that year there were 6,454 cars of fruit shipped, and 1,937 of those cars, or 30 per cent of the total, was interstate.

The following year, 1903, there was a total production of 7,825 cars, and total shipments to points beyond their terminals, under refrigeration, amounted to 1,632 cars, or only 21 per cent of the total production shipped to points beyond their terminals under refrigeration.

From this it will be noted that while the maximum production was reached in 1903, the first year that the exclusive contract was in full force, interstate shipment fell off 305 cars as compared with the preceding year, and were reduced from an average of about 32 per cent to 21 per cent of the total production, therefore increasing by a large percentage the amount sold on the local markets to local buyers and shipped to markets located on the carrier's terminal.

Mr. STEVENS. What would be the effect of that as to the price to producers?

Mr. FERGUSON. The effect would be to throw a larger quantity of this fruit on markets like Chicago and Milwaukee-terminal pointsand cause lower prices to obtain in those markets, and it is frequently the case almost commonly the case during the heavy Michigan fruit season-that we can buy Michigan fruit cheaper in the Chicago market than we can in Michigan in the orchards because of the Chicago market being overstocked.

Mr. MANN. That overstocking comes by reason of the fruit that goes by vessel. The bulk of the fruit comes by boat, does it not? Mr. FERGUSON. A great deal of it.

Mr. MANN. The bulk of it?

Mr. FERGUSON. I am not prepared to state that the larger part of it comes by boat, but a great deal of it comes by boat.

Mr. MANN. There is no doubt about that.

Mr. FERGUSON. But what I want to call your attention to is that it has been claimed that this car-line system has come in there and changed all that, and that it has brought in buyers from all parts of the United States.

Mr. ADAMSON. When the market becomes glutted in that way, and they have more than they can sell at good prices, they take less care of it, and there is less certainty of getting a good article on the part of people who buy it for use?

Mr. FERGUSON. I do not think that I quite understand your thought. Mr. ADAMSON. Where there is so much fruit on the market, and it gets so cheap, is not there less certainty about a purchaser getting good fruit, from the condition of that market?

Mr. FERGUSON. There is a certainty that there will be more poor fruit on the market to offer and somebody must consume it.

Mr. MANN. Might I ask you whether the fruit that goes on the Pere Marquette road from the radial points to the terminal points is carried in the Armour refrigerating cars or not?

Mr. FERGUSON. Not necessarily. The contracts do not require that. Mr. MANN. The exclusive contract

Mr. FERGUSON. The carriers admit it to be their lawful duty to furnish cars for commerce destined to these terminal points, be that interstate or otherwise. That is the position of Michigan roads, I believe. Mr. MANN. Do the exclusive contracts only relate to the shipments beyond the terminal lines?

Mr. FERGUSON. Yes, sir.

Mr. STEVENS. Do you claim that the falling off in the percentage was due to any exclusive contract by the Armour company with the Pere Marquette road?

Mr. FERGUSON. Yes, sir; I think so, and it completely answers the contention that has been made and doubtless will be made that this system is in the interest of the growers, because it broadens markets. Now, the figures that I have given here are taken from the testimony of Traffic Manager Patriarch, of the Pere Marquette Railroad Company, he being the highest traffic official on that road. If they are wrong, his testimony is wrong.

Mr. STEVENS. Why do you think that difference should be made on account of the exclusive contract?

Mr. FERGUSON. Because of the excessive carrying charges.

Mr. STEVENS. That is what we want to find out.

Mr. MANN. The actual number of cars, however, did increase? Mr. FERGUSON. The actual number did the first year, but these contracts were not advertised broadcast to the public. Buyers did not come in there because they knew those contracts obtained. They did not know it until they went in there and got up against the contracts. Mr. ADAMSON. Before you go further, will you not give us a short outline of the exclusive contract conditions with which you are acquainted?

Mr. FERGUSON. Perhaps I had better read from the contract.

Mr. ADAMSON. I suppose that you could state the salient points more briefly than you could read from the contract.

Mr. FERGUSON. I have a contract here which has the salient points indicated in it.

Mr. STEVENS. Can you not state them? Would not that save time? Mr. FERGUSON. I will read a few extracts [Reading]:

The Pere Marquette agrees and obligates itself to use the car line's equipment exclusively in the movement of fruits under refrigeration from points on its leased and operated lines, except the Detroit and Lake Erie Railroad in Canada, during the term of this contract, excepting from Grand Rapids, Mich., and excepting in the case of such shipments of fruit as are destined to points on the line of the Pere Marquette, and to Milwaukee, Wis., and Manitowoc, Wis., for which shippers may request Pere Marquette system refrigerators, and with the further exception that such Pere Marquette system refrigerators as are in suitable condition as the Pere Marquette may elect, shall be used in the handling of said fruits when the same are destined to points beyond the Pere Marquette Railroad; but in that event the car line's regular refrigeration charge, as indicated hereinafter, is to be applied and the shipments iced and handled under the supervision of the car line.

In other words, if a Pere Marquette car is loaded at Grand Rapids, Mich., for instance, consigned to Chicago, if for any reason the shipper should want to reship that car, having sold it to St. Paul or Minneapolis or any other point beyond Chicago, while it may have been transported up to Chicago without this Armour car line charge, if it is reconsigned to points beyond, the Armour car line charge applies from the point of origin to its destination.

Mr. STEVENS. Although it was not used?

Mr. FERGUSON. Although, had that car stopped in Chicago, no charge would have been made.

Mr. ADAMSON. Do you know of any other facilities which were offered or obtainable for the service that this exclusive contract covers? Mr. FERGUSON. Lots of them.

Mr. ADAMSON. Have you ever consulted any lawyers in regard to whether that is not in violation of the Sherman Act in restraint of trade?

Mr. FERGUSON. Yes, sir; I think it is.

Mr. ADAMSON. It would be a good case to prosecute them on under the present legislation, it seems to me.

Mr. FERGUSON. I think so.

Mr. MANN. The Interstate Commerce Commission held that legal! Mr. FERGUSON. I think not. They have not yet concluded their findings in the case.

Mr. MANN. I read in the press or in one of their reports

Mr. STEVENS. Here is the last statement on the subject, and I will read it so as to make it a matter of record:

This record calls, therefore, for no discussion of that subject, and the matter is referred to here merely to make plain that no opinion has been expressed upon that phase of the private-car question which may come to be one of vital importance. Mr. FERGUSON. Here is another extract from this contract.

In case consignees refuse to pay refrigerating charges, and agent at destination is unable to collect the same, the railroad shall be reimbursed for the amounts advanced to the car line. The Pere Marquette shall pay the car line three-quarters (4) of one cent per mile run by each car of the car line used in said refrigeration service, both loaded and empty, except on such cars as may be left over at the end of the season in shipping districts, and hauled empty to connections as provided for in the last sentence of this paragraph, while in service upon the lines of the Pere Marquette, and furnish free transportation over its lines for the use of representatives of the car line engaged in looking after the fruit movement referred to.

That is very useful when the same companies happen to be merchants in the same commodities. I will not say in every instance, but as a general statement. [Reading:]

Including permits to ride on freight trains, on the condition, however, that the car line shall (and it hereby agrees to) indemnify, protect, and save the railroad company from any loss, damage, or expense on account of any claim against the railroad growing out of any injury sustained or claimed to have been sustained, either in person or property, by any employee or agent of the car line receiving such free transportation over the lines of the railroad under the provision of this contract, whether or not such injury is due to the negligence of the Pere Marquette or its employees. And the Pere Marquette also agrees to instruct its agents to obtain by wire from the officers of the Pere Marquette such information as may be requested by the car line's representatives.

That is broad enough to get any information that they may require or desire concerning my shipments or anybody else's shipments traveling over the common highways.

Mr. STEVENS. What is the effect of that?

Mr. FERGUSON. The effect is that where the same companies are engaged in the same line of business, that knowledge alone, with ample capital, is sufficient to enable the favored firm to crush out competing dealers.

Mr. STEVENS. Have they ever attempted to avail themselves of that information?

Mr. FERGUSON. That would be a very difficult thing to ascertain—a very difficult question to ascertain.

Mr. STEVENS. Is there any charge made that they do?

Mr. FERGUSON. I have heard it charged to be true in eastern markets; yes, sir.

Mr. MANN. Does the Armour Car Line Company purchase peaches? Mr. FERGUSON. Not to my knowledge.

Mr. MANN. You are reading about a contract that relates practically solely to peaches.

Mr. FERGUSON. But this same contract is admitted to be in existence on the larger portion of the fruit roads in the country, and they have handled oranges and lemons and pineapples and other commodities pretty generally that are handled by the wholesale fruit men of this country, and because they have not handled a car-load of peaches is no assurance that that will not be the next step.

Mr. STEVENS. Do they handle vegetables-have they handled vegetables?

Mr. FERGUSON. Yes, sir.

Mr. STEVENS. Where, in the Pere Marquette region?

Mr. FERGUSON. I do not know of any to our market coming from there.

Mr. Escн. Does that cover the celery shipments from southern Michigan?

Mr. FERGUSON. Those shipments do not move in carload lots to my knowledge. They move usually by express. I will read further from this contract:

The Pere Marquette agrees to sell the car line such quantity of ice at Shelby, Ionia, Ludington, and Saginaw as the Pere Marquette can reasonable spare from time to time, if required by the car line, on basis of not to exceed $2 per ton in bunkers of cars.

You will observe that the railroad company sells the ice in the bunkers of the cars. When it is in the bunkers of the cars all the service is performed as to the scientific icing.

Mr. STEVENS. How long under ordinary conditions would that ice last? I appreciate that it depends on climate and season and so forth somewhat, but how long would it reasonably be expected to last?

Mr. FERGUSON. I would not know how to answer your question with respect to how long it would last, but may better answer it by saying that we were able to obtain this service prior to the exclusive contract, under the railroad system of handling the business, at a charge varying from $5 to $15 a car, according to the weather and to the constant movement of the car.

Mr. STEVENS. What was it afterwards?

Mr. FERGUSON. Forty-five dollars.

Mr. STEVENS. A uniform price?

Mr. FERGUSON. A uniform price.

Mr. STEVENS. For the same kind of service?

Mr. FERGUSON. Yes, sir.

Mr. STEVENS. Was the service, before the exclusive contract, satisfactory?

Mr. FERGUSON. As good in every respect.

Mr. STEVENS. You were getting fruit through in as good condition? Mr. FERGUSON. Yes, sir.

Mr. STEVENS. Did you get the facilities that you wanted?

Mr. FERGUSON. Yes, sir.

Mr. STEVENS. The cars arrived?

Mr. FERGUSON. Yes, sir.

Mr. STEVENS. Were the facilities changed in any way afterwardsafter the exclusive contract was made?

Mr. FERGUSON. In some respects; yes, sir. After the exclusive contracts were made the facilities were almost entirely the Armour I believe in some instances when Armour cars were not avail

cars.

able for some markets other cars were used, but then the Armour charge obtained just the same. Prior to the contracts we frequently received our shipments in an Armour car, but the Armour price was not demanded. The regular railroad charge was all that was asked. Mr. RYAN. Does it make any difference about the distance? Is the $45 charge for any distance the car travels?

Mr. FERGUSON. No, sir; there are different charges to different markets. I will reach that a little bit later. In some instances the refrigerator charges exceed by quite a little the railroad charge itself. Mr. SHERMAN. The stipulation of that contract is for the payment of $2 a ton for ice. Is that a reasonable charge for the icing?

Mr. FERGUSON. The maximum price is $2 a ton. That would indicate that the railroad companies felt perfectly safe in engaging to do that work on that basis, and no doubt would make a profit on it. I think it has been disclosed at some of the car-line hearings that at certain points there were contracts as low as $1.37 a ton. Indeed, until very recently, and although I am not in a position to vouch for the truth of it, yet the source of my information leads me to believe that it is correct, I am told that at Duluth the contract price was 75 cents a ton whenever it was required to ice a car there. The icing is not always done by the Armour Car Line Company. It may be done by local icing companies, with which companies they make contracts the same as railroad companies do.

With respect to providing ice, I would state that it is done in most instances for the car-line people by the same companies or persons that perform these services for the railway companies. Particularly is this true in territory not covered by exclusive contracts. While cars may originate in the exclusive contract territory and pass out of that territory after a few miles travel, the buyer is compelled to pay car-line charges for the services performed by the connecting railway

carriers.

As to the statement that ice in certain localities costs $6 to $7 per ton, I will state that I have in my possession expense bills rendered for ice at points in the desert country where ice is doubtless as difficult to obtain as in any other place in the United States at $2.50 per ton delivered in the bunkers.

With respect to the Michigan growers who testified at the June carline hearing in Chicago that the Armour car-line service had enhanced the value of their land and products, I would say that their conclusions, according to their own testimony, were based upon their statement that they were located at noncompetitive points, and the railway company did not furnish them sufficient cars in which to ship their products, and for that reason an Armour car under any terms and conditions was better than no car at all.

But if this be admitted as a reason for maintaining the private carline system, it must also be admitted that it is not a carrier's duty to furnish cars, and I do not believe anyone is desirous of releasing the carriers from that duty.

Car-line companies state that they pay out large sums of money on account of loss and damage claims. If this be true, their records are the best evidence. Why not require a detailed statement and ascertain to whom they are paying these claims. It may be interesting to know. Certainly the shippers do not make their loss and damage claims directly to the car line companies. They file them with the