using larger cars and increasing the minimum weight of carloads from 20,000 to 26,000 pounds have added $75 per car to their revenue from this industry. The rental paid by these carriers for the use of the ventilator-refrigerator cars used in the traffic has been reduced more than one half. The mileage which was formerly three-fourths of a cent both ways is now six-tenths of a cent per mile on the Southern Pacific and it applies only to the east-bound haul, unless the cars are loaded on the return trip. The Santa Fe Refrigerator Despatch which furnishes the cars for use on the Santa Fe System is owned by that system. Though not shown in this case, it is understood by the Commission that the car line receives more than six-tenths of a cent per mile for its cars from eastern connections of the Southern Pacific, and even obtains as much as one cent per mile for the distance between the Missouri River and Chicago. A fair approximate average is three-fourths of a cent per mile.

During the period of seven or eight years prior to 1900 large rebates were paid amounting generally from $15 to $25 per car, and though often paid by the car lines they must be regarded as deductions to the shipper from the amount paid for transportation. Whether any of these rebates were paid by the defendants, who are the initial carriers, or whether they were paid by their eastern connecting lines, or by the car lines, the fact is that the net cost of transportation to the shipper was to that extent reduced, and discontinuance of the rebates increased the cost of transportation to the shipper. The amount paid by the shipper is what is being treated in this particular connection. Such a deduction of $20 per car is equal on a shipment of 26,000 pounds to about eight cents per hundred.

The carriers take much greater time in transporting these perishable fruits to eastern markets than they did prior to 1900. The dilatory character of the service has aroused general complaint and this complaint was voiced by nearly every shipper who testified in the last investigation. The schedule time from San Bernardino, a collecting point in the fruit section of Southern California, to Chicago is eight days and to New York twelve days. The time actually consumed is much greater, very often reaching fifteen days to Chicago and twenty days to New

York. Prior to 1900 the usual time was according to the schedule mentioned. When citrus fruit cars are side-tracked the ventilation is reduced to a minimum in comparison with the free circulation of air caused by the moving train, and the sidetracking for days at a time, as has sometimes been the case, inevitably results in damage to the product. These transportation delays beyond the practicable schedule time began about the date when the exclusive routing regulation was made effective in January, 1900, and have continued ever since. The defendants assert that such unexpected conditions as congestion of freight through unprecedented traffic offerings, want of motive power, lack of water, strikes and even an epidemic of grippe among the employees, have caused the delays and that notwithstanding such conditions the citrus fruit traffic has been preferred over other freight. The congestion caused by heavy traffic is the only one of the excuses given which has material weight and during a period of three or four years that condition could have been largely changed. The additional time of transportation to New York and Chicago for so long a period indicates a practice of providing slower train service and consequent reduction of cost to the carrier. Shippers were paid for damages to the fruit caused by delay in transit in 1900-1901 the sum of $54,000 by the Santa Fe and $32,000 by the Southern Pacific. Notwithstanding the payment of these claims and smaller amounts in later years there has been no improvement in the service. The fruit should reach the market in as fresh condition as possible, and if the rate should remain as it is with an eight day service to Chicago and a twelve day service to New York and proportionate train service to other destinations, it would be as much to the advantage of shippers as a small reduction in the rate and leaving the time of service fifteen days to Chicago and twenty days to New York.

Some of the delay must, in justice to the carriers, be ascribed to the great number of diversions of freight in transit which are made upon the request of shippers. These diversions from the original to a new destination after the car has left the point of shipment, and which are made to reach a better market for the fruit, entail considerable expense upon the carriers for

which they do not receive compensation in addition to the rate. In April, 1903, a large number of growers organized the Southern California Fruit Agency. This agency has contracted with about 80 per cent of the growers to market their product. The object of the agency is to cheapen the handling of the fruit and accomplish distribution according to the actual demands of the markets. The agency has selling agents in numerous eastern localities. This method of marketing is intended to greatly reduce the number of diversions in transit.

Fully 60 per cent of this citrus fruit traffic goes east of the Mississippi River. The geographical center of the distribution is estimated by a witness for defendants as in the region of Buffalo, N. Y., but with only 60 per cent of the tonnage carried east of the Mississippi, the actual average length of haul would seem to be considerably shorter than the distance to Buffalo. The distance to that point is about 2700 miles by the Santa Fe and connections and about 3000 miles via the Southern Pacific and connections. For those distances the rates per ton per mile are by the Santa Fe 9.26 mills and by the Southern Pacific 8.33 mills. The rate per ton per mile by the Santa Fe to Kansas City, 1747 miles, is 1.431 cents, and to Chicago, 2205 miles, it is 1.134 cents. By that line and its connections the rate per ton per mile to New York, 3117 miles, is 8.02 mills. The total receipts from the 20,724 cars of citrus fruit carried east in 1902-03 were, based upon the minimum carload of 26,000 pounds and the $1.25 rate, $6,735,300, of which the Santa Fe and connections received $3,496,350 and the Southern Pacific and connections received the remainder, $3,238,950. The Santa Fe system has a long haul and its share averages $1.05 per hundred pounds out of the $1.25 rate, equal to $273 per car, or a total of $2,936,934 for the year 1902-03. The Southern Pacific with shorter haul averages about 52 cents per hundred pounds, or $135 per car, and in that year it received a total of $1,345,410.

A reduction of 15 cents per hundred pounds in the rate of $1.25 would on the basis of that year's movement reduce the total receipts for all lines participating in this entire traffic $808,236. Such a reduction would tend to increase the ton

nage. The increase in the minimum carload weight, amounting to $75 per car, added to the decrease in mileage paid by the railroad for the use of the refrigerator cars (amounting to 72 mills on the westbound haul and, on a basis of 2200 miles to Chicago, to $16.50) gives a total reduction in cost to the carriers of $91.50 per car. That sum, using the minimum carload of 26,000 pounds per car, represents 35.19 cents per hundred pounds.

These reductions in cost to the carrier are subject to whatever deduction is warranted by the increased dead weight of the refrigerator cars and any additional cost of operation and maintenance. The increased value of the refrigerator car and a considerable portion of the expense for repairs are items covered by the rental paid for the use of the car. A large percentage of the refrigerator cars used in this traffic are returned empty and hauling these empty cars is another element of cost to be considered. On the Southern Pacific the mileage of loaded freight cars was about 71 per cent of the total car mileage in the year ending June 30, 1903, and it appears from the testimony that the refrigerator cars used on that line in the citrus fruit traffic are loaded for only about 57 per cent of the miles run.

The fourth vice-president and general manager of the Southern Pacific Company put in as part of his testimony a statement containing figures intended to show that his company loses money in the transportation of citrus fruits over the line from Los Angeles to Ogden and only comes out about even when it carries citrus fruit over its line from Los Angeles to El Paso. The statement is based upon figures giving the cost of transporting all freight and of the citrus fruit traffic over each of the two lines operated by the company. One obvious error in this statement is that it compares the orange traffic passing over the full length of its road with all traffic through and local of every description and going in both directions over the line. The basis upon which these figures as to cost to the company were ascertained is not shown, and the Commission, though entirely familiar with the accounting methods of the railways, is unable to conjecture what basis could be employed to arrive at

even an approximately accurate estimate of the cost of transporting all freight or any particular kind of freight over any railroad. Expert railway accountants agree generally that the proportions of total operating expenses assignable to freight and passenger service cannot be ascertained or even fairly estimated. The Commission formerly required carriers to report estimates of the cost of the two services according to the freight and passenger mileage after assignment of those expenses belonging exclusively to each of the two great divisions of traffic, but this requirement was discontinued by the Commission after careful consideration and as the immediate result of the investigation and report by a committee of the National Association of Railway Commissioners in 1892, which found the apportionment of expenses to be merely an arbitrary division and without value, and stated that the opinions of the railway accounting officers were practically unanimous in favor of discontinuing the attempt to apportion expenses between passenger and freight traffic. For these reasons this statement is insufficient and unreliable as a showing of the cost of transporting over the Southern Pacific all freight and the particular traffic herein involved.

The statement referred to sets forth that the average number of gross tons per train of dead and revenue producing freight in the fiscal year ending June 30, 1903, on the Los AngelesOgden line was 788, of which 369 tons were revenue producing, the remainder representing the weight of the cars, that is to say, that for every ton of revenue freight 1.14 tons of dead weight were hauled. On the Los Angeles-El Paso line the gross tons per average train were 891, of which 400 were paying freight, indicating 1.23 tons of dead weight to every ton of revenue freight. On oranges and other citrus fruit the statement gives for both branches of the system 2.70 tons of dead weight for each ton of paying freight. This calculation includes 212 tons of ice per car on the assumption that 50 per cent of the citrus fruit traffic is shipped under 5 tons per car refrigeration. The refrigerated citrus fruit cars from the season of 1897-98 up to March, 1903, on the Southern Pacific were a little under 29 per cent and on the Santa Fe about 32.6 per cent of the whole number carried during that period. For