■ v. 
 
 LIBRARY 
 
 OF THE 
 
 UNIVERSITY of ILLINOIS, 
 
 S. R. Knott, Esq. 
 
 Arbitrators. 
 
 T. G. Bosh, Esq. ) 
 
 Gentlemen : This case is a controversy between 
 the Southern Railway on the one hand and the Louis- 
 ville & Nashville, the Mobile & Ohio, the Kansas City, 
 Memphis & Birmingham, the Alabama & Vicksburg, the 
 New Orleans & Northeastern, the Yazoo & Mississippi 
 Valley, and the Illinois Central railroads, on the other, 
 growing out of the action of the Southern Railway in 
 arbitrarily reducing the rates on cotton, in some cases as 
 much as $1.10 per bale, from Alabama, Tennessee, and 
 Mississippi stations to the mills in North and South 
 Carolina, against the desires, -the entreaties, and strong 
 protests of the other lines in interest, causing a large 
 and wanton destruction of the earnings of these other 
 lines without any material gain to the Southern Railway. 
 
 This matter had its inception at a meeting of the 
 Southern cotton-carrying lines held at Atlanta, Ga., 
 June 5 and 6, 1900. At that meeting a representative of 
 the Southern Railway offered a resolution providing: 
 “That in establishing through rates on cotton from 
 points outside of the territory of the associated railways 
 of Virginia and the Carolinas, said territory of destina- 
 tion be divided into two parts.” The boundaries of these 
 parts were defined, the farther, or northern part, being 
 designated as Group 1, as follows : 
 
 Group 1. Points on and north of a line drawm from 
 Marion, N. C., through Rutherfordton, Lincolnton, Char- 
 lotte, thence along the Seaboard Air Line to Maxton, 
 
 i 
 
2 
 
 inclusive, and including stations on main line of the 
 South Carolina & Georgia Extension Railroad, west of 
 Blacksburg, and stations on C. & N.-W. Ry. north of 
 Gastonia, except Durham & Charlotte Railroad stations, 
 Aberdeen & Asheboro Railroad stations, and Charlotte, 
 N. C. 
 
 Group 2. Points in the territory of the associated 
 railways south and west of the above line not provided 
 for in Group 1, including Charlotte, N. C. 
 
 Then followed a list of the rates which were to apply 
 to Group 1 territory on cotton from Atlanta and stations 
 west thereof to the Mississippi River. To points of des- 
 tination in territory described as Group 2, the rates were 
 to be 5 cents per 100 pounds less than to Group 1. 
 
 Rates to stations on the Durham & Charlotte and 
 Aberdeen & Asheboro stations excepted in Group 1 terri- 
 tory were to be made on so-called “combination,” that 
 is, by adding the rate to a basing point in Group 1 terri- 
 tory to the rate from such basing point to destination. 
 
 Previous to this proposal of the Southern Railway 
 the rates established to the territory embraced in Groups 
 1 and 2 were the same. Under this new division, how- 
 ever, while the reductions to Group 1 territory have been 
 of a radical character, the rates to Group 2 territory are 
 more so, being 25 cents per bale greater. 
 
 This proposition of the Southern Railway which, since 
 September 1st, has been forced in effect by that line, 
 reduced the rates from its junctions with the Illinois 
 Central and Yazoo & Mississippi Valley lines as much as 
 90 cents and $1.10 per bale at points of importance, and 
 $1.45 and $1.65 per bale at places of less importance. 
 
 The proposition was supported only by the Southern 
 Railway and the interested Carolina lines. Upon its 
 rejection, the Southern Railway gave notice, reserving 
 its right to establish the reduced rates upon giving notice 
 to other lines interested. (Southeastern Freight Associa- 
 tion Circular Letter No. 4, Series 1900-1901.) 
 
3 
 
 The next phase of this subject was a telegram from 
 Mr. Finley, the vice-president of the Southern Railway, 
 dated New York, June 7th, addressed to the executive 
 officers of southern lines, as follows : 
 
 u The cotton mill industry in the Piedmont and other 
 sections of the South has been so developed that the 
 volume of cotton controllable within the States in which 
 the mills are located is not sufficient to fully meet the 
 requirements of the mills, and it has become necessary 
 for the mills to draw a portion of the cotton necessary to 
 meet their requirements from other sections of the South. 
 Heretofore the rates on cotton from points in the South 
 have been made in the main in relation to mills in New 
 England and the requirements of the export trade. The 
 conditions now surrounding the cotton mill industry of 
 the South naturally create another market, in relation to 
 which rates on cotton should as well be equitably ad- 
 justed. This large investment in cotton mills in the 
 South has been made with confidence in a rate policy on 
 the part of the railways of the South which will fully 
 protect the mills in their natural and relative position. 
 I regret, therefore, that an adjustment of rates proposed 
 by our company at a mass meeting at Atlanta, on the 6th 
 inst., concurred in by the Atlantic Coast Line, Seaboard 
 Air Line, and others, and which has only in contemplation 
 the protection of the cotton mill industry of the South in 
 • its relative position, should have met with some opposi- 
 tion. It would unfavorably affect the general industrial 
 development of the South to force the cotton mills into a 
 position where they may be obliged to resort to commis- 
 sions and courts for the relief which should be equitably 
 and voluntarily accorded by the railways. I am quite 
 sure, from information in my possession, this will be the 
 course of the mills unless the matter is fairly adjusted by 
 the railways. Our company is opposed to permitting the 
 matter assuming this shape. I bring the matter to your 
 attention, feeling sure that our proposed adjustment will 
 meet with your concurrence. Joint to executive officers 
 of lines in South.” 
 
 Another meeting was held at Atlanta June 27tli, to 
 consider these Carolina cotton rates. At that meeting 
 Mr. Finley’s remarks are reported as follows : 
 
4 
 
 “To get this subject before the meeting, I will sub- 
 mit a statement in behalf of oar company, for the reason 
 that it is largely responsible for the docketing of the 
 subject for this special meeting. We have been engaged 
 for the last several years, or for a longer period, in an 
 effort to have these mills located in the South. That 
 work has been not only among those who have capital to 
 invest in such industries in the South, but among those 
 who already have investments of the same character in 
 the North. The efforts of our company, and the efforts 
 of others in that direction, and the force of natural con- 
 ditions or circumstances, have led to the location of a 
 great many mills, and the industry has grown far beyond 
 my own expectations — I mean within this limited time. 
 I firmly believed this industry would reach its present 
 condition in time, but I think it has been already devel- 
 oped far beyond the expectations of all of us. Up to 
 this time, or up, you might say, to the beginning of last 
 year, the mills were able, in a comparatively satisfactory 
 manner, to supply themselves with cotton from their 
 immediate districts, certainly from within the States in 
 which they were located ; there was no standard demand 
 for cotton from outside territory. Last year the situa- 
 tion became acute by reason of the short crop ; this was 
 notably true in South Carolina, and w T e are liable, aside 
 from the fact that the industry may, and undoubtedly 
 will, further develop, to farther short crops ; last year 
 can never be pointed out as an exception to all years ; 
 we have had short crops before, and we will have short 
 crops in the future. It certainly emphasizes the fact 
 that we have a new market in these mills, and that, tak- 
 ing the average conditions of the cotton crops in the 
 South, this new market requires that there shall be some 
 adjustment of the rates on a basis on which these mills 
 can actually have a supply of cotton from territory out- 
 side of their immediate districts ; and even with the full 
 crop of cotton in the States, I don’t think we can take 
 the position or say to those mills that you must exercise 
 a control of all the cotton in your State ; you must 
 underwrite your own ventures to the extent that you 
 must keep out all buyers for the New England mills, or 
 for mills in foreign countries, or to the extent that you 
 must be able to supply your own wants fully from your 
 own State. That is an economic condition that they 
 can’t control. Therefore, I think the situation has 
 
5 
 
 reached the point where they must be in a position 
 where they are recognized as a new market for the cotton 
 grown in the South. In a small committee which called 
 upon some of us in this matter, there were fifty-eight 
 mills and $28,000,000 investment represented, it has 
 been suggested that probably the situation of these mills 
 did not require a relative adjustment with respect to the 
 exports or the New England mills, but required a rela- 
 tive adjustment as among the mills themselves. That is 
 true, as far as it goes, but in that adjustment, in my 
 opinion, you don’t get the primary conditions. The 
 primary condition, in my opinion, is the relation which 
 the rates to these mills bear to rates to other consuming 
 districts, with respect to raw cotton, there being, of 
 course, the other conditions, such as our obligations 
 under the law, which require that the rates shall be 
 relatively adjusted as between the mills themselves in 
 this part of the country ; but the important question is 
 the broader question, in my opinion. It would be all right 
 to restrict the question to the narrower consideration 
 of it if the mills found their market for their products in 
 this section of country ; it would be then like adjusting 
 merchandise rates as between Atlanta, Macon, Columbus, 
 Augusta, because they all seek the same territory for 
 distribution. But the territory to which these cotton 
 mills distribute their product is not the territory sur- 
 rounding the mills, in the South, which requires this 
 relative adjustment as between the mills themselves, but 
 the distributing territory for these mills is the world ; 
 it is just as^mucli the world as it is in the case of New 
 England, or the English mills, and it seems to me, in 
 • considering this question, we must have some considera- 
 tion for what makes the rate to New England, and for 
 what makes the rate for export, and not restrict it to the 
 question of w~hat the rates shall be to Spartanburg, say, 
 £s against the rate to Pacolet, or the rate to Augusta, as 
 against the rate to Griffin. That is the view that we take 
 of this question, and that is the explanation in a general 
 way of the figures which we have submitted. I am not 
 in favor of what might be called a milling-in-transit rate 
 for the mills ; I do not think that is the way in which 
 to adjust it ; but I believe some consideration should be 
 given to the combined cotton and cotton factory prod- 
 ucts rates, as against the raw cotton rate, say, to the 
 New England mills. As I understand it, the amount of 
 
6 
 
 domestics, or cotton factory products, that go direct to 
 the West from this milling section, is comparatively 
 small ; the main trade is export ; but there is some of 
 the product, under the conditions under which manu- 
 facturing is done now in the South, that necessarily goes 
 to New England, for the purpose of bleaching, etc. 
 Therefore, the basis upon which we should give the 
 most consideration to the question is the basis of rates 
 to Carolina mills, compared with those to New England 
 mills and for export. And I trust the parties here .may 
 see their way clear to give their consent to the proposi- 
 tion we have made. I haven’t got before me the propo- 
 sition submitted, and while it may possibly cover the 
 Carolina district, I want it clearly understood that we 
 are not taking any position in opposition to a proper 
 adjustment to the other sections of the South where 
 mills may exist. We are dealing with this question 
 from the standpoint of the Southern mills, and we 
 believe that conditions with respect to all of .them should 
 be considered. But I am quite sure, from my investi- 
 gation of this matter, and from hearing people who have 
 money invested in the industry, that there is a feeling of 
 deep concern about the present situation, and they look 
 confidently to the roads to relieve them in a reasonable 
 way. They very rightly point out facts we all know, 
 that there is a great deal in the mill business for us, not 
 only in the transportation of cotton to the mills where 
 the rates must necessarily approximate the port rates, 
 but in the incidental business we get, in the machinery 
 we haul, the construction material we haul, and in all 
 that goes into the manufacture, to say nothing of the 
 merchandise business that Hows from the mill centers, 
 the consumption of merchandise in the mill centers, and 
 the passenger traffic that is developed. All of these 
 items of revenue, of course, are missing when we simply 
 haul raw cotton through our territory to the port for 
 export, or for the New England district. Unless we 
 take this question up seriously, and adjust it by recog- 
 nizing this as a new market for which adjustment should 
 be made, I don’t see how we can, with any sincerity, go 
 further into the New England district and urge the 
 removal of these mills to the South; it will never do to 
 say, when it comes to a question of cotton supply: 4 You 
 must look to your own State for that cotton ; we are 
 unable to do anything for you from the general district 
 
7 
 
 from which the New England mills and the mills abroad 
 take their cotton.’ ” 
 
 The same proposition as was made at the meeting of 
 June 5th and 6th, as to the reductions on Carolina cotton 
 rates, was put to vote and defeated. Mr. Finley then 
 made some further remarks, as follows : 
 
 u There are not less than $80,000,000 invested in 
 cotton mills along the Southern Railway lines, and that 
 industry, as I have explained, has complained of the 
 inequitable adjustment of rates from the cotton territory, 
 the "greater part of which is reached by the Southern 
 Railway’s rails. We believe that if we do not come to 
 the relief of these people, we can not, in any court, or 
 before any commission, justify the present adjustment of 
 rates. We have solicited the extension of the mills ; we 
 have solicited the location of the mills ; and there is 
 nothing left for us to do except to avail ourselves of the 
 right, the privilege, we have under our present organiza- 
 tion, of putting in what we regard as equitable rates to 
 the mills ; we could not stultify ourselves to the extent 
 of refusing to take that action in behalf of the mills. 
 As has been explained, we have not, in these rates, come 
 anywhere near meeting the figures that the mills say will 
 be necessary, and we feel that we have got a task ahead 
 of us to satisfy the mills that the rates are reasonable. 
 I don’t know that w^e will be able to do it. Neverthe- 
 less, out of consideration for the interests of others in 
 this situation, and for the purpose of bringing about 
 what we believe to be relative rates, we are. willing to 
 stand upon these figures ; it is only the force of those 
 conditions that puts us in the position where we are 
 obliged to take action in this matter. I don’t want our 
 position misunderstood. I don’t want it thought for a 
 moment that we are taking this position to be arbitrary, 
 or taking it in disregard of what others may regard as 
 their rights, but this is an important question with us, 
 and I think it is an important question with every line 
 here. Other interests may not be under pressure in 
 other directions at this time, but as sure as we all sit 
 here, there is going to be a common interest in it before 
 we get through with it, and I am quite sure the question 
 of the adjustment of the rates can not be delayed further. 
 It won’t do to go into another season on the basis that 
 has prevailed in the past ; there must be an intelligent 
 
8 
 
 and reasonable adjustment of these rates, made with 
 respect to this coming season. It is only in that spirit 
 that we may take action with respect to this matter.” 
 (Southeastern Freight Association Circular Letter No. 
 12, Series 1900-1901.) 
 
 The rates on the reduced basis, as proposed by the 
 Southern Railway, were forced in by that road and 
 became effective September 1st. Other Mississippi, 
 Tennessee, and Alabama lines later on reduced their 
 rates to Gulf ports and New England territory to save 
 their cotton traffic, and, as a consequence, their merchan- 
 dise traffic, from this action of the Southern Railway, 
 the result being that cotton at the present time is 
 hauled from many places to Gulf ports and eastern 
 points at from 15 to 60 cents per bale less than last year. 
 In view of the higher price for cotton which the producer 
 receives this year, and the decrease in business for the 
 railroads consequent to the short crop, this does not 
 appear to be a j udicious course for those entrusted with 
 the charge of these important interests to pursue. 
 
 Subsequent meetings were held with a view of having 
 the Southern Railway recede from its position, but to 
 no purpose. Finally, as the situation became grave and 
 threatened to become more so, by the other lines making 
 further reductions in their rates to save their business, 
 the Southern Railway, at a meeting held in St. Louis 
 October 4th, agreed to arbitrate the question as to what 
 are fair and equitable rates to apply from Alabama, 
 Tennessee, and Mississippi junctions to Carolina mill 
 points. It is thus that this question has come before the 
 arbitrators. 
 
 As to whether the existing rates prior to September 
 1st from the Mississippi junctions to the Carolina mills, 
 were adjusted on a supposedly fair relative basis to those 
 charged to the Gulf ports, or to New England territory, 
 we do not know. Mr. Culp, the traffic manager of the 
 Southern Railway, says they were not so adjusted ; that 
 
9 
 
 they were u a continuation of figures which did not in 
 themselves represent any defined basis.” However this 
 may be, they were the rates which the Southern Railway 
 or its predecessor, the Richmond & Danville, by its own 
 voluntary act established without let or hindrance from 
 other lines, and inasmuch as its line extended then as it 
 extends now, all the way from these same Mississippi 
 junctions to the Carolina mills, it is reasonable to sup- 
 pose the rates were so adjusted as to enable it to take a 
 fair share of the business between stations on its own 
 line, whereby it was enabled by so doing to get its long 
 and most remunerative haul. If not, what was the line 
 extended for from Columbus, or from West Point west 
 to the Mississipjri River, and why were the rates thus 
 established ? Cotton was then, as it is now, one of the 
 principal commodities offered for shipment. 
 
 As is well known, branch lines or extensions are not 
 bought nor built for what they can do for themselves ; it 
 is rarely that one of them is self-supporting, per se. 
 They are bought and built generally for the aid and 
 support they can give the main stem, by throwing a 
 volume of traffic thereon, which, on account of the 
 existing plant, equipment, and other capabilities, can be 
 handled cheaply. Why should not this be true of the 
 Southern Railway’s extension west through the State of 
 Mississippi, and why should it not be true that the rates, 
 first established by that line for the movement of its 
 staple product in the State were so adjusted that it could 
 control a fair share of the business on its long haul 
 between its own stations as against a shorter haul to 
 other less remunerative destinations ? A contrary course 
 would be entirely incompatible with any theory or prac- 
 tice of traffic operation within our knowledge. 
 
 The rates enforced by the Southern Railway from 
 Alabama, Tennessee, and Mississippi to the Carolina 
 mills, Group 2, and the amount of reductions that these 
 produce on the rates in effect prior to September 1st, are 
 as follows : 
 
10 
 
 TO GROUP NO. 2, CAROLINA 
 
 FROM 
 
 Southern Railway’s 
 Enforced Rate. 
 
 MILLS. 
 
 Amount of Reductions. 
 
 Memphis, Term. 
 
 Huntsville, A’a. 
 
 Decatur, Ala. 
 
 Florence, Ala. 
 
 Sheffield, Ala. 
 
 Tuscumbia, Ala. 
 
 Corinth, Miss. 
 
 Grand Junction, Te 
 Somerville, Tenn. 
 
 Selma, Ala. 
 
 Montgomery, Ala. 
 
 Chattanooga, Tenn. 
 
 Anniston, Ala. 
 
 Oxford, Ala. 
 
 Birmingham, Ala. 
 
 Bessemer, Ala. 
 
 Oxanna, Ala. 
 
 Alabama City, Ala. 
 
 Attalla, Ala. 
 
 Gadsden, Ala. 
 
 Pell City, Ala. 
 
 Jenifer, Ala. 
 
 Munford, Ala. 
 
 Columbiana, Ala. 
 
 Calera, Ala. 
 
 Talladega, Ala. 
 
 Curry, Ala. 
 
 Barclays, Ala. 
 
 Childersburg, Ala. 
 
 Meridian, Miss. 
 
 Maplesville, Ala. 
 
 York, Ala. 
 
 Akron, Ala. 
 
 Blockton, Ala. 
 
 Cordova, Ala. 
 
 Parrish, Ala. 
 
 Columbus, Miss. 
 
 West Point, Miss. 
 
 Winona, Miss. 
 
 Greenwood, Miss. 
 
 Morehead, Miss. 
 
 Elizabeth, Miss. 
 
 Greenville, Miss. 
 
 Vicksburg, Miss. 
 
 New Orleans, La. 
 
 Mobile, Ala.* 
 
 * Compressed at shipper’s expense, 
 
 42 cts. 
 
 per 
 
 100 lbs. 
 
 17 cts. per 
 
 100 lbs. 
 
 46 
 
 a 
 
 it 
 
 (( 
 
 a 
 
 05 
 
 
 it 
 
 te 
 
 tt 
 
 46 
 
 tt 
 
 tt 
 
 a 
 
 tt 
 
 05 
 
 u 
 
 it 
 
 a 
 
 tt 
 
 f 46 
 
 u 
 
 tt 
 
 t. 
 
 tt 
 
 05 
 
 n 
 
 it 
 
 tt 
 
 tt 
 
 46 
 
 tt 
 
 a 
 
 a 
 
 tt 
 
 25 
 
 a 
 
 tt 
 
 n 
 
 tt 
 
 r 
 
 
 
 
 
 33 
 
 
 
 
 
 55 
 
 tt 
 
 tt 
 
 u 
 
 tt 
 
 
 
 
 
 
 | 40 
 
 i 
 
 a 
 
 u 
 
 a 
 
 a 
 
 11 
 
 it 
 
 tt 
 
 ti 
 
 it 
 
 i 
 
 >40 
 
 tt 
 
 a 
 
 tt 
 
 a 
 
 11 
 
 it 
 
 tt 
 
 n 
 
 tt 
 
 < 
 
 
 
 
 
 09 
 
 tt 
 
 tt 
 
 it 
 
 tt 
 
 
 
 
 
 
 09 
 
 a 
 
 ti 
 
 tt 
 
 tt 
 
 
 
 
 
 
 09 
 
 it 
 
 a 
 
 u 
 
 tt 
 
 
 
 
 
 
 \ j 
 
 tt 
 
 tt 
 
 a 
 
 tt 
 
 M2 
 
 1 
 
 it 
 
 a 
 
 a 
 
 a 
 
 09 
 
 ti 
 
 it 
 
 tt 
 
 tt 
 
 | 
 
 
 
 
 
 11 
 
 tt 
 
 tt 
 
 it 
 
 tt 
 
 | 
 
 
 
 
 
 11 
 
 it 
 
 a 
 
 tt 
 
 tt 
 
 J 
 
 
 
 
 
 11 
 
 tt 
 
 n 
 
 tt 
 
 tt 
 
 ] 
 
 
 
 
 
 11 
 
 it 
 
 tt 
 
 tt 
 
 tt 
 
 Mo 
 
 a 
 
 it 
 
 u 
 
 tt 
 
 11 
 
 (( 
 
 tt 
 
 tt 
 
 tt 
 
 j 
 
 
 
 
 
 11 
 
 ti 
 
 a 
 
 tt 
 
 tt 
 
 46 
 
 tt 
 
 u 
 
 a 
 
 a 
 
 05 
 
 tt 
 
 a 
 
 tt 
 
 tt 
 
 Ms 
 
 j 
 
 it 
 
 a 
 
 <( 
 
 ti 
 
 06 
 
 ti 
 
 it 
 
 tt 
 
 tt 
 
 j- 48 
 
 tt 
 
 tt 
 
 a 
 
 tt 
 
 25 
 
 it 
 
 a 
 
 tt 
 
 tt 
 
 j- 46 
 
 tt 
 
 it 
 
 a 
 
 tt 
 
 22 
 
 it 
 
 u 
 
 tt 
 
 tt 
 
 [ 50 
 
 tt 
 
 tt 
 
 a 
 
 a 
 
 18 
 
 H 
 
 it 
 
 tt 
 
 tt 
 
 50 
 
 tt 
 
 a 
 
 a 
 
 tt 
 
 
 
 
 
 
 50 
 
 tt 
 
 n 
 
 tt 
 
 tt 
 
 29 
 
 ti 
 
 tt 
 
 tt 
 
 u 
 
 50 
 
 tt 
 
 it 
 
 a 
 
 tt 
 
 21 
 
 it 
 
 a 
 
 tt 
 
 ti 
 
 50 
 
 ti 
 
 u 
 
 tt 
 
 tt 
 
 21 
 
 tt 
 
 a 
 
 tt 
 
 tt 
 
 50 
 
 a 
 
 tt 
 
 it 
 
 ti 
 
 21 
 
 tt 
 
 a 
 
 tt 
 
 tt 
 
 46 
 
 a 
 
 tt 
 
 tt 
 
 n 
 
 05 
 
 <( 
 
 a 
 
 tt 
 
 tt 
 
11 
 
 Group No. 1 takes 5 cents higher rates, and therefore 
 the reductions to that territory are 5 cents less than 
 those shown. 
 
 Mr. Finley, in his statement, alleges as the first reason 
 for the sweeping reductions, that owing to the growth of 
 the Carolina mills, and on account of short crops, and 
 liability of future short crops, these mills are not able to 
 supply themselves with cotton from within the States in 
 which they are located, notably South Carolina, and 
 that, considering the average conditions of cotton crops 
 in the South, these Carolina markets require there shall 
 be such an adjustment of the rates as will enable the 
 mills to get a supply of cotton from territory outside of 
 their immediate districts. 
 
 Let us see how far this is true. The reports of the 
 United States Department of Agriculture for the follow- 
 ing named years, except 1899-1900, which is taken from 
 the report of the secretary of the New Orleans .Cotton 
 Exchange, show the total crop of these States, together 
 with the mill purchases, as follows : 
 
 NORTH CAROLINA. 
 
 (In Commercial Bales.) 
 
 Years. 
 
 Total Crop. 
 
 Bought 
 
 by 
 
 Mills. 
 
 Surplus. 
 
 Percentage 
 
 of 
 
 Surplus. 
 
 1895-96 
 
 ... 397,752 
 
 219,822 
 
 177,930 
 
 44.7 
 
 1896-97 
 
 ... 521,795 
 
 245,177 
 
 276,618 
 
 53. 
 
 1897-98 
 
 ... 646,726 
 
 334,873 
 
 311,853 
 
 48. 
 
 1898-99 
 
 ... 629,620 
 
 374,891 
 
 254,729 
 
 40. 
 
 1899-1900 
 
 ... 561,000 
 
 435,686 
 
 125,314 
 
 22.3 
 
 
 SOUTH 
 
 CAROLINA. 
 
 
 
 
 (In Commercial Bales.) 
 
 
 
 Years. 
 
 Total Crop. 
 
 Bought 
 
 by 
 
 Mills. 
 
 Surplus. 
 
 Percentage 
 
 of 
 
 Surplus. 
 
 1895-96 
 
 ... 764,700 
 
 257,700 
 
 507,000 
 
 66.4 
 
 3896-97 
 
 ... 936,463 
 
 297,782 
 
 638,681 
 
 68. 
 
 1897-98 
 
 ...1,030,085 
 
 398,456 
 
 631,629 
 
 61. 
 
 1898-99 
 
 ...1,035,414 
 
 466,181 
 
 569,233 
 
 55. 
 
 1899-1900 _ . 
 
 ... 921,000 
 
 497,146 
 
 423,854 
 
 46. 
 
12 
 
 GEORGIA. 
 
 (In Commercial Bales.) 
 
 Bought Percentage 
 
 Years. Total Crop. by Surplus. of 
 
 Mills. Surplus. 
 
 1895 - 96 . 1 , 067,377 200,636 866,741 81 . 
 
 1896 - 97 1 , 299,340 227,831 1 , 071,509 82 . 
 
 1897 - 98 1 , 350,781 285,219 1 , 065,562 79 . 
 
 1898 - 99 1 , 378,731 281,527 1 , 097,204 79.5 
 
 1899 - 1000 1 , 309,000 339,110 969,890 74 . 
 
 The contention of the Southern Railway that there is 
 not enough of cotton within the Carolinas to supply the 
 mills is scarcely warranted by this showing. Taking last 
 season, for example, when the crop was shorter than it 
 has been since 1895, there was a surplus over the mill 
 consumption in the Carolinas of 549,168 bales, notwith- 
 standing the fact that the mills bought nearly 100,000 
 bales in excess of their purchases of any previous year. 
 Nor is this the full extent of the surplus of the States 
 named. The mill purchases of North Carolina from other 
 States the past season, included in the above figures, 
 were 100,000, and of South Carolina, 42,000 (both partly 
 estimated), which, if deducted from the total amount 
 bought, would swell the surplus of those States 142,000 
 bales more. 
 
 Mr. Finley, speaking on June 27th, says, “Up to this 
 time, or up, you might say, to the beginning of last 
 year, the mills were able in a comparatively satisfactory 
 manner to supply themselves with cotton from their 
 immediate districts ; certainly from within the States 
 in which they are located : . . . . Last year the 
 
 situation became acute, by reason of the short crop ; 
 this was notably true in South Carolina.” 
 
 We are at a loss to understand how this statement 
 can be reconciled with the facts as they appear above. 
 The situation in South Carolina “acute,” with a surplus 
 after the mills Were fully supplied, though working 
 night and day, of 423,854 bales, or 46 per cent of the 
 entire crop. Admitting, for the sake of argument, that 
 
13 
 
 the situation was “acute,” what was to prevent the 
 Carolina mill owners from getting their cotton in the 
 adjoining State of Georgia, where, as may be seen from 
 the above figures, there has been an average surplus of 
 over 1,000,000 bales each year since 1895? It would 
 seem the natural order for mills to get their supplies at 
 low rates from contiguous territory where there is a 
 large surplus, rather than from more distant territory, 
 from which rates must necessarily be higher. 
 
 We think a more reasonable and a more equitable 
 course for the Southern Railway to pursue would be to 
 so readjust its rates from this Georgia territory as would 
 enable the Carolinas to draw upon it for so much of this 
 large surplus as they might need, and not break down 
 the rate basis 700 miles away, entailing hundreds of 
 thousands of dollars loss to the other lines in interest. 
 The Southern Railway runs 402 miles from the extreme 
 northwest via Atlanta, to the extreme southeast of 
 Georgia. It also runs from the extreme northeast via 
 Atlanta, to the middle southwest, besides ramifying the 
 State in other directions with its branch lines. It has 
 control of enough of cotton on its own Georgia lines, 
 besides that which comes to its junctions, notably at 
 Atlanta, to supply the demand of the Carolinas long after 
 they consume their own supply, and it can not well be 
 said that it is estopped from doing this by State rates 
 or State commissions, inasmuch as the action outlined 
 would be of an interstate character. 
 
 But Mr. Finley says that “even with a full crop of 
 cotton in the States (meaning the Carolinas), I don’t 
 think we can take the position, or say to those mills, 
 that you must exercise a control of all the cotton in your 
 State ; you must underwrite your own ventures to the 
 extent that you must keep out all buyers for the New 
 England mills, or for mills in foreign countries, or to the 
 extent that you must be able to supply your own wants 
 fully from your own State ; this is an economic condition 
 that they can not control.” 
 
14 
 
 It is an economic condition, but it is one that can be 
 controlled much easier by the Carolina mills with the 
 aid of the Southern Railway, than can the economic con- 
 dition of reaching out to territory 600 or 700 miles away, 
 and therein competing with markets and conditions that 
 were in existence long before the Carolina mills were 
 established. We do not question their right to compete 
 for the business in an equitable and reasonable manner, 
 even though they are surrounded with a plentiful supply 
 nearer home ; but we do object, and solemnly protest 
 against such a reckless competition as has a tendency to 
 tear down all standards of rates and revenues of the 
 other lines, which, through time, experience, and an 
 enlightened knowledge of the requirements, have been 
 long established. 
 
 If it is an economic condition that they can not control, 
 it is because the price of cotton in the immediate vicinity 
 of the mills, plus the rates, is greater than is the price of 
 cotton plus the rates in Mississippi 700 miles away. 
 And is it not a fact that the active competition of the 
 236 mills ot* North Carolina, and the 131 mills of South 
 Carolina, between themselves, in the purchase of cotton, 
 raises the price to a degree as to make them desirous of 
 entering other cheaper fields ? Should the railroads be 
 expected to equalize, by their rates, disadvantages of 
 this character brought on by the acts of the mill opera- 
 tors ? If the Mississippi and Alabama railroads have in 
 the past, by conservative and judicious action, built up 
 and maintained to Gulf ports and to New England terri- 
 tory, reasonable rates that may be fairly remunerative, is 
 it proper that' the Southern Railway should enforce upon 
 them a system of rates ruinously low, to satisfy the 
 unreasonable and illegitimate demands of its cotton 
 mills ? The demands are unreasonable and illegitimate, 
 inasmuch as over 58 j>er cent of the amount bought in 
 the year of greatest consumption yet remained in the 
 Carolinas which could be purchased by them ; and if we 
 add to this the surplus in the adjoining State of Georgia, 
 
15 
 
 which should be accessible at much lower rates than the 
 cotton from Alabama or Mississippi, we have a surplus 
 of 162 per cent of the amount consumed not yet trenched 
 upon. This showing, it should be remembered, is for 
 a year of minimum production and maximum consump- 
 tion. 
 
 How far a remedy for this situation would lie in a 
 proper relative adjustment of the rates as between the 
 mills themselves, we do not know, but as the rates were 
 generally reduced from Georgia, and afterwards made 
 5 cents per hundred less to some of the mills than to 
 others, it is very evident there was more or less dissatis- 
 faction with them. Mr. Finley says on this: “It has 
 been suggested that probably the situation of these mills 
 did not require a relative adjustment with respect to the 
 exports or the New England mills, but required a rela- 
 tive adjustment as among the mills themselves.” He 
 then answers this by saying, “That is true as far as it 
 goes, but in that adjustment, in my opinion, you do 
 not get at the primary conditions.” He inferential ly 
 acknowledges here that there was not a proper relative 
 adjustment as between the mills themselves, and we can 
 well understand this when he says: “In a small com- 
 mittee which called upon us in this matter, there were 
 fifty-eight mills and $28,000,000 of investment repre- 
 sented.” As North Carolina is reported to have 236 
 mills, and South Carolina 131, having an investment, as 
 Mr. Finley says, of not less than $80,000,000, where were 
 the representatives of the remaining 309 mills, and the 
 $52,000,000 of investment \ Why did they, having much 
 the larger interest, not complain ? The alleged grievances 
 of 15 per cent of the Carolina mills, which, if actual, 
 could, in all probability, be redressed by the Southern 
 Railway within the confines of the complainants’ States, 
 or at least in the neighboring State of Georgia, are here 
 made the basis of such radical action as threatens the 
 safety of millions of dollars of the property of some of 
 these Mississippi lines. 
 
16 
 
 As may be seen from the map of Mississippi, the main 
 line of the Southern Railway crosses the Illinois Central 
 and Yazoo & Mississippi Valley railroads at West Point, 
 Winona, Greenwood, Morehead, Elizabeth, and Green- 
 ville, and parallels them from Aberdeen to Tchula, a 
 distance of 135 miles. The Memphis & Charleston divis- 
 ion of the Southern Railway crosses the Illinois Central 
 farther north, at Grand Junction, and intersects it and 
 the Yazoo & Mississippi Valley Railroad at Memphis. 
 
 The reduction made by the Southern Railway from 
 
 Grand Junction, is 
 
 West Point 
 
 Winona 
 
 Greenwood 
 
 Elizabeth 
 
 « Greenville 
 
 We can readily understand that the other roads must 
 make reductions in their rates to Gulf ports or New 
 England territory in order to hold their share of the 
 traffic. It is not alone the junction station that is affected 
 by these reductions, for as the reduced rates apply 
 equally to the local stations of the Southern Railway on 
 each side of the junction, it follows that the local sta- 
 tions of the other roads for at least forty miles on either 
 side of the junction will be directly affected by them. 
 Cotton does not grow at the stations ; it is raised in the 
 outlying country, and it is a well-known fact that the 
 offer of one-quarter or even one-eighth of a cent a pound 
 higher price will divert cotton from its accustomed 
 channel of trade as much as twenty or thirty miles. 
 
 Nor is it solely the cotton traffic that must be con- 
 sidered in this matter. Where the farmer sells his 
 cotton, there he will purchase his merchandise, machin- 
 ery, and other supplies, so that the loss of the cotton at 
 any station means also the loss of nearly all other 
 freight. 
 
 The southern cotton-carrying railroads, therefore, no 
 matter what the rates, can never permit the diversion of 
 
 1.65 per bale. 
 1.10 “ 
 
 .90 “ 
 
 .90 “ 
 
 1.45 “ 
 
 1.05 “ 
 
17 
 
 cotton from their stations that is naturally and thirl y 
 tributary to them, without sacrificing other business. If 
 they did the result would be that the towns upon which 
 they are dej)endent for business would fall into ruin 
 and hopeless decay, while the rival towns, their com- 
 petitors, would thrive and grow prosperous. We all 
 know that the town which once attains a commercial 
 supremacy over a competitor progresses thereafter in a 
 much greater ratio than does the other. It is for these 
 reasons that a railroad must scrupulously guard its local 
 station rates, particularly so when the outlying territory 
 may be served by a rival line. 
 
 Then again, as the Illinois Central Railroad observes 
 the long and short haul clause of the interstate com- 
 merce act, except in cases of water competition, and a 
 few other exceptional instances, a reduction of cotton 
 rates from a junction to New Orleans or to New England 
 territory would carry with it a reduction from inter- 
 mediate stations. 
 
 The reductions of rates on our lines which the action 
 of the Southern Railway has necessitated extend from 
 Alexander, Tenn., to Crystal Springs, Mission our main 
 line, a distance of 354 miles. These reductions on New 
 England shipments vary from 25 cents to 60 cents per 
 bale. On New Orleans shipments they vary from 15 
 cents to 45 cents per bale. On the Aberdeen branch, 109 
 miles, our reductions are 60 cents per bale to New 
 Orleans, and from 25 to 45 cents per bale to New Eng- 
 land. On our Grenada district, 100 miles, the reductions 
 are 40 cents per bale to New England. On our Yazoo and 
 Tchula branches, 141 miles, the reductions run from 25 
 to 60 cents per bale to New England. As the rates from 
 Memphis to the Gulf have been reduced as much as 50 
 cents per bale, and as the rates of the Yazoo & Mississippi 
 Valley Railroad are based largely on the Memphis rates, 
 we were obliged to make reductions of 50 cents per bale, 
 both to New England and to New Orleans, from long 
 stretches of territory on that u ne . Notwithstanding We 
 
18 
 
 confine these reductions to the lowest possible minimum r 
 yet it will be seen they are very serious. 
 
 The Illinois Central and Yazoo & Mississippi Yalley 
 railroads move annually, according to crop conditions, 
 from 1,100,000 to 1,300,000 bales of cotton. It would 
 not be too much to say that, based upon the above 
 figures, the average reduction is now 35 cents per bale. 
 This approximates a loss of $420,000 per year of net 
 revenue. As the 3J per cent bonds of the Illinois Cen- 
 tral Company are selling above par in the markets of the 
 world, this yearly loss capitalized is equivalent to de- 
 stroying outright $12,000,000 worth of its property. 
 
 It will thus be seen that in view of the large traffic 
 affected, if the Illinois Central and Yazoo & Mississippi 
 Yalley railroads, in order to protect their cotton traffic, 
 are ever obliged to make to their markets of destination 
 corresponding reductions in their rates to those made by 
 the Southern Railway to the Carolina mills, the loss’ of 
 revenue and destruction of property will be enormous. 
 If, as is reported, the Southern Railway took cotton 
 freely, under the old adjustment of rates, it would seem 
 that self-protection would render it necessary that the 
 other lines should make corresponding reductions. In 
 their desire to save revenue they have not, however, 
 gone so far, but the present operation of their reduced 
 rates is only experimental, and it may be that tlieir 
 experience with them will demonstrate the necessity of 
 making reductions to the full figures made by the 
 Southern Railway. 
 
 The measure of reductions to be made in these rates 
 to meet the action of the Southern Railway is not what 
 the traffic manager of any one line may think its inter- 
 ests will stand. All will have to be governed by the 
 views and action of the line whose interests will suffer 
 most by the reduction. The strength of the chain has to 
 be tested by its weakest link. For instance, if the 
 Mobile & Ohio or the Kansas City, Memphis & Birming- 
 ham railroads should feel that the proper protection 
 
19 
 
 of their interests at Columbus, Aberdeen, Starkville, or 
 West Point required reductions in consonance with 
 those made by the Southern Railway, there would be no 
 alternative for the Illinois Central, no matter what its 
 traffic officials thought, but to follow them with like 
 reductions from the same stations, or other stations 
 thereby affected. 
 
 Mr. Finley, however, again shifts his position, and 
 this time we are served with his main reason for the very 
 radical and sweeping reductions which he has made in 
 these cotton rates. He says : 
 
 “The primary condition, in my opinion, is the rela- 
 tion which the rates to these mills bear to rates to other 
 consuming districts with respect to raw cotton, there 
 being, of course, the other conditions, such as our obliga- 
 tions under the law, which require that the rates shall be 
 relatively adjusted as between the mills themselves in 
 this part of the country, but the important question is 
 the broader question, in my opinion. The territory to 
 which these cotton mills distribute their product is not 
 the territory surrounding the mills in the South which 
 requires this relative adjustment as between the mills 
 themselves, but the distributing territory for these mills 
 is the world ; it is just as much the world as it is in the 
 case of New England or the English mills, and it seems 
 to me, in considering this question, we must have some 
 consideration for what makes the rate to New England, 
 and for what makes the rate for export, and not restrict 
 it to the question of what the rates shall be to Spartan- 
 burg, say, as against the rate to Pacolet, or the rate to 
 Augusta as against the rate to Griffin. This is the view 
 we take of this question, and this is the explanation, in 
 a general way, of the figures we have submitted. I 
 believe some consideration should be given to the com- 
 bined cotton and cotton-factory-products rates as against 
 the raw-cotton rate, say, to the New England mills.” 
 
 The primary and chief consideration, therefore, which 
 actuated the Southern Railway in this action of reducing 
 rates from Alabama, Tennessee, and Mississippi territory 
 was to put the Carolina mills on a parity with other con- 
 suming districts, and in determining what the rates 
 
20 
 
 should be to the Carolinas due cognizance was no doubt 
 taken of the New England rate and the export rate. If 
 this principle obtains with the Southern Railway we 
 assume it is willing to accord the same privilege, under 
 like conditions, to other lines whose interests lie in haul- 
 ing cotton to markets other than those of the Carolina 
 mills. 
 
 The following is a statement from the United States 
 Agricultural Department of the total cotton crop, total 
 mill purchases, and mill purchases from other States, for 
 the Carolinas, for the seasons named : 
 
 NORTH CAROLINA. 
 
 (In Commercial Bales.) 
 
 Percentage 
 Mill of Mill 
 
 Total Purchases Consumption 
 
 Year. Total Crop. Mill from other taken from 
 
 Consumption. States. other States* 
 
 1896 - 97 521,795 322,046 43,350 13.4 
 
 1897 - 98 646,726 334,873 52,596 15.7 
 
 1898 - 99 629,620 374,891 71,392 19 . 
 
 SOUTH CAROLINA. 
 
 (In Commercial Bales.) 
 
 1896 - 97 936,463 297,782 24,637 8 . 
 
 1897 - 98 1 , 030,085 398,456 1,581 .4 
 
 1898 - 99 1 , 035,414 466,181 10,953 2.3 
 
 We are not able to give the mill purchases from other 
 States for the last season, as they are not yet published. 
 If we estimate for North Carolina an increase for last 
 year in mill purchases from other States, 29,000 bales, 
 which is 10,000 in excess of any prior year s increase, it 
 will give 100,000 bales of mill purchases as having been 
 received from other States. This would be 26 per cent 
 of the mill consumption. 
 
 The mill purchases of South Carolina increased the 
 past season 31,000 bales. If we assume that this increase 
 had to be taken entirely from other States, it would make r 
 by adding to it the total mill purchases of the previous 
 year, about 42,000 bales. This would amount to less than 
 
21 
 
 9 per cent of tlie total consumption of the South Carolina 
 mills as having come from other States. In the previous 
 year it vvill be observed the mill purchase from other 
 States slightly exceeded 2 per cent. If we are correct in 
 this estimate — and at the worst the figures can not be 
 much out of the way — of the total cotton consumed by 
 the North Carolina mills, 74 per cent of it was cotton 
 raised in that State, and of the total mill consumption of 
 South Carolina, 91 per cent was cotton grown in that 
 State. Of this 74 per cent of the mill consumption of 
 North Carolina (or 322,407 bales), which was taken from 
 its own State, how much of it paid any railroad rate at 
 all ? Of the 91 per cent of the total mill consumption of 
 South Carolina (or 452,402 bales), grown in that State, 
 how much of it paid any railroad transportation? We 
 all know that the mills in these States are generally 
 located in the heart of the cotton district, and we are of 
 the opinion it would not be too far-fetched to say that, 
 on the average, 50 per cent of the cotton grown in these 
 States consumed by the mills is brought to towrn in 
 wagons and pays no railroad transportation. The remain- 
 ing 50 per cent pays railroad transportation, but, of 
 course, on account of the short distance hauled, the 
 charges are nothing like what they are to New England 
 territory or European countries, a thousand to three 
 thousand miles away. Mr. Culp, the traffic manager of 
 the Southern Railway, says the rates to the mills will 
 average $1 per bale from points within the States. 
 
 Now, if it is right for the Southern Railway, as 
 stated by Mr. Finley, to insist that the rates to the 
 Carolina mills, with respect to raw cotton, shall bear a 
 proper relation to the rates to other consuming districts, 
 is it not equally right for the other lines, operating in 
 Alabama and Mississippi, and who have no interest in 
 the Carolina mills, to insist that the rates to the consum- 
 ing districts and marts of trade which they serve shall 
 bear a proper relation to the rates charged on the larger 
 proportion of this cotton consumed by the Carolina mills ? 
 
22 
 
 If it is proper for the Southern Railway, in order to 
 obtain 26 per cent of the mill consumption of North 
 Carolina, and 9 per cent of the mill consumption of 
 South Carolina, to come west 700 miles and say to the 
 lines traversing that territory “we shall insist upon 
 such rates for this small proportion of the mill con- 
 sumption of our States as will fully enable them to 
 compete with your consuming centers,” would it not be 
 equally proper for the Alabama and Mississippi lines to 
 insist upon putting their consuming centers on as good 
 a relative plane as the Carolina mills enjoyed on 74 
 per cent and 91 per cent of their cotton by having to 
 pay no rates on possibly half their cotton, and com- 
 paratively low rates, or $1 per bale, on nearly all of 
 the remainder? If this principle of rate-making is right 
 to apply to one consuming center, why not to other 
 consuming centers ? 
 
 By reason of the fact that the New England mills 
 have to pay high rates on 100 per cent, or all of their 
 cotton, the rates being, from Mississippi on our line, 
 80 to 95 cents per hundred, the rates from Texas com- 
 mon points, $1 a hundred, is it not a little far-fetched 
 for the Southern Railway to set up the plea that, though 
 74 and 91 per cent respective^ of the North and South 
 Carolina consumption is obtained at home, with possibly 
 50 per cent of this paying no rates at all, and the 
 remainder comparatively low rates by reason of the 
 short distance hauled, yet on the 9 per cent of the one 
 State and the 26 per cent of the other, it must have 
 rates that are below the rates on 100 per cent of the 
 cotton of the other lines to their consuming districts as 
 much as $1.80, $2.25, and $2.50 per bale ? The Southern 
 Railway’s rate from Winona to the Carolinas is $2.50 
 per bale, out of which it pays 50 cents for compression ; 
 the Illinois Central’s rate from Winona to New England 
 was, prior to the Southern Railway’s reduction, $4.30 
 per bale, out of which it paid 50 cents for compression, 
 leaving a difference in favor of the Carolina mills of 
 
23 
 
 $1.80 per bale. This difference, of course, would be 
 further increased as our rates get higher, to 95 cents, to 
 New England territory. 
 
 It may be of interest to give here the movement of 
 cotton overland to New England mills for the past year. 
 
 OVERLAND MOVEMENT ACROSS THE POTOMAC AND 
 OHIO RIVERS AND THE MISSISSIPPI 
 RIVER ABOVE CAIRO. 
 
 SHIPPED FROM AND VIA 1899-1900 
 
 St. Louis 865,107 
 
 Hannibal and other points above St. Louis. 36,695 
 
 Cairo 226,421 
 
 Louisville 211,877 
 
 Evansville 1,685 
 
 Shipments from other points on Ohio and 
 
 Mississippi rivers not elsewhere included 14,982 
 
 Virginia points 99,704 
 
 Cincinnati receipts by rail and river not 
 
 elsewhere counted 135,652 
 
 Shipped to mills on Ohio River not in- 
 cluded above 11,318 1,603,441 
 
 Less: 
 
 Shipments from Cairo and Paducah at 
 
 St. Louis 23,190 
 
 St. Louis to New Orleans and Memphis by 
 
 river and local consumption 5,811 
 
 St. Louis and Cairo to Newport News, 
 
 Norfolk, etc., via Cincinnati, etc., and 
 
 St. Louis to Pensacola 46,863 
 
 St. Louis to and via Louisville, etc 1,923 
 
 Cincinnati to Southern mills and New 
 
 Orleans 1,783 79,570 
 
 Deduct: 1,523,871 
 
 Inland shipments across Mississippi, Ohio, 
 
 and Potomac rivers from New Orleans. 17,262 
 
 Mobile 7,482 
 
 Galveston 480 
 
 Receipts by Rail Overland at: 
 
 New York 80,713 
 
 Boston 118,891 
 
 Philadelphia 36,206 
 
 Baltimore 101,648 362,682 
 
 Net Overland Movement (including Canada) 1,161,189 
 
 [New Orleans Cotton Exchange Report, 1900.] 
 
24 
 
 The 865,107 bales via St. Louis, and 36,695 bales via 
 Hannibal largely came from Texas, where rates are as 
 high as $5 a bale. The 439,000 bales via Cairo, Louis- 
 ville, and Evansville largely came from Mississippi, 
 where the rates are from $4 to $4.70 per bale. The 
 rates from Memphis, from which a portion of this cotton 
 was shipped, are not as high as the others named, being 
 $2.77| per bale, but it must be remembered that all this 
 cotton from Memphis had a rate assessed upon it to get 
 it to Memphis of from $1 to $2 per bale. 
 
 What has been stated in reference to the New Eng- 
 land rates will apply in a stronger degree to export 
 cotton for Great Britain and the continent. In view of 
 what has been shown regarding the home supply of 
 cotton of the Carolina mills and the rates thereon, it 
 seems like a very irrelevant undertaking to set up the 
 plea or argue before an intelligent tribunal that lower 
 rates are necessary for the Carolina mills to enable them 
 to compete with the English or continental mills. The 
 foreign mills have to pay high rates on the raw material 
 to the ports of trans-shipment plus an ocean rate for 
 four thousand miles, plus an inland rate in the foreign 
 country that we know is much higher than any rate in 
 the United States for a corresponding distance, a further 
 high inland rate on the product plus the ocean rate to 
 destination, as against the “no rates” of the Carolina 
 mills on a large proportion of their cotton, and low 
 rates on the remainder, plus rates on the product which 
 we are sure must be as reasonable as are those of the 
 foreign mills. 
 
 But, even though the Carolina mills labored under a 
 disadvantage by reason of more favorable rates on ocean 
 carriage and inland transportation of other countries on 
 the export raw cotton and product thereof, would it be 
 a proper office for the Southern Railway to undertake to 
 equalize these disadvantages by destroying the rate 
 fabric of long years’ standing in territory 700 miles away 
 from its mills, thereby depleting the revenues of other 
 
25 
 
 * 
 
 lines to a far greater degree than it might hope to gain 
 by the destruction. But, that the fears entertained by 
 the Southern Railway traffic officials as to the ability of 
 the Carolina mills to compete in the markets of the 
 world with other consuming districts have no founda- 
 tion in fact, can be readily demonstrated. A glance at 
 the record of the development of the Carolina mills will 
 suffice to allay all apprehensions on this score. The fol- 
 lowing statement shows the spindles in operation in the 
 States of North Carolina, South Carolina, and Georgia 
 for the past four years : 
 
 SPINDLES IN OPERATION. 
 
 STATE. 1897. 1898. 1899. 1900. 
 
 North Carolina .. 969,337 1,018,303 1,283,638 1,581,787 
 South Carolina ..1,250,324 1,307,566 1,626,370 2,119,995 
 Georgia 704,753 765,142 926,044 1,186,71 6 
 
 2,924,414 4,888,498 
 
 2,924,414 
 
 Increase in four years 1,964,084 
 
 Percentage of increase 67$ 
 
 [New Orleans Cotton Exchange Keport, made up from actual figures from the mills 
 for year ended August 31, 1900.] 
 
 The figures show a steady and large growth each year 
 greater than any cotton industry in the world, the in- 
 crease in the four years being 1,964,084 spindles, or 67 
 per cent. 
 
 It may be well to remark here that the New England 
 mills, in five years, increased only 250,000 spindles, or 
 1.8 j>er cent; Great Britain only 2.4 per cent. There were 
 built in North Carolina during the past year thirty-four 
 new cotton mills, in South Carolina thirty-one, and in 
 Georgia thirty-seven, and the number of spindles in these 
 States increased the past year 1,052,446, which was nearly 
 as much as the total increase of Great Britain in five 
 years, and more than four times the increase in the New 
 England States for five years. Does it seem reasonable 
 
26 
 
 that fresh capital would be invested in these new mills if 
 the rates charged on cotton were unfavorable ? How, 
 then, can we treat with seriousness Mr. Finley’s asser- 
 tion that ‘ ‘ there is a feeling of deep concern about the 
 present situation, and they (the Carolina mill owners) 
 look confidently to the roads to relieve them % ” 
 
 The bases for these low cotton rates to the Carolinas 
 enforced by the Southern Hailway were given by Mr. 
 Culp, its traffic manager, at a meeting in St. Louis Octo- 
 ber 4th, as follows : 
 
 “We did take Atlanta as a basis. The rate (from 
 Atlanta) to South Atlantic ports was 43 cents. The rate 
 from Atlanta to Wilmington was 43 cents. The mills in 
 North Carolina — most of the important mills — are inter- 
 mediate between Atlanta and Wilmington. Some of 
 them in South Carolina are intermediate between 
 Atlanta and Charleston. The rate from Atlanta to 
 Carolina mills had been 49 cents — not all, but most of 
 them. Spartanburg would have been as low as 38 cents. 
 Some others, I think, had been 40 cents. We, of course, 
 gave due consideration to the rate on cotton to these 
 mills and the rate on the cotton factory products out to 
 the eastern points to which they would be shipped. 
 Taking these two, it was apparent that they were at a very 
 great disadvantage as compared with the eastern mills; 
 that the eastern mills could ship their cotton to their 
 mills, manufacture it and ship it back to New York — 
 the principal market, and the market rates to which are 
 always, or nearly always, considered in making sales for 
 export. It was very apparent to us that if we charged 
 even 43 cents from Atlanta to the North Carolina mills, 
 the same as to Wilmington, we were charging all that 
 we ought to charge. We might very properly have 
 figured out, if we had attempted to equalize — to put 
 them on a parity with the eastern mills — that they 
 ought to have had a lower basis than that ; but we said 
 that we would try this rate. Now, the rates on cotton 
 factory products from South Carolina to the East are 
 considerably higher than they are from North Carolina 
 — more than 5 cents higher ; in some cases considerably 
 
27 
 
 more than 5 cents. We therefore suggested 43 cents 
 from Atlanta to the North Carolina mill§, and we made 
 the South Carolina mills 5 cents less. That gave us a 
 starting point. Now, the rates from Birmingham and 
 Montgomery and Selma and Meridian and Chattanooga 
 and Borne and Dalton and all points between Chatta- 
 nooga and Atlanta, and all points between Chattanooga 
 and Birmingham and Chattanooga and Selma to the 
 East and to the South Atlantic ports are now and have 
 been for a good many years 2 cents per 100 pounds 
 higher than from Atlanta. It was, therefore, a proper 
 basis to make the rates from these same points to 
 Carolina mills 2 cents higher than from Atlanta to the 
 Carolina mills. That brings us down to points west of 
 Birmingham. We found there was a difference of 16 
 cents per 100 pounds existing between the rates from 
 Birmingham to Carolina mills and from Mississippi 
 points (Columbus and West Point) to Carolina mills. 
 That is perhaps the difference, or about the difference, 
 between the rates from those points and the rate from 
 Birmingham to eastern cities. Whether that difference 
 is too high or not, I am not going to say. The rates 
 from Mississippi to the East, as I have before stated, 
 had been fixed largely via Cairo or via the Gulf. The 
 Bichmond & Danville, and later the Southern Bailway, 
 have never pressed very much for reductions from those 
 rates to eastern cities. They have adopted the rates 
 which were fixed from time to time through Cairo or 
 through the Gulf ports. There may now and then have 
 been some rate changed a little, but I don’t even recall 
 that. They have adopted and continued and worked the 
 basis fixed by the Southern lines to northern and eastern 
 cities, and suggested no change ; but when they came to 
 fix rates from those points to points on our own line east 
 of Atlanta, from 160 up to 200 or 300 miles, it was clear 
 that those rates could not be defended. They could not 
 be defended before any set of railroad men, traffic men, 
 who had no interest in the business at all and who 
 looked at what was fair and right. They could not have 
 been defended before any Interstate Commerce Commis- 
 sion. They could not have been defended before any 
 court. The question with us was what differential we 
 should fix as between Columbus and West Point and 
 Birmingham. We had there a 2-cent differential be- 
 tween Birmingham and Atlanta, a distance of 167 miles. 
 
28 
 
 The distance from Columbus to Birmingham is 123 
 miles. At the lirst idea, it might have seemed that a 
 2-cent differential over Birmingham would have been a 
 proper differential to make to these Carolina mills, but 
 there was Meridian a little farther away from Birming- 
 ham than Columbus, with a 6-cent differential, and I 
 reasoned that, ‘Well, we will let Meridian stand; we 
 won’t change that rate, and we will make Columbus as 
 high, although the distance is less and although it 
 makes the difference 6 cents per 100 pounds between 
 Birmingham and Columbus, whereas the difference be- 
 tween Birmingham and Atlanta is 2 cents.’ Now, I 
 submit that not one of you gentlemen, if you had been 
 figuring rates on your own road, would have done more 
 than that. 
 
 •‘Montgomery and Selma are based 2 cents higher than 
 Atlanta; have been for a great many years. The competi- 
 tion via the Alabama River through the Gulf has seemed 
 to prevent a higher rate than that. No doubt, as every 
 one who participates in business from Montgomery 
 knows, many seasons the bulk of the business which 
 goes out via the Gulf does not pay anything like 45 
 cents per 100 pounds to New Orleans, or 35 cents to 
 Mobile and Pensacola. They don’t get even those rates. 
 Likewise, the bulk of the business which goes out from 
 Montgomery does not pay 45 cents to South Atlantic 
 ports. Those rates are cut in two sometimes, and there 
 is always a very marked shrinkage in them. They are 
 simply paper rates when it comes to the movement of 
 the business which does not go to South Atlantic ports 
 proper, but goes beyond. But we took this paper rate to 
 the South Atlantic ports and to Wilmington, although 
 the business does not move at it. and we used that as a 
 basis for our rates to Carolina. Now Birmingham being 
 nearer Atlanta and the South Atlantic ports than Mont- 
 gomery or Selma, has always taken the same rates to 
 Atlantic ports as Montgomery and Selma for so many 
 years that I doubt if it w’ould be practical, or even wise 
 or expedient, to undertake to put that rate up, but that 
 was the rate, and that is the rate as we took it. Now, 
 when we went west of Columbus, cotton was carried last 
 year — we had plenty of information to show that cotton 
 was carried last year from Vicksburg to Carolina mills 
 as low as 55 cents per 100 pounds. It did not pass over 
 the Southern Railway. I think the rate from New 
 
29 
 
 Orleans was 55 cents. We had a rate of 51 cents from 
 Columbus and West Point, and it looked like (55 cents 
 being the rate from Vicksburg and 55 cents from New 
 Orleans) a 4-cent differential, making the rate 55 cents, 
 was not unreasonable in fixing the rate from Winona, 
 Greenville, and other points.” 
 
 [Report of meeting at St. Louis, October 4, 1900.] 
 
 And again, in a letter to the Illinois Central Company, 
 he says : 
 
 “A further justification for establishing a rate of 51 
 cents from Columbus, Miss., is found in the rate from 
 Meridian to mills in North Carolina. This rate has been 
 for years, with one temporary exception, 51 cents per 
 100 pounds, and it is not inconsistent to make the rate 
 from Columbus and West Point the same as from 
 Meridian, the distance from Columbus being less than 
 from Meridian to Charlotte, taking Charlotte as a 
 common center and the rates from West Point being 
 usually the same as from Columbus. 
 
 “ In comparing the rates to other territory, purchasing 
 cotton in competition with the Carolina mills, it will be 
 found that from Greenville the rates fixed by water 
 competition to New Orleans are on a ver}^ low basis, not 
 only to New Orleans but also to eastern cities, which is 
 likewise true of Greenwood, Miss. ; therefore, being 
 lower than the rates from Columbus and West Point, 
 Miss., to New Orleans or eastern cities. Therefore, in 
 fixing the rates from Greenville and Greenwood, Miss., 
 to Carolina territory, 4 cents per 100 pounds higher 
 than from Columbus and West Point, Miss., it can not 
 justly be said that the rates from those points were 
 nndulv low as compared with the rates from Columbus 
 and West Point. The rates from Winona and Carolina 
 mills were made the same as from Greenwood. In 
 making the rates from Greenville, Greenwood, and 
 Winona to Carolina territory higher than from Columbus 
 and west instead of lower, as is the case with respect to 
 rates to gulf ports, to eastern and foreign mills, we have 
 made them 4 cents per 100 pounds higher, and this 
 basis should, and I believe will, furnish ample protection 
 to your local territory.” 
 
 We find here no consistent principle underlying this 
 rate structure. In the case of the rates from Atlanta he 
 
30 
 
 is actuated by the proportions of through rates which 
 accrue to the line between Atlanta and South Atlantic 
 ports ; in the next case by the differentials existing 
 between Birmingham and Atlanta under totally different 
 traffic conditions to those governing the Carolina situation. 
 In the rates from Columbus the differentials which guided 
 him in the Birmingham case are ignored and he has 
 recourse to distance and the fixed rate from Meridian for 
 his basis. In this case he says: “Well, we will let 
 Meridian stand; we won’t change that rate, and we will 
 make Columbus as high, although the distance is less.” 
 Nevertheless he did change Meridian by reducing the 
 rate 5 cents per 100 pounds to Group 2 territory, 
 embracing much the greater part of the Carolina mill 
 consumption. For the district west of Columbus, Miss., 
 168 miles to Greenville, traversing almost the entire 
 width of the State, and probably the most important cot- 
 ton territory in question, he cites for his basis alleged 
 rates in effect from Vicksburg and New Orleans, 82 and 
 317 miles, respectively, away from Greenville, also the 
 rates in effect to New Orleans and eastern cities made 
 necessary by river competition. 
 
 We here have a method, or rather a lack of method, 
 for compiling rates which, to say the least, is unique. 
 If the structure is not ingenuous it is certainly very 
 ingenious. 
 
 While we have no desire to question the rates which 
 the Southern Railway may deem proper to charge from 
 Atlanta or other Georgia points to the Carolina mills, 
 not being directly interested in them, we think the 
 principle upon which they are constructed and its espousal 
 by such a large and important railway system as the 
 Southern Railway may be fraught with many evils ta 
 the railroad body politic. As a part of this body politic, 
 we take exception to it as being a pernicious attack upon 
 all local rate structures which railroads have to depend 
 upon for their main revenues. 
 
 The recognition and practice of a principle that local 
 
31 
 
 rates to towns or industries should be measured by the 
 proportions which accrue to a line for like or other 
 distances on a through shipment destined 1,000 or 
 4,000 miles beyond, as in this case, would be subversive 
 of the most vital interests of railroads. It could not be 
 sanctioned without grave consequences, even though 
 the shipment were destined only 100 miles beyond the 
 local point ; therefore, the less could it be sanctioned 
 when with its additional rate assessment the shipment 
 is destined to New England, 1,000 miles away, or to 
 Europe, 4,000 miles away. If there is one traffic principle 
 more than another that railroad managers have striven to 
 inculcate in the minds of shippers, courts, communities, 
 and commissions, it is that a division of a through rate 
 which a road receives between given points should never 
 be considered the measure of the local rate between such 
 points. Of course, there are many good reasons for this 
 which have been, and can be, advanced. The Interstate 
 Commission has in its decisions many times sanctioned 
 this principle, that through rates are not illegal which, 
 when divided, give carriers less than their local rates ; 
 and in a recent case, Edward Kemble vs. Boston & 
 Albany Railroad, it declared that “it is not, as a matter 
 of law, a violation of the act to regulate commerce to 
 make a lower rate to the port of export upon traffic 
 which is exported than upon that which is locally con- 
 sumed, for the export rate is in essence the division 
 of a through rate.” 
 
 In the case of the rates from Birmingham enforced by 
 the Southern Railway we find, in essence, the same per- 
 nicious principle underlying them as that which governed 
 the Atlanta rates. Because, through the many variable 
 conditions and circumstances affecting the rate situation 
 of Birmingham in the past it was found necessary to so ad- 
 just and readjust at the incoming of new roads the rates 
 to New England and to South Atlantic ports, on cotton 
 for foreign countries, that a difference of only 2 cents 
 per 100 pounds existed between them and the rates from 
 
32 
 
 Atlanta, it is now claimed by the Southern Railway that 
 this is a proper difference to apply between Atlanta and 
 Birmingham on cotton for consumption by the Carolina 
 mills. We can well understand that the conflicting 
 interests of the railroads, as they were built into Birming- 
 ham, one by one, would require a readjustment on the 
 advent of each that in time would produce this difference, 
 but we can not understand why this should be applicable 
 to the Carolina mill industry, with the conditions and 
 circumstances affecting it entirely unlike those governing 
 in the case of the New England or foreign mills. Mr. Culp 
 does not endeavor to explain; he merely says “it is 
 proper,” and, ipso facto , down go the rates as much as 
 55 cents per bale. 
 
 To haul cotton, the staple commodity of the southern 
 railroads, upon which they are so much dependent for 
 their revenue, to a local industry within the bounds of 
 the southern zone, a distance of 168 miles, for 2 cents 
 per hundred pounds, is not going to prove profitable. 
 There is no necessity for it, as has been shown by the 
 rapid and successful growth of the Carolina mill industry. 
 There is no such competition with northern or European 
 mills as is claimed by the Southern Railway, and never 
 can be so long as these Carolina mills get the greater part 
 of their cotton, as is the case now, at nominal rates of 
 $1 per bale, or free of any rates when hauled to the 
 mills in wagons from the immediate country. 
 
 The average distance from Atlanta to the mill points 
 in Group No. 1 territory is reported to be 358 miles, and 
 to Group No. 2 territory, 222 miles. The difference 
 between these is 136 miles, making that the average dis- 
 tance between the mills in the two groups. Now, it will 
 be observed that the Southern Railway charges 5 cents 
 per 100 pounds less on cotton to one of these groups than 
 to the other. If it is proper to have a difference of 5 
 cents per 100 pounds to points of destination, where the 
 difference in distance will average 136 miles, is it not 
 equally proper that at least a corresponding or propor- 
 
33 
 
 tionate difference should mark the rates from points of 
 origin where there is a difference in distance of 168 miles? 
 
 Farther west we come to Columbus and West Point, 
 Mississippi. Aberdeen, Starkville, and West Point, 
 towns of importance, are near Columbus, and as they 
 largely derive their trade from the same territory, they 
 necessarily have like rates. In adjusting the rates from 
 these stations to the Carolina mills, Mr. Culp says he 
 found the rate from Meridian 51 cents, and though he 
 thought 2 cents over Birmingham would be proper to 
 make from Columbus, on account of the distance, 123 
 miles, he would not change Meridian but would make 
 Columbus and West Point the same. The former rate of 
 51 cents applied to the whole of the Carolina territory, 
 whereas under the new adjustment, the rate applied only 
 to Group 1, and was reduced 25 cents per bale to Group 
 2, in which are comprised the mills consuming the larger 
 share of the cotton. The reductions from Columbus and 
 group stations to Group 2 of the Carolina mills are as 
 much as $1.10 per bale. 
 
 It will be noted that the rule which governed in 
 making the rates from Birmingham to the Carolina 
 mills — that of making them so much higher than 
 Atlanta as the rates from Birmingham to New England 
 and South Atlantic ports where higher than Atlanta — 
 was not observed here. If it were, instead of the rate 
 being 36 cents on compressed cotton from this group of 
 stations to the Carolina mills, it would be 49 cents. 
 Even then it would be too low as compared with other 
 rates and conditions. 
 
 The rate from Meridian to New Orleans, 196 miles, is 
 36 cents per 100 pounds on compressed cotton. The rate 
 to Boston, made by the Southern Railway to meet this 
 New Orleans competition, is 61 cents. The rate to Char- 
 lotte, 589 miles, made by the Southern Railway to meet 
 the Gulf and Boston competition, was 41 cents. It now 
 reduces the rate to Group 2 of the Carolinas to 36 cents, 
 making it the same for three times the distance as the 
 Gulf rate. This, on its face, is considerably out of line. 
 
34 
 
 Having established these reduced rates from Meridian 
 which can not be justified by competition with either the 
 rates to the Gulf or New England, it applies the same 
 rates to Columbus and West Point, notwithstanding the 
 rates from those stations were 13 cents per 100 pounds 
 more to Boston and 11 cents more to New Orleans than 
 were the Meridian rates. If the Meridian rates to the 
 Carolinas were originally based on the rates to the Gulf 
 and to Boston, and the West Point group stations were 
 higher than these latter, why should not the Carolina 
 rates from West Point be made higher accordingly? 
 These rates from West Point were, to New Orleans, a 
 distance of 294 miles, on compressed cotton, 47 cents; to 
 Boston, 1,391 miles, 74 cents, of which the Southern lines, 
 for a haul of 259 miles, received 37 cents. The rate to 
 Charlotte, 577 miles, on the reduced basis, is 36 cents. 
 It will be here seen that the Southern Bailway, for its 
 Carolina mills, had 8 cents and 13 cents margin to work 
 on at Meridian, as against the Boston rate. As these 
 rates were made by the Southern Bailway it is assumed 
 they were relatively fair. If they were, how can a dif- 
 ference of 33 and 38 cents in favor of the Carolinas be 
 justified at West Point? If the Meridian rates are fair 
 to the Southern Bailway, the West Point rates must be 
 very unfair, and in time as the Carolina mills wax 
 stronger, they will work sad havoc to the other lines’ 
 revenues. 
 
 For the 150 miles west of West Point, via Winona, 
 Greenwood, Morehead, and Elizabeth, to Greenville, the 
 Southern Bailway has also established an unjustifiably 
 low basis to its Carolina mills, the reductions being from 
 Winona and Greenwood, 90 cents per bale, to Group 2, 
 and $1.05 per bale from the other stations. As the 
 Southern line parallels the Illinois Central for a distance 
 of 135 miles in this territory, it means that all local sta- 
 tions, as well as the junctions, will be affected. 
 
 The first reason assigned by the Southern Bailway for 
 this low basis from Winona and Greenville is that cotton 
 
35 
 
 was carried l#st year from Vicksburg and New Orleans 
 to the Carolina mills as low as 55 cents per 100 pounds. 
 We had no information of this character, although we 
 were in a position to know something about it if such 
 had been the case. Since this statement was made we 
 inquired into the matter, but were unable to get it veri- 
 fied. The facts are that the rates from Vicksburg and 
 New Orleans all of last season were 71 cents per 100 
 pounds. Mr. Culp should remember, however, before 
 basing any rates on those from Vicksburg or New Or- 
 leans that the cotton on entering those places has been 
 already assessed a rate of from $1.00 to $2.75 per bale, 
 and this should have cognizance when considering the 
 relation of other rates to those from New Orleans or 
 Vicksburg. 
 
 In further reference to Greenville, Mr. Culp says that 
 the rates fixed by water competition to New Orleans and 
 Eastern cities are on a very low basis, which is likewise 
 true of Greenwood. He then states that as they are 
 lower to New Orleans and Eastern cities than the rates 
 from West Point, by making them 4 cents to the Caro- 
 linas higher than West Point, they can not be considered 
 unduly low. 
 
 Our rates from Greenville and Greenwood are lower 
 than desired by us, but stress of water competition ren- 
 ders us powerless to advance them. From Greenville 
 they are 55 cents, compressed, to Boston, and 21 cents to 
 New Orleans ; from Greenwood, 64 cents to Boston, and 
 33 cents to New Orleans. To Charlotte, via the Southern 
 Railway, 727 miles from Greenville, the rate is 40 cents. 
 Now, low as the rate is from Greenville to New Orleans, 
 made necessary by river competition — and it should be 
 remembered it is only a proportion of a through export 
 rate — yet it is higher per mile than is that of the Southern 
 Railway, which is a strictly local rate. The Southern 
 Railway rate should be 48 cents instead of 40, to be on a 
 parity, on a mileage basis, with the New Orleans rate. 
 Our proportion to Cairo, 20 cents per 100 pounds of the 
 
86 
 
 Boston through rate from Greenville, is also higher, pro- 
 portionately, per mile than is the strictly local rate of 
 the Southern Railway to Charlotte. To be on a parity, 
 the Charlotte rate should be 47 cents instead of 40 cents. 
 To be on a parity, on a mileage basis, with the Illinois 
 Central’s low export rate from Greenwood to New 
 Orleans, made necessary by water competition, the South- 
 ern Railway’s rate would have to be 79 cents per 100 
 pounds instead of 40 cents. As these Illinois Central 
 rates, with the possible exception of those from Memphis, 
 are lower as related to distance than any others on the 
 line, it will be readily observed how radical and how 
 sweeping are the reductions made by the Southern 
 Railway. 
 
 These same low rates of the Southern Railway from 
 Greenville are carried to Winona, eighty-seven miles east, 
 where it can not be said that low rates either to the Gulf or 
 to Boston make them necessary. Neither does the long 
 and short haul clause of the Act to Regulate Commerce 
 make them necessary, inasmuch as the river competition 
 at Greenville justifies the Southern Railway in charging 
 less from that place than from the inland town of Winona. 
 This has been its practice in the past, and is now on cot- 
 ton to the Gulf and to Eastern cities. It is not its prac- 
 tice, however, on cotton for the Carolinas ; Winona, an 
 interior town in the heart of the Mississippi cotton dis- 
 trict has been doomed to take the same low rates to the 
 Carolinas as are alleged to be necessary to charge from 
 Greenville where water congelation is active. The Illinois 
 Central’s rates prior to the recent reduction were from 
 Winona, on compressed cotton, 45 cents per 100 pounds, 
 to New Orleans, 272 miles, and 76 cents to Boston, 1,458 
 miles. It may be well to mention that we formerly car- 
 ried higher rates to Boston than these, but they were 
 reduced by the Southern Railway’s predecessor on the 
 completion of that line to the river. 
 
37 
 
 Mr. Finley says “the basis upon which we should 
 give the most consideration to the question, is the basis 
 of rates to Carolina mills compared with those to New 
 England mills and for export.” 
 
 It is reasonable to assume, then, that in laying the 
 foundation for his rate structure at Atlanta, where he 
 made large reductions to the Carolinas, thus increasing 
 the difference between them and Boston and export 
 rates, this important phase of the matter had deserved 
 consideration. There is no good reason, of course, why 
 the principle, if a good one, should not apply in the 
 Carolinas and in Georgia, as well as in Alabama or 
 Mississippi. From Atlanta we find that by his adjust- 
 ment of 43 and 38 cents to the respective groups 1 
 and 2 of the Carolinas, he enjoyed a differential for 
 his mills under Boston of 20 and 25 cents, and to South 
 Atlantic ports, 5 cents to Group 2 territory. When we 
 come to Birmingham we find that the adjustment from 
 there makes the same difference in rates between the 
 Carolina mills, on the one hand, and Boston and South 
 Atlantic ports on the other, as at Atlanta. At Meridian 
 the difference, in favor of the Carolina mills as against 
 Boston, is 25 and 20 cents; it is 17 and 12 cents as 
 against South Atlantic ports, and 8 and 3 cents as 
 against New Orleans. At Columbus and group stations, 
 the difference in favor of the Carolina mills as against Bos- 
 ton is 38 and 33 cents, and against New Orleans 11 and 
 6 cents. At Winona, the difference in favor of the 
 Carolina mills as against Boston is 36 and 31 cents. 
 
 Now, if he can control cotton <for the Carolinas as 
 against Boston or Europe at the difference in rates 
 established for the Atlanta, Birmingham, and Meridian 
 territories, why is it necessary for him to make greater 
 differences at Columbus, West Point and Winona? If 
 cotton can be controlled for the Carolina mills in one 
 territory as against Boston or export at a given differ- 
 ence in the rates, why can it not be controlled at another 
 having like differences? If this logic is sound, does it 
 
38 
 
 not look as if the Southern Railway was wasting 
 revenue that otherwise could be retained? The most 
 serious feature of it, however, is that it forces upon 
 other lines a reduction of rates, the necessity or justice 
 of which can not be explained, but which results in large 
 losses of revenue. 
 
 Mr. Finley states in a letter to Mr. Van den Berg, 
 vice-president of the Louisville & Nashville Railroad, 
 that from a number of mills in North Carolina the rate 
 on cotton factory products to New York is 7 cents lower 
 than the rate from mills in the Piedmont section, and 
 “ from Burlington, Raleigh, and points in contiguous 
 territory, in the State of North Carolina, the rate to 
 New York is 41 cents per 100 pounds, or 12 cents less 
 than the rates from the Piedmont section of South 
 Carolina.” 
 
 From Piedmont to Burlington, N. C., the distance is 
 233 miles, and we here have a differential of as much as 
 12 cents per 100 pounds on the product of the mills 
 between the two points. If it is fair to allow 12 cents 
 differential on the product for 233 miles, is it not equally 
 fair that a proportionate differential should be allowed 
 on the raw cotton between Atlanta and Birmingham, 
 168 miles ? The object of the reduced rates, as stated by 
 the Southern Railway, is to put the Carolina mills more 
 on a parity with New England and foreign mills. To 
 accomplish this, why should not such large differences 
 in the rates on the product as are here shown be reduced 
 instead of the rates on the raw material ? If it is proper 
 that Piedmont, 233 miles farther west than Burlington, 
 should have 12 cents per 100 pounds higher rate on 
 products, then we can see no good reason why Birming- 
 ham, 168 miles west of Atlanta, should not have a 
 proportionate difference higher than Atlanta, or 8.6 
 cents per 100 pounds instead of 2 cents as fixed by the 
 Southern Railway. 
 
 In his telegram to Mr. Russell, president of the Mobile 
 & Ohio Railroad, Mr. Finley says : 
 
39 
 
 “ You must certainly overlook the fact that Carolinas 
 in taking this raw cotton on rates under discussion have 
 also to pay rates connected with long hauls on their 
 cotton factory products in reaching Eastern markets. 
 This combination being, even on basis reduced rates, 
 materially in excess of rate direct to Eastern mills.” 
 
 We ask if this equalization is necessary or desired, 
 why not attain it by making the rates on the products 
 to the common market commensurate with those made 
 by the New England mills? We are told by the 
 Southern Railway officials that the rate on the products 
 from New England mills to New York, the common 
 market for all mill products, is 10 cents per 100 pounds, 
 while the rate from the Carolina mills is as high as 53 
 cents per 100 pounds, and the inference is from state- 
 ments made and action taken that this difference must 
 be equalized by reductions in the raw cotton rates. 
 Never a word have we heard with reference to reduc- 
 tions on the product. 
 
 Even though this principle of equalization sought to 
 be established by the Southern Railway were recognized 
 by the other lines, why should not the products of the 
 Carolina mills take rates to New York, the common 
 market for all mill products, proportionate with those 
 from competing centers in New England, at the same 
 distance-ratio-rate as the rates on the raw cotton to 
 the Carolina mills are proportionate with the rates of 
 other lines to their marts of trade ? Is it fair that the 
 raw cotton alone should stand the entire brunt of the 
 equalization ? 
 
 As before stated, the average distance from Atlanta 
 to the Carolina mills Group No. 1 is 358 miles and to 
 Group No. 2, 222 miles. The difference between these is 
 136 miles, so that the average distance from Atlanta to 
 all Carolina mills is one-half of 136 plus 222, or 290 miles. 
 The distance from Atlanta to New York is 868 miles. 
 Deducting from this the average distance from Atlanta 
 to all the Carolina mills, 290 miles, gives us 588 miles as 
 
40 
 
 the average distance from all the Carolina mills to New 
 York. 
 
 Mr. Finley says in his letter to Mr. Van den Berg,, 
 “the rate on cotton factory products of South Carolina 
 mills to New York is 53 cents per 100 pounds. The rate 
 on cotton factory products from the important mills in 
 North Carolina to New York will average about 46 cents.” 
 An average, therefore, of 49J cents from all mills in thfr 
 Carolinas will probably be not much out of the way. We 
 then have an average rate of 49f cents on the products of 
 the Carolina mills to New York for a distance of 588 miles 
 as against a rate of 10 cents, as stated by Mr. Culp, from 
 New England, where the average distance will, in all 
 probability, be 240 miles. The average distance from 
 Lewiston, Merrimac, Boston, Lowell, Providence and 
 Fall River to New York is 242 miles. Lest Mr. Culp 
 should be in error as to the rates on the product from 
 the New England mills being 10 cents per 100 pounds,, 
 though he has used this figure repeatedly in his state- 
 ments and comparisons, we will, for the purpose now on 
 hand, double it and make it 20 cents, which will be so 
 much in favor of his side of this particular point we 
 wish to elucidate. 
 
 Now, if, for the purpose of putting the Carolina mills 
 on an equality with the New England mills on the com- 
 bined rates on the raw cotton and the product thereof, 
 the Southern Railway charges 36 cents per 100 pounds 
 on raw cotton from West Point to Charlotte, a distance 
 of 577 miles, as against a rate of 47 cents charged by the 
 Illinois Central Company to New Orleans, a distance of 
 294 miles, what rate should it, the Southern, charge on 
 the product from the Carolina mills to New York, a 
 distance of 588 miles, when the rates of the New England 
 competitor are 20 cents per 100 for a distance of 240- 
 miles? This is a conversion of the intricacies of this rate 
 problem into a mathematical proposition pure and simple 
 the answer to which will not admit of denial. 
 
 Is the answer 49£ cents, which the Southern Railway 
 
41 
 
 is now charging? No, the answer is 19 cents, and if we 
 make our computation based on 10 cents from New Eng- 
 land to New York, claimed by Mr. Culp to be the general 
 rate in effect, the answer will be 9.5 cents. This same 
 formula applied to other points will show that the South- 
 ern Railway’s contention for equalization of the combined 
 rates on cotton and product, means that the rates on 
 cotton shall be relatively very low, and the rates on prod- 
 uct relatively very high. 
 
 The equities of the situation demand that there shal 
 be no more inequalities at points of origin than at points 
 of destination, and that if any equalization of the com- 
 bined rates on the raw cotton and product thereof is 
 sought for, the product shall stand its share of the level- 
 ing process as well as the cotton. Where a railroad, as 
 in the case of the Southern Company, controls the situa- 
 tion, both at the point of origin of the cotton and the 
 point of origin of the product, it can offer no valid excuse 
 when contending for equalization of the combined rates 
 to charge disproportionately less on the cotton than on 
 the product. Equalization of the combined rates is the 
 proposition and contention of the Southern Railway, and 
 if conceded by the other lines, it should be followed to 
 its logical conclusion as above outlined. 
 
 We have had the repeated assurances of the Southern 
 Railway traffic officials that in adjusting these Carolina 
 rates, proper regard for the rights of others was ob- 
 served, but an analysis of them, as here shown, does not 
 •evidence such assurances. It would appear that the 
 method observed was to adopt minimum figures of 
 differentials, distance, or competition of markets, which- 
 ever best served their purpose. In other words, the 
 rates were formulated as they were enforced, by “main 
 strength,” and are a fitting concomitant to the assertion 
 of Mr. Finley in his letter to Mr. Yan den Berg that “the 
 mills have a right to demand and we owe it to the mills 
 that we shall make such an adjustment of rates from 
 points outside of the States of North and South Carolina 
 
42 
 
 as will enable them to compete with foreign markets and 
 with Eastern mills, so long as we are not called upon in 
 making this adjustment to sacrifice the revenues of our 
 company .” 
 
 What think you of that doctrine in the conduct of 
 traffic affairs where the inter-dependency of railroads is 
 recognized as being axiomatic \ It is so much at variance 
 with anything that can be enforced, without the entire 
 destruction of the railroad properties, that we do not 
 care to further discuss it. 
 
 Both Messrs. Finley and Culp have stated that the 
 rates in effect to the Carolina mills, prior to the recent 
 reduction, could not be defended before courts or com- 
 missions. Of course, this is mere assertion, as it has not 
 been tried, and possibly, like the other assertions of these 
 gentlemen in reference to the necessity for the reductions 
 to the Carolinas, may, upon examination, be found not 
 susceptible of proof. 
 
 The rates and rate per ton per mile, prior to the recent 
 reductions to the Carolina mills and to New Orleans, and 
 the proportions of the Boston rates to the Ohio River, 
 w r ere as follows : 
 
 Proportion of 
 
 From To Carolina Mills. To New Orleans. Boston Rates 
 
 to Ohio River. 
 
 
 Distance. 
 
 Ra'e. 
 
 Distance. 
 
 Rate. 
 
 Distance. 
 
 Rate. 
 
 Birmingham _ 
 
 ..458 
 
 52i 
 
 349 
 
 35| 
 
 481 
 
 25.5 
 
 Meridian 
 
 ..620 
 
 51 
 
 196 
 
 36 
 
 634 
 
 31.5 
 
 West Point __ 
 
 ..608 
 
 58 
 
 294 
 
 47 
 
 259 
 
 37 
 
 Winona. _ _ _ 
 
 -.675 
 
 58 
 
 272 
 
 45 
 
 276 
 
 39 
 
 RATE PER TON PER MILE. 
 
 Proportion of 
 
 From To Carolina Mills. To New Orleans. Boston Rates 
 
 to Ohio River. 
 
 Birmingham 2.51 cents. 2.03 cents. 1.060 cents. 
 
 Meridian.. 1.60 “ 3.67 “ .993 mills. 
 
 West Point 1.90 “ 3.20 “ 2 80 cents. 
 
 Winona 1.78 “ 3.32 “ 2.80 “ 
 
43 
 
 It will be seen from this that the rates to the Carolina 
 mills, as related to the distance from Meridian, West 
 Point, and Winona, were, on an average, only about one- 
 half the rates to New Orleans, and only 76 per cent of 
 the rates to the Ohio River on Boston shipments. The 
 difference, it will be observed, is more than enough to 
 allow the Southern Railway for any claim it might ad- 
 vance that, on account of its longer distance, its rate per 
 mile should be less. If other lines can charge higher 
 rates to their markets than are the old rates of the 
 Southern Railway, we do not think it need be worried 
 about justifying them before courts or commissions. 
 
 In March, 1889, soon after the Interstate Commission 
 was established, and when it was inclined to be more 
 radical with the railroads on account of assumed powers, 
 which since then it has found it did not possess, the Illi- 
 nois Central Company was cited before it to answer as to 
 the reasonableness of its cotton rates on a complaint made 
 by the New Orleans Cotton Exchange. The contention 
 of the Cotton Exchange was that the rates to New 
 Orleans were unreasonable, and that the rates should be 
 no higher per mile than to Boston. These rates to New 
 Orleans were as follows : 
 
 Miles. 
 
 Rates per Bale 
 to New Orleans. 
 
 50 
 
 100 
 
 150 
 
 200 
 
 250 
 
 300 
 
 $1.30 
 
 1.75 
 2.25 
 2.50 
 2.70 
 
 2.75 
 
 After an earnest and vigorous contest on the part of 
 the New Orleans Cotton Exchange, the rates charged 
 were decided by the Commission to be reasonable, and 
 were charged and collected on the Illinois Central Rail- 
 road up to the time of the reduction made by the South- 
 ern Railway. 
 
 It will be observed that these rates to New Orleans, for 
 300 miles, are as high as 55 cents per hundred, whereas 
 
44 
 
 the rate from Meridian to the Carolinas, 620 miles, prior 
 to the reduction, was 51 cents; from VV est Point, 608 miles, 
 58 cents, and from Winona, 675 miles, 58 cents. If the 
 Illinois Central Company, in 1889, established before the 
 Commission that a rate of 55 cents per hundred was rea- 
 sonable for 800 miles, and that this rate was, in essence, 
 only a proportion of the through export rate, we do not 
 think it would be difficult for the Southern Railway to 
 establish the reasonableness of a 58-cent rate from 
 Winona to a local industry 675 miles away. — New 
 Orleans Cotton Exchange vs. Illinois Central Railroad 
 Company, I. C. C., Yol. III. (Later, in 1894, on a 
 complaint of a shipper, we had occasion to defend these 
 same rates before the United States District Court of 
 Mississippi and were successful.) 
 
 Allusion is made both by Mr. Finley and Mr. Culp to 
 the fact that the Southern Railway derives only 41 cents 
 per hundred on its cotton from Alabama and Mississippi 
 on shipments to Boston or for export via South Atlantic 
 ports, and this is given as a reason why it is justified in 
 charging low rates on cotton from those States to the 
 Carolina mills, inasmuch as by the addition of the rate 
 on the product from the mills more revenue is realized 
 than if the cotton were taken to the South Atlantic 
 ports. On this subject Mr. Finley says : 
 
 “On cotton exported from Mississippi territory to 
 foreign ports we are compelled to meet through rates 
 made on New Orleans. Our average rate from Green- 
 ville, Greenwood, Winona, West Point, and Corinth to 
 Norfolk during the last season on export cotton was 41 
 cents per 100 pounds. If, therefore, we haul to the 
 Carolina mills the proportion of the cotton we have 
 heretofore handled to Norfolk for export, we shall secure, 
 say, to North Carolina mills, 55 cents per 100 pounds, less 
 the compressing, leaving 45 cents, which is 4 cents per 
 100 pounds more than we get on the cotton for export. 
 Our average earnings from Carolina mills to Norfolk on 
 
45 
 
 cotton factory products is about 30 cents per 100 pounds, 
 so that on cotton drawn from points in Mississippi west 
 of West Point and Columbus to Carolina mills, and 
 reshipped in the shape of manufactured product, we 
 would earn approximately 75 cents per 100 pounds, as 
 against 41 cents, our earnings on cotton exported 
 through Atlantic ports. On cotton from Columbus, 
 Miss., shipped to Carolina mills, manufactured and re- 
 shipped, we would earn approximately 70 cents per 100 
 pounds, as against about 53 cents per 100 pounds on 
 cotton from Columbus to Boston. Similar comparisons 
 can be made with respect to cotton from points in 
 Alabama.”* 
 
 Mr. Finley here endeavors to show that because 
 geographically his line is disadvantageous^ located, 
 with respect to hauling cotton to New England or to the 
 Gulf, lie is justified in making low rates to the Carolinas 
 which pays his line as much or more than his proportion 
 of the through rate. We have already descanted on the 
 impropriety of a division of a through rate being made 
 the measure of a rate to a local industry. 
 
 The fallacy of this lies in the fact that he can get the 
 cotton to the mills at the old or higher rates, and the 
 product from the mills at his regular rates, and in 
 addition to these get an equitable share of the cotton for 
 export or to New England mills. 
 
 Mr. Finley states in a letter to Mr. Van den Berg : 
 
 “You overlook entirely the fact that the develop- 
 ment, up to a comparatively recent period, has been 
 based almost entirely on the consumption of cotton 
 grown in the territory immediately contiguous to the 
 mills. You completely ignore the fact that the enlarge- 
 ment of the mills heretofore built, and the addition of 
 many new mills, under the operation of natural forces, 
 together with the fact that a number of the mills are 
 manufacturing a finer grade of goods than formerly, 
 make it absolutely necessary that those mills should go 
 to other States for a portion of their supply of cotton.” 
 
 We can not very well ignore facts that are so promi- 
 nent as these. If the development of the cotton industry 
 
46 
 
 in the Carol inas increases in anything like the same 
 ratio that it has for the past five years, it will only be a 
 short time when the demand for cotton for the Carolinas 
 from Alabama and Mississippi will be fully as great as 
 that of Jflew England. It is because we are so conscious 
 of these facts, rather than that we ignore them, that 
 makes us so solicitous for the maintenance of the old 
 rate schedule. When these Carolina mills begin to manu- 
 facture to any great extent a liner grade of goods, and 
 are obliged to come to Mississippi for a better staple of 
 cotton, then it is that we will feel the full force of the 
 rates which the Southern Railway proposes to establish. 
 In order to protect our interests on shipments to New 
 England or to the Gulf, for export, we will be obliged to 
 put our rates down to a plane that will enable the mills 
 in which we are interested to compete successfully with 
 those of the Carolinas. In view of the great strides 
 made, and the certain further growth of these Carolina 
 mills, it is the future results of these rates that we are 
 most apprehensive of. Their record, as we find it to- 
 day, with the improvements and enlargements of old 
 mills, as well as the construction of new ones, does not 
 evidence any need of reduced rates for their maintenance 
 or future growth. It is common report that they are 
 highly prosperous. In its review and report of the 
 cotton crop for the past season, the Financial Chronicle 
 Supplement of September last, in alluding to the benefits 
 which accrue from the operation of small mills, states: 
 
 “.It so happened that Mr. Witliam of Georgia, had 
 three of these mills in operation in 1899, which were 
 extremely profitable. Of these three mills lie is reported 
 to have said one made a profit last year of 40 per cent, 
 one 54 per cent, and one 100 per cent. 
 
 A recent issue of the Manufacturers ’ Record of 
 Baltimore, gave a statement of the values of stock of 
 many of the mills in North and South Carolina. From 
 this I find that the value of the stock of sixteen mills in 
 North Carolina ran from 76 to 210, the average being 
 
47 
 
 130 ; of thirty -five mills in South Carolina, the stock 
 value ran from 90 to 275, the average being 124. 
 
 This is much better than the price of any southern 
 railroad stock that has come to our notice. 
 
 It has been stated by the Southern Railway officials 
 that the requirements of the Carolina mills from outside 
 States would not, for the p resent, exceed 250,000 bales 
 of cotton, and for this reason the north and south lines 
 in Alabama and Mississippi should give the reduced 
 rates a trial. It is not necessary to give them a trial in 
 order to learn what their effect will be on the other 
 roads. Mr. Graham, Traffic Manager of the Louisville 
 & Nashville Railroad, stated at the St. Louis meeting, 
 October 4tli, that the experience of his company the 
 previous season, before the rates were reduced, was that 
 buyers who desired to ship for export and to Eastern 
 mills were not able to compete with the Carolina mills 
 at either Decatur or Birmingham. He relates that 
 his line brought into Decatur locally, 6,756 bales of 
 cotton more than it took out, though by custom and 
 usage it was understood that each line would take out 
 as much as it brought in. On the Decatur proper 
 cotton and cotton from the river, which by custom was 
 generally divided half and half to the Louisville & 
 Nashville and Southern Railway, the latter took 10,801 
 bales and the former only 4,309. At Birmingham it was 
 very much the same, the cotton was bought for and 
 shipped to the Carolina mills. 
 
 We find that there were shipped from our local 
 stations via our junctions with the Southern Railway 
 last season to the Carolinas, or other mills, 5,865 bales 
 at the old rates. This was in addition to 38,605 bales 
 which the Southern Railway took from the junctions 
 proper. 
 
 Does it not stand to reason that the Carolina mills 
 can pay these old rates ? Only a small percentage of 
 
48 
 
 their consumption is competitive with New England or 
 foreign markets, then a certain percentage of the prod- 
 uct is sold in the South and West, upon which they 
 do not have to pay as high rates as do their competitors 
 of New England. We are unable to give the percentage 
 of the product of all the mills which is marketed in the 
 South and West, but an idea as to this may be formed 
 from information obtained direct from some of the 
 important mills. 
 
 The percentages of the product, as stated below, are 
 reported by the following mills to have been shipped 
 West: 
 
 Grendel Greenwood, S. C 60 $ West. 
 
 Columbia Columbia, S. C. 50 $ “ 
 
 Clifton Mfg. Co., No. ]& 2. Clifton and Converse, S. C..25 $ “ 
 
 Glendale Glendale, S. C _25 “ 
 
 Granite Mfg. Co ) 
 
 Cora M fg. Co. >■ Haw River, N. C. 33j$ “ 
 
 Tho.M.Holt Mfg.Co.__ ) 
 
 Aurora Cotton Mills Burlington, N. C 40 $ “ 
 
 Elmira Cotton Mills Burlington, N. C 40 $ “ 
 
 Attamaha Cotton Mills Elon College, N. C. 80 $ “ 
 
 Ossipee Elon College, N. C 20 $ “ 
 
 Durham Cotton Mfg. Co. .East- Durham, N. C. 25 $ “ 
 
 Erwin Cotton Mills West Durham, N. C 25 $ “ 
 
 Pearl Cotton Mills Durham, N.C. 25 % “ 
 
 Odell Mfg. Co Concord, N. C 25 0 “ 
 
 Cannon Mfg. Co Concord, N. C. ... 25 $ “ 
 
 Cabarrus Cotton Mills Concord, N. C 33i a 
 
 Patterson Mfg. Co China Grove, N. C 25 $ “ 
 
 Wiscossitt Cotton Mill Albemarle, N. C 25 $ “ 
 
 Efried Mfg. Co. Albemarle, N. C 20 $ “ 
 
 Highland Park Mfg. Co._ .Charlotte, N.C 15 $ “ 
 
 While it may be, as stated by the Southern Railway, 
 that 250,000 bales from other States will meet the present 
 requirements of the Southern mills, how about the future 
 demand, considering the marvelous progress which the 
 industry is making ? With the many natural advantages 
 which the Southern mills will always enjoy, such as 
 getting a large share of their cotton at home, cheap labor 
 and fuel, and the marketing of a portion of their product 
 
49 
 
 in the South and West at cheaper rates than Northern 
 mills, will not their development be as great for years to 
 come as it has been in the past? Will it not come to a 
 pass, then, where the North and South lines will have to 
 protect their cotton markets against the competition of 
 the Carolina mills? 
 
 The New York Mail and Express, in a recent issue, 
 had this to say on the cotton situation of the South : 
 
 Notwithstanding the falling otf in the export of the 
 coarser and cheaper cotton fabrics on account of the 
 interruption of trade with China, there is evidence of a 
 continued increase of cotton mills in the South. Reports 
 for the month of September show that six new factories — 
 five in Georgia and one in North Carolina — were on the 
 point of completion. They represent an investment of 
 $735,000 and contain a total of 29,000 spindles and 861 
 looms. Besides these, eleven other mills are projected 
 and under way, which will cost over $1,000,000 and have 
 a capacity of 53,000 spindles. 
 
 This is part of a growth that has been continuous in 
 recent years. During the cotton year 1898-99, ending 
 with September, Northern cotton mills used 2,247,092 
 bales of material, and those of the South 1,400,026 bales, 
 while in the year just closed the Northern consumption 
 was 2,192,671 bales and the Southern 1,599,947. The 
 former show a decrease of 54,421 bales and the latter 
 an increase of 199,921. 
 
 The advantages of the South for cotton manufactur- 
 ing have been many times set forth, and are, in fact, 
 rather obvious — unused water power, contiguity to the 
 raw material and consequent low cost of transportation, 
 cheap labor, and a home market formerly supplied from 
 the North. These conditions insure a continued growth 
 of the industry in the production of the lower grade of 
 goods, but the people there are beginning to learn how 
 to produce some of the liner grades. There are spinning 
 mills at Chattanooga which are using Egyptian cotton 
 for tine yarns. 
 
 The present advantage of the New England mills lies 
 ■chiefly in the production of the liner goods and print 
 •cloths and the greater facility for export from Eastern 
 ports, though they still have control of a larger domestic 
 market. There is likely to be a growing rivalry in the 
 
50 
 
 South in all branches of the cotton industry, for it has a 
 permanent advantage in growing the raw material, while 
 capital and skill are easily transferred. 
 
 In the Atlanta Constitution of November 7th we find 
 the following editorial, which is germane to the points in 
 issue : 
 
 OUR REAL CONTEST. 
 
 The real contest in which the whole South is interested, 
 and from which no outside question should divert her, is 
 the cotton stalk. 
 
 It is no longer the lint, because inventions now made 
 and under completion disclose the cotton stalk as a whole 
 the creator of wealth. Cotton seed has created a busi- 
 ness which rivals the manufacture of the lint, and now 
 that hulls enter to furnish the great paper output of the 
 world, it will be seen that the entire plant is coming into 
 play as an agency of profit to the skillful handler. 
 
 In a recent statement before the New England Cotton 
 Manufacturers’ Association, Mr. Edmonds presented 
 these gentlemen with some figures which must have been 
 a revelation to them, as they certainly are to the people 
 of the South itself, where the aggregate result has never 
 been fully comprehended. We have previously com- 
 mented upon Mr. Tompkins’ analysis of the situation, 
 in which he showed that this tide is but returning to its 
 natural channel, from which it was diverted to New 
 England almost a century ago by unfortunate political 
 developments. Now that it has returned, it finds no 
 handicap either in public condition or in personal align- 
 ment. All eyes are turned toward the rising sun, and 
 our people are anxious for the work to proceed until it 
 shall have accomplished the full measure of its purpose. 
 It is at this point that Mr. Edmonds has been at some 
 pains to collate figures which must be an inspiration to 
 those who stand expectant in the cotton field, and who 
 have thrown into their hands such wonderful possibilities. 
 
 The period of twenty years from 1840 to 1860 was 
 filled with a spirit of commercial unrest in the South, 
 which tasked the energy of politician § to overshadow. 
 Between 1844 and 1850 the local consumption of cotton 
 had increased from 66,000 to 100,000 bales, or 20 per 
 cent, for which sale was found through New York and 
 Philadelphia merchants. Though little attention has 
 
51 
 
 been paid to this phase of the question, there can be no 
 doubt that much of New England’s jealousy of the South, 
 then growing strong, was prompted by the fear which 
 this local cotton consumption suggested. In fact, the 
 matter was made subject of one notable debate. 
 
 The capital invested in Southern manufactures in- 
 creased from $94,595,734 in 1850 to $167,855,315 ten years 
 later, the number of employees from 163,903 to 189,832, 
 and the value of products from $165,581,935 to $291,375,- 
 413. Hence we may see that even then we were claiming 
 our share. But it is from 1880 that we must date the 
 onward boom which has since swept so resistlessly 
 onward, in which the great cotton exposition held by 
 Atlanta in Exposition park was such a factor. At that 
 time the Southern States had 160 cotton mills, with 
 583,696 spindles and 12,194 looms, using 188,744 bales of 
 cotton, while the total number of mills in the country 
 was 751, with 10,678,516 spindles and 227,156 looms, 
 using 1,570,342 bales. By 1887 the number of mills in 
 the South had increased to 249, with 1,213,346 spindles, 
 while in the whole country there were 916 mills, with 
 13,520,119 spindles. A fair estimate of the relative prog- 
 ress of the industry in the North and in the South since 
 1887 may be had in the following table, in which the 
 figures for Southern mills represent actual consump- 
 tion of bales, while those for Northern mills represent 
 “ takings ” : 
 
 Year Southern Northern 
 
 Endine Mills. Mills. 
 
 August 31. Bales. Bales. 
 
 1887 401,452 1 , 710,080 
 
 1888 456,090 1 , 804,993 
 
 1889 479,781 1 , 785,979 
 
 1890 .. 546,894 1 , 799,258 
 
 1891 604,661 2 , 027,362 
 
 1892 686,080 2 , 190,766 
 
 1893 743,348 1 , 687,286 
 
 1894 718,513 1 , 601,173 
 
 1895 .. . 862,838 2 , 083,838 
 
 1896 . 904,701 1 , 600,271 
 
 1897 1 , 042,671 1 , 804,680 
 
 1898 1 , 231,841 2 , 211,740 
 
 1899 1 , 399,399 2 , 190,095 
 
 1900 1 , 597,112 2 , 068,300 
 
 Summarized by Mr. Edmonds, the result was that in 
 fourteen years the advance in consumption of Southern 
 
52 
 
 mills was from 401,452 bales to 1,597,112 bales, or 297 per 
 cent, while that at Northern mills was from 1,710,080 
 bales to 2,068,800 bales, or 20 per cent. A striking fea- 
 ture of the advance at the South is the fact that every 
 year has shown an increase except in 1894, when there 
 was a decline of about 25,000 bales, which was more than 
 compensated for in the advance of 140,000 bales the next 
 year. While it required from 1890 to 1897, or seven 
 years, for Southern consumption to increase from the 
 lialf-million to the million-bale mark, the increase from the 
 million-bale mark to the million and one-half bales took 
 only three years. On the other hand, the consumption 
 of Northern mills has fluctuated, showing declines in 1889, 
 1893, 1894, 1896, 1899, the takings in 1900 being but 40,- 
 000 bales more than those of 1891, ten years before. 
 
 In this fourteen-year period the South’s consumption 
 of cotton expanded from less than 20 per cent to more 
 than 40 per cent of the total used in the country, yet 
 that total, amounting during the past season to 3,665,412 
 bales, represented only about 38 per cent of the crop of 
 cotton raised in this country. That fact leads to the 
 main point, viz., the outlook for American cotton manu- 
 facturing from the Southern standpoint. 
 
 From such study of this whole subject as we have 
 been led to make, we are firmly of the opinion that if 
 protection in the way of reduced freight rates is to be 
 accorded to any of these cotton mill industries, the New 
 England and the foreign mills will need it much sooner 
 than will the Southern mills ; indeed, from what has 
 been here shown, it is a grave question as to whether 
 they do not now need it as against the competition of 
 the Southern mills. 
 
 Is it not possible that the Southern Railway, by its 
 proposed action, may defeat the very object it had in 
 view? That object was to give its Carolina mills, in the 
 way of low rates, still further advantages over the New 
 England and foreign mills. At the best, the Carolina 
 mills can partake of these low rates only on a limited 
 percentage of the cotton consumed, as the major part of 
 their requirements will be supplied at home. If the 
 
53 
 
 north and south lines in Alabama and Mississippi 
 should make to their markets sweeping reductions cor- 
 responding with those made by the Southern Railway — 
 and it is only a matter of time when they may be 
 obliged to do so — such reductions being on a much 
 larger percentage of the New England consumption 
 than on the Carolina consumption, would it not neces- 
 sarily benefit the New England mills much more than it 
 would those of the Carolinas ? A reduction in the rates 
 from Mississippi to Boston would in all likelihood result 
 in reductions from points west of the Mississippi River, 
 in which event all of the New England cotton would be 
 hauled at reduced rates, whereas only a small percentage 
 of that to the Carolinas would be thus favored. How 
 would the Southern Railway equalize an apparent ad- 
 vantage to New England of this kind? 
 
 Since the low rates have been in effect we have had 
 reports from our agents that the price of cotton for the 
 Carolina mills has been quoted at stations on the South- 
 ern line contiguous to ours at as much as f cents per 
 pound higher figure than shippers to New England 
 or to the Grulf could offer. We have a record of a 
 transaction November 6th, when two orders were 
 booked, 1,000 bales strict middling for North Carolina 
 and 300 bales for Boston, both at 9f cents f. o. b. des- 
 tination. This would show that North Carolina can pay 
 as much for cotton as Boston. The freight rate in this 
 case was about twenty-five points in favor of North 
 Carolina, account of the Southern Railway reduction. 
 It will be noticed that in this instance the Southern Rail- 
 way could just as well have gotten a rate equivalent to 
 that charged to Boston. 
 
 We do not see what the Southern Railway hopes to 
 gain by this large reduction in the cotton rates to the 
 Carolina mills, unless the other lines charge, the old 
 schedule. . As we understand this matter, the price of 
 cotton on our line in Mississippi is governed by the quo- 
 tations at New Orleans. The price of the cotton at our 
 
54 
 
 stations is the New Orleans price, less the brokerage and 
 freight rates to New Orleans. If, therefore, the North 
 and South lines should deem it necessary to reduce their 
 rates a corresponding figure to the reduction made by 
 the Southern Railway, the price of cotton at the stations 
 would still be the New Orleans price less the freight 
 rates. This would enhance the value of the cotton at the 
 stations to the extent of the reduction, and not reduce 
 the price at the mills or other marts of trade. 
 
 In his statement at the St. Louis meeting Mr. Culp 
 said that, ‘ 4 If there is a demand for cotton in the Caro- 
 linas, the lines which do not carry Carolina cotton must 
 recognize that they will have to give up some of their 
 cotton, and that, even though the Southern Railway 
 charged higher rates, and the Carolina mills saw fit to 
 buy it, the lines who do not carry the Carolina cotton 
 would have to give up some of their cotton anyhow.” 
 This does not necessarily follow. No matter what 
 the rates the Southern Railway makes from Alabama 
 or Mississippi to the Carolina mills, every intelligent 
 and faithful traffic officer of other lines must see that 
 not one single bale of the cotton that is naturally 
 tributary to the stations on his line shall be diverted 
 therefrom. He must grade his rates to his markets so 
 that this is given full effect. The loss of cotton at the 
 towns on the line of any road means the loss of nearly 
 all kinds of other business, and in order that the other 
 business shall be retained, the cotton must be taken, no 
 matter what the rates. 
 
 The Southern Railway has established a very low 
 basis of rates from Mississippi points 700 miles away, to 
 its Carolina mills. It justifies it upon the ground that 
 the adjustment is equitable, considering the rates on raw 
 cotton to the mills plus the rates on the product, as com- 
 pared with the rates on raw cotton to New England and 
 European countries plus the rates on the product. The 
 Southern Railway, regardless of the interests of other 
 lines, forces upon them this low basis of rates and 
 attempts to justify it by the reasons given. 
 
55 
 
 The Illinois Central has no cotton factories requiring 
 cotton from the outside, but it has markets, marts of 
 trade, which are as important to it as are the Carolina 
 mills to the Southern Railway. If the Southern Rail- 
 way arbitrarily announces that it will make certain low 
 rates to Carolina mills from junctions with the Illinois 
 Central, why is the latter not justified in saying u the 
 Illinois Central can haul cotton as cheaply per mile as 
 can the Southern, and will establish rates from its junc- 
 tions to its marts of trade on as cheap a basis per mile as 
 the Southern Railway.” For instance, if it were to estab- 
 lish from West Point to New Orleans the same rate on a 
 mileage basis as that made by the Southern Railway 
 from West Point to Charlotte, the rate would be 18 cents 
 per hundred instead of 47, as it was prior to the recent 
 reduction. In the same way, a proportion to Cairo of 
 the 76-cent rate from Winona to Boston would be 17 
 cents, instead of 39. If the Illinois Central were to estab- 
 lish rates on the foregoing basis, it would mean that the 
 Mississippi cotton of the Southern Railway would come 
 to the junctions on the Mississippi State tariff, and be 
 transported by the Illinois Central to New Orleans. 
 What difference is there between this principle and 
 that which the Southern Railway insists shall apply 
 with regard to the rates that it shall charge ? 
 
 It will be a long time before the railway lines south of 
 the Ohio and Potomac rivers can operate on as low a 
 basis of rates as that in effect on the lines north thereof. 
 The following statement from the Interstate Commerce 
 Commission’s report, for the year ending 1899, shows the 
 earnings per mile and tonnage one mile per mile of line 
 of railroads North and South : 
 
 Tons one mile 
 
 Earnings. per mile 
 
 of line. 
 
 Group 2 $14,949 1,774,273 
 
 Group 3 7,859 1,042,562 
 
 Group 4... 4,707 539,966 
 
 Group 5 4,883 416,152 
 
56 
 
 Groups 2 and 3 comprise the lines north of the river 
 traversed by New England cotton. Group 4 includes 
 the two Virginias and the Carolinas. Group 5 includes 
 all the territory south of the Ohio, east of the Missis- 
 sippi, and west of the Virginias and Carolinas. 
 
 It will be seen from these statements that the earn- 
 ings per mile of Group 2 are over three times in excess 
 of those of the Southern lines, and the earnings of 
 Group 3, or the lines west of New York and Pennsyl- 
 vania and east of the eastern boundary of Illinois, are 
 nearly twice greater per mile. The tons carried one 
 mile to the mile of line show about the same excess. 
 
 When a thousand or more miles of the haul of the 
 cotton shipments to New England territory is made over 
 the roads north of the Ohio River at much lower rates 
 than the Southern lines would be justified in charging, 
 it would scarcely be considered a remunerative office for 
 any Southern line, with limited earnings, to attempt to 
 equalize them. It can not be done without destroying 
 the entire cotton rate fabric, which is of so much impor- 
 tance to the railroads of the South. Neither can it be 
 expected that the low rates for ocean carriage of three 
 or four thousand miles to foreign countries can be equal- 
 ized without also breaking down the entire cotton rates 
 of the South. 
 
 Is it not a futile undertaking to attempt by equaliza- 
 tion of the combined rates on cotton and its product to 
 put the cotton mills in different territories on a parity in 
 the markets of the world without taking into considera- 
 tion other factors that affect them, such as the price of 
 labor, fuel, etc. In a book published in 1899 by D. A. 
 Tompkins of Charlotte, N. C., a recognized authority on 
 cotton mills and their operations, entitled “Cotton Mill 
 Commercial Features, for the use of Textile Schools and 
 Investors,” he shows that in the Southern States the per- 
 centage of labor to the whole cost of cotton goods is 
 
57 
 
 19 per cent as against ^28 per cent in New England. In 
 this one item alone there is a saving to Southern mills of 
 over 47 per cent. As the Carolina and Georgia mills con- 
 stitute 78 per cent of all the Southern mills, they must 
 be large participants in this saving. In the same publi- 
 cation we find that the production of cotton yarn per 
 spindle per year was 66 pounds by the New England 
 mills and 161 pounds by the Southern mills. While we 
 understand that the yarn number spun has something to 
 do with this, we also understand that it is largely 
 influenced by the modern, newer, and more rapid running 
 spindles of the Southern mills. A certain percentage of 
 the product of the Carolina mills is sold in the South and 
 West upon which rates are less than from New England. 
 All these things, of course, should have consideration in 
 an attempt to equalize the price of the product in the 
 common market, but no cognizance is taken of them by 
 the Southern Railway. We have a right to demand and 
 to know how far these several factors, as well as the 
 others mentioned, enter into the question before we are 
 prepared to admit that a reduction of the rates on raw 
 cotton as much as $1.10 per bale at West Point or $1.65 
 per bale at Grand Junction is the only way by which 
 equalization can be effected. 
 
 From the foregoing analysis of the various devices 
 and reasons given by the Southern Railway for this ter- 
 rific onslaught on the revenues of the other lines, it will 
 be observed that not in one single instance can they stand 
 the tests usually applied iu determining what are fair, 
 reasonable, and necessary rates. They are found wanting 
 in the claim set forth that the production of cotton in the 
 Carolinas is not sufficient for the mills’ consumption; 
 they are found wanting in the claim of equalization on 
 combined rates as against New England or foreign rates; 
 they are found wanting in the necessity of equalizing the 
 combined rates on cotton and the product; they are 
 
58 
 
 found wanting in tlie claim of commercial necessity or 
 competition with other markets; they are found wanting 
 in the claim for an equitable adjustment irrespective of 
 rates to other sections; they are found wanting in the 
 claim that the rates previously charged could not be 
 justified before Courts or Commissions; they are found 
 wanting as to their being justifiable on account of dis- 
 tance when compared with rates and distance to other 
 marts of trade; they are found wanting in every essential 
 claimed by the Southern Railway except the one that the 
 adjustment shall be made so long as the revenues of the 
 Southern Railway are not sacrificed. 
 
 We have a right to demand, and must insist, that the 
 Southern Railway must charge from its junctions with 
 our lines as high rates as related to distance on cotton to 
 its Carolina industries, as we charge to our marts of 
 trade, or to where the cotton leaves our line at the Ohio 
 River, due allowance, however, to be made for extra 
 distance of the Southern Railway by the application of 
 the recognized principle that the ratio of the rate de- 
 creases with the distance. ~No valid reason can be shown 
 by the Southern Railway why this practice should not 
 be observed. 
 
 The Carolina mills are not one jot of more importance 
 to the Southern Railway, so far as the cotton transpor- 
 tation and the revenue to be derived therefrom affect the 
 situation, than are our cotton markets to us. We must 
 zealously and resolutely guard these against the inroads 
 of the Carolina mills or any other injurious agency that 
 may encroach upon them. It is only in this way that 
 our interests can be properly protected. 
 
 If, by the action of the Southern Railway, we are to 
 have an era of low rates in the South on this important 
 traffic, it is to be regretted. Low rates on this traffic 
 mean a very large loss of revenue. A serious loss of 
 revenue to the Southern railroads, as this will prove to 
 be, will, with a hope of recouping the loss, result in a 
 sharper and more active competition in other freights. 
 
59 
 
 It is needless to mention what this will beget. The 
 comparatively high rate standards in the South which 
 have so long been upheld will be shattered. We are all 
 aware that owing to sparsity of tonnage on the Southern 
 lines, as contrasted with two and three times the volume 
 per mile of the Northern lines, these high standards are 
 an absolute necessity for the proper maintenance of the 
 railroad properties. Even now we are doing none too 
 well. For the year 1899, one of unprecedented prosper- 
 ity to all railroads, the lines south of the Ohio and 
 Potomac and east of the Mississippi rivers earned only 
 3.2 per cent on one-third of their capital stock. On the 
 other two-thirds, or $445,621,000, nothing was paid. 
 Under such conditions as now obtain it would seem 
 almost criminal for any line to take such independent 
 or individual action as would have a tendency to jeop- 
 ardize the tranquillity of the entire rate situation of the 
 Southern railroads. 
 
 Respectfully submitted, 
 
 For the Illinois Central Railroad Company, 
 
 Yazoo & Mississippi Valley Railroad Company, 
 
 M. C. Markham, 
 
 Assistant Traffic Manager . 
 
 Chicago, November 15, 1900. 
 
 Rand. McNally & Co., Chicago. 
 

Memorimdtim . 
 
 Lest it might have been thought that the 
 Illinois 'Central 1 s rates on cotton were too 
 high a 55 related to the rates of other roads 
 or to the rates on other comodi ties, the fact 
 was emphasized in the oral argument that cot- 
 ton was selling at all our stations at $9.50. 
 per hundred pounds; that our average rate on 
 the cotton is about 40 cents pe^r hundred pounds 
 and that this was only about 4p> of the value. 
 
 It was also shown that the rates on grain, 
 meats and other commodities ran as high as 
 twenty-five, thirty and forty per cent of the 
 val ue . 
 
 The Interstate Commerce Commission’s 
 Report for the year 18£9 shows that while the 
 “Southern Roads had 17 / > of the entire mileage 
 of the United states, Inhere was originated on 
 those roads only 12.4/? of the tonnage of the 
 United "tates ;2ilso that while the mileage is „ 
 17/7 of the whole, the earnings ware only 11.6/1 
 and the dividends paid only 6.4/? of the div- 
 idends paid by all the railroads. 
 
 It was also stated in the oral argument 
 that Poor’s Manual for 1900 shows over 
 $753,000,000 of stocks and bonds of the South- 
 ern Railroads that were non-productive in the 
 year 1893. It was further shown that while the 
 capital stock of railroads north of the Ohio 
 and Potomac Rivers was as much as thirty, forty 
 and fifty-four thousand dollars per mile, the 
 average of the Southern Roads was only twenty- 
 one thousand dollars. The average for the 
 whole United States was thirty-one thousand 
 dollars. The dividends paid by the Southern 
 Lines was 1 .08/> while the dividends of the 
 other lines with this greatly increased capi- 
 tal stock were as high as three to five per 
 cent . 
 

 ■ 
 
 ®,d$ y . *f ' tiij ; $$£ HvV; w e\K 4 $ ■ ■ y^B'f 
 ■ t ' \ '■ *d&^ 6 (y\r: 6 ", ■ ' ' 
 
 8 - - : ch V:>KV 15 aB'Hnbi 
 
 ■ .•'"■■ v. ■ ■ ■ . •• . t 
 
 H a ' 3: " a : . ^ / t 1 
 
 : ■ : •■{ -erj-rLtiY^ r h-:<- '£.* .,*:/■ «- &.(>:■:?• 0 (\ ^b r i-y.SP:i '•:<'.•* 
 
 | • -V • : ,. r ' 
 
 ' -i" bo • i- , ‘ -o . f B.c;b; .\* •/ : .• 
 
 tffisi-i \0 ae{|.e*‘ nbb jK/Ur- / . v oil: Oc-I- :-..v 3 
 
 ■*u : ’ ’ £.-■■> ri ~ e £• 3 f Zho ,•; oo ‘ * &■. . + o L,tb .* ;,\-. 
 
 - ■••• ^ ■> •*’ : o v^ol' 
 
 > - .. 
 
 8 F ■ - ’£?z£^rio r ‘ vTof? -r. ; *' -o .-'nl ./-rib | 
 
 ^ " ' CbRaIV .: ^0 ,\a €H . ! 3 r v ‘--/Yl $rtQ (re : 
 
 u' : " ttr- > l :' \ o V. r ■ i,i :!.? ;Ob fV'XB " ■.: 5 1 QC 
 
 -V i/rl •: 3^0 p;w p^rU r aBb.:^f - : .;.-t '! v 
 
 e '• ^ ' rro,* o/.Lt Jo ■ ,*r. 
 
 8 ' s«* s o ': ;• , r- ■ -• ^ /' t ci ^ d h - ' " o Cil j s e ,- - 7 r • ) t i: r-rlJ 
 
 -vij; *10’ ■' v-’- * -3 ^:_ r :"0 “u. ; K.n.:oh.Ciri;> : 
 
 * El):.’0*'£.:L'i. v 4 ! vJL*> i)h; r*f 3 :'i. f(=? h 
 
 £H: 
 
 .'tr. ,.-3'\o %>i.. 
 
 ^ x i > dr or £:> : : „-:vr $ I 
 
 'r.-YO 
 
 aw ons 
 
 ; sr >ei .^o't r: * CC-O^T 
 
 & d u i 'Z U 
 
 
 b 3xo oba o (■ f • 0 ? 00 r : f 
 
 c-v vr d a 
 
 itO'ir- 
 
 X 0 ; B r V BV* 7 -t .; • £ 2f s 0 *X I i B <’ * 
 
 v; d'.Br.tt 
 
 PX s >ii 8 
 
 -.c.Bvr b I +Q&KL 
 
 •-•-j *i: c 
 
 
 abKO^llyy To ZiooXiP.- I;:i t 
 
 S'rttij 
 
 c >: : . 
 
 t a,.; ;-..£*r ao;-v.t.b o cnc r 
 
 ■• ~-r* 
 
 a-.. ■ a 
 
 1;* A 
 
 V 
 
 f v n 
 
 ■■ • 31 c ' . -• . - -- 
 
 ^ l 3 v ‘ f-v W •' v.r . no P. ';y- : 7\-: ,).*.. :T Y : ' • r j. i*> «;3 
 
 -jr .trju- fayy »;■ ,'C- f>r •:,.,?>/• 
 
 c- • -.8 r. r - c • ' — ' ’ t • r .v p. ■ ^ . j •' •" - '. Oi’V 
 
 L> r’ 
 
 ...- D ^ -r ••; . •-OP'i: • ' - - • i: {* /'+ r r \&; : .'c 
 
 ■> ■; -VC'r o,- •.: / ‘r ■; "" c^','a.v* rloodr 
 
 . ultrj 
 
„ 
 
 ■ 
 
 It Whs reasoned from this that until t,h« 
 ftnnage becomes much mor « dense in the South* 
 rn Sttefe«s,«ny rates that. were not prohibit- 
 v« at shipment s or that did not have a tendon- 
 s'' to restrict the proper development of the 
 cum try were absolutely necessary for the prep- 
 r maintenance of the properties and could be 
 pstified before any reasonable tribunal . 
 
 | 
 
 r. 
 
 - 
 
' :x 
 
 
 *5&IlP| ■ E 
 
 ... - - ■ »•< ■■■■ ■'■ ' 
 
 - , r i i .’ 1 ’ 
 
 f&mi 
 4 «.**•, H 1 
 
 P* 
 
 ... - - •- 
 
 ,>>.•> s ' r =’ ’*■■■ ”\ : . \ , . V - r,.J ■ ■ 
 
 ■ ■ ■' ■ . • .. 
 
 ■ ; . . 
 
 : 0 
 
 u . • , - • • 
 
 #•* ' M*.’ y ;