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of local freights for a shorter distance. On first presentation the reasonableness and equity of this rule seem to be apparent but when we apply to it the test of practical experience it will not bear examina tion, and its absurdity becomes obvious.
As already stated, a large majority of the railroad companies who have built the railroads in this country have gone into bankruptcy, and the railroads when sold have been purchased at prices greatly below the cost of construction by companies which have consolidated them into a few long trunk lines, which now run in competition with each other, and which have become necessary in conducting the business of transportation. And many of them purchased at prices far below cost do pot pay dividends upon the purchase price.
As long as competition can be maintained without ending in consolidation competition seems to be conducive to public prosperity, but if you apply the rule that railroads shall in no case carry freights of like quantity and quality a longer distance for less money than they carry similar freights a shorter distance, you will soon check and destroy a great deal of the competition which now exists.
The position amounts to this: that a car-load of corn when conveyed as through freight shall not be carried 25 miles for less money than a like car-load of corn conveyed as local freight is required to pay for 20 miles. Now, if you will fix a reasonable rate of local freight for 20 miles, such as will enable any railroad company to pay even the fixed expense of keeping its road in repair and running it, and you will then fix a through rate for the same car-load for 25 miles at the same rate charged for 20 miles of local transportation and extend that rate to 1,000 miles, you will find in every instance that the rate of freight will amount to a prohibition, and you can not transport the goods and pay the rate. To maintain the rule you must either fix the local rate below the point absolutely necessary to pay the running expenses or you must fix the through rate so high it will prohibit the transportation of the commodity.
Take the case already supposed of a car-load of corn shipped from Marietta to Atlanta, charging a local rate of $5 per car-load for 20 miles. Then suppose a through shipment over the same road at a rate that would carry the car-load of corn 25 miles for $4. This would be a violation of the proposed legislation, as it would be a case where a like commodity is shipped a longer distance for less money. Or if you discriminate even more than this between local and through freight, carrying the through freight a still greater distance for less money than you carry the local, unless you extend it very materially it will amount to a prohibition, and you can not ship through freight at all.
In the case supposed we carry a car-load of local freight for 20 miles for $5 and a car-load of through freight 25 miles for $4. For 100 miles this would be $16, and from Kansas City, Mo., to Atlanta, 1,000 miles, it would be $160 for transporting a car-load of 350 bushels of corn. This would be about 45 cents a bushel on the corn for freight. What say the farmers of Missouri and Kansas ? Would their corn bear this freight? Clearly not. A great deal of corn is now shipped from Kansas City into Georgia. Such a law would at once prohibit further shipments of corn for so long a distance.
But to meet the objection of the hypercritical as to rates, let us suppose the case that the local rate on a car-load of corn from Marietta to Atlanta, 20 miles, is only two dollars and a half—and no railroad can keep long out of the insolvent court which carries its local freights as low as that; then suppose the rate on a car-load of through freight between Kansas City and Atlanta should be $2 for every 25 miles. This again would violate the law if the proposed legislation should be enacted.
The car-load of corn carried as local freight from Atlanta to Marietta being charged two dollars and a half for 20 miles, and the car-load of through freight being charged only $2 for 25 miles, we would be carrying the same commodity a longer distance for less money; but even the low rate of two dollars and a half per car-load for 20 miles of local freight would, when we apply the rule to through freight, be prohibitory. If we charge $2 for 25 miles on a car of through freight this would be $8 per hundred miles and $80 for a thousand miles. This would be a fraction over 22 cents a bushel freight on corn from Kansas City, Mo., to Atlanta.
Now, if we may credit the newspapers, I believe a bushel of corn is worth but little more than that in Kansas City at the present time. Even at this ruinously low rate of local freight (which no railroad company can afford to charge and continue to do business) the rule applied to through freight makes it prohibitory before it reaches a thousand miles distance. It would probably be prohibitory in the case supposed at 500 miles or less distance.
If you enact such a law as this you will derange the whole transportation of the country, and you will either drive the railroads generally into bankruptcy on account of the low rate you permit them to charge for their local freights, upon which they rely mainly for their support, or you will prohibit the interchange of commodities at a greater distance than five or six hundred miles. As the figures plainly show, it could not possibly stand the rate for a thousand miles.
Under such a rate of freight how would the farmers of the teeming West ever reach European markets with their productions? It would be simply an impossibility.
Such a law would destroy not only the interstate commerce of the country, but utterly ruin our foreign commerce by prohibiting the exportation of our productions to foreign markets. I take it that wise men will not be guilty of enacting into a law a proposition so manifestly absurd.
Some of the Southern lines of railroad and steamships are trying to build up competition with the Northern roads for the Western business.
For a long time the Northern roads have had a monopoly of that business. They run four trunk lines, as you are aware, from the Eastern cities into the great West—the Baltimore and Ohio, the Pennsylvania, the Erie, and the New York Central. These are the four great trunk lines that penetrate the West in every direction, going to Chicago, Saint Louis, and other central points in that section, and they do the business between the East and the West.
They frequently, while at war with each other, carry freights for almost nominal prices from the West through to New York, and thence by steamer to Charleston and Savannah. Then they load their steamers with cotton and other productions back to New York, and load their cars in New York with Western-bound freights. Now that freight landed in Savannah by the steamers from New York can be taken and carried to Louisville, Ky., at a very low rate, and the railroads still make money on it.
This shows the feasibility of opening another great trunk line between New York and the other Eastern cities and the great West. In prorating freights railroad men count 1 mile of rail equal to 3 miles of water. Why so ? The company has to secure the right of way, grade the road, lay down the track and prepare it for the cars, which is a heavy expense for each mile.
God has prepared the ocean, and it is ready to receive the burden of transportation without the construction of a track, and all man has to do is to put on the rolling-stock-in other words, build the ship-and the road is already prepared for use.
It is very evident, therefore, that freight can be transported 3 miles by water as cheaply as it can be carried 1 mile by rail. Now we have a splendid line of steamers running between New York and Savannah, which make their trips with great regularity and carry passengers and cargoes of freight. Then we have a line of railroad from Savannah through to Louisville, Ky., connecting at different points with other roads penetrating the West and reaching Saint Louis, Chicago, and Kansas City, and other commercial centers. Now apply the prorating rule to the portion of the distance which includes conveyance by water, and counting 3 miles of water for 1 of rail, and the line from New York to Louisville is shorter by way of Savannah than by any one of the four great Western trunk lines from New York to Louisville. The same is true as to Memphis, Saint Louis, Kansas City, and in fact to all cities of any importance west of Cincinnati and Chicago.
There is an immense section of the West which should have the benefit of a competing line between that section and the Eastern cities, which is the shortest of the five competitors. Then it has this additional advantage so far as the transportation of freight from the East to the West is concerned: Of the immense number of trains which run from the West into Georgia and the South Atlantic States to supply the cotton planters with Western productions, seven out of every ten of the cars go back empty when they return to the West for another load. Now, a cargo of goods in New York intended for Saint Louis has the advantage of the shortest line by Savannah; it has the advantage of transportation by ocean from New York to Savannah, and of transportation from Savannah to Saint Louis in cars that would otherwise go back empty.
There are four links, composed of different companies, in the line of rail between Savannah and Saint Louis. Now, suppose each of these receives but $5 on a car-load of goods going from New York to Saint Louis, it makes money on the shipment, because the car would go empty if it were not permitted to carry the goods.
It is nearly 300 miles from Savannah to Atlanta. Suppose the Central road receives but $5 for the car-load for that distance. As the car was going back empty, it is $5 made. But if you lay down the rule that the Central shall charge $5 a car only for carrying the local freight 300 miles, it ceases to be able to pay fixed expenses and goes into bankruptcy in a single year.
Therefore you can not reduce the rate of local freight on the Central to $5 a car; but if the Central undertakes to carry a car-load of goods in transit between New York and Saint Louis from Savannah to Atlanta for $5, when the car would otherwise go empty, you prohibit it, by establishing the rule that no company shall carry on its own road the same freight for a longer distance for less money than like freight is carried for a shorter distance, and the Central is excluded from carrying this freight at all. The people of the West are deprived of the competition while it lasts of a fifth great line between them and the Eastern cities, and deprived of a cheaper rate of freight which they could secure by the shipment over the line referred to.
Now, what good, let me ask, does it do any one, except the great trunk lines, to prohibit the opening and operating of a fifth great line between the East and the West ?
And what good does it do any one but trunk lines to drive this freight around upon the trunk lines by establishing the rule that you can not carry the like freight a longer distance for less money? In this case you must carry this great through business a longer distance for less money than you carry local freights a shorter distance, or you must prohibit the use of the line for the purpose of carrying through freights.
But you may say it is unjust to the people of Georgia to permit this through business going from New York to Saint Louis to pass over the railroads in Georgia a longer distance at less rates than they pay for the shorter distance. What harm, let me ask, does this do any citizen of Georgia?
The freight goes to Savannah by steamer ; it is loaded on a car that would otherwise go empty to Saint Louis, and it passes rapidly over the soil of Georgia, doing nobody any harm but really doing a service to the people of Georgia. But you may ask how? I reply that the railroads of Georgia must make out of some business money enough to keep them in good condition and run them for the benefit of the community, to say nothing of the justice of paying dividends to their stockholders.
Now if we can not conduct through business over these lines as cheaply as it is done in other sections, or can not be permitted to compete with other long lines for the business, then we must levy the amount that we would make on through freight as an additional charge on the local business.
In other words, each $1,000 that the through line makes in carrying return freights on cars that would otherwise go empty is that much that goes into the support of the railroads forming the line, and that much which must be levied upon the local business, if we are not permitted to collect it on this class of through business.
What good sense, let me ask, what sound policy, what statesmanship, would justify the exclusion of this freight from the soil of Georgia, driving it around on some other line, because it must pass through the State, if at all, on account of the great distance it has to travel, at a lower rate than we can charge for local freights and continue to live? These freights between New York and Saint Louis must go over some line.
What injury does it do any man, woman, or child in Georgia for it to pass on a Western and Atlantic Green Line car loaded in Savannah across the soil of the State to Saint Louis, which car would otherwise go back empty? None possibly that I can perceive.
If the freight does not go in a car that would otherwise go empty over the line between Savannah and Saint Louis it will go in a car that runs between New York and Saint Louis over one of the trunk lines. If it goes in a car over our Southern line that would otherwise go back empty, and we make $5 for each company on it, it is that much clear profit to the people of Georgia. Then why should it be prohibited ?
But you may say that an act of Congress prohibiting transportation of that character will apply as well to the other trunk lines. True; and if so, then it would disturb the whole through business between Eastern cities and the West, and the people would be clamorous for its repeal as soon as they saw the mischievous and injurious impediments which the rule throws in the way of the business of the country.
But it may be said in the case supposed, in carrying the through freight from New York to Saint Louis over the Central road of Georgia, if the company carries it from Savannah to Atlanta for $5, in its transit across the territory the company should not charge more than $5 if the consignee should require it to be taken off the train and delivered at Jonesborough, 20 miles before reaching Atlanta.
In other words, that car-load of the same character of freight going from New York to Jonesborough, Ga., should only be charged $5 if the company carries a like car-load of through freight consigned to Saint Louis from Savannah to Atlanta, which is 20 miles farther, for $5. In the one case the freight shipped from New York by steamer to Savannah and then shipped by the Central road from Savannah to Jonesborough would be local freight, so far as the Central road is concerned; and if the Central road should be required to transport like freight by car-load from Savannah to Jonesborough and to put all its local freights at the same rate, its income would not pay one-halfof the fixed expense of maintaining and running the road, and bankruptcy would follow.
Then no reasonable man would insist that the Central road should be required to put its local freight at $5 a car-load between Savannah and Jonesborough, as all must admit that the railroad could not run and charge such rates. In the other case the through consignment from New York to Saint Louis reaches Savannah by steamer, and it is pat upon a car that is going by the next train from Savannah to Saint Louis for a load of bacon. The car is going empty, as the company has no freight with which to load it. By receiving the consignment from New York to Saint Louis on board the car and charging $5 for transporting it to Atlanta and delivering it to the Western and Atlantic road the company makes $5 clear money, which goes into its general income for its support, and of course charges $5 less on account of local freights. Where is the injustice? Where is the wrong?
But, says the objector, if the company only charges $5 on the through freight from Savannah to Atlanta, 300 miles, it should not be permite ted to charge more than $5 on a car-load of local freight from Savannah to Jonesborough, 20 miles less distance. Why not? It actually costs the company more to deliver it at Jonesborough than at Atlanta.
You may ask me how? I reply that a car-load of through freight hitched on by the Central at Savannah to a train going to Atlanta is carried through without any necessary stoppage at Jonesborough, and when it reaches Atlanta it is simply uncoupled from the Central train and is coupled to a Western and Atlantic train, which takes it in charge and carries it to Chattanooga, and there delivers it to the Nashville, Chattanooga and Saint Louis Railroad. The transfer is made by the simple operation of uncoupling it from one train and coupling it to the other, and the Central road in that case has no delay or stoppage at Jonesborough, and no trouble or expense of switching off the car and delivering the freight; but if it is required to deliver the freight at Jonesborough instead of Atlanta, the train must be stopped at Jonesborough and the car must be switched off from the track to a side track, causing several minutes' delay and consequent expense; for every minute of time lost by a train costs something in the salaries of persons managing the train, in the fuel consumed, in the engine, and other necessary expense. Then the agent at Jonesborough must take the car in hand, and unload the freight upon a platform, place it in the depot, and roll it out again, and deliver it to the consignee when it is called for.
In the case supposed it actually costs the Central Railway decidedly more to deliver the car at Jonesborough than it would to run the train through to Atlanta, uncouple the car, and turn it over to the Western · and Atlantic, which couples it to its train and carries it along. But the more important point is that the Central can not maintain itself and put its local freights as low as $5 a car-load from Savannah to Jonesborough, and it must break down and go into the hands of a receiver if it attempts it, while in the case supposed it can take the car-load of through freight consigned to Saint Louis in a car that would otherwise go empty from Savannah to Atlanta and carry it for $5 and make money on it, and all the money it makes by carrying freight of that character