shipped originally from Buffalo by the same person, at same rate of freight on a through bill of lading, the corn having all been taken from the same elevator? Could the shipper claim different rates, or the road claim exemption from the provisions of the section, because the corn had been previously transported to Buffalo from different States, over different routes, or had been produced on different farms? Could any coloring be given to the word "line which would cover these cases? Mr. DAWES. I should like to ask my friend what force he gives to the word "aggregate?" Mr. ALDRICH. The "aggregate" compensation I understand to be the total sum received by any common carrier for any given service in the transportation of passengers or property. When the bill was before the Senate originally for discussion the Senator from Connecticut [Mr. PLATT] said that it was intended to embrace terminal and other charges as well as compensation for the transportation of merchandise; but the term "transportation," as defined in the bill, includes all instrumentalities of shipment and carriage." So it makes no difference in the amount of the charge whether the word "aggregate" is used or not, as the charge for all terminal and other services, it seems to me, must be included in the charge for transportation. Mr. SEWELL. Taking the word "aggregate" in that sense, $10 would be the charge for the transportation of a hundred barrels of flour Mr. ALDRICH. Yes, it means, I repeat, the total sum received by any railroad company for a particular service rendered by it. Mr. DAWES. I suppose, if I do not interrupt the Senator, that the word " aggregate" put in would prevent inequality of rates in a particular case by terminal charges. Mr. ALDRICH. The Senator from Connecticut [Mr. PLATT] suggests it means the total sum received for taking a given quantity of freight from one point to another. It means the sum of every conceivable charge which can be made for service from one station to another. Mr. ALLISON. On the same line. Mr. ALDRICH. Yes, on the same line; and I repeat again that the aggregate sum so received is the inexorable measure by which all the other business of the line, through or local, must be limited. If the requirements of the section had not been limited by the words "in the aggregate," its provisions would have obliged every common carrier to charge a uniform rate per ton per mile for the transportation of like property. With this limitation in the section, however, the ultimate effect will be to establish on all interstate roads charges which will approximate equal mileage rates. The variation in "aggregate" sums received will not be determined by the difference in the number of miles freight is moved, but by the difference in the number of stations between the points of shipment and arrival on any given road. Instead of taking an exact and invariable unit of distance for measurement, one is taken which is conspicuously inexact. Take for illustration a road 100 miles long with one hundred stations; the aggregate rate in each case would be the same as if computed on a mileage basis. If a road of equal length were taken, with a less number of stations, the extent of the variation from an equal mileage rate would depend upon the number of stations on the road. If there should be but three IS C-17 the rate to the intermediate station might be nearly twice as great per ton per mile as that between the termini. The rate imposed by the terms of the section as it stands would not be a certain rate per ton or per 100 pounds per mile, but an aggregate sum per ton or per 100 pounds per station; the rate, in both cases, however, being determined by the distance hauled, but by different methods. To illustrate my understanding of the effect which the provisions of the section if they become operative would have on the actual traffic of a road, I have had this diagram prepared. Special Through Rate, 10 cents per 100 lbs. Average Through Rates, 15 cents per 100 lbs. Rates in all cases from the several Stations to New York. I have taken for convenience of computation a road 500 miles long, with local stations, a, b, c, d, e, f, g, h, i, 50 miles apart, and have supposed it to be an interstate road running from Buffalo to New York. In the preparation of the diagram aggregate sums in cents per 100 pounds have been fixed for the charge in each case from the various stations t New York. The local rates are fixed at what may fairly be taken as an 1875 1876 1877. 1878.. 1879 1880.. 1881 1882 1883 1884.. average rate on roads doing a heavy business, namely, 1.20 cents per ton per mile, or 3 cents per 100 pounds from one local station to another. The through rate is fixed on a basis of 0.60 cent per ton per mile, or 15 cents per 100 pounds for the haul from Buffalo to New York. The rates I have taken are the average rates shown by the following table for a series of ten years on the only road whose reports are available to show for a considerable period the comparative rates on through and local freight. Comparative statement of the freight traffic rates of the Cleveland, Columbus, Cincinnati and Indianapolis Railroad, as per annual reports from 1875 to 1884, inclusive. The average rates of the table have been adopted because it is believed that they fairly represent the average variation between through and local rates. The freight charges on the Chicago, Milwaukee and Saint Paul road in 1885 were 0.84 cent per ton per mile for through and 1.34 cents per ton per mile for local traffic. It will be observed that it makes no difference what rates are used in the construction of the diagram so long as the proper relative proportion between through and local charges is preserved. I have also shown the effect of a special through rate of 0.40 cent per ton per mile, or 10 cents per 100 pounds from Buffalo to New York. If the Senate conferees' understanding of the section is correct this specialrate limit would not be effective, but the other limitations would apply. The figures used show, and the length of perpendicular lines indicate the aggregate charges, local and through, in cents per 100 pounds, from each station to New York for the transportation of any like kind of property (say a car-load of flour in every case), the freight moving in the same direction in all cases. The horizontal dotted lines show some of the maximum and minimum limitations fixed by the terms of the section. It will be evident, however, on examination of the problem, that the limitations marked on the diagram are but a few of the great variety which the traffic between different combinations of sta tions would produce, as the aggregate sum charged between any two stations fixes a minimum limit for the sum to be charged between any other stations located a greater distance apart, and a maximum limit for the sum to be charged between any stations which are nearer together. For instance, the sum charged from station a to New York, being the greatest local rate, 27 cents per 100 pounds, fixes a limit for the lowest sum to be charged for through freight from Buffalo to New York. While the sum charged from Buffalo to New York, 10 or 15 cents per 100 pounds, being the lowest through rate, fixes a maximum limit for the rate from stations a, b, c, d, e, &c., to New York. It is evident that in order to reconcile these limitations an equalization of through and local rates is necessary. This equalizing process can only be effected by advancing through rates. The rates to or from local stations a, b, c, d, e, &c., are now fixed by conditions and necessities entirely independent of the through rate from Buffalo to New York. The amount of business done at each station, the character of competition, if any, with other lines, and, more important than all, the necessities of the railroad company to obtain income with which to pay charges and expenses of all kinds, interest on its indebtedness, and possible dividends on capital stock, are elements which have been taken into consideration in the establishment of local rates, and these conditions will all remain in vital force after this section becomes a law. The new local rates will be gauged by distance, but the total sum to be received from local traffic can not be greatly diminished, so that the general range of local rates must remain substantially at present. This will certainly be true on all Eastern roads where the local traffic forms in earnings 75 to 90 per cent. of the business of the companies. I am reminded by the Senator from Massachusetts [Mr. HOAR] that on the Providence and Worcester road local traffic furnishes 93 per cent. of the receipts. In the interior of the country, in Ohio and Illinois, the relative percentages are 70 for local and 30 for through business. On some roads in the extreme West the percentage of through business is much greater. In Iowa in 1883 about 80 per cent. of the business was through and about 20 per cent. local. It must be evident from a consideration of these figures that it is essential in order to secure the continued operation of the roads, especially those in the East, that the income from local rates shall be substantially preserved. To refer again to the diagram. It would not be possible, for many reasons, to cut all local rates down to the unbroken level of 15 cents per 100 pounds fixed by the through rate. It would be prevented by the trade conditions and the necessities to which I have already alluded, and the rates fixed would probably be found in conflict with the terms of the second section of the bill, which requires that all rates shall be reasonable, as the rates from stations a, b, c, and d would probably be unreasonably low, and from stations f, g, h, and i unreasonably high. Several Senators have stated that this section would permit as great a charge for one hundred as for one thousand miles, and that the rate might, for example, be the same from Denver, Omaha, Chicago, or Cleveland to New York, as from San Francisco to that city. The section would undoubtedly prevent a greater charge from any of the intermediate points than from San Francisco; but this prohibition would have no practical effect, as the rate from San Francisco, if reasonable, would be so far above the rate from Cleveland that the limitation would be valueless. The rates from Cleveland could never be as great as the rate from San Francisco or the rates from Cleveland, Chicago, &c., to New York would be fixed by other conditions, limitations, and comparisons, without reference to the rate from San Francisco. To illustrate by the diagram, the rate from i to New York could never be greater than the rate from Buffalo to New York, but the comparison is one which never would be made in an actual transaction. The rate from i to New York would be in the first instance compared with and must not be greater than the rate from / to New York, and the rate from his compared with g, and so on through a long series of gradually increasing rates. As the financial needs of railroad companies will not admit of any considerable reduction in the income from local traffic, nothing is left but to advance through rates; but this would not always be possible. To refer to the diagram again, the through rates from Buffalo to New York are fixed in competition with water carriage by the Erie and Welland Canals and with a carrier whose railroad, entirely within the .boundaries of a State, is expressly exempted from the rule laid down in this bill. To advance rates from Buffalo, materially, means loss of through business and a necessary advance of local rates to recoup the loss of receipts thus sustained. Where, then, would be the limit and what would be the average rate after the equalizing process was completed? I believe that it would not be less than the average rate received for transporting freight on all the railroads in the United States, namely, 1.06 cents per ton per mile. The approximate resulting rate limit on the diagram is placed at 0.84 cent per ton per mile, which is about the average rate for all traffic on the trunk lines in recent years. To avoid the necessary inference that through rates must be advanced if rates are to be equalized as required by the section, some of the advocates of the bill have intimated rather than asserted that the qualifying words "under substantially similar circumstances and conditions" may be construed to authorize carriers to charge more from noncompetitive short-haul points than from competitive points where a longer haul is necessary. The chairman of the conference committee, in his explanation of the meaning of the words, said: They mean just what they say, that you shall not charge more for the shorter than for the longer distance on the same line in the same direction under substantially similar circumstances and conditions, and those conditions and circumstances may be, if you please, the fact that one place is a competing point and that another place is not, the fact that one place furnishes a large amount of business and the way-station does not furnish perhaps more than a car-load, and that it incurs additional expense and all that sort of thing. The words referred to were, I think, inserted in the section at my suggestion, and it was my purpose, by the insertion, to limit as far as possible the disastrous effects which would follow the adoption of the rigid rule laid down in the section, but I could not hope that any such significance as that now suggested could be given them. If the proportion of a through rate which a carrier receives places no limit on local charges, and if there is such dissimilarity of circumstance and condition between points where there is competition, and those where there is none, as would allow higher rates for a shorter haul to or from the latter, then what is the purpose of the section, and what becomes of the protection to be afforded shippers at non-competitive points? If this interpretation can be given the section those gentlemen who believe that a long and short haul provision furnishes a panacea for all railroad troubles will sooner or later find out that this bill is a |