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.commerce of the country and threatens a general commercial disaster. Assuredly there is not, and there never has been, any danger of carriers being punished for violating a law whose provisions are not clearly understood. They will not be punished except they wilfully violate the law after its provisions have been construed by the proper authorities.

As heretofore stated, the views of some of the members of this committee do not coincide with mine; but for the reasons given we are all agreed upon the necessity of asking your Commission to exercise the authority delegated to you by section 4 of the act, in that we “be authorized to charged less for longer than for shorter distances for the transportation of

property.” For convenience, to lighten the labor, and to facilitate progress, we will divide the questions to be submitted into six classes.

First. That we“ be authorized to charge less for longer than for shorter distances for the transportation of

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property where the property transported between the longer distances is secured in competition with the water carriers not subject to the provisions of the act.

There are many instances of this class of competition. It exists between Boston, New York, Philadelphia, Baltimore and Richmond, Wilmington, Savannah, Mobile, New Orleans, Montgomery, Selma, Mem. phis, etc. Between Louisville and Cincinnati, between Cincinnati, Louisville, and Owensboro, Ky.; Evansville, Ind.; Memphis, Tenn.; New Orleans, La.; Mobile, Ala.; Montgomery, Ala.; Selma, Ala., etc.

Second. That we“ be authorized to charge less for longer than for shorter distances for the transportation of

property where the traffic for the longer distance is taken in competition between rail lines and rail and water lines which may or may not be subject to the provisions of the act.

There are numerous instances of this kind of competition. For example, between Baltimore and Richmond; New York and Nashville, Tenn.; Memphis, Tenn.; Montgomery, Ala.; Selma, Ala.; between St. Louis and Nashville, Tenn.; Montgomery, Ala.; Selma, Ála.; Atlanta, Ga., etc.

Third. That we be authorized to charge less for longer than for shorter distances for the transportation of

property where the property moved between the more distant points is taken in competition between rail and water lines, and rail and water lines subject to the provisions of the act.

Instances of this kind of competition are shown in the case of traffic between eastern cities and Atlanta, Ga.; Macon, Ga.; Augusta, Ga.; Chattanooga, Tenn., etc.

Fourth. That we“ be authorized to charge less for longer than for shorter distances for the transportation of

property when the property moved between the more distant points is taken in competition between rail lines and rail lines.

This class of competition occurs in the case of traffic between Cincinnati, Ohio, and Chattanooga, Tenn.; between Louisville, Ky., and Chattanooga, Tenn.; Atlanta, Ga.; Montgomery, Ala., etc.

Fifth. That we “be authorized to charge less for longer than for shorter distances for the transportation of

property ”

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when the property is moved between competitive points connected only by a single direct rail line; the rates between such competitive points being fixed or controlled by competition of other carriers competing for the traffic between one of the points and other points, or between other points and other points.

Sixth. That we “be authorized to charge less for longer than for shorter distances for the transportation of

property” when the property is moved to and from points "under circumstances and conditions ” which are believed to be “substantially similar.”

While the six classes described do not embrace all the different conditions of competition, and while the different classes shade or blend into one another, still it is believed that your decision upon one case in each class will practically be a decision upon the larger portion of the applications which the carriers, members of this Association, may submit for your decision in the future.

First. Application is hereby made to charge less for the transportation of property between Louisville, Ky., and Memphis, Tenn., than for shorter distances on the same line, to the extent that the rail carriers may be enabled to adjust their rates of transportation so as to enable them to successfully compete with water carriers between the same points, without making any reduction from present rates to and from or between intermediate local stations.

The roads now forming the Louisville and Memphis line of the Louisville and Nashville Railroad Company were not primarily constructed with a view of competing for through traffic. As the Louisville and Nashville railroad was extended from Louisville in a southerly direction, traffic shipped from Memphis destined to points like Elizabethtown, Ky., were shipped to Louisville, by water, thence to destination by rail, the aggregate charge being that to Louisville plus the rate from Louisville to destination. Property shipped from Louisville, Ky., to Brownsville, Tenn., was shipped to Memphis by water, thence to Brownsville by rail, the aggregate charge being that to Memphis plus the rate from Memphis to destination.

When the rail line was completed rates of transportation by the rail line from Memphis to Elizabethtown were materially reduced and the facilities and character of service greatly improved. The same is true in the case of Louisville, Ky., and Brownsville, Tenn. Yet the rates received were in excess of the charges by the water carriers for the transportation of like kind of property between Louisville, Ky., and Memphis, Tenn.

Your attention is invited to the following comparative table, showing tonnage, ton miles, revenue, and rate per ton per mile received for the transportation of property to and from local stations between Louisville and Memphis; and tons, ton miles, revenue, and rate per ton per mile received for the transportation of property passing between Louisville and Memphis, and the total tons, ton miles, revenue, and average rate per ton per mile received from local and competitive traffic on the line between Louisville and Memphis for the fiscal year ending June, 1886:

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NOTE.-Only one-half of the traffic passing between stations on main stem from Memphis to Louisville is included.

The cost to the Louisville and Nashville Railroad Company of its road between Memphis Junction and Memphis and one-half the cost of the road between Memphis Junction and Louisville, with average equipment, has been $16,500,000, on which the interest charge, at six per cent. per annum is $990,000. The earnings from local and through traffic over that portion of the line between Memphis Junction and Memphis added to the earnings derived from transportation of traffic passing between Louisville and Memphis added to one-half the earnings from the transportation of traffic between stations, Louisville to Memphis Junction included, have not in any year been sufficient to pay operating expenses and the interest charge. This is conclusive evidence that the charges are not unjust nor unreasonable.

It only requires a glance at the foregoing figures to show that, if the company is to choose between reducing the rates for transportation of property to, from, and between intermediate stations so that the charge shall not in any case exceed that received for the transportation of property between Louisville and Memphis and abandoning the competitive traffic, it will, in justice to all parties, choose the latter. Financial embarrassments might and probably would result to the company from the adoption of either course. Nevertheless, it would plainly be the duty of the management to choose the course that would involve much the smaller loss, and endeavor, by reducing facilities and expenses, to avoid bankruptcy.

Second. Application is hereby made for authority to charge less for the transportation of property between New York and Nashville, Tenn., than for shorter distances to the extent that the rail and water carriers may be enabled to adjust their rates so as to successfully compete with the rates established by the all-rail lines, without making any reduction in present rates to and from or between intermediate points.

In this instance the maximum rate that can be charged from New York to Nashville is the rate from New York to Louisville plus the rate from Louisville to Nashville.

We have here the paradox of water and rail lines asking for authority to make the same relative rates between the points named as are made by the all-rail lines, the rates by the all-rail lines being fixed by water competition. By an arrangement that has been in effect for many years the rates from New York to Louisville are made relative to the rates from New York to Chicago, the rates between the two last-named points being fixed during a large portion of the year by the rates charged by the canal and lake and the rail and lake carriers. The rate from Louisville to Nashville is fixed by competition with the river carriers between those points.

Practically, therefore, the rail line, New York to Nashville, becomes the shorter line, or the line by which the rates between the two points are fixed. It follows that the competing ocean and rail lines via Norfolk, Savannah, Charleston, etc., must make corresponding rates if they are to compete for the traffic. Again, it has been the custom to make the rates from New York to Nashville relative to the rates from New York to Memphis. The rates between the two last-named points, on many classes of freight, are fixed by competition of the water line and the rail and water lines from New York via New Orleans to Memphis. The rate from New York to Murfreesboro', Wartrace, Shelbyville, and other stations between Nashville and Chattanooga are made by adding to the rate from New York to Nashville the rate from Nashville to those stations. The rates from New York and other Eastern cities to Nashville, fixed as hereinbefore described, are upon a much lower basis than the Southern lines, members of this Association, can afford to adopt between intermediate points. The territory served by the lines in this Association, as compared with that served by the trunk lines north of the Ohio river, is much more thinly inhabited, and relatively the tonnage moved is much less.

Third. Application is hereby made for authority to charge less for the transportation of property between New York and Macon, Ga., than for shorter distances.

The maximum rates that can be secured for the transportation of property from New York to Macon are made by adding to the steamer rate from New York to Savannah the rail rate from Savannah to Macon. Practically this becomes the short line, or the line that fixes the rate.

There are two lines competing for the traffic via Savannah, viz., the steamships and the Central railroad of Georgia, and the steamships and the Savannah, Florida and Western, and the East Tennessee, Virginia, and Georgia roads via Jessup.

There are several lines via other routes competing for the traffic between the same points, viz., the line via Brunswick, the line via Charleston, the line via Port Royal, the Coast Line via Norfolk, the East Tennessee, Virginia and Georgia via Norfolk, and the Richmond and Danville road via West Point.

All these lines compete for traffic from New York to Chattanooga, Atlanta, and all points between Chattanooga and Macon. As rates are at present adjusted, the rates from New York via Savannah to all points north of Macon are greater than to Macon. It will at once be seen that unless authority be given to the lines approaching Macon from the north to accept less rates on shipments from New York to Macon than to intermediate points, those lines will be prevented from competing for shipments to Macon, though a point on their own lines. On the other hand, unless authority be given to the lines working via Savannah and Bruns. wick, and approaching Macon from the south, to accept less for the longer than for the shorter distance, they will be prohibited from competing for traffic to points on their own lines north of Macon.

Fourth. Application is hereby made for authority to charge less for the transportation of property between Cincinnati, Ohio, and Chattanooga, Tenn., than for shorter distances on the same line.

The rates from Cincinnati to Chattanooga are nominally made by competition between two rail lines, to wit, the Cincinnati Southern railway, 336 miles, and the Louisville and Nashville railroad, 446 miles. In practice the rates are made relative to rates from other points to Chattanooga, and relative to rates from Cincinnati and other points to other competitive points south of Chattanooga and the Memphis and Charleston railroad, viz., Montgomery, Selma, Birmingham, Ala., Atlanta, Ga., etc.; also on some classes of freight relative to rates from Baltimore, Philadelphia, New York, etc., to Chattanooga and other competitive points in the territory of the Association.

For some years the custom has been, whenever the rates were reduced or advanced from Eastern cities to Chattanooga, Atlanta, Montgomery, and Selma, corresponding changes were made in rates on some classes of property from Cincinnati to Chattanooga. Again, the custom has been that whenever, for any cause, the rates were reduced or advanced from Louisville, St. Louis, Chicago, etc., to Chattanooga and other competitive points in the territory, corresponding changes were made in rates from Cincinnati to Chattanooga. In this way water competition does affect indirectly rates from Cincinnati to Chattanooga. For instance, rates from St. Louis to Chattanooga, Montgomery, Selma, Birmingham, etc., may and often are reduced by the water and rail lines via Cairo, ill.; Columbus, Miss.; Memphis, Tenn.; Vicksburg, Miss., and New Orleans, La. Rates from Eastern cities to Montgomery and Selma may be, and often are, affected by water and rail competition via New Orleans and Pensacola, and by water competition by ocean to Mobile, and by river thence to Selma and Montgomery.

If the Louisville and Nashville Railroad Company can not have the right to make rates between Cincinnati and Chattanooga as low at least as those made by the Cincinnati Southern Railroad Company between the same points, without reducing its rates from Cincinnati to intermediate stations, and from intermediate stations to intermediate stations, it must necessarily surrender all the traffic to the shorter line.

Fifth. Application is hereby made for authority to charge less for the transportation of property between Nashville, Tenn., and Birmingham, Ala., than for shorter distances on the same line.

The direct rail line from Nashville to Birmingham is 208 miles long. There is a less direct line via Chattanooga, but owing to its indirectness and other conditions the direct line has no competition. In this case the competition is purely that of market with market and product with product, “the most potent factor of competition.”

In adjusting the rates between the numerous points reached by the carriers, members of this Association, continuous and persistent efforts have been made to secure and always maintain a fair and equitable relative adjustment. If the rates from Cincinnati to Chattanooga, Atlanta, Montgomery, Birmingham, etc., were reduced, corresponding reductions were made from all other points, including Nashville, to the same points. If competition between rail lines and rail and water lines from St. Louis to Selma, Montgomery, Birmingham, etc., caused a reduction

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