INDUSTRIAL COMMISSION. TRANSPORTATION. ATLANTA, GA., March 21, 1900. TESTIMONY OF MR. SAMUEL C. DUNLAP. General manager, Cornelia and Tellulah Falls Railroad, Gainesville, Ga. The subcommission of the United States Industrial Commission met at the Kimball House at 9 a. m., Senator Kyle presiding. Mr. Samuel C. Dunlap, general manager of the Cornelia and Tallulah Falls Railroad, Gainesville, Ga., was introduced as a witness at 10.40 a. m., and, being duly sworn, testified as follows: Q. (By Senator KYLE.) You may give your name, post-office address, and vocation.-A. Samuel C. Dunlap, Gainesville, Ga. Q. (By Representative LIVINGSTON.) You are connected with railroad enterprises of the State?-A. For the present I have some connection, sir. I have two local roads under my supervision. Q. (Interrupting.) What is the condition of the railroads in Georgia and the South generally, financially?-A. I want to state first that I have two small roads under my management. One is 65 miles and the other is 20 miles long. I am receiver for the first road, running from Gainesville to Social Circle-the Gainesville, Jefferson and Southern-appointed by the superior court, and though I am general manager of the Tallulah Falls Railway, running from Cornelia to Tallulah Falls, I am not an original railroad man. I have been a lawyer most of my life, up to about 1893, when I was appointed United States marshal. I went from that to the receivership of that road, and I have been managing it since. As far as I know about the financial conditions of the roads, one of my roads is insolvent, and the other has not got any money. As to the larger systems, I think they are all pros perous. Q. (By Senator KYLE.) You do not think that represents the condition of all roads in the South?-A. No, sir; I think the railroads are making money now, all of them. Q. (By Representative LIVINGSTON.) How are the railroads controlled in this country, simply by the board of directors, or by railroad commissions, or jointly?— A. I did not catch that question. Q. How are passenger rates and everything fixed; by railroad commission?-A. Well, the railroad commission make rates, and I believe the roads conform to the particular commission. The railroads have an association, the Southern Freight Association, of which Mr. Parrott is the chairman. They regulate this through it to some extent. I am not a member of that association. Q. Your roads are not included?—A. I conform generally to the rules, but I am not a member. Being a court officer I did not care to hamper myself with any outside regulations. I have a connection with the Southern Railroad at Gainesville, with the Seaboard Air Line at Winder, and with the Georgia at Social Circle, which is leased now to the Louisville and Nashville and the Coast Line. All those systems are friendly with me. I give them business and get business from them. On the little Talulah road here I depended entirely upon the Southern for all my through business. Q. The reason why you were subpoenaed is that you are controlling independent lines that were supposed to be entirely outside of these associations and combinations. We hear complaints of the roads giving advantages to terminal points, and we will be pleased to have you say to the commission what there is in this complaint about long 16A-1 1 and short hauls.-A. Well, I do not do much interstate business, and my business is mostly local. While I am independent in one sense, I am dependent in another. The little local roads would not do much without the friendship and assistance of the big lines. They could crush them out, if they had a mind to, without any effort, so I get along the best I can and do all the business I can. As to the long and short haul business here, that question could be better answered by some of these long lines. Q. What is the discrimination on your line between two points, Social Circle and Gainesville, suppose you stop off for some freight at Monroe from Social Circle, and the rest of the freight you haul from Social Circle to Gainesville. How do you pro rate your freights in that way, on your line?-A. We have local schedules, and Social Circle is a common point; Winder is a common point, and Gainesville is a common point. There we have competition, and the rate is a little lower than at the intermediate points. At these common points I get all I can. Q. Now, provided that freight was going to Augusta, you really compete with the Southern Railroad, and if you can, you cut the freight rate there and take it across to Social Circle? Do you make any trade about or anything of that kind?-A. No, sir; I do not cut the rates. There is a law against cutting rates, and I am a court officer and a law-abiding man, and I don't cut rates. I try to get it by various other arguments, but I do not cut rates. I can not cut the rate without the support of one of the main lines. Q. Well, then, the independent roads in the State are pretty much like yours, if there are others; they are dependent largely for favors on the main trunk line?-A. Yes; the day, it seems to me, for short lines has gone. There isn't one of them in the State, which I know anything about, that can live without the assistance and friendship and support of one or the other of the large systems. Q. That practically, then, shuts out railroad building except by trunk lines?-A. Well, when we first passed the Georgia commission law I think that that killed the little roads. The 10-mile road was forced to haul passengers and freight at the same rates as the big trunk lines, and it could not live. Q. Did they make no discrimination in your favor?-A. Well, the Tallulah Falls road is so short and so poor that they do. I get 5 cents a mile up there for passengers, and a little more for freight, but on the Gainesville, Jefferson and Southern road I charge the same that is charged by the Southern, 3 cents a mile for passengers, and the same rates of freight, and there isn't enough business. The population is too sparse, and freight is too little. There isn't business enough, unless you have a mineral road or some road that has an extraordinary advantage. Q. You think the commission, then, works a hardship on independent short lines?— A. I think it forced them to conbine with the long lines. Q. In other words, it gives the main trunk lines the advantage, and consequently they usually absorb them?-A. All the advantages; yes. Q. (By Mr. RATCHFORD.) You say you charge the same rate of freight on one of your roads that the Southern charges. What is that rate?-A. I have got no rate sheets here, and I am not an expert on rates. Any freight agent can give you that. Q. You can not say whether it is 10 mills per ton per mile, or 15 or 20?—A. I would rather not undertake to answer questions about detailed rates. Q. (By Mr. SMYTH.) You said just now that you thought the main lines were making money and were prosperous? A. Yes; I think they are. Q. More so than a year ago at this time?-A. Yes. All the railroads now, that I know anything about, are filled up with business, and there has been a great scarcity of cars this season. Q. If that is so, what is the reason for the increase in freight rates that went into operation on the 10th of this month on the Southern system, Atlantic Coast Line, and Seaboard Air Line?-A. Well, I suppose that the railroads thought they ought to get a little advantage of the prosperity of the times. They were doing more business. Q. Making more money, and therefore thought they ought to make a little more?— A. Well, the railroads have been cutting down, down, down for 20 years, and have had to cut a great many things down to a point where there was nothing in it. Q. At the same time they are making much more money than a year ago?-A. A year ago they were pretty well broke. They have just got out of bankruptcy and started up, and I suppose now they want to make some money, and want to be in position Q. (By Senator KYLE, interrupting.) That is, they have not been able to pay dividends on stocks, bonds, etc.?-A. Yes. Q. How are the roads stocked in proportion to the cost of the roads?-A. I can not very well answer that question. As you know, all these roads that have gone into reorganization-the Central, Southern, and the various lines-the stock has not Deen considered as worth anything. Q. A great many roads over the country have complained in past years that they have not been able to make any money at all, but the roads have cost in many sections of the country about $7,000 a mile, and they are bonded at about $42,000 or $43,000 a mile. It is pretty hard to make good dividends on stock, including the water?-A. Well, I do not know about that. Q. (By Mr. SMYTH.) Do you know what the Southern system is capitalized at per mile in Georgia?—A. I do not. Q. Do you think there was a necessity for an increase of 5 per cent in freight rates?-A. Well, I think the business would bear it. I do not see why the railroads should not make something in profit out of the business. Q. You said just now there was great scarcity of cars to haul the business.-A. Yes. Q. So there is no lack of business being offered?-A. None at all. Q. The tonnage was a great deal greater than a year ago?-A. Yes. Q. Profits were a great deal greater than a year ago, as shown by the published receipts? A. Yes. Q. What excuse is there for the increase in the rate of freight?-A. Well, I have increased my rate; I am not connected with the interstate lines. That would be a question more for Mr. Culp, Mr. Scott, or Spencer, or somebody else to answer. do not belong to that freight association. I Q. (By Senator KYLE.) What governs you in determining the freight and passenger rates?-A. Well, I am governed largely Q. (Interrupting.) By what the business will bear?-A. No; the State of Georgia fixes the passenger rate and freight rate. Q. You used that expression-what the business will bear?-A. They were far below commission rates, and I think they were probably trying to get up. I give that as an excuse for it. Now, take the cotton factory companies; you know we all want to build anything in the way of factories, and it was said for a long time that the railroads had helped the factories because they were all infants and weak, and had to be fed and nursed by the railroad and every other interest. They kept at that until the factories have put down all the cotton, and in all this vast section here we can not get any cotton to haul to the ports. I suppose the railroads, maybe, want to get something back out of the cotton companies don't know. Q. (By Mr. SMYTH.) They get that same cotton in the shape of goods, do they not?-A. No; they don't get nearly as much freight as out of cotton. Q. It is a better class of freight, not so inflammable?-A. Yes; cotton is easier lighted than anything. Q. There is danger from fire in cotton, is there not?-A. The insurance companies pay that. Q. (By Mr. RATCHFORD.) Don't you think the finished article, including the shipment of machinery and materials for the construction of mills, will amount to about as much freight as raw material would?-A. I am in favor of it, but we give them reduced rates on machinery and material and everything else, and then they get a very low rate on their manufactured stuff, and they get advantages everywhere. Q. Is there increased passenger traffic as a result of the building of those cotton mills in different communities?-A. Well, we all want cotton mills built. I was trying to give an excuse for raising rates. Q. (By Mr. SMYTH.) That is, that you think the traffic would bear it?-A. I said I supposed the railroads thought so. I will give you an instance: On my road over there at Monroe there is a little cotton mill, and last year they sold 1,200 bales of goods-cloth-to be exported to Shanghai, China. Those goods went out from Monroe to Shanghai for $1 a hundred. Mr. Johnson, general freight agent of the Georgia Railroad, made the rate and fixed it, and when I found out what it was going at, I found I was only getting 3 cents a hundred out of that business. Q. (By Mr. RATCHFORD.) Out of that dollar?-A. Out of that dollar. Q. (By Mr. SMYTH.) For how long a distance?—A. I do not know how far it is to Shanghai. Q. About 3 cents?-A. I hauled it about 10 miles; but it came to Atlanta for 6 cents. I got 3 and the Georgia Railroad got 3. That is all we got out of it. Q. How much did the Southern get?-A. The Southern did not get it. As I understood, the railroads divided the 93 cents to San Francisco, and the balance, 7 cents, went across the Pacific, and that is what took cotton goods out of the country. I objected to it. I did not want all my cotton business ruined. I would get out of cotton 12 cents, and I was only getting 3 out of manufactured stuff. I wrote Mr. Johnson and protested that he should not have made such a price as that without consulting me; and he wrote back and said that if I wanted to deprive the Walton mill of the privilege that all other mills were enjoying, I could do it; but he thought as a matter of policy I ought to let a little mill make some money, too. Q. Do you suppose that mill paid freight to China?-A. No; sold goods. Q. That rate was made in competition with the Suez Canal and tonnage across the Atlantic?-A. I can not speak as to that. Q. Don't you suppose there are two ways to ship goods to China-over through the Suez Canal or across the continent to the Pacific-and the railroad made the rate in competition with them?-A. Well, I do not get enough out of the manufactured stuff to pay for handling it. Q. How many shipments of that kind have you made?—A. I shipped 1,200 bales in that lot. Q. You do not know of any other shipments?-A. No; I do not know any others. Q. Only the one case?-A. Yes. I just mentioned that case as an illustration. Q. How do you quote shipments from that mill to New York?--A. I get my local rate-about 6 cents. Q. (By Mr. RATCHFORD.) In receiving 3 cents for a 10-mile haul, is it not a fact that you are paid proportionately higher than those other roads that handle goods?— A. Yes. Q. You admit you were paid proportionately higher than others, according to the distance hauled? A. Yes. Q. (By Mr. SMYTH.) You hauled 10 miles for 3 cents, and the Pacific Steamship Company hauled it 4,000 miles for 7 cents? Q. (By Senator KYLE.) It was hauled from the mill across the continent here to the Pacific for 87 cents?-A. That is what I understood. Q. (By Representative LIVINGSTON.) What is the freight rate per hundred from Atlanta to New York on the manufactured stuff?-A. I think it is about 50 or 60 cents. I can not quote the rates. Q. Nearly as much as across the continent? A. Yes. Q. (By Mr. SMYTH.) Don't you think that mill allowed the exporter the New York rate of freight, 50 or 60 cents?-A. I do not know how it was based or divided. Q. Were not those goods sold at that mill based on New York delivery, and the buyer received a bonus of 50 or 60 cents?-A. I can not answer that. Q. (By Senator KYLE.) You say you give very low rates on machinery brought into the country here. Do you ever grant rebates?-A. Well, I do not know what the main lines do. On my road we have built two cotton factories, and we have given the manufacturer a two-thirds rate on the machinery and material for the mill. I think that has been pretty generally followed in the State. I can not speak with certainty. Q. So you act in harmony with the main lines in doing that?-A. Yes. Q. (By Representative LIVINGSTON.) Does the practice of granting rebates obtain in Georgia over these roads or not?-A. I think not, sir; no, sir. Q. Is there any discrimination between shippers that you know of?—A. None. Q. Large and small shippers?—A. No, sir; I think not; none that I have knowledge of. Of course I have seen something in the papers about these things, but I do not know anything about them, Q. (By Senator KYLE.) No violation of the interstate-commerce act?-A. No, sir; I do not suppose there is any of any consequence. Q. (By Mr. SMYTH.) You talk about special rates on machinery. Do you know what the rates are?—Á. I do not; I think the rate on machinery has been about 55 cents a hundred. Q. That is the rule, is it not?-A. I think so. Q. That is the charge of the minimum car rate, is it not, of 20,000 or 24,000 pounds?—A. Yes; I can not speak of that because I can not quote through rates accurately. Q. If a car contains 12,000 pounds they have to pay on 24,000 pounds, do they not, and if the car contains 30,000 pounds they have to pay the excess over 24,000 pounds. Do you call those special rates of any great advantage or convenience to the manufacturer or mill owner?-A. I do not know. I only answered the question about mill machinery, and I said we built two mills on my little road. Q. I understood that you said that the cotton mills were receiving special advantages and specially low rates. I want to find out if things are being done differently in Georgia from what they are in other States.-A. I can not quote rates. I think we ship cotton goods-manufactured goods-cheaper than we do anything else. Q. Is it not considered about the best class of freight you can carry?-A. Yes Q. Easiest handled?-A. Yes. Q. No danger of breakage? A. No. (Testimony closed.) MEMPHIS, TENN., March 23, 1900. TESTIMONY OF MR. JAMES S. DAVANT, Commissioner of the Memphis Freight Bureau, Memphis, Tenn. The subcommission of the United States Industrial Commission met at the Peabody Hotel at 9.15 a. m,, Senator Kyle presiding. Mr. James S. Davant, commissioner of the Memphis Freight Bureau, Memphis, Tenn., was introduced as a witness at 11.07 a. m., and, being duly sworn, testified as follows: Q. (By Senator KYLE.) Please give your name, post-office address, and vocation.A. James S. Davant, Memphis, Tenn., commissioner of the Memphis Freight Bureau. Q. (By Mr. SMYTH.) Will you explain to the commission what that Memphis Freight Bureau is, its objects, and how long it has been in existence?-A. It is an organization of the merchants and manufacturers of Memphis for the purpose of adjusting inequalities in freight rates at Memphis as compared with other competing points. Q. The object is to advance the business interests of the city of Memphis by making this a point where cotton and other commodities can be bought and transported as cheaply as at other cities?-A. Yes. Q. Have you met with much success?-A. Yes, we have accomplished a good deal. Our efforts are mainly directed to the adjustment of the rates to and from local territory. Q. We had before us yesterday Mr. Porter as a witness to give us some information with reference to freight rates on cotton from Memphis to points east and southwest and southeast-that is, to the Carolina mill points, as compared with New England mill points. Can you give us information as to these competing rates?—A. Yes. The rates to the eastern spinning points are based on 55 cents to Boston. Q. That is, all points that take the Boston rate, 554 cents?-A. Yes. Q. What is the rate to New York?-A. Fifty and one-half cents. Q. What is the rate to Cohoes, N. Y.?—A. I am not quite sure whether that takes the New York or the Boston rate. I think it takes the New York rate. Q. Fifty-five and one-half cents?-A. Possibly so; I do not know. Q. Do you know the rates to Carolina mill points?—A. Fifty-nine cents. Q. Then cotton going, say, to Charlotte, N. C., or Greenville, S. C., some 300 or 400 miles this side of Pinners Point, would take the rate of the 59-cent point, whereas cotton passing through those points and going to Norfolk would take a rate of 42 cents?-A. Yes, that is true. Q. Does not that difference in the freight rate tend to prevent any cotton from being shipped from this territory to the Carolina mills?-A. It has that effect to a certain extent. The high rate from Memphis as compared with near-by points is against it. Q. You mean points near to the Carolina mills? A. Yes, but the rates are relatively adjusted from all territory on the Mississippi River, so that we are in line with those points in the distribution of our cotton. Q. What excuse does the railroad make for charging a rate so much higher to a point so much nearer Memphis than to a point farther on?-A. The rates to the coast points are made arbitrarily, or rather by river competition and other influences that they can not control. Q. The effect, however, is to give an advantage to the foreign spinner, is it not, in his cotton?-A. Yes. The rates to Liverpool are sometimes lower than to Carolina points. Q. And so the Carolina mills, instead of having an advantage by their nearness to cotton, are really at a disadvantage?-A. Yes; that is true with reference to Memphis and adjacent territory. I understand the objection urged to reducing the rates to the Carolina mills is that it would result ultimately in the reduction of local rates from near-by points. Q. Has any effort been made to secure a reduction of rates to the Carolina mills?— A. Yes; we have had it under correspondence for a number of months. Q. It has been stated as a fact that the mills, particularly in upper South Carolina, consume very much more cotton than is raised within any reasonable distance, and they are obliged to go away for cotton. Is there any reason, if that is the case, why they should not enjoy at least the same rates as the New England mills on their cotton?-A. I do not know of any. My contention has been that the rates from Memphis should be the same to the Carolina mills as to Norfolk and other Virginia ports. |