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The increase of tonnage in 1869-70 and 1870-'71 over the previous year is due to the business from the Memphis line which was opened in 1867, but its business had not been fully built up before 1869.

The increase of north-bound in 1872-73 over previous year is partly due to the opening of the South and North Alabama Railroad. The reduction in 1873-74 in south-bound is the effect of the panic, and the continued reduction in south-bound tonnage since that year may be ascribed to the fact that the South is producing more of its own provision and is importing less. It is also partly due to increased competition.

Question 29. Please to present two or three examples showing the manner in which water-rates regulate rail-rates in the transportation of cotton. First, cotton at Jackson, Miss., bound for Cincinnati on its way East, how will the rail-rate be governed by the water-rate during good stages of navigation; or, rather the rate by all-rail from Jackson to Vicksburgh, and thence to Cincinnati by river? Second, the extent to which the all-rail rates from Jackson, Memphis, and New Orleans to Providence, R. I., are regulated severally by the competitive water-rates, i. e., Mississippi River and ocean?

Answer. The various competing routes from Jackson, Miss., to New York, each of which can establish its own rate and to which the others have to conform, are the following:

1. From Jackson to Vicksburgh by rail, from Vicksburgh to Saint Louis or Cairo, or Evansville, or Louisville, or Cincinnati, or Huntington, or Parkersburgh, or Pittsburgh by river, and from either of these places, by rail, to New York.

2. From Jackson to Vicksburgh by rail, from Vicksburgh to New Orleans by Mississippi River, and from New Orleans to New York by ocean.

3. From Jackson, by rail, to New Orleans, and from there, by ocean, to New York. 4. From Jacksonto Meridian by rail, from Meridian to Selma, and from Selma by the Western Railroad and Selma, Rome and Dalton Railroad and their various connections, to New York.

5. From Jackson, by rail, to Cairo, and from there to New York by rail.

6. From Jackson to Milan by rail, thence to Louisville and East by rail.

There are other combinations of routes not necessary to mention, as they do not carry any portion of the business.

The all-rail rate has to be adjusted to meet the rate of the combined water and rail route. The route via Vicksburgh, New Orleans, river, and ocean, or the route via Vicksburgh and the Mississippi River to any of the points on the Ohio River mentioned in the first route are availing themselves of the cheap water transportation and determine the rate. The all-rail routes can charge, in addition to the combined water and rail route, the difference in insurance, and perhaps something additional for quicker time and less handling. At present the rate established by the rail and ocean route from Jackson to New York is $1.20 per 100 pounds on cotton, and the all-rail rate, in conformity thereto, is $1.25 per 100.

(NOTE. To illustrate the effect of water competition still farther, take the rates from Memphis to Cincinnati by river, which are from 50 to 75 cents per bale or from 10 to 15 cents per hundred. The distance by rail from Memphis to Cincinnati is 485 miles. The railroad has to take cotton in competition with the river for from to cent per ton per mile, which they could not do without loss were it not that cars would otherwise be obliged to return empty.)

Question 30. When the Illinois Central Railroad endeavored to obtain control of New Orleans traffic, did it enter into that line of policy with a view of developing new business between Chicago and New Orleans, or of deflecting business from New Orleans to Chicago which had heretofore gone over other roads; and if it attempted such deflection of business, was that attempt made by means of a discriminating throughcharge in favor of the Illinois Central Road as against the Iron Mountain Railroad at Columbus, the Louisville and Nashville Railroad at Humboldt, and the Cairo and Vincennes Railroad at Cairo ?

Answer. Railroad companies endeavor to influence business over their lines in the manner described in the question. It was no doubt the intention of the Illinois Central Railroad, when they aided the New Orleans and Jackson Railroad, to control business in that way; but their contract with that company only stipulated that the New Orleans and Jackson Railroad should not do any business with any other road between Chicago and New Orleans, but should direct their whole traffic over the Illinois Central Railroad. The agreement was not well considered on the part of the Illinois Central Railroad. It left the New Orleans and Jackson Railroad free to work with other connecting roads to Louisville, Saint Louis, &c., and its relation to other connecting roads were such that it could not afford to discriminate against them and in favor of the Illinois Central. For example, when the Illinois Central Railroad, in connection with the New Orleans and Jackson Railroad, reduces the rate from Chicago to New Orleans in order to throw business to Chicago, the Louisville and Nashville Railroad claimed that a corresponding reduction should be made between Louisville and New Orleans. Had the New Orleans and Jackson Railroad refused to co-operate with the

Louisville and Nashville Railroad, the latter company could have directed its business over its Montgomery line to New Orleans. The disadvantage to the New Orleans and Jackson Road would have been much greater than the benefit it could derive from the business of the Illinois Central Road. Practically, the aid afforded by the Illinois Central Road to the New Orleans and Jackson Road has been of no benefit to the Illinois Central Road.

Question 31. In order to set forth clearly the question as to the force of the competition between markets, will you please to give two or three illustrations of the competitive power of the Chicago, Saint Louis, Cincinnati, and Louisville markets for western products at points in the South?

Please also to present an illustration of the competition between western and eastern markets at Atlanta, showing how such competition influences rates on the various trunk-lines. It is suggested that you assume the articles of beef or pork in barrels. In carrying out the illustration, it strikes me that you might show how such competition directly or indirectly affects freight-rates, not only from the various markets mentioned to Atlanta, but the rates from the western markets to the eastern markets, and also the rates from the eastern markets to the southern markets, and indirectly the rates on vessels bound coastwise.

Answer. It is generally supposed by the shipping community that railroad companies arrange their tariff arbitrarily, and hence they are generally designated "monopolies." This is a great mistake. The conditions which regulate their tariffs are in most cases beyond their control; and all that railroad companies can do is to study their conditions and to conform to the same.

It would not do for the roads from Louisville to the South to establish a certain tariff, say from Louisville to Atlanta, (on bacon for example,) without taking in consideration the tariff on the same article from competing markets, not only the freight-tariff, but also the market-value of that article. If the tariff from Chicago or Saint Louis to Atlanta was lower than from Louisville, the roads interested in the Louisville commerce could not expect to do any business. Should, in addition to these lower freightcharges, Saint Louis or Chicago enjoy other advantages, by which they may produce bacon cheaper than Louisville, the roads centering in Louisville are interested to see that the Louisville producer of bacon is not excluded from the market of Atlanta by offering lower rates. The competition between railroad companies is really a competition between the different markets or communities they serve. They cannot neglect the interests of the merchant and manufacturer. In serving them they serve themselves. Strange to say, to all appearances, the merchants and railroad companies do not act together; there is apparently a constant conflict between them. For this there is generally no good reason, and it should not be so. To illustrate the effect of the competition between different markets and the manner in which rates of transportation are influenced, and have to be adjusted with regard to that com petition, I will mention the present adjustment of rates on bacon between some of the competing western markets and Atlanta.

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These rates are established by agreement between the different transportation-lines serving the cities named, and are based in a measure (although not in direct proportion) upon the respective distances of those cities from Atlanta. Chicago is 63 per cent. in distance farther from Atlanta than Louisville, while the increase in rates is only about 40 per cent.

Now, suppose that any one of the transportation-lines working out of these varions cities should reduce its rate below those named, (to any considerable extent,) it follows that the lines working from the other cities must reduce their rates also if they would not change the relative value of the article in the different markets, and allow the trade to be monopolized by the city offering the lowest rates of transportation.

As soon, therefore, as the rates from one city are reduced, the rates from all other cities must of necessity be reduced also, as each railroad company or transportationline has the right to establish what rate it pleases, but one is depending upon the other. Agreements are generally made (not, however, often without a railroad war) as to the relative rates that should be charged from each city to a common market. The

principle upon which rates are regulated is to give each of these markets a fair chance of selling its goods.

These rates are not merely a question of distance from the market. If the principle be adopted that the rates from the respective markets should be in proportion to distance, it would soon be found that more distant competing points would be or could be entirely excluded from those markets. If they possess routes independent of those that are nearer to the point of competition, by which they can reach it, they will not submit to this. Take for example Chicago, which is 777 miles from Atlanta, while Louisville is only 424. The rate from Louisville to Atlanta on bacon is 51; from Chicago, 70. Were rates made in proportion to distance, the Chicago rate should be 84 cents. The Chicago lines object to so much difference, and a 70-cent rate is adopted as a compromise. Thus it happens that while a Louisville merchant has to pay 51 cents to Atlanta, a Chicago merchant shipping through Louisville pays less per ton per mile than the Louisville merchant. This does not seem right, yet it cannot be avoided. If the Louisville roads would insist upon reducing its rates, to make it a pro rata according to distance of the 70-cent Chicago rate, or about 43 cents, there would be nothing to hinder the Chicago lines, who can ship their bacon to Atlanta without passing through Louisville, at any rate they choose, to make a still lower rate.

The attempt to underbid each other in the different markets would lead to low, unremunerative rates to all the transportation-lines. Hence the relative rates from competing markets are or ought to be made the subject of mutual agreement. Any one railroad or any one city cannot expect to monopolize the whole business of a country. There must be a reasonable and fair distribution among all the centers of commerce, and as far as that distribution is influenced by rates, it must be made a subject of mutual compromise. It cannot be settled by force.

Millions of dollars are now uselessly wasted by the trunk-lines in the attempt to determine (by warring upon each other) the relative rates which should be charged on grain to New York, Philadelphia, and Baltimore. In the mean time a certain distribution of the business takes place. No one line gets it all, or can expect to get all. (The Baltimore and Ohio Railroad claims that it gets more under the present condition than it got before.) Would it not be better to settle this question by mutual agreement, determine upon the relative rates upon an equitable basis, upon the principle of distance and fair proportioning of the traffic, rather than to destroy each other in the attempt to overreach each other?

Here you have a fair example of how the markets control railroad companies' tariffs. The war between the trunk-lines is a war waged for the interests of each city with which each road is identified. I have illustrated how competition between the different markets influences and regulates railroad-tariffs in case of certain cities to one common point. But this influence is not confined merely to certain cities, but is felt between different sections of country, and has to be considered in establishing railroadtariffs. Certain articles are manufactured in the East and in the West; for example, furniture, machinery, iron, bagging, &c. The tariff from the western manufacturing places to common points in the South have to be arranged with a special view to the rates made from the eastern places of manufacture. The railroad companies serving either section of country cannot arbitrarily fix their tariffs. Here again they are subject to the laws of competition between markets.

Touching the competition existing between the western lines of transportation to the South and the eastern lines from the West to the South, I refer you to the following rates between the cities named to Atlanta and Charleston and Savannah:

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You will see that the rates to Charleston and Savannah on freight passing through Atlanta are lower than those to Atlanta, and this is due to the competition of the eastern trunk-lines in connection with the ocean lines from New York, Philadelphia, and Baltimore to Charleston and Savannah.

At these points the cheaper water-transportation makes itself felt, and these cheaper rates to the seaboard cities influence the rates to the interior cities. Were it not for the low rates to Savannah and Charleston the rates to Atlanta would no doubt be made higher.

Question 32. Please to express your views more fully as to granting special rates to individuals, and show why you consider such special rates (where the quantity equals a car-load) to be opposed to public policy, and calculated to arouse in the minds of the people a feeling of animosity toward railroad management.

Answer. It is sometimes urged that railroad companies should grant lower rates on large shipments, upon the same principle that wholesale merchants can sell cheaper than retail merchants. The same reason why wholesale merchants can sell cheaper than retail merchants do not apply to the case of large or small shipments on railroads when we have reference merely to car-load shipments. The cost of retailing merchandise is much greater than the cost of selling it in large quantities. It requires a different kind of an establishment, larger warehouses in comparison with the goods stored, more clerks, longer time to sell the same quantity of goods, slower returns, &c.

In the case of shipments on railroads in less than car-loads, the cost will be greater than full car-load shipments-not always, but as a rule. Cars cannot be fully loaded, when a number of small shipments are made, which have to be unloaded at different stations. After unloading one shipment at an intermediate station the train has to proceed with a smaller load, but without reducing expenses in proportion. It is therefore proper that the shipper should pay the additional cost. There is good ground for discriminating between small and large shipments. But when shipments are made by the car-load, where it is merely a question of one or more car-loads, no additional cost is incurred by the railroad company.

Whether these shipments are made by one or by many shippers it costs the same. It costs no more to ship car-loads of freight between two stations of a railroad whether they belong to one shipper or to ten shippers, whether one man ships ten car-loads or ten men ship one car-load each. There is no ground for discriminating in favor of the large shipper. Any discrimination made in his favor is entirely arbitrary.

There is no rule, no principle on which it can be established or defended. All arbitrary discrimination works injustice to others.

Take a flour-mill producing ten car-loads of flour a day, and alongside of it at the same station a mill producing only one car-load. The railroad company decides that it will give to the larger mill a rebate of 25 cents a barrel. This of itself constitutes a fair profit.

The large mill can undersell the small mill in any market in which they are competitors. It can sell at cost and make 25 cents per barrel profit, when the other mill, if it wants to sell at all, must sell without any profit at all. This leads to breaking up of the small establishment, and the railroad company is the instrument through which it is accomplished.

A common carrier has no right to make itself a party to such transactions. Moreover, it is not to its advantage to do so. This policy of discrimination prevents the employment of small capital, and prevents the building up by slow degrees the industries of the country. Only large capitalists can afford to carry on business, and they are not always to be found. From small beginnings, if properly fostered, large enterprises are built up. The larger manufacturers enjoy already sufficient advantages over the smaller. Being able to produce cheaper, they do not require the aid of railroad companies to still farther discriminate in their favor.

Question 33. Have you the information from which you can state, in general terms, in what respect the German Railroad Union resembles a Southern Railway and Steamship Association? Does the plan of pooling enter into the workings of the German Railway Union?

Answer. The German Railway Union takes into consideration all subjects in which railroad companies are mutually interested, as well as such in which co-operation is absolutely necessary between certain railroad companies in order to conduct business properly. It takes into consideration all technical subjects, the best mode of constructing and operating railroads; it endeavors to secure the best and uniform mode of constructing and operating railroads; it endeavors to secure the best and uniform modes of constructing rolling-stock and adoption of uniform signals, &c. But it is only a deliberative body. It has no power to enforce its decrees; free consent of all the members is required for that purpose.

Besides the German Railway Union there are the German Railway Werbünde, which are unions formed by separate groups of railway companies having closer business relations. These werbinde resemble more the Railway Association of Atlanta. They take in a number of railroads in certain sections of country, although they have no executive officers, but carry on business in the same way as our freight-agents' and ticket-agents' and superintendents' conventions. They agree, as our conventions do, upon rates of passenger and freight traffic, interchange of traffic, exchange of cars, compensation to be paid for car-mileage, &c., settlement of balances arising from interchange of traffic, &c. They may be considered in all respects answering the same purpose as our railway conventions formed by a number of interested railroad companies. Upon this imperfect mode of transacting business the Atlanta Association is a great improvement.

Question 34. Please to present your views as to the limit of capacity of both single and double track railroads, and the small proportion of capacity utilized in practice. Answer. I estimate the capacity of a single-track road at 36 trains per day in each direction, and of a double-track railroad at 72 trains.

These estimates, I think, are rather below than above the actual capacity, which I think might be taken as 25 per cent. more; but I wish to be on the sure side. To estimate the freight-carrrying capacity upon roads upon which both freight and passenger trains are run we have to deduct the number of passenger-trains from the above number of total trains. The number of passenger-trains generally bear certain relations to the number of freight-trains; the larger the latter, the smaller the former. I will assume one-fourth of the trains to be passenger-trains, leaving the number of freight-trains on a single-track road 27, and on a double-track road 54, in each direction daily.

In order to determine the number of tons of freight that can be moved by so many trains, we have to know the gradients of the roads, the loads that can be drawn by a locomotive, the tractive power of the locomotive, the character of traffic, that is, the relative proportion of traffic in each direction of the road, and the relative amount of through and way business, as affecting the average load that may be hauled in a car. These conditions we must assume. I will estimate the number of car-loads that may be drawn by a locomotive, as determined by gradients and tractive power on four different roads, at 20, 25, 50, 100 cars, and the average load hauled by each car at 6 tons; accordingly we have the freight-carrying capacity of these roads for single and double tracks as shown in this table:

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These estimates will appear large. They have not been tested practically, but I know of no reason why they should not be correct. There has been no chance for a practical test, but on the Philadelphia division of the Pennsylvania Railroad, I am informed, as many as 92 freight-trains and 19 passenger-trains were moved in each direction in six hours; if this be practical on one division it is on a whole road.

The question of terminal facilities enters, of course, into the consideration of this subject, and the capacity of a road may be limited on that account. It must be borne in mind that, in assuming that 100 cars can be carried in a train, we assume a perfectly level road, but the estimate of 50 cars is based upon a limiting grade of about 20 feet per mile, which it may be practical to obtain, between the East and West. The estimate of 25 cars to the train is realized on the Pennsylvania Railroad, and on the New York Central Road is greatly exceeded.

To compare the ultimate capacity of single and double track roads with the actual carrying capacity, we have the following results for single track:

Main stem Louisville and Nashville Railroad, average tons carried per mile

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Estimated capacity...

433, 662 2,486, 500

152, 273

72, 456

3,912, 260 5,913, 000

This will show the small proportion to which some of the single-track railroads are taxed. Even the Pennsylvania Railroad is only taxed to its full capacity, taking the whole line. No doubt on some portions of it, between Philadelphia and Harrisburgh for example, it may be taxed nearer to its full capacity. The New York Central Railroad carries less freight than the Pennsylvania; the exact amount on its main line does not appear from the report, but the total number of tons carried on main line and branches, 1,000 miles of road, is not more than the total ton-miles carried between Philadelphia and Pittsburgh on 358 miles of roads; the New York Central on account of its lighter grades and greater loads it can haul per train capacity-50 per cent. greater than the Pennsylvania Railroad. It was therefore unnecessary to build two additional tracks, (at an expense, I believe, of $27,000,000.) It is true that the passenger traffic is greater on the New York Central than on the Pennsylvania Railroad, yet the capacity of the double-track road was not yet taxed sufficiently to justify the outlay of the third or fourth track.

The folly of building new railroads parallel with those already built-for example, a four-track railroad for freight alone-the favorite plan of some people, will also be fully shown if you consider the carrying capacity of the existing roads, and the fact that without any further outlay of capital they can and now do carry as cheap as

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