in small quantities. Water transportation also makes modifications in classifications necessary; in Pacific coast traffic there are nearly 1,500 exceptions to the general classifications. The railways themselves are seeking uniformity in classification as rapidly as possible. There were fully 20 different classifications fifteen years ago. The classification committees of the different sections meet yearly, and often have hundreds of applications for changes. One difficulty encountered by the railways in trying to get uniform classification, which would also arise in trying to fix a uniform classification by national authority, grows out of the classifications prescribed on particular commodities for traffic within various States by statutes of those States, as in Illinois

The Official classification has only six classes; the Western is much higher on general merchandise, and lower on the products of the country; the Southern is more largely based on quantities than on the value of goods, on account of water competition. (202-204.)

Mr. SPENCER, president of the Southern Railway, believes that greater uniformity of classification than now exists is desirable, but regard must always be given to the different conditions in different sections. Classification amounts to the fixing of rates. Many articles have been taken out of the regular classes and given special commodity rates. Thus in the State of Alabama as soon as the iron business was introduced and largely developed it became absolutely necessary to make a special commodity rate for iron, such as was not necessary before. The railway must thus always consider local conditions, must take into account the markets to which local products can go, and the prices which can be obtained. While the original theory in fixing classification was probably to impose all the traffic would bear, the method is now to constantly whittle away rates according to constantly changing conditions. (277.)

Mr. COWEN, of the Baltimore and Ohio, thinks that uniformity in classification is out of the question for a country so large and with so great a traffic as the United States. But the railways themselves are tending to secure uniformity as far as possible. (217.)

Mr. CALLAWAY, president of the New York Central, does not understand all of the reasons for differences in the classification of commodities in different sections of the country, but admits that there are differences in conditions. (237.)

Mr. KELLEY, of the Philadelphia Trades League, believes that on the whole a uniform system throughout the country would be very desirable, although it would take a considerable time and much labor to prepare one, and although there are often reasons why classifications should differ somewhat in different territory. At present, under the three classifications which prevail in different sections, the shipper, who can not be familiar with them all, or even with a single classification, on account of its complexity, does not know when he ships goods what the freight to some distant point will be. Shippers themselves, rather than buyers, usually determine the route of shipment. The witness believes that, individually, railroads do not depart materially from the general classification adopted for their respective sections of the country. (191.)

E. Miscellaneous questions.—1. Through freight rates.—Mr. BLANCHARD testifies that through freight rates and fares were formerly made by adding up the various local rates with the terminal charges, etc. The rules and responsibilities of the different carriers forming the links in the through lines were dissimilar and even clashing. Transfers were numerous and the time of through transit very long. At present through routes have been arranged either by actual consolidation of ownership or by joint agreements of different kinds, and now more and better through routes are offered to shippers in this country than in any other. The result has been economical to the railroads in car supply and return loads, and advantageous to the general public in quicker time and lower charges. It is not necessary to pass laws to induce railways to make proper through connections. The self-interest of the carriers themselves will regulate the matter. At present any road, which can offer reasonable facilities and which will divide charges as satisfactorily as existing connecting lines, can usually secure through rates from any important railroad connecting with it. It is true that railways sometimes have preferences for particular roads. Thus a group of roads under common ownership will naturally tend to prefer one another in their shipments. So, too, if one connecting line has a reputation for demoralizing rates and injuring both shippers and carriers it will naturally be less favored than more conservative lines. (627,632.)

2. Fast freight lines.-Mr. NEWCOMB, of the Department of Agriculture, says that there are many lines of freight cars going by special names which traverse two or more lines of railways. Their purpose is to secure a reputation or trade name for through traffic. Through traffic arrangements of some sort are absolutely essen

tial. There were formerly some fast-freight lines which were incorporated and separate from the railways, but the Empire Line and the Merchants' Despatch are the only ones of this kind now. Others are merely cooperative arrangements among connecting roads. Each puts in a number of cars and pays expenses and divides receipts in proportion to its mileage. The railway companies consider the separate, incorporated fast-freight lines disadvantageous. (98.)

3. Competition of Canadian railroads (see also under Grain shipments).— Mr. MORTON, vice-president of the Atchison, Topeka and Santa Fe Railway, complains of the fact that the Canadian Pacific Railroad is permitted to carry freight from one State in our Union to another through the Dominion of Canada, and especially of the fact that it demands that the American transcontinental lines shall charge 10 per cent higher rates than the Canadian road. He thinks that this practice should be prohibited by law. (492.)

Mr. PROUTY, of the Interstate Commerce Commission, referred to the practice of permitting goods to be carried by the Canadian railways from one part of the United States to another in bond. The practice is opposed by those railways which do not participate in the traffic brought by the Canadian roads.

4. Export of butter and cheese.-Mr. KENNARD, of the Chicago Butter and Egg Board, says that the export trade in butter and cheese is quite large, amounting to millions of dollars yearly, but that it is hindered by lack of shipping facilities and is not increasing in amount. There is only one steamship line from New York which will carry shipments of butter, and the freight rates on this line are almost prohibitive. Chicago dealers ship largely by way of Montreal, the freight rate being only about one-half that from New York. Owing to these lower Canadian rates the exportation of butter and cheese has developed enormously, although the witness does not know how far the statistics distinguish between the product made in Canada and that shipped through Canada from the United States. The shipments of cheese from Montreal from May 1, 1899, to November 1, 1899, were about seven times as great as those from New York, and the shipments of butter about four times as great. The Canadian steamers would only take American products when they can not get the products of their own country, and they keep their freight rooms open, excluding American products, up to within three days of sailing. Mr. Kennard thinks that American shipping should be encouraged in order to remedy this difficulty. (368.)

5. Weight of shipments.-Mr. EMERSON, a produce dealer of St. Paul, says that shippers of bulk vegetables, especially potatoes, frequently have difficulty on account of the apparent shrinkage in weights. Where these dealers ship to other persons the lack of proper supervision by the railroad over the discharge of the freight sometimes permits part of the goods to be taken away, either by accident or intentionally, without being weighed. The goods are paid for by the discharge weight. In other cases on shipments made to the dealer the car is found to contain less weight than the amount billed by the person loading it, but the consignee is compelled to pay freight at the higher rate. In the case of potatoes there is naturally a slight shrinkage, chiefly due to the evaporation of moisture, but it should not exceed two per cent, whereas some of the discrepancies which the witness has met with have been much larger. The difficulty of lack of supervision over the discharge of cars is found chiefly in medium-sized markets. The witness thinks it would be possible for the railroads to exercise proper supervision without employing many more men; at any rate, shippers would be willing to pay for necessary supervision. Where potatoes and similar articles are shipped in barrels instead of in bulk, little difficulty occurs.

In this connection the witness declares that the track scales used by the railways are often inaccurate. He has weighed the same car on the same day on the scales of two different railroads at St. Paul and found a difference of nearly 3,500 pounds. (480-485.)

Mr. KENNARD says that great inconvenience is caused to dealers by the different weights fixed for bushels of different products in the various States. Sales of all sorts of products should, if possible, be made by weight instead of measure. (369.)

6. Perishable products.-Mr. KENNARD, vice-president of the butter and egg board, successor of the Chicago Produce Exchange, says that that board meets daily to give opinions and to vote on the market price of butter and eggs and to consider the interests of business. Many of the members are interested in the handling of other perishable farm products. There are about 200 or 250 firms in Chicago in these general lines. These dealers use refrigerator cars largely, and are charged very high rates. In the case of fruit products, for example, in addition to an extra freight rate for the use of refrigerator cars, there is a charge for icing, which the dealers think should be omitted. (363.)

Mr. EMERSON complains that the increase of the minimum carload of fruit from 20,000 pounds to, he thinks, 26,000, compels the loading of cars almost or quite to the roof. The result is injurious to the product, because of the generation of heat and of its tendency to rise to the top of the car. Potatoes are often injured from the same cause. (482, 483.)

7. Terminal charges, live stock, Chicago.-Mr. MALLORY states that a charge of $2 per car on live stock sent to the Union stock yards at Chicago was added to the regular tariff on June 1, 1894, and is still collected by all roads. The excuse for the imposition was that on the same day the Union Stock Yards and Transit Company, which owns tracks in and about the stock yards, imposed a trackage charge of 80 cents per car upon most of the roads and $1.50 per car upon others, which used the company's tracks for a longer distance. This is aside from the charge made to stock owners by the stock-yard company for feed and yardage. By the decision of various courts and commissions, the terminal facilities must be furnished by the railroads and must be included in their rate. Consequently any charge for them must be entirely separate from the charges which shippers have to pay to the stock-yards company. The live-stock exchange took the matter up with the Illinois Board of Railroad Commissioners, and obtained a decision that the terminal charge was unjust, unreasonable, and illegal. The matter was afterwards taken to the United States court in Chicago and a similar decision was obtained; the railroads were ordered to desist from making the charge, and they did so until the court of appeals reversed the decision of the lower court on a technicality. Complaint was made to the Interstate Commerce Commission, and the commission, after a full investigation, ordered the railroads to cease collecting the charge. The railroads refused to obey the order. The commission appealed to the United States court to enforce the decision, and at the time of Mr. Mallory's testimony the court had the case under advisement.

The Cattle Growers' Association, which is the largest association of its kind in this country, and is composed largely of Texas, Montana, and other range people, has joined the Chicago live-stock men in their fight. (587, 588.)

8. Chicago Belt Railroad.-Mr. GREELEY says that the usual charge for transferring grain around the Chicago Belt Railroad is about $3 per car, which he considers excessive. He does not know concerning the power of the Interstate Commerce Commission in regard to this railroad. (381.)

Mr. VANLANDINGHAM refers to the abuse of the belt-line system around Chicago for the purpose of making discriminations in favor of that city and of particular shippers. The allowances made by the trunk lines to the belt lines for handling their cars have been so large that the belt lines have been able to make large rebates. The belt lines claimed not to be amenable to the interstate-commerce act. The Interstate Commerce Commission, however, has ruled against this practice. (208, 209.)

9. Furnishing of cars.-Mr. CALLAWAY states that his own and other railways sometimes find it difficult to furnish cars to shippers promptly. He admits that railways ought to be compelled to take care of their customers, but declares that the inequality of the business at different times makes complete supply of the demand occasionally impossible. (232.)

10. Express companies.—In the opinion of Mr. INGALLS, of the Chesapeake and Ohio, the earnings of the express companies are not increasing relatively to those of railways, especially those of the fast freight trains which the railways are running. He believes that on the Chesapeake and Ohio the earnings of the companies amount to only about 1 per cent of the freight receipts. (301.)

11. Freight bureaus.-Mr. KELLEY, president of the National Association of Freight Commissioners, and freight commissioner for the Trades League of Philadelphia, testifies that there are about 25 freight bureaus in the different States similar to the Trades League of Philadelphia. This consists of merchants organized for the purpose of furthering the mercantile interests of the city by securing fair rates of transportation to and from the city. The freight bureau acts as the mediator between the transportation companies and the members of the association in case of grievances, and also furnishes advice to shippers. The Philadelphia bureau, for example, has presented a number of grievances and has succeeded in having Philadelphia shippers and merchants placed on a parity with those of other cities. The railway companies usually give fair consideration to questions raised by these bureaus, knowing that they represent probably the major proportion of the shipping interests of their respective cities, and that they are familiar with the subjects discussed.

The National Association of Freight Commissioners has for its purpose the discussion of matters of transportation of a national character, the presentation of resolutions to Congress, etc. It has an executive committee, which takes up

important matters during the intervals between the national conventions. (185, 187, 193.)

Mr. VANLANDINGHAM, of the St. Louis Traffic Bureau, similarly points out that such bureaus are able to influence railway officials materially. The usual method of action is to visit the traffic officer of the railway company and confer with him informally. He will often be much more frank than if the investigation were a public one, and the fact that the representative of the traffic bureau is familiar with railway matters, so that he is not forced to believe all the arguments of the traffic manager as he pleases to give them, and that he has behind him the moral influence of a large body. enables him often to secure important changes. (208.)

III. DISCRIMINATIONS BETWEEN INDIVIDUALS.

A. Existence of discriminations.-1. General affirmation.—Mr. KNAPP, Mr. PROUTY, and Mr. CLEMENTS, members of the Interstate Commerce Commission, all agree in the opinion that numerous and secret discriminations are still made by railways, notwithstanding the interstate commerce act, although there has, in their opinion, been a marked improvement during the past year. They attribute these discriminations to competition between carriers, and the attempt to secure business in whatever way is possible, rather than to a desire to injure or favor any shippers. It is poverty which leads to dishonest action.

Mr. PROUTY declares that he has no doubt that during 1898 the demoralization of rates by discriminations was about as bad as it could be. Competitive traffic did not pretend to move on the published rates. At Portland, Oreg., it was found that large shippers telephoned to the agents of the different railways, got the best rates possible, billed their goods at the published rates, and afterwards received the difference. This witness also points out that railways in the hands of receivers have been among the most serious offenders, although since about the beginning of 1899 the courts appointing receivers have been more strict in keeping them within the law.

Mr. KNAPP, especially, believes that since the action of the receivers of the Baltimore and Ohio Railroad in the latter part of 1898, in acknowledging the extensive practice of discriminations and agreeing to aid in the future in preventing them, there has been a very marked improvement of conditions. The managers of many railroads had become impressed with the danger to their finances from the reduction of rates to many special shippers. They believed that, since practically all railways made these special rates, no one really gained largely in traffic. Moreover, rates at first granted secretly tended afterwards to become published rates, at less than profitable figures. The Baltimore and Ohio Railroad simply took the initiative in a movement favored by many other railways, especially of the Northeast. This changed attitude of the railways, together with the increased amount of traffic, and with the narrow margins which now remain for making concessions, has, in the opinion of Mr. Knapp, largely done away with direct discriminations on the trunk lines, although grain for export, packing house products, and some other classes of traffic are perhaps still subject to dis criminating rates.

Mr. PROUTY, however, declares himself less optimistic as to present conditions regarding rates, and Mr. CLEMENTS implies that he considers discriminations between persons, as well as between places, to be still a serious evil. (Knapp, 132, 139, 142, 143; Prouty, 150-152; Clements, 159.)

Mr. COWEN, president of the Baltimore and Ohio Railroad, says that the letter written by him and Mr. Murray to the Interstate Commerce Commission in 1898 was occasioned by the great reduction in the revenues of that railway from the secret cutting of rates. The granting of rebates and lower rates affected a great deal more than 50 per cent of all the traffic at that time. All packing-house products and iron and steel products were getting cut rates. The system is contrary to the public welfare and injurious to the railways. Excessive competition and open rate cutting are the chief causes leading to discriminations. All sorts of methods were being employed. There is much less abuse in this way at present, but the witness fears that when the great demand for transportation again falls off new discriminations will be made. Pooling is the only remedy. (313316.)

Mr. BLANCHARD, late commissioner of the Joint Traffic Association, says that the practice of granting discriminating rates differs in extent at different times and in different sections of the country. The actual amount is difficult to ascertain, since the offending companies never divulge their actions to anyone. The witness believes, however, that discriminating rates have increased steadily since about the first year after the passage of the interstate commerce act, and that 655A-TR- -4

they will continue to increase in the absence of pooling. Throughout his argument in favor of pooling the serious character and results of discriminating rates are repeatedly referred to. (625, 626.)

Mr. Blanchard declares further that it is usually the shippers who demand rebates, and threaten to transfer their patronage to other lines, rather than the railway companies which solicit traffic. The railways have no desire to build up large shippers. (683, 684.)

Mr. INGALLS, president of the Chesapeake and Ohio, also says that the practice of granting discriminations in favor of individuals has varied greatly at different times. Thus in 1885 there were many discriminations. The interstate commerce act checked them for a few years, but they increased until in 1894 and 1895 the evil was about as bad as possible. During 1896 competing railways made joint agreements which almost prevented discriminations, but the decision of the Supreme Court in the trans-Missouri case under the antitrust act caused anarchy in railway rates. The conferences between the Interstate Commerce Commission and the railways have resulted in a great improvement, but Mr. Ingalls fears that when the present rush of business has ceased the railways will gradually drift back into their old ways until they are permitted to form agreements. (286,297.) Mr. FISH, of the Illinois Central, also speaks of the decrease in discriminations due to the conferences with the Interstate Commerce Commission, to abundant traffic, and to the consolidation of railways. (336.)

Mr. SPENCER, president of the Southern Railway Company, believes that discriminations in favor of individuals are still largely granted by the railways. The object is to get business without enabling competitors to find out how it is obtained. If the law were obeyed which requires rates to be made known, and three days' notice of reduction to be given, the competitor would have the same opportunity to make bids for traffic. The evil takes many forms, including direct rebates, commissions, car mileage, underbilling, and billing to the wrong destination.

Mr. Spencer declares, however, that the Southern Railway is not making any discriminations between individuals, aside from the general difference between carload rates and part-carload rates. This was not true of the separate lines which were consolidated a few years ago into the Southern Railway, and the witness thinks that consolidation generally tends greatly to reduce discriminations. Throughout the South rates are much more uniformly maintained now than five years ago. Shippers have confidence that other shippers are not getting advantages, and hence do not themselves apply for advantages. (273, 279.)

Mr. BIRD, of the Chicago, Milwaukee and St. Paul, also testifies that railway rates are not maintained as the law requires, but believes that the number of instances of violation is much less than is generally supposed. However, on account of the severe penalties, the railways are apt to confine their discriminations to the largest shippers, who will help them in concealment, and these shippers need favors less than the others. Generally speaking, a large volume of business tends to steady the rates. (470, 471.)

Mr. HYLAND says that there is no necessity for railroads to make private discriminations in order to compete. Only three days' notice of reduction in rates made for the purpose of securing business is required by the law. Mr. Hyland declares that the long and short haul clause of the interstate-commerce act is especially important and should be strictly enforced. Railways should be willing to give up any part of their traffic which can not be carried on legitimately. (352.)

Mr. STICKNEY, president of the Chicago Great Western Railway, declares that published tariffs are not maintained by railroads and can not be maintained. Moreover, he does not think that uniformity of rates between different shippers is natural or necessary. The producer of transportation, like the producer of other commodities, should be free to sell for all he can get and to make different prices to different persons if necessary. "If I was a banker and found a merchant that had an idea that somebody had to buy his goods I would not allow him to do business at my bank." It takes two to make a bargain. Mr. Stickney discusses quite fully the conditions which must be considered in making freight rates, his evidence on this subject being summarized in another place. (460-462.) Mr. MORTON, of the Atchison, Topeka and Santa Fe Railroad, thinks that discriminations, whether between individuals or localities, should be prohibited. There certainly do exist unjust discriminations of both classes, although it is not always easy to decide what are fair rates as between different communities, and what constitutes discrimination. A man who ships a single carload should receive as low a rate as one who ships 100 carloads.

The witness thinks that preferential rates are probably given on as large a proportion of the business as before the interstate-commerce act, or even larger, although the number of persons who receive these rates is smaller. Practically