Mr. RIPLEY, of the Atchison, Topeka and Santa Fe, says that the lines in the East are largely consolidated into a few hands; in New England there are practically only two railroad corporations, and yet there is less complaint there than in any other part of the United States. Things become more settled as a community becomes older; but Mr. Ripley thinks that the great reason for the tranquility in the Eastern States is that the people along the lines are interested in the railroad properties. (598.)

Compared with the rates in the past, and considering the improved methods of handling business, Mr. MALLORY thinks that existing rates are reasonable. (588.) Mr. GALLAGHER states that at his mill, in Dallas, Tex., the freight paid on coal is nine times its value at the mine; and he knows of a mill in western Kansas where the freight paid on coal is ten times its value at the mine. (543.) This question is also touched by many points in paragraph A, above.

2. Mississippi Valley railroads.—Mr. FISH, president of the Illinois Central, points out that the statistics show that the reduction in the number of employees during the hard times from 1893 to 1897 was twice as great relatively in the Mississippi Valley as in the other parts of the country. The average rate of transportation is less in the two chief groups of railways in that valley than in almost any other locality. There were more bankruptcies among these railways during the hard times than elsewhere. The witness implies that railway rates have been unduly reduced in that section. The physical condition of the railroads is now as satisfactory as that in the Eastern States, and earlier watered capital has been destroyed by reorganization. (321,322,330.)

3. Decrease in rates.-Mr. NEWCOMB, of the division of statistics, Department of Agriculture, says that a careful statistical comparison made by the Department of Agriculture shows that the average freight rate per ton per mile throughout the country has declined from 1.9 cents in 1867 to 0.8 cent in 1897. The former figure is probably too low, because statistics were available only from the largest roads, having the lowest rates. The average rate on the Hannibal and St. Joseph Railroad in 1870 was 3.194 cents; in 1897, 0.617; on the Union Pacific Railroad, 3.596 cents in 1869, 0.791 cent in 1897; Chicago, Milwaukee and St. Paul, 2.376 cents in 1865, 1.008 in 1897. On the Georgia Railroad the average rate in 1866 was 3.552 cents; in 1897, 1.112 cents. On the Louisville and Nashville, 3.007 cents in 1867, 0.791 in 1897. All the figures given are those in gold. (108.) Mr. Newcomb refers especially to the reduction in freight rates on grain during the past forty years. The only case of increase was after the special reduction made in 1890 to relieve the farmers at a time of exceedingly low prices, but this increase did not bring rates back to their former level. The decrease in rates has been greater than the decrease in the price of grain. The average rate per ton per mile on grain in 1896 was only 44 per cent as great as in the years 1867-1872, while the average price of wheat was 67 per cent of the price at the former period, and the average price of other products from 44 to 65 per cent. The rate for allrail transportation of wheat from Chicago to New York was 39 cents in 1858, 12.5 cents in 1897. The rate for part-rail and part-water transportation from Chicago to New York was 20.76 cents in 1868, 7.37 cents in 1897. În all-water transportation one bushel of wheat would pay for carrying 5.78 bushels in 1868, for 17.25 bushels in 1897. The rates on beef and live stock have decreased from one-third to one-half since 1879. (101, 108.)

Mr. BLANCHARD also compared the existing freight rates with those at earlier periods, to show the reasonableness of the present charges. In 1873 there were 70,268 miles of railway, and the average charge was 2.21 cents per ton per mile for 168,000,000 tons carried. In 1895 there were 179,162 miles of railway, and the average freight rate was 0.839 cent for 763,800,000 tons.

The reduction in dividends of railways also shows how low the rates are. The dividends per mile of railway in 1895 were equal to only 40 per cent of the dividends per mile of railway in 1872. The gross receipts upon each ton of freight moved in 1895 averaged 97 cents, regardless of distance, and 48 cents was the average receipt for each passenger carried. The dividend payments in that year were only equal to 7.2 cents per ton and 3.6 cents per passenger carried. The average rate of dividends on railway capital in 1895 was only 1.57 per cent, while 68 per cent of the entire amount of capital paid no dividends. (630, 631.) Mr. CALLAWAY, president of the New York Central, thinks that railway rates have been reduced through competition of different kinds to such low figures that further extensive rate wars or serious discriminations between individuals or places will practically be impossible. Thus, on the New York Central the average rate received for hauling a ton of freight has been reduced from 1.88 cents in 1870 to 0.59 cent in 1898. These reductions have been rendered possible by cheaper cost of transportation, through use of larger cars and engines, superior rails, etc. (223.)

4. Foreign freight rates and service (see also under Government ownership, p. 125 ff).-Mr. VANLANDINGHAM, of the St. Louis Traffic Bureau, does not believe that the freight rates in this country are exorbitant. They average lower than in any European country, although this is not true of local traffic, the average being reduced by the low rates on general traffic. Comparisons are difficult on account of different methods. Thus in England transportation covers delivery to the place of business of the consignee. Wages are very much higher in this country than in Europe. (201, 204.)

Mr. SPENCER, of the Southern Railway, likewise declares that railway rates in this country are reasonable, being cheaper than anywhere else in the world. Although some of the short-haul rates are as high as in other countries, this is necessitated by the small amount of business. Undoubtedly the long hauls of American roads are one element in making the low rates possible. (278, 279.)

Mr. BLANCHARD says that American rates are certainly the lowest prevailing in any country and the service the quickest and best. In 1886 a British writer pointed out that the freight rate on grain and flour from Liverpool to Birmingham, 97 miles, was $3.01 per ton, while the rate from Chicago to New York, 1,000 miles. was $5.60 per ton. Another English writer, in 1886, said that the average ton-mile rate on English roads was probably not under 3 cents, which was three times the amount charged on the principal American lines. (630, 631.) Mr. STONE believes that the facilities for the transportation of persons and of property are much better in this country than elsewhere and that the time of travel is shorter here and the regularity of service is greater. A commission from the Continent, which came here not many years ago to investigate the matter, reported that railroad travel here is much faster. Mr. Stone admits that the fairest comparison would be one between our railroads as a whole and the railroad service as a whole in western Europe, and that he has not seen a comparison made upon this line. He believes that there are more miles of road to the square mile in England and western Europe, and that discriminations are not a serious question there, as they are here. (536, 538.)

C. Publication of tariffs.-Professor JOHNSON and Mr. NEWCOMB both declare that publicity of railway rates is the first requisite of regulation. Books and accounts should be subject to inspection, on account of the essentially public nature of railway business. (62, 100.)

Mr. MORTON thinks that the requirement that railways shall post their rates conspicuously in every office is a good deal of a farce and causes unnecessary trouble and expense. Not one intelligent man out of a hundred can ascertain from the published tariffs any one rate within probably 24 hours. It might be possible to publish rates clearly if the attempt were not made to include so many stations. On the other hand, the requirement that rates shall be filed with the Interstate Commerce Commission is eminently desirable and has proved beneficial. The publication of passenger rates as distinguished from freight rates is desirable and not unduly complicated. (491, 493.)

Mr. STICKNEY says that while it is the clear intent of the interstate-commerce act that tariffs of local rates and also of joint rates should be posted in such a way that the ordinary shipper can himself ascertain the rates in any particular instance, the actual carrying out of this requirement is impossible. There are such innumerable railway stations and commodities that it would require several billions of rates to make a complete tariff. Several years ago the Western railways showed the Interstate Commerce Commission their printed tariffs, each having volumes as large as a small trunk, and although they admitted that the ordinary man could not ascertain the legal rate by inspecting these tariffs, the commission did not attempt to require anything further. The witness presumes that the tariffs filed by his own company with the Interstate Commerce Commission include 5,000 or 6,000 sheets. It is true, however, that the ordinary mau usually learns the rates on standard products from his own local station to the leading markets. (458, 459.)

Mr. BIRD, general traffic manager of the Chicago, Milwaukee and St. Paul Railway, in reply to these statements of Mr. Stickney, says that the publication of rates with the Interstate Commerce Commission has been decidedly beneficial. The Western railroads as a rule maintain agencies in Washington especially to examine the tariffs of other roads. The courts hold that no tariff can be introduced as evidence in a suit unless it has been duly filed with the commission according to the law. (477.)

Mr. BLANCHARD, late commissioner of the Joint Traffic Association, does not believe that published tariffs are so complicated that experienced shippers and railway officers can not find the rates by means of them. There is not a large shipping firm in Chicago, for example, which does not keep tariff rates in its

office. Most of the large shippers have special traffic managers to look after such matters. (674.)

D. Classification of freight.-1. General principles.—Mr. RIPLEY, chairman of the Western Classification Committee, explains that classification is the basis of freight rates. When an article is presented for shipment the classification is examined and the rate upon the article is determined by the class to which it is assigned. Bulk and value are the two controlling features in the classification of freight. Value determines what an article will stand; bulk represents the accommodation furnished by the carrier. Probably the greater quantity of freight consists of articles which are shipped at commodity rates outside of the classification, such as wheat, coal, pork, etc. (568, 569.)

Mr. TUCKER, chairman of the Central Freight Association, states that classification is based on value, bulk, and risk. The question what an article is able to stand, in view of its value, is also taken into consideration. (564.)

Mr. KELLEY, freight commissioner of the Trades League of Philadelphia, considers that the classification of the goods is the basis of the power of the railroads in influencing commodities. The railways at present can fix the final classific tion of any commodity, and there is no redress except by appeal to the committee of officials which makes the classification. (191.)

2. Classification committees.-Mr. RIPLEY, chairman of the Western Classification Committee, states that this committee establishes the freight classification for the roads between Chicago and the Pacific coast. The committee is composed of a delegate from each road, usually the assistant freight agent, sometimes the general freight agent or the traffic agent, sometimes the commercial and general agent. The by-laws of the committee provide for two meetings each year; but it is usually necessary to have an extra meeting. The chairman presides at meetings, decides questions on the construction of the classification in the intervals between meetings, and rules upon new articles presented for classification which are not already provided for. Changes are constantly made at the semiannual meetings, but they are not very numerous. All rulings are operative on the roads in the territory as soon as published. (567,568.)

Mr. RIPLEY states that shippers have the privilege of appearing before the Western Classification Committee, in person or by attorney, and presenting their cases. He thinks that shippers are generally satisfied with their privileges in respect to the presentation of their desires before the Western Classification Committee. (570.)

Mr. BIRD says that business men and others wishing changes in classifications are permitted to appear before a subcommittee of the Western Classification Committee during some time before the meeting of the association itself. This subcommittee passes on the questions submitted in part and submits the others in due form to the association. Requests for changes are usually made by those who hope to get some special advantage for themselves at the expense of others. (478.)

Mr. TUCKER says that the Eastern Classification Committee is composed of 6 members of the Central Freight Association and 9 others; 15 in all. (558.)

3. Uniformity of classification. Mr. NEWCOMB says that there are at present three more or less uniform systems of classification of freight in this country-one in the Northern and Central States (the Official), one in the Western States, and one in the South. These classifications differ in important respects, a thing which is justified by the differences in the character of the products chiefly hauled. A uniform classification for through freight would be desirable, but there would be too many exceptions as to local traffic. (100.) ·

Mr. REAGAN says that the State of Texas has adopted practically the Western classification, but has prohibited the railways from making certain reservations exempting themselves from liability. (350.)

Mr. RIPLEY, chairman of the Western Classification Committee, says there are three principal classifications in the United States-the Official, which covers the territory east of Chicago and the Mississippi River and north of the Ohio; the Southern, which governs south of the Ohio and east of the Mississippi, and the Western, which governs from Chicago to the Pacific coast. If freight is shipped from New York into the territory of the Western classification, through Chiago, it is rebilled under the Western classification. This is not uniformly true, however. For instance, freight from points east of Chicago consigned to St. Paul or Mississippi River points goes through on the Eastern classification. Mr. Ripley does not think that difference of classification is a source of much inconvenience to the shipper. It does, however, produce some unjust discrimination between places. For instance, a shipper in Chicago, sending to St. Paul or to Mississippi River points, is likely to be at some disadvantage as compared with an

Eastern shipper sending similar goods to the same points. This is because the Eastern classification is, upon the whole, somewhat lower than the Western. Many complaints on the part of shippers arise from these differences of classification, and often delay is caused in the delivery of freight. The witness has not known of any suit arising from such a cause.

In Illinois there is a classification framed by the Illinois board of railway and warehouse commissioners. Of course this applies only to business wholly in the State of Illinois. (568,569.)

Mr. BIRD, of the Chicago, Milwaukee and St. Paul Railway, explains the reason why the Eastern or Official classification has been applied by the Western railroads as far as the Mississippi River. It was used by the railroads running directly from Eastern points to the Mississippi River, and roads from Chicago were forced to adopt the same classification on through traffic in order to compete in handling the goods. Thus, in one instance, the witness found that whisky was being shipped from Cincinnati to St. Paul at less than the rate from Milwaukee to St. Paul, whisky being fourth or fifth class at Cincinnati and first class under the Western classification.

The witness was a member of the committee which attempted to establish uniform classification throughout the country. Each section has made its classification with a view to promoting business and building up manufacturing in its own territory. Consequently each section must yield something to the other to secure uniformity; it is a matter of giving and taking. This committee prepared a classification which was agreed to by the roads west of Chicago and by several Eastern lines, but it was defeated by the vote of one or two of the trunk lines. Even if this uniform classification had been adopted, special commodity rates on grain, lumber, coal, etc., would still have been permitted, just as they are at present. (477, 478.)

Mr. KNAPP, of the Interstate Commerce Commission, believes that uniform classification of freight under public authority would lessen discriminations and be generally beneficial. The desirability of uniformity comes not so much from the difference in absolute expense of shipment of a given commodity under different classifications as from the fact that its relation to competing commodities is largely determined by classification. Thus the differences in rates between wheat and flour, referred to in another connection, are exceedingly important in their influence upon the milling business. (142.)

Mr. DICKINSON, of La Crosse, Wis., a manufacturer of agricultural implements, testifies that he has suffered serious injustice as a result of the differences between the existing classifications. For instance, under the Official classification, which rules in Michigan, certain sizes of packages of vehicles are shipped as first class. Under the Western classification, which governs in Wisconsin, practically all vehicles, except those of large and bulky structure, are shipped at 13 times first class. The classification at the initial point of shipment controls the rate to destination. From this it results that while a shipper of vehicles in Wisconsin has to pay 14 times first-class rates, a shipper in Michigan can reach the same points by payment of first-class rates only. Again, trouble arises from the different requirements as to packing. Under the Official classification cutters may be shipped in crates, set up, with the bows projecting, and without wrapping the projecting parts; under the Western classification the bows must be wrapped or a higher rate is charged. The railroad companies have also made a special ruling on buggies, which enables the Michigan manufacturers and the manufacturers in Chicago, Milwaukee, and Racine to ship vehicles to Iowa points at a rate that is sometimes even less than the first-class rate. Mr. Dickinson is obliged to pay 14 times first class on the same commodity to the same points. He considers this a gross injustice. He admits that there might be a particular instance in which a strictly uniform classification might work hardship, but, taking the country as a whole, he believes that the uniform classification would be the proper and right thing. He does not think that uniformity of classification can be hoped for except through governmental action. (548.)

Mr. Dickinson states further that the manufacturers in the West are dependent on commodity rates to put them in a position to compete with manufacturers farther east. He finds, however, that his own town is put at a disadvantage in respect to these rates as compared with St. Paul. The commodity rate on the witness's raw material, mostly iron and steel, is about one-half of the rate from Chicago to St. Paul on the finished product, but as it takes about two carloads of raw material in the rough to make one of finished product, this amounts to a discrimination against La Crosse. (550.)

Mr. RIPLEY is in favor of a uniform classification of freight for the whole United States. It should be framed by the railroads. The roads made an

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attempt some years ago to frame such a classification, and practically agreed upon it; but the agreement failed through the objection of a few roads. The objecting roads were principally in the East, although some of the Pacific coast lines also objected. The witness thinks that the trend of the changes which are made from time to time in the Western classification is toward uniformity. The framing of a classification is a very complicated matter, and it is doubtful whether one made by the Interstate Commerce Commission would give general satisfaction, at least at first. The classification which all the roads drew up some time ago, however, would be available as a basis. The witness would not anticipate any injury to the roads by a classification framed by the commission after a full hearing. It is perhaps hardly possible that a uniform classification will be attained, unless the framing of one is put into the hands of the Interstate Commerce Commission, or it is made mandatory upon the railroads to frame one. (568-570.)

Mr. MORTON believes that the universal classification is very desirable. He was a member of the committee appointed with a view to such classification. The attempt failed, because men in different sections desired different classifications on account of the commodities most largely carried in their sections. The witness thinks it would be to the interest of the railroads and of the public that some commission, perhaps under the supervision of the Interstate Commerce Commission, should fix a uniform classification. It would still be possible for different rates to be made upon the same classification, and for special commodity rates to be made as at present. (491,496, 497.)

Mr. INGALLS, of the Chesapeake and Ohio, declares that differences in classification cause an immense amount of trouble. He thinks that uniform classification would not necessitate making the same rates in every section. (300.)

Mr. BLANCHARD, late commissioner of the Joint Traffic Association, declares that he is in favor of uniform classification so far as it is practicable. The railways themselves ought to formulate classifications. Assignment of articles to classes is a very important element in deciding what the rate on those classes shall be, and the railways should determine these classes for the same reason that they should determine the original rates. It might be wise to permit the Interstate Commerce Commission to order the railroads to adopt a uniform classification by a certain date, leaving it to the railways themselves to work out the classification. In case of failure to adopt a classification, the commission might perhaps put one in force.

At the same time the importance of uniform classification, Mr. Blanchard thinks, has been overestimated. Its adoption would not stop discriminations. The chief advantage would be in securing unbroken through rates. Moreover, there are many difficulties in the way of uniform classification. Despite these difficulties, however, the number of classes has been greatly reduced, as well as the number of classifications. The eastward tariffs of the Central Traffic Association formerly contained 13 classes; these have been merged into 6, exclusive of commodity rates. (633, 676, 677.)

Mr. Blanchard says further that there are many reasons which warrant differences in charges and in classifications in different sections of the country. In a section where there is a large and regular traffic in some one commodity, such as cotton, live stock, or manufactured products, it is proper that a lower rate should be made on that commodity than in a section where the traffic is very light. Thus, the large concentration of manufacturing industries in New England justifies lower rates on manufactured products from that section than in the regions where manufactures are little developed. Other items in the classification must be affected by canal, ocean, and river transportation. This is especially true as to transcontinental traffic. On account of the numerous influences which affect the transportation of commodities in different sections, it is necessary to have special commodity rates intermediate between the various classes. It is desirable that these should be reduced in number as far as possible, but they can not be entirely done away. Mcreover, to establish uniform classification for interstate traffic would also necessitate changes in regard to State traffic. The present classifications have been adopted in view of the circumstances and conditions in their respective regions. The system of freight classification in England and on the continent of Europe is, roughly speaking, similar to that in this country. (632-634.)

Mr. VANLANDINGHAM, freight commissioner of the St. Louis Traffic Bureau, does not think that a uniform classification by statute is advisable or even possible without many exceptions of particular commodities. The territory in which an article is produced in large quantities must naturally have a lower rate on that article to the central market than prevails in territories where it is carried