expense, a belt-line system to be operated
by public officials. This belt line consists of more
than twenty miles of double track, with switches
at every wharf, every freight depot, and every
important industry, thus eliminating drayage to the
PORT FACILITIES AND RULES. 365
greatest possible extent. Besides switching cars
brought in by various trunk lines, it operates its
own cars, in order to handle less-than-carload ship¬
ments, so as to do away with a great part of the dis¬
advantages commonly attaching to small shipments.
Charges For Use of Wharves.
Where the wharves do not belong to the steamboat
or navigation companies making use of them, wharf¬
age or dockage fees must be paid, unless wharves are
leased for the exclusive use of particular lines.
These wharfage or dockage fees, which are commonly
calculated according to the amount of freight pass¬
ing over the wharves, vary greatly from place to
place. Where the wharves are publicly owned the
usual theoretical policy is not to make them a
source of net revenue, but to fix the wharfage charges
at a point which will yield only enough to pay the
expense of maintenance and interest on the improve¬
ments. Where the wharves are privately owned,
the maximum rates are often prescribed by law or
municipal ordinance, in order to prevent extortion.
Along the Ohio river, especially at the less impor¬
tant landings, it is customary for the wharf master
to act to some extent as local agent for the steamboat
lines, and his "agency charges" are in some cases
combined with or included in the charge for the
use of the wharfboat in such a manner that it is
difficult to distinguish between the two charges.
It is evident that reasonable terminal charges are
of almost as much importance to a port as adequate
366 PORT FACILITIES AND RULES.
and convenient terminal facilities. The impor¬
tance of reasonable wharfage charges is indicated by
the statement of the traffic manager of the Pittsburg
Chamber of Commerce, to the effect that excessive
charges along the Ohio river offset the lower rates
of water transportation as compared with rail trans¬
portation, and in the case of small towns cause
steamboats to pass without landing at all, depriving
those places of the advantage of water competition.
Control of the Water Fronts.
Commercial water fronts which are not publicly
owned are controlled to a very large extent by rail¬
road interests. Perhaps the best known case of
such control is the occupation of the lake front in
Chicago, opposite the business section, by the Illi¬
nois Central railroad. Among other noteworthy
cases of railroad control of important parts of city
water fronts may be mentioned Buffalo, N. Y. ;
Cleveland, Ohio, Norfolk, Ya.; Mobile, Ala., and
Oakland, Cal., while at Pittsburg, St. Louis, Vicks-
burg, New Orleans, and other river points the rail¬
roads occupy long stretches of water front, including
not only the areas needed for their own terminal
facilities, but also miles of river bank which but for
the adverse possession of the railroads might readily
be acquired and utilized by water lines. The dom¬
inant position of the New York, New Haven and
Hartford railroad on Long Island Sound is due
partly to the ownership of water fronts and wharves
at various points on the Sound, notably at Bridge-
PORT FACILITIES AND RULES. 367
port. A somewhat similar situation exists on Chesa¬
peake Bay, where lines controlled by Pennsylvania
railroad interests have a very large number of
wharves and have for some time monopolized the
steamboat traffic, though without rendering very
satisfactory service.
Rules Governing the Ports.
Every port of importance, especially those loca¬
ted on tidewater, has an official set of rules govern¬
ing the loading and unloading of vessels, and various
other matters of similar natures. Thus, Rule XV
of the Maritime Rules of the Port of Philadelphia,
as revised by the Maritime Exchange, provides that
"lay days shall not begin during the continuance
of a strike of employees of the elevator at or from
which vessel has to load or of stevedores or laborers,
which entirely stops charterers from delivering cargo
to the vessel or the vessel from receiving said cargo. "
People unversed in marine language will naturally
ask: "What is a 'lay' day?"
It is the time allowed to the charterer for carrying
out either or both the operations of loading or
unloading and is reckoned by days, called lay days or
lying days. Lay days are reckoned either by run¬
ning days or working days, and it is important to
know the difference. Running days are consecu¬
tive days—that is, days running from one date to
another without any break or exception—while
working days are such as are usually devoted to
work, according to the custom of the place, or during
which it is possible for laborers to work. Some-
368 PORT FACILITIES AND RULES.
times the additional clauses "weather permitting,"
"Sundays excepted," are inserted as a restriction
on running days.
A number of days over and above the lay days is
also fixed in some charters, during Which the vessel
is bound to remain at charterer's disposal for load¬
ing or unloading purposes, against payment of an
indemnity to the owner at a fixed rate per ton and
per day; sometimes, and particularly for steamers,
even per hour. Such an indemnity is known as
"demurrage."
Sometimes the subject of lay days and demurrage
is regulated by the rules of the port. For example,
following are the lay day rules at Boston:
Qrs., 10% more
or less.
Running
days, Sun¬
days and le¬
gal holidays
excepted.
Qrs., 10% more
or less.
Running
days, Sun¬
days and le¬
gal holidays
excepted.
6,500- 8,500
9
16,500-17,000
18
8,500- 9,000
10
17,500-18,000
19
9,500-10,000
11
18,500-19,000
20
10,500-11,000
12
19,500-20,000
21
11,500-12,000
13
20,500-21,000
22
12,500-13,000
14
21,500-22,000
23
13,500-14,000
15
22,500-23,000
24
14,500-15,000
16
23,500-24,000
25
15,500-16,000
17
24,500-25,000
26
CHAPTER XI.
POLICY OF FEDERAL IMPROVEMENT.
One of the main causes of the present unsatis¬
factory condition of inland waterways is that the
Federal government has never had a well-defined,
practical plan of conducting improvements. As
shown in the chapter on "What Constitutes Nav¬
igable Water, " our inland waterways have been large¬
ly, if not almost exclusively, used as the means
of advancing the interests of politicians. Advance¬
ment of commerce, the furnishing of means for better
transportation by water, has been of secondary im¬
portance in the opinion of our national lawmakers,
the men who vote the appropriations for alleged
river and harbor improvements.
That some good work has been done is undeniable,
but a large part of the money expended has been
deliberately wasted. Works have been undertaken
which it was self evident could not be carried to suc¬
cessful completion on the plan outlined. The only
purpose was to expend a large sum of money in the
home district of the congressman who fathered
the appropriation in order that he might gain favor
among his constituents. Two dozen or more con¬
gressmen, each with a pet scheme of this kind, and
working in unison, each in favor of the other's proj-
369
370 POLICY OF FEDERAL IMPROVEMENT.
ect, constitute an almost irresistible force in securing
the passage of appropriation bills.
Enormous Appropriations Made.
Enormous amounts of money have been expended
by the Federal government on the alleged improve¬
ment of our waterways, but these are still, aside from
the great lakes and a few canals, in a condition far
short of what they should be. These appropriations
are nothing like as numerous or extravagant as they
were some years ago, but they are still framed on a
liberal scale. Congress, in 1909-10, set aside $9,435,-
750 for the improvement of rivers and harbors. In
the days when the river-and-harbor bill was being
worked to the limit this would have been looked upon
as a mere bagatelle, a paltry sum.
In 1870 an appropriation of $2,000,000 was made
for the improvement of rivers and harbors, and from
that time such appropriations have continued to be
passed, and usually for increasing amounts. In 1873
the appropriation was $5,286,000; in 1883 it was
$18,743,875; in 1897, $15,944,147; in 1907, $45,125,-
589. In recent years it has been customary to make
large appropriations in alternate years, in the inter¬
vening year appropriating only for contracts under
way.
Until 1865 the appropriation bills were prepared
by the House Committee on Ways and Means
(created in 1795), but in 1865 there was established
a separate Committee on Appropriations, whose
control extended over the river and harbor bill.
POLICY OF FEDERAL IMPROVEMENT. 371
The Committees on Commerce (established in 1795)
and Roads and Canals (established in 1831, changed
to Railways and Canals in 1869) also claimed juris¬
diction over this bill. The Rivers and Harbors
Committee was created in December, 1883.
Lavish Expenditure of Money.
The total appropriations for rivers and harbors to
and including the act of 1910, have been $562,379,-
275, of which 61.3 percent has been appropriated
since 1890. Of the total amount, $210,484,720 has
been for rivers of the Mississippi Valley (above New
Orleans)— $100,000,000 for the Mississippi itself
and $26,000,000 for the Ohio. Most of the remain¬
der has been for harbors, lake channels, and the
lower reaches of tidal streams, but perhaps $40,000,-
000 have been appropriated for river improvements
(apart from the improvement of the lower reaches
for coastwise traffic) on the rivers of the Atlantic,
Gulf, and Pacific coasts. Thus, $5,451,745 have
been appropriated for the Hudson river, $3,585,500
for the Potomac and Anacostia rivers, $2,645,500
for the James river, $7,139,521 for the Alabama
system of rivers, $8,436,301 for the Columbia river
above its mouth, and $957,000 for the Sacramento
and Feather rivers.
Wasteful Nature of the Work.
Immense amounts of money have been expended
on the Missouri and Mississippi rivers, and the larger
part of it absolutely wasted owing to the manner in
372 POLICY OF FEDERAL IMPROVEMENT.
which the work was done. The government engi¬
neers in charge were competent and honest, but
political conditions were such that their efforts in
the way of securing permanent results have been
unavailing.
Both the Missouri and Mississippi are peculiar
streams, subject to many changes of channel, the
Missouri especially so. There are no natural retain¬
ing banks, and the waters wander at will over a wide
expanse of valley, constantly changing their course
as obstructions are encountered. Common sense
would dictate the beginning of improvements at a
point where the stream was reasonably well confined,
and continuing downward, keeping back of the floods.
But this would not suit the politicians, as it would
involve expenditures in localities where they could
get no return in the way of votes, and they have in¬
sisted upon an entirely different course of procedure.
Instead of making the work of improvement a
continuous, permanent one, they agree upon a
program for work at widely scattered points, secur¬
ing an appropriation for each. One of these works
is located, let us say, at Sioux City. A start is made,
and the improvement is only fairly under way,
when along comes a flood, the water cutting a new
channel in the rear of the work, either rendering it
useless, or destroying it completely.
Beginning of Government Aid.
From the beginning of the government under the
constitution, Congress has provided for the erection
and maintenance of light-houses, beacons, and buoys,
POLICY OF FEDERAL IMPROVEMENT. 373
and aids to water navigation of this kind have been
granted without question. But for a long period
there was strong opposition to the improvement of
the waterways themselves by the government, on
the ground that these were under the jurisdiction
of the states. This was the view especially of the
older seaboard states. In the newer states of the
West the demand for the assistance of the national
government rapidly developed, and the growing
influence of these states in the government led to a
modification in the policy of Congress. This change
of policy followed the decision of the Supreme Court
in the case of Gibbons v. Ogden, asserting the author¬
ity of Congress, under the commerce clause of the
constitution, to control navigation over all waters
where interstate and foreign commerce was concerned.
Even after these events had altered the course of
action, the government for some time assisted in the
improvement of waterways mainly by grants to the
states or subscriptions to the stock of private com¬
panies for works of the most general importance.
By degrees, however, improvements have been
directly undertaken to a greater degree by the govern¬
ment; and in the last forty years its activities have
been extended in many directions.
Grants Made to the States.
As early as 1802 the enabling act for the admission
of the state of Ohio provided that 5 percent of the
proceeds from the sale of public lands in the state
should be applied in the construction of roads.
Similar provisions for the grant of 5 percent of the
374 POLICY OF FEDERAL IMPROVEMENT.
proceeds from the sale of public lands have been made
in the subsequent acts for the admission of public-
land states ; and in most of the acts until the admis¬
sion of Nevada in 1864, these grants were available
for the construction of canals or other internal im¬
provements.
Beginning in 1824 grants of land were made to a
number of states (including Indiana, Ohio, Illinois,
Alabama, Wisconsin, and Michigan) to aid in the
construction of canals and river improvements; and
in 1841 the state selection act granted to each state
named and to each new state afterwards admitted
into the Union, 500,000 acres of public land for in¬
ternal improvements. Under these acts over 12,-
000,000 acres of land have been granted to the
states, nearly 4,500,000 acres specifically for the
construction of canals.
Perhaps the most important grant to the states
was the deposit of the surplus funds in 1837. The
rapid increase in the sales of public lands after 1830
—from an average of $3,000,000 a year for the
preceding decade to $25,000,000 in 1836—led to the
accumulation of a large surplus in the treasury.
After several years' discussion an act was passed in
1836 providing for the "deposit" of these surplus
funds with the states, and in 1837 an aggregate of
$37,000,000 was so distributed, before the panic
caused the surplus to disappear. None of this
"deposit" has ever been recalled.
Direct money appropriations for internal im¬
provements began with the Cumberland road act of
1806, and for thirty years acts for the construction of
POLICY OP FEDERAL IMPROVEMENT. 375
roads were passed; but in deference to constitutional
objections the roads were built through the terri¬
tories, or where they passed through a state were
constructed under a compact with the state and by
its consent.
In 1808 Secretary Gallatin submitted to Congress
his famous report recommending an extensive system
of internal canals, including a series of canals along
the coast to provide an inside waterway from Boston
to the Carolinas. No action was taken on this plan.
In 1817 a bill to set apart the bonus and government
dividends of the national bank as a fund for construct¬
ing roads and canals and improving the navigation
of water courses, passed both Houses of Congress,
but it was vetoed by President Madison on consti¬
tutional grounds. In 1823 the first act for harbor
improvement was passed by Congress. A year later
an appropriation of $30,000 was made for the survey
of such roads and canals as the President should
deem of national importance, and $75,000 was ap¬
propriated for improving the navigation of the Ohio
and Mississippi rivers. This was followed in 1825
by a subscription of $300,000 to the stock of the
Chesapeake and Delaware canal, and by similar
subscriptions to the stock of other canal companies
in subsequent years. In 1834 $70,000 was appro¬
priated toward the improvement of the Hudson
river.
Limitations of Transhipment.
It can not be expected that any reasonable expend¬
iture on our inland waterways will wholly remove
376 POLICY OF FEDERAL IMPROVEMENT.
existing difficulties. It would never pay, except in a
few cases, to try so to deepen and improve the rivers
and canals as to permit vessels suited to the ocean
to use them to any appreciable extent. Tranship¬
ment from one water carrier to another will con¬
tinue to be necessary on most long inland, or partly
inland, hauls, even from and to points actually on
waterways. Moreover, the greater part of our traffic
originates in, or is destined to, points not on water¬
ways, so that transhipment from rail to water will
always be necessary on most long hauls which seek
to use the waterways at all.
Since such a large portion of our traffic is long-dis¬
tance traffic which will thus involve transhipment,
the question of the future development of our inland
waterways resolves itself into one of relative operat¬
ing expenses and of investments of capital. There is
little doubt that for a given distance a continuous
water haul in a boat of even moderate size is, and will
continue to be, cheaper in operating costs alone than
a similar continuous rail haul. If the channels are
made deep enough to permit the use of relatively
large boats, this greater cheapness will, in some
cases, be sufficient to cover also the additional cost
of transhipment. The question is, however,
whether besides doing so it will afford enough saving
to cover reasonable interest on the investment in
waterways and water terminals necessary to secure
such measure of efficiency. This is a question which
can only be answered after most exhaustive engineer¬
ing estimates of the cost of constructing waterways
of different depths and most thorough investigations
POLICY OP FEDEKAL IMPKOVEMENT. 377
of operating expenses of different kinds and sizes of
vessels, in comparison with expenses of rail trans¬
portation.
Limit of Railway Capacity Reached.
It should be noted, however, in considering how
far expenditures of capital for improved water routes
are advisable, that in some cases the railroads have
already reached the limit of their carrying capacity
and that they will have to make additional invest¬
ments of capital if they are to meet the demands of
transportation. The relative amount of investment
necessary thus to increase the facilities of the rail¬
roads, as compared with the investment necessary
to afford adequate water routes and terminals,
must therefore be likewise taken into account.
QUESTIONS
FOR
REVIEW.
QUESTIONS FOR REVIEW.
CHAPTER I.
Origin of the Express Business.
1. Who was the originator of the express business
in the United States, and how did he start it?
2. What are the points of difference between the
American express companies and the British parcels
post?
3. What are the parcels vans of the European
railroads, and how are they conducted?
4. What are the terms on which the American
express companies do business with the railroads?
5. Is there any community of interest between
the express companies and the railroads? If so,
what is its nature?
6. How were packages usually transported from
place to place before the express business started?
In what year did it start?
7. Between what cities was the first express service
started? To what other city was it soon extended?
8. How was the business further expanded within
a few years? What part did. it take in the bringing
of immigrants from Europe?
9. When was the American Express Company
formed? When were the Adams and the United
States Express companies started?
381
382 QUESTIONS FOR REVIEW.
10. When was the Wells, Fargo Company
formed, and what were the concerns united under
that name?
11. What were the circumstances that led to the
formation of the Southern Express Company? In
what year was it formed?
12. How many express companies are there now
in the United States, and what is the total mileage
covered by their operations?
13. What six states of the Union are served by
only one express company? What states are served
by six or more?
14. Is there competition between the various
companies for business? If not, how is it avoided?
15. Who provides the cars for the express com¬
panies? How many express companies own their
cars, and what companies are they?
16. What other functions, besides the transpor¬
tation of goods, do the express companies now per¬
form?
17. What is the capital liability of the Adams
Express Company today, and how much of it is rep¬
resented by earnings and investments?
18. What was the income of the same company
in 1911? What its total assets? What its profit
and loss account?
19. What was the total income of all the American
express companies in 1911? How much of this was
paid to the railroads? What were the operating
costs? What the net income?
20. What amount was paid in dividends from
QUESTIONS FOR REVIEW. 383
earnings? What amount from surplus? What was
the total balance carried to profit and loss?
21. What advantage have the money orders
issued by the express companies over ordinary checks
on a bank?
22. What does the business of the express com¬
panies in money orders amount to yearly? What
three companies do the largest business in them?
CHAPTER II.
Contracts With Railroad Companies.
1. State briefly the usual terms of the contracts
between the railroads and express companies.
2. State the terms of an exceptional form of con¬
tract, and explain why it is exceptional.
3. What provision is made in the contract for
exclusive express trains, and under what conditions?
4. Are express messengers and supplies required
by the express companies carried free, or must their
transportation be paid for?
5. How are the express companies enabled to
avail themselves of the services of station agents and
train employees when the latter are railroad servants?
6. In case a railroad employee proves dishonest
while also serving the express company, is the rail¬
road company liable to the express company?
7. What is the percentage paid the railroads by
the express companies for the privilege of doing busi¬
ness? What was the gross sum paid in 1910?
384 QUESTIONS FOR REVIEW.
8. When does computation of the operating reve¬
nues and expenses begin?
9. Are the railroads ever guaranteed a minimum
income from the express companies? How do charges
for express service compare with railroad freight
charges?
10. What services do the express companies ren¬
der to the railroads free of charge?
11. How does the railroad company keep track
of the business being done by the express company,
and* secure correctness in accounting?
12. What is the interest of the public in the per¬
centage form of contract between the express com¬
panies and railroads?
13. How did Wells, Fargo get the contract on the
St. Paul railroad? After obtaining it what did the
express company do?
14. How much more did the Adams Express
Company pay the Colorado Southern railroad for
the express privilege than Wells, Fargo was paying
on their previous contract?
15. How much did this advance in percentages
mean to eight roads alone in 1911?
16. What was the old system of transacting
C. O. D. business? What is the new; how do the
railroads suffer from it, and how do the express com¬
panies profit?
17. What was the total amount of the C. O. D.
checks issued by the express companies in 1910?
18. May an express company operate over the
lines of two competing railroads?
19. What is the commission usually allowed by
QUESTIONS FOR REVIEW. 385
the express companies to railroad agents for their
services?
20. How are the railroad companies able to con¬
trol the rates made by the express companies?
CHAPTER III.
Railroad Control of Express Companies. .
1. What does the history of the organization of
the American express companies on file in Washing¬
ton show?
2. What connection will the controlling share¬
holders of the express companies be found to hold to
the railroads?
3. Mention some of the large interests in the
management of the Adams Express Company.
4. What railroads was Levi C. Weir interested in?
How many railroads is Mr. Steele a director in?
Mention some of the principal railroads George F.
Baker is interested in?
5. How many out of the seven directors of the
Adams Express Company are directly interested in
the management of railroad companies?
6. Mention five of the directors of the American
Express Company?
7. What railroad companies is Mr. Fargo inter¬
ested in? What railroads is Mr. Ledyard a director
in? What railroad interests has Mr. Pratt?
8. How much of the stock of the American Ex-
386 QUESTIONS FOR REVIEW.
press Company is owned by the New York Central
railroad? How much by Charles Pratt & Co.?
9. What railroads control the Globe Express
Company through stock ownership? What family
interest do they represent?
10. What two express companies are known as
Hill enterprises? Over what railroads do they oper¬
ate?
11. When did the Pacific Express Company dis¬
continue business? What railroad companies held
its stock, and in what proportion?
12. What are the controlling interests in the
Wells, Fargo Company express? What railroads
are represented in the directory?
13. What railroad is the exclusive owner of the
Western Express Company?
14. What family interest is in control of the
United States Express Company? Who is its general
counsel, and what great railroad interests does he
represent?
15. What prominent railroad men are identified
with the National and Southern Express companies
as shareholders or directors?
16. What two Canadian express companies do
business in the United States, and by what railroads
are they owned?
17. How much stock did the Wells, Fargo Com¬
pany give as a bonus to the Southern Pacific railroad?
18. How much, in stock and dividends, has the
Wells, Fargo Company paid the Southern Pacific
railroad since 1879?
19. How much do the percentage payments of
QUESTIONS FOR REVIEW. 387
the Wells Fargo Company to the Southern Pacific
railroad now average a year?
CHAPTER IV.
Classification of Traffic.
1. What is the plan on which express companies
classify their traffic? What three factors are the
ruling features?
2. How do express charges on the weight of a
package vary from the rule customary on the rail¬
roads?
3. Do express companies classify their traffic by
groups, as do the railroads, or have they another
system? If so, describe it.
4. What are the considerations which account for
the variations in express charges?
5. What has been the tendency of the express
companies in recent years in their charges on empties?
6. What percent of the recent changes in classi¬
fication have resulted in a decrease of express charges?
7. How often is the official express classification
issued? How is it filed with the Interstate Com¬
merce Commission?
8. What percentage of shipments by express
consists of packages weighing less than 100 pounds?
9. In what territory do the express companies
operate most largely, and what percentage of their
total mileage is embraced in it?
388 QUESTIONS FOR REVIEW.
10. How do the express companies compute their
charges on shipments of gold coin or currency?
11. What has been the decrease in the charges of
transporting money by express in the last sixteen
years?
12. How do the express classifications compare
with the freight classifications of the railroads?
13. What has the Interstate Commerce Commis¬
sion suggested in the way of a simplification of ex¬
press classifications?
14. Is there any discrimination between the pri¬
vate individual and the large shipper on express
charges?
CHAPTER V.
Computation of Express Rates.
1. What are the three heads under which the
computation of express charges is considered ?
2. What are the two elements involved in the
classification of express matter?
3. What effect, if any, does competition among
the express companies have upon rates?
4. What is meant by "money" in express classifi¬
cation? What are the subclassifications of "mer¬
chandise?"
5. What is the basis of merchandise rates? When
a shipment exceeds $50 in value how are the addi¬
tional charges made?
QUESTIONS FOR REVIEW. 389
6. What is comprised in " general special" freight?
How are the charges on such shipments computed?
7. What articles are comprised in "section A"
shipments, and what is the rule as to charges on such
matter?
8. What articles are comprised in "section D"
shipments, and what is the rule on such shipments?
9. What articles take "section E" rates? What
is the limit of value in this section and the rule as
to charges?
10. What are "graduated charges" and how are
they applied to find the rate on packages?
11. Explain the difference between a "single
graduate" and a "double graduate"?
12. What two express companies use the single
graduate only?
13. Why is the charge for transmission of $1,000
in money less than for a package valued at $1,000?
14. What are the rates for the transportation of
daily newspapers? If wagon service is rendered how
does this affect the rates?
15. How many states are comprised in "Terri¬
torial Group No. 2?" Why are the rates on news¬
papers, magazines, etc., less than on the same weight
of merchandise?
16. Give an illustration of the use of the double
graduate in the case of a shipment from Syracuse,
N. Y. to Avon, N.Y.?
17. What would be the effect of the three graduate
rule on a shipment from Litchfield, Minn, to Tellu-
ride, Col.?
18. What difference, if any, would be made on
390 QUESTIONS FOR REVIEW.
the charges on such a shipment if it was "prepaid"
or "collect?"
CHAPTER VI.
Profits of Express Business.
1. When was the Northern Express Company
organized and what was its capital?
2. Was any money paid in for this capital stock?
What disposition was made of the stock?
3. What were the net earnings in 1911? In
1910? What was the profit and loss account in 1910?
4. What did the Northern Express Company
pay the Northern Pacific railroad in 1910? What
was its total income?
5. What did the Northern Express Company pay
as a dividend in 1911? From where was the money
derived?
6. What are the main expenses of the express
business after the railways have been paid?
7. What were the gross receipts of the Adams
Express Company in 1911? What amount was paid
to the railroads?
8. What amount did the Adams pay in dividends
in 1911? What was the total undivided surplus
of the company?
9. What is the number of shares in the Adams
Express Company? What is its bonded debt, and
how was it incurred? What were the actual earnings
in 1911?
QUESTIONS FOR REVIEW. 391
10. What were the gross operating receipts of
the American Express Company in 1911? What
did it pay for express privileges?
11. What were its net profits for the year? What
amount was paid in dividends? What is the amount
of its surplus fund?
12. What is the nominal capital of the American
Express Company? What amount of cash was paid
in on this capital? What were the earnings in 1911
equivalent to?
13. What were the earnings of the Globe Express
Company in 1910? What amount was paid in divi¬
dends?
14. What is the capital of the Globe and how
much actual cash does it represent? What percent
does the dividend paid on this cash represent?
15. What were the gross receipts of the Great
Northern Express Company in 1910? What was
paid for express privileges?
16. What was the total net income for the year?
What amount was paid in dividends? What is the
total surplus?
17. What is the capitalization of the Great
Northern Express Company, and how much actual
cash does this represent?
18. What percent does the dividend paid represent
on the capital? What on the actual cash paid in?
19. What is the nominal capital of the National
Express Company, and how much actual cash does
it represent?
20. What were the gross receipts of the Pacific Ex¬
press Company in 1910, and what was its net income?
392 QUESTIONS FOR REVIEW.
21. What was the capital of the Pacific, and how
much actual cash did it represent?
22. What disposition was made of this stock?
What percentage on this stock were the 1910 earn¬
ings equivalent to?
23. What were the gross receipts of the Southern
Express Company in 1910? What the total net
income?
24. How much did the Southern Express Company
pay in dividends, and what is the amount of its
surplus fund?
25. Assuming that the capital of the company is
$5,000,000, what percent did the net income in 1910
represent?
26. What amount was distributed in dividends
in 1911, and what percentage on the shares did this
represent?
27. What were the operating receipts of the
United States Express Company in 1910 and what
was its net income?
28. What amount was paid in dividends, and
what is the amount of its surplus fund?
29. What are the number of "interests" in the
United States Express Company? What amount
do they represent?
30. What were the operating receipts of Wells,
Fargo Company in 1910, and what was its net in¬
come?
31. What amount was paid in dividends from
earnings? What from surplus? What balance was
left in the surplus fund?
32. What amount of stock is outstanding, and
QUESTIONS FOR REVIEW. 393
how much of it is fully paid? What percent were
the net earnings in 1910 equivalent to?
33. What was the percent of dividends in 1911,
and what amount was left in the surplus fund?
34. What were the net earnings of the Western
Express Company in 1910? What amount is invested
in the business, and what percent was the dividend
equivalent to?
35. What was the amount of the undivided sur¬
plus of all the express companies in 1910, and what
was the increase over that of the preceding year?
CHAPTER VII.
Method of Keeping Accounts.
1. In what form does the Interstate Commerce
Commission require express companies to keep their
accounts?
2. State briefly the defects in the accounting
system of the companies to which the Interstate
Commerce Commission took exception.
3. How long a time was allowed by the Interstate
Commerce Commission for the express companies
to bring their accounts to the required standard?
4. Describe the old practice of the companies in
relation to charging expenditures on capital account
to operating expenses.
5. What change was ordered by the Commission
394 QUESTIONS FOR REVIEW.
in the matter of charging the amounts paid to the
railroad companies for express privileges?
6. What was the old custom of some companies
in the matter of charging rent on buildings owned
by themselves to expenses, and why was this practice
forbidden?
7. What is the chief service rendered by express
companies?
8. Why should the cost of transportation be
largely eliminated from the operating expenses of an
express company?
9. What was the unit of service selected by the
Interstate Commerce Commission as best suited for
a statistical statement of the express companies'
business?
10. How was express freight classified? What
consignments were included in "extraordinary ship¬
ments?"
11. Why were the months of April, August and
December selected as representative of the traffic
movement throughout the year?
12. How many distinct accounts were ordered by
the Interstate Commerce Commission under the
general heading of "operating revenues?"
13. What are the four divisions prescribed by
the Interstate Commerce Commission under which
operating expenses are grouped?
14. How many subdivisions are there of these
four main divisions?
15. What are the two largest items of expendi¬
ture charged under the head of "Operating Ex¬
penses?"
QUESTIONS FOR REVIEW. 395
16. What must the general balance sheet show?
17. What must the record of transactions in
financial paper show? How many items are there
under this head?
18. Why is each company required by the Com¬
mission to keep a detailed account of its expendi¬
tures for realty and equipment? What was the old
custom in this respect?
19. What is the nature of the inventory required?
State five of its items.
CHAPTER VIII.
Division of Territory by Roads.
1. In how many states of the Union is there only
one express company in operation? Name the states.
2. How many express companies operate in the
territories of Hawaii and Alaska?
3. In what states has the Wells, Fargo Company a
monopoly, and over how many miles of line does it
operate in these states?
4. In what states has the Southern Express Com¬
pany a monopoly, and over how many miles of line
in these states does it operate?
5. In what state has the Adams Express Company
a monopoly, and over how many miles of line in the
state does it operate?
6. The tendency of express companies being to¬
ward expansion, what has hindered the larger com¬
panies from doing business in every state of the
Union?
396 QUESTIONS FOE REVIEW.
7. Has there ever been a division of territory
among the companies in which the rights of one com¬
pany to certain territory have been recognized as
paramount?
8. In what particular territory is the Wells, Fargo
Company paramount?
9. In how many states does it operate and over
how many miles of railroad? In what section of the
Union is it not represented?
10. What is the territory in which the Adams
and American Express Companies are supposed to
be preeminent?
11. How many states does the Adams Express
Company operate in? In how many does the Amer¬
ican conduct operations?
12. What is the total mileage of the Adams Ex¬
press Company, and in which state has it the greatest
mileage?
13. What is the total mileage of the American
Express Company, and in which state has it the great¬
est mileage?
14. In what section does the Southern Express
Company operate, over how many miles of road, and
in what state is its greatest mileage?
15. Where is the main territory of the United
States Express Company? In how many states
does it operate? What is its total mileage? Who
has the control?
16. What is the field of operations of the Great
Northern Express Company? Over how many miles
and in how many states does it operate?
17. Where was the principal field of operations of
QUESTIONS FOR REVIEW. 397
the Pacific Express Company? In what state was
its greatest mileage?
18. In what states does the Globe Express Com¬
pany operate? What is its total mileage?
19. What is the field of operations of the National
Express Company, and in what state is its greatest
mileage?
20. What Canadian express companies do busi¬
ness in the United States, and what is their mileage
in this country?
21. What is the field of operations of the Western
Express Company? Over how many miles does it
operate?
22. What is the steamboat, electric road and stage
coach mileage of all the express companies?
23. How many steam roads does the Adams Ex¬
press Company operate over? How many the Amer¬
ican? The Southern? Wells, Fargo?
24. What was the understanding in the earlier
days with the Wells, Fargo Company in regard to
territory?
CHAPTER IX.
Money Orders and C. O. D. Business.
1. What was the total of financial paper issued
by the express companies of the United States in
1910?
2. What is grouped by the Interstate Commerce
398 QUESTIONS FOR REVIEW.
Commission under the head of "financial paper?"
How many pieces of paper were issued?
3. What two classes of paper furnished the larger
portion of this total, and how much of each was
issued?
4. What particular express company led all the
others in this class of business, and what did its total
business amount to?
5. What was the average amount represented by
each piece of paper issued by this particular company?
6. What class of financial paper leads all the
others in the operations of the express companies?
What comes second?
7. What express company is second in the issue
of financial paper? How much did it issue? What
company is third? What is fourth?
8. What classes of financial paper does the Adams
Express Company issue, and what was its total
amount for the year?
9. What is the advantage of an express money
order over the ordinary bank check?
10. Give an illustration of how many orders
frequently take the place of a savings bank?
11. How does the express money order rank in
the estimation of foreigners? What happened in the
panic of 1907?
12. What is the nature of the C. 0. D.? In what
way is it a valuable auxiliary to the business interests
of the country?
13. When an express company collects the money
on a C. 0. D. how does it return the money to the
creditor? What was the old way?
QUESTIONS FOR REVIEW. 399
14. Why is the C. 0. D. business an especially
remunerative one to the express companies?
15. What was the revenue of the American Ex¬
press Company in 1910 from its financial paper busi¬
ness? What percentage was this on the business
transacted?
16. How many pieces of paper were issued to do
this business, and what was the average charge per
piece?
17. What was the average size of the money orders
issued by the American Express Company in 1910,
and what the average charge per order?
18. What was the average size of the C. 0. D.
checks, and what the average revenue per check?
19. What was the revenue of the company from
"miscellaneous" financial paper, and what was the
total of such paper issued?
20. When were traveler's checks first issued?
Give a description of their nature and convenience
to travelers.
CHAPTER X.
Block System of Stating Rates.
1. How many express stations are there in the
United States?
2. To state the rate from each one of these sta¬
tions to each one of the others, how many rates would
be necessary?
3. How many blocks does the Interstate Com-
400 QUESTIONS FOR REVIEW.
merce Commission propose to divide the country
into, and how are these blocks arranged?
4. How are these blocks numbered, so as to ex¬
pedite and facilitate the work of the local express
agents?
5. By the adoption of the block system how much
of a reduction will be made in the number of rates?
6. How will the adoption of the block system
simplify the rate question? Give an illustration in
the case of a shipment from New York to San Fran¬
cisco.
7. How is it proposed to subdivide these blocks
so as to find the rates between points within a block?
8. How are the rates on shipments to be found?
Give an illustration of the working of Scale No. 1.
9. Under Scale No. 294 what are the graduations
in charge for every additional pound in weight?
10. In the making of rates is there any provision
made for terminal expenses? If so, give an illustra¬
tion?
11. How shall the shipper of a package from
Square A, Block 532, to Square A, Block 431, find
the rate?
CHAPTER XI.
Fruitful Causes of Complaint.
1. What are some of the abuses incident to the
express business complained of by shippers?
QUESTIONS FOR REVIEW. 401
2. What was the position taken by the express
companies relative to these matters in the hearing
before the Interstate Commerce Commission?
3. Why have the efforts of individual carriers in
the past to check these abuses proved failures?
4. Why is there reason to doubt the contention
of managing officials that these abuses are the result
of carelessness?
5. If a package is stamped "prepaid," is that a
sufficient guide to the wagon driver? If not, what is
his guide?
6. What is the rule formulated by the Interstate
Commerce Commission regarding the delivery of
packages?
7. How does the Interstate Commerce Commis¬
sion propose to eliminate the overcharges and under¬
charges now so common?
8. What further precaution against erroneous
charges does the Interstate Commerce Commission
suggest?
9. For the purpose of avoiding circuitous routing
of shipments what does the Commission suggest
that the express companies should do?
10. In the establishing of express through routes
what plan did the Commission outline for the express
companies?
11. If the consignor of a package designates the
through route he wishes his shipment to take, must
the carrier follow his directions?
12. What are the arbitrary free-delivery limits of
the express companies, and why do they cause much
complaint?
402 QUESTIONS FOR REVIEW.
13. What is the plan ordered by the Commission
for the purposes of rectifying this abuse?
14. What are the provisions in the present form
of express receipt which make it objectionable to
shippers?
15. What action was taken by the Commission
relative to the form of receipt?
16. What has been the general attitude of the
express companies toward the settlement of claims?
17. What did the Commission find, on investi¬
gation, to be the policy of one of the companies
towards claims?
18. What reform in the matter of claims did the
Commission suggest to the companies?
CHAPTER XII.
Duties and Salaries of Employees.
1. In what respect do the railroad employee and
the express employee bear a close resemblance to
each other?
2. What are the qualifications required of a man
in the express business?
3. What is the greatest express company in the
United States? How does its business compare with
that of the other companies?
4. Who furnishes the express company with the
larger part of its business? How is this business
obtained?
QUESTIONS FOE REVIEW. 403
5. What essentials are drilled into every employee
of the express companies?
6. After packages have been collected and brought
to the express office, what is the first thing to be done?
7. Why is the statement of value important?
Why do express companies charge a higher rate when
the value exceeds $50?
8. What information is contained on the way¬
bill? How many packages are entered on a way-bill?
9. Way-bills are made out in duplicate. What
becomes of the original and duplicate?
10. When the packages are taken from the office
to the train, who receives them and what does he do
with them?
11. When the train messenger delivers packages
to the local agents what does he receive to show the
delivery?
12. What is the first duty of the local agent after
having received packages from the train messenger?
13. Describe the method of delivery and the man¬
ner in which the agent keeps a check on the work of
the driver?
14. When the consignee refuses to receive a pack¬
age, what must the agent do?
15. What is the nature of the agent's daily report
to headquarters and how is it transmitted?
16. How often must he turn in his collections?
17. Does the prepayment of a package to its des¬
tination obligate the express companies to deliver it?
18. How old must an applicant for a position with
the American Express Company be to receive con¬
sideration?
404 QUESTIONS FOR REVIEW.
19. What is the nature of the examination he
must undergo, and the references he must furnish?
20. Why does the company employ only men
when there are many positions that could be filled
by women much more cheaply?
21. What employees are required to furnish bonds,
what is the usual bond for a beginner, how does he
obtain it, and what is the cost?
22. What is the salary usually paid to a beginner
in the American Express Company? Is there any
difference in salary in city and country offices?
23. Where does the beginner in the express busi¬
ness get his best training? Why is this so?
24. Why do the heads of express companies
prefer the country boy to the city boy?
25. What are the various positions in the express
business and how do the salaries range?
26. To whom should the applicant for an express
position apply? What will be the first work of the
new employee?
27. What is the basis on which promotions in the
express service are made?
CHAPTER XIII.
Rules Governing Express Service.
1. What are shippers required to state for entry
on the express receipt?
QUESTIONS FOE REVIEW. 405
2. If shippers refuse to state value when asked
what must the agent enter on the receipt?
3. Under what conditions must shipments not
be accepted when tendered?
4. Mention some of the persons to whom express
packages must always be sent "charges prepaid?"
5. Where two or more packages are forwarded
at the same time by a shipper to the same consignee,
what is the rule as to charges?
6. If the shipper of a package should notify the
express company to return it by mail, what is the
course of the express company?
lt What articles must not be accepted when
tendered for shipment?
8. Where is free collection or delivery allowed
under the classification? What agreement about
delivery is prohibited?
9. When the valuation of a shipment exceeds $50,
how are the charges figured for the excess value?
10. What are the rules governing C. 0. D. ship¬
ments and the return of the money?
11. What are the rules in relation to examination
or partial delivery of C. 0. D. shipments?
CHAPTER XIV.
Changes Ordered by Commission.
1. What was the view of the Interstate Commerce
Commission regarding the practices and rates of ex¬
press companies in Opinion No. 1967?
406 QUESTIONS FOR REVIEW.
2. What express companies were named in the
charges filed before the Commission, and what com¬
panies were represented at the hearing?
3. How many plaintiffs were represented at the
trial? Give the names of five?
4. How many attorneys took part in the presen¬
tation of evidence, and how long did the hearing
take?
5. How did the Commission decide that express
rates should be stated?
6. What did the Commission order on the subject
of rebates concealed in the tariffs?
7. What was the Commission's order on a new
classification of traffic, and oh what must the first-
class rate be based?
8. What did the Commission conclude would be
a fair rate for the traffic now moving as "general
specials?"
9. What did the Commission order on the matter
of through routes?
10. What was the label system ordered by the
Commission to prevent overcharges and double col¬
lections?
11. How did the Commission characterize the
express companies' scale of graduated charges?
12. If the rate between two points is $2.50 per
100 pounds, what will be the charge on a 10-pound
package by the graduated scale?
13. How do the English rates for the carriage of
ten and twenty pound packages compare with those
of American express companies?
14. What is the weight of the average shipment
QUESTIONS FOR REVIEW. 407
by express, and of what does one-half of the business
consist?
15. What amount of revenue would an increase
of 5 cents on each package bring to the express com¬
panies in the course of a year?
16. How many grand subdivisions did the Com¬
mission divide the country into as a basis for the
formation of rates? How are these subdivisions
designated?
WATER TRANSPORTATION.
CHAPTER I.
Freight Traffic by Water.
1. What effect do water routes have on the freight
rates of American railroads?
2. How many water routes are there which affect
American transcontinental railroad rates? What are
they?
3. Why can transportation by water be conducted
more cheaply than by the railroads?
4. What is one of the vital considerations which
induces shippers to favor the railroads rather than
water routes?
5. What method of transportation is favored by
the Chicago packers? Why?
6. What other consideration in transportation
enables the railroads to hold their own as against the
water lines?
408 QUESTIONS FOR REVIEW.
7. Where is to be found the greatest system of
inland water transportation in the United States?
8. What are the facilities of some of the lake ves¬
sels for carrying freight, other than the bulkier com¬
modities?-
9. What are the two greatest commodities car¬
ried on the great lakes? What is the direction of
their movement?
10. What conspicuous illustration of the cheap¬
ness of water transportation is furnished by the com¬
merce of the great lakes?
11. What great coal fields are shut out of a great
portion of the Minnesota and Wisconsin markets
because of cheap water transportation?
12. In the movement of general freight on the
great lakes, what particular interest controls the
movement?
13. What saving, if any, will be effected by a
shipment of flour from Minneapolis to New York
lake-and-rail over a shipment all rail?
14. Why is it possible to ship a commodity like
grain by water at a great saving over the cost of rail
transportation?
15. What was the total tonnage of the freight
movement on the great lakes in 1911? How many
tons of iron ore? Of coal?
16. Was this great traffic conducted to the detri¬
ment of the railroads? If not, how did the railroads
derive any benefit from it?
17. How do the canals at the Soo rank as trans¬
portation routes? How many vessels passed through
them in 1910? What was the vessel tonnage?
QUESTIONS FOR REVIEW. 409
18. What was the tonnage of the freight carried
through the Soo canals? What was the cost of mov¬
ing per ton mile?
19. What was the freight tonnage through the
Erie Canal in 1911? How does this compare with
the tonnage of 1880?
20. What was the total tonnage of the New York
state canals in 1911, and how does this compare with
the tonnage of 1880?
21. What commodity furnishes the largest ton¬
nage of freight on the Ohio and Mississippi rivers?
22. What is the nature of the water traffic on these
streams? Does the freight movement show any
signs of increase?
23. Which are the principal ports of the Pacific
coast? What was the vessel tonnage of San Fran¬
cisco in 1911?
24. What is the nature of the freight seeking
water transportation? Name five of the principal
articles?
25. With what countries is the principal water
trade of Portland? Of Seattle? What was the ves¬
sel tonnage of Seattle in 1911?
CHAPTER II.
Established Routes and Distances.
1. Why does the bulk of the freight traffic between
the east and west move by rail rather than water?
2. What water routes, or water and land routes
combined, are available for this traffic?
410 QUESTIONS FOR REVIEW.
3. What defines the routes of trade and travel in
all countries?
4. Why do vessels after leaving Cape Horn for
Yokohama usually stop at the Hawaiian Islands?
5. Are there established lines of trade on the
oceans the same as on the land? Are they followed
closely by vessels?
6. What influences must the master of a sailing
vessel reckon with to which the steamship is in¬
different?
7. What effect will the opening of the Panama
canal have on many of the existing trade routes?
8. Which of the oceans has the greatest number of
trade routes? What are the two principal objective
points on this ocean?
9. Why does a vessel sailing from New York to
Gibraltar have to diverge from a straight course?
10. Why is the distance between Quebec and
Liverpool so much less than the distance between
New York and Liverpool?
11. What is the distance from York Factory to
Liverpool? What is the position of York Factory
as compared with Minneapolis, Minn.?
12. What land will be sighted by a vessel sailing
the established route between New York and the
Cape of Good Hope?
13. Why do vessels sailing between the Atlantic
and Pacific usually pass through the Straits -of
Magellan instead of rounding Cape Horn?
14. How much of the distance between New York
and Valparaiso will be saved by the opening of the
Panama canal?
QUESTIONS FOR REVIEW. 411
15. How does New Orleans rank as a shipping
center? With what particular part of the world
does it maintain established routes?
16. Where are the lengthiest established routes
of American commerce to be found in the Pacific?
17. WThat is the longest route from Panama?
What is its mileage?
18. What is the longest established route entirely
within the Pacific?
19. Name three of the established routes of com¬
merce that radiate from Honolulu?
CHAPTER III.
Defects of Present System.
1. What has been the tendency of American
water transportation, aside from the great lakes and
coastwise commerce?
2. What was the tonnage of American vessels
engaged in the foreign trade in 1909? What was the
decrease from the figures of 1883?
3. What was the tonnage of vessels engaged in
coastwise trade? What was the percentage of in¬
crease from 1883?
4. What was the tonnage on the great lakes in
1889? What was it in 1906? What was the per¬
centage of increase?
5. What was the total tonnage of all American
shipping according to the census report of 1906?
412 QUESTIONS FOE REVIEW.
6. What is the condition of water transportation
in Europe? What has been expended by the various
nations on their waterways?
7. How has the traffic of the European water¬
ways increased as compared with the railroad traffic?
8. Mention two reasons why European water¬
ways should prosper while those of the United States
decline?
9. Describe the peculiar family conditions that
are connected with waterway transportation in
Europe.
10. Why is there not the same incentive for cap¬
ital and individuals in water transportation in Amer¬
ica that there is in Europe?
11. How do the established currents of trade in
America run? What is the one waterway that follows
the same direction?
12. With reference to what method of transpor¬
tation have the industries of the United States been
built?
13. What sections of the United States have the
greatest number of natural navigable channels?
14. What is the nature of the commerce upon
them, and what seems to be their greatest line of
usefulness?
15. What are the names of the navigable rivers
of the Pacific coast? What Pacific coast waterway
carries the greatest commerce?
16. What is one of the great obstacles to the de¬
velopment of commerce on United States waterways?
17. What is the nature of the business to which
the common carrier by water is now restricted?
QUESTIONS FOR REVIEW. 413
18. Where is a good illustration of this restriction
found on the Pacific coast? State the conditions
there?
19. What is the special type of vessels that has
enabled the commerce of the great lakes to grow
and flourish?
20. What analogy is there between the commerce
of the great lakes and that of the oceans?
21. Why is it not possible to conduct transporta¬
tion over American waterways under the same con¬
ditions as in Europe?
22. What is the difference between water trans¬
portation on the great lakes and the rivers as far as
the railroads are concerned?
23. What effectual method of checking competi¬
tion by the rivers have the railroads at their com¬
mand?
24. What two reasons may be given for the failure
of the European railroads to kill off waterway com¬
petition?
CHAPTER IY.
Shipping Contracts and Documents.
1. What kind of vessels are "chartered," for
marine transportation?
2. What does the "charter" of a vessel mean?
Who furnishes the crew and navigates the boat?
3. What is the basis on which the owners of the
vessel are paid?
414 QUESTIONS FOR REVIEW.
4. What kinds of vessels are known as "tramps? "
When do they cease to be tramps?
5. What is a "vessel broker?" What informa¬
tion must he have, and how is he paid for his services?
6. Is there a fixed rate for charters, or is the rate
a fluctuating one?
7. What are the principal freights moved on in¬
land waters by chartered vessels?
8. How do the charter rates compare with the
cost of rail transportation?
9. Who pays the cost of insuring a chartered
vessel, the owner, or the charter party?
10. Briefly state the terms of a time charter on
the great lakes.
11. Briefly state the terms of a time charter on the
Pacific.
12. What is the nature of a vessel's manifest?
What is the nature of a bill of lading?
CHAPTER V.
Official Regulation of Liability.
1. What explosive is forbidden to be carried on a
vessel engaged in the carrying of passengers by United
States laws?
2. If the shipper of valuable articles on a vessel
fails to notify the master of their true character, are
the owners liable for them?
3. In case of loss or damage to freight by fire on
a vessel, are the owners of the vessel liable?
QUESTIONS FOR REVIEW. 415
4. What is the limit to the individual liability
of a ship owner?
5. When is the charterer of a vessel deemed to
be the owner?
6. Can the owner of a vessel be relieved from
liability by the insertion of an agreement to that
effect in the bill of lading?
7. Is it obligatory for vessel owners to furnish
a bill of lading to shippers when demanded?
8. What penalty is provided for failure to issue
a bill of lading?
9. What was the effect of the flag clause in bills
of lading?
10. What is the nature of the Harter Act, and
when was it passed?
CHAPTER VI.
What Constitutes Navigable Water?
1. How is the term "navigable water" defined
by the United States courts?
2. How is the term "navigable water" defined in
England?
3. Does "navigable water" in the United States
necessarily mean the movement of traffic-carrying
boats?
4. Does the term "navigable water" imply facili¬
ties for commercial navigation?
5. What are the most important bodies of navi-
416 QUESTIONS FOR REVIEW.
gable water within the boundaries of the United
States?
6. What effect do these navigable bodies of water
exercise on railroad rates?
7. Why should improvements on these navigable
waters be encouraged?
8. When was the Erie canal constructed? What
was its length, original width, and depth?
9. What work has recently been undertaken on
the canal? What is the estimated total cost of this
work?
10. While the Erie canal is a purely local work,
how does it prove of great benefit to the west?
11. What bodies of water are connected by the
Sault Ste. Marie canal? What is its length? What
was the original cost?
12. Where is the Portage Lake canal? What was
the purpose of its construction? What amount of
traffic passed through it in 1911?
13. What was the tonnage moving on the great
lakes in January, 1912?
CHAPTER VII.
Tonnage and Classification of Vessels.
1. Why is exact tonnage measurement of vital
importance in marine circles?
2. What does the word "tonnage" denote when
applied to a vessel? How is tonnage ascertained?
QUESTIONS FOB REVIEW. 417
3. How many cubic feet will a ton of fresh water
eontain?
4. How is the cargo-carrying capacity of a vessel
ascertained?
5. How many cubic feet of space does it take
to represent a cargo-carrying capacity of one ton?
6. What is the value of proper registry and classi¬
fication for the purpose of insurance?
7. What are the three classes into which ships
are divided by the British system of classification?
8. What is the British publication in which the
classification of British and foreign shipping is given?
9. What are the three registers in use in the
United States?
10. What is the American Lloyds and by whom
is it published?
11. What is the highest and lowest character
assigned to a ship in the "Record?" How is it ex¬
pressed?
12. When was the American Bureau of Shipping
organized, and what are its objects?
13. Before a vessel is classed or rated by the
Bureau, what must be done?
14. What is the Great Lakes Register, what is
its purpose, and where is its main office?
15. What other registers relating to American
shipping are there published?
16. What is the object of requiring vessels en¬
gaged in the foreign or coastwise trade to obtain
Federal registry?
17. What kind of vessels are excluded from the
coastwise trade of the United States?
418 QUESTIONS FOR REVIEW.
18. What is the penalty for transporting passen¬
gers from one port of the United States to another
in foreign vessels?
CHAPTER VIII.
Types of Vessels in Service.
1. What are the various forms of classification
for vessels?
2. What are " regular-line boats? " What is their
method of propulsion and what kinds of freight do
they carry?
3. What are the dimension of the steamship
Creole of the Southern Pacific Company's Atlantic
fleet? What is her cargo capacity?
4. What are the dimensions of regular freight and
passenger steamers on the great lakes? How are
they propelled?®• " ; » f
5. What are the dimensions of some of the great
lakes freighters? What cargoes do they usually
carry?
6. What is the peculiar character of the con¬
struction of the great lakes freighters?
7. What has become of the old "whaleback"
fleet once on the great lakes? Why is this type of
vessel disappearing?
8. What class of vessels is gradually displacing
the old-style steam colliers in the Atlantic coast coal-
carrying trade?
9. What are the characteristics of the new type
QUESTIONS FOR REVIEW. 419
of steam colliers now being placed in the Atlantic
coast coal trade?
10. What is the type of bulk carrier built for the
Brunswick Steamship company for use in Atlantic
coast trade?
11. What special features are connected with the
vessels of the United Fruit company in the banana
trade?
12. What are the characteristics of the steam
schooners engaged in the Pacific coast lumber trade?
13. What is the nature of the " screw-in-tunnel"
steamer now being built for river trade?
CHAPTER IX.
Marine Insurance—Its Features.
1. What difference is there in the liability for
loss or damage to goods between carriers by land and
carriers by water?
2. What is the form of policy generally used by
English insurers?
3. How many different forms of marine insurance
are there?
4. What is the difference between an "open"
policy and a "valued" one?
5. What is the difference between a "floating"
and a "named" policy? What is the object of the
floating policy?
6. What is the difference between a "voyage"
and a "time" policy?
420
QUESTIONS FOR REVIEW
7. What are the expressed or implied warranties
in marine insurance policies?
8. What do most American companies omit in
their insurance policies on vessels?
9. What is included in the term "perils of the
sea?"
10. When is the marine underwriter responsible
for losses caused by fire?
11. How has "jettison" been defined? What is
comprehended in the term "barratry?"
12. How many forms of losses is the insured
protected against?
13. What are "constructive total losses?" What
is the nature of a "notice of abandonment?"
14. What is the object of the "collision clause"
in marine policies, and when did it come into general
use?
15. What is the custom in regard to cargo in¬
surance? What is the custom on certain Atlantic
coast lines?
16. When can barges engaged in the Atlantic
coastwise trade obtain no insurance?
CHAPTER X.
Port Facilities and Rules.
1. Why are terminal facilities the key to any
transportation system?
2. Why are terminals of even greater importance
to water lines than to the railroads?
QUESTIONS FOR REVIEW. 421
3. Why are good harbors not enough for modern
vessels? What is meant by adequate port terminal
facilities?
4. What effect do the terminal facilities exert in
determining the prosperity of different ports?
5. How do the terminal facilities at American
seaports differ from those of European seaports?
6. What is the nature of the terminal facilities
along the Ohio and Mississippi rivers?
7. How is fruit unloaded from vessels at New
Orleans? How is coal loaded on vessels on the Ohio
river?
8. How is coal loaded on steamships at New
Orleans? How is grain transferred to vessels at
New York?
9. What are the arrangements for handling the
iron-ore traffic on the great lakes and connecting
railroads?
10. What has been done by New Orleans to
cheapen and facilitate the handling of freight be¬
tween the railroads and vessels?
11. What is the custom in fixing the wharfage
charges in the case of publicly owned wharves? In
the case of privately owned wharves?
12. Why are reasonable terminal charges of al¬
most as much importance as convenient terminal
facilities?
13. In what important cities do the railroads
control to a great extent the commercial water
fronts?
14. To what is the dominant position of the New
422 QUESTIONS FOR REVIEW.
York, New Haven & Hartford railroad on Long
Island Sound partly due?
15. What is meant by the term "lay day" in
the charter of a vessel? What is the difference
between "running" days and "working" days?
CHAPTER XI.
Policy of Federal Improvement.
1. What has been lacking in the Federal govern¬
ment's work of waterway improvements?
2. What has been the principal motive back of
such work as has been conducted?
3. What is the condition of the waterways today
after the expenditure of enormous sums upon them?
4. How do the appropriations for improvements
at the present time compare with those of some
years ago?
5. What was the amount appropriated by Con¬
gress for improvements in 1909-10?
6. What was the appropriation for river and
harbor improvements in 1870? What was the ap¬
propriation in 1907?
7. What is the total amount of the appropria¬
tions for rivers and harbors up to 1910?
8. How much has been expended on the improve¬
ment of the Mississippi river and rivers of the Mis¬
sissippi Valley?
9. How much has been expended on the improve-
QUESTIONS FOR REVIEW. 423
ment of the Hudson river? How much on the Colum¬
bia river?
10. How may the expenditures on the Mississippi
and Misouri rivers be characterized?
11. What have been the defects in the improve¬
ment work, and what influence has hampered the
work of the government engineers?
12. On what ground was the improvement of
rivers by the Federal government for a long time
opposed?
13. What was the decision of the Supreme Court
in the case of Gibbons vs. Ogden?
14. How many acres of land have been granted
by the Federal government to the states for the
construction of canals?
15. What was the amount of the deposit of sur¬
plus funds with the states in 1837? From what
source were these funds derived?
16. What was the nature of the work proposed
by Secretary Gallatin in his report to Congress in
1808?
17. When was the first Act for harbor improve¬
ment passed by Congress?
18. Why are the waterways helpless in competing
for long-distance traffic with the railroads?
19. Would any reasonable expenditure on inland
waterways remove this handicap? If not, why?
20. What is the present condition of some of the
railroads in regard to their carrying capacity?
INDEX.
INDEX.
Block System of Stating
Rates, 155.
new plan proposed, 155.
present system confusing, 156.
too many rates, 156.
details of new plan, 156.
finding rates by blocks, 158.
method of using system, 159.
only one rate sheet, 160.
using the rate sheet, 160.
the scale card, 161.
minimum charges, 162.
maximum charges, 162.
short-haul charges, 163.
the square plan, 164.
the express directory, 167.
finding rates by squares, 168.
reduction in rates, 171.
Changes Ordered by
Commission, 221.
opinion No. 1967, 221.
express companies involved,
221.
eighteen plaintiffs appear, 222.
the main defendants, 222.
date of decision, 222.
synopsis of finding, 223.
simpler tariff ordered, 224.
rates allowable, 224.
new classification method, 224.
new rate system, 224.
simpler rules required, 224.
direct through routes, 224.
illegal overcharges, 224.
merchandise rate evil, 225.
exhaustive hearing, 225.
graduated charge evil, 227.
effect of extortion, 228.
what express records show, 229.
blanket rates impracticable,
230.
distance-and-weight basis, 231.
zone rate system, 232.
method of application, 233.
Classification of Traffic, 65.
the ruling factors, 65.
classes and sections, 65.
merchandise gradations, 66.
official classification, 66.
increases in charges, 68.
nature of increases, 69.
selected rate averages, 71.
graduated charge table, 72.
per 100-lb. rates, 72.
base rates and distances, 73.
special graduate rates, 74.
classification mysteries, 76.
how to find items, 76.
plan of commission, 77.
evils of present method, 77.
Computation of rates, 79.
rates, how figured, 79.
various class rates, 80.
merchandise the basis, 80.
"general special" freight, 81.
sections A and D, 81.
section E, 82.
graduate charge rules, 83.
single graduate, 83.
427
428
INDEX.
double graduate, 84.
queer money charges, 84.
low newspaper rates, 86.
rate inconsistencies, 87.
working of double graduate,
91.
short distance, high rate, 92.
three-graduate rule, 93.
Contracts With Railroads,
39.
nature of contracts, 39.
exclusive privilege, 39.
usual conditions, 39.
railroad employees as agents,
40.
payment to railroads, 41.
customary percentage, 41.
percentage actually paid, 42.
other contract features, 45.
feats in high finance, 45.
Wells, Fargo case, 45.
advance in percentages, 46.
C. O. D. checks, 47.
competition restricted, 48.
nub of express contracts, 49.
railroads control rates, 50.
nature of control, 51.
Division of Territory, 127.
competition in states, 127.
tendency to expansion, 128.
Wells, Fargo Go's, field, 129.
where Adams Co. operates, 130.
sphere of American, 130.
home of Southern Co., 131.
United States territory, 132.
field of Great Northern, 132.
Northern confined to West, 132.
Globe Express operations, 133.
Canadian operations, 134.
Western Express, 134.
Duties and Salaries of
Employees, 195.
high ability demanded, 196.
chances for promotion, 196.
American Co's. methods, 196.
collecting shipments, 197.
duties of wagon men, 198.
making out way-bills, 198.
records at shipping office, 199.
delivery at trains, 199.
the local agents, 201.
routine at delivery points, 201.
daily return of funds, 201.
hiring of employees, 202.
necessary qualifications, 202.
kind of men wanted, 203.
bonds required, 203.
salaries for beginners, 203.
best training field, 204.
inspection of offices, 205.
applying for position, 206.
work of beginner, 206.
opportunities in service, 207.
Fruitful Causes of
Complaint, 175.
nature of complaints, 175.
position of express managers,
176.
collection of double charges,
177.
remedy proposed, 178.
new label plan, 178.
overcharges and undercharges,
183.
tariffs too involved, 184.
precautions suggested, 185.
circuitous routing, 185.
plan for stopping it, 186.
information for public, 187.
free delivery limits, 188.
limitations in receipts, 190.
valuation clause attacked, 191.
delays in claims, 192.
INDEX
429
excessive insurance charges,
193.
Keeping Accounts, 109.
new method installed, 109.
reasons for change, 109.
old cause of trouble, 110.
radical change in method, 110.
systematic classification, 110.
operating expenses, 112.
how made up, 113.
express service unit, 114.
operating revenue details, 115.
operating expense details, 116.
general balance sheet, 119.
what it should show, 120.
financial paper issued, 120.
realty cost, 121.
equipment cost, 121.
equipment inventory, 122.
income account, 123.
profit-and-loss account, 123.
Money Orders and C. O. D.'s.
141.
magnitude of business, 141.
American far in lead, 141.
average value of paper, 142.
relative rank of companies, 142.
benefit of express orders, 144.
foreigners partial to orders, 145.
large c. o. d. business, 146.
profit to companies, 148.
charges on financial paper, 150.
"miscellaneous" paper, 150.
large dealings in exchange, 151.
value of traveler's checks, 152.
Origin of Express Business,
19.
humble start, 19.
no limit to traffic, 19.
ownership of companies, 20.
railway interest heavy, 20.
benefit to express people, 20.
first express service, 21.
profitable from start, 22.
Harnden's system, 22.
first express cars, 25.
origin of big companies, 25.
express mileage, 27.
operations of companies, 27.
expansion of business, 28.
contracts with railroads, 29.
express privilege exclusive, 29.
varied functions, 30.
truck farming encouraged, 30.
an express bonanza, 31.
banking business, 34.
mileage by states, 35.
where companies operate, 35.
Profits of Express Business,
99.
Northern Express case, 99.
Adams Express Co., 101.
American Express Co., 102.
Globe Express Co., 102.
Great Northern Co., 103.
National Express Co., 104.
Pacific Express Co., 104.
Southern Express Co., 105.
United States Co., 106.
Wells, Fargo Co., 106.
- Western Express Co., 107.
Railroads Control Express
Companies, 55.
heavy financial interests, 55.
holdings in Adams Co., 56.
railway men prominent, 56.
American Express directors,
56.
N. Y. Central a stockholder,
57.
Goulds own Globe Co., 57.
430
INDEX
J. J. Hill's ventures, 58.
Union Pacific interests, 59.
Harriman in Wells, Fargo, 59.
"Soo" road owns Western, 60.
United States Company, 60.
railway interests allied, 61.
National Express Co., 61.
Southern Express Co., 61.
Canadian companies, 61.
stock bonus to railways, 62.
Wells, Fargo finances, 63.
Rules Governing Express
Service, 209.
receipting for shipments, 209.
routing shipments, 210.
prepayment of charges, 210.
pound rates, 212.
aggregating weight, 213.
returned shipment, 214.
valuation charges, 215.
c. o. d. shipments, 216.
carload or bulky shipments,
218.
division of charges, 218.
commodity rates, 219.
change of destination in tran¬
sit, 220.
Ascertaining Tonnage of
Vessels, 323.
two kinds of tonnage, 323.
displacement and capacity, 323.
reasons for difference, 324.
naval craft measurement, 324.
pleasure craft measurement,
324.
cargo craft measurement, 324.
how ascertained, 325.
fixing size of craft, 325.
method of measurement, 325.
100 cubic feet to ton, 325.
necessity for exactitude, 325
classification and registers, 326.
grade marks, 328.
great lakes registry, 331.
Federal registry, 333.
Defects of Present System,
263.
merchant marine's decline, 263.
domestic tonnage gains, 264.
coastwise tonnage, 264.
great lakes tonnage, 264.
all-American tonnage, 624.
reason for prosperity, 265.
family interests, 265.
north and south channels, 267.
Pacific coast streams, 268.
Puget Sound commerce, 268.
many types of vessels, 268.
great lake vessels, 269.
control of vessel lines, 271.
killing off river lines, 272.
lakes-to-Gulf project, 274.
marine insurance costly, 275.
Established Routes and
Distances, 251.
Isthmian routes, 251.
via Cape Horn, 251.
world commerce routes, 252.
currents and winds, 253.
Panama canal effect, 254.
Atlantic trade routes, 254.
diversity of mileage, 255.
shrinkage in longitude, 256.
longest Atlantic route, 257.
longest ocean routes, 257.
New Orleans as a port, 258.
routes in the Pacific, 259.
Alaskan routes, 259.
Oriental trade routes, 259.
routes from Panama, 260.
longest Pacific route, 260.
INDEX.
431
Freight Traffic by Water,
237.
effect on rail rates, 237.
economy, features of, 238.
liability of carriers, 239.
coal and ore cargoes, 240.
low rates on coal, 241.
flour, rates, 242.
Soo canal traffic, 244.
Erie canal tonnage, 245.
Mississippi river tonnage, 246.
Pacific water routes, 247.
Puget Sound traffic, 247.
Atlantic coast business, 248.
Marine Insurance—Its
Features, 355.
made by vessel owners, 355.
made by shippers, 355.
risk of property afloat, 355.
water carriers' liability, 356.
many forms of policies, 356.
Lloyd's policy, 357.
open or valued policies, 358.
floating or named, 358.
voyage and time policies, 358.
implied warranties, 358.
mention of perils, 359.
"perils of the sea," 360.
fire, jettison, barratry, 360.
various grades of losses, 361.
notice of abandonment, 361.
collision clauses, 362.
cargo insurance, 363.
great lakes insurance, 365.
season insurance, 365.
survey and classification, 366.
Official Regulation of
Liability, 299.
carriage of explosives, 299.
liability of masters, 300.
duty of shippers, 300.
losses by fire, 300.
when owner is liable, 301.
limit to liability, 301.
averaging losses, 302.
when charterer is owner, 302.
liability for debts, 303.
bills of lading, 304.
errors in navigation, 305.
bill of lading compulsory, 306.
negligence penalized, 307.
"flag clause," the, 307.
Harter Act, the, 308.
warranty on owner's part, 309.
Policy of Federal
Improvement, 377.
practical plan lacking, 377.
money thrown away, 377.
political projects, 377.
enormous appropriations, 378.
appropriation of 1910, 378.
expenditure of $562,000,000,
379.
how money was spent, 379.
wasteful nature of work, 380.
errors on the Missouri, 380.
vital mistakes in procedure,
380.
what should be done, 380.
first of Federal aid, 381.
grants to the states, 381.
river and canal improvement,
382.
river and canal traffic, 383.
transhipment limits, 383.
limit of railway capacity, 385.
Port Facilities and Rules, 361
keys to transportation, 361.
harbors not enough, 362.
wharves and warehouses, 362.
importance to ports, 362.
mechanical auxiliaries, 363.
432
INDEX
great lakes facilities, 363.
handicaps to shippers, 364.
wharf or dock fees, 365.
water front ownership, 366.
"lay days, " 367.
"running days," 367.
"working days," 367.
"demurrage," 368.
Shipping Contracts and
Documents, 279.
"chartering" of vessels, 279.
the "tramp" vessel, 279.
terms of charters, 279.
why charters are made, 280.
vessel broker's field, 280.
what the broker does, 281.
fluctuating charter price, 281.
causes of fluctuation, 281.
specimen charter, 282.
time charter party, 283.
memorandum of charter, 286.
charter for Pacific trade, 287.
marine bill of lading, 289.
ship's manifest, 291.
Tonnage and Classification
of Vessels, 323.
tonnage, what it is, 323.
how measured, 323.
various kinds, 323.
displacement tonnage, 324.
cargo tonnage, 324.
accurate measurement, 325.
registry and classification, 326.
British system, 326.
registers of nations, 326.
American register, 328.
grade marks, 328.
bureau of shipping, 329.
registry on great lakes, 331.
other American registers, 332.
Federal registry, 333.
laws governing shipping, 334.
penalty for violations, 336.
Types of Vessels in Service,
337.
great variety of forms, 337.
regular-line boats, 338.
bulk cargo vessels, 339.
great lakes models, 339.
Atlantic freighters, 341.
United Fruit Co. vessels, 344.
Pacific steam schooners, 345.
river traffic vessels, 346.
What Constitutes Navigable
Water, 311.
no standard rule, 311.
term "navigable" elastic, 311.
the English standard, 311.
movement of tide, 311.
conditions in America, 312.
log-moving streams navigable,
312.
judicial rulings, 313.
some curious results, 313.
demands of water highway, 313.
tactics of politicians, 313.
really navigable waters, 314.
where located, 314.
effect on transportation, 314.
navigable canal system, 315.
magnitude of Erie canal, 315.
Sault Ste. Marie canal, 316.
Portage Lake canal, 316.
lakes-to-gulf waterway, 317.
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