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This Kern It filmed at the reduction ratio checlced beiow / Ce document est filmi au taux de rMuetion indiqui ci-d«ssous. lOx 14x 18x 22x 26x 30x J 12x 16x 20x 24x 28x 32x as's.'... T-rwws-n^aisaK r^ * /RiSE^iChiT^ s>^1PPLIED IM/1GE 1653 East Ma^n Street Rochester. Ne« York '4609 IJ^A (716) 482 - 0300 - Phc-e (71^, 288 - 5989 - Fax 1 Modern Business A Series of Texts prepared as part of the Modern Business Course and Service Rtgttltrtd Trade Mark UnUed Statet and Great Britain Marea Regiatrada, U. de F. Alexander Hamilton Institute 'ag^r^ Modern Business Texts Prepared as ])art of the Modern Business Course and Service 1. Business and the Man 2. Economics The Science of Business 3. Business Organization 4. Corporation Finance 5. Marketing and Merchandising 6. Salesmanship and Sales Management 7. Advertising Principles 8. Office Administration 9. Accounting Principles 10. Credit and Collections 11. Plant Management 12. Cost Finding l.'J. Advertising Campaigns U. Business Correspondence 15. Inland Traffic 16. Foreign Trade 17. Banking Principles and Practice 18. International Jixchange 19. Insurance 20. The Stock and Produce Exchanges 21. Accounting Practice 22. Financial and Business Statements 23. Investments 24. Commercial Law EDITOR-IN-CHIEF JOSEPH FRENCH JOHNSON EDITOKS. WRITERS AND CO.VSri.TANTS f See list on page V of Volume I J Inland Traffic By Simon J. McLean Assistant Chief Co™a.is«ioner. Board of Railway Co.^i.W™ for Canada Modern Business Texts Volume 15 A.') 0( L-r- f ' ... 6S29 Alexander Hamilton Institute New York fc£" :;:.■ - A rs. <*> •-W V < C^J :1 « -*' 4 Si^ \ "»-, CI ••.,.-/ h V- <^y.^^/ PREFACE The incidents of the contract of carriage and tlie prohJenis concerned with the rates char^^ed for rail- nay services have developed a large body of , -nda- •ve enactn.ents. Transportation is a fundanier.tai factor ,n nuHlern life. This vohnne on "Inland Iraffic ,s concerned with an ar.alysis and explana- tion of some of the more in.portant phases of Canada's transportation n.echanism; the central position beinix given to railM'ay transportation. Many important pronlems of public policy arise out of the relation of the transportation mechanism o he pubhc. .]h,t the limitatir,n of scope of this hook precludes other than incidental references to them. The treatise is , narily concerned with the practical working as ahccting business. An outline sketch of historical development is .riven to make clearer the setting of the Canadian tn ffic situation The development of Canada's transporta- lon facd.ties is of interest both to the student of heg.nmngs and to the student of present day prob- lems. At every step, it is a stuay of Canada in the making. Governmental aid has been extended to railway construction with a view to developing settlement and expanding trade. There has also been govern- rr .ViSH • /■"vr*'- VI phi: FACE iHcnt aid and const met ion of railways, intended as lionds to tie together the seattered portions of C'aruuhi. The poliey of railway suhsidi/ing hy govenuneiual bodies began when private fnnds of eapital in Canada were practically non-existent. What began as a necessity has eontinned as a habit. Under the stinjuhis of governmental aid, there has been a rapid and nndisciplined railway expansion. Today the most important practical transportation problem facing Canada is the development of its highways. By their improvement and the conse- quent lowered costs of transportation, new areas will be linked up to the railways, thereby permitting them to be utilized more efficiently than at present. S. J. McLean. Ifa^^X^^^g^'f • ^-r'^-" TABLE OF COXTKXTS CHAPTKH I CANADIAN RAILROAD HISTOUV ■EtTION 1. Early Waterways '*"^ 'i. Improved Ili^hvvavs . ^ .'{. The First Ri.ilroa 3. CHAPTER VI FREIGHT RATES Importance of Freight Traflic lOi Tonnage and Mileage Service 102 Railway Rates of Universal Interest , . . .102 Competition iqi CONTEXTS xi BIX.TION PA(.t 5. Transportation Compared With Merchandising and Manufacturing jO.> 6. Evils of Parallel Lines 100 CHAPTER VII THK BASIS OF UATK MAKING 1. "Postage Stamp" Rates 109 a. Distance Rates HO 3. Rates Based on Capitalization Hi 4. Physical Valuation as a Rate Basis . . . .112 5. Physical Valuation and Its Effect . . . .112 6. Cost of Service 115 7. What Is Cost of Service.^ Hg 8. Factor of Value in Cost of Service . . . .119 9. Allocation of Railway Costs 120 10. Costs are Average, Not Specific 120 11. What the Traffic Will Bear 1 121 12. Other Applications of This Principle . . . .122 13. Practical Meaning of the Term 123 14. View of Canadian Manufacturers' Association . 126 15. Determining the Reasonableness of a Rate . . 127 1(5. No One Factor Determines Reasonableness . . 128 1. o 3. 4. 5. 6. 7. 8. CHAPTER VIII FREIGHT RATKS I\ PRACTICE Class Tariffs and Commodity Tariffs . . . 130 Comparisons of Freight Traffic 133 Difficulty of Comparing Foreign Freight Rates . 135 Terminal Charges Kept Separate from Rates . 136 Two Leading Factors in Freight Rates .... 136 Switching Costs at Winnipeg igy Terminal Cost in Wisconsin ..,..,_ 139 Distance as a Factor in Rates 140 ^» INLAND TRAFFIC SKCTIO.V y. Distance Basis of Rates in Official Classification '^" Territory ... , . , 10. Distinction Between Local and Thru Rates 144 11. Arriving at a Tiiru Rate ^_^q CHAPTKR IX COMPETITIVE JACTOKS IN RATE MAKI.VG 1. Competition of Lines of Different Lengths . . U7 ^. Difterential Rates , ,„ S. Water Competition 150 4. Changing Center?, of Production . , . . 153 5. Competition of Ports 154 6. .Market or Trade Competition ...*'.' 155 7. Rates for Sugar and Oil .......* jsg 8. Rates for Comj)lementarv Commodities . .' * 158 y. hcope of Market Competition 159 CHAPTER X PHASES OF RATES AND TAKIEFS 1. Freight Tariffs and tJie Railway Act ifji 2. Standard Tariff' • • . . . ! ! leJ 3. Steps in Development of Standard Tariffs 16*!^ 4. Standard Scales in the West .... 153 5. New Scales Adopted ••.165 6. Prairie Standard Tariff Replaces Saskatchewan .' 165 7. h^xtension of Manitoba Scale ... jgg 8. Pacific Standard Tariff ■ • . . . . IQQ 9. British Columbia Lakes Standard Tariff . 167 10. Where Maximum Rates of Pacific Standard Ap- P'y jgg 11. When Combination Rates Apply " jgg IS. Why Rafe Scales Differ .... jgg 14. Standard Rates Are Maximum Rates . .' .* .' igg ■^^■^PiS! CONTEXTS xili SECTION 15. Freight Rate Increases from 1916 to 1920 . . 169 16. Crowsncst Pass Agreement ' 172 17. Special and Competitive Tarifls '. * * 173 18. Transcontinental Kates ... l*" 19. Transcontinental Tariff No« Filed By Canadian Freight As.sociation ...'.. 175 20. How Rates Are Quoted 176 21. Water Competition Governs Rates to Terminal Points ,»,p 22. Rasing Point Changed on Transcontinental Clas.s Rates ,..,.. 23. Group System Csed for Quoting . . . . . 178 24. Differential I.ake-and-Rail Routes . 179 Sr). Commodity Traffic East-Bound, Important . ' 180 CHAPTER XI TOWX TARIFFS, KXPOUTS AND IMPORT RATES Distributive Rates 1^1 International Rate Case 18"'> Rate Readjustment and Group Rearrangement . 181. Town Tariffs in the East 184 Some Objections Overcome i^r^ Town Tariff System Related to Rate Reductions . 186 Western Rate Case Causes Tariff Rearrangement 1S7 Town Tariff' Points ■^^^ Export and Import Rates in Canada . . . 19() Export Traffic on Cliicago-Xew York Base . . 191 Im|)ort Rate Anomalies 192 Influences on Import Rates .194 1. 2. ;i. 4. .5. 6. i . H. 9. 10. 11. 12. y„ CHAPTER XII IXTEhCHAN'CIXG TRAFFIC WD OTHER SEVICES 1. Transit Arrangements 19^; • • . . .198 2. Stop-Ovcr Arrangements I «iv INLAND TRAFFIC SKCTIO.V a. Tariffs Recognize Principle of Consignments Stopped in Transit jj 4. Changing Destination in Transit l< 5. Concentration Rates g( 6. Special Rate Reductions 2( 7. Cartage Service 2( 8. Cartage Charge Not Under Board's Jurisdiction . 2C CHAPTER XIII , PASSENGER TRAFFIC 1. Water and Port Competition in Passenger Traffic 20 2. Distance Important Factor go 3. Time Element 20 4. Expensive Stations 20 5. Other Factors 21 6. Passenger Business in Practice 21 7. Passenger and Freight Receipts Compared . .21; 8. Density of Traffic 21 9. Effect of Economic Depression on Passenger Busi- "^"^ 21J 10. Measurement of Passenger Traffic . . . . 21( 11. Differences in Freight and Passenger Busiiiess . 21' 12. Capacity of Cars 21 { 13. "Dead" Weight 21 J 14. Increase in Weight and Cost of Passenger Equip- ment 21C 15. Relation Between W^eight of Vehicle and Returns on Cost 021 16. Weight and Cost Measured in Capacity. . . 221 17. Occupancy of Sleeping Cars 22S 18. Passenger Hauls Kept Down By Suburban Traffic 22a 19. Commutation Business as Part of Railway Earn- '"ffs 229 PAOK ;nts . 199 . 199 . 200 . 201 . 202 n . 204 iffic 206 . 207 . 207 . 209 . 210 . 212 . 213 . 214 51- . 215 . 216 . 217 . 218 . 219 P- . 219 ns . 221 . 221 . 222 Re 223 n- . 223 CONTENTS KKCTIOir 20. Automobiles Affect Passenger Revenue 21. Differences Between Freight and Passenger Busi- ness .... zv PAni 22^ 225 1. 2. 3. 4. 5. I 6. ' 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 1. 2. 3. 4. CHAPTER XIV PASSENGER RATES Passenger Rates and the Railway Act of Canada . 227 Standard Rates in Effect 228 Different Kinds of Passenger Tickets . ." .' * 3<»o Provisions for Unused Tickets .... 232 Rules for Baggage . 233 Baggage Defined .233 Railway's Liability for Baggage . . . .* * 233 Storage Charges 234 Initial Carrier Liable for Baggage ... 334 Baggage Handled in Toronto ..... 235 Parcels Checked at Toronto ..... 235 Baggage Carried By Railways . ! . * * 235 Sleeping-Car Service . 236 Classified Passenger Rates . . . . . 235 Passenger Classes in Europe ..... 233 Class Rates in Foreign Countries .... 239 Average Hauls in Foreign Countries . . 239 Passengers per Train in Foreign Countries .' .' 240 Zone Tariff System 241 Methods Used in European Passenger Rates . . 24« CHAPTER XV CONTRACT OF CARRIAGE Common Law Obligations of the Railways . . 243 Bill of Lading and Its Conditions . .' aA J-""""-- : : m IVTS'' «*8 *!'. xvi INLAND TRAFFIC SBCTION PAOl 5. Liabiliiv as a Warcliousenian Ji-tS 6. Warehouse Defined 5iJ49 7. Storage and Demurrage Cliargos 249 8. Loss or Danuige 249 9. Payment of Charges iJ50 10. Forms of the Bill of Lading 250 11. Due Diligence 253 CHAPTER XVI MOVING THE TRAFFIC 1. Actual Car Movements 254 2. Manifest Freight Attains High Speeds . . . 255 3. Demurrage 255 4. Claims Presented 258 5. Demurrajre and Car Shortage 258 6. Car Detentions 259 7. Higher Demurrage Charges 261 8. Special Delays Occur in Unloading .... 262 9. Average Demurrage 263 10. Reciprocal Demurrage 265 11. Railway Interrelations and Per Diem Charge . . 268 12. Interswitching 270 13. Industrial Sidings 271 14. The Work of the Claims Department . . .273 CHAPTER XVII EXPRESS SERVICE 1. Express Service and Its Scope 276 2. Early History of Express Companies .... 278 3. Express Companies in Canada 280 4. Arrangements With Railways 281 5. Provisions of an Agrooment 282 6. Arrangements With Agcnt3 284 7. Express Classification 285 CONTENTS x^ji ««CTIOV 8. Value, Weight and Space ^'^^ 9. Conditions of Carriage . * * 3uu 10. Liability Under Revised Kxpre^s Iteeeipt ! ' ' $89 . Lmbihties Under Various Fonns of Kc!cipt.s . ' ^nju 12. Standard Mileage Tariffs . i ■ ■ ■-J" la. Differences in Traffic Conditions ." .' ' ' ' Zal 14. Four Standard Tariffs ' ' ,,,.7. 15. Local and Transfer Tariffs ' ' " uq- 16. Rates as Affected R.v Quantity .' ' " " cnt' 1^. Freight Rate as a Basis . ' ' ' ' a«o 18. Special Circulars . 2in. 19. The Graduate Table . i;Z 20. Rates Not Uniforn. . fJ! 21. Single Thru Rates ....".'.■ .' " ' 3^^ CHAPTER XVIII INLAND WATER TK AXSPORT ATION 1. VV^ter Transportation as a Regulator of Rates . 307 2. Efficiency of Waterways . ano 3. Canal Terminals . '. .'j"^ 4. Obligations of Vessel Carriers ." T^c 5. Scope of Statutory Provisions on Wat'er Carriage 309 6. Fxempt.ons Prohibited in Bill of Lading . ^ jio 7. Due Ddigence ... • • .>»iw 8. Limited Liability . J^^" 9- Contents of Bill of Lading ;!![! 10. Dangerous Shipments Must Be Declared .' ' 31 11. Railway Bill Used on Lakes . o' 12. Provisions of Grain Bills of Lading .' " ' ' t ! 13. General Liens ... • • • -ill U. What Constitutes Complete' Delivery .' " ' " III io Canadian Lake and Canal Route . " " ' o^Z 16. The Welland Canal ... ' ' ' I]. 17. Traffic on the Welland Canal . .* ' ' " ^n t • ' .010 ^^W TRP xviii INLAND TRAWIC 18. Ottawa System jjKj 19. No Canal Tolls ;j|(5 20. Great Lakes TiMftic ' 'JH 21. Traffic on the I'lJpM- Lakes .•j^-' 22. t'haracter of Fr ight jjiy CHAPTER XIX CHAIN .WD OTHER TRAFFIC ON THE GREAT LAKES 1. Questions Connected With Grain Traffic . . .321 a. Capacity of Elevators 322 3. Method of Doing Business Under Grain Act . . 322 4. Licenses and Inspection 322 5. Causes for Car Shortage 323 6. Documents in Grain Shipments 324 7. Statutory Grades of Grain 325 8. Special Charges 326 9. Utilization of Elevat' Facilities 326 10. Analysis of Grain Movement 326 11. Grain Traffic Divi: ted to United States . . .327 12. Upper Lake Traffic Encourages Specialized Vessel Construction 328 13. Package Freight 32S 14. Influences Affecting Lake Rates 329 15. Load Factor in Lake Traffic 329 Ky. Movement of Traffic 330 IT. I'ornif'tion of Canada Transportation Lines, Ltd. 331 18. Advtiit of Large Vessels 332 19. Loading and L'nloading 333 20. Combined Inland and Ocean Traffic . . . 334 21. Lake Rates 335 22. Ton-Mile Rate in Water-Borne and Rail-Borne T'-affic 336 £3. Variations on Watii -Borne Grain Rates . . . 337 24. Comparison Between Lake and Canal Movements 338 I INLAND TRAFrIC CHAPTER I CANADIAN RAILHOAD HISTORY 1. Ear!// xvaterrayH.—lu the early days of indus- try and connnerce. waterways are all-important, in a new country, sueli ms Canada, (nie observes in the dis- tribution of settlement that inHuenee of waterways which on account of the lapse of time is more masked in older lands. In Xova Scotia, the extensive coast line and the numerous rivers determined the settlement. In Xova Scotia, as in Ensdand. it is difficult to find any point more than forty miles fron. the sea. This made the sea an im])ortant element both in the settlement and in the trade of Xova Scotia. In Xew Brunswick, the coast lines of the Bay of Fundy, the Bav Chalcur and the Gulf of St. Lawrence, and the course of the river St. John cooperated in determinin|r where set- tlement should be. As late as the nn'ddle of the nine- teenth century, Xew Brunswick was divided into louff hues of settlement along the watercourses with tracts of wilderness between, which were traversed -^ rare intervals by roads leading from one line of s lent to another. It was natural that lumbering and its auxiliary industries should first attract attention there. 1 2 INLAND TRAFFIC * I- In the colonies of Tpper and Lower Cunada, the St. Lawrence and the Cireat Lakes were from an early date an important factor in settlement. Today the white-walled villages of Quehec which line the St. Lawrence in almost continuous formation, while in part due to tlie French-Canadian system of suhdi- vision of property, are also a reminder of the time when the i. j was the only highway. As Parkman said, "One coidd have seen nearly every house in Canada hy paddling i canoe up the St. Lawrence and the Richelieu." The activity of the fur trader and the zeal of the missionary opened up the route to the Upper Lakes, hy way of the Ottawa River, Lake Nipissing and Georgian Ray, which was an old warpath route of the Iroquois. The direction of French settlement and trade in Canada was fashioned hy the location of the Ottawa and of the St. I^awrence. With the settlement of the United Empire Loyal- ists in T^ppe: Canada, 177.5-1787, the St. Lawrence and Luke Ontario obtained an added importance. Gradually settlement f^^e^i h\ the country between Kingston and Lake St. Clair. The trade importance of the lake and river route was early recognized and plans for the construction of canals around the ob- structed sections of the St. Lawrence were de^ jloped. ISIerritt saw that the construction of the AVelland Canal would unite the route from Lake Ontario to Lake Huron. The Lachine Canal, the other St. Law- rence canals, the Ottawa canals, the Rideau canals all CANADIAN THANSPORTATION 8 Iwar oil the jiositioii whith was taken by Colonel Uy in 1820 when he stated that the eonstruelion of an iin*- proved waterway from the l/pper \akes hy way of the St. Lawrenee to the sea wonid attract the^rowin^^ trade of the western territory of the Tnited States to a Canmlian route, thereby assisting in building up the Canadian towns alon^ that route and inereasin^ the shippini^r und export trade of Canada. 2. Improved li if/IiK a i/s.— While the waterwa\ s ta- eilitated settlement atid permitted lumbering to be carried on, the development of a^ricidture was de- i.»endent upon imjjroved roads. Koads were neees- sary if the country was to have width instead of mere length. Roads were necessary if there was to be any adequate organization of government. One of the first acts of the first Parliament of l^pi)er Canada wa concerned with highways. Soon the j)olicy of con- structing "(Jrand Trunk" roads was launched. In Upper Canada, Yonge Street leading from Toronto to Lake Simcoe, the Dundas Road and the Talbot Road were undertaken. A similar policy of con- structing Grand Trunk roads was followed in the maritime provinces. Ry 1885, Xew Rrunswick had roads radiating from St. John to Miramicbi, St. An- drews and Fredericton. In Lower Canada roads were constructed to connect with the United States frontier. The improved highways played their part in the de- velopment of trade. With the opening up of Yonge Street, the Xorth West Fur Company diverted its r-trmti, -a* ••• ! |i I if l:t * INLAND TRAFFIC cargoes from the Ottawa to the St. Lawrence, Lake Ontario, and this new liighway. The importance of this early stage in the transit trade across Canada is seen in the fact that British goods which thus found their way to :Mackinaw were thence distributed as far south as the Spanish settlements at the mouth of the ^Mississippi. While the construction of plank roads in the County of York in Upper Canada increased the values of the lands located along them 50 per cent, the disadvan- tages of the existing system of transportation were seen in the prices of agricultural commodities. Near St. Thomas, at one time, eighteen bushels of wheat were exchanged for a barrel of salt, while one bushel of wheat was given for a yard of cotton. The de- pendence of ^Montreal on water communication and winter roa Is was such that as late as 1851 the cost of food and fuel doubled while the ice was forming on the river. The movement of freight was slow and expensive. From the townships of Innisfil and Ves- pra in the County of Simcoe, it cost 7^d per bushel to convey wheat to Lake Ontario. From Laprairie to St. Johns, a distance of fourteen miles, it took a day to haul three barrels of ashes in a cart drawn by two horses. Stage-coach movement had ecjual draw- backs. Between :Montreal and St. Hyacinthe, a dis- tance of thirty miles, it took a stage-coach twelve to ' lurs in the fall and spring to make the teen journev CANAUIAN TnANSPORTATION 8 3. The fint /w/Z/w/A-.-Agitation in favor of rail- roads began as early as 1824. At this early period «o projects engaged public attention, one for a line Iron. CiueLee to St. Amirews. New Brunswiek, the other from .Montreal to Lake Chan.plain. The first I-rojeet went no further than a survey, and further progress was stopped by the islation was the eomparatively early appearanee of two systems whieh dominated the railway fiehl. The Great Western was oj)ene(l in January, 18.)4, altho there still remained eonsiderable work to be done in euttino- and in ballastinir. In the previous year the road had a projeeted mileage of 311 miles of whieh 23.> miles were under construetion. The latter in- cluded routes from Ilann'lton to London, London to Detroit, Hamilton to the Niagara River and Junction to Gait. More ambitious were Tie i)lans of the Grand Trunk whose prospectus was issued in 18.).'}. The first sec- tion of the road from Montreal to Brock ville, 12.> miles, was completed in Xovember, 185.7. The first thru train between Montreal and Toronto made the journey on October 27, 18o0. 5. Period of great raihcn/f development.— This Srcat railway activity in l^pper Canada took place in a period of great commercial acti\ ity. Altho some of the projects were not completed before 1860, the bulk of the construetion was over by 18.56. The im- CANADIAN TRANSPORTATION I mediate effect of this cessation was disastrous. The payments of railway contractors had hahituated peo- ple to a free flow of money; now came restriction at u time when the l»rovi!ice had heen rapidly increasin^r its expenditures. In 18.34 there was a surplus of $3,000,000; in 18,38, a deficit of $3,7.30,000. The Cri- mean \Var had raised prices. The changed conditions coupled with i e had harvest pressed with especial rigor on the farmers. S[ adative conditions had detrimentally affected the (Jrand Trunk from the outset. Construction costs had increased and sufHcient care had not always heen taken in construction work. The niistakes of construction were in part inseparahle from construc- tion under new and untried conditions. The (irand Trunk had also to meet a wasteful and ruinous cof*i- l)etition from the (ireat Western which paralleled its route for a distance of 230 miles. Furthermore, the (rrand Trunk had water competition to face. When the main line was surveyed the route chosen lay near the leading water-courses. It soon developed that the railwax' could not compete successfullv with water carriers, l^etwccn Montreal and Queliec it was ad- mittedly impossible for the railway to compete for heavy traffic which was carried by water a distance of 180 miles at $1.00 a ton. C. Government loan,s to Grand Tntnk.—Thi^ first issue of the stock of the Grand Trunk had been sub- scribed twice over. By 18.35, however, the road found that it could not obtain money except at ruinous dis- 8 INLAND TRAFFIC counts. Tlie Government loaned the railway £900,- 000 and, in 185G, postponed its lien for grants already made until certain bonds had been issued for improve- ments. In the next year, the government again post- poned the lien until a six per cent dividend on conmion stock was earned. 7. Other railway construction. — During the period between 1849 and 1867, in addition to the railway^ already referred to, there were sixteen others con- structed. A comparison of the completed railway mileage for two of the years within this period, 1853 and 1800, shows the rapid growth whicii was attained. In the former year the completed mileage was 205 miles, as against 1,895 miles in the later year. Of the mileage of 18C0 the Grand Trunk had the largest share, 830 miles, followed by the Great Western with 331 miles. In 1807, the year of Confederation, the different colonies now grouped under the name of Canada had 2,529 miles of railway which had cost in round num- bers $160,000,000. Of this sum the different colonies had contributed approximately 37 per cent. 8. Intercolonial Raikcai/. —The establishment of the Dominion in 1867 brought new factors into the railway field. Despite early discouragements the maritime provinces had not given up the effort to se- cure rail conpcolion with the more inland provinces. It was their hope to make Halifax the chief port of Canada. During the earlier period of its history the Intercolonial Railway was known as the Halifax and CAXADIAN TRANSPORTATION 9 Quebec. The aid of the Imperial tfoverniuei.t ha, the line being opened for thru traffic on June 28, 188(J. The railway was thus constructed in one half the tim^i stipulated in the agreement. 15. Eastern con nccfiom:— The original charter provided for a road from Callander near Lake Xipis- sing to the Pacific coast. It authorized the company to obtain a connection with the city of Ottawa thru tiie acquisition of the Canada Centriil Railway and also empowered it to "hold and operate a line or lines of railway from the city of Ottawa to any point at navigable water on the Atlantic seaboard! or to an intermediate point, or it may acquire running powers over any railway now constructed between Ottawa and any such point." Before actual operations began, the Canada Cen- tral and some other lines had been acquired. Friction ^it^i^t|ie^ Grand Trunk soon developed. The latter 14 IXLAM) TRAFFIC charged that the Canadian Pacific was departing from the original plan and entering into competition with the C;rand Trunk. The position of the Canadian Pa- cific was that had it rested with the completion of its main line across the continent the enterprise would have existed "ordy as a sickly appendage of the Grand Trunk." The opposition of the Grand 'i'runk could not -Tevcnt the gradual expansion of the Canadian Pacific in eastern Canada. 16. Monopohf clause in Canadian Pacific charter, --The policy of the Canadian Pacific, according to Sir John A. Macdonald, in discussing the charter of the railway, was to confine trade to the Canadian side of the hor-^er and to huild up ^Montreal, Quebec, Toronto, Halifax and St. John by means of one Canadian line. To this- end there' was included a monopoly clause in the legislation which provided in substance that to preclude the traffic of the Northwest from being tapped by American carriers, for twenty years after the enactment of the charter legislation no railway should be chartered within fifteen miles of the international boundary. And the Government undertook to maintain this prohibition within the period stated in the case of any provinces created in the future in the Northwest. 17. Traffic facilities for western wheat areas.— The wheat-belt of the Canadian Northwest begins about 400 miles farther west than the r ^ern limit of the wheat-belt of the American Nortnwest. Compara- tively little local traffic offers between Winnipeg and CA N A DI A \ I'll A N S I»( )U'rA TI()\ 1ft Fort Willi Tlu illiain. iiie L anaduiii I'acitic line ar iiid me head of huke Superior is essentially a traffie hridire It has been double-traeked for VM).:ii miles, or ;j.> per cent of a total distanee „f .5.51).J) n.iles fion. Honiford the eonneetion will, the Toionto-Sudluirv Hrar.eh to' Tort William. 'I'his will enhance' its haulage eapae- ity. With its sin^de-line faeilities, it handles between the elose and the (jpeni..^- „f navigatiim as mueh as the lake boats handle in ten days. The development of mining 'aetivitv in Southern British Columbia led to the subsidizing, in 1H<)7 „f the Crow's Nest Pass extension of the Caiuulian Paeifie. This line was granted a subsidy of $ll.()()o per mile to eonstruet a -ailway from I.ethbridge to Nelson, a distanee of im miles, thus affording a eon- neetion with the Kootenay Lakes. 18. Snbfddj/ prov'mom for Canadian Pacific—It was part of the foregoing subsidy agreement witli the Canadian Paeifie that the rates on this line should be subject to the revision of any regulative tribunal thereafter ereated. When the Canadian Paeifie was chartered, the general railway law contained a pro- vision that rates might be regulated by Parliament, but so as to i)roduce a return of not less than 1.5 per cent on the capital actually exi)ended. In the Cana- dian Pacific charter, 10 per cent was set as the mini- mum; this was represented as an extension of the reg- ulative power of Pai.ament. However, in the revision of the Railway Act of 1888. the 1.5 per cent clause was struck out and the 10 per cent clause remained in the 16 INLAND THAFFIC Canadian PudHi* charter, lliiis exempting its rates from reduction until this figure was reached. It was now made a condition of the suhsidy that re(hictions of from 10 |,er cent to .TJ', per cent should he made on specified commoihties moving over the main line of the Canadian Pacific. 10. The MacKcnzk ami Mann railtoai/n. — In Manitoha, the al)rogation. in 1888, of the "monopoly" clause had heen followed hy the entrance of the Northern Pacific into AViimij)eff. rate concessions also having heen obtained. The desire for a lower rate to the Lakes remained unsatisfied. In 1800, MacKenzie and Mann obtained the charter of the Lake Manitoba Railway and Canal Company, a line which had been chartered in 1880 and which had been voted a land grant by the Dominion. They now acquired in cpiick succession the charters of the Winnipeg and Hudson's Bay, the Manitoba and the South Eastern, the On- tario and Rainy River, and the Port Arthur, Duluth and Western. In 1808, the Greenway administra- tion, which had thought of obtaining an independent outlet from ^Manitoba to Duluth, decided to assist l)y a bond guarantee the Mackenzie and Mann line to Port Arthur. The consolidation of these different properties now created the Canadian Northern Svs- « teni. 20. Cnnndinu Northcru acquired Northern Pacific Lhies' h Manitoba. In 1001, the Manitoba govern- ment took over on a 000-year lease, at a payment of $300,000 a year, the 354 niiles of the Northern Pacific CANADIAN TRANSPOHTATION 17 within Manit„ba. Thereafter, these lines were turne.I over to the C'ana.lia.i \„rther„ whieh assumed the ''"Hens under the lease. The ( iovernn.er.t nov guar- anteed interest on the hcnds oi' the C'ana 15 per eent of its tariff rates then in force on articles other than grain, for points in JNI,,,,- itoba from and to Fort William and Port Arthur I rov,s.on was also made for a lO-eent rate on grain' from Winnipeg t(, I>ort Arthur. The Canadian Northern from Port Arthur was completed in Feb- ruary, 1902, and in April of the same year the re- duced rates were put in effect. The acquisition of the No'rthern Pacific hnes in Manitoba increased the Canadian Northern mileage to 1,240 miles. By 1903, its lines had crossed out of 31anitoI>a into the Northwest territories. It has been successful in enlisting the aid both of the Dominion and of the Provinces. In British Columbia, it has constructed its line under a British Columbia charter the hue being known as the Canadian Northern' I acihc. 21. The Grand Trunk Pacific project— On No- vember 3, 1902, the Grand Trunk brought before the Dominion government a proposition for the con- struction of a line of railway from North Bav on the errand Trunk system in Ontario, to the Pacifie Coast at or near Port Simpson. It was stated that a second tr^inscontmental railway was necessary in order to Ki-^.:' 18 INLAND TRAFFIC handle the expanding business of the Northwest and prevent its detlection to American channels. A gov- ernment grant of $6,4-00 and 5,000 acres of land per mile were asked for. 22. Terms of the charter. —In 1903, charter legisla- tion was enacted. In this legislation, there were es- sential modifications of the original proposition. In- stead of providing for an eastern terminus at North Bay, access to the Canadian seaboard being obtained therefrom by means of the lines of the Grand Trunk and the Intercolonial, it was now provided that the line was to be continued east from Winnipeg to JNIonc- ton, New Brunswick. From Winnipeg to the Pacific Coast, the Grand Trunk Pacific was to build the line. From Winnipeg to Moncton, it was to be built as a government work, under the name of the National Transcontinental. The Government undertook to guarantee interest on bonds to 75 per cent of the cost of construction, but not exceeding $13,000 per mile on the prairie section and $30,000 on the mountain sec- tion. The section known as the National Transcon- tinental was to be leased on completion to the Grand Trunk for a period of fifty years ; the first seven years being rent-free, three per cent per annum on the cost of the work being paid as rental during the balance of the time. The Government reserved the right to grant running rights over either or both sections. The Company agreed that all freight originating on the line of railway or its branches, not otherwise spe- cifically routed by the shipper, should, when destined -i;?»:.'?ir- • CANADIAN TB \\Si'ORTATIO\ 19 for points in Canada, e eiiniec. entirely thru Canadian territory; that the thru rate on exjjort traffic from the point of origin to the point of destina- tion via Canadian ports was not to exceed that con- temporaneously in force by the United States ports; and that such traffic not otherwise specifically routed by the shipper was to be carried to Canadian ocean ports. The terms contained in the legislation of 11)08 were regarded by the Grand Trunk management as too onerous considering the condition of the money market at that time. A re-arrangement of terms was made early in 1904. The essential modification was that in the case of the bond guarantee on the mountain section, the maxinmm limit of $30,000 was removed, the government now being liable for a bond guarantee u]) to three-fourths of the cost. 23. Grand Trunk shareholders dissatisfied.— Altho the shareholders of the Grand Trunk were assured by Sir Charles Kivers AVilson that "the Grand Trunk will be in the very foremost rank for securing itself an ample participation in the rich traffic both east- bound and westbound which will be derived from the cultivation of this vast area and the requirements of its constantly growing poi)ulation," there was a strong feeling among them that the government had not been sufficiently generous: and it was not with- out difficulty that their acquiescence was obtained. 24. Grand Trunk Paeifie becomes political issue. —In the general election of 1904, in which the Lib- 20 INLAND TRAFFIC eruls were successful, the issue was the government pohcy in regard to the Grand Trunk Pacific. The Conservative leader reathrnied his hehef in the neces- sity of government ownership, stating that the peoi)le still had power to rescind the hargain, and that if popular sanction was gi^•en to the agreement it would postpone government ownershij) for a century. The guarantees of an all Canadian route were attacked as illusory. The Liberal Leader said the route to the seaboard was necessary to make Canada independent of American lines. He affirmed the necessity of private ownership, pointing out the greater elasticity of private ownership in the matter of development of traffic and summed up his j)osition — "Governments can build railways— I have no fault to find with that — ^but governments cannot operate railways." 25. Government operation. — As a result of the ad- verse fortunes of the Grand Trunk Pacific, the Na- tional Transcontinental is at present operated by the Canadian National system. It extends from Monc- ton to Winnipeg, embracing a mileage of 1,993 miles, which have cost $lo2.802.74(5, or an average of $76,- G69 pel- mile. For the calendar year 1920 it had an operating ratio of 170.1 per cent. 26. Other s^^/fif em s.—Since 1899, the Great North- ern system h^is built up a mileage in Canada of ap- proximately .500 miles. AVhen the Crow's Nest Rail- way was chartered, there was a strong desire in British Columbia for a railway direct from the Kootenay to the coast, which would not only tap the mineral re- '.>''*■!' ii J9'' C^ ^:^^^ $^tel, S.vxtcr>.~A tem- porary organisation was effeeted in September ,9 8 s "elTent"t "'^"';'"■•■'•T Sroup. however, retaining tsjegal entity and attendant liabilities. In Oetober J-, the Canadian Xational C'ompany was created e purpose of consolidating the roads a.^a i"^ ;rr;^:;rTt;er H™edandtbeprovisi;.n:d;i.ecf;::^^^^^^^^^^^^^ "■ere has been a stead^- 1^:^;:^^''^:: 26 INLAND TRAFFIC the niiinber of railways. Larger companies have eliminated the smaller ones by absorbing them. The extent to which concentration has developed is indicated by the fact that, of the total railway mileage of .52,;j().) miles in Canada at the end of 1923, the Cajiadian National operated 2o,81() miles and the Canadian Pacific lO.OOO miles — between them, over 85 per cent of the total. There were .3.) other lines listed, the largest of which (the Canada Sonthern) had a mileage of 8()7. They are, for the most part, short-haul lines of local interest. REVIEW Why was Upper Canada more lavish in granting railroad charters than Lower Canada? State the circumstances which led up to the absorption of the Grand Trunk by the Great Western. W'hen was the first transcontinental line in Canada projected, when started ai i by whom built? What part did the Dominion plaj' in its construction? What was the Monopoly Clause in the Canadian Pacific charter? What subsidy provisions did this railroad obtain? Discuss the Grand Trunk Pacific project. What were the salient points in the charter granted to this road? How were they regarded by the stocklioJders? Explain tlie sclieme of railway control proposed by the Drayton- Acworth Report. 7^ IW ti'''--*,^'*^'!' CHAPTKH II THK COVEUMIKNT AMJ TI.K .IAI(,«AVS I. Sailw„,,co„trol.~The Unti.sh X.,rtl, An.c-ican Act gives jurisdiction over railroads situatcl entireiv uithin one province to that province. All other roa,ls are chartered and conlrcllcl l,v the Dominion government, and the latter also has the right to .le- Clare any railroa.l locatc.l entirely within another I.rov,.,ce to he under Domini,,,, control, heeause the railroad is for the "general a.lvantage of Cana.la." 1 here has heen an incresing tendency to expand tage of C anaila, and many pu,ely local ,„a,ls have heen granted Dominion charteis. Jealousv hetween the Provincial governments and the Dominion gov- ernment has c,-eate.l some friction in railwav aff^Iirs, hut tiK. teiiclency of new enterprises is to .".htain, if l)ossible,a Dominion charter heeause it is l)clieve! > interest has been charged against the company since 1807. The Great West- ern's obligations were settled in 18()8 by approxi- mately 85 per cent of the total ijidebtedness. In 1883, the Canadian Pacific found itself in finan- cial difficulties. Of the one hundred mdlions of cap- ital authorized, fifty-five millions had been issued ; and in the depressed condition of the money market, stock could not be dis^iosed of at any remunerative price. It was therefore determined to deposit a sum with the Government to guarantee the payment of dividends for ten years on $05,000,000 of stock and in this way enhance the value of the stock. Towards the fund the Government loaned $7,390,912. In 1884, a further temporary loan of $22,500,000 was made to the company, while in the following year there was a loan of $5,000,000. Thv most recent phase of the situation is the aid given to the Grand .. ?•#' (JOVKHNMKVT AM) TUV HAILWAVS 29 Trunk Pacific. This road durin;.- 1J)1(5, 1917 and 1918 received $19,(i;j9,8;J7 in advances from tlie ^'(.v- ernnient. At the close of the fiscal vear 1918-1919 .$9-,0,00() of $7,.)00,000 authorized remained unex- pended. The Grand Trunk wished to use this m<.ney to pay interest on its dehenture stock hut the govern*- ment oh jected and insisted that deficits in operation should have jiriority over other charges. The gov- ernment made the remittance conditional on that un- derstanding. This made it impossihle for the rail- road to meet its interest payments and the road passed into the hands of the receiver on March 9th 1919. The Canadian Northern was given a demand loan of $15,000,000 bearing interest at six per cent and secured by a mortgage on the undertaking. 4. Sub-^^Jics.— The details of the subsidy assistance to the Can^uian Pacific have been stated already. In 1882, a new phase of the subsidy policy developed. In entering Confederation each province surren- dered authorized powers in regard to taxaticn it had hitherto exercised. The provinces were unable there- fore to give the same attention to the development of railways, and demanded that the Dominion govern- ment grant subsidies to aid in railway development. It had hitherto been understood that the subsidy pol- icy was reserved for the main trunk lines uniting dif- ferent provinces. In 18C2, without it being stated that the work to be aided was- for the general interest of Canada, a grant of $3,200 per mile was made to various intra-provincial lines. KV 0—4 i li^m' no INLAND TRAFFIC In 1807 a iiKKliHcatioii of the cash suhsidy policy was made whereby the iioiiiial rate of ^;i,2iH) per mile was to l)e Ki-aiited when the road cost less than }i,()0() per mile, and when the cost was in excess of this H^ure there might he an additional suhsidy etpial to 50 per cent of the excess, hut not exceeding a total sum of Jj5(),400 per mile. 5. JiailKatf count nutiou uudcr nrrc snhsidi/ policy of JSSJ. — In the majority of the railways constructed under the new suhsidy pohcy, practically all the c;.sh that went into the enterprise was ohtained fron. the subsidies and the bonds. Often the ternis oi" a con- tract have been that the coMtractor shall take the Do- minion, provincial and municipal subsidies and some percentage of the bonds. Sometimes a portion of the stock has been thrown in as "sweetening." Of the exami)les available, two will serve. In 188(> a con- tractor undertook to build 100 miles of the Haie des C'haleurs for $20,000 a mile. He was to receive sub- sidies amounting to $(),400 a mile. $13,1)00 a mile of first mortgage bonds, and one-half the capital stock. Jn 1890, an investigating committee of the Legisla- ture of Quebec said this company had relied entirely "on the njoney to be obtained from the government and the municii)al corporations to carry on their enter- prise." This road, which had been charteied by the Province of Quebec in 1872, had received from the Dominion and the Province of Quebec $1,474,800 m aid of 100 miles of railway. In 181»i), the on account of the difficulties in which it comp found [UIV itself. G()m:hn.mi.:nt and thi: ham.wav 31 I proposed to transfer the railway to the Donmuon Movernment. The (iovernnient operated it »><„„ De- een.her, IHIKI, to May, 18<)7. DuriuK this ,,erioVestport and Saidt Ste. Marie ealled for the siih- sidies together with ^'jr>,00() per mile in stoek and •r2.j,()(M) in honds. The attitude of the Don.irnon, whieh was shared hv the Prov.nees, was that the ^rantin^r of a suhsidv to sueh a radway as has l,een spoken of was not to he eonsidered as the expression of an otfieial opinion with relerenee to the prohahle sueeess of a railway. For the bondholder, the rule was cmraf emptor. Hut ^'overnnK-nts eauF.ot so liVhile the (iovernnier.t (hd not eoneern itself with the raisin^r of the remaining por ion of the neeessary eapital, the En^dish bond- holder re^rarded the (iovernnient as a partner in the enterprise, not as a eareless distributor of lariresse 1 he plaint, in 1880, of a bondholder of the Caraquet Kailway presents the bondholder's point of view— ';We surely had a riKht to assume that in niakino- a tree gift of nearly i:80,000 towards the eonstruetion oi the line, the Dominion and Xew Hrunswiek gov- ernments were satisfied with its importanee and would see that the money was properly and judiciously ex- pended. ..." • 6. Land grants, subsidies and /or///*.— Earlier 32 INLAND TRAFFIC J ! r i i liistory shows that there had been a cooperation of and subsidies and cash payments outright. The Do- minion has not made any hmd grants jince 1894. While Ontario has made a land grant in aid of the Canadian Northern, as well as of the Algoma Cen- tral, the land grant system no lojiger possesses public favor. The following table gives a summary of the land grants made : Acres ^"""■"Jon 31,684,838 ^"^'^^'^ 1,788,950 Bntisli Columbia 8,233,410 New Brunswick 1,788,392 Nova Scotia 160,000 - 3,421,207 Onti ario '^otaJ 46,886,797 The figure shown for Quebec is a net figure. The total grant was in excess of 23,000,000 acres. Part of this has been taken back by the government at a cash payment per acre; part has lapsed. There re- mains the figure given in the table. '*'he cash subsidies and loans, including the cost of tlie mileage constructed by the Donunion and handed ^n-ei to the Canadiaji Pacific syndicate, which have been paid are: Dominion $221,911,278 ^^"^■^''•" 9,669,236 ^M'^>^'^ 12,333,197 Nova Scofia 6,987,850 New Brunswick 4,907,487 British Cohunbia 1,284 572 BTfr GOVERNMENT AND THE RAILWAYS 33 Manitoba ^ 2,878,887 Municipalities 17,91 4,830 Total $277,887,343 7. Bond guarantees.— The Provincial and Domin- ion Governments, in the majority of cases, have au- thorized the railways to issue bonds for a set amount per mile of road and for a certain mileage. The bonds were printed for the full amount authorized and were delivered to the railways as the roads were built. The railways, in turn, sold the bonds to the public, the government guaranteeing both principal and interest. A summary for 1923 follows: Authorized Delivered J^T'"'°" $248,^27,438 $231,665,762 **f " °''* 25,50?,873 24;l89,89-2 ^"'^l". 41,724,410 3.M88,128 hasltatchewan 42,900,000 17,904,062 ^"**"'''" 7,860,000 7,859,998 British Columhia 68.135,000 45,186,000 New Brunswick 8,028,977 8,028,977 ^»^^^c 98,000 98,000 '^o*«' it!44.>,+7(i,698 $:nO,620,8I9 8. Rate regulation.— In the early days, the Cana- dian provinces were concerned with the problem of how to obtain rapid developme;it, and while railway legislation contained provisions dealing with regula- tion, these provisions attracted little attention. In 1851, the Railway Clauses Consolidation Act provided that tolls were to be fixed by the directors subject to the approval of the Governor-iji-Council, and that there were to be no preferences. It was ten years frrm 34 INLAND TRAFFIC later before the interest in rate regulation became more concrete. The Grand Trunk, in the develop- ment of its system, had become a competitor for United States business. Flour was shipped by rail from Chicago to Portland and thence by boat to Boston. The rate basis was low. In Upper Canada there were complaints that local rates were unduly high, as compared with these thru rates. Rates west- bound from JMontreal were low as compared with rates eastbound from Toronto, and this was deemed to be to the advantage of Montreal. The interest in rate questions continued and was in- tensified between 1880 and 1890 by the railway amal- gamations in Ontario. The old belief of efficiency in competition as a regulator of rates was shattered. 9. Legislation.— Bunng this period, continued ef- forts were made to secure legislation regulating rail- way rates. It was not until 1888 that the authority to supervise rates was given to the railway committee of tlie Privy Council, a committee composed of desig- nated members of the cabinet presided over by the ^Minister of Railways and Canals. Provision was made for uniform classification. Rebates and other forms of discrimination were prohibited. Complaints arising with reference to rates were to be dealt with by the railway committee. 10. Report and investigation. —The question of the appointment of a special regulative tril)unal came up again in 1896. In 1899, by the direction of the JNIin- ister of Railways and Canals, a special report on the Mmimm^^mim^m^^m^^fmi^mm:s''^^^m GOVERNMENT AND THE RAILWAYS 35 operation of railway coniiiiissioriers in England and in the United States was prepared by the writer. In 1901, the writer was appointed fecial commissioner to investigate the existing eont -• i„ j-egai-j to rate grievances in Canada. 11. He port on rate grin an ccs:— The report of the investigation so conducted found that making all al- lowances for differences in conditions, many non- competitive rates were excessive as compared with competitive rates. Great dilatoriness had been snown m the settlement of claims. Under the Railway Act, subject to the outside limit fixed by the maxima, rates might be varied at will. The class rates of the rail- ways were within these maxima. The railwavs had exercised the right to vary these without notice.' Dis- turbance to industry had thus been caused. Sudden changes in rates had sometimes inflicted losses on in- dividuals. In cases where notice had been given, this had been done as a matter of courtesy, not of obliga- tion. In the creation of commoditv rates there had been lack of principle. The rates had in manv cases been granted simply on the continued urgencv of the shippers affected. There were constant complaints regarding minimum weights. It was complained that rates on American shipments into Canada had been so arranged as to offset the geographical advantages of Canadian producers. Rates on short distance traf- fic had been so high that commodities had to be moved by wagon. There was disproportion, in many cases, between the carload and less-than-carload rates. 36 INLAND TRAFFIC It was recognized that the organization of the Rail- way Committee put difficulties in the way of the et'- fective control of rate matters. The Royal Commis- sion of 1880 recommended that the process of the committee should he supplemented hy appointed offi- cers who should, on the direction of the conunittee, look into and report on rate grie\'ances as the\- arose in the different sections of the country. This sug- gestion was not acted upon. In consequence, all questions which arose had to be dealt with before the Railway Conmiittee in Ottawa. When a complaint arose in some locality at a distance from the seat of government, ihe distance to be traveled and the ex- pense involved were serious obstacles in the way of an effective remedy. 12. Dual functions of committee.— Anoiher diffi- culty had faced the committee. It had dual func- tions—administrative and political. Its members were primarily concerned with political functions. For the mojt part, they came to the deliberations of the committee with little prior technical knowledge concerning the principles of railway regulation. The Minister of Railways and Canals was chairman of the committee. In matters of importance, the com- mittee did not feel free to go on when he was absent. In fact, he was the committee. ^Mlen there was a ^linister of Railways who took a keen interest in the matters, the committee was active; otherwise not. The duality of function of the members of the committee— each member being head of a depart- •.-V l^I-MTSm^tfli^k^ GOVERNMENT AND THE RAILVV-AYb 37 merit— and the lack of continuity of tenure, on ac- count of the exigencies of politics, prevented the de- velopment of a consecutive pohcy. 13. Report recommended Railway Commimon.— I'he report, after reviewing the complaints, conchided that the nature of the Railway Conmiittee and the fact that it was not a migratory body, prevented its looking after rate matters in the fullest way; and it recommended the appointment of a speciafUailway Commission as essential to a more efficient regula- tion. 14. Board of Railway Commissioners created.— The Board of Railway Commissioners for Canada was constituted under the Railway Act as amended m 1903, which became operative February 1, 1904. As organized, the Board had a membership of three —a Chief Commissioner, a Deputy Chief Commis- sioner and a Commissioner. In 1908, there was a re- organization providing for six members— Chief Com- missioner, Assistant Chief Conmiissioner, Deputy Chief Commissioner and three (Commissioners. The (lualifications of the Chief Commissioner are that he IS or has been a Judge of a Superior Court of Canada or of any Province of Canada, or that he is a bar- rister or advocate of at least ten years standing at the Bar of any such Province. The qualifications ot the Assistant Commissioner are the same as those of the Commissioner. The qualifications for Deputy Chief Commissioner are not specified. The Commis- sioners are appointed for a term of ten years and may li^^'\i;£'l 88 INLAND TRAFFIC be reappointed. The age limit is seventy-five years. I.>. Pozcrr of Board over location, count ruction and operation.— The Board possesses extensive powers in regard to location, eoustruction and operation of rail- ways. It approves location plans before construction begins, grants leave to cross bigliways or railways, and fixes the protection, if any, at such crossings! In the ease of railways constructed l)efore 11)01), the eost of protection at crossings, following the usual practice, was divided betweei; the nuniicipality an - l(i^„ ■^iSr? ... 'S ji -. i '^^^SC^ '■^. x< 1 1 ■■•J GOVERNMENT AXD THE RAILWAYS 41 m 000,000 bushek in loi i i 1913) ..lm?T '"'"^ .503.000,000 hushe 1913) almost swamped the railways. KJevators and temporary granaries were not sufficient n I /. A'rain, and nmeh of it I,., i f , " '''»"'^«'* the iiiutii or It iijui to be inovec before fli*. spring rams „f ,ui« .et i„. The „«,al rule ,, ! «..np«n.v .s entitled to the tn.ftic .... its „wn h, e 1 , .. .a.lway eo„.p„,.v e.,..ld he expecte.l to",. . Z Mtion. O, tie other han.l, a..y e„,.,iiti„n of trans- portat.„n which kept the western farn.er from Zr kefng h,s crop until the following J..ne „r Ju vTaJ regarded as unreasonahle. The Act was tl"if an.ended to ...eet the situation "^^""^ aofh'^''''-'''''"''-"'^"''" ^'^''*' t-on..niss.oner presides and h.s „p,„,„„ on any ..uestion which. i„ the opWon 1 ' the" A "t" ri^f •'"' '""■• '» «""'• ^" hi ab" »ence, the Assistant Chief Conin.issioner takes hi. place; and in the ahsence of both, the Deputy Cht Co™„.ss,oner presides. \Vhen so p,.esi,C either ...isine,"" '" "' """ '"^^'-^ - «"- '^h'^f Cot- at,on of 1908 provided, as a n.atter of conven e ,Z fm the organ^ation of the Board i..to two sections 1 h,s ,s not a hard-and-fast division, but sin.piv d -' Ms.o„ of convenience; that is to sav. anv tlu^e' Co,„. 7rr% or even two. n.ay hold a s'.tting of he ;^ not usual for m.-, than three Commissioners to it The dec.s,on of the three so constituting a section!' 4ft J INLAND TRAFFIC accepted as a decision of the whole Board. Fur- ther, two Coiiiinissioners constitute a quorum; conse- (|uently, if two Commissioners are agreed at the sit- i'm.f reasonableness and discrimination as well as cases aficctin^ facilities, long distance telephone connection, traiji operating rules, flapr station facilities, wire crossing rules, standard regulations as to locomotive boilers and their inspection, regulations as to air-brakes, hand-holds, dumj) ash-pans, etc. 25. Applications ami complaints.—Vrom the or- ganization of the Board dowji to the end of 1923, some 81,251 applications came before it. Matters- submitted may be dealt with either formally in hear- ings or informally by investigation, report or corre- spondence. The informal procedure predominates. In 1923, ninety-four per cent of the applications made were so dealt with. In various instances, complaints in which it has no iurisdiction, e. g., claims for loss and damage, come before the Board. Here, without alleging jurisdic- tion, the matter is usually brought to the attention of the railway concerned, in the hope that thru the Board's good offices a settlement may be expedited. Many requests for information, e. g.. as to particular GmmSVliST AM) THE RAILWAYS 45 rates, conu in. The applieatic.ns cr.ver a wide variety of matters ecmiin^ uiuJer the Hailwav Aet and vary n.ni the eon.phiints of indivi.h.al.s to n.atters of nuh- Jic interest affecting the whole eornniunity. REVIEW What interpretati.M. has been taken of the British North Ammcan Act by b<-al railroads and with what re,ult» How was ratf regulation regarded in the early days of Ca- nad.an railroad buildmg: What change wa. brought about by the Radway Clauses Consolidation Act? ^ mis?ione;r !I!m ^"7" '"''' ''"*•"" °' '^' ^"'»'''* «f R«"^«v Com. missioners with reference to rales and traffic facilities ^ In your opmion what has the Board accomplished? XV c ! i I! ■ CHAPTER III DEVELOPMENT OF RAILWAY FACILITIES AND EQUIPMENT 1. Expansion of Canadia railway system. — The railway mileage constructed in Canada showed a con- sistent rate of increase up to the year 1917, when it aggregated 38,604 miles. A large proportion of this mileage has been built west of the Great Lakes, in one year, 1912, 71 per cent of the mileage being con- structed in Western territory. As in the United States the railway mileage constructed in Canada within recent years has been small. From 1919 to 1923, the net increase in mileage, including all track- age, Vvds only 1,750 miles. 2. Distribution of railway mileage. — Analysis of the f?^res of railway mileage as contained in the gov- ernment returns for the year ended Dec. 31, 1923 shows the following distribution: Provinces Prince Edward Island New Brunswick Nova Scotia Quebec Ontario Manitoba Saskatchewan Alberta British Columbia . . . Yukon Percentage of Percentage of Population Mileage 11.38 26.86 33.38 28.26 9.32 12.49 27.59 49.55 46 wmm' RAILWAY DEVELOPMENT 47 It might seem that in proportion to population, the section west of the Great Lakes is well supplied with railways; but this would be a hasty conclusion. Of the total area embraced in the diifferent provinces the provinces west of the Great Lakes constitute 57 per cent. The following table summarizes the relation be- tween population and mileage in the different Prov- inces in 1923 ' based on the latest censu?: Miles of rail- Population p Railway way per 1,000 j>ermileof f roMnce mileage .„. miles railway Prmce tdwar, Island ,.77 Uti.H ;i,9o' New BrunswKk ,,917 69.8 .obis Nova Seotia ,,447 ^jj, ,. .^^ it';:;:, ^-^^^ 7.1 i^:? hakatehewa,, «,.5,7 ^^^ :^J-: ,J".'"*J^,-. 4,784 18.9 iko British Columbia 4^19.5 ,3 ^ , ,„ „ ^"l'"" 58 0.3 7i:"7 3. Potential railzvm/ traffic— An interesting in- dex of the traffic possibilities of an agricultural coun- try like Canada is to be found in the sum total of agricultural production. For while this, on account of local consumption, will be much in excess of what moves by rail, it shows the maximum possible move- ment. Details as to agricultural production and as to live stock are given in the following summary : ' 1 he total is exclusive of 273 miles located in the I'nited States. 48 INLAND TRAFFIC LIVE STOCK, EXCLUDING POULTRY, 1924 Provinces Hear! Ptrcentage Priiu-e Edward Island 284,0,'J5 1.4 Nova Scotia 658,102 3.1 New Brunswick 488,565 2.3 Quebec 3,755,146 18.1 Ontario 6,259,359 30.1 Manitoba 1,600,535 7.7 Saskatchewan 3,695,757 17.8 Alberta . ; 3,639,862 Britisli Columbia * 414,342 2.0 20,816,303 100.0 *1923. Between 1923 and 1924, there was an increase of about 900,000 head. There were increases in horses, mules, cattle and swine and a decrease in sheep. FIELD CROPS, 1923 Provinces Tons Percentage Prince Edward Island 969,012 2.1 Nova Scotia 1,199,540 2.6 New Brunswick 1,224,410 2.6 Quebec 9,336,526 20.5 Ontario 16,178,588 35.7 Manitoba 4,330,146 9.5 SaskatcJKwan 7,104,468 15.6 Alberta 4,264,378 10.1 British Columbia 610,400 1.3 45,217,468 100.0 The totals were about 2 per cent below 1921. There were decreases in all the Provinces excepting Prince Edward Island, Quebec, Ontario, and Manitoba. In i^'mm^:^mm UAILWAY I)K\ELOPME\T 49 1921, the eastern Provinces produced 2.5.8 millions of tons and the western 20.;j nnllions (,f tons of farm products; in 1923, the figures were 28.9 and 10 ;j mil- lions of tons respectively. These figures do not include fruits, home-made cheese and butter, which fig,„.es are not available for the mter-censal years. The omitted quantities would make about one per cent difference. 4. Actual traffic.~Oi course, the potential traffic differs m such items as have been quoted from the actual traffic. The traffic returns for 1923 show that the tonnage of agricultural products transported was .>0 per cent of that given in the preceding state- ment. 5. Freight traffic— Between 1919 and 1923 inclu- sive, the total freight traffic of Canadian railways increased by nearly 6 per cent from 111.5 to 1183 millions of tons. In the same period, agricultural products carried increased 21 per cent and products of mines 12 per cent. The following table shows the percentage importance, for a period of years, of the leading articles carried: if)if) l^roducts of Apriculture 19.14, I'roclucts of Animals 4 r j I'rodncts of Mines 3,1 7] Products of Forests is. Mi Manufactures and Misc 54.05 lf)50 ;?.9H :v>.37 17.*8 -'.5.84 19I?I 2'J.97 •.i.> ;„;" -'-'MW) r.SH8,83i :«.Mi ;;?; -'•»'<•>';:» H,-'5<),G7.'! ;«.6«f) *^^ -'-'fl.'iU 8,349,.'7I :«;.3fi.' 12. Car loaiUng. —The forty-ton car mav be re- garded as the standard general-purpose car today. The larger cars are used for heavy bulk commodities, rnder the railway rules, a car may be loaded 10 per ^anjim^j J54 INLAND TRAFFIC I N cent above its marked capacity. But the extent to which raih'oad freight cars can be loaded nearly to their carrying capacity depends on connnercial con- ditions, and on whether tonnage can be held until a maximum load is obtained in the car. From the standpoint of the railway there is not only the advantage of the larger amount which can be handled in the larger car, thus economizing in engine and train mileage; there is also an increase in the pay weight per car. An interesting example of the economies in this re- spect was afforded by the comparative experience of the Canadian Pacific for the month of January in 1917 and in 1918, in the movement to St. John, New Brunswick. The fact that 95 per cent of the cars con- cerned contained export freight facilitated heavy load- ing in view of the ocean tonnage conditions existing. In 1918, the average load per car was 32.3 tons as compared with 26.4 tons in 1917. This on the same movement meant a saving in use of 1,313 cars, a lessened coal consumption of 7,336 tons, and in addi- tion there were savings in labor and repair costs. On overseas export freight during 1918. the gen- eral rule of the Canadian Pacific was that cars were to be loaded to full carrying capacity. Negotiations took place between the railways and the shippers with reference to increased loading. It wa^ represented that it was necessary to do everything possible to ob- tain heavy car loading to conserve car supply, with a view to meeting the expected heavy demand during 9flc?as4:;?v^ii'''f^ji k^FJUF-1% RAILWAY DEVELOPMENT r)3 '4 I the fall and winter. By August. 1918, as a result of these negotiations, there was a substantial agreement as to the necessity of the increased loadings. As a re- sult, increased weights became effective on some one hundred articles moving on commodity taWtt's. The increases varied in amount but are roughly equivalent to 12 per cent. The representatives of the shippers emphasized that their agreement was for the duration of the war only. An incident of importance in connection with the use of a larger car and attendant concentrated load- ing IS that the tare or weight of the car itself does not increase in the same ratio as carrying capacity. The report of a speci.d Committee of the British Ministry ot Reconstruction has recently dealt with the question ot standardization and uses the following language: We wm.Ul cnll at^ontion to the amount of dead weight ear- ned on i r.Ush railways. The tare of an ei^H.t-ton wagon, bu.It to the I learni« House Regulations is 70 per cent of" thj eountTies^'""'^ ^"'' *" *" "*'" ''"" '""* "^ ^''" "■''^«""'* "^ "*''^''- Taking larger cars, out of the total loaded wei"lit the tare of the 20-ton car is 41 per cent; of the ;j()-ton car, 3.5 per cent; of the 40-t()n car, 32 per cent; of the .50-ton car, .30 per cent. 13. Advantages of electric traction over steam — Electric traction has so far been chiefly concerned with passenger hauls, either on street car or inter- urban lines. Steam power is uneconomical in that only a rela- 56 INLAND TKAFFIC lively small number of heat units is utilized. In favor of eleetrie traetion, it is elaimed that when l)o\ver is generated by fuel there is a redueed fuel hill— henee a g.-eater distanee obtained per ton; the expense of enginemen is redueed; the eftieienev of the terminals is inereased, sinee the ordinary serviees of coaling and watering for engines is not neeessar>' at terminals. It is elaimed further, that there is in- ereased power during eold weather for the reason that the eleetrie motor is more effieient in cold weather than in hot. There is inereased tractive power, maxi- mum tractive effort being obtained from the start; and there is, also, a reduction in marmal labor. Whether or not electric traction will In? used depends primarily on the volume of traffic moving. If there is a large volume of traffic, it will pay to instal the new system which will give reduced costs on each unit moved. If, however, the volume is light or fluctuat- ing, it may be more economical to use extra pusher engines since these engines can be used on other sec- tions of the system; while, with the electric installa- tion, or, for that matter, with any other permcnent haulage improvement, there are continuing overhead expenses attaching to the section improved, regardless of the fluctuations in volume of traffic. 11. Economy in operation. — Various tests of eco- nomical operation present themselves. With increase or decrease ii* revenue ton-miles, how does the reve- nue freight locomotive mileage compare? A recent report of the Boston and Maine shows an increase of \3tt)K: HAILWAV l)i;Vi:i.()|\MK\T 57 22.« per cent in revenue ton-n.iJes, with only an in- crease of 14.2 per cent in freiKht loconuitiu' miles. Ihe si^uficance .,f the freight locoinc tive miles is concerned not ojily with the capital cost and deprecia- tion of the locomotive producing these miles, hut also with the fuel consumption. The cost of fuel is a lar^re item in the expense of railway operation. In 1923, the cost of coal repre- sented 14 per cent of the operatiriK expenses of Cana- dian railways. In 1923, the consumption in Canada per 100 freight locomotive miles was 8.5J) tons, cost- ing $50.60. In recent years hoth consumption per unit and costs have shown a tendency to increase. The variation, on a locomotive mile hasis, for differ- ent types of traffic during 1923 mav be put m a tab- ular form.^ CIas«>of Consumption C<,st fx-r looo- p,.rec„t liomotive ^" .'"*■!"""*"*' """^'"^ '""^ "f f'"' «•••"- uHomoine mile in lbs. in r.-nts „ »• KreiKht ,7. ""^' """'I'*'"" ,, ''- 50.6 1^11 Passenger 94 ,- ., "'•'•** ^^'*^»>'"i^ '■■ uo ;,ei h:?" Other tests that may he considered are; Is there an increase in revenue tons per freight-train milef Is there an increase in the train-load? Is there an increase in revenue tons per loaded revenue car-miL^ An ajialysis of aver.„res for all roads at different periods is interesting. The ton-mile rate for 1923 was 9.87 mills as C(mipared with 6.9 mills in 1917 Between 1917 and 1923, the average loading per 'Computations for mixed an.J special locomotive mileages are i'j' How irton r;; '^'*"";'"*' *!i^ *"• '""•^ ••- '-"-"^^ -i'^? mined? '""''^ "'"^ pas.}.f,^ jH>r ton XV c — 8 Jj'-'f.e*! INLAND TRAFFIC f The Concord also had two classes. The ratings of the classification are either for less- than-carloads (L. C. I^.) — that is to say, for one hun- dred pounds or for multiples of one hundred pounds charged as a multiple of the hundred pound rate — or for carloads ( C. L.) • When no distinction is made in rating in respect to quantity between a carload and a smaller shipment and the rate is the same per hundred pounds for the smaller as for the larger shipment, it is called an any-quantity rating. An any-tjuantity rating enables the small shipper to compete on fairly equal terms with his more powerful competitor. 3. Railwai/ contention on rating. — It is contended by the railways that when carload ratings are pro- vided, they should represent a legitimate commercial necessity and a genuine carload movement. That is to say, the average bulk moving should be such as to justify the C. L. rating. From the standpoint of the railway, it is articles which are traffic producers, such as fuel, raw materials, productive implements or ma- chinery, building materials, and foodstuff's other than luxuries, which should have the first consideration in g'-anting C\ li. ratings. The railway position in regard to the conditions which justify granting C. L. ratings may be sunmia- rized as follows: It is to the interest of the railways, as well as to the public, that rates be low enough — but not below a re- nmnerative point — to permit the general movement and distribution of commodities in general demand in i' > FREIGHT CLASSIFICATION Qg large quantities for constructio , buildirj^, iiuinufac- turirig and other pu^x.ses. It is a sound rule for rail- ways to adapt their classification to the hiws of trade- it the article moves in sufficient vohin.e and the de- mands of commerce will be better served, it is reason- able to give it a carload classifi^- VVestern. Ihe Official covers traffic in the territory north of the I ■ !, ii! J 'L 66 INLAND TRAFFIC Ohio and Potomac Rivers, including New England, and east of a line from Chicago to St. Louis and the mouth of the Ohio River. This is the densest traf- fic territory in the United States. The Southern applies east of the Mississippi River and south of Official territory. The Western Classification ap- plies west of Lake Michigan, the Mississippi River and Official Territory. Occasionally there are over- lappings of these classifications; for example, in the case of a shipment to or from a point near the bound- ary of the classification territory one classification may govern thru. Thus, St. Louis uses the Official Classification eastbound, the Western westbound, and the Southern southbound. AV'hile there has been a movement for uniform classification in the United States, the diversity of trade and traffic conditions has so far prevented the success of this movement. Consecjuently, there is no necessary uiiifcrr.ity as between the classifications, in respect of either rating or description. A step toward uniformity was taken wlien on December 30, 1919 a Consolidated Freight Classification was adopted in the United States bringing together in one book and in parallel columns the facts for the Official, Western and Southern Classifications. The Official Classification has six numbered classes, 7 nml- tiples of first class and two "rules." These are, in eff'ect, additional classes. Rule No. 2.5 includes arti- cles rated at fifteen per cent less than second class, and m FRLIGHT C LASSIFICATIOX 67 Rule Xo. 20 includes those rated at twenty per cent less than third chiss. The Southern CMassification has SIX numbered. r(Hn- lettered classes and 7 multi- ples of first class. 'IMie Western Classification con- tains five numbered and ttve lettered classes and 7 multiples of first clasa. (5. Ccnadinn classification.— In the earlier days chaotic conditions in regard to classification existed also in Canada. The various small, independently- operated roads had each its individual classification. In 1874, the class rates applying from station to sta- tion on the Grand Trunk were governed by the ' (irand Trunk Railway Classification of Freight." The merchandise classes, which were four in number, scaled as follows: ^^* ^'as'* 200^;, of 4th 2n the classification it would he imp(i^sil)le. without cjuoting the complete classilication, to give a fulK illustrative list. For the purpose, howevr, of illustrating the way in which the groupiiiur is arranged, th^' foHowinn; examples may he (juotcd (see also specimen page shown on page 72) : Class 1. Drygoods, clothing. 2. Cotton piece goods. 3. Apples; fish, salted, dried or smoked. 4. liUmher. cement, huilding material. 5. Iron pipe, pig iron, horseshoe nails, green coffee, paints, etc. 6. Machinery, agricultural implements, etc. 7. Railway equipment. 8. Flour, grain, and coarser grain products, potatoes, and vegetahles. " 9. liive stock. 10. I.umher and forest products, coal, rough stone, sand, lime, hay. and straw. As examples of the supplementary classes the follow- ing may he quoted: \ -\. Airplanes; wicker haskets not nested. .'}' — 1. Canoes; three or more crated together. 3 — 1. Aquariums, boxed; baseball bats in boxes. 2i — 1. Cutters and carryalls, single or crated, over 34. inches high and less than 72 inches long, actual weight. D — 1. Binders, s. u., honey. ISij FRKIGHT ( LASSIFICATION 71 li. Strawberry baskets, nested; perfumery in eases. 9. StatiHtical rctunus to Govern men f.~T\w form in wh.eh the stati tieal returns are made to the ^overn- iiient does not differentiate eonunodities aceordinir to the elasses of the classiHcation. A partial re-.rroun- lyg, however, shows the followin^r results : » Hailwny Muh. CVntral Fntcrcoloniiil ( an'n. N'ortlM-rn 0.8 o.i UISTHIBITIOX BY CLASSKS ., . , , . Per n-iit in • -Ji o.(, 9.-, j,i ().;, jji , _, J^^ ^^ • ••• I* 0..> 8..i „,.-, „,, ,„, <•» i6.2 "i ».H 17.-> I.H .U.H «8.0 ^^"'"' r-"*^ '•« 0.^ ,u 0.5 ..0 ,1:3 3:5 S ;i;; 10. QuanUt// fJifercfwes.-The Cnmxdhin Classi- hcition, in eommon with other dassi/ications, recoir- n.zi s a (hfference in (juantity as justitVinK a difference "» nit.nu.. In Kr.^rland it has been reeo^mized that in strikuiK a rate a railway may reeo^rn/.e that the eom- "»od,ty moves in Ia,-e (,uantities. Hut in Cana«h.. as HI the rnite^l States, the earload is take.i as the high- est unit of .iuantity. The shipper who moves thirtv '•arloads (](,es not reeeive more favorable treatment tban the man who moves one earh.ad. In turnino- at '■andom the pages of the Canachan Chissifieatinn it will be found that eotton pieee .jroods are rated 2 i- C. L., 4 (\ I..; or, to take another example, canned ffocds are 3 T.. C. L.. .', C. L. MICROCOPY RESOLUTION TEST CHART (ANSI and ISO TEST CHART No. 2) ■ 61 .■f 14.0 2.5 2.2 1.8 A /APPLIED INA^GE S^'. 1653 East Main Street g"-a Rochester. Ne« rork 14609 USA '— ^ (716) 482 - 0300 - Phone ^S ('■•6; 288 - 5989 - Fax Iwraty-five per cent, over and above tbe rates herein specified shall be charged for tk« oarriase of all articles shown m this Classincatiun as to be c^itiad at Ownet'a Risk of Weather, Breakage, etc., as tne cise may be. if tbd same are re- quired by shipper to be carried at Gamer's Kisk (sed Uule 7). s Classification No. 15 Beads:— J Change to Sead: — J 1 H a. a It 6 ^ Date o a. •a a J Kffprt- ive C J O Chemicals, Drugs and Chemicals, Drugs and Hedicinet— Medicines- Aci e 1 y strapped, or with Iron straps or clamps on the ends 1 Cigarettes and Cigars— In cases securely strapped with wire or band iron; or In cases fastened with iron or steel key clamps, and In oases, not strapped as above D-1 bonrds forming top. bottom and sides sta- ^ pled topetlier on the inside, and so stated b.v shipper on bill of J3 in lading 1 In cases, not fastened 20 27 Crates, Empty, prepaid— ^ ** as above Dl 3 Crates, Empt.v, prepnld — L.C.L Dl 10 o S.f'.. C.L. minimum 20,- C.L., minimum 20,000 lbs be 000 lbs D-1 10 ^ D D 4 21 50 Detonators.— Subject to Rule 10. Dry Ooods — Eliminate Item .TO. pagf 21.— See Item 4. page 2 of this supplement. 9 22 5 Bagging and Bags, N.O.S.: In bales.... Cloth. 3 5 Dry Ooods— Bags and bagging, N.O.S.: in bundles or e 22 13 Brattice— Same as Oil Cloth. bnles 3 5 Cloth: Brattice: 13 fret long and over 1 Under 13 feet long; In bales or rolls 3 5 E E 7 25 8 Equipment, Hoadmaklng— Consisting uf carts, dump cars, dump wagons, engines and boilers, g r n il e r h , plows, road machines, road rollers, rock crushers, srrnpers. stone-spreading wag- ons, tile nioulils and wheelbarrows, in mixed carloads .... 6 Equipment, Roadmaklng — Consisting of carts, dunii> cars, dump wagons, en gines and bolUrs, grad- ers, plows, road nia chines, road rollers, rock crushers, scrap ers. stone-spreading wagons, street-sprlnk- ling wagons, street sweepers, tile moulds and wheelb«rrows. In mixed pdrlonds e Specimen Page From Caxadian Freight Classificatiox *'-«l^7>Mr •W.t^fVtif T niEIGHT CLASSIFICATION 7» The L. C. L. rating is for one hundred pounds or upward. In the case of "smalls," or shipments under one hundred pounds, no matter what the class might otherwise be, the charge is the same as that for one hundred pounds first class, with a mininmm charge of 35 cents. The railways take the position that on ac- count of the bookkeeping and handling costs inciden- tal to such small shipments, a charge for one hundred pounds at the class rating to which it belongs would not be adequate. Fourth class is the lowest L. C. L. rating in the Canadian Classification. As is indicated in the fol- low tabular summary, it comprises only the heavier, coarser and cheaper commodities: L.C.L. C.L. Iron and steel ... 4 - Fire brick 4 - 10 Cement 4 - 10 Plaster 4 - 10 Pitch and tar. . . 4 - T Asphalt 4 _ 7 Caustic soda. ... 4 _ 5 <^]oal 4 _ 10 Fertihzcr 4 - 10 L.C.L Building and roof- ing paper .... 4 Salt 4 Potash 4 Flour 4 (iraiii 4 Oil cike 4 Pickled meat and h'->h 4 Sugar 4 C.L. 5 10 5 8 8 8 5 — .} 11. Follow Lot Rule— Under the Classification an overflow quantity less than a carload mav under definite conditions obtain the carload rate The rule governing this is: Wh ere more than the minimum carload weight of freight f §■ I rv-.'-.-t •T:'-E ar.>v 74 INLAND TRAFFIC classifying 5th class or higher in carloads and provided the classification minimum is not less than 24,000 lbs. per car not exceeding 36 ft. 6 in. in length is shipped on the same da}- by one consignor, on one bill of lading, to one con- signee at one destination, the established rate for a carload will apply on the entire consignment, although it may be less than two or more full carloads, provided that such car, ex- cept the car carrying the excess, must be loaded to its visible or marked capacity. In order to obtain the advantage of a car-lot rating it is not necessary that one should load up to the full carrying capacity of the car. But it is necessary to furnish a minimum weight. The position taken by the railways in regard to minimum weights is put succinctly in a statement made by the Chairman of the Canadian Freight As- sociation in a case before the Board: All articles are provided with a less-than-carload rating, but only those which are generally and to some extent for- warded in straight carload quantities are given the carload rating. ... In order to entitle a shipper to the lower car- load rating when it is provided in the classification, the rules require that a full straight carload, subject to certain mini- mum weights which are designed to produce adequate }>er car revenue, be forwarded by one shipper from one station on one day to one consignee and destination. . . . Where the character of the freight, size of the package, method of packing, weight of the goods, strength or fragil- ity, vary so greatly, it is impossible to fix by rule a minimum weight which will in all cases exactly correspond with (and not in some cases exceed) the actual quantity which can con- veniently be put into a car. It is impracticable by rule to confer the benefit of the carload rate without the use of a minimum weight. In the case of heavy coarse freight, the ' jt**i"-85''£'-- fti. .••• r-'^-ei^'m^ '^sm^.i^.'^msiS: FREIGHT CLASSIFICATION 75 shipping public finds no difficulty in loading up to and even in excess of the niinin.u.u weight. There are no co.n.nercial transactions winch .nterfere with this being complied with. In the case of hght bulky freight, the weight-carrying ca- pacity of the car .s disregarded, and the loading capacity generally deternnnes the niinin.u.n ..eight, but always subjec^t to Its appl.cat.on resulting in a fair per car'revenue. This r lirf A 7 ''"^"' ,*" ^''''''^ *''^ necessity of hauling a l.gh ly loaded car and to obtain economy in the use of equip- n^Vv'^^""':*":- ^ '--*han-carload consigZ ^t s charged for its actual weight at the higher less-tlmn-car- inlfh ' "f '^ ^'•'•'"''^^ '^^'^' ^-^^^^^^ *h- charge based upon the carload minimum weight and carload rate, in which eyent the lower charge governs. At no time does a charge thrsimTcW^'^^"^' ^^* ''''''' ''' ''''''' ^- ^ -^'-^ '^ The classification provides that unless otherwise specifically provided for m the classification, the minimum weight in box cars not over 36 feet 6 inches in length is to be as follows (actual weight to be charged for when in excess of the minimum) — 1st, 2nd and 3rd class 20,000 lbs. per car 7th, 8th and 10th ^0,000 lbs. per car On specific items in the classification there may be nnnimum w- .ts differing from those just quoted. 10 quote a few examples: lumbermen's boats and bateaux have a tenth class rating, with .. minimum of 20 000 lbs., while boats X. O. S. (not otherwise specified) have a sixth class rating, with a minimum ot 20,000 lbs.; concrete spreading carts with a fourth class rating have a.ijiinmum of 14,000 lbs., and char. 76 INLAND TRAFFIC coal, with a seventh class rating, has a minimum of 24,000 lbs. 12. Car measurements. — The box car not over 36 feet (> inches, inside measurement, 8 feet 6 inches wide and 8 feet high, inside measurement, is taken as the standard box car; but as the car increases in length the Canadian Classification increases the minimum. The same thing is done by both the Official and West- ern Classifications. In the two former the increase in the minimum does not increase in regular gradation as the length of the car increases, while in the Western Classification the rule is ft Mowed, in the case of light and bulky goods, of adding for each foot over 36 feet, inside measurement, three per cent to the minimum. The question of the increased minimum is not con- cerned with increased length alone: there is also the question of increased height of the ca-. While the standard box car is 8 feet high, inside measurement, or 13 feet 6 inches from the rails, special cars, as, for example, furniture and automobile cars, are higher. There has been submitted to the Board a proposition that, in the case of light and bulkv goods, the cubical capacity of the car should be looked to and a minimum fixed on it, and that for every one hundred cubic feet over twenty-five hundred cubic feet of containing space there should be a percentage addition. The Wisconsin Railway Commission, in dealing with the three per cent scale of the Western Classification, has expressed the opinion "it would seem that the cubic . J- I FRKIGHT CLASSIFICATION 77 capacity of the cars is „ better basis for adjusti„« minima than length ale le.' "jusiing 13 Cost ofC. L. and L. C. L. shipment.s.-WKx^ the placing of a higher rating upon an I, C I practice, there is a question as to whether there ZnU^l 1 differentiating these two traffie ZZ ments that the apparent discrinJnation is not "un- just It may be said that the small shipment is a Tne " BrrH"."';'* r '"«^ ''^ '-^'^^^ ^un'dame" '"^""'''°" "»'^^'' '^ ■"-* ^ "- l.,5r'l* *'?**" .'' relatively much less costly to handle than less-than-car-lot traffic. I„ the former the loadmg per car is relatively heavy, thus materially reducing the proportion of dead weight to the nav weight. When it is loaded and unloaded by the ship- pers as compared with the less-than-car-lot traffic it 'It'"' r^ '''' '"P""'" '■" *■"= '"'5' of station- office, and other services. In western Canada, the Ca- nadian Pacific estimated some years ago that the physical cost of handling L. C. L. traffic from shed ...or .mtil ,t IS sto«-ed in the car was from 3., cents to .f.1.00 per ton. The time it takes to assemble a tar must also be considered. At AVinnipeg or Cal- Sary. for example, cars are spotted every dav for , %, 1, iM;, 2, 2V-i, 3 and 4) times A. As has been indicated, the Canadian Freight Classi- fication is built up on fifth class. But while in West- ern Canada, outside of the Yukon, the principle of having ten classes is followed, the method of building is different. In Western Canada, when the Ca- 80 '^■■jL-ji.ii'/-Ti~iA-. ..Tr^jf ,■ CANADIAN' FREIGHT CLASSIFICATION HI iiadiaii Pacific began operation, the elassifieation uhich was adopted was the Joint Northern, whiih at that time was being used in the Dakotas and the ad- joinitig United States territory. In this chissiHea- tion, first-chiss was (loul)le fourth. There was no percentage rehition as to the intervening chisses. Later, when other chisses were athled, no percentage I)asis of relation of these was adopted; and so, while seemingly uniform, the classification in ^Vestern Canada is out of line with that in use in Eastern Canada. 2. Mijring priviUge.~ln deabng with the question of minimum weights, it was for the moment referred to as if straight carloads of a single commodity alone were involved. But m addition to a mininmm weight made up of one article alone, there may be a mininmm weight arrived at by mixing. in Eastern Canada the arrangement as to mixing may be summarized a^ )llows: (a) When a number c. articles of the same ehss in carloads are tendered on one day by one con- signor, destined to one consignee, the quantity being sufficient for a carload, they take the rate per hundred pounds of the class at the highest minimum of any of the articles so car- ried. (b) When the articles are of different classes, the rate and minimum of the article in the highest class applies. (e) In a mixed carload of the fifth and higher class in % mt^ 5^^^^= I .ZM.:i ■.•'4.' 82 INLAND TRAFFIC freight having a iiiiniinuni of less than 20.000 lbs., a niininiuni of 20,000 lbs. at the highest class rate applies. For obvious reasons, there are, in dealing with cer- tain commodities, such as petroleum, lubricating oil. gasoline and live stock, limitations of the general mixing privilege. The mixing privilege is limited to articles which have a distinctive car-lot rating, which means that in a majority of cases less-than-carload quantities may be combined to obtain the advantage of carload rates. At times an application for a C. L. rating is made, not because it is expected that the commodity will move in carload quantities, but because with such a rating it can form part of a mixed car, thus obtaining the advantage of the carload rate. Effervescent f)r Health Salts are rated, any quantity, first cla s; Ep- som Salts are classed 3 and 5. Application was made to give Health Salts the same rating so that, being handled by wholesale grocers, they may enjoy the mixing privilege undc/ the grocery list. Tiie Board refused to change the r.' *^' .g. In Western Canada, however the mixing privilege is limited by the adoption of the principle of trade lists. The clfissificaiion states that "articles under distinctive headings will not be taken in mixed car- loads at carload rates." "Distinctive headings" as set out in the classification are, for example, agricul- tural implements, hardware and groceries. The ^'!^ ffidtL^ti ■m 1 CANADIAN FHKIGHT CLASSIFK ATION 83 same provisions apply in the \\ st as do in the Kast, (a) where the articles are of tlie same ehiss, (h) where the artieles are of (lJf!Vient ehissci. a. hjfj'cct on Mhippcrs and ronsumcrti.—'Vhv etfeet of this is that there is a much wider vn\\u^ privilege east of Port Arthur than west of it. In KasterFi Canada the system redounds to tlie advantage of the consignee who cannot take straight carload of a particular line of goods. In Western Canada, the rule existing redounds to the advantage of the U'an wh6 can take a straight carload of a particular line of goods. The rule as to limitation to distinctive headings applies not only to shipments hetween l)oints in the West, hut also to shipments hetween points east and west of Port Arthur. The difference in situation as hetween the East l 1 the West in this respect may be indicated by a specific example. A mixed carload of hoe M.nvils, and cultivators is possible east of P.^t Arthur. In Western Canada, tools and hand farm implements aie in the hardware list under fifth class, while the cultivators are in the agricultural machinery list with a sixth class rating. Consequently, on such a ship- ment from an Ontario point to a point west of Port Arthur, the sixth class rating would apply on a minimum of 20,000 pounds for the cultivators and the L. C. L. rate vi^ould be charged on the tools and hand implements. If, however, the tools and hand implements formed the bulk of the shipment, they %H 84 INLAND TRAFFIC would move on a fifth class rating with a minimum of 24,000 pounds, and the other articles would move on an L. C. L. rating. 4. Divergent trade interests secure compromise classification. — The effect of this is, that in respect of distributive business, there are really two classifica- tions. This situation has grown up as a result of a compromise between divergent trade interests. In the classification of 1893, the mixing privilege was limited by the list principle. Various modifications were subsequently made. By 1897, the general practice established was the same as it is east of Port Arthur today. In 1902, the list principle was adopted generally. In 1904, an attempt was made to obtain the open r jle for the whole of Canada. In- stead, there was vorked out the compromise which gives two S3'stems, as has already been indicated. The compromise was attributable, in the main, to the increasing importance of the jobbing business of Western Canada. British Columbia and Eastern Canada wanted a generous mixing system : Winnipeg did not favor it. A dozen years ago, the manufac- turers of Eastern Canada were pleading before the Board for more generous treatment to mixed carload lots, with a view to the furtlier development of a job- bing business thruout the Northwest. To this, Mr. J. H. Ashdown of Winnipeg, whose prominence in the mercantile world made his utterance significant, I CANADIAN FREIGHT CLASSIFICATION 85 rejoined that such an application was entirely in the -nterest of the Eastern jobbers. These, he said were merely birds of passage coming to Winnipeg when t,n,es were goml „„,! leaving when they were th.^W Tl ''''*"*""■'!" "'"'■'•*-T;>e expansion of the West has led to the building up of new distribut- ing centers In 1901. the bulk of the distributive busmess m the West was done either from Eastern Canada m- from Winnipeg westward on the one hand. ... from Victoria or Vancouver eastward on the other. Between Wimnpeg and the Rockies, Calgary and Edmonton were the largest wholesale points; but their busmess was small. Since 1901, there have grown up m the Prairie Provinces, west of Winnipeg, such d.stnbutmg centers as Portage la Prairie, Brandon, Regina, Moose Jaw, Swift Current, Medicine Hat Camrose, Yorkton, Saskatoon, Wevburn. Leth- bndge In British Columbia, there are, in ad.lition to Victoria and Vancouver, Revelstoke, Kamloops, •Nelson and V^ernon. 6. Long and short hauls for Prairie centers -The I .aine distributing centers, once develope Vancouver, Winnipeg, Fort William, Toronto and Montreal are opposed to the further modification which has been outlined. Mont- real, for example, desires that the open rule should apply generally thruout Can.cda. 10. Factors affecting classification. — As Ex-Com- missioner Clark of the Interstate Commerce Commis- j^ion has aptly said : Classification is not an exact science nor may the rating of a particular article be determined alone by the yardstick, the scales and the dollar. The volume and desirability of the traffic, the hazard of carriage, and the probability of misrepresentation of the article are large factors of prime importance in classification. At best it is but a grouping. Consideration of tlie earlier examples of classifica- tion, to which reference has been made, indicates that at least three determining factors were considered — space, weight and value. It was considered that where an article could be packed solidly into a com- mm IV .1 i ' CANADIAN FREIGHT CLASSIFICATION 89 paratively small space it wa^ proper to make a lower charge tlian when the same weight took up a mud. larger space. And the.e was also, in a somewhat crude way, a,, attempt made to take into considera- t.on the l,as,s of value or ahility to pay. Todav, I"'''';''! ""'"•^' '•'^«"'^"'<^nt'< of elassifieation. these tlnce lactors are still of n.uch importance. Whdc the scope of the elassifieation has hecome more mclusne as business has expanded, and while he ratings have at the same tin.e become more dif- lerentiated, ,t ,s in.possible to have a class for each art^le. Consequently, the class groupings, wMe ntended to embrace an.-ogous articles, do not em- hrace articles necessarily identical in point of value cost of carriage or other factors. 11. Value of the article.~Tbe value of the article IS recognized as an important factor. From the »tandpo,„t of cost of service, it does not appear justi- hable to class gloves, whalebone, thread and umbrel- as in first L. C. L., while common brick, concrete huilding blocks and coal are classed fourth L. C. I.. H f^.^^^f' ^' ''''*'"^* ""■^ considered it will be found that the first group of commodities extracted from the dry goods list have an any-(]uantitv rating, while common brick, stone, building blocks and coal have a tenth class rating C. L. If, however, an attempt were made to arrange the ratings r,, he basis of the cost of service, assuming tiiat this could be accurately established, the result "ould be that the low-grade omniodities which are .'. <%■•■' *-jJi|j!Hi«iwt*jr«iyi»i.»p 1 J 90 INLAND TRAFFIC placed in tenth class would be able to stand only a short haul movement. Under these circumstances, such commodities would be monopolized locally with a resultant disadvantage to the consumer. As a re- sult of this, value is recognized as a factor, and ability to pay places certain articles in the first class and c»thers in the tenth. In so arranging connnodities, cognizance is taken of the fact whether the articles are in the rough, partly finished or finished state. Millstones in the rough are classed L. C. L. third, C. L. fifth; when finished they are classed second and fourth. While dimension or building stone in the rough, sawn or dressed, not carved, is fourth and tenth, it is first and fifth when carved or lettered, crated or boxed. Or, again, difference in quality is recognized. Thus, while brick — common, fire, vitrified and scoria blocks — is rated fourth and tenth, enameled and glazed brick is third and fifth. In dealing with the classification of bla.igas, the Board found that the ratings of second and fourth were reasonable, this conclusion being based on a con- sideration of the article and of its ability to pay as compared with the lower ability to pay of the articles classed third and fifth, which were the ratings asked for. So, also, where a carload rating wiis asked for on cigars, which have an any-quantity rating of first class, it was held that as cigars were luxuries the any- quantity rating was not unfair. A similar position i 1 CANADIAxN FREIGHT CLASSIFICATION 91 was taken in dealing with an application to reduce the rating of cut-glass from douhle first to first class. On a complaint that prepared roofing was improp- erly classed L. C. L. 3, C. L. 5, while plain felt for roofing was classed 4 and 5, it was pointed out that there was a wide range of prepared roofing— that it sold by the square of 100 feet at wholesale prices, varying from 70c to $2.56 per square. Com- mon saturated felt, with which comparison was made, sold wholesale at from 26c to 82c per square of 100 feet. But even tho the highest quoted price for felt overlapped the lowest price for prepared roof- ing, it was recognized that the general range of value of the "roofing" was much higher, and it was held that, from this standpoint, it was not improperly classified. In using value as a basis, there is considered not only the ability to pay, but also the market value of the article. That is to say, where an article has a high market price, the higher rating has but a slight per- centage effect tipon the market demand. But in the case of articles of wide demand and consequently lower market price the higher rating would add such a percentage to the market price that the demand would be curtailed. Consequently, as a matter of self-interest, the ratings must, within certain broad limits, recognize ability to pay as a factor. 12. Bulk and weight.— As the railways in trans- porting freight are selling car space, what can be I m ■^ 92 INLAND TRAFFIC packed in a given space is important. There must be considered whether the articles are K. D. (knocked down) or S. U. (set up). Sheaf carriers, S. U., are D-1, while K. D. they are second class, these ratings being for L. C. L.; while lumber wagons are first class S. U. and second class K. D. Another consideration is whether the articles are loose or in bulk, including in this the consideration as to whether they are crated in boxes or otherwise packed. A variety of ratings will be found based on the difference in packing. Thus in the tin and tinware list the following will be found: Tinwc.re, N.O.S.: L.C.L. Loose, O.R.D D-1 Not nested, in crates, boxes or barrels. . 1 Nested, in crates, boxes or barrels .... 2 Nested solid, in crates, boxes or barrels . 3 C.L. 6 5 5 5 Other considerations falling under the heading of bulk and weight are, whether the commodities are in L. C. L. or C. L. shipments and questions of min- imum weights. Lamp chimneys have a rating of second and fifth, with a minimum of 20,000 pounds. It may be noted that while the ncrmal fifth class min- imum is 24,000 pounds, the load weight of these goods will, on account of their being light and bulky, very seldom reach 20,000 minimum, normally. 13. Risk attached to carriage. — A railway is an in- surer, and so the risk attaching to the carriage of the CANADIAN FREIGHT CLASSIFICATION 93 goods is considered. Scattered thruuut the classifica- tion will be found the following notations: -- <)wnrr\ risk ')f hreakajre. rr- ** tt " chafing. — _ ** »t " (lamaffe. — . *' »4 " diterioration ti t« " fire. . (t ii " loss. *( ti " leakage. rrir *' " sifting. . . , *4 •ft " weather. O.K.!'.. O.U.C. O.R.D. O.U.Dit. O.R.F. O.R.L. O.R.Lkge. O.R.S. O.R.W. When these owner's risk notations appear in the class- ification, the railway is relieved of the risks necessar- ily incidental to the transportation of the article so noted. But it is not relieved of the liability for any loss or damage which may result from any negligence or omission of the railway, its agents or employes. If a shipper does not wish to ship at "owner's risk " then the articles proffered by him will be carried sub- ject to the terms of the Standard Bill of Lading, but subject to the addition of 25 per cent to the rates appiymg when the goods are carried at "owner's risk." Particular examples of the classification, consider- ing the risk attending transportation, are plentiful Green vegetables O. R. Det., in baskets, bags or cTates, are first class L. C. L., while evaporated or «iesiccated vegetables are third class L C. L. in bags 'oxes, or barrels. The rating is affected bv the ques-' tion of whether the commodity is liquid or dry J^iquid shellac in tins, boxed, is first and third, while XV c-8 94> INLAND TRAFFIC fk dry shellac is second and fourth. In the rating of acids, there has to he taken into consideration not only the risk of hai' iling with reference to the goods them- selves, hut also as to other property. Special care must he taken hi handling them. 14. FaciliticH and equipment /Tr/«//Tr/.— While the nature of the facilities recjuired has a!i important hearing on the rate, it also affects the conditions at- taching to the classification rating. Apples ami po- tatoes nmst he prepaid, in winter. In arranging classilication, the matter of tonnage movement is important. While low-grade commod- ities nmst have a low rating in order to move at all, the fact that a commodity moves in large hulk facili- tates the low rating arrangement. The (luestion of competition of markets is a factor, too. So, also, is the competitive effect exercised by alternate water routes. In dealing with classification, the question of anal- ogy plays an important part. A change in the rat- ing of an article will create a demand for a change in a complementary commodity. While aluminum and copper wire are distinct commodities, they are both complementary and competing; so we find them both with a rating of secom -id fourth. The lists of the classification have grown up out of t\w varied needs of business and to disregard these is to upset business. In the grocery list, we find not only flour, sugar, jams and jellies, but also glue and tobacco. In 1911, the Canadian Freight Associa- CANADIAN FREIGHT CLASSIFICATION 95 tion, iictiiij^ for tlie Canudiuti railways, proposed n rearraiigeiiient of the ratings on tobaeeo. Tlie most important part of this rearrangen.^.it was the substi- tution of a fourth ehiss earload rating for the existing fifth ehiss rating. Jn evidei ee, it was shown that 84 per cent of the output of phig tobaeeo of the Domin- i( n Tobaeeo Company and over 00 per cent of its cut tol)aeeo was disposed of to the groeery trade. Tlie Ontario WhoJ-sale Ciroeers' (iuiM testified that from «0 per eent to 85 per cent (vf the toliaeeo sohl was handled by grocers, and that the tobaeeo business was about ten per eent of the total trade of the grocers. The result of the proposed change wouUl liave been a dislocation ot business, since tobacco and groceries would no longer have been able to mix on a fifth class rating. The Board, in ruling on the matter, said: "In view of the dislocation which the proposed in- creased ratings would cause, it would be necessary for the railways to make out a strong affirmative case. This they have not done . . . and their application should be dismissed." It is impossible, without going into tedious detail, to enumerate all the factors which determine the classification ratings. As a fairly compendious sum- mary, there may be quoted the following extract from the Annual Report of the Interstate Conmierce Com- niission for 1897: (there is considered) whether commodities are crude, rough or finished ; liquid or dry ; knocked down or set up ; loose or in bulk ; nested or in boxes or otherwise packed ; of vegetables ■y'i 96 INLAND THAFFIC whether green or dry, desiciMited or evaporated ; the market value and shippers' represent at ions as to their character; the cost of service, length and duration of haul; the season and manner of 8liij)ment; the space occupied and weight; whether in carlo .d or less-than-carload lots; the value of annual shipments to be calculated on; the sort of car re- quired, whether flat, gondola, box, tank, or special ; w hether ice or must be furnished: the speed of trains necessary for pcrishaHe or otherwise rush goods; the risk of handling, either to the goods themselves or other property ; the weights, actual and estimated; the carriers' risk or owners' release from damage or loss. l,j. ClanHification in operation in Canada. — The Railway Act provides that the railway shall keep on file, at the stations where freight is received and deliv- ered, a copy of the freight classification or classifica- tions in force upon the railways for inspection during business hours. The Board is given wide powers in dealing with the c lassification. These are set forth in Section 321 of the Railway Act, which provides: The tariff of tolls for freight traffic shall be subject to and governed by that classification which the Board may pre- scribe or authorize, and the Board shall endeavor to have such classification uniform thruout Canada, as far as may be, having due regard to all })roper interc«ts The Board may make any special regulations, terms and conditions in connection with such classification, and as to the carriage of any particular commodity or commodities mt ntioncd therein, as to it may seem expedient. The company may from time to time, with the a])proval of the Board, and shall, when so directed by the Board, place any goods specified by the Board in any stated class or remove them from any one class to any other higher or lower class. Provided that no goods shall be removed from a lower io a higher class until such notice m 1 CANADIAN FUEIGIIT C'l.ASSIFU'ATION 97 Hs the Hoard tJek'nniius lm.s l>...ii givt-n in tla- Canada iiazctti'. The classification is revised trom time to time. It is issued at irregular intfjrvals. Down to date there have hcf'ii sixteen issues. Hetween issues, supple- ments are issued to take care of changed ratings. While the Board of Railway Conunissioners for Canada, popularly spoken of as the Railway C'onunis- sion, has power to initiate changes in classification, normally it does not act on its own initiative, but on cv. .iplaint. The initiation of the classification or of a supplement thereto is in the hands of Lhe Canadian Freight Association, acting for the railways, and more particularly the Advisory Committee thereof. As has been seen, the increased ratings have in be published in the Canada Gazette. The Board hy its order of January 18, 1909, provided that, in filing changes of classification, this material should be sub- mitted in proof-sheets setting forth a list of the articles not previously provided for, wliich it is proposed to add to the classification and the ratings for these articles. Further, it was directed that information should be given as to the proposed advances, retluc- tions or other changes in rules, ratings or nnriimum weights. In making application as to changes, it is rccjuired that the reasons should l)e set out. As an I'xample of reasons given, the following dealing with Lath, iron or steel, in bundles, crates or boxes," may he referred to: II i I m 98 INLAND TRAFFIC This material has several uses chief of which is for plas- tered walls. In this it takes the place of expanded metal or wooden lath. Coming in conipetition with expanded metal of about the same value and transported under the same general conditions, there should be no difference in the ratings, and third class L.C.L. seems reasonable and should we think, be permitted, 16. New issues of classifications. — Any proposed new issue of the Classification, or any proposed sup- plement thereof, must be submitted in printed proof form for the approval of the Board before it becomes effective. If the new issue or supplement increases a classification rating, notice that the Classification or supplement has been submitted to the Board for its approval must be ^iven in two issues of the Canada Gn rfte. It is required that the proof shall show under the heading of "additions," articles not pre- viously classified and the pro])osed ratings therefor; also new rules or regulations which it is proposed to add to the Classification. Tndcr the heading of "Changes," proposed increases, or reduced ratings, or changes in the existing rules or regulations must be set out, there })eing included in a parallel column those previously a})])roved by the Hoard. The application to the Board is to be accompanied by a statement of the reasons for proposed changes involving increased transportation charges. At the same time, it is retiuired that there be furnished to each of some 54 representative industrial associa- tions and Boards of Trade a copy of the proof and of it I "H CANADIAN FREIGHT CLASSIFICATION 99 the notice of publication, with the re([uest that fully explained objections, if any, to the prop>.»e(l changes involving increased transportation charges be Hied with the Board within thirty days from the receipt of said proof and notice. 17. Board's participation in tiassifwations, — In- stead of dealing with the classification after it is made, the Board may be said to participate in its making. After representations are received from the various trade bodies, it is usual to arrange a conference be- tween the railways and the representatives of the trade organizations. At this conference, the Chief Traffic Officer of the Board is also present. The matters at issue are discussed, and an attempt is made to arrive at a conclusion. The Chief Traffic Officer reports to the Board, which deals with the unsettled (juestions, if there are any. When this has been done, an order is issued authorizing the coming into effect of the classification. 18. False classification and complaints. — False classification of freight, either l)y a railway or its em- ployes, or by a consignor or consignee, with a view either to give or to obtain carriage of goods ac lower than the rates legally in force, is punishable for each offense by a penalt}- not exceeding $1,000 and not less than $100. From time to time, an individual may complain of the classification as fixed. For example, a manufac- turer of explosives desired paraffin wax to be given a rating under chemicals. lie made application to the 100 INLAND TRAFFIC Advisory Committee of the Canadian Freight Associ- ation which did not see fit to accede to his request. F apphcation to the Board the matter was set down for hearing and a direction was given that the revised rating should he granted. Since classification is tied up with rate-making, and since the changing of an article from one class to an- other is etjuivalent to a change in the rate, it is es- sential that any organization regulating rates should have an efficient control over classification as well. REVIEW What is the mixing privilege and to what articles is it limited ? How is it applied in Eastern and in Western Canada? What objection has been made to the extension of the mixing privilege ? Name the principal factors in railway classifications and de- fine the influence of each. How is a freight classification changed and what regulations govern a new issue? If you. as a merchant, wanted to complain about a classification how would you proceed? CHAPTER VI FREIGHT RATES 1. Importance of freight traffic.— In the fiscal year er A December 31, 1923, the tariffs filed with the Board totalled 68,892. Of these, 53,096 were freight tariffs. That is to say, 177 freight tariffs were filed every working day. These tariff's are concerned not only with traffic lying wholly within Canada, hut also with the transit business in which both Canada and the United States participate. The tariff's vprv in size from a transcontinental tariff, with its more than a hundred pages, to a supplement of a single sheet. In a new coun.ry such as Canada, where a sparse population is spread over u large territory, the i-eceipts from freight traffic largely outrank those from pas- senger business. The following tabular summary gives the principal items of railroad earnings for the calendar years noted : 19^?! 1923 •'''•eight (if).7«i 7o.:}0 Passenper Ifl.H? 17.7(5 Sleeping cars 1.0(i i.oi •^^ail 1..5fi 1.55 Kxpress :j.45 ^.j^ Misc. rail 1.15 1 |>j Water lines ().«5 0.60 Incidental j.74 u.29 .Joint facilities (credit balance) 0.01 0.02 101 102 INLAND TRAFFIC ! A Bulking passenger revenues and revenues inci- dental thereto in 1928 on rail line movements, $3.85 were earned from freight for every dollar from pas- senger business. 2. Tonnage and mileage service. — In Canada, in the period from 1919 to 1923, the gross earnings from freight increased by 24 per cent. The tonnage and mileage service i)erformed afford a measure of what the railways are doing. The following table puts the matter for a period of years in a summary manner: 1919 oil \920 250 19.83 23.05 1921 258 447 20.22 22.12 1922 1923 280 288 481 502 20.88 21.41 23.03 23.42 Average haul, miles Average tons per train ^Sl Average loaded cars per train 19.55 Average tons per loaded car 22.21 But for the shorter hauls and lighter loadings of the smaller lines the averages here shown would be higher. As an example of the position of the longer lines, reference may be made to the Cam dian Pacific which, in 1922, had an average haul of 402 miles and an average tons per loaded freight car of 27.1. The increase in general in the aveiage haul is an index of the rapidly expanding railway network of Western Canada. In the period in question, there is an increase in the average loading per car. But tak- ing the average car at forty tons capacity, in 1923. over forty per cent of the carrying space, on the av- erage, was empty. G. Railway rates of universal interest— The funda- »! FREIGHT RATES 103 mental part that transportation plays in all countries and the greater importance of freight traffic in a new country has caused much discussion as to the proper basis of rates, and especially of freight rates. While certain phases of competition have an effect on railway transportation, there are also limitations of competi- tion. In a sense this is becoming more and more true of all modern industry, and the easy-going ideas as to ^' e pervasive effects of competition which developed Ht a time when industry was not organized on a large scale and large investments of capital were urmeces- sary are now being shocked into a readjustment. In the case of the railway, its service is as funda- mental in modern industrial life as electric light and water services and street cars are in the routine of the city dweller. Any interference witli the efficiency of the transjjortation system is of far-reaching conse- quence. A congestion at a frontier terminal creates a fear of a coal famine. The large mass of the people is in one way or another affected by the transixi-t of commodities on the railway. Few, nowadays, lead tile hermit life. Xot only are we dcperjdent on the railway in the normal distributive process, but we are greatly dependent on it in our maladjusted distribu- tive organization which is characterized by wastes of transportation. "^Vhen we ship Eastern Townships l)utter to Vancf • Island ."-i I Xcw Zealand butter to Ottawa, Xew Zealand pom try and mutton to the interior valleys of Biitish Columbia, and eggs from [I ( 104 INLAND TRAFFIC Ontario to Regina, it is but little wonder that the freight rate elicits active discussion. 4. Competition. — Not only is the rate a matter of wide interest; the nature of the railway transportation business is also hnportant. In a letter which Leland Stanford wrote to the San Francisco Chamber of Commerce in 1873, he said : "Whenever undue prof- its upon an investment in railroads, or any other cor- porate property accrue, other capital will always be found to enter into the same business to share such profits, and, by competition, to reduce them to a legiti- mate standard." On the other hand, J. J. Hill, in his evidence befor' the Interstate Commerce Commission in 1902, said: "Competition does not lower rates; on the contrary, it advances them. In the North- west, where for twenty years the Northern Pacific and the Great Northern have been at peace, where one road has agreed with the other on rates and maintained the agreement, rates are lower than in any other part of the country." Railways are not operating in a frictionless eci)- nomic ether, as Stanford naively suggested. The> are forced by their nature to come into some kind of relationship. A dry-goods merchant, dealing with his customers, is not dependent upon the other merchants concerned in local trade. He may do more than a local trade without demanding any cooperation with other merchants. It is true that the pursuit of his trade demands a cooperation with the wholesale mer- chant. But within the limits of his retail business hi^ FREKiHT HATKS ,05 ^ relationship to other merchants is not one of eoonera- tion, hut of competition. 5 Transportation compared :cHh mcrchamVmnn and manufactnrinf/.-A merchant nmsi, of course he prepared to supply, within limits, the goods demanded l)y his customers, within the time specified. A railwiv IS engaged m selhng services, and readiness to serve {"s herefore essential to its husiness. A merchant, while he must be ready to serve, has the opportunity of as a factor to be considered. He identifies the cost'of the shortest haul with the cost of the average haul. 1 his IS a manifest misconception of the significance of -lyorages. Because the average is made up of a series <•< journeys, long and short, of which the shortest haul '•( terred to is one. there is no assurance of identity !>etween the uvern^ haul and the shortest haul. In assim^ng that the rate will pay the cost of service "^ 109 no INLAND TRAFFIC of the shortest haul will he the proper nite for all. he is resting upon pure assuiiiptioii. If applieation ol' the theory were made, it would iuevitahly liappeu that the long-distauee trathe wouhl l)e imduly honused at the expense of the short-haul trattie. Further, if the rates, as Cowles holds, are to he determined hy eost of serviee and at the same time distanee is to he tlisre^arded by applying the postal principle, it will follow tha distanee is not a varying element in the eost of serviee, and that it eosts no more to haul a ear five thousand miles than to haul it five. While the theory might possibly be enter- tained as a matter of public policy, as a statement ot a cost of ser\'ice basis it is a patent absurdity. 2. Distance rates.— WhWe the "postage stamp" theory disregards distance, the equal mileage theory over-emphasizes it. In 1873, there was introduced into the Parliament of Canada a bill to provide that "tolls should be at all times charged equally to all persons and after the same rate per mile for all dis- tances in respect of passengers and traffic." At that time, the same subject was engaging the attention ol the legislature of New York. In both cases, it was the competition of goods from farther west, which went thru on a low-rate basis per mile as compared with the higher-rate basis of the shorter haul, that brought the matter to the front. In Canada, the con- ditions following the panic of 1873 caused this project to be rather actively discussed in the period from 1873 to 1875. THE BASIS OF RATK MAKING m III EriKlaixl, the Select Crninittee on Railway i'nmimuws AinalKaiimtion, 1872, smnnmrized the dis- advantages as follows: ia.) It Moidd prevent railways from lovverin^r mtes to meet sea, eanal, or shr)rter railway distance rates, thus lessenin^r advantages of competition. Uk) It W(,uld interfere with ^ivin^r better rates on ar^er quantities, or on earryiuK lon^ distances at I<»uc, , ates. ( In respect of ciuantitv, note the differ- ence in Canada l)etween L. C. L. and C. L. I,, Enir- land, trainload (piantities may also he considered.) ic) Jt would compel the same rate over expensive as over less expensive lines of the company. 3. liafcs based on capitalhution.—Vnkssthcrt is "• the first instance, a regulation of the issue of the' securities entering into the capitalization, there is no assurance that the capitalization as it stands is, in its ^•it.rety legitimate. Then, again, a railway which lias hecn lavishly assisted by the (iovernment; for ex- ample the Canadian Pacific, may he a!,le to keep am'.— Correlated with the question of capitalization as a rate basis is physical valuation, which has attracted a great deal of attention in the United States. Former Commis- sioner Clements, of the Interstate Commerce Com- mission, m speaking before the House Committee, j^aid. "I think it is .sound justice and law that, as a basis for constitutional earnii gs, a fair return on the value of the property means, generally speaking, a tail- return on the investment actuallv made, orig- inally and subsequently." 5. Phifsical valuation and its c feet. -Before the 1 bysical Valuation Act of lOl.-j was pas.sed, the Rail- road Securities Commis.sion advocated that the Inter- state Commerce Commission "be given broad powers and adequate means for valuation of the physical property of the railroads as one element in determin- THK BASIS OF UATK MAKINC ,,3 ing fair values wherever, in the judgment of the Comnnssmn. th,s ,s of . Hji.ict l:.,„„rt.nee to war- rant sueh action." One m.v,„„se „' the aet will have been aeueve.l if the valu.i.,., ,:,,„,,, „,,ea,iv secure,! are made the basis for .leternmunf, a level' „f earn- ings wh.eh will encourage railroad investment Ihe va nation of the railways of the Uniten,pet,t.ve conditions of one sort or another. «, that the rates of one railway cannot be eonsi.lere.l with- ""t regard to the rates of other railways. Whatever l'utV,'l"«.V'''''i'", " " """' ""■'■"">.' ..f <-i,,„„l, 'f Cincuiitrc, ill' L^:i^'^.^ikrM^eaL.^mk^^m ti •■■. V -J^ -^■'1: 114 INLAND TRAFFIC charge is made by one line between New York and Chicago must be made by all, whatever charge is im- posed for hauling lumber to Chicago by one route must be the same by all competing routes. Wher farmers have access by wagon to two railways, the rate to a common destination on farm produce nmst be the same. To (juote his summary: The rate established for one of necessity, influences and frequently absolutely determines the rate of all, a fact which must never be forgotten when discussing the subject. Now, it is evident that if the Commission should select that road most advantageously situated, that road whose business ix the largest and upon which the conditions of operation are the most favorable and should so adjust the rates as to yield a return of six ])er cent upon its value, every other road standing in com}K'tition with it would receive less than a six per cent return and some railroads might receive nothing whatever. The schedules under which one carrier would earn a fair return upon its investment might not even pay the operating expenses of its competitor. Upon the other hand, if that road laboring under the greatest disadvantage wen to be selected and such rates establislied as would permit it to make a return of six per cent upon its investment, its com petitors would, one and all, iw receiving an undue return upon the investment. Valuation cannot determine the relation of the rates as between themselves because all commodities cannot contribute in the same proportion to the u})- keep of a railw^ay without seriously incommoding the movement of low-grade bulky commodities. To sum up, as was pointed out by Conunissioner Clements, valuation will not dis])lace the necessity for the use THE BASIS OF RATE MAKING 115 of judgment since it will not give a hard and fast rule. 6. Cost of service. — The theory which has at- tracted increasing attention as a determinant of rea- sonableness is that of the cost of service. In modern days, when we find construction companies offering to erect a building for cost plus ten per cent, the (ques- tion is constantly asked why rates cannot be fixed ac- cordingly. In business, the prices, whether for serv- ice or for commodities, must first of all cover all ex- penses, and thereafter enters the item of profits. Many railways have attempted to distinguish be- tween the expenses of passenger and of freight l)usi- ness. Certain itenjs may be directly allocated; other items which are not enable of direct allocation are. in the case of the I.(. je and Xashville and the Burlington railways, d.vided on the basis of the en- gine mileage for each class of traffic. While this af- fords a system of distribution of c( .^t which may be of tomi)arative value one year with another, it does not show how cost is actually distributed, because it is based on an assumption - ch may or may not be true. The Interstate Commerce Commission abandoned, in 18J)-t, the attempt to arrive in its accounting system at cost of service. In the matter of soft coal' rates to the Lakes, it again considered cost distribution. However, the Commission has never definitely ac- lU) INLAND TRAI TI( ceptcil cost of service as tlie infallible criterion of reas()nal)leness. In railway service, there are certain general ex- penses which must be borne ii" the railway is to be a railway at all. These charges, in the rough, do not vary with the amount of business done. Then, agahi, the railway does both passenger and freight business; the facilities of the railway are used bv both these types of traffic. The (luestion arises: how are the ex- penses ot creation and maintenance of these facilities to be divided between these forms of traihc? More- over, freight may be moving in trainloads, as in the movement of such a staple as wheat; or it may be handled in way-f r ' ;ht trains which are peddhng package freight. The question whether the move- ment is in carload or in less-than-carload quantities, as has been indicated, also affects the cost of handling. But the freight rate which is struck must be an inclu- sive average. The cost of the movement of freight is affected by the question of whether it is thru ov local. The amount and direction of loaded, as com- pju'ed with empty, freight-car mileage is also to Ic considered. In Canada in 1923, 40 per ceut of tlu total freight-car mileage re})resented an empty move- ment. 7. UHiaf is cost of serviced — \Vhen we speak oi cost of service it must be remciiibered that it cover^ a variety of meanings. It may be a pilnsary C( >; representing the actual cost of movement either of tin THE BASIS OF KATK MAKINti 117 article moving or of an additional unit ol coininodity when the tratlie is already moving-. For example, a lertairi amount of package frei<4lit is movin^i^- west- ward from Fort William and tiiere are empty ears whieh have to be taken westward. A railway may eoneeivably desire to attraet tralHe at low rates to redress the volume of empty milea<^c, since, as tlie cars are moving anyway, it has only the (luestion of tiie additional cost. Every commodity must contri- l)ute in some degree to secondary cost. That is to say, it must make such a contribution to all the ex- penses of the road plus some return of prolit which will enable the railway, one counnodity w ith a lother, to be continued in an efficient condition. This is the most difficult phase of the cost of service theory, for what the commodity can contribute to this secondary, but none the less necessary, cost, depends «)n its ability to contribute, not on any i)reconceived idea of what it ought to contribute. An important (juestion as affecting any attempts to determine cost of service is the ratio of constant to variable expenses. Adopting the method of analysis used by W. Z. Ripley,^ the following summary analy- sis of one year's total expenditures of the railways of Canada may be made for illustration: - ' "Kailroad Hates and Refrulations," ji. Vi, by W. Z. Ripley. • Ai! amended classification adopted in tiie statistical reports of the Department of H.'iiiways and Canals In later veir- pivents the .'.nn!'. - si> iKMug brought down to date. 118 INLAND TRAFFIC ANALYSIS OF TOTAL KXFKXDITLRES.CANADLVN RAILWAYS I'tT (flit of Per cent of Opt-ratiiiji Kx |)»'nscs Total Kxpfiiscs Both Constant N'ariable Both Constant \ ariaMe Maintenance of w ay ;in 9.53 9.jJ 1G.8 H.l HA Trattic fxpt-nsfs. :}.9e liA 'J'ransportatiori . . ,V.'.79 .'H.:575 iH.37j 4().5 2iMj J4.9.> (i»MH'ral »'X|)eiise.s. 4. 7 J A.72 4.2 4.,' . . • ■ Fixt'il (ha 1 {it s. . . . 1L8 ll.H lUO 5.()45 4l.:J.iJ 100 00.73 39.-'j Summarizing' these computations, we arrive at the result that approximately three-fifths of the total ex- penditures of the Canadian railways and .>.") per cent of their operating expenses are independent of the changes in the volume of trattic. Two-fifths of the total expenses and 45 per cent of the operating ex- penses vary with changes in the traffic. The Wisconsin Commission, whose work in connec- tion with the regulation of rates as been extremely valuable, has placed great reliance upon the cost of service principle. Commissioner Erickson said: "The cost of service both in law and in fact appears to be the fundamental basis for rates." But tlie judgments of the Commission show that it is an a\erage cost of .service, modified by what the traffic will bear, which the Commission is attempting to ap- ply. It ruled in one of its decisions: Tlie cost of transportation to the carriers consists of tlu' operating exj)enses including reasonable returns on their in- THE BASIS OF RATE MAKING 119 M U v»-.stment. This cost, wIr-h inodiHtd hv wimt tin- traffic can fairly In-ar in the way of transportation charges constitutes the inai.i basis for rate making. In distrihutnig these costs upon the units of transportation, it is necessary to take into account the resj)ective proportions of tlie terminal and move- ment expenses, the qu litity transported, the vahie, rehitive weight and risks involved tor each of the various classes of freight, Ihe loading per car, the gross tonnage of both |)av and dead weight the difference in cost as between local and thru trains and many other elvments of this nature. It is obvious that in calculations into which so many factors enter, as ui the case here, only approximately correct rescdts can' be obtained. 8. Factor of value in cost of ,scrvicc.~T\w iiiipor- tance of value as a factor was emphasized in a paper read by Connnissiouer Krieksori before the National Assoeiation of Railway Commissioners, a niimher of vears ago, in which he saiil: ... costs . . . (are) the first and most essential element in rate-making. But . . . recognition of value in fixing rates is usually regarded as in line with the best interests of all consumers . . . cheap and bulky articles are as a rule, not moved at all except at comparatively low rates, and this for the reason that their ability to pay is small. . . . While low-priced articles should be charged comparatively low rates, the rates so levied upon them, under normal conditions, shoidd, as a rule, be high enough to cover their share of the ordinary operating ex,)enses including something in the wav ot net earnings. Such traffic is of importance even on these terms. It increases the volume of the traffic and therebv de- creases the cost of the same per unit. By contributing something to net earnings it also decreases the amount that will have to be borne by the rest of the traffic. The de- ficiencies in the net earnings from low-grade traffic should be made up by higher rates on the higher grade traffic. I 120 INLAND TRAFFIC ' i Used in this way cost of service determines not the actual reasonable rate to be ciiar««'ed hut the niiniimiin average necessary rate. 9. ^lUocation of railxeay costs. — The matter ol* cost analysis is one whicli involves nianv technical consid- erations and in which, so far, it cannot he said that there is a consensus of opinion as to method. If a <^eneral scale of rates is hein^ considered, it is neces- sary, in the first instance, to subdivide ex])enses be- tween frei<»ht and passenger business, and the first (juestion then is to ascertain what expenses may froni their nature be allocated directly to a particular serv- ice. Over and alune these are certain costs, e. g.. those of maintenance of way and structure. How are these to be allocated? They are expenses which must be incurred if the railway is to operate at all. In fact, they are common expenses necessary to and influenced by the necessities of both services, but not wholly controlled bv either. The methods utilized in such ^ ibdivision are interesting hut too technical to be examined within the limits availal)le. 10. Costs are average, not sj)eci/ic. — The costs, no matter how worked out, are average, not specific costs. The judgment of the Board in the Western Kates Case, in dealing with the cost methods used by Mr. ^liiller who gave expert evidence, was as fol- lows : The matter was presented to the Board in a very conipli cated manner, and the cross-examination of the witness and the results can be also so described. Mr. Miiller himself de- THi: BASIS OF HATi: MAKING IH\ »cril)e.s the sitimtion in this way, on hrin^' a>ko(l us to what ui'N uii-ant by tlio statiincnt tliat thi' tii^uivs were avcra^f h^jrcs. "Tiu'}' are not specitii- costs ivlatin^ to a spt-c-iUf iiiovenient or a spt-citii- coinniodit v, in anv siiim'. I think it is pri'ttv well ret'o;;ni/e{i that it is practicallv an iinpossihilit v ill transj)ortation work to aseertain specihe eost for iiandlin^ aiiv specific service, due to the tact that tlie transportation service is composed of niuitifar.'ous and exceedin^lv numerous individual items and services far more diverse than usuailv is the case in most manufacturing and mercantile establish- ments where costs are used. So that the only basis which can be developed at this present timi — at least with such sta- tistics as are available — is an average basis in wliich all the various kinds and characters of freight service are 'nixed and levelled." . . . It goes on to show that tlie iKJ primary accounts, as contained in the railway returns, are apportioned by Mr. ]MiilIer in terms of nine different hases. il. What the traffic tiill hcar.~The Cullom Com- mittee, whose report was responsil)le for the constitu- tion of the Interstate Commission, said: "The capac- ity of each commodity t) contribute to tlie payment >f the fixed charges is measured by the extent to Nvhicli the cost of its transportation fixes its market value and determines the (juestion of its movement." The late Commissioner T^ane. who during his tenure of office as a member of the Interstate Commerce Commission was a most trenchant critic of railway evils, said: *-' ■■'< fc.-^ . . . consideration must be given to what may be termed ]>ublic policv, the advantage to the communitv of haviiiir some kinds ot freight carried at a lesser rate than other kinds, and 1 I 122 INLAND TRAFFIC this is the true nienniii^ of thr plirasi-, "What the traffic will bear." It expresses the eoiisidtiiitioii that must be shown bv the traffic manager to the need of the people tor certain com- modities. He accordingly imposes a higher rate upon what may be termed luxuries as comjjared with that iuiposed upon those articles for which there is more universal demaiid.' . . . Albert Fink, who was the first railway otfieial in the l.'^iiited States to attempt to make a seientifie study of traffic, believed that: 1 ne (juestion that greatly controls tariff's is uluit is the .service zcortli not iclKit does it cost; and this is a mere com- mercial transaction uncontrollable by acts of legislation. The relative value of an article at tht place from and to which it is shipped dele n 'nes the charges for transportation it can l)ear. If a greaier charge is made than the difference in these values, the article cannot be moved. It may, there- fore, be found necessary to charge on some articles less than the full cost of transportation, in order to enable them to be niovtd at all, and this necessitates again to charge more on others which can bear higher charges. Is the principle which the foregoing quotations set out limited to railway business alone? 12. Other applications of this principle. — The princij)le of "what the traffic will bear" has been a})- j)lied in other forms of business besides transporta- tion. In a certain Canadian department store, it is the rule to have every commodity sold within six months, altho the turnover of most commodities is much more frequent in the six months' period. ^V picture, for example, that can not be sold at the price 1 9.-2 I. C. C, «-'3. JZ^ TllK HASLS OF HATK MAKINXJ 12.i originally iiiarkfci will ho reduced until it is (lisi)()se U € Mi^ TIIK HASIS OF HATi: .MAKI> G IJ.-) ^ :.f portation charge hoars an analogy to the hasis of taxa- tion, naiiitly, ahihty to pay. rroperly appHid. char^iii^ what the traflic will hear means so appor- tioni!)^ the ehar^es as to allow the widest possihle iiiovenient of all eomniodities. Certain ehar^es. as has heen shown, do not vary with the tralHe. Xo artiele shonid he handled at less than the out-of-poeket charges for its movement. Bnt what shall it eontrihute to the general expenses^ As the Wiseonsin Commis- sion points out, there nuist he eonsidered the value and nature of the artiele as well. If iee. lime or stone cannot eontrihute mueh over and ahove the out-of- jMK'ket expenses to eonstant expenses, some other commodity must hear more. Some years a^ro, a railway official stated that rates were hased on competition, comparison and compro- mise. That is to say, rates are wholly empirical. While this may he too hroad a treneralization, the experience i>f Germany is to the point. There, on the ^ove'-iunent owned and operated railways, they had at first a 'space" tariff' under which each commodity pnid an equal rate per kilometer hased on the space oecupiedhy It in the car, plus a fixed terminal char«re. Now there IS in operation a tapering rate. The rate per kilo- meter decreases as the distance increases, and it is also modified in j)articular cases hy competition. The Government has had to consider the ahility of com- modities to pay. In the export rates of the German railways to the seaports the same recognition of com- petition is to be found, both in respect to water and XV c— 10 ^agfa; mi I 126 INLAND TRAFFIC market competition. For example, before the late war, to meet the competition of British manufac- tured goods at the seaports, similar German goods were carried by rail to these ports at much lower rates than were charged on local rail movement. 14. Fiew of Canadian Manufacturers' Association. — The organ of the Canadian Manufacturers' Asso- ciation, Industrial Canada, in dealing with the sub- ject from the shippers' standpoint, stated the situa- tion as follows : Criticism of the railways and their methods of rate making should be tempered by a consideration of some of the prob lems they have to meet. In theory, no doubt, a carrier should charge the same rate for the same service under all conditions. Practically, such a thing is impossible. In order that the factories of Ontario may operate, it is neces sary that coal be carried from Pennsylvania. It must be do livered for a few dollars a ton ; it costs so much at the mint mouth; the rest goes for transportation. If more wer< charged the factory could not buy it and the business devel oped by that factory would cease. For that reason, rail- ways are hauling coal at a price which in itself would not pay the cost of operation. They do it in order that busines- in their territory may be developed. The man who estab- lishes a smelting plant in Ontario must be able to manufac ture pig iron at a cost which will enable iiim to sell in competition with his competitors in Pittsburgh, Sydney or any other point. With fixed charges established and tin cost of ore and coal at the mine mouth uniform, he is able to pay only so much for transporting that ore and coal. That is all the traffic will bear. It rests then with the railway t=i sav whether, for the sake of the business such a plant will bring into existence and to keep rolling stock moving or tn provide return cargoes, this traffic is worth while at such a THE BASIS OF RATE MAKING 127 i )le, that of cli •Imt th rtic price. But the principle, that or cimrging wimt the triimc will bear, is sound and is indeed the only system which is at all practicable. Tiie idea that other industries haye to pay extra to make up for their low rates on raw materials is absurd. The business has to be taken ai a low price or not at all. By taking it fixed charges arc distributed owv a wider bulk of business and conditions are to that extent im- proved for other users of the service. It jjrobably costs a railway as much to handle a ton of coal as a ton of silk. If the rates were averaged the buyer of a piece of silk might benefit to the extent of a cent or two, while the householder would find his coal bill go up some dollars a ton. The sug- gestion would be no more popular tlian feasible. As the present system is the only one which practical railway men have so far been able to devise and as it has been a|)|)roved by shippers as right in principle, tlio frecjuently, it is true, somewhat unsatisfactory in its individual incidences, we may be allowed to accept what we have rather than ... to fly to evils that we know not of. 15. Determining the reasonableness of a rate. — Jn ;i case coming before the Public Utilities Coniinis- bion of Maine, ^Ir. C. H. Tiffany, Traffic Manager f)f the pulp companies concerned, used the following language : . . . the making of freight rates is not an exact seience, because it is impossible to determine witii exactness ju-t what portion of the investment costs nnd oj)erating expenses >b()uld be charged to any particular commodity out of the tliousands carried on our railroads. The .iifficulty of the problem is shown by the different theories of able men as to Hie proper way to allocate costs and expenses even between tlio freicrht ai I lass inrer bii smosNC. \s a ])ractical mattt r what the carriers and connnissions must do. in order to de termine the reasonableness of a rate, is to find out I low much revenue is necessary to i)av oT)erati ing expenses and permit US INLAND TRAFFIC a proper return for depreciation and interest on the invest- ment ; apportion tliat amount between tlie passenger and freiglit business as scientitieally as they may; and tlien ap- portion the freight revenue amongst the ditt'erent commod- ities carried considering a number of ditt'erent factors. Thus from the very beginning the question of the reason- ableness of a particular freight rate has been determined, not by finding the value of the investment apportioned to and the cost of carrying that particular commodity, but by comparing the characteristics of its carriage with the char- acteristics of the carriage of other commodities. Generally speaking, the rate for a long haul is relatively lower than for a short haul; a rate for a valuable article or one easily damaged is relatively higher than one for a cheap article or that is hard to damage; perishable freight which must be carried without delay should j)ay a higher relative rate than freight which is not damaged by delay. Articles that load heavily and compactly are entitlod to lower rates than those which are light and do not load the car to capacitv- Commodities carried in large quantities should have lower rates than those in which traffic is not so dense. In general, manufactured articles should pay higher rates than raw materials. 16. Xo one factor determines reasonableness. — What, then, is the test of reasonableness? Distance, bulk, conditions of loading, value, cofiipetition, cost of service — these and other factors all have weight. Kut no one factor can be pointed to as exclusively applicable in every case. There is no yardstick of reasonableness. While there are factors capable of more or less precise determination which bear upon the question of reasonaideness, the final answer of a regulative tribunal must be that the reasonableness of a rate is a matter of judgment. THE BASIS OF RATE MAKING 129 REVIEW What is the diiference between the postage stamp rate and the equal mileage tlieory? Discuss pnysical valuation as a basis of rate making. What do you understand by '' ••- cost of service theory of making rates? How would y a, '^ly it? How lias it been made to apply by the Wisconsin nission? Explain what you believe the p.. ' "what the traffic will bear" means. Can this principle be applied in your business? Discuss. How did the Canadian Manufacturers* Association regard the question of rate making by the railroads? W^hat is the test of the reasonableness of a rate ? * ■> J- C IIAPTER VIII FREIGHT RATES IX PRACTICE rv*| 1. Class tariffs and commodity tariffs. — By refer- ence to the classificjition it niav be ascertained in which class the article (for example, cotton piece goods), which the shipper desires to send, is to be found. By referent e to the appropriate tariff, the rate for the article \\\\\ be secured. Tariffs niav name rates either in classes or bv com- modities. When they name rates on specific com- modities, these commodities are taken out of the or- dinary classification rating. In C^anada and the I'^nited States, tariffs quoting rates on commodities are known as commodity tariffs. In P^ngland and Germany, they are known as exceptional rates. Commodity tariffs are concerned with the lower grade goods. In a commodity tariff, the normal unit is the car- load. A commodity rate is, in general, a recognition of the volume of movement. It may be given with the intention of developing an industry, or as a recogni- tion of a large tonnage from a staple industry — for example, the movement of grain or live stock in Can- ada. When there are different classifications in a country, as in the United States, a commodity may 130 FREIGHT RATES IN PRACTICE 131 be given different ratings in different territories; for example, in the Southern Classification, raw cotton, a staple commodity, has a commodity rating, while under the Western and Official Classifications it has a class rating. Again, the voluuie of movement of iron ore in the northern states leads to the establish- ment of a commodity rate. A commoditv rate mav be given as a result of water competition, as in the case of traffic destined for the Pacific Coast. In Germany, the reasons given for granting such rates will outline the extent of the practice. The rea- sons summarized are; railway competition, competi- tion against waterways and highways, competition against foreign transportation ways, competition to divert traffic to a given harboi-, competition of markets, rates granted to develop industries which have unfavorable geographical situation, rates granted to insure the continuity and increase of transportation. For England, tlic granting of sucli rates has been justified by the foregoing considera- tions and, in addition, by volume and regularity of traffic, loading per car or per train, earning power of traffic, liability or non-liability to damage and general considerations of what the traffic will bear. As indicative of the nature of the commodities on which such rates are granted, the following list of the principal articles on which carload commoditv rates are published in Canada mav be referred to: Canned goods, lumber and shingles and rough forest 13a INLAND TRAFFIC products generally, salt, coal and coke, ores, grain and grain products, cement, hides and skins, packing-liouse products, iron and steel articles (coarse), building material (brick, stone, sand, lime, etc.), paper, wood-pulj), petroleum and its products, fertilizeis, sugar and molasses, starch and glucose, ice, sugar beets, coo])erage stock, })otatoes, turni])s, onions, flaxseed and meal. As an example of the method pursued in building up a particular commodity tariff, reference may be made to the C. P. R.'s special coke and coal tariff, C. H. C, No. W1296, effective October 4, 1909. This tariff, which applied in Western Canada, took coal out of the 1 0th class, to which it belongs, and worked out the following basis, the rate taperhig as the distance increases : 100 miles and less 66% of 10th class J^OO miles and less 6-t% of 10th class 300 miles and less 63% of 10th class 400 miles and less 6^2% of 10th class 500 miles and less 61% of 10th class 600 miles and less 60% of 10th class 700 miles and less od% of 10th class 800 miles and less 5iy/r of 10th class 1000 miles and less 51% of 10th class Class rates apply to movements either way. The\ carry the notation that thev are effective "between"' stations. A commodity rate is specific and applies to a movement in one direction, unless otherwise noted. For example, the Canadian Pacific tariff on grain, flaxseed and grain products from stations in ]Mani- toba, Saskatchewan and xVlberta to Westport, Fort FREIGHT RATES IN rHACTICE 133 William and Port Arthur is limited to the movement in one direction and to specific points. Commodity rates are extensively used. In Canada, al least 75 per cent of the railwav tonnage is carried' on commodity rates. In the United States, prohablv a larger percentage of the business is so transacted. In Canada, 90 per cent of the commodity rates are on articles rated below third class, i. e., on the bulkier ar- ticles moving in large volume. In the transcontinen- tal business to the Pacific Coast, into which water com- petition enters as an important competing and regu- lative factor, all the rates may be regarded as com- modity rates. In England, the commodity rates cover about 75 per cent of the business; in Germany, about 63 per cent. 2. Comparisons of freight traffic— Comparison be- tween the freight rates of Canada and the United States on the one hand, and the freight rates of Eng- land and Germany on the other hand, are often made with a view of showing how low we the rates of the New Wo'ld. Before making comparisons one must be sure that there is a common denominator. While in Canada and in the United States the in- crease in the number of carload ratings and the in- c'lease in the size of the cars has had its effect in the increase of the average tonnage per car, commercial 'onditions differ in England and in Germany. In !'oth Canada and in the Ignited States the ^O-ton tar may be taken as normal. In England, the 10-ton car and in Germany, the 20-ton car are the 134 INLAND TRAFFIC I' normal cars. The Canadian Pacific in moving grain to the head of the Lakes, in trainloads, can average 33.75 tons per car. In Enghuid, the average consign- ment of grain is about two tons. In England, an av- erage of the business in general merchandise from a representative station of the Great Northern for one day showed 4,427 packages, wliich had a total weiglit of 123 tons. The verage weight per consignment was two cwt., the average weight per package was 62 lbs. The total number of cars required to move this business was 72, while the average load per car wj: - 34 cwt. Under the most favorable circumstances, the average loading of merchandise per car on the London and North Western does not exceed three tons. In England, small cars with small shipments and greater dispatch are used. Some years ago an officer of the Caledonian Railway, in comparing the rates of the quantities moving normally on his railway with those of New York and Philadelphia, found that for distances of forty or fifty miles, the rates on groceries, dry -goods and tea on his railway were lower. In Canada and the United States, the ton-mile rate, a work-distance rate, built up by multiplying weight by distance, affords a statistical measure of earnings. Ton-mile rates are kept in England by the Nortli Eastern Railway, and comparison may be made with the German railways. But in England and in Ger- many the average haul and the average loading are, because of differences in business conditions, very much less than in Canada and the United States. In FREIGHT RATES IN PRACTICE 135 England, it would be too expensive, even if business were so conducted, on account of the expense of termi- nals, to hold traifis until niaxiniuni tonnage was ac- cumulated. The ton-mile rates in Canada are held down by the long hauls. Ton-mile rates are of value as a measure of earnings and of the work done for earnings. They are useful for comparative pur- poses oidy when conditions are similar. Since they are averages of all kinds of traffic, long haul and short haul, carload and less-than-carload, high-grade and low-grade tonnage, they are averages which do not necessarily afford a conclusive criterion of the reason- ableness of a rate. 3. Difjficultij of comparing foreign freight rates.— The difficulty of obtaining any common denominator which will permit the freight rates of different coun- tries to be compared is illustrated by the following table which shows how certain essential factors affect- ing the freight rates differ in different countries: ' A verage ca- parity (if Ton mile Tons per Average haul freight cars ^"""t'-y rate train in miles in tons ^"^-tria i..-,ofl 211 65 14, ^'"'""^ 1 7.51 3U 203 33 '••'i"^'' i.ia-i 1*7 77 li (■ermany 1.211 ;?39 gg j5 ''"•'■■« fifi« 1R5 188 N<".v South Wales.. l.,57.> \12 88 Switzerland ;?.389 Mj 50 \k Smith .\Mstralia ... 1.919 lU 88 Suited States 2 ... .753 451 260 38 'The figures in this table are for different years. As the table simply illustrative they serve adequately for this purpose. 1:36 INLAN) TRAFFIC 4. Terminal chargen kept separate from rates. — In Knglaiid, charges for station and other terminal serv- ices are recognized as being distinct from the hauhige charge. In Canada and in the United States, the practice has been to (luote an in^hisive rate. Of re- cent years, however, the Interstate Commerce Com- mission has shown favor to a (Hfferentiation between a road haul and a terminal chargr. Some of the State Commissions are also taking the matter up. It is a method pursued by the Wisconsin Commission in building up rates. The Nebraska State Commission in dealing with intrastate rates found that the aver- age direct station terminal costs, per hundred pounds, of handling L. C. L. shipments in the first four classes of the Western Classification, was 10.9 cents. In the Western Rates Case evidence was submitted to the Board that on a 380 mile haul the terminal exT^ensc was 35 per cent of the total expense. 5. Two leading factors in freight rates. — Lo^ oally. the freight rate is composed of two factors — the termi- nal charge and the haulage charge. Whether the termi- nal service is carried on in a large expensive terminal or at a small wayside stat'on, the service is distinct from that performed in the road haul. In the Grand Trunk terminals a. Ottawa, it takes, allowing space on the team track for a car and for the necessary road- way for access, a space of 800 square feet per car. This space at $5 per scjuare foot represents an ii; vestment of $4,000 per car for freight-car space, with interest at 6 per cent, this would mean an interest FREIGIir RATES IN PUACTK K lai charge of (>.> cents per day per car so handled. Tlien there are also tlie freight-shed facihties and tlie switching expenses. Switching movements in ter- minals have hcen computed as representing an ex- pense per mile of from six to twelve times that in- curred per mile on a road haul. In the terminal cost there is included not onlv the cost of the particular movement, hut also the (jues- tion of its contrihution to overhead expenses. Then, again, there is the complicated (juestion of the joint cost of the ternunal as hetween freight and pass- enger services. Aside from large expenditures on l>assenger stations, it is to he remcmhered tliit the passengers move themselves in and out of the ter- minal; the freight has to he moved. On the road haul there are the expenses for the wages of the train and engine crews, the cost of fuel, oil and waste. Here, again, there is not only the (juestion of the cost of Ihe j)articular movelnent, which, in the ease of a trainload movement proceed- ing continuously thru a division may i)e comi)uted exactly on a tonnage basis, there is the further and more difficult question of what contrii)ution the com- modity moved should make to overhead charges. iJoth in the case of the terminal costs and of the road-haul cost the matter is complicated by the fact tiiat different (piantities may he concerned; the cost of handling carload and Icss-than-carload quantities is not the same. The terminal costs at l)oth ends of the haul are con- i i -%H.l 138 INLAND TRAFFIC ^ff stunt whether the ha* I he for 10 or for 300 miles. But ill the eost of the road haul, tlie serviees incidental to the movement do i i -rease in the same ratio as the mileage. Furi;\ iJi • necessary terminal cost is ji greater percentagi '. h- .oint cost on the short haul of, say, 10 miles thai ')i\ loniff r haul of 300 miles. ;i> ha ' ' charges tend U) aal costs chargcahk' me of less important .. ' asis of ton-mile earn- As the distance incr vary inversely, whif r against the niovemeiit .lisi, per mile. That is to ly, < ings, the ton-mile rate tends to decrease as the dis- tance increases. In the transshipment of grain cargoes at Dei)()t Harbor, the I'arry Sound Railway placed grain on cars at an expense of 25 cents per ton. The Board has recognized that in dividing up a rate to arrive at the reasonableness of the component parts, a terminal expense of 'iO cents per ton is not unreasonable, liv- ers, in his "Kconomics of Railway Operation," has figured out terminal costs per ton on the basis of Xeu York figures as follows: Interest and depreciation ilH.(] Station services and shipping 41..'> ro.i 6. Switching costs at Winnipeg. — In 1000, the Ca- nadian Pacific made a computation as to switchiiiL; costs in terminals at Winnipeg on line haul business: that is, on carloads recei\ ed from or shipped to points FREIGHT KATKS IN PK AC TICK 139 .)iitside WiiiMipcg. Tlie services pertorined wen* classiiied as follows: (ji) The expense of assembling and sorting thru ears was eoinpiited at .%'MM) per ear. This covered 18;),;>01 cars handled an average move- ment of ;j,({()0 feet. (h) The placing, sorting and assembling of cars for local sidings in C. P. H. terminals. This covered 1.34.202 cars, with an average movement of 7.200 feet. The cost was computed at $5.;i2 per ear. (c) The transfer of car>> between the Ca- nadian Northern and Canadian l^icific at St. Boniface, destined to or received for siding de- livery in either terminal, cost $({.05 per car. This covered 24.901 cars, with an average movement of 20,050 feet. The cost figures were based on interest and depre- ciation on the freight terminals; interest and deprecia- tion on the engines used exclusively in the switching- service; actual cost of fuel, oil, waste and rei)airs on these engines; actual cost of wages, superintendence, itc, in connection with terminal work exclusively. These figures, assunnng that ^he cars were of ,*iO- tons capacity, gave averages per ton as follows: (a), l-}.3 cents: (b), 17.7 cents: (c). 22.1 cents. If an average of all the cars switched is taicen, it amounts t't 10 cents. 7. Terminal co.st in Wi scon .sin. —The Wisconsin Commission worked out, some years ago, compu- ^u « uo INLAND TRAFFIC tations of terminal cost per ton for the different classes of the Western Classification as follows: Classes 1 n C D E $1.68 $1.39 $1.12 8ic. (i'c. 750. 58o. 50c. 420. ;}:{<• The terminal costs thus computed are arbitrary, since they vary with the value and the rate, instead of bein/ exactly proportioned to cost. Variations in terminal expenses will be found not only in regard to the cost of terminal properties, but also in connection with the nature of the loading. 8. Distance as a factor in rates. — Examples have already been given showing how in rate-making, dis- tance may be minimized. In addition to those al- ready given, reference may be made to the system of group rates. In Illinois, in the movement of coal. points forty miles apart have been grouped under the same rate. Under the Canadian Pacific coal and coko tariff, already referred to, the Lethbridge group, in- cluding six shipping points, covers a distance of fifty miles. Examnlcs of either the originating or the destination points l)eing grouped are (luite common. Reference nviy be made to the class and commodity tariffs west-bound to points west of liake Superior, includinar the Pacific const: to the rates on grain and grain products from Fort AVillinm to eastern points. Montreal and west thereof; and to the rates on lumbu and forest products from the coast and at British Columbia interior mills to Eastern Canada. One ex- -i NH '^m m FREIGHT RATES IX PRACTICE 141 ample will serve. In the shij)nient of luiiiher east from the British Columbia mills the territory to the head of the I^akes was prior to 11)18 divided into the H)e and 4oe groups. The first extended to Winnipeg and ineluded, so far as the lines of the Canadian l*a- eifie are coneerned, 4>',iO destination points, while the seeond extended to Fort William and inehided 149. The regulative tribunals of Kngland, Canada and tlie United States have recognized that reasonable grouping is permissible. Groui)ing arrangements usually come into existence where there is a consid- erable number of points supplying a commodity of general demand to a common market. Grouping at the destination points may ilso occur when such a commodity is marketed over a consideral)le are.< after a long haul. But while, because of special conditions, distance may be minimized, it is, in the absetice of such disturb- ing conditions, always to be reckoned with. 0. Dififatnr basis of rates in OJJicial Classification Inritort/. — The most interesting example in America of the adoption of the distance basis of rate-making is io be found in the territory of the Official Classifica- tion. This territory is sulxlivided into Trunk Line Association territory, which may, in a general way, be described as the section east of a line drawn thru liuffalo, Pittsburgh, Parkers])urg, West A^irginia, "ud Norfolk, Virginia: west of this is to be found C entral Freight Association territory occupying the remainder of the Official Classification territory. XV c— n 14S INLAND TRAFFIC In the early seventies the railways located in what is now the territory of the Official Classification were engaged in cut-throat competition. In addition, the water competition of the lake carriers was also felt. As an outcome of this there was worked out a system whereby the Chicago-New York rate was taken as a base rate. The rate system so built up was concerned with the movement from Central Freight Association territory, in which are located some 8,000 stations. Taking the base rate as 100 per cent, the shorter distance points have rates worked out on a percentage of the base rate. For example, on the movement from Detroit to New York, Detroit has 78 per cent of the Chicago rate. Toledo and Sandusky are 71 per cent points. The rate adjustment works westward to the Mississippi River crossings, where 125 per cent points are to be found. While the percentage system was adopted in 1870, there have been various readjustments and regroup- ing since that date. Water competition, market competition, and the effect of the rail movements ot north and south lines working in thii. territory havt aided in bringing about the system as it stands today. The result is that instead of percentage points then' are percentage groups. While the system was con- cerned in the first instance with the movement east- bound, it now, in general, applies west-bound as well. A similar system is made use of in the movement from points in Central Freight Association territory . FREIGHT RATES I\ PRACTICE 143 intemiediate to Chicago, to points in Trunk Line ter- ritory intermediate to New York. The basis on which the percentages are wt)rke(l out is as follows: From an assumed rate of 25 cents from Chicago to New York there was first deducted the sum of 6 cents to repre- sent the fixed terminal exjx'nses at the j)oints of origin and destination. The remaining 19 cents represented the as- sumed charge for the rail haul exclusive of any service at eitlier terminal. This rate being divided by 920, that being the accepted short line mileage from Chicago to New York, yielded a rate per mile of 0.0206 cent for a movement from Chicago to New York under the assumed rate; and this rate per mile was used as the factor for establishing an assumed basis from any particular junction or competitive point on the basis of its mileage to New York. That factor or rate per mile multiplied by the number of miles from the par- ticular po'nt to New Y'ork gave an assumed rate for the rail haul from that point exclusive of any terminal service at either end of the movement. To that assumed rate, tlie six cents was again added to cover the terminal expenses at the points of origin and destination. The result gave an assumed rate from the particular ])oint to New York inchjd- ing the terminal charges, and the percentage whicli this assumed rate bore to the assumed rate of 25 cents from Chicago to New York determined the percentage of the Chicago rate which the particular point would take on any given class of merchandise. To iUustrate by a concrete exani])lc, the short line mileage from Indianapolis to New York is 8.33 miles. Then 833 times .020() (cent) equals 17.2 cents. To this add 6 cents for fixed terminals, and a total of 23.2 cents, or 93 per cent of the Chicago assumed rate MHr.^tar' ItlT O^.XSBraBKrER.'SV PTC^y^s?? .■•CflMi.V^iTnCL.HL, . 144 INLAND TRAFFIC of 25 cents, is obtained. Theret'ore, Indianapolis is a 1)3 per cent point. 10. Dhtinclion bctivccn local and thru rates. — A distinction is made between local and thru rates, altlio the distinction is not a very exact one. Sometimes a local rate is spoken of as being- concerned with a short movement on a given railway, and a thru rate with a longer distance on the same railway. It is more cor- rect to speak of a thru rate as being concerned with a joint tariff movement over two or more railways. Under the Railway Act, the railw ays are required, as incidental to the movement of thru traffic over two or more lines, to afford facilities for the due and reason- able receiving, forwarding and delivering at the re- quest of any other railway, of thru traffic; and, in the case of goods shipped by carload, of the car with the goods shipped therein to and from the railway of such other company at the thru rate. It is also provided that when traffic is to pass over any continu- ous route in Canada, oj)erated by two or more com- panies, the several companies may agree uj)on a joint tariff for such continuous route. There is the obli- gation also, that when traffic is to pass over any con- tinuous route from a point in Canada thru a foreign country into Canada, or from any point in Canada to a foreign country, and such route is operated by two or more companies, whether Canadian or foreign, the several companies are to file with the Hoard a joint tariff for such continuous route. It is similarly pro- vided that a joint tariff is to be filed in respect of a wan^nRBH mm FREIGHT KATKS IN PKAtTICE 145 similar movement from a point in a t'orei^ni coimtrv into Canada, or from a foreign eountry tliru Canada into a foreign conntry. Prohibitions* are contained in the Railway Act on devices whereby, thru break in Imlk, stoppage or interruption of u movement of traffic an attempt is made to interrupt tlie continuous carriage. Provision is made in the Uailway Act that where railways subject to the Board's jurisdiction fail to agree upon a joint tariff, the lioard may, on the appli- cati()n of any company or person desiring to forward traffic over a continuous route which the Hoard con- siders a reasonable and practicable one, recjuire the railways to file a satisfactory joint tariff; or the Board may ('ptermine the rate and apportion the same among the companies interested. It is the practice for railways to file concurrences in regard to thru rate arrangements. 11. Arriving at a thru rate— A thru rate may be made up of the sum of the local rates attaching to the mileage haul on each railway. In most cases, how- ever, the thru rate is less than the mm of the local rates. In each of the local rates, costs for two tcnni- nals are chargeable, while in the case of a thru move- ment over two or more lijics, there is an initial and a final terminal cost, the other costs in res[)ect of movements from one line to another being in the nature of transfer charges. It has not appeared fea- sible to lay down any rigid rule covering all cases in regard to the extent by which it is proper that the j(,;^ 146 INLAND TRAFFIC thru rate should be less than the sum of the locals. The Board has ruled that where a thru rate exceeds the sum of the locals, it is prima facie unreasonable and the burden of justification is on the railway. It has been recognized that when there is a haul over two or more railways, it is not reasonable to di- rect that the thru rate shall be identical with the rate for the same mileage over the line of a single rad- way; for, in the former case, there is a subdivision of the rate between two lines as well as a transfer cost. In dealing with the reduction of coal rates in the Western Rates Judgment, the Board directed that a reduced scale of rates should be put in; and further directed that on any given movement over two lines the thru rate should not be more than 20 cents a ton over and above that applicable to the thru mileage as for one carrier. REVIEW Distinguish between class and commodity rates. How are commodity rates used? To what movements do they usually Compare the freight rates of Canada with those of England showing the diH'ercnt characteristics which influence the making of rates in each country. Wliat are the two factors in each rate? What is included under each ? Discuss distance as one factor in rate making. What is the distinction between local and thru rates? How is a thru rate arrived at? mmmimmimmmmmmm CHAPTER IX COMPETITIVE EACTORS IX RATE MAKING 1. Competition of lines of different lengths.— W'liere a railway has to meet between two points the competition of the shorter mileage of another railway, the short line mileage rate governs of necessity. Ex- amples of this follow: I a Fort VVilliani to Winnipeg — C.P., 419 miles C.N., 436 miles G.T., 449 miles Portage la Prairie to Winnipeg — t'.P., 56 miles (i.T., 54 miles Montreal to Toronto— G.T., 334 miles ('.P., 345 miles ex., 407 miles i'.V., 487 miles I.e., 735 miles (".P., 256 miles C.N., 258 miles (J.T., 375 miles ('.P., 122 miles G.T., 164 miles (i.T., 69 miles t'.P., 144 miles Montreal to St. John, N. B. — Toronto to Ottawa — Toronto to Owen Sound — Woodstock to Goderich — Cornwall to Ottawa — O.&X.Y., 57 miles G.T., 109 miles Differences in mileage as between different routes 147 I ill >■'' h U8 INLAND TRAFFIC connecting two points arc common. For example, between Chicago and Kansas City we have the fol- lowing: Atfliison, Topeku «V Sjintii Fo 4.58 Burlington Route 489 Chica^'o ^: Alton 488 Chicago Great Westeni 597 Chicago, Milwaukee it St. l»aul 498 Rock Island Route 517 Wabash 512 But the competition is not necessarily limited to that existing between lines of slightly differing lengths. Once a railway is built the capital is fixed, and so, in order to obtain a return on the investment, it may participate in traffic which is handled by an exceedingly roundabout route. Between New York and New Orleans there are about one hundred all- rail routes which may compete for business. The shortest is 1,340 miles; the longest is .53 per cent greater. When such a roundabout route coripetes for this business it must, of necessity, reduce its rate on the principle of what the traffic will bear. Under the centralized control of the Railioad Administra- tion theij were energetic endeavors to utilize direct routes and thus lessen the extra engine mileage of i) roundabout routes. Under such circumstances the anomalv mav arisr of the rate being controlled by tb<^ longer line or route, for the longer line, not being able to give the same dispatch, may have to give a more advantageous cuMi'irrniM: factors in uA-ri: making u9 rate. Just Ik lore the Civil War the (Hand Trunk carried flour from C'iiiea^o to iN)rlhui(l hy rail and i thence by boat to Hoston in competition with all-rail iVuierican lines. From a situation like this mav arise so-called "differential" rates. 2. Differential ratcH.—A differential rate arises when two or more competing carriers a^ree that a |)reseribed difference shall exist between their respec- tive rates. This may be regarded as a concession to avert a greater cut in rates. W'hcFi the Canadian Pacific entered the field of thru business, it engaged in the carriage of business to San Francisco by means of its rail route to its Pacific terminus and tlienee by boat to destination. It took the position that, as it was a broken rail and water route, and was, in its condition, a weak route, a differential should be al- lowed. It also emi)hasized the disadvantage under which it labored because of its roimdabout route— ^.O'iO jniles by rail and water as against 3,270 all rail. in 1887, the American lines agreed that on business to San Francisv'(., the Canadian l»acific might quote lates lower, by agreed differences in cents per class, tlian the all-rail American lines. At the end of 1892, tlie Canadian Pacific adopted the principle of charg- ing rates ten per cent less than tiiose of the American imes. The latter contended that this was not a differ- I'titial, but a "cut" rate, since they had not agreed to It. The matter came to arbitration in 1898, when it 150 INLAND TRAFFIC was decided by the Board of Railway Commissioners that the Canadian Pacific Raiiway was not entitled to a differential rate. The Grand Trunk Railway operates under a dif- ferential freight rate from Boston to Chicago, all- rail, of seven cents first class, as against the standard lines. On the movement of freight traffic by way of Depot Harbor, it has, on the lake and rail route, a differential of 11 cents below the standard lake and rail from New York and 7 cents from Boston to Chicago. 3. IVater competition.— An early example of water competition in the passenger business is set out in an advertisement publishe2 INLAND TRAFFIC niiiy move: all-rail t<» the seahoan. \)\ rail to Fort VVilliani or Port Arthur aii lake to Buffalo and thenee eastward by rail or othti eonibination; to Duluth by rail and thenee castwap! hy lake and rail; or by lake and eanal combination, or by lake, eanal and the St. Lawrenee. As has been pointed out. in the movement tc the Paeifie Coast, water competition is important. Some years ago the China Mutual, or Blue Funnel Line, was bringing n monthly to British Columbia via the Suez Canal from three to five thousand tons of package freight. Of late, on account of business depression and eastern competitiht, witliin their (iiscretion, meet it to such extent as they thou^rht fit A rate tV.rccd hy water competition is not the IH•ce,vli^ iMcasurc of a rcasonahle rate where such compel hit,/, ioc nf,t exist. 4. ChatKjing ecu tins of production. ln\ he (Jnited States the westward movement of the a;4rieultural centers has had an influence on rates. In the north, it has lessened the importance . f Lakes Krie and On-' tano as controllin^r factors. Ahout the time the Erie Canal hecaine an efficient carrier, the (ienesee \'alley ni western Xew York was important in wheat produJ- tioM. Since the seventies the center of wheat produc- tion m the United States has heen movinw- „(„th and westward until now it is west of the Mississippi In Western Canada, the wheat area is not reach-d ""td at a point some four hundred miles west of Lake ; Sn|,crior. This has increased the traffic importance <'l the Lpper Lakes. Coui)led with this is the fact that on account of this northward and westward mnv^. im lit, east and west lines of movement from Georgian P i«ay are now t f increasing- imi)ortance. In the southern portions of the I jiited States, the ^■' 'mi jiv}\mmC 'Ui 154 INLAND TRAFFIC westvard movement of the cotton crop, as well as the development of the wheat areas of Kansas and of Ok- lahoma have added to the efficiency of ocean compe- tition hy way of the CJulf of Mexico. In the United States this westward movement of grain has created a competitive area extending from the international bomidary as far south as Kansas and Missouri and west to the western boundaries of the Dakotas. Its effects are especially noticeable in con- nection with the primary grain markets. Grain from the Dakotas and Minnesota is normally tributary tc Minneapolis and Duluth; it may move to Chicag(». The grain of XUssouri is normally tributary to St. Louis; it may also move to Chicago. 5. Competition of ports.— As has been seen in dis- cussing water competition, Chicago has some eight possible outlets on the North Atlantic seaboard. With the westward development of American rail- ways the shoi t line mileages to the seaboard have been readjusted. This is illustrated in the following table : Short Rail Distances from Some ok the Interior Grain Markets and Packino-Hoise Centers to New Vouk and New Orleans To To Saving to N«".v York N«w Orleans New OrK-aii^ Chica^ro 9U 91J2 Duluth 1,JJJ)0 l,''J'n 53 Minneapolis ... l,im 1,268 M St. Paul l,5iai l,ii68 53 Sioux City 1,4J22 1,!^5« 164 Tirr COMPETITIVE FACTORS I\ RATE MAKING 155 V ^" . . '^" Suvinjrto ^•^^^"'•k NewUrl.ans New Orleans ^'"^^'* l'^«2 1,070 332 ^uf^uqui' 1,079 988 91 f}- ^""it, 1'058 695 363 Kansas City... 1,335 y^y ^^^ If, be^rinning at Diiluth, a line is traced riinning south 10 Lake xMichiKan and following the western boundary of that lake to its southern extremity, thence swinging southeasterly until the south Athmtie sea- l)oard is reached a little south of the northern bound- aiy of Georgia, it will be found that all points west of this line are nearer to the Gulf ports than thev are to Aew York. Of course, the mere question of distance is not the only controlling factor. The question of the volume ot traffic moving, the matter of established trade routes, and the amount of ocean tonnage offering at the port are important factors. As between M(,nt- real and New York, the volume of ocean tonnage "ffering is necessarily an important factor. In the ;i*v.v ". '"^t^i 156 INLAND traffic: ways are wmstaiitly faced with tlie (iiiestion of this competition and of the extent to which they will, hx readjustment of rates, extend the area in which indus- tries may compete. Wastes of transportation may arise from this overlapi)inK «*' markets. The sut»ar refining industry of Canada affords a striking example of trade competition. Sugar re fineries located at Halifax, St. John, Montreal and Wallacehurg compete in Toronto and the Canadian Northwest. A sugar refinery located in Vancouver meets the competition of the eastern refineries in Manitoba. The Knight Sugar Refining Company, of Raymond, Alberta, is also engaged in the manu- facture and distribution of sugar in Alberta. \Vh:it are the boundaries of the respective markets' Where shall the rates meet f Again in the readjustment following the 25 pci cent order in 11)18 the refineries on the seaboard de- sired an adjuiitment which would enable them to do business west of Montreal. The Dominion Sugur Company, of Wallaceburg, said "should the AtlantK seaboard relineries be given any consideration . . we woultl . . . re(iuest the Board to give us similar consideration from Wallaceburg and Chatiiam U, points east." 7. Nates for sugar and o/7.— Sugar moves w. st from Montreal on a fiftli-class rate; it moves fnm Vancouver on r commodity rate. Under this ar- rangement the rates meet at Portage la Prairie, Man COMPETITIVK FACTOUS IN KATE MAKING 157 itoba. When the Board »)y its order in the Re^Hna Kates Case reduced rate.^ westward from fort VVil- hani, coniphui.t was made by the reHnin^ company at \'ancouver that this, by extending the Monti:/al terri- tr)ry westward, had resulted in curtaih.ig the territory naturally tributary to V'arKou\er. The Imperial (>jj Company has a rcfinerv at loco. »eir \'ancouver, in which it reHnes Peruvian oil. From Vancouver to Calgary, a distance of dMi miles the rate in 11)15 was 84 cents. Caspar, Wyoming, is' in a new oil Held which ships north by way of Coutts, Alberta, to Calgary, a distaficc of "soO miles. The nite from Caspar to Calgary was $1.11. The Im- perial Oil Company, being subjected to this competi- tion, and contending that its cost of bringing oil in tank vessels from Peru should be considered as a.^ainst the lower cost of obtaining oil at C^isi)ar, desired to have its rate to Calgary reduced to 70 cents. The Canadian Oil Company, whose reHrierv is at Petrolia also ships into the Canadian AVest; and its position was that, if on account of competitive conditic.ns, the rate from Vancouver was reduced east, the rate from I'etrolia should be reduced west. The shortest rail route, thru the United St ites. from I»etrolia to Cal- vary is 1,972 miles. By the ail-Canadian route, it is -\275 miles. In distril)uting its products the Imperial Oil Com- pany ships to Manitoba from its Sarma reHnerv by uay of the Lakes and Fort William. Saskatchewaii 'dv ....^.MLs, . XV 12 158 INLAND TRAFFIC is supplied from its Regina refinery which obtains its crude oil from Wyoming, while Alberta is supplie^esterii Canada began with the issuance of the Canadian Pa- cific tariff issued May 1, 1881, and which was applica- ble in Manitoba. This tariff was adopted apparently from rates then applying in the adjacent states of the American union. The rates were built up on the SSSftfil*: -. ;. PHASES OF RATES AND TARIFFS 163 Joint Northern Classification then in force in the ad- joining territory. In this classification, first class was double fourth. When the mileage extended west- ward, the standard tariff was extended. By 181)4, a standard mileage tariff known as Xo. 270 had devel- oped. The modifications by way of reduction re- ferred to in another connection, started from this as a base. The tariff in (juestion also applied in British Columbia, so far as the rates were concerned. The l)ase, however, was different. In building up the mileage, the railway considered that the higher cost of operation in the mountains justified assumed mileage being used. From Wincouver to ^'ale, at the head of navigation on the Fraser Kiver, actual mileage was used. From Yale to Uevelstoke, each mile counted as 1| miles; while from Uevelstoke to Canmore each mile counted as 2 miles. When the Crow's Xest ex- tension was made, it also was put 0 uuUs hetween Cann.ore and Lafr»an, ami (he Gran.1 Trunk PaeiHe .est of T .ornton. It apphes also on that portion of the Cana.lian Northern'.s Le Pas Line u.th.n Man.tohu. This seale is Kenerallv 7':. per cZ owe,- than the nn.forn, -rrairi.." tariff ^o] 27(rah!,s. „„,, hone, the rechirhon In-in^r eon.pk-nu ntary to that nuule in A la ntoba hy he ( ana.han I'a<-.ic. I, .as ^oIunta^v on th. pait of the (oM.pany whieh was, at that time, the only (oinpan.y operating in Saskatchewan and Alherta. Thi. rate basis was adopted l,y the Canadian Northern in those sections of the two Provinces opened up later on hv hat ( ompany. P.iifi ''^ '"•.T''""**'"" r"'^'' •" '^''^ "" the Cana.han Panfics ra.l Imes west of (row's Nest and Can.nore; a.,o on the following railways under (.reat Northern control, viz.. Hie (rows Nest Smithern, the Hedlington «: Nelson, th, Rod Mountain, the Nelson ^ Forf Sheppard, and the V«. coiner, \ ictoria .V Eastern, east .,t Kil^ard, B C «r, r of 1S94; hut, ow.n^r to the ^.reater cost of construe t.on and operation in Uritisl, Cohnnhia, one n.ile is counted Hs two pranu tariff' miles for distances up to m) miles those over i>-:, per cent. No abatement in Hrit": isli ( ohimbia followed the prairie reductions of l})()o (4) The -Lake" scale between ports of call and landini; of the ( anad.an Pacfic Railway steanu-rs and bar^.s on Arrow Kootenay. Siocan, Trout an.l Okanagan Lakes an.i the ( olumlua R.ver; also on the iwo renu.inirwr (;,vat North orn contro led prop.rh-es; vi/., the New Westminsf. .- South em, and the Y .f K ilff.'ird. B. ( ncouver, Victoria R: Kastern H Electric Railway ('omf)anv nm\ on tho lin.s of the BritiM, C ^av. wes' oiunib PHASKS OF HATKS AM) TARIFFS 165 Tliis scali' is virhmllv flu- tint pniirit- tariff No. S>7() of 1H94. The (irtat NOrHuiii'.s iiiaxinmin ratt-s on tin- two rail sections naimd nrv tlit- saiiii' as thosi- ol flit- Canadian i'aciHf on tin- inl.ind wati-r .stn-tclifs, bivause the Hoard n(|uircd tliiiii to be so, —these lines hein/r in the Naneoiiver- \ ale di.friet; and the sanie is true of those lines of the Uritish ('ulunil)ia Kleetrie Kailwav Coinpanv which are sub- net to the jurisdiition of the Hoard. {•')) The "Lake-and rail and Inter-Lake" scale, applicable fo traffic interchanged betui.n the Kootenay Lakes, and be- tween the steanirr landings and rail stations of the Canadian Tacific in West Kootenay and the Boundary district. This scale is conside.ably higher than the last mentioned "Lake" scale, bit somewhat lower than the ''Mountain" scale (No >. Xew ncales adopted—The jud^nicnt in the AVestern Rate Case directed that these five western stan(hird scales should he re(hiced to three to he kni» 'ii as The Prairie, The J»acitic, and Tlie British Coluni- l»ia Lakes Standard tariffs. (). Prairie Standard tariff replaces Saskatehetvan. The I'rairie Stanclard tariff was made to cover the section formerly covered under the Saskatchewan M'ak. The niaxiniuni basis was to he that of the standard tariff of niaxiiuuni nnlea«»c rates then in torce in Manitoba and New Ontario. Formerly, the initial milea«4c rrroup west of the Lakes was ten miles. This ^roup was broken up so the initial ^roup is now tivc miles. Tliis reduction, and the re-^roupint,' '"•ou^dit if, meant consi(lcrai)le reduction in re^rard to Alh( . ta and S-iskatclu'w.-ts. The westeifi !)oundary of the territory covered hv iJi." ^m. MICROCOPY RESOLUTION TEST CHART (ANSI and ISO TESV CHART No. 2) 1.0 I.I 150 2.8 ||3_2 ■ 3.6 Li 2.5 2.2 1.8 ^ APPLIED IIVMGE I ^^ 1653 East Main Street I^S Roctiester. Ne* York 14609 USA '-^S (716) 482 - 0300 - Phone ^S (^'6) 288- 5989 - Fax 166 INLAND TRAFFIC I this standard extends to Canmore and Crow's Nest, on the Canadian Pacirie ; to Tollerton, Alberta, on the Canadian Northern, and to Thornton, Alberta, on the Grand Trunk Paeifie. The tariff covers a mileage of 2100 miles. Up to 100 miles the groups advance by tive-mile steps, from 100 to 500 there are ten-mile steps, from 500 to 1 ,500 there are twenty-five mile steps; the balance of the mileage is divided up into fifty-mile groups. The result of this was that the hitherto existing Manitoba scale was adopted as the scale for the Prairie Provinces. 7. EiVtension of Manitoba scale. — The Board, deal- ing in the Regina Rates Case with the question of dis- crimination as between Winnipeg and Regina, had recognized the propriety, within limits, of the exten- sion of the jNIanitcba scale. It was now recognized that the class of commodities offered for carriage, and the climatic and operating conditions of the districts being largely the same, it would not be fair on the ground of density of traffic to give Manitoba an ad- vantage which, in a great degree, was derived from a volume of tonnage arising in the first instance in Sas- katchewan and Alberta. 8. Pacific Standard tariff. — In de-limiting the Pacific Standard Tariff it was r-^cognized that both the construction and railway operation thru the moun- tains are much more expensive than on the prairies. The Pacific Standard covers 2,200 miles, and its east- ern Ihnits begin at the points already indicated as tiie PHASES OF RATES AND TARIFFS 167 uestern boundary of the Prai'-ie Standard. The rate groups are the same as in the case of the Prairie Standard. Tlie hirger part of the mileage grouped under the Pacific Standard is concerned simply witli the provision of an interchange mo\ -ment. The ex- treme movement local to British Columbia is 750 miles. In consideration of the difficulties of operat- ing mountain mileage, cost, c tc, the rates are weighted -that is to say, up to a distance of 7oO miles each mile IS given the rate chargeable on the Prairie Standard for li miles. Beyond this, the rate is held down on the longer movement by being tied up to the Prairie Standard rates. For distances over 750 miles the Pacific Standard rates are made by adding the differences of the Prairie Standard twentv-iive-mile groups. For example: 750 miles Prairie Standard is 161 cents first-class 775 miles Prairie Standard is 164 cents first-class a difference of 3 cents. As 750 miles on the Pacific standard is 209 cents first-class, the rate for 775 miles IS made by adding the above difference of 3 cents, giv- ing a rate of 212 cents. From what has been said, it IS apparent that it is on the interchange movement be- tween standard tariff territories that the effect of this IS felt. 1). British Columbia Lakes Standard tariff. —The British Columbia Lakes Standard tariff applies lo- cally between ports of call on the Arrow. Slocan, Kootenay, Trout and Okanagan Lakes and the 168 INLAND TRAFFIC i () Columbia River. It does not apply where rail haul intervenes. The tariff covers 150 miles. Up t 100 miles the groups advance in five-mile steps, be- yond that there are ten- mile steps. This was amended in September, 1916, by ihe dropping of Trout Lak. on account of the elimination of ports-of-call on that lake. The standard rates are exclusive of marine insur- ance. Bulk freight will not be accepted for ship- ment to or from points where a boat haul is involved. Heavy and bulky articles moving under the standard tariffs in Western Canada will be accepted under special contract only. 10. Where mojc'.mum rates of Pacific Standard apply.— The maximum rates of the Pacific Standard are chargeable between: (a) any two rail stations, both of wliich are west of the western termini inclu- sive of the Prairie Standard tariff; (b) any station so situated, and any advertised port-of-call on tlie Arrow, Slocan, Kootenay, Trout and Okanagaii Lakes, and the Columbia River; (c) any station or port of call so situated, and any point east of the west . termini of the Prairie Standard tariff to an. I including Port Arthur. 11. When combination rates appit/.— The tariffs apply both on local and interchange traffic. In tlie handling of freight under the standard tariffs between points east and west of Canmore or Crow's Xest. if it is found that a combination of rates to or from Canmore or Crow's Xest, and stations east thereoi, PHASES OF BATES AND TARIFFS 169 under the Prairie Stan.Iar.l, a,„l rates t<, or Iron, these "m,ts under the I'aeiHe Stan.lanV n.akes a Jow.r hru-rate than would result Iron, t<,e application o the hru-rate under the l-aeiHe Standard then, ul lonibination is authorized to ai>ply 12_ Wlwn ,iamh,nl milcayc 'tariffs apph/.-Th^ standard nnleage taritfs refer-e.! to ab„4 a.plv in the absence of special tnriff,. „..,*■ ■ ' ' rh»„„i„ 1 '^^^''" "'""'> quoting lower rates. int th,t "^^^ "" 'nterchange business, the rule be- ng that m a movement f ron, a higher tariff division to 13. rVh,, rate scales rf/#>'>■ ""■ materials attribuf.l.le t '"'•'•easms e,«t.s „f ^tantiy in evidence "'■ '""''"'""^ »-- «'■- Aetof theDo:.:rSare:t''";;r "•^- ■'^"-■'" 't was represented that an rcre se of """"^ """'• -'■-> per eent in existing freiXnt '•PP'''""""'Hv order to meet the inereled otts I T"' ""'''""'' '"' ' ".gly taken by the Governo ;„ ^'"""r' """"'- provisions of the W.r Arlf. ."'''' ""'''^'- "'« "f which pern, ttcd tl,;";.'^'*' *'"^ "'''^ P"wers "f the Specill Ac, "^"-■"''"S of the provisions wa!;?opt:d^„'c:::d' ""':' ''"•^- ^^"'- ""«• *'- '■'- as t^o spe::;ic'r:;d:ti f itr'f ■""""'- nites which the MoA,u , . " "' "'<^^'-fase< '" the United StS;^" ""'" '""' "'•'"''^ "I'-^fve Where in contiguous Umt^,! «t . . • ''••"i not been an antece,Ie„ ' *""'"'>' '^'"^ granted under the K ftc tp "TT r'"''" '" *''-^' ^"crease was eliminated fron the Ca "''' "'™ ""'^ "-••-osa.inwester„7:rd^;r:i;:;tt mi 172 INLAND TUAFFIC no siicli increase in eonti^nious Ignited States terri- tory, the averaj^e 10 per cent increase under the Fit- teen Per Cent Case was eliminated and the increas. was apphed on the antecedent rate basis. The result is that in the East there is the full effect of the i:> and the 25 per cent increases, while in the West the latter alone applied. This further tended to les sen the s])read betweeti the Kast and the West. len- der these conditions, the average increase over all sec- tions was approximately 20 ])er cent. Effective September 13, 1920, freight rates in tli. territory east of Port Arthur were increased 40 pt i cent and west thereof 25 ])er cent. On January 1. 1921 the increases were reduced to 35 per cent re- spectively and on December 1, 1921, again reduced t<. 25 and 20 per cent respectively. Transcontinental rate inc^'^ «;■"" were reduced to 23h per cent. 16. ( st Pass Agreement. — Under order in council ' / 27, 1918, the Board of Railway Com- missioners were authorized to disrega! d the Crowsnt st Pass Agreement, as well as all other rate controlliim agreements, for a period of three years begiimiiij,' July (), 1919. The Agreement, except as to rates on grain and flour, was again suspended until July «•>. 1924 by an order in council dated June 30, 1923. When the Agreement again became effective on July, 7, 1924, the roads, interpreting strictly, limittd the low rates to points on lines in operation in 18'.>7. After lengthy hearings, the Board then ordered the roads to cancel on October 27 the tariffs made efft c- PHASES OF UAIKS AND TARIFFS 17.1 tive on July 7 and restore tliose in effect on July (5. The dispute was then referred to the Supreme Court which decided ( 1 ) that the Hoard could not fix rates higher than the niaxinunn provided in the Ajfreement hut that (2) the Agreement shouhl ap- ply only to Canadian Pacific mileage existing in 1897. In 1925 an iVct of Parliament gave to the Hoard fuil control of all railway rates in the Dominion, thus nullifying the statutory maxinrim fixed in the Agree- ment with one important reserv^ition, namely, that the low east-bound rates on grain and flour should he retained. This Act will enable the Commission gradually to eliminate inequalities in existing tariffs with the one important exception noted. 17. Special and competitive tariff's.— Special and competitive freight tariffs do not require the approval of the Board before becoming operative. They come into force upon filing the tariffs with the Board. A special tariff reducing existing rates must also be on file for three days before the effective date in every station or office of the company where freight is re- ceived, or to which freight is carried under the tariff' in question. In the case of increases of rates thirty (lays' public notice is required. Competitive tariffs ace not under any obligation as to pub''c notice, this matter being left to the discretion of the Board to fix Mich regulations as it may deem necessar\\ To meet temporary emergency conditions, special late notices may, without publication, be issued (juot- ites on specific shipments })etwccn injints \v i:} 174 INLAND TRAFFIC n on the railway which are not competitive. It is pro- vided that the railway may issue these rate notices jii its discretion, to help create trade or to develop the business of the company, if it he in the public in- terest and not otherwise contrary to the provision- of law. The special rate notice has to be filed witli the Board, and is operative only for a specific shipment. It nmst also specify the reason for issu- ance and the rate which would otherwise have been effective. In practice, the railways have been permitted under this provision to provide for the prompt ihip- ment of any freight which may unexpectedly be of- fered and for which no suitable tariffs have been j)rt- pared, there being the condition that the filing and publication of the tariffs shall be immediately pro- ceeded with. Such special notices may also cover tlu' disposition of a shipment which has been forwarded to a wrong destination, or which may have been re- fused by the consi ee. Small sample shipments, for example, of ore. may be carried under such notice for testing purposes, actual weight at carload '"ate applying. Formerly such a notice might cover the removal <>f live stock by rail from exhausted grazing grounds to new pastures on the ranches of the Xorthwest for sul)- sequent reshipment to the markets. With the chan^'c in agricultural conditions the need for this has passed. The railways are also permitted under such an ai- v": 'jf^hm. t.'StiifsSi^ PHASES OF HATKS AND TARIFFS 17/j rangement to carry fuel for their employes at reduced rates. 18. Tranacontwcntal rntvH.—\y\m\ the Canadian Pacific entered the field of thru traffic at the I'aciHc coast it adopted in a general way the system as to terminal points which it found in use on the American railways to the south. These had ',een affected h" various rate adjustments in which the competition hy way of the Isthmus of Panama and C\ipe Horn hail played an important part. The movement hy way of Cape Horn is. so far as the movement fror. the east- ern to the western coast of Xorth xVmerica is con- cerned, of diminishin/nr importance. Since 1900. a few chartered sailing vessels have eacli year carried cargoes around the Horn. The Panama Railway lias heen overshadowed in puhlic interest hy the Pan- :ima Canal. But the railway has heen an im- portant factor. Bt fort- it becan'c the pro,)erty of Ww United States C xrrn^ ,rnt. the United States railways had been ahif- to i, ke it simply a differential rate route. The route ly « ly (»f the railway across the Isthmus of Tehuar.t' . in importance, and uill become more so in th u c With settled in- ternal conditions in ^\v\u ,t will cease to be ,i negligible factor. 19. Tranticouthenial tariff ,rc filed % Canadian I'rcighf Association. — Form* r *he tf- ins<'.ntinental tariff, covering the movement h\y,u *'-»s'u rn Canada to British Columbia coast-points, wn ' h m Vmeri- 176 INLANJ) THAI KK I can aK^-nt uftiti^' for both tlic Caiuuliafi and tlu riiilt'd States roads com-criiid. Since ScpteiidKr. ]\n{), tlK' tariff is Hk-d on iKhalf ot* the Canadian Freight Association, hy tlic C'liairinan 't* tliat As- sociation. 20. IIoic rates arc r/z/o/cr/.— The rates (inoted in the tariff' are from specified rate points in eastern Cana(hi, which rate poifits give the rates for the re- spective groups to seventy Hritisli Cohiinhia Pacific- coast points, or terminal points; to seventeen points which take rates made up hy adding arhitraries of 5 cents per 100 Ihs. C. L. and 10 cents L. C. L. to the rates to Pacific coast points, and to one point which has arhitraries of 7Vi» and 1.3 cents. 21. Water corn petition govern .s rat cm to terminal points. — Rates to the tertninal points are made on the hasis of water competition. In April, 191.), u\- aimo, on Vancouver Island, was taken out r)f the ter- minal point list, its rates thereafter heing 1 jilt up hy the addition of the arhitraries ahoe indicau-d. Vie toria and Esquimalt remained as tern.inal ])oints. In justifying the difference in treatment the railway said that the rates from Eastern Canada to the tc minal iK)ints were made to meet water competition, that the competition at Xanaimo difiered from that nt V'-'toria and Vancouver; there were no direct sailings from Panama to Xanumo. 22. Basing point changed on transcontinental class rates --Vormcrly the rates charged from Eastern Canada on transcontinental freight were based upon rilASr.S OF UATKS AM) TAHI. IS 177 the rates dmrov.l |,y Ainciican railways on ti;m ..n- lim-iilal trallic .ri«ir".ii,,.r at C"liif:i«n. W'hili tli. tratlif «»ri;4i I la tiller j ,•^^^. eastt-rii Statt-s is sul-jcrt t(. kirn watt-r c'«.ni|H'titi(.ii, the wattr (•oiniutiti«.i. in Kastirn Canada is niucli Irss active. The elass traffie oritfinatinor at C'liiejii-o is also less iiiMueneed hy water (•(' etition. The similarity in respeet of lessened vv eornpetiti(»n was considered hy the ra'ways as a justiHeation tor ChieaKo's hein^r taken as a hasir;^- point. 'I'o the elass rates from C'hiea^ro were added certain arhitraries, or rates not proportioned to dis- tance, to cover the han east thereof from points in Kastern Canada. For example, these arhitraries were classed as follows in cents per hmidred ponnds, ill the case of the movement from Montreal or Toronto: < liiss 1 2 ;{ 4 -^) IH 1.-, i:{ .» 10 The class rates to liritish Colnmhia are no lon^rer arrived at in this way. The rate from the Toroi^.)- Montreal gronp is the hasin^ ra'e, juid other points east exceed this rate hy certain arhitraries. The Canadian Pacific estahlished the rate from this i-roup it .%S.(;2, first elass, an increase of 2 cents per 100 l"nmds over the hitherto existing- transcontinental late. The other classes, however, are scaled on the Canadian Class" ication with resulting- lower rates tlian under the Western Classification which applies in.m Chica^ro. The result is that while frf)nj the I'nronto-Montreal ^roup the first-class is increased 2 M:^ 5. h ■ 178 INLAND TRAFFIC I i cents, the other classes are reduced in cents per 100 pounds as follows : Class. i 16 3 28 4 26 27 6 4U 7 37 8 20 10 23. Group system used for quoting. — A grouping system is used in quoting the rates; and in the above rearrangement the groups east of Montreal have been made smaller. In this way, the arbitraries over the Toronto-Montreal group have been increased. But aside from the first-class rate, there has been a general reduction in the class rates. The rates in cents per hundred pounds from the various groups to Vancouver are: Group • 1234.56789 10 } 580 i 474 373 298 253 232 179 160 .. .. 159 584 477. \ 375 299 \ 254 233 181 162 .. .. 160 58T.\ 479 376'. 301 \ 256J 235 181 162 . . . . 162 591 484 .V 380 304'. 258 ,\ 236 182 163 .. .. 162 594 486* 383 306ik 260 238 .\ 184 165 .. .. 163 60U 493 389 \ 309 ; 263 242 188 169 .. .. 167 608 \ 497 \ 394 315 266 \ 245 191 170 .. .. 170 61U 502 395.^ 317 268 \ 247.1 192 172 . . . . 172 615 505 399 318 270 248 i 1941 173 .. .. 173 62 U 510 4041 324 2U 2,>2 198 175\ .. . . 1 r.) 628J 516i 409 ^ 327 277. \ 253.\ 199* 179 .. .. ITf) Toronto Montreal St. Constant St. Hyacintlie . . Stanb ridge Sherbrookc Quebec Riviere du Loup Mont .loH St. John Halifax Miilfrravc Sydney The ninth class, as it co\ers live stock, is not given. The class rates from the groups in question to Van- couver are built up by adding to the class rates from Fort William-Port Arthur to Vancouver, arbitra- ries covering the eastern group of origin. For ex- ample, the following shows for three classes the class rates and the arbitraries from the Sydney group to Vancouver. PHASES OF RATES AND TARIFFS 179 Class 1 Class 2 Class 3 Cl.iss rate from Fort William 431 191 110 Arhitrary east of Fort William 197§ 86J 69 Under the rate increases allowed in September, 1920, a 40 per cent increase in freight rates was al- lowed east of Fort William and 35 per cent west thereof. After December 1, 1921, the respective percentages were reduced to 25 per cent and 20 per cent, and were as above given. As the rate is made on Fort William, the respective percentages apply on the component portions. That is to say, on the arbitrary east of Fort William the eastern percentage of increase applies, while on the class rate west of Fort William the western percent- age applies. 24. Differential lake-and-rail routes. — During lake navigation differential lake-and-rail routes are granted the Montreal-Toronto group to Vancouver. They are, including insurance : All rail ...... I. like and rail 1 2 3 4 .5 6 7 8 9 10 5701 4()5 HMh 2901 248 226 I'M l.Ui ... 154\ 545 A 445 350 Ji 280 i 242 221 UiH\ 149i ... 149 i DiflFerence 25 20 14 10 6 These rates apply not only to the coast but are also a maximum to intermediate points; the intermediate rates are scaled down. The lake-and-rail class rates from the initial group to Vancouver, and to inter- mediate points as well, are made by adding, in each case, to the lake-and-rail rate from the initial group to Port Arthur, the rail rate from Port Arthur to the 180 INLAND TRAFFIC point beyond. The rate is thus a combination giving the advantage of the water competition to points beyond. The local lake-and-rail rate from Toronto to Port Arthur is on a lower basis than from ^lontreal. The all-rail rates from Montreal and Toronto are on the same basis. The following tables set out the rates: From Montreal 1 2 3 4 5 6 7 8 9 10 All-rail . ino^ KJO 13H 9'>\ 79 (i(U ()()'. G5 05 Lake-and-rail . . . 125 i 1091 9J3 81 i «3 03 43 43 43 V roiii Toronta All-rail . 199', IGO 131 \ 9:,\ 79 6«J (,G\ 05 65 l,akf-an d-rail .... . lUi 9Jl 8U m 54 50 39i 39 i 39 The rates on the thru movement via lake-and-rail from Eastern to Western Canada beyond Port Ar- thur are the same from both Montreal and Toronto. 25. Commoditi/ traffic easthouml, important.— 1\\ the case of lake and rail rates from Fort William - Port Arthur to eastern Canada, the railways, in filing tariffs under the 1920 judgment, have in the case of grain and grain products retained the 5 cent differ- ential. On traffic eastbound from British Columbia to Eastern Canada, class rates are built on the same general system as for westbound traffic. Practicalh all the movement is on commodity tariffs. REVIEW Wliat now scales wert' adoptcfl as a result of the Westen Hate Case He«'isi<)n? What regulations SE3Ei 182 INLAND TRAFFIC 3 The tariffs given to distributing points are known as "town tariffs." The various points so treated may be either distributing or manufacturing centers. In effect, they may be regarded as rate-basing points. The town tariffs in Ontario and east to Montreal were readjusted by the order of the Board in the In- ternational Rate Case which was decided in 1907. 2. International Rate Case. — It had long been a source of complaint that the rates eastward to Mont- real exceeded those westward from Montreal. Ap- plication was made by the Toronto Board of Trade that this discrepancy be removed. It developed that in order to deal properly with the matter it was neces- sary to have a general rt^arrangement of the class rates between all points. Coupled with this complaint Mas a further complaint as to international rates on the ground that the rates from Detroit were lower than the rates from Windsor, just east across the river. It was recognized that the reduction of the rate from Windsor would necessitate the scaling down of rates to intermediate points. So the question of the com- plaint advanced by the Toronto Board of Trade as to Montreal rates westbound versus Toronto rates east- bt)und became interrelated with the complaint of thf Canadian ^Manufacturers' Association as to interna- tional rates. The traffic from the Detroit River was affected by both th^ Official and the Canadian Classification. It was impossible to harmonize these, as they are built up in a different manner. The existing first-class ."-^m. TARIFFS AND RATES 183 a rate was taken from Detroit and the rates from Cana- dian points eastward were scaled down accordingly. It was then directed that the rates from Canadian |)oints on the Detroit and St. Clair River frontier to all points east to the Atlantic and north to the Ottawa Uiver should in no case exceed the rates from Detroit and Port Huron. Directicm was given that the town tariffs, then in existence, be reduced so as to place them all on the same mileage scale. The scale directed to be adopted covered up to 5f)0 miles and is commonly known as Schedule A. It may be summarized as follows: (1) Up to 5 miles, 8 cents per 100 lbs. 1st class. (2) 6 to 20 miles, 2 cents increase for each 5-mile step (-'J) 21 to 80 miles, 2 cents increase for each lO-mile step (4) 81 to 110 miles, 2 cents increase for each 15-miIe step (o) 111 to 200 miles, 2 cents increase for each 20-niile step (6) 201 to 440 miles, 2 cents increase for each 30-milc step (T) 441 to 5()0 miles, 2 cents increase for each 40-mile step It was found necessary in making this rearrange- ment to re-group the existing rate points. The mile- age ovided for in the scale covered as far as Mont- real. Beyond ^Montreal to Quebec the thru rates from the territory between Win-100 and 111-120 miles of the scale. 4. Totcn tariff H in the East. — East of Montreal in the Proyince of Quehec and in New Hrunswick and Nova Scotia town tariffs also exist. These caniKit he expressed in terms of any general percentage <-!' the standard tariff. In the westward movement from eastern Canada ti the Northwest there is not only the all-rail movement, hut also the lake-and-rail movement, which is on a TARIFFS AND KATES ;s5 low basis to meet tlie lake eoinpetitioii. (JockIs may he carried all-rail or l)y lake-aiul-rail, or between eer- tain points by all-water. For example, prior to tlie rate increases of 1910 to 11)18, tlie all-rail rate, tilth class from London to Sault Ste. Marie was .'i.j cents. By lake-and-rail, it was 2.5 cents. In the movement hy water of independent water carriers, Sault Ste. Marie and Fort William were blanketed on bar iron and other iron and steel commodities with the rate of 17| cents. The railways met this competition by (juotin^ a lake-and-rail commodity-rate of 19| cents to the same points. While on the lake-and-rail movement thru rates ai*e worked out by the railways and their connecting water carriers, the independent boat lines — for example, the Inland IJnes, the Canadian Lake Line, and the Mer- chants' Mutual — do not make joint rates with the railways. They base on the same rates from Fort- William or Port Arthur as the lake-and-rail lines do on tiaffic beyond. While, of course, from Deceml)er to the end of April the lake route is closed, it is con- tended by the railways that its competitive effect is l)ervasive thruout the year. For goods can be and are shipped forward during the navigation season to the head of the Lakes, where they are warehoused and shipped out froiu time to time during the winte?-. 'y. Some objections overcome. — When distril)utini^ husiness developed in Winnipeg, Eastern Canada complained of competition. Take a point, say, 100 miles west of Winnipeg, and the situation arose that ^j-'VV." *ry 186 INLAND TRAFFIC the thru rate on a carload of groceries from Hamilton to this point would be less than the conibination of thi rate from Hamilton to Winni})eg, and the local out. As an outcome of much discussion and agitation, Winnipeg was given the "traders' tariff" arrange- ment. I'ndci this tariff, merchandise, when shipped ifito Winnipeg from an eastern point and warehoused, paid the balance of the thru rate from Wirmipeg on being shipped out. That is to say, to a point 100 miles l)eyond it would get the same rate trea*^!nent as if the shipment had moved direct from, say, Hamilton to a point 100 miles bey(md. There had, however, to be paid in connection with the stopo\er the cartage and handling charges. These averaged 8 cents per 100 pounds on the first four classes and 6 cents on the fifth class. Under this arrangement 95 per cent of the freight west-bound from Winnipeg moved on this tariff. Subsequently, Brandon, Regina and Calgar\ were given the same arrangement. In 1907, this tariff arrangement was found by the Board to be dis- criminatory, since it was limited to certain places, consignors and consignees. 6. Toxvn tariff si/Htem related to rate reductions. — The town tariff or distributing tariff system as it developed in the West is related to various reductions in rates which took j)lace from time to time. By the Crow's Nest Pass agreement of 1898, re- ductions were made by the Canadian Pacific in cois sideration of a subsidy. On the thirteen classes of merchandise mentioned in the legislation, reductions TARIFFS AND RATES 187 of 10 per cent were inude on ele\ eti classes, -JO per cent on coal oil and 33.^ per cent on «» reen and fresh fruits. The Act also called for a redact 'on of 3 cents per 100 Ihs. on ^rrain and Hour rates. As a result, the grain rate was reduced in Septeniher, 1899, to 14 cents on the haul from Winnipeg to Fort William. The agreement hetween the Manitoha government and the Canadian Northern has already heen referred to. As u result of the agreemeiil, the 1-t-cent rate on grain from Winnipeg to Port Arthur and Fort William became 10 cents, and reductions approximating 15 per cent of the tariff rates on all other freight were made. The Canadian Northern having made this reduction, it was met in Manitoba by the Canadian Pacific, the rates in general thus becoming 85 per cent of those hitherto existing. The Canadian Pacific, of its own volition, made a reducti(m of 7h per cent in the rates in Saskatchewan and Alberta. Scaling, as they do, 15 per cent off the standard so reduced, town tariff's in Manitoba were reduced to 70 per cent of the stand- ard and in Saskatchewan and Alberta to 77^ per cent. Under the 15 per cent case the grain and grain products rate to the head of the l^akes had been increased by 2 cents. Under the 25 per cent order there was allowed an increase similar to that allowed in the McAdoo order with a maximum increase of 6 cents over the rate existing prior to the 15 per cent uiorease. 7. Western Rates Case cause^ tariff" rearrange- ment. — By the judgment in the W^estern Rate Case, i wmm 188 INLAND TRAFFIC the following reanangtiiients of the town tariffs wen directed: (1) From rccogiii/id distrihuti • points in rrairic tir ritorv ^vst of Forf Williani to points within tin- xunie turn torv wo.-.t of Fort Williuni, tin tir>t-cla.ss rati-s >litill not Ix more than 85 j)i'r ciiit of t\ v tirst-dass rates in the I'rairii Standard tariff". (2) Fnmi recognized mainhind distributing centers in Hritish Columbia, other than Vancouver and New West minster, to mainland points in Pacific territory, all-rail or part rail and part inland waters, also from the said dis tributing centers to points in Prairie territory and ri< < versa, the first cla: s rates shall not be greater than the first class rates in the Pacific Standard rate less 15 per cent of the Prairie Standard. Thus, in the Prairie Provinces, the town tariff's are uniformly 15 per cent below the Standard rates. In the case of British Columbia, the percentages ot reductions vary. Subject to the effect of the Crow's Nest Pass agree- ment the 15 per cent increase applied to the town tariff rates. The 25 per cent increase also applied. 8. Tort'/? tariff points. — The following list sets out practically all the town tariff' points in Canada: Nova Scotia axu Nkw Bkixswick Woodstock, N. B. F'redericton, N. B. Campbellton, N. B Edmund^' \. B. QUEBF.C Montreal and its grouped St. Hyacmthe. terminals. St. Rosalie Junction. Halifax, N. S. St. .John, X. B. West St. John, N. B. St. Steuhen, N. li. ia«c-'^"» -i:«jnf TARIFFS AM) HATKS 189 l.Hchine. Doininiun. St. Johns. IlKrville. Aurora. Hurriv. Hilli'viUc. Hcrlin, Bow man villi'. t ollii jod. ( o -nHall. Dtpot Harl><>ur. Dt'scronto. Doon. Diindas. Elora. Fergus. Gait. (fHnanoque. Gui'lph. Hamilton. Ht'speler. Ingi'rsoll. Kingston. Lindsay. London. Moaford. Mrrritton. Mi.iland. Napanee. N«'Hniarket. Niagara Falls. N"ith Bay. Oriilia. Osliawa. Ottawa. Owen Sound. XV 0—14 Slit-rbrookf. Li'miiiwilK*. yufbtf. Ontario Brant ford. Bridgfhurg. Brock villi-. Cliatliam. Cobourg. Pfti-rboro. Pt'troliu. Port DalhoM^ I*ort Hoik Presc'ott. Preston. St. Catharines. St. Marjs. St. Tlioniii .. Sarnia. Stratfc Sudbur Sault Sti. Marl* Thorold. Toronto. Trenton. VValkerton. Waterloo. Welland. VVelland Junction Whitby. W^iarton. Windsor. Wingham. Woodstock. Port Arthur. Fort William. Westford. '■^•i.wik'VL' ~».s— -j»^a«3«(c;"*»''»'zi»»T":«»" 190 INLAND TKAFFIC Parry Sound. Paris. Winnipeg. St. Boniface. Regina. Moose .Jaw. Yorkton. Saskatoon. Calgary. Camrose Lethbridge. Fomie. C'ranbrook. Nelson. Rossland. Keiiora. Keewatin. Manitoha Hn 'ulon. Porhip' la Prairie, Saskatchkwax Battleford. North Battleford. Prince Albert. Wcyburn. Albkkta Stratheona. K- the Official Classification and the local rates bv the Canadian Classification. Consequently, on account of differences in the ratings, comparisons can only be made in the higher classes. The excess of the local over the import rates on the first six Hasses is as follows: 1 2 3 4 .5 6 15.5 10 14- 1 7.5 The railways contend that the import rate is dt- r»endent upon the conditions of traffic by way of tin various North American ports. The adoption of tlic Official Classification is an evidence of this. Tlic rates thru, say, New York, are affected by the amount of tonnage offering in Europe for New York and the greater density of traffic in the eastern states. New York, it is urged, is more favorably situated from the standpoint of attracting ocean tonnage than is Montreal. The rate fixed by way of New York TARIFFS AND RATES 195 will then, it is contended, fix the maximum which the sliipment entering by ^lontreal cannot exceed. On shipments to Ontario points, the access afforded by I'nited States lines sjjreads into Canada the effect of the United States import rates. The import rate being thus fixed, the railways further contend that, if on account of the lesser amount of ocean tonnage moving to Montreal, the ocean rate to that point is higher than to New York, then the Canadian railway participating in the im- {)ort traffic must either shrink its proportion of the inland rate or forego the business entirely. In other words, it is contended that it is not thru any desire to discriminate against the Canadian domestic movement that the lower import rate basis is given, but because it will not stand any higher rate. ■■ t'Tj REVIEW What do you understand by distributive rates? What is an- other term for such rates? What factors complicated the rate situation f;oni Montreal? What do you understand by a standard tariff? What situation in Canada corresponds to the long-and-short Iiaul difficulty in the United States? How was this situation Mttled? What has been the efJ'ect of special export and import rates Ml the United States on Canadian rates? . rawr-v! a as*' iri- liir CHAPTER XII INTERCHANGING TRAI TIC AND OTHER SERVIC KS 1. Transit arrange mentis, — In the tariffs are to he found arrangements which permit the raw material to be worked up in whole or in part before the rail- journey is completed. The Board has recognized in the case of sugar beets and of pulp wood, for example, that the railway may take into consideration in fixiim the rate basis inwards on crude material, that it carries out the finished outcome of this raw material. It may, therefore, adjust its rates on the basis of a con- tinuous service instead of the basis of two distinct services. The milling-in-transit privilege is probably Ww best known of these manufacturing-in-transit nr- rangenients. With the expansion of the r.iilway s\ ^ tem of the United States in the early seventies, tluK came readjustments in fiour milling. For example . a new milling industrj' began to develop in Wisconsin and Minnesota. Hitherto, the important flour milN had been located in the f2ast and in the Midtlle We-i. With chan*^ • in agricultural conditions, the estali- lished mill ! to look ^'.n-ther West for wheat. Tlic new western mills were m a position to obtain their grain locally, in the first instance, by wagon haul. INTERCHAXGING TRAFFIC 197 The railways competing for their husiness gave low- rates eastbound on the milled product. The rates were further held down by the proximity of these mills to the Lakes. At the same time the established mills farther East were apparently faced by a cost which, as compared with the costs of the western mills, would be pro- hibitive. For it appeared as if the eastern mills would have to stand the rate of the relatively long liaul on their wheat in and the full rate on the tiour out. To meet this condition, the railways developed the 1 ^-in-transit arrangement whereby the ship- ment of the wheat in and of the product out were treated as a continuous movement on one rate in- stead of two local movements on two local rates. This transit arrangement, which is mutually advan- tageous, since it enables the miller to draw upon wider areas for his supplies and insures the railway the outward movement, is now widespread. It is taken advantage of in western Canada and extensive use is made of it in eastern Canada. In the case of grain, flaxseed and grain products originating in the Xorthwest, destined to Fort William, Port Arthur and Westfort, and shipped to millers on tiie direct line of transit, the charge is the current local grain rate in. To take advantage of the transit arrangement, the milled product has to be ship])ed out in six months. If so shipped, it goes out on the balance of the thru MHiin mileage-rate from the point of origin to final 198 INLAND TRAFFIC destination, plus one cent per 100 pounds for terminal services at the milling point. A similar arrangement is made when the grain is shipped to elevators for cleaning or storage. In the adjustment of the rate, there is refunded to the ship- per the difference hetween the local rate in and tiie thru proportional rate for the inhound haul. It is not permissible to reship outwards one kind of grain or its product against an inward billing for an- other kind of grain. That is to say, wheat or its product may not be reshipped against inward billing for oats, or vice versa. Under grain products are included barley, clean- ings, breakfast foods or cereals (uncooked), bran, buckwheat, buckwheat flour, chopped feed, cornflour, cornmeal, flour (made from grain only ) , grits, groats, hnseed meal, malt, middlings, millfeed, oathulls, oat- meal, oilcake, oilmeal, peas (whole or split), rolled oats, rolled wheat, rye flour and meal, sweepings and screenings, shorts and wheatmeal. Malting is covered by the transit arrangement on the same general con- ditions subject to the further condition that the bal- ance of the thru rate will apply on the product out- ward only to the amount of 80 per cent of the weight of the barley covered by the inward billing. 2. Stop-over arrangementH. — A stop-over is al- lowed on rough lumber for dressing, re-sawing or sorting and reshipment. Here, while a similar rate arrangement is permitted, the stop-over is limited t(t thirty days. When re-sawing or dressing is per- W INTERCHANGING TRA7FIC i9r t'ornied, the outwards weiglit must not exceed the fol- lowing percentages of the weights shipped into stop- off point: 95 per cent when re-sawn in the rough: !)() per cent when dressed only; 85 per cent when re-sa\vji and dressed. 3. Tariffs recognhc principle of comignmcuta stopped in tranmt.—ln the tariffs will he found var- ious recognitions of the principle of treating the con- signment as a thru movement, altho it is stopped in transit for one purpc e or another, there heing some charge for such stop. The more important exam- ples may be mentioned. Apples may be shipped to storage and inspection points for subsequent reship- nient. Beans may be held for cleaning and reship- ment. Coal and coke may be reshipped in the same car if there is no breaking of bulk. Provision may l)e made for completion of carloads of hog-s, or for feeding in transit. 4. Changing destination in transit. — While the con- tract of carriage is in reality concerned with the movement between the points set out in the bill of lading, the railways arrange for changing destina- tion. This is of advantage because when the commod- ity goes forward it may not be known what is the l)est market for it; or when it is in transit, information as to a better market than that to which it was orig- inally consigned may be obtained. On payment of •Si per car for each change of destination in transit, the railway will, on request, attempt to change the destination. In addition, the difference between the 200 INLAND TUAFFIC rate as paid and tlie rate to the ultimate destination has to be paid. In the event of a ear bein^ hauled «)ut of tlie direet line from the shipping point to its ultimate destina- tion, a eharge of one eent per ton per mile, with a miiiinmm of twenty miles, will be made for extra haul. But in no case must the total eharges exceed the local rate to and from the point at which t' « change of destination is made, plus the charge for chmge of . In hoth of these eases. if there is an out-of-line haul, there is, in addition to the stoj)-off charge already mentioned, a charge of one cent per ton per mile, with a minimum of $a. Butter, cheese and eggs when shipped in less-than- carload quantities (in the case of cheese, 2,000 pounds or over) to cold storage points, for cold storage, branding or inspection and reshipment, have a special rate basis in. Such commodities when exported are given the advantage of the export rate from the origi- nal shipping point to the port of export, plus 2 cents per 100 pounds for stop-over. 0. Special rate rcfhtctions.—Ai times, the railways carry pedigreed stock at half rates. This is regarded by the railways as a matter of concession, not of right. The smaller roads when asked for such an arrauirc- inent, reply that their traffic will not warrant the reduction. Seed grain is carried at reduced rates. This con- cession is not, however, a continuous one. It is pub- lished from season to season, -is crop conditions seem to demand it. With a view to facilitatin£«- seLllement, the railways in the Xorthwest carry settlers' effects in carloads at reduced mileage rates. The Canadian Pacific re- 202 INLAND TRAFFIC strlcts this concession to settlement on its own lines. The Canadian Northern does not so limit the con- cession. 7. Cartage *r;T/ a^e rates arc (,m,to(! i„ th. tanH's Mini uwtl, the I{.,anl tUc iJoanI lias no jurisdietioii „ver tlu- C arta^o C om- I'anies |Kit'(,n„i„^r the service; and that the rates „,„„, ^vhieh they ,,ertoni. the serviec- for the railways are e-n<]c„t entirely upon eontraets (,ver the tenns of ulueh the i{„anl has no nmtrol. The siti.ation was that while the railway nn^ht, cf iis „wn v(,lit..,n « -ter into an arrangement with earta^e ecnpanies tor the perf„nnanee of the serviee on eertain terms the Board had no power under the Hailway Aet to ••rder it to make arrangements as to these eartaire ^-rviees with hodies over whieh it had no eontrol wh^t- ever. RKVIKW What is a milling-in-transit ratt-.^ Wl.v is it nmt.iallv .,k«n ta^eous to miller and railway? " """"«"> 'dvan- Oiscuss Cf>ncentrati«iii rates. What otiier special rate reductions Ho the railvvavs rnak,- » .rs eharg"* '"" ''''' '""'"''•" ''^*' "" *'"' ''"-^-" "^ « -^t- w CH/U^TKR XIII s IS- 1 PASSENGER TRAFFIC 1. Water and port competition in passenger traffic. —Passenger rates are not affected by competition of markets and only to a slight extent by competition of ports. While the development of facilities for for- eign travel by way of a particular port may attract passenger traffic by rail from one route to anotlier. this depends upon the preference of the passenger, not on mere cheapness of route. While to the ton of freight the cheapness of the rate is the thing, in the case of the passenger there enter in conditions of per- sonal comfort, scenic attractions of the route, and tin like, which may more than outweigh a lower rate af- forded by a shorter mileage to a particular port. Water competition and its ccmcomitants which, in certain phases, connect themselves with com])etition of ports, are also much less important here. The coni- pctititm of the Great Lakes attracts tourist tratlic-. But the business man who has to meet some business engagement seeks the most expeditious rail route' Low-grade bulky freight is attracted by water because the rate is more important than the time of transit. Within limits, the time of transit is more important to the business man than is the rate. •206 wr^smsm^^m^^^^imi .^^Mi-Z jKL ''WW PASSENGER TRAFFIC 207 In freight business, ocean e()iiii)etition connects it- self with port competition when a particuhir port may, hy attracting a hirger vohime of tramp tonnage, af- ford a cheap, slow and perhaps roundabout route for freight, lint here, again, on the ocean movement, time and directness of route are more important to the passenger. 2. Distance important /V/r/or.— Distance affects passenger rates nuich more directly than it does freight business. Ueference has been made to the extent to which circuitous routes :nay enter into tiie transportation of freight, liut in the movement of passenger business between Xew York and New Or- leans where the most roundabout route is .5.3 per cent longer than the most direct, normally passcfiger travel between these two points will seek, if not the'^shortest, at least the shorter routes. For if the longest route is taken, there will be such an addition of time to the journey that unless the rate is very much reduced the additional expenses of travel, meals, sleeper ac- commodation, etc., will more than take up the rate advantage, if any. Again, in the movement from the eastern states to San Francisco by a broken rail and water route by way of \^ancouver as compared with a direct all-rail route, the former may, on account of the ma,Tnificent scenery of the Canadian Kockies, at- tract the tourist, but the latter will attract the busi- ness man. 3. Ti?nc clement. — In passenger travel, the time element is much more important than the rate ele- W ^:^y^A Jliiw:,^^^ ti*^ 2()S INLAND TRAFFIC nient. But this must l)e incKlitied l)y the fact that it the time taken in transit is not too great, a slowei- and more circuitous route may within rather narrow limits compete with a more direct route. This is recognized in the transportation field he- tween Chicago and New York. The high-speed trains are excess-fare trains. Between Detroit and Buffalo, the Michigan Central has its high-speed excess-fan train, the "Detroiter." The Grand Trunk, hecausc of its longer line hetween Chicago and Xew York, formerly had a differential rate of $10 first class, as compared with the $18 rate of the Michigan Central and other standard lines. The excess-fare trains ar. run on the principle of a i)remium for higher speed. the premium Ir ' repaid if the time is not made During the p of the war when all non-es- sential services were eliminated, the Railroad xVdmiii- istration withdrew the excess-fare trains and aholished all differentials. The excess-fare trains have been restored hut not the differentials. The excess-fare train, on account of the limited numher of cars it c...i haul and the superior luxury it aff'ords its passengers, is more costly than the lowt i speed trahi. Possibly a railway may feel that it c;;!i in a way regard this ditt'erence as being properly chargeable to the advertising which such a servicr gives the railway. Hut the additional costs are n.-t limited to the train movement alone, 'i'he high spet IHJ-J l'as>.cnjr«T tlt-nsity !):i.()(iH H't.JM) ;i,ViH 7(),7,>l TiiJJS I rfi^tht density (JfJO.Oli H()<»,h:}J (i(»(),;J7:{ "(»;{.,«() 8U».ricultural staples depends on weather and climatic conditions. In passenger business, one bad year, hy its curtailment of income, att'ects business in succeeding years. I\Ieasured in trips per cai)ita. i. e., freijuency of travel, passenger business, whieli " U after the depression in the year 1908, took until 11)12 to recover. In the same period there was a steady increase of freinht traffic j)cr capita. On tlic other hand, as between 15)14 and 101. >, the decrease is much sharper in the case of freight traffic than in the case of passenger traffic. The war brou<.ht a de- crease wliich was especially marked in 191,3. From then until 1919 there was an upward trend in pas- sen*»er movement and a decrease until 1923. 10. Measurement of passenger traffie. — A measure of passcn«>er business is obtained by computing the frecjucncy of travel as measured in trips per capita and the average mileage traveled per capita. The _^-"i._^ ~-i^.i^,Ti^ 1*1! •: PASSK\(;i:i{ THAFFK ji; fm^'ht tnimc may he iiuaMiml in terms n\' toimnirc |)i'r c.Mpita.' I'.l^scntUT Year '''■■'''•. ^'"'"^ T..,„ p.r . ' !\ :*•'• II ..i ;•; ■*'"•■•' i^-i . ; '!•- »K'-' ii.i i ^' :«"" U.;J ' i '-^ :«:*:<•-? lo... ; - "" :»:»<> i:u '■ '" J.i U.>H.7 I I I 1.,.,, .'■ ■♦•"••' \i> ;-. .'" "'^•' '^•' ;; ?•; :«:«"•» 11.7 '■'-* '■" Mi.H r:M 11. DiffcirmrH in frci(/ht and passe nf/cr husincss. A striking (litt'erence exists between frei^rht .(iid passenger business, both in respeet to the load aiid the haul. 1919 !!).'() lOJi \i}>j |<,>.{ \vfrafr,. frt.jjrlit l,,,ii( in iiiiU's. , . . Ji» .>,-,() y,^ 'h(I 'ss ^^'''■"^''' t"nM>«T train t;u i.57 417 m .',()> \\«Ta;r»' pasM'iipcr haul in miles. Hi tin (;;i »i;{ (in VwrajTf pa.sMiijrfis on train .... 7(» (it .-,7 5'-, ;,h While railways have been able in the freight busi- ness to haul more ears behind an engine and get more into the ears, the eonditions are ditt'erent in passenger luisiness. For 192.*J. the freight reeei|)ts were IVM] per eent of the j)assenger reeei|)ts, and the freight train mileage was only 1.'}.'} per eent of the passenger ; n..- statistlos „f tlH- (l..partn..-.,t of Uailwavs a.ul ranaK fnrnish tlu- I . n..mlK.r .,f pa.sM.nf:.rs a„,l tlu- avn-a,.. ,,a.s..„,..r haul, as wHI as 'Ik total trn-ht tonnit;,-. lo (ret tlu' v.-ariv (.onul/.tion It - -i^s-nn.-.l "■'I lilt- rato of iMcrcaM- in thi- intcrnris.ij iMTio.l l<(Oi -|<)i | w,,s sDr.-id on ev.nly i„ each y.-ar an.l that this rat.- has since rontinue.i: ' The liiiiitations ot this method are moLrnized. t,'% '*♦!#' C. j5^^^. M: I? ir: iii' •JIH INLAND THAFFIC train mileage. 'Vhv earnings per freight train milt were $4. *.).>, wliile per passenger train mile they were $2.27. 12. Caparitf/ of cars. — The eeonomies of heavier loadirifr are not availahle in the passenger business. Altho the (Jreat Northern onee attempted in pas- senger business tlie principle of maximum loadin;; which it used in its freight business, it was foimd that the princij)le could not be aj)plie(l. With the f rt - (pient service which hi^ldy developed passenger busi- ness demands, the average loading per train is low. The standard first-class cars of the Canadian Pacitic seat 72. The .>8 passengers accommodated by tlu average train could be handled in one car, with spaci to spare. \Vhile the traveler may at times be sub- jected to overcrowding, on the avera<(e four-fifths of the seating capacity of a train is UFioccupied. Travel in Pullman and sleeping cars reduces tlit' average to some extent, the ordinary maximum carry- ing capacity of a slee|)in^ car beiti^ \wenty-seveii. However, it was testified in the Pullman Rates inves- tigation that, on the Canadian Pacific, one year witli another, there were not on the average more than tt ii berths occupied. While sleeping-car movement and parlor-car movt- meiit do hold down the average, the effect is not as <4-reat as might be anticipated. In a given year, only 2.01 per cent of the total number of passengers on the Canadian Xorthern were carried in slee[)ers. F<»i the same year, the Crrand Trunk carried 8.2.) per cciit passi:n(ji:h thaffic 31!) <'l" Its passcFi^rtr., in .sltcpiii;. cars and 1.1.5 per iviit III parlor cars. On the Canadian Pacific, the fi^ure^ was .l.J) per cent for sleeping-car l)usiness and \:2 per cent t'( r parlor-car business. To carry seven per tent of the total nuinher of passengers in rnllnians :ind parlor ears meant that the niilea^^e of these ears uas 20 per cent of tlie total passenger-car niilea^rc. This is due in part to such eijuipnient being used on longer hauls and in part to the lesser carrying capacity of each car. i;j. "Dead" ta/V////.— The lesser average loading in liasseiiger car business means increase in fare. In passenger business, competition in service has led to ;m increasing weight of car. This is especially notiee- iil.Ie in sleeping-car traffic. West of Wimiipeg. to .111(1 from Vancouver, there is a solid Pullman move- ment just as there is between Chicago and the Pacific coast of the United States. This has been charac- tcri/.ed by the carriage of additional weight, observa- tion cars, buffet cars, etc. The competition has been one in luxury and service, not in rate. The "Over- land Limited," between Chicago and San Francisco, lias in addition to observation car and club car the following services: barber and baths, valet, stenog- rapher, ladies' maid, telephone, electric ventilation, telegraphic news service, stock and market reports. It may be argued that a lesser competition in point of luxury would have been a better business poliev. 14. Increase in xceight and east of passenger cquip- iiii'ut. — The weight and cost of passenger cars has 220 ii ■jV I! 1 t: INLAND TRAFFIC increased. The standard passenger engine, for ex- ample, which, in 1000, weighed ahout 145 tons liad by 1910 increased to ahout 175 tons, at which figure it stands today. A thru train on the Grand Trunk between Mont- real and Toronto may be taken for comparative pur- poses. The train is composed as follows: engine, mail, baggage, express, second-class, first-class, diner, parlor and sleeper. The following summary com- pares the weight and cost : Year 1906 1911 1916 1924 Weight of rrain Lbs. 1,144,000 1,383,899 1,577,000 2,281,000 Cost of Train $ 108,173 128,801 175,379 689,705 The weight of the train has increased 99.4 per cent, while the cost has increased over 500 per cent. A similar comparison of a Canadian Pacific train in transcontinental service may be made. While there have been changes in ecjuipment, the compari- son between trains is valid. 11^ ?.i U Wt'ijilit of rrain Cost of Train Year I.hs. $ 1906 1,343,800 128,177 1911 1,557,300 161,295 1916 1,994,500 242,694 1924 1,719,000 640,500 The weight of the train increased 28 per cent, while the cost increased about 400 per cent. :]E^^iW^r- imwmmm. ^rm PASSENGER TRAFFIC 221 Taking the figures of 1 {)()(; as 100, the following comparisons of weight and costs are available : t-ar Weight Cost Weight Cost [^^^onkt 155 195 182 293 ^,r^.^ Ill ••• 139 r.i6 /"""«t 163 20fi 168 281 '^,'"^''' 105 119 109 125 ^''^^P^"- 112 ... 123 139 15. Relation between weight of vehicle and returns on cost.— T:he weight of the vehicle is an index of the work to be done in earning a return upon the cost. The large amount of dead weight which has to be hauled per passenger is noteworthy. The returns for 1923 show the average number of cars for all trains in passenger service as 4 and the average number of F)assengers per train as 58. How the cars were dis- tributed according to class does not appear. Assum- ing that all were first-class, the result would be that these cars hauled only 20 per cent of their passenger capacity. The average dead weight hauled per pas- senger traveling would be about 5 tons, while the cost of the vehicle per passenger was over $1,000. 16. Weight and cost measured in capaciti/.— The constant tendency to increase weight and cost may l)e measured in terms of the capacity of Canadian Pacific passenger rolling stock. The figures are based on physicaL not normal, capacity, the latter being much less. Subject to this caution, the comparisons are: XV c-lti h.- 222 INLAND TRAFFIC 190ti 1911 1916 Car w't. Car cost Car w't. Car cost Car w't. Car cost Type of per pass, per pass, per pass, per j)ass. per |)ass. per pass, cur H)s. $ ll>s. $ Hjs. $ Colonist -'303 160 -'750 250 33T7 383 First 138o IJJ i:W8 15-' 1916 -'08 Tourist -'5S-' -'-'-i *-86 465 +35." 635 Sleeper 4073 555 4592 555 5037 774 Compartment-^ ... 7111 114;i 7111 l-'O' Observation j 17. Occupaiicij of slecin..y cars. — In Gerinaiiy, calculating Vih passengers as weighing a ton, it has been computed that 93.75 per cent of the weight hauled is dead weight. Of course, passenger fares are not calculated on weight; but the computation is of some value as indicating where some of the cost of passenger business is to be found. While sleep- ing cars are supplied with both upper and lower berths, normally, the upper berths are in use only about one-fifth of the time. In the summer months, all the accommodation in a sleeping car may be taken up. At other seasons, there is often much empty space. Calculations made by the Canadian Pacific for certain winter months in 1910, showed for Janu- ary of that year, between Montreal and Toronto which is a heavy passenger run, 88 per cent of tlu' lowers and 29 per cent of the uppers were occupied westbound; while eastbound tlie percentages were 8<> per cent and 27 per cent respectively. For the month of March, between Toronto and Winnipeg, the per- centages of occupancy were renpcctively 20 per cent and 14 per cent. In the same month, between Mon- treal and Vancouver, the occupancy westbound was mmmmm ^^r^^mmtmm wm. PASSENGER TRA ^C Hfta 70 per cent and 34 per cent, while eastbound it was .)9 per cent and 14 per cent. 18. Passenger hauls kept dozen by suburban traffic. —The average passenger liaul is kept down by the amount of suburban tiatfic, while in freight business the average haul has tended to increase l)ecause of the long haul of staple products. At the same time the suburban traf.ic, which is normally handled on com- mutation rates based on assured frequency of travel has in recent years been subjected to competition from new methods of convevance. 11). Commutation business as part of railzcai/ earn- ings. — In establishing comnmtation rates the volume of movement is important. Canadian railways do not differentiate conmiutation business in their reports. The Boston and IMaine formerly differentiated its monthly ticket business in its reports. For the year ending June 30, IDKi, the railway earned .053 cents per passenger mile from comnmtation business as against 'J.OIO cents on local business and '2.248 on interline. That is to say the commutation business earned per passenger i)er mile only 32 per cent of the local passenger mile earning. The commutation l)usiness, however, represented 11 per cent of the total number of passengers carried. The commutation Itusiness affords a chance to apply the wholesale prin- ciple which is not available in other parts of the |)assenger business. The traffic moves in (juantity at definite times and conse(iuently the needs in point of rolling stock can be more readily forecasted. ri lil 1 1 \l I •' i 't' 224 INLAND TRAFFIC 20. Automobiles a feet passenger revenue. — The rapid development of automobile traffic in the East- ern States has, in recent years, affected railway pas- senger revenue. In Canada, there has also been a rapid development of automobile traffic. In Ontario, down to 1917, the number of motor-driven vehicles had doubled every two years since 1911. In 1920. there was one motor vehicle for every 10 persons. The following summary shows the number of automo- biles and the ratio to population Hati(>niot()rs to estimated population 1919 19-20 19;20, oneto even Ontario Vi9,-2m 177,561 16 Sasitatchewan 56,40i 60,3-'5 U Quebec ;}1,777 41,562 55 Alberta :W,000 38,015 U Manitoba :W,89« 3M55 16 British Columbia 31,450 28,000 18 Nova Scotia 10,0;W 13,450 49 New Brunswiclc 8,061 11,196 34 Prince Fdward Island . . 1.000 1,419 66 Yukon Territory 81 94 :}3(i,854 407,064 In 1924 there were 030,489 motor driven vehicles registered in Canada. While some part of the motor traffic is undoubtedly new traffic created by the new vehicle, some portion of it is short distance traffic that would otherwis( have moved by rail. While electric cars and motors undoubtedly hiiw an effect on short distance steam railway traffic, tlu extent to which this is effective, while it can be indi- cated, cannot be exactly measured. One index is tli* average journey. With increasing density of popu- PASSENGKR TRAFFIC 225 lation, it might be expected this would mean a consid- trahle increase in short distance traffic, thus bringing' down the average. The Grand Trunk, running tlirii the more densely settled section of Canada, where the vompetition spoken of is keener, may be taken as u measure. Here it is seen that the average varied but little in the period from 1912 to 1921 inclusive: 1012 1913 19U 1915 1916 49 51 49 i9n 49 1918 1919 1920 1921 48 48 41 21. Differences between freight and passeugir busineas. — In general, the difference between freight and passenger business is much the same as the differ- ence between carload and less-than-carload business. It is possible to handle freight in a wholesale way. Passenger business has, except in the case of excursion and similar traffic, to be handled in a retail way. REVIEW In what respects do freight rates and passenger rates difFer? What is the effect on passenger rates (a) of distance. (W of time, (c) of stations? Why is it easier to apply the theory of ecpial mih-age to passen- i;<'r rates than to freight rates? What arc the im}X)rtant eU'nients in rate-making for long-liaul l>;isiness? ■ '!< 5 I; -,: t S26 INLAND TRAFFIC I i i Do you believe that the passenger department of a railroad as- sists tlie freight department in gaming business? How does an eeonumic depression att'eet the passenger busi- ness ; Why is dead weight greater in pass-nger than in freight business ? Diseuss the eommutation business of the railways, and the in- fluences atl'ecting it. !i«KP wm CHAPTER XIV PASSENGER RATES 1. Passenger rates and the Raihcai/ Aet of Canada. —Passenger tariffs are classified as standard and special. Standard passenger tariff's may express the mileage they cover in the same way as in standard freight tariffs. Special tariffs specify the passenger tolls to be charger', when such tolls are lower than the standard. The re(juir':ments as to the approval of standard passenger tariffs are the same as in the case of standard freight tariffs. The re(iuirements in re- gard to the filing and coming into force of sj)eciid passenger tariffs are the same as in the case of special freight tariffs, except that the public notice is limited to three days. The Board is also given a wide discretion based on 'the exigencies of competition or otherwise" to deter- mine, notwithstanding the provisions of the statute, the time or manner within and according to which publication of any special tariff is to be made. The railways may grant free or reduced rates to the Dominion, any provincial or municipal government, fairs and exhibitions relative to transporting the exhibits, to charitable societies and the necessary 227 ■^ 'r' i^8 IxXLAND TRAFFIC agencies of such institutions in connection with the carriage of destitute or lioineless persons. In defining the services just set out, the word "traf- fic" is used in the Railway Act. This covers hoth passenger and freight business. Railways may issue mileage, excursion or conmiu- tation rates, and mav carry at reduced rates immi- grants or settlers and their effects as well as a member of any organized association of commercial travelers with his baggage. They may carry at free or reduced rates their own officers and employes, or their families, former employes of any railway, mem- bers of the provincial legislatures or of the press, members of the Interstate Commerce Commission of the United States, their officers and staff, with bag- gage and ecjuipment. The railways may also carr\ free or at reduced rates such additional persons as the Board may approve or permit. Kxchange of fret transportation between the principal officers of rail- ways is permitted in respect of the carriage of their officers and employes and their families, or their goods and effects. The statute also provides for the free transporta- tion as a matter of right of members of the Senate and House of Commons, the members of the Board and such officers and staff of the Board as it mav de- termine. 2. Standard rates In effect. — In 1907, the Board issued an order requiring the Canadian Pacific and the Grand Trunk to reduce their standard rat'^s east HP PASSENGKU RATES S29 of the Calgary and Edmonton Railway to a cents a mile. At the same time, the other railways were eir- culari/ed to see whether their condition would stand the reduction. Suhse(iuently, the Canadian North- ern, as it was then called, redui-ed its rates to the .'J cent basis. The rates west of the Calgary and Kd- inonton line remained at 4 cents. Before the order was issued, there were various standards on the different railways. On the Alhcrta Railway and Irrigation Company, the standard was :> cents. On the Algoma Central and on the Atlan- tic and Lake Superior, it was 4 cents. On the Grand Trunk (with the exception of the line from St. Lam- l)crt Junction to Rouse's Point, a distance of 44 miles, on which the rate was 4 cents) the standard was 'Ma cents. On the Canadian Pacific in Manitoba, the rate was 3 cents; while in Saskatchewan and ^Mberta it was 3/{' cents. A similar condition existed on the Canadian Northern lines in the West. On various sections of its lines east of the Great Lakes, the Ca- nadian Pacific had rates of 3, 3Mi, and 3!l' cents. The general standard rate in British Columbia is 4 cents. Prior to 1001, it was ."i cents. The matter of the reduction of the 4 cent standard was one of the (|ucsti()ns at issue in the Western Rates Case. The Roard then found that the operating expenses per mile of line on tlie British Columbia division were 22 j)er cent hig-ic?* tl.an the average for the entire Ca- nadian Paciic per mile of line, and u])wards of 30 per cent higher than the average on the Prairie di- 230 INLAND TRAFFIC visions. The operating expenses per train mile were found to be 54 per eent higher on the Hritisli Colum- bia division than for the entire line, and 47 per eent higher than on the Prairie divisions. Previous to the Judgment in the rate applieatioii. effeetive September Vi, 1920, rates were on a ihree- eent standard in the territory east of the Calgary and Edmonton Line. Certain exeeptions to the stand- ard were made as follows: Algoma Central, Algoinii Eastern, Quebec Oriental, Atlantic Quebec and Western, 4 cents; Pas Division of Canadian North- ern, 3^; Temiscouata, New Brunswick and Prince Edward Island, Dominion Atlantic, 3;\ cents. These exceptions have a mileage of 1,010 miles. On the government railways the standard was 3 cents except in New Brunswick where it was 3?, cents. In the West the British Columbia Eastern had a rate of cents. The White Pass and Yukon route, in British Columbia and the Yukon, had under ex- ceptional circumstances, a rate of 18 cents per mile while the Klondike Mines, a short railway in tlie Yukon, had a rate of 15 cents to 20 cents a mile. The order in the Fifteen Per Cent Case permitttd standards to be increased by 15 per cent, except in British Columbia. Effective September 13, 11)20 standard passenger rates were increased 20 per cent. subject to a maximum of 4 cents per mile. On July 1, 1921 rates were reduced 10 per cent in both east- ern and western territory. 3. Different kinds of passenger tickets. — The dif- 'ASSENGKR KATKS 231 ferent kinds of tickets in use on the Canadian Pacific may be taken as typical. Mileage tickets in books of coupons covering 1,()()() miles are issued east of Port Arthur. To he used on a train the coupons nuist first be exchanged for reg- uhir transportation. A ticket will not Iw honored if lost. On a first-class one-way ticket over more than one line, the company acts as agent and assumes no responsibility beyond its own lines. No stop-over is permitted, uidess especially provided for. An emi- grant ticket is good only for five days from date of issue and for continuous passage. No stop-over is allowed. Conductor's tickets are issued on the train at a charge of ten cents over regular fare, but the tickets are redeemable. Arrangements are also made to sell regular transportation on the train in the case '>\' passengers getting on at flag, or non-agency, stations. The second-class ticket has the same gen- eral limitations as the first-class. Cominutatioii tickets are issued in: 10-trip tickets, good for continuous l)assage only, with no stop-over; scholars' 4(5-trip tickets, good only for continuous trip with no stop- over, not good after date of expiration even if a j)or- tion is unused, and if lost, a duplicate will not })e issued; .55-trip tickets with same conditions. In con- nection with commutation tickets, marketing stamjis are issued. These may be used by suburban holders ol .)5-trip tickets. They provide for free transporta- tion of 2,5 pounds of marketing in the baggage car on one day. 3Iarketing is defined as being perishable IB lip iiiiL...^/i Tlli J^ SB» IN I AM) THAFFIC I 't' [.^ table f(HuI supplies. The tiekets used between Xelsoii and Kooteiuiy Lauding, on tiie boat, liave in addition to tlie usual eonditions on first-elass tickets, the eondi tion th ;c it' the vessel's legal earrying capacity is all taken when the ticket is presented, then the company^ habihty is limited to the redemption of the uiUL.cd portion of the ticket. In the case of excursion tickets over two or more lines, such as the nine months' round trip to Pacific coast points, in connection with which a series ot options as to routes is permitted, provision is made f<»i identification of the passenger. There is also a pr«>- vision that the return portion of the ticket will not be good for passage unless validated by the agent desig- nated for this purpose. Traveling on non-passenger cars is permitted in cases of emergency and on special permission from tli* superintendent of the division, or any higher otlicial. A release from liability hi:s to be given. First-class fare is charged. 4. Provisions for unused tickets. — On all ti tickets issued there is the general condition that thc\ are not transferable. The contract is a person.il one. between the railway and the passenger. The salt of an unused portion of a ticket is in Canada, undi i R. S. C, 188(5, Chap. 110. s. s. 7 and 8, a Lrimin:il offense. The railways make provision whereby a wholly unused ticket will be refunded when presenttai(I for the tieket, l« >s the oiu-u.iy tare. When wiiolly unused or uinised ntiin, portions of round- trip tickets are presented for ndemption, more than sixty days aft<>r the (hite of expiration, the matter of redemption has to he taken up with the general pas- senger agctjt. r>. UrU's for ha(/(/af/c.—'V\\c ha^^a^a' rules i)r<.vide that 1.50 pounds of haggage, not exceedififr $100 i„ value, will he cheeked without ehar^rc for each aciult passenger, and 75 pounds, not exceeding .%j() value, for each child traveling on a half tieket. «. Bdf/f/nf/c (Ic fined— \V hut is covered hy haggage has been Mie subject of judicial construction'; and indication has, for example, been given that personal l)aggage is limited to clothing and such articles as a traveler usually carries with him for his personal con- venience. Disney, in 'The I -aw of Carriage by Rail- way," defines baggage, in a summary way, as includ- ing what a passenger takes with hini for ! is personal use and convenience, according to the habits and class "f life to which he belongs. 7. Uaihauf's liahilit// for ha f/f/af/c— The liability of the railway in respect to the carriage of baggagv s limited to a liability during the time of carriagt^ and ;i reasonable time thereafter for delivery. The trans- portation of u passengciV l)aggage is an incident of the passenger's jour h, !,» .,11 f^,^ j^ ^ reasonable time aft -jc <, =- «,. .k )vasonai)le time, jv uabilitv as insurer S34 INLAND TRAFFIC ceases and becomes that of warehouseman or bailee. Whether the company's hability will be that of ware- houseman will depend on whether it is entitled to charge storage or not. The regulation in this respect, as revised by the Board, is "After the expiration of twenty-four hours from the receipt of such baggage or articles in storage, the carrier shall be liable as a warehouseman only." 8. Storage charges. — When baggage is uncalled for after a certain time, storage charges are imposed. The railways state that the charge is not imposed with a view to making a profit, but as a deterrent. Their facilities are too expensive to justify their engagin<; for profit in the warehousing of baggage at the rates charged. At first, storage charges were on inbound baggage only: but it was found that outbound bag- gage was at times left for a considerable period; so storage charges were made to apply in both directions. After the lapse of twenty-four hours free time, storage is charged on ])aggage remaining at station^ or wharves. Twenty-five cents is charged for the see- ond day of twenty-four hours or portion thereof, in- cluding the preceding day. For each additional day. or portion thereof, including preceding days, there is an added charge of 10 cents until with the ninth day a charge of 9.5 cents is reached. For the tenth dav and to the end of the month the charge is $1. For subsequent periods, the maxinmm charge is $1 per month. 9. Initial carrier liable for baggage. — In the re- PASSKNGKR RATES 235 vision of the baggage rules in 1915, the provision was added that where baggage moves over two or more lines, subject to the jurisdiction of the Board, tiie checking carrier is liable for the loss or (himage (hie to a connecting carrier and shall have its recourse against each connecting carrier. This enables the passenger to deal with the initial checking carrier, in- stead of trying to ascertain who is responsible and then following the matter up. 10. Baggage handled in Toronto.— A special study made in connection with the plans of the new Unioli Station in Toronto showed that in one year there were on the average 4,400 pieces of baggage handled per day. One-quarter of this total was made up of hand baggage. A check of traffic taken for one day, showed approximately one in every eight passengers had baggage checked. In the period 1900-1912, the pieces of baggage handled at Toronto increased 93 per cent. 11. Parcels checked at Toronto.— Vnrcel checking is one feature of the activity of the modern passenger station. At Toronio, there are 1,000 parcels checked per day. 12. Baggage carried bi/ raihcat/s-.— The returns do not show what amount of baggage is carried. If it is assumed that the average, as shown at Toronto, applies generally, then taking heavy baggage as averaging 100 pounds per piece, the railways carried in 1915 at least 240,000 tons of baggage. In various countries, a considerable revenue is o!)tained from baggage carried. .lb 2^6 INLAND TRAFFIC 13. Sleeping-car service. — The sleeping-car ser\- ice, which is now regarded as one of the necessary comforts of long-distance traveling, has been con- nected with Canadian railway travel since Confedera- tion. The first Pullman car, the "President," was put into operation on the Great Western Railway in 1867. It was a combination sleeper and kitchen witli portable tables. When the Pullman Company oper- ates the service under contract, as on the Grand Trunk, the arrangement is that if less than a sum set out in the contract is earned per car per annum, the railway pays mileage. When this guaranteed sum is reached no mileage has to be paid. When a certain fixed sum is exceeded then the railway receives one- half of the excess. In the case of the Canadian Pa- cific, the Great Northern, the Canadian Northern, and the Grand Trunk Pacific, the sleeping cars air operated by the railways themselves. The rate basis of sleeping-car tariffs is, east of Cal- gary, 7.2 mills per mile, with 20 per cent off on upper berths. West of Calgary the basis is 9.6 mills per mile. with the same reduction for upper berths. The par lor car rates are based on a charge of 5 mills per mile east of Calgary, and two-thirds of one cent per mile west thereof. Effective September 13th, 1920, under the judgment in the General Rate Application, tiie basis was increased by 50 per cent and December 1. 1921 this increase was reduced to 25 per cent. 14. Classified passenger rates. — While the matter of ability to pay is recognized in passenger rates, il iy ■:mrrsm?'\!jiiHaJt^'w.'-^9ssa^ri^!:^.i'f^yi-ers m the lumber industry. These -.aes wcit also used in connection with colonization. While ti'ev were used on the original (irand Trunk line and were later met by the Canarlian I'acific in com- petition, they are not in general use in c:.stem Canada Second-class rates from eastern to western Canada |vere also put in to aid colonization and settlement it .s contended by the railways that the need for the i.- f$ 1 'm ,\ii l| \\ m Hi it: H>»-.3ifi.iuii mk 238 INLAND TRAFFIC second-class rates for this purpose has passed, as there is not any considerable movement of colonists from eastern to western Canada. Most of the movt- ment, it is stated, is of immigrants from either Eurojjt or the United States who move on special fares, in many cases lower tlian second-class. Second-class rates are in force from practically all points in eastern to all points in western Canada. As an example of the relation of the rates, the first-class limited ticket from Ottawa to Calgary is $72.40; while the second- class is $67.40. In general, from points intermediate to Winnipeg and Vancouver. *'iere are no second-class rates east of Winnipeg. Formerly there was ;i blanket seccmd-class fare from Vancouver to Winni- peg to meet American competition. This has been c; Mceled. In general, the railways take the position that second-class rates are an unnecessary survival. So far as Canada and the Ignited States are con- cerned, it may be said that in reality the Pullman i> the first-class and the standard first-class car tlit second-class. 1.3. PaHsciicfcr classes in Europe. — In Europe, tlie ])ractice of having three classes and even foin- j)r( - vails. The following tabular sununary as to the j)er- centage of passengers by classes in various countrits is of interest:' 12 3 4 Militin Austria O.t 5.8 92.7 ... M Francf 4.0 19.0 77.0 G.-rmanv n.l 7.4 42.:? 49,0 !..' 1 Tlif comparisons jrivon are on a pre-war liasis. I FFT*r>*aRT .Fitrrit -\w.': "TS^T^SS'. ri«v. ^T' ■8R PASSENGER KATES 239 I -' :t i Military India ()..» 0.7 ;.>.7 Kjm .lai>flll ().:J l.i )).-,.;{ Liiited Kingdom j.7 ;{.!) yd.t In the case of passenger business, as in the ease of freight business, it is praetieally impossible to make any comparisons of vahie between conditions abroad and conditions on tliis continent. Tliere is hiek of a conmion detiominator. IG. Clam' rates in forcifjn countries. — In the mat- ter of rates, the low averages of various foreign countries are due to a type of travel, third-class or even fourth-class, which is not found on this coiiti- iient. Examination of the first-class rates will indi- cate that they average higher than the corresponding rate on this continent. Average receipts i)er pas- senger, per mile, are set out in the following table with also a class differentiation for France and (iermanv: AvtTiifrf fit re in (viits Allchivses I 2 ^ i .Military Austria 1.(17!) .... I'rantr l.()()H 2A2.i \:.{T.i .S!)l ,,] ^''^'lany JHW J.mn l.,i70 .!»sl .7()!» .:{S7 India tl J •litpfin (iS;} " [ I'nited Kinfrdom .. 1.,j1 t'inada J.02] L iiited Statf.s J.OI.i .... \7. .Ivcragc hauls in forcic/n countries. — AVhere the average haul is short, it is apparent that a lower standard of comfort or convenience is re(|uired in con- nection with the accommodation supplied. There ! ( u;r.^a!!F^ 5»40 INLAND TRAFFIC was :i time in England when tliird-class traffic moved in open cars, the passeng'ers being seated on their bag- gage. In Germany, the fourth-chiss traffic is sub- jected to a degree of discomfort whose ordy paUiativt is its economy. The following table of average hauls is of interest : A vera};*' all flasso^ 1234 Militan AiiNtrii 1( l-'ranc. .'I 10 22 20 (HTiiiam U 100 18 1;{ l.» .jl India X't I'liitt'd Kingdom K Canada '.I I iiited States 39 While with lower standards of comfort and lower earning power, money is more highly estimated than personal comfort, still from the standpoint of personal sacrifice it is true that the native of India in paying tive-tenths of a cent per mile is making a heavier pro- portionate deduction from his income than the avei - age passenger in Canada or the United States who l)ays a fraction over three cents. 18. Pas'.scnc/crs per train /» forcic/n count ricH.- Wliether traffic will move in third or even in fourtli- class accommodation in a particular country depends on the length of the journey, the services and con- veniences demanded, and. above all, on the generjil standard of economic well-being. Reference has been made to the large amount of dead weight hauled jxr pas.senger in Canada. As indicative of the greater utilization of space, the number of passengers per train as set out in the following table is of interest: ^vr-.BHiM'S ".^SIJJl-X '7Sf^.#ia«« 4Cii|.ES!L&lL.'aL''» •Ai!f. *L,A ^V tMi^ ZA'&'VjC-.^t.X&fLr^ PASSK\(ii:il KATKS 241 Austria 73 India Franc( ro ( anada 18J3 (ii'niiaiiy Hi Tnitcd Stato 47 19. Zone tariff st/,st cm. —As a iiicims of mluctioii of passenger rates, the "zone" tariff* system of limi- tary, >vliieh was adopted in 1881), was hailed 011 its iiitrochietioii as a revolutionary ehan^e. As a mat- ter of origin, it may he said tliat a New Zealander, Samuel V'aile, claims that this idea was first developed m his "stage" system of rate-making in 1882, and from it adopted in Hungary. The Z(.jie system was worked out on the hasis of fourteen zones which increased in size as the distance from Budapest increased. Within each zone there was a Hat rate. In i-eality, instead of computing rates on a mileage basis, the zone or fixed numher of miles was taken as the unit. The idea was to develop longer distance traveling. To the extent that it was su.'cessful in this, the siorter hauls were helping to pay for the longer hauls. The difficulties which have arisen as to journeys between points in two zones, such points heing located near the boundary of the two zones, have lieen such that various modifications have been intro- duced so that it ;)W 1 iffers but little from the ordi- nary distance basi.. The zone system is used in connecticni with street railway traffic in the Ignited Kingdom as distin- guished from the flat-rate system lor the total dis- t.mce which has been used in Canada and in the I'nited States. In England, the Great Central juMki 24s: INLAND TRAFFIC adopted in steam-railway travel, in 1907, the zone system in the Manchester and Sliettield district. But the situation here was different from that in Hun- gary, for here the adoj)ti()n of the zone system was concerned with short (hstance traffic which had to meet electric railway competition. 20. Methods used in Europcuii passenger rates. — The methods of huilding passenger rates adopted on the Continent of Europe are, in general, of three kinds: the strict distance tariff, for example, in Ger- many, ',\hen the fare is so many pfennigs for each class for each kilometer traveled; the tapering tariff, as in Italy, under which the charge per kilometer de- creases as the distance increases; the zone system, a tapering tariff under which the rates are the same to all stations within a particular zone, radically decreas- ing to the stations in the next zone. In Germany, the situation may be summarized by saying that the pas- senger pjiys, first, the ticket rate; second, an extra charge for the use of an express train; third, a ticket tax: fourth, a fee for registering any baggage whicli is not carried bv hand. UK VIEW Wliat is the dittV'rciioe between standard and special pa>>- seng'T tariff's? Wliat special tariff's may the railways niake' Describe the ticket regulations of tlie Canadian Pacific Rail- Way ? What does baggage include? What is the liability of tin- carrier with regard to it? Under what conditions is sleeping-car service furnished? Discuss passenger classification in eastern and western Can- ada. CIIAl'TKU XV coNTK.UT or cahhia(;k iTi 1. Common laze ohlKjatiom of the ruihcai/s. — Tlie cominoii law which apphed to the earlier, simpler forms of carriage has heeri made applicable, except in so far as it has been modified by statute, to the rail- way which is today the most striking example of the common carrier. Hutchinson, in his work on "Carriers," has defined a common carrier as follows: A common carrior or public carrier i- one who under- takes as a business, for hire or reward, to carry from one I)hicc to another the goods of all persons who may applv for such carriage, provided the goods are of the kind wiiich lie professes to carry and the person so aj)plving will agree to have them carried upon the lawful terms' prescribed bv the carrier; and who if he refuses such gojxis for those who are willing to comply with his terms Incomes liable to nn action by the aggrieved party for such refusal. It was decided, as early as 1700, that the common carrier was liable, as an insurer, for all goods which he undertook to carry. In general, the position of tlie common carrier at common law may be summarized jis follows: He was liable as an insurer of the goods, except in cases arising from — 243 avi INLAND TRAFFIC (a) An act of (iod. (b) An act of the Kind's enemies. (c) An act of public authority (e. ^., (luurantine). (d) An act of the shipper. (e) Inlierent vice or defect in the «;()od.s. iVll these exceptions liave been the subject of ju- (hcial definition, items a, I), d and e are, however, subject to the condition that tlie ne^hgence of the carrier did not concur therein. Xeghgence is in hnv the omitting to do something that a reasonable person would do, or doirjg something that a reasonal)le per- son would not do. While carriers are insurers as to freight, in the case of passetjgers they are liable only for negligence. iVt common law, as soon as goods were delivered to the carrier, he had the risk of safe custody as well as the duty of carrying as directed. His liability did not rest on contract. However, it was in time estab- lished that, in consideration of a reduced rate, Ik might limit the common law liability by special con- tract, providing such contract was not: (a) contrarv to an express provision of law; (b) contrary to pub- lic policy; (c) unjust or unreasonable. When the contract of carriage of the carrier was terminated and the goods remained in the possession of the carrier as a warehouseman, he was no longer liable as an insurer, his liability for loss or damage being dependent on some negligence on his part beiiiy shown. Before the days of railways, it was estal)- lished that while carriers of goods were insurers, CONTHACT OF CARHIAr,i: nry carrit'i's of passtii^ers weir linlilc only f'oi* ru;»li^t'iK'f in tlu' |K*rf()niia?u'c of their eoiitraets. •J. ///// of laditif/ and it.s fondititnis. - As an iiiei- (Iriit of the neeessary eontraetiial relations of the shipper and the railway, there eanie into exisleiiee a hill of lading- settin«»' out the eonditions of earria^e and the liahilitv of the railway thereunder. The Railway iVet of Canada provides that no eon- traet, eondition or hy-law, re<»ulation, deelaration or notiee limiting' the liahility of a railway in ''espeet of the earria^e of any tratfie is to he valid uidess ap- proved hy the Hoard, any natural shrinkage or discrep- ancies in elevator weights, a hen such elevators are not operated hy the carrier, nnlf-.s the weiufhts are evi- denced hy government certificattM tior for any los^ damage or delay due to th( auiliority of law or ol •• implied, extending the liability. In the Kng- u rule, the position was different. When the carrier accepted for a thru movement to a point off its own line on the line of a connecting carrier, the first or rontracting carrier became liable no matter by whom the goods nnght be lost: it became exclusively respon- sible and it alone could be used by the aggrieved person. Any attempt to hold the subsequent or con- necting carrier liable for this loss, altho it might have happened from its negligence or fault, would fail be- pmm iri. i«.t ~ MS INLAND TRAFFIC cause of the want of privity or eontraet between siuli carrier and the injured party. It was, of eoursr. open to the carrier to safeation by contract so that it acted only as the agent of the shipper in re- spect of the movement off its own line, it was naturally a difficult matter for the shipper to localize the cans* oi loss and determine against whom action shouhl h* brought. 4. Insurance. — When any pers(m is reimbursed on account of loss or damage, the carrier may have tlu advantage of the insurance in effect upon such goods, subject to its reimbursing the perscm so assured for the premium paid. .5. lAahiUty us a tcarchouscman. — The railway is not liable, except as a warehouseman — in which c.i- pacity it is answerable for waiit of reasonable care for loss, damage or reasonable storage char<>cs: or the goods may be re- moved to a ])ublic or licensed warehouse and thcrt held at the owner's cost and risk until he sees fit to remove them. vm^^m COXTHACT OF CAKHIAGK 2IJ) (J. W archoiiHC defined. — 'Warehoiisc or shed fVt'i^lit" refers to less-tliaii-carload traHk- usually liaiulled in the warehouses of the eonipanv, iiu-ludintr re«.ular freight sheds and auxiliary warehouses owned and operated by it, but not warehouses whieh, tho erected on the lands of the company are not owned or operated by it, nor wareb.ouses uv other buildings the property of the company, but leased to other parties. The commodities so defined are, after free time, held in the company's warehouse at owner's risk of loss or damage, e.\ee|)t loss or damage from fire, uidess caused l)y invasion, insurrection, riot, civil com- motion, militarv or usurped nower. > I A 1. Storage and demurraye (7/r//Y/c.v. -Carload freight received in cars and subseejuently unloaded (HI the prenn'ses of the company is subject to demur- rage rules while in cais, and to storage charges aftei- lieing uidoaded. Tnder the former bill, the responsi- liility of the railway ceased when the goods were |)lace(l in the company's sheds or wareln)uses at desti- nation, and storage charges ran from twenty-four liours after arrival. H. Lo.v.v or dnnifif/e. — Loss or damage is <*omputed on tlie basis of the value of the goods at the place and time of shipment, |)lus freiglit and duty, if any. j)aid, uidess a lower value has been declared, in whk'h ease the lower value governs, even if the loss or • lamage is due to negligence. Xotice must be given, in writing, to the railway either at the point of origi-' ora^ the point of delivery. ' ' m'^ 250 INLAND TRAFFIC within four months after the (lehver\ of the goods: in case of faihn-e to make dehvery, notice must l)e «^iveii within four months after a reasonahle time fi»r (leU\ - ery has ehipsed. Uni' / the old l)dl, chiims for dam- ages or \os liad to l)e presented at the nearest phur of dehverv within thirtv-six hours after dehverv of tlie goods. 9. Pat/mcnt of charges. — The owner or consigns may pay freight either hefore or after dehverv. Under the old hiJl, the charges had to he paid hefor( (iehvery. While tiie railway may, in practice, give ;i jjeriod of credit for the settlement of such charges it is not under legal ohiigation to do sc. The Railway i\ct provides that on refusal to pay tolls they may he recovered in any court of competcii^ jurisdiction. Instead of hringing action, the railway mav seize the "oods and hold them at the risk i)f tli( owner as security ff)r the payment of the chargc>. If the tolls are not paid within six weeks, the railway, after advertisement, sells the goods, reimhursing itseli out of the proceeds. If the goods reniain in the pos- session of the railway unclaimed for six months, it may, after public notice, sell the gcKxls, reiml)ursiim itself out of the proceeds. If the halafice remains un- claimed after three months, it is to he deposited with the Minister of Finance for the public use. 10. Farms of the hill of /r/r////ills of hi(hn«4 the strai<,dit and the order hill. The papers concerned with the strai<^ht hill are printed <»n white paper; the order hill IS printed on yellow paper, while the shippinii order :ii!d niemorandiini are printed tructed to hoM the document until the draft is paid. Tlie net amount of the draft ^oes at once to the credit of the dealer's acrount. Then the hank owns the draft. Jt forwards the draft and hill of ladino- to loronto. The Toronto firm must j)ay the draft in onler to oet possession of the hill of lading-, which is it^ title to the <4rain. The hulk orain liill j^ an "order" hill w jth the same i4<'neral terms as have heen summarized above. In 1004., a uniform bill of lading was adopted in 252 INLAND TRAFFIC the United States. Application was made to the Board to approve t)t' this l)ill in the ease of shipment n i'rom any point in tlie United States into Canaihi and in the transit trade thru C'anachi. In makiuii this appheation, the railways set out that it was desired to settle the (piestion of the lev loci contractus on shipments from different states into Canada, the law not heing the same in these different states. Then - fore, as it was phrased, the recpiest was made for tlu Board's protection hy way of approval so far as Ca- nadian transit was concerned. The approval was granted in IIHO. Two special forms to he noted are the special con- tract on silver and other valuahle ores, in which tlu railway limits its liahility to $.)()() per net ton, and the household goods "release" in which a lower rate is given on a released valuation of $5 for any y>uv piece or package. Both in English and Canadian law. it has been recognized that the carrier may, hy contract, exempt itself from liahility for negligence: such exemption has, however, to he put in express and unamhiguon^ terms. There are a number of contracts dealing with liahility in respect to particular comniodities oi- serv- ices. The livestock co!itract is at present heinu worked over by a special committee of shij)pers and railway representatives. Men in charge of property other than livestock are recpiired to sign a release from claims for injury, whether causetl by negligeiu ( or not. The potato contract of the Vermont Central mm 1 CONTKACT OF CAPRIAGE iioH contains an exemption Iron: ne«rlinence. The same provision oeem.s in the ^reneral release forms of the Michigan Central and the Xiaoara, St. Catharines, and I'oronto Hailways. It is also to he found in the contracts of the Michi^r-m Central and the Toronto, Ilannlton and Buffalo in the ease of animals carried in hag>ra^re cars. In the ease of cirt-us contracts, a nuniher of Canadian railways recite that they act neither as common nor as special carriers, hut sim})ly as hirers of ecjuipment and train crews for the circus ill respect of the transport of its outfit, and that the latter assumes all risks, inclu(lin«r ne^lioence. 11. Due (liligemr.—Vnkss arranged under special contract, the railway is not hound to transport ^^ninh hy a particular train or vessel, or in time for a'' par- ticular market. Its ohlio-ation is to use 'clue dili- .iXcnce." Due diligence in law means everything reas- onahle, not everything possihie. The ipiestion of what is reasonahle time for delivery is one of fact for the jury, and it has heen decided that no deHnite rules can he stated as to what will and what will not constitute nnrcasonahle delay, as this nmst depend on the circumstances of each case. RKvrr.w Wliat are tlif ooimiinn law nlilipitions of (arrirrs: Wliat is a hill of ladin-j;? Tiivr the limitations of a railway's hahilitv. What is the fxt.-nt of a railway s liahilitv as a war.hoi man .■' ls«'- What are the forms of a hill of ladinii- What i^ the dif- f'Tence hetwern a straiyht hill and an order hilP XV c— 18 I IPi im ' -i'-.i . — »=^ CHAPTKK XVI MoviN(; THK THAI ric 1. Actual car movements. -The shipper is inter- t'stt'd in ohtaiiiiii^ a prompt supply of cars with prompt iiiovcmeiit in transit. The railway is inter- ested in ohtainin^ the greatest possihle effieieney, sinee it is its ears whieh are its money eolleetors. Hut wliile it mi^ht appear that there shouhl he no dittieulty in ohtainin^ an ide.nl eomhination of interests, never- theless there are diffieulties in praetiee. Expedited movements, e. ^., livestoek, time freights and various other eireumstanees and eonditions interfere with the hahujee of miitnal satisfaetion. An ordinary frei<^ht ear while in motion on the road may he reekoned to move at 10 miles per hour. How far the |)erformance falls short of the possihle move- ment may he gathered from the following summary settin*^ out the avera«(e numher of miles traveled hy a freight ear in a day: i<)i I- JC.fl idifi i)»i; -•;.:{ I!)|S 1<»|<) .n.i :i.: ifi.'d lit.'i lit J J .H.I i<)j:j Putting eertain eom|)arisons in a summary way. tin followinir results for lt)2.'J as compared with lOli) ar( availahle: /:-|li ■ ■ MOVIM; TIIK traffic 2)5 I'reiftht trnin inili';ipe j»rr frvifi\,\ cnjrini- incn-ascd liv lH,„.rilit train iniltage iru-reascil l>y I > iht <«tit That is to say. tonnage lias Ik'o!! iiuTi'asin|r K'ss rap- idly than the work to he done in hanhng this ton- nage. In Canada, in 192.'J, the average haul of a ton of freight was 288 miles. With a freight ear moving 27 miles per ' or urdoadiny- impraetieahle dur- ing business hours, the time allowance is to be so ixtended as to allow the full free time of suitable weather. Hut if the |)arties neglect to a^ail them- selves of the period of free time, no additional free time is allowed. Delays due to conditions over which the consiunee has no control frecpiently cause trouble. To cover this, there is a "bunching" rule. I 'ndcr the 1 'Mm rulr, it is, in substance, provided that wh(i< thru rail- way conditions or the act or neglect of the railway or connecting railway or emphnes or to railway acci- dents "cars are tendered to the consignee in numbers i)eyond his ascertained reasonable ability to mload within the authorized free time." he is to be allowd such additional free time as will allow hini with due and reasonable diligence to unload the cars so in ex- cess. Under the 1017 rule, the provision is that where cars for loading "arc bunched and placed for iiiiiimding in excess of daily orders" and in the c.ts- f,f unloading or recotisigning "are dclivLCcd by the line carrier in accumulated numbers in excess of daily shir^iJiCirts," the shipper or coTisignee. as the case v.iuv b( , is t > liavt the same free time as he would liave had if ihc instructions or daily rate of shij)ment had been live - np to. ilfl ilr 258 INLAND TRAFFIC Kxcess time umler the 100(» inks was subjected tn u penalty d." {j^l.OO per ear per day. Tuder tlie 1021 rules, the penalty for the first and second (hiys is $1.00 a (hiy: for the third $.3.00 to $.>.00; for the fourth $4.00 to $.).00; for the HI'th and each sueeeed- nig (hiy $5.00. Kaeh railway has its own ear-service officials and depjrtinent. in addition, a Car Service Hureau or^rani/.ed in 100({, deals with complaints between railways and with conjplaints from individuals as to the amount of (|cniurra«ife assessed. 4. Claims presented.- DuriUir the year ended De- cember 31',t, 1021, the Canadian Denuirra^e Hureau handled 1.7 millions of freight cars. This was eejuiv- alent to handling all freiglit cars in Canada nine times during the year. The Canadian Pacific and the (irand Trunk had respectively 28..) and a7 per cent of the cars handled. The claims for refunds pre- sented were 1781. involving $27.5,042; .57.0 p'^i cent of this amount was adjusted. .5. Demurrage and ear shortage. — The importance of the demurrage rules is especially bound up with the truek in the United States, in 187*i, the normal ear held fifte( n tons and had an average load of about six tons. Now there are HO-ton ears with an i\\ eraiie load of twenty-two tons. They point out that in Canada the average daily earnings of a freight ear are $-2..52, and that the demurrage eharges should he eommen- surate. The shippers rejoin that, when operating e\|)enses are deducted, a ear nets about $!.(),> a day. Tlie higher demurrage eharges provided for in 1917 were intended by increased penalty to force (luicker car handling by consignors and consignees. In California, as a result of the co!igestion of the San Francisco and Oakland terminals after the earth- (|iiake, high demurrage rates were adopted. These hecame general, and so between July, 1009, and April, liUl, there was a rate of $(> per day on the intra- state traffic, while on interstate traffic the rate was •^1. In March, 1911, 98.12 per cerit of the cars in state traffic were released in the free time, wliile on interstate traffic the pereeni.tge was 94.79 per cent. The excess over free time on the state rate was 1 day, while on the interstate traffic it was 2.15 days. In ?:fi INLAND TKAFirlL I m May, 1911, u -$3 rate went into force on tlie stati traffic, Tile same rate was adopted on the interstate traffic in February, l<)i;j. In Annust, l<)i;j, the percentage released in i'va time on state tratHc was t)8.12 i)er cent, while oi, interstate traffic it was J)T.2() per cent. A consider- able j)art of the difference is due to the t'aci that on the state movement the originating- road has bettei control of the movement. Further, in California. ;i Kreat j)art of the movement is concerned* with one- line hauls on which the orioinating carrier has con- trol thruofut. On the interstate movement there an- delays in connection with "order" shi})ments, deliverv of coal direct from track to the consumer and con- tractors' supplies shipped in advance of actual de- mand therefor. The Pacific Car Demurrage Bureau, in its brief be- fore the Interstate Conunerce Cf)mmissio!i in 1<)1'J. (|Uoted the mana.i>er of the Weed Lumber Conij)any of San Francisco: Siiu'o till" per day, after reasonable time al- lowed for loading or discharging, would be more advan- tageous to the shipper than a lower rate, because of the facr that it would keep ecjuijnnent from being used for storage purposes and keep it free for transportation })urposc-. 8. S pedal (h'la//.s occur in unhmdiug. — A special MOMXC; THE TRAFFIC 2r).'3 report for the four inontlis eudin/^- May .'Jl, V.ni\ shows that under the deninrra^e rate of .s;j per (hiy, 1.74 jK-r cent of the ears in Cahfortiia were held over free time. The espeeial dehiy was in unloading-. More tijan lialf the total numher of ears were held for loading-; |,ut less than one per eent of these were held overtime; whereas 2.82 per eent of the ears held for uidoadin^ were held overtime. In California, .'J-i per eent of the cars held overtime eontained hay, potatoes, ^rrain. fruits and vegetahles, i.e., eommodities held for market conditions. Sand, rock, eement, ete., made up 7 per cent more, while eoal represented :j per eent and auto- niohiles 4 per cent. 1). Average demurrar/e.— While the railways have made suggestions, as indicated, for the imi)r()vement <»f the demurrage situation, the shippers have from tune to time made recommendations that either aver- age demurrage or reciprocal dennu-rage should he adopted. Tiider the national demurrage rules of the Fnited States it is provided that when the shipper so elects, and gives assurance of promj)t payment to the rail- \v,i\', the demurrage charges may he settled on a ' .chly halance of dehits and credits worked out as follows: a credit of one day at a rate of $1 |)er day ^ given for each car released within the first twenty- tour hours of free time: a dehit of one day is charged tor each car held for each day or portion thereof that tiie car is held })eyond free time. In no case is a credit of more than one day allowed on anv one car, nor mav «6^ INLAND TRAFFIC" more tlian rive days' credit l)e allowed in cancelation of debits accruing on any one car. If* there is an ex- cess of credits, no payment is made therefor. Tlu credits of one month do not apply on a subse(jucnt month. When a shipper elects the average system he has not the advantage of the allowances in respect to weather conditions and "hunching" which are avail- able to those using the straight demurrage rules. Those who argue for an average arrangement treat the free time allowance per car as a matter of right to which each shipper is entitled. A representative ol the Canadian brancli of the International Ilarvestci Company testified that the company's yard tracks could be worked more efficiently under the averai>x system. Instead of the extra switching necessary in order to get out a car in the order of date and tluis save demurrage the car could be used regardless of date of arrival. In a summary way the arguments advanced for average demurrage are: it means the more rapid nhu - ing of cars for loading or unloading, thus effecting ,i saving on tlie cost of handling by the railways: cni^ will be emptied faster and will be })laced at the dis- posal of the carriers earlier, and not only tlie reccivt ; who takes an interest in releasing his cars, but evci \ shipper, will be benefited: and it will remove the fric- tion which frequently arises between the carriers and the receivers in respect of weather interference aixl bunching in transit. The railways contend that tlic maximum free time is intended simply to give a maxi- M()viN(; Tin: traffic iim Jiiiini reasonable t me to eovei* not o;ily tijose who liave <'()0(l unloading laeilities, but also those who have |)()orer faeilities, and that the shii)|)er should use only M) niueh time as is neeessary. in dealino- with the lelation ol' detention to ear shoriaiies the (ieoruia Uailroad Commission said in 11)12: Whiii' tcrtiiiii fivi' time is ullowtd lor l()u. 10. Reciprocal (Jcmiirntfjc. -I/nder tlr- Uailwav m ! 5^66 INLAND TRAFFIC' L:i IK Act the lioani is specitically ^iveii power to deal witii reciprocal deinurra^e. Knder reci|)rocal (leiniirra^( the railways are penalized in the same way as the ship- pers. The penalty may he for delay in supplyin*^ :i ear or I'or delay of the car in transit, or hoth. Ajipli- cations in this connection, take on two forms. One demands that the railway shouhl he re(irired, uiidn penalty, to place cars for loading within forty-eiyhl hours after they are ordered; to lift the cars within twenty-four hours after notification of loadin*^-. and to place cars for delivery at destination within forty- ei^ht hours after arrival. The second application re(iuires that, in addition to these conditions, the rail- way should also he penalized if it does not transport each loaded car a fixed distance, say one hundred mil(.> per day, twenty-four hours additional bein^' allowtn'akin 268 INLAND TRAFFIC way owns and a tine on a car whifli the shipper hires. It is fnrther contended that reciprocal deinnrra^ic wt)nid. hy colhisive arrangements, open np the wn\ for rehatin^", since it vvonid l)e p()ssil)Ie to allow ,i favored shipper to have cars even tho it were known that the terms on which they were ordered nnder tlie reciprocal demurrage could not he adhered to. In respect to mileage re(piirements the railways <|Uott(l the following average daily movements during tlu grain shipping season at the end of 1911: .S.pt. Oct. Nov. n.r Great Nortlurn 2T.T 31 S+.S ilOM Nort'iK'ni Pjiciftc 24.4 2~.2 24.1 20.1 Grand Trunk racihV 25.4 2;>.6 2.5..-> 2().!) Canadian PaciHf (\V. Lines). .'iJj.J)T 3.>.51 ii.iMH 2().0i and they contend tliat the recpiirement of a detiiud mileage per {lay, irres])ective of climatic and oth( r conditions over which they have no control, nld le unfair and nnworkahle. IL liaihcaf/ intmrlations and per diem eharge.— The large develo])ment of thru })usiness leads to cni> nnder load going to foreign lines. The ..American Kailway Association has a code of Car Service Riilt n and per diem charges. The leading Canadian road^ are memhers of this association. The essential rules covering the honieward movement of foreign cars. i. c. cars of another line, are that foreign cars nuist lie proni])tly returned to their owners loaded (via any route) so that the home road will participate in the freiffht rate: or loaded to the road from which oriui- MOVING THi: TH \FFI( o ifJiJ iially received, if such loadiiio- is in tlie direetioii of the home road, i)ut not otherwise; or loaded to an intermediate road in the (hreetion of the hoin«- roa<': or loaded in local ?! vice in the direction of an\ jnne- tion j)oint with the ijome road. There is a per diem cliar^e in the case of foreign cars. This charge, which has varied from time to time, was. hefore Decemher. l!n(), 4.5 cents. It was then raised t(» 7.> cent> and |)rovision was made that it mi^ht, for short |)eriods. he raised to $1.-J.>. It is now one dollar. This char<^e is not analogous to the demurrage charge, for, in addi- tion to the per diem, the home road participates in the rate when the car has moved off its own lines under a thru rate or moves on its own lines under a thru rate. The hox car has been called a 'iegal tender" car since it is a car of general and interchangeable service nil any line. It would s*'em justifiable, with a view to preventing car shortage, to e<|ualize car e eeiits per milt. phis hrid^e and terminal ehar^i s. with a minimum ol 100 miles for eaeh road handling the ear. the roa- tariti's, and tariff's ot general scope. 12. I)iti'r.sicit('liin\i cents per ton with a minimum of $.'J and a maximum of ^'r m ear was provided. Where, sul- scijuent to shipment, a reconsi^nment .scivicc, invoU - in^' the use of the terminal of the second carrier w;i>> asked for, the full charge fell upon the consignor (i consignee. When the shipment, as billed, involve 1 1 the use of the terminals of the second carrier, the liiK carrier, as enjoying the benefit of the line haul, and .M()VI\(J TIIK TKAFrir ^71 so esfapiu^' the ttrmiiial cliar|ri..s, u ahsorl) oiu-lialf of the toll. Hy a (KiR'ial Oi-lcr itri'i'livi- .1 provision is iiiadf not ..iily for taiifl* ihaiors hiit al lor tlu as rciniircii t»i niiiarv 1st. HUM, so service hein^- eoniprsory. On sliipmt iits t<» pi ivate sidings, the ^^eiieral rate remains nnehaiiue,|. The niaxinmni is removed. While the minimmrper car is unchanged on t'rei^iit in classes seven to ten, it " . fixed at $.5 per ear in the higher classes. { 'nder tlu I'ormer Order, th line carrier was not re(|mre«l to re- duce its revenue l)elow }f?K per car: this figure is nou tixed at ^\2. The present Order ap|)lies lo team tracks as well. These were not included in the former Order. On the ground of puhlic convenience, team tracks are opened to interswitchin^r. Thv rate, however, is (louhle that set out ahove and there is < minii um of 'S<) per car. The line carrier has to a )rl. orjc-half the rate. While the interswitch movem* t.t rc(juires the ad- ditional service of an inw rmediate carrier, there is authorized for this a charge of $;j per car up to three miles and $3.50 up to four miles. 13. Industrial sidinf/s-. — A consio-nor or "onsio-nee handling carload lots mav ship or receive freight on the railway team tracks or lie may handle his husiness <;ii a siding or industrial track of his own. Where raw material is heing- hrouifht in fnr manufacturinii", it is an advantai^e to uidoad it at the plant w ith a single break bulk movement. Again, as at the plant of the ^72 INLAND TRAFFIC International Harvester Company in Hamilton, when shipments of agricultural implements are !)ein^ made to the Xortlivvest, it is an advantage to havt the loachng to the cars done at tlie plant, for this method economizes both time and money. 'J'o the shipper or the consignee engaged in a busi- ness of some volume, the industrial siding has become ahnost an essential. Under the Railway Act, a railway may be autho- rized by the Board to build such branch lines not ex- ceeding six miles in length. When an individual or an industry desires to obtain an industrial siding, ap- plication is made to tlie railway, and a statement is made as to what traffic and how much of it will prob- ably be handled. At the time of application to the Board, the municipality has to be notified if any street crossing is involved. Each railway has a standard form of siding agree- ment which the ap))Hcant lias to sign. The work of construction is performed, and all material, except rails, fastenings, spikes, etc., is supplied by the api)li- cant, unless he desires the railway to do it at his expense. The aj)phcant has also to secure the right of way. For the movable material, i.e., rails, etc., so fur- nished, tlie applicant pays a specified yearly rcn'. Kates being as good and service l)cing as satisfactorx as on the other lines, the ap})licant is to ship over tlie lines of the railway with which agreement is made. The railway is to have the use of the siding so far ;is y^ i' ^.«S«»«ni>k'iL ite' :«n£3IM^V|Ml!leit.'N~ --rv*' i^S: ilseSaf^' tV MOVING THE TRAFFIC 273 not needed by the applicant ; and may also permit the use of it by others upon proper compensation to the applicant; any dispute about compensation, in de- fault of payment, is to be settled by the IJoard. Provision is made for terminating the agreenjciit in tlie case of default in payment of rent. Either party may also terminate the agreement on two months' notice, provided the permission of the Board has i)ecn obtained. When the railway and the applicant cannot agree regarding a siding to an industry, established or to l)e established, the Board may order tlie construction at the expense of the applicant, with provision for re- fund of such cost out of the freight rates collected. 14. The work of the claims de part rncjit. —Claims may arise from train collisions and derailments, break- age, ])ilferage, leakage, soakage, weather conditions, non-delivery or delayed delivery, overcb.arges due to erroneous rate quotations, misclassifications. errors in way-billing, weighing. There arc also claims aris- ing from accidents to passengers and claims for cattle killed on the tracks. These are simply mentioned here. The Canadian Pacific deals with about .^.j.OOO claims a year, the Grand Trunk with about .>8.()()0. There is probably no department of the railway service Avbich has a greater opportunity to create fric- tion, or a l)ctter op])ortunity thru the exercise of iact to prevent friction. Sliippers constantly com- plain that there are undue and unreasonable delays in connection with the settlement of claims. The rail- ^ m !■ in Ji74 INLAND TRAFFIC ways respond that while they use every endeavor to settle claims, there are of necessity delays in settle- ment. While many claims are made in good faith, there are others that are fraudulent ; and so all must be tested. In case of claims arising in connection with move- ments local to the line, the matter should be promptly sifted and settled. But when two or more lines are iin olved in the haul there is a reason why greater de- Liys may take place. It has been contended by ship- pers that interest should be allowed on claims after ii certain date. It is further maintained that the ex- pense bill should give more detail as to advance charges of other lines and the additional charges, if any. While it is the regulation of the railways that as full information as possible should be given on the expense bill, in various instances the absence of it has made it difficult for the shipper to check the items. If claims cannot be satisfactorilv settled thev have to be dealt with in the courts. In a hearing before the Board an exhibit was sub- mitted by the Canadian Northern for its lines west of Port Arthur, setting out the disposition of claims filed on account of error in rates, weight, classification, or accounting. For one year, the following details were presented : Claims received, local 1962 Claims received, foreign 142f'3 3385 ■?«'■■ ]g^v MOVING THE TRAFFIC 075 Adjustment made as follows: Local — 16 '/( adjusted in loss than 7 davs 21.87r adjusted in less tlian 14 davs 9.ii' I i'.djusted in less than ^1 daVs 11. 1',; adjusted in less than -'JO days 41. .S', ad justed bevond J3() (lavs l!i.,'J'r took over ti months to ad.just. Mean average — HH days Foreign — (refers to claims on joint business): 9M[r adjusted in less than 7 days lO.o'f adjusted in less than 14 days 5.7 '/r adjusted in less than 21 days H.V/r adjusted in less than JJO days 6.61% adjusted beyond 30 days iM.iy/c took over 3 months to adjust. ^Nlean average — 37 days REVIEW Explain the meaning of the word demiirrafje. as it is used in this Text. What are the rules in regard to demurrage? What is the connection hetwecn demurrage and car shortage? What are the arguments advanced in favor of Ingiit r demur- rage charges? Give tlie arguments in support of an average demurrage -ate. Discuss tlie nuestion of reciprocal demurraire. Summarize the subject of interswitching; of industrial sidings. .e. 11 CHAPTER XVir EXPRESS SEKVIC E 1 . h\r press service and its scope, — Express service ' is ail expedited freio-ht service carried on passen«rer trains under the personal care of an express niessen- ^e.. In addition, there is, in the case of towns and cities, either a dehvery or a pick-up and dehvery ser\ - ice. \Vhile it is a frei^dit service, the companies per- fonniii^r th^ service do not own the means of trans- portation, as in the case of ordinary freiirht carriers. They enter into contractual rehitions with the railways for the purchase of space for the carria^^e of ^ootis. While the railway has a larcfe investment of capital in ti fixed form in roadhed and cars, the express com- pany's investment is concerned for the most part with office s])ace, horses, wairons, or motor vehicles for per- formino- piek-up and delivery service. The express service covers not only the carriacre of hio-h-^rrade parcel frei«rht, liut also that of articles of f (K)d and drink. Xot only are packaf?es carried : ])ro- vision is also made for the movement of horses in car- loads as well as for refri^sferator car service in the case of fish and fruit. Provision is made for the ship- ment of currency, bullion, ^old and silver coin, i)re- • There were C filings of express tariflF s with the Board in 19?f?. 276 EXPHKSS SKRVKi: 277 cknis stones, valiuible papers and seem-ities. A l)ankin^- bnsiness is done tin-u the issuanee of nionev orders. The returns from C\ (). 1). shipments are also colleeted and returned to the eonsi^n,,,,-. Tlie n)oveinent is not limited to one eountry alone, foreioi, shipments also beino- liandled. In addition, viirions other serviees are rendered. The wide seope of these is set out in the following- extraet from a speeial report made l>y the Interstate Commeree Com- mission in 1000: (inuuunhtws of all kinds arc bought and tnins,,„rti.,l on orders and arc likewise transported and sold on orders To care for and extend this branch of the business properly, the various companies maintain order and eoniinissjon dJpart- nients. . . . E" press business is carried on thru order p.nd comnussion departments in four different wavs, vi/., (1) a patron may order any commodity, subject to express ship- ment, ^vhich ^vill be purchased by the company's agent and transported to him for express charges; (Ji) a patron may (lehyer any commodity, subject to express shipment, to ai. agent of the comi)any, to be transported to a certain buyer and the agreed sale price to be collected, ami transmitted' to the shipper for express and money order charges; (.'}) a pa- tron may deliver any connnodity, subject to exfi>vss ship- iiunt, to an agent of a company who will undertake to sell it tiiru other express agents to the best advantage on shippers' account and transmit the proceeds for express and money order charges: (4) a patron may request an express agerit to perform any reasonable commission, such as collecting ^<.lls, filing papers for record, redeeming pledges, etc., which "ill be undertaken by the company for agreed charges. The report continues by stating that the express agent will enter and clear articles at custom houses, i VI , 11 r 278 INLAND TRAFFIC transport goods in bond, exchange foreign money, redeem pawned articles, pay gas bills, and "in short. will attend to any legitimate business trans ction as the customer's agent." 2. Early history of c.rprcss cow panics. — In the early days of railway travel in the I'niled States, espe- cially between New York and Boston, there grew up in the case of food supplies a spasmodic traffic of con- venience. In some cases a friend in one city would send to a friend in another a package, basket, or bundle which some i)assenger would undertake to look after on the way; or sometimes the conductor or bag- gageman would undertake the service for a considera- tion. Under such conditions, all the risks of loss thru lack of care, is well as all the risks incidental to trans- portation, had to be borne by the shipper. In 1839, the modern express service began in the venture of William Herndon, who undertook to carry packages between New York and Boston at fixed rates. He entered into an agreement with the Boston and New York Transportation Company, a water carrier, and the Stonington an " Providence Railway, whereby he obtained certain privileges for carrying on an express business. By the former company, he wns granted the right to transport in the steamers of the company })etween Xew York and Providence, via Newport and Stonington "not to exceed once in each day from Xew York and froai Providence, and as les^; frequently as the boats run between and from said places, one wooden crate, of the dimensions of five EXPRESS SERVICE 279 feet by five feet in width aiul hei^lit and six feet in length (contents unknown) until the aist day of l)e- ceniber 1839." The nature and extent of this under- taking may be gathered from a,000 was paid in cash: of the halance, five slujres went t(» tjiialify cer- tain shareholders, while the remainder went t(»Mac- Kenzie and Mann, who thus thrn stock owiiership con- trol the company. The stock is now owned hy the C'a- na(h'an Northern, a part of the Canadian Xational Kailways. 4. Arrmujemcntit xcitfi raihvaf/s.- \i\ general the express company pays the railway over whose lines it operates an af,n-eed percentage of the «.ross earnin^rs. For example, the Canadian Express Company pays the (irand Trunk M) per cent. The halanceOf the earnin^rs, after the deduction of operatin^r char^res, ^^•oes, on account of the fiduciary relationship of the express company to the railway, "to the Crand Trunk. The operation of an express company is not limited to the lines of the railway which controls it. The smaller railways have no separate express comj)any service of their own, and enter into relationships with one or other of the express comi)anics already re- ferred to. For example, the Canadian Express Company has contractual relationships with the fol- lowing: Quebec, 3Iontreal, and Southern: Quebec Oriental: Inverness Railway and Coal Company; St. Martin's; Windsor, Essex, and Lake Shore: the Canadian Goverimient Railways and others. The ffi 282 INLAND TRAFFIC Dominion Kxpress Company als » operates over the Canadian Ciovernment Railways. In the contracts referred to, the Canadian Express Company iiays the railway percentages varying from 4(> per cent to .>() per cent of the gross. While the Dominion Kxpress Company enters into arrangements with different railways on a percentagi hasis of division, its arrangement with the Canadian Pacific is on a toimage hasis. Under the agreement hetween the Kxpress Company and the Canadian I'acific, it is hound, urdess it receives written permis- sion from the railway, to charge for the express traffic per hundred poutids, a sum not less than twi) and a half times the railway's regular first-class freight rates per hundred j)ounds hetween the points where the express packages are moving. The Kx- pres.^ Company is ohligated to pay to the railway $100,000 a month, plus such additional sum as will result in there heing paid to the railway on express traffic moved hetween any two given points, the same earnings per hundred pounds as would he afforded hy 1,50 per cent of the first-class rate per hundreil j)ounds hetween the same points. The amount of $100,000 mentioned is, under the agreement, suhject to revision every two years. 5. Proriffous of an agrccmcut. — The nature of the relations hetween an press company and the rail- way in control may L^ gathered from the agreement entered into hetween the Canadian Pa^.ric Railway 3Lt-u. KXPHKSS SKHMCK HSU ami the DomiFiu,,, Kxpicvs C ompjuiN on Jaimarv 1 11)07. * • ' The raihvay took over the Kxpress C'ompanv with tlie ohjeet of eamiu^r „„ over its laihvav an el'lieient txpress seniee under ; fled management. '."/if litiihca/j covenanted — (1) T«. transport .xpr.ss ,natt..rs o„ ,,a>..,.^M,- trains «.tl. a> n.uci, pron.ptn.s, and .lispat.l, as i. n>„,,l an.l na.M.nahU. a.ui m-cossarv for tl... i„tuv>ts of Hu- V.^uv.'.s ' onipanv. \ ' (^J To furnisl, m.cvssarv spare- on its ,>,;.M.n^r.., ,,„i„, tor such transportation. V'U To carry the nusscn^nrs, safes and trunks of the Kxpress (onpany, af the rate of JiL. cent> per nnle for file messengers, ( + ) T.) furnish free of charge all nec^sarv ingr, ss and .gross to and tro.n stations, an,l such space on" station phit- onps as is necessary for ioadii-g and unloading, pn.vi.led tlie railway s business is not interfered with {.■)) The railway to he liable tor the ,1, uth or personal mjury of a„.v agent or employe of the railway, if acting jointly tor the railway and the express companv" (6) Tlie railway to , a^'eiits or iinplons not also aitin^' at the tinii- of iniurv a, joint agents. (()) To bo liable for loss or damage to express inattir, exc't-ijt where oeeasioned bv aceidents to the railway's trains. (7) To furnish the railway daily stateuunU of tli. weights, and niontbly statements of the weights, earnings and exjienses. The Part it. s iniitually ogriiil — (1) The agreement to run for ten years. (2) Station agents and train baggagemen may al.M) be come agents of the express company so far as the railway considers compatible with efficient peVformanc^ .,*' their duty. (3) Where acconunodation is afforded at stations to tin express company, it is to pay, in monthly pavnienN, eight per cent per ainium on the actual yalue of ^he land, building or buddings, or portion of building or buildings, safes and trunks, etc., given up to the use of the Express Company (4) Disputes as to the construction of the agreement or the rights and liabilities thereunder to be settleii bv arbi t ration. (5) Milk traffic on passenger trains is exempted from tli, scope of tile agreement. 0. Arrangements rcith agcnts.~The e.\i)re.ss coii.- pany operates not only ordinary express ears, but alsv refrigerator ears in tlie transport of fish and fruit. At the lar^^er points it maintains its own salaried agents. At tb.' .s.naller points, the raihvav station agent will aet as a joint agent of tiie expres> company and of the rail-ay. He is paid l)y the ex- press company, in the ease of the Canadian* Express Company, by a commission varying from 2i ., per ,»..= : i ? C If ? 5 ^ ■■• 3 Z ^: 5 ~B - !?!-§) it? 3S 3 C ii^l ^_ ". -"-riy'F- »^1»*"»>'^ ■T'5 I o s to 83 c V c 03 C 3 O c 1- C o o -» 03 h c 03 o iX) C3 < c n a c E ffi CO E E o u e u 09 E E o O u o :^ n) ^ Is £ h-i (0 i "5 a: CQ 0) E o Q c o s o z o *& o ! _3 i V c o 73 fe: •T3 c el en a 03 o o o h-^ *-' t- *■ •• — -fl • 1. ^ «; S "- c * ~'E 5 ce L. * o . S ; Ei = ^' c c^ o > a : £5Su ^ 5 £ = t ■^^■ w £ a " o t" _ - 1^= c * "■BTS «,S I, S c i( C jjS S = t«§.§t:f c '^^ » >i 4 Z! ♦J ^ ^ e c ^ * e- O fc« - ■*^ 2 » * «^ r;— E cc o o -.5 § ■ c '^ 3 »i - >» ^ - '^ a t; -. 2.-0 1^ o 2-2 i S a 2 •- « o 5-§ i* s-g s •w a o -c c ? o « 0.2 CO (a OS J.IJi •t; g sa ej .^ £ « « ■t; « c fc. M -s i-jS o c B "" C "r; r -a: .~ 7} C "^ = 2-" >.^^ m o _C3 'S 03 O 0) •o 3 go w a> 09 eS 5 O - 09 O -a g .2 *l e8 n*' ^ S a .1 1. 3i > HU 1 Of A and (3 o 4J A •c ■ : u .1.1 . C tc -■ O O c O Q ;:: 55*2? O'ri >.-z »J"^ C — 83 * 5» ~ to O *j o - > s r*r 5 r -^ i« > o S « = -w "- t c 6^3 ST 3 ■n ITS' c: , %- - 3 TS I O y -t *. 2 . -. 3 O ^C EXPRESS SERVICE 285 cent to 10 per cent of the gross earnings at the point in question. In the case of the Dominion Express Company, he is paid on a tonnage basis. The result is about the same in either case. The express business in Canada is concerned pri- marily with a movement in and out of the larger cen- ters. In the case of the Dominion Company, it is estimated that 64 per cent of the business handled by It originates at Montreal, Toronto, and Winnipeg.' 7. Express classification. —While it has been sug- gested that the freight classification might, with some necessary amendments, be adopted to suit express traffic, there exist sufficient difficulties in the waj to prevent this. The great hindrance is that in cities express traffic is collected in large quantities and de- livered just as trains are departing, when there is no time to handle it under freight classifications. The express classification in use has first to obtain the formal sanction of the Board. The Railway Act states that all its provisions "applicable to freight tolls and freight tariffs, in so far as such provisions are applicable . . . shall apply to express tolls and tariffs." In express classification the nature of the business prevents the use of a system of subdivision into a con- siderable number of classes. In general, it may be said that the classification of commodities is baseil on the rate the commodities take. Express shipments ii oadly distinguished as "freight" and "money." L r "money are included not only shipments of III XV c— 80 Mi^ll 2HG INLAND TRAFFIC actual money, but also of bullion, stocks, bonds, valu- able paj)ers, and various articles in unusual value. Prior to the Judgment of the Board In re Ecvprcss Kates in 1019, "freight" shipnjents were sub-classed as "merchandise," "general special" or Scales X and Scales K, M and Section 1). There were also sj)ecial scales and rules covering shipments of "money." "Meichandise" rates were those applying on commod- ities for which there were no special rates. Scale K was a special tariff on ale, aerated waters, etc.. and was from 30 per cent to M) per cent lower than "merchandise." It applied at pound rates on actual weight. Scale M was a special tariff on eggs in cases. Scale X quoted special rates on per- isihable foodstuffs, such as provisions and vegetables; originally it was concerned simply with farm prod- uce. Its scope had been widened, so that in the grouj) of forty-three articles covered by it there were in- cluded, in addition to provisions and vegetables, the following: cuttings, fertilizers, ])iants, poultry food, roots, scions, seeds and seed grain, stock food, tallow, trees for setting, stearine and tubers. Its rates were from 20 per cent to 30 per cent below "merchandise." Section D rates a})plied on packages not exceeding five pounds, of books, stationery, lithographs, periodi- cals, etc.. carried in competition with the post office. The express rates were lower than those of the post office on packages exceeding five pounds. Section D rates were one cent for each two ounces or fraction thereof, subject to a minimum. EXPRESS SERVICE 287 As a result of the Judgment above referred to, merehandise is now subdivided into first-elass and see- ond-class, the second-ehiss being twenty-five per cent lower than the first. The merehandise rate is still exi)ressed as a rate per hundred pounds. Various groupings may l)e expressed by multiples of the rat- ing, e. g., elephants erated are li times first-elass: pianos, not boxed, 1 \ times first elass. The commodities carried under Scales X, M and K are now placed under the second-class rating. Section D is also abolished as a separate rating, and the goods covered by it come under the first-class rating. The Board held that there was no principle under which the articles moving on this scale were of right entitled to any better classification than general merchandise. 8. Value, xveight and .space. — In the classification ratings, value, weight and space are considered. The value of the article is considered, since the nor- mal rate is based on a value per })ackage not exceed- ing $.50. If the shipper desires the company to as- sume a liability in excess of this sum, he has to pay adduional charges, which are known as valuation charges. These are imposed on the excess value for each $100 value, or fraction thereof, as follows: Where merchandise rate is $1 or loss, per TOO lbs.. . 5c. Where merchandise rate is .$1 to pi per 100 ll)s. . . 10c. Where merchandise rate is $.'3 to $8 per 100 lbs.. . loc. Wliere mcrcliandisc rate is over >!S |HT 100 lbs.. . 20c In the matter of weight, shipments of extraordi- nary weight or size are carried only under special con- > i |; X ! fit 2HH INLAND TKAVKic tract. The factor of wei^iil is considered in connec- tion with packages of less than 100 pounds weight. Space is recognized hy the provision that conven- tional weights shall apply in the case of light and hulky goods, e. g., millinery shipments. On r'onij)utations made hy the Dominion Express at one time, 47 per cent of the shipments move on the merchandise rate; the halance are on lower rates. In the amendment of the Classification hy the Board in the express investigation, the owner's risk c()nC't'"t;.T,'y.-i T.H EXPKKSS SKHVK i: ilH\) (e) For loss, daina^e, or delay resulting from im- proper or insufficient packing-, sec'iirin«'-, or addross- in^r, or from chafing wluii ^oods are packed i'l hales. (f) For loss of, or damage to, any fragile article, unless the carrier was negligent. (m) For loss or damage from delays heyotid the company's control. (h) For loss or damage arising out of examina- tion, or partial delivery to the consignee, of C. (), I), shipments. (i) For (hunage, loss or partial shortage, uidess written notice is given hy the shipper at some ofHee of the company within thirty days froni delivery. ( j ) For loss or damage occurring to shipments ad- dressed to stations where there is no agent of the com- pany, after the shipments have heen left at such sta- tion. (k) For non-delivery, loss or destruction in C'an- ada, unless written notice is given hy the shipper within four months from tliC time delivery should, in the ordinary course of transit, have heen made. 10. Liabilitij under revised ed' press reeeipt.— Under the express receipt, as revised in the expiess investigation, the express company was not liable for any loss, damage or delay caused hy conditions beyond its control. This condition exen)j)ted it from such loss, damage or delay caused by the railway com- pany. The express company, while performing a transportation service, was a separate corporate entity. The acts and defaults of the railway were i ! 290 INLAND TRAFFIC heyond its control. In 1{)1.>, this was amended so that tlie express eonipany was liahle, if the loss or (laina^v was caused by the iie*^ licence of the railway company upon whose trains or property the shipment was at the time such loss or damage occurred. 11. Linhililics under various fitrmn of receipts. — The word "company," as used in this receipt, includes any comicctin^- express company subject to the Kail- way Act. The a/'-reement entered into hy the si^n- in^- of the receipt is binding- on the shi[)per and all persons in privity with him, and inures to the benefit of any person or company to whom the shipment may be delivered for the performance of an express serv- ice. There is a money receipt, the conditions of which, in respect of liability, are subject to modifications due to the difference in the nature of the commodities— sub- stantially the same as in the case of the merchandise receij)t. In the C. O. D. receipt covering collections by the company, the common-law defenses apply; in addi- tion, the company is exempt from liability for loss by fire unless there has been negligence. It is also free from liability for loss, damage or delay resulting from im[)roper or insufficient addressing or securing. lender the livestock contract, the comi)any is ex- empt from liability for delay, injury or loss from any cause whatsoexer unless there has been negligence. The attendant accompanying the animals is required KXPRKSS SIlKMCi: •-'i>l to M^ii a release from all liahility. iic^rji^rt.iu.f ii,- eliided. 12. Standard mdiaffc lari/fs. The staiidaid miU- n^v tariir ^nvcs the inr.vliaiidise rate. Tjie l.a^i^ of such a tariff is the (luestio.i of the division of hrii- torv into mileage hloeks. When the ^reiieral investi^r;,tioii of express ijiles was eondiieted. the Hoard found that west of North Hay no sueh exaet arrau^rnnent as that east tiiereof existed as to the mileage groups. Kaeh standard tariff' had its own particular mileage grouping, and the groups were irregular and overlapped. Direc- tion was therefore given that there should he a rear- rangement with a view to approximating uniformity, so that, for example, any two or more of the western groups should he equivalent to. and included in. the eorresDonding eastern group, instead of the relation heing fractional, as it then was. The Eastern and Lake Superior standard scales then met at North Hay. Direction was given that, to harmonize with freight conditions, the rates should, instead, hreak at Sudhur /. The meeting point of the prairie and the mountain express standard i>iileage scales had hitherto heen at ^lacl.eod and at Calgary. Direction was given that the rates should break from one scale to another at the points where the rates hroke in the ease of freight rates. The direction published was. in si"..mary: (1) That there shall be four "standard" mileage- basing scales, viz. : 292 IM.AM) THAI'FR (a) On all liius oast (if and including Wind- sor and SiKJhury. cxrhiding the lines ol" the Teni- iskarning and Northern Ontario Hailwav. (h) On all lines west of and including Sud- bury, to and including Sault Stc. Marie, Crow's Xest, Caiunore, and Thornton, iVlherta; also north of and including North Hay. (c) On all lines west of and including the ter- minal points set out in the preceding section to the Pacific Coast and to \'ancouvcr Island trans- fer points. (d) In Vancouver Island. (2) That the basis of (a) should not exceed $.3, of (h) ^5, of (c) *0. per 100 pounds for the 1)00- 1,000 mile group. In Vancouver Island, the mile- age groups were to he harmonized without increasing the rates. The standard rates so fixed were further reduced hy the Board in April,. 1<)1;J. when it was directed that instead of the $.5 and $(> rates already referred to there should be substituted rates of $4 and .$4.7.> re- spectively. I'.i. Diffcrenccfi in traffic conditions.— In sanction- ing differences in rate basis as between the sections co\ered by the different tariff's, differences in traffic conditions were recognized. In rearranging rates under its recent decision on express rates in the United States, the Interstate Commerce Commission has taken a similar position. The following words are from its judgment: KXI»HI:SS SFIIVICK 'JWI Wf liav«', theivfoif, tVIt that it Ma> iuti>>aiv for us to r.cogiii/i till- vuriafioii in tlu- of o|HTatiii;,r railroads in tin dithrmt Mttions of the country. With this in mind a> a l)asi, f,,,- tli« formation of rates, tlii" tountrv has hv,u divid«i| into fi\r ^M-and siihdivisions, Tlu'so .subdivisions loriform ^r.tuiallv to tliOM r« co^rni/id hv thr rail nirritrs, and which this Coni- mission has, in th«' consideration of frei^r|,t rates, Ixen hd to heliive were ha.sed upon actual diflereiices in operating' and traffic conditions. Following out the practice luiiiii laid down, the In- terstate C'omineree C'oiimiissioii reeo^iii/es five zones, dirteriii^ in traffic and in population density, and has ad justed rates with this dift'erence in mind. 14. Four standard tariff's.— As a result of the va- rious steps set out, four standard tariffs were estah- lished. The following tabular suniniary ^ives a ^'en- eral idea (»f the rate arrangement. A 'J.5 iniU's and iiii(i«T. I iiiilts ,iiu! under. 1i»»<> Miilfs and under. I) I'Oniili ^ and -•) miles and !i< .K) Jji ..">() under. S .-){) under. ."«! 50 .75 I.(HI I..'.-| 1.00 3.(M> ^00 t.7-i The IJoard found that in the traffic between the l)rairie section and liritish Columbia the practice was to make up a thru rate by adding the two tariffs to- gether. In order to bring about uniformity and lessen the burden of rates, direction was given that on interdivision traffic which was not subject to the Sud- bury basing schedule, or tariff* mentioned below, the K^^X.sH'jm wav^/i-ijp 294 INLAND TRAFFIC highest staiKhird mileage seale, as applied to the thru mileage, should govern in either direetion. lietvveen points east of Sudbury and points west thereof, thru rates were built up by adding to the loeal rate east of Sudbury a speeial basing tariff west thereof, whieh latter is assumed to be lower than the Sudbury loeal tariff. Direetion was given that the system imght be eontinued, provided the thru rates were less in all eases than the sum of anv tariff rates to and from Sudbury, and were not greater than the higher standard tariff as applied to the thru mile- age from the ])oint of origin to destination. The Sudbury basing seale was eontained in the Dominion Kxpress Company's loeal mileage basing tariff. Sehedule *'?.." This. then, set out the speeifie rates for mileage west of Sudbury whieh. when added to the rates east and south of Sudbury, would give the thru rate to destination, exee])t where the standard tariff west of Sudbury applied to the thru mileage gave lower thru rates. As a result of the Judgment of 1010, a still further sim])lifieation and systematization of standard tariff's and the territories to whieh they !ipi)ly has been made. There are nov» three standard territories: (A) As jit ])rcsont. (R) Tlu> only clian^e in this territory is to inohule witliin it, for all movements, })oints on the TemJNkamin^ and N'ortli- ern Ontario Railway. (C) The only change here is to include in this aria Van- couver Island, which was formerly classed under Standard tariff D. ■P m^mm ^.LfH^^il :::-... ,:t^f^: M^i^m^tjs^ism. EXPUKSS SKKVICE 2i)o There are, therefore, now three standard zojies — the eastern, j)rairie, and mountain, \ancouver I>land heni"- in- rjuded in tl>e latter. As a resii! v.f the readjustnient of rate bases, vvhieh is dealt Mth latrr. ■■.. rearrangement has heen made whieh m; V he indie ited hy a tabnlar summary. For j)urp()ses of eoiii|,va*ison, reference to United States' rates is also given. Eastern Zont' Prfiiric Zone Mountain Zunc Canada I'. S. Canada l\ S. Can.id.i T. S Milt's A Zone 1 R Zone:? C Zone I Cents Cents Cents Cents (%-nts Cents 50 80 82 85 8H l 5t!() 481 6«>() (i(»5 2,000 660 405 8(iO S(i3 lOfiO 1<»72 2,500 • . • . , . f) ageney business. The charge of the latter is, there- fore, not necessarily looked at from the standpoint of the return on capital invested, but from the question (»t what is the rate of pn.fit on the turnover. AVhile competitive conditions, such as water and inarJ- valry. exercise an important effect on freight rates. express rates the ease is different. Walter competition certainly cannot be said to inffnence in any way a serviee the essential of which is speed- nor IS the express service inffuenced in nearlv the same de- gree as freight by tlie (|uestion of competitive points. In the Judgment of 1010. the I?oard took the posi- tion that t.e practice of multiplying the existing first- class standard rates was unsound. It was held that there should be two factors~a c.mpensation for rail service: and a compensnt!r»n for express comi)anies' work. The following language was used : In consulerinc? tl.o cxpr.vss rate I uould. tl.oroforo. adopt as the basis for rail service one and a half Hnies the frei-ht •■l; K«>l j!--i' mm 298 INLAND TKAIFIC rate. To this a sum must be added to cover the express ooinpauies' service. The work of the express companies consists of billing aiul shipments, loading them, accompanv- ing the transportation movements by messeiigir>, unh)ad- ing at point of destination. . . . Over and above this it also inchi(hs in all instances the necessary clerical work and auditing .is v.ell as liability for loss and damage claims. In working this out, the distances for each scale u}) to 1000 miles were sulnHvided into blocks of 50 miles for each of which blocks one and one-half times the standard first-class freight rate was computed. This gave for each 1000 miles, under cj ch scale, twenty sets of block rates, on the basis of one and one-half times the first-class freight rates. Taking the aver- age of the sum of the rates for each twenty-block group under its respective scale, the result is for the Eastern Scale, 20 cents: Prairie Scale. 2.5 cents; and for the Pacific Scale. 30 cents. Adding to each of these 60 cents to cover exjjress companies' work the resultant standard rates for 100 pourids for a .)0-mile distance under the respective scales are 80 cents, 8.) cents, and 00 cents. The rates for longer distances are a matter of simple computation. For exam])le. if it is desired to compute the rate for 3.50 miles on the Eastern scale, this represents seven blocks multiplied by the average freight rate of 20 cents, ])lus 00 cents for express companies' services, or total of J^2.00 per 100 pounds. On this basis, th'^ Eastern scale works out at 227 per cent of the first-class freight rate; the Prairie \r^*M, ■Vv\ < ', EXPRESS SERVICE •J\)i) scale at 217 per cent; and on tlie Mountain scale at ID.'i j)er cent. 17. Firif/ht rale as a hasi.s.~Ai times the ex- pedited .service att'orded in express luisiness has \.vvn expressed as a niultii)le of the first-class liei<4ht rate. Thus, in some of its earlier deci ions on cxjiress i ates. the Interstate Commerce Commission held that an exj)ress rate of three times the first-class freiound rate as a maximum. In g(.'neral. any article .'iOO INLAND TRAFFIC of a higher dassification than single merchandise rate could be carried on this rate basis. The Judgment of 1919 held that this arrangement was in reality a freight movement, and that, in addi- tion, it gave a discriminatory advantage to the larger over the smaller shipper and should be st'-icken out. (2) The 100-pound rate on merchandise and. (.'}) Packages under 100 pounds which are car- ried on the graduate scale. 19. The f/raduatc tabic. — Approximately 90 })er cent of the packages handled by express companies weigh 100 pounds or less. The Interstate Commerce Commissi(m in its investigation found that ap- proximately one-half of the express business c(m- sists of packages under 20 pounds in weight, and that the average shipment, including carloads of horses and of fruit and vegetables, is 84- })ounds. To tjike the business of the Dominion Express Company foi September 18. 1912, as an example — when a compu- tation was made in which the same average was ap- plied to the year's l)usiness. it appeared that 2() per cent of the reveni.e was obtained from parcels of 1 1 pounds and under. In the Express Investigation, it was shown that for a given month in 1907 the aver- age weight of packages shipped into Toronto was 19 pounds, while in the case of outward shipments it was 43 pounds. For the years 1918. 1914 and 1915 the average weights per package were, in the case of the Dominion Express Company. 33.39, 3.5.86 and 36.27 pounds respectively. On a check made by the Do- EXPHKSS SKHVICK .•JOl minion Kxj)ress C"()nii)any in \\)\H the avera-^v \vei2 pounds while the avera'rt' liaul was .'J4(> miles. In the ease of sllij)llU'nt^ under 100 pounds, whieh represented 84 p^r edit of the total shipments the average wei«»ht was "7 i are worked out from a tahle of ^rnidnated 0 miles in Eastern Canada, the a^^ent. from his tal)le of dis- tanees, will aseertain the standard rate on a hundred pound shipment for the distanee in (piestion. He finds it to he $2.00, and he must now aseertain how mueh of the rate is applieahle to a shii)ment of 1.' pounds. Then he will look down that eolunm until at the left hand side of the pa^re he finds the 1.5 pound line; where this line intersects the $2.00 column the jiroper rate, viz.. ,5.5 cents, will he found 20. Kates not uniform. — Scrutiny of the ^rniduate tahle will show that the rates are not huilt up on a scientific hasis. The effect of the 100 pound rate is not carried down uniformly thru the cohnnns of rates. For example, under the $1 merchandise rate, the charge for 00 pounds is 70 cents; 40 pounds, m cents; 20 ])ounds. 4.5 cents: 10 pounds. .'J.5 cents. It is urged hy the express r'ompnnies that the expenses in connection with colLcting. deliverinfr. liandling and ^1 1 Sof sppcinion on tlu- foUowiiifr pafro. XV -i\ r/i I Ss2^, 13 S'ri;2i2s Si^p.'rf;;? fe U^ 2i ' SS^^iS ^SS!S^^ S9999 . 'L = = 5i3^ i;?^i21?l^ ^':5^;5i:? "tri cS^^nco cocococort rt^^^^ cs 2 § S S ?. ^ ~5 « « « n n i4 « rf K ~ 2 o 3i SS^S^ m^^^^ ^^$9S '% -3 S 55S2l5^ i?^i?^^ ^^21:5^3^: "as 1=1 _ i rac^co^co cococococo cococo^^ % -)>^ = l?55i:? i4i?^i?;5 i?^^i:5i2 3i SiS^^^ ^^^^^ ^m^mS Q5^ *!i ^ ^ ^ ^ ^ I** 1^ l*^ 1-^ t"^ l«s 1^ i^ |«^ ••, i> •t. Ti, SSSSS iS^^SS^ ^iSiSiSiS CO CQ CQ CO CO CO CO CO CO C^ CO CO CO CO CO e 11 iS5§g^ ^'^'^ '■?.•?. ^^^^^ rC r CO CO CO CO CO CO CO CO CO €0 CO CO CO CO CO 2 ■|J -!^Sr=^^ ^^.'^'^'^ '■^'^'^.•^'^ t. ■r. :; SSSSS SiSiiSS^ S^i?^!S fococococo cococoeooo COCOCICOCO 0^ 2 s = s§^s§ %?,%'a'a, ^^^^^ o CO ^ CO A CO CO CO CO CO CO CO CO CO CO CO = a 5 = = ^S§ s255^ ^^^^^ — r-: p5c5c5o5cq cococococo wcocococo ^ |il assss ag52g ss;;?;;?^ «; OMcococo eococoeoeo e^eowcoco 1 ■? ! M t tH ^ iN ^ f^ tH 302 .c.i -vj.iU:... l yi^jj 55^^^!^^* i3a§?i? ^ .=? 5? ;;? :2 % 5 13 R .= 13 :: ^sstss Sggg^g 338^^8 '^.9.^^^ •'^ •* w * »• 1^ f 'f *- i.': t!^ >i ^!9ss:g SiSigg?^ SSSSS^ ^^i^$5 •^ •* "^ t"^ <~ !•; :2 i 2 Q :i = $^sss iSSSiS^g ^SSSSS ^ u o^ 9!$^SS sssssg g^^sss ri H « rf J? ^ ^ ^ ^ ^ ,"s J" •'-I'? 12 -3 2 S^!$SS ISiSSS^.^ ^g^^ss ■3 '"5 '■: tri CSC '■: .- n n n n ^^^^^ ai^^!$S SSSSSS iSSgg^S o "? '■^ "^ lii o c c c c '•; 1- i« -» — — ,^ « r: r: t: rs ~; ^ ^ ^ ^ ^ ^ ^ .-^ .-s .-s ,.; 999^^ SSSiSISS SSiSS^^ *T J-; .-; 1^ i<^ .^ ,^ ,-; ^ ^ * ^ ,^ J. ^^ ^^ ^ c^t^c^c^?^ c^t^T^-t**-* ^-f.^^^,':; ^s§9§ :3sss;s:§ ssssss i 1-^ 1^ tri SSSS^ lOIOiOQQQ lOiOiaiOQO o '"^ ''^ »^ »■?• !5!5SSS QtoioioioQ ooo^oiao r eoeo eciits. or HO cents. With the single ^rmduate on the s_>..-,() ,;,te. the char^ri. is .50 cents. When the -rraduate was made on the sum of the locals, there really was included in the rale char^rts a payment for four terminal ser\ ie< s. instead of two as at present. The effect of the reduction in western rates, already referred to, wherehy a reduction of -JO percent in tin- stainlard rates was directed. afVecled not oidy the mer- chandise rates and the special scale for shipments of .500 |)oun(ls. hut also the (juantitits of less than 100 pounds movin^r under the merchandise rale an«l scahs K and M. KKMKW Ulial is tlu' (liffcrciicc Ix-tw.-ni tlir ^<-v\'\ii- ,,\' .-xpro, ,uin. IKiiiics and tliat (if ordinary Ircitiht ;' Kxplaiii Ik.w tin- fxprcss ayciit is said f<> ad as IIm- ■■(•u^toincr"- ai;.iil."" Wliaf was llic a INLAND TUAFFIC What arc hie stauilanl iiiilraKr tarilTx; local ami lraii>f«'r tar- iffs? Ilow arr tlity Imill u[>f Wliat arc coiiiiiKMlitv ratc^.? Wlial i-. Ilic graduate talilc? Iliiw arc rales fi\cil on packaii'-^ of |c». than one hiinilrcil IM>uinlsi' \\ iiat coiniwlitivc conditions alliccl ••xprc-s rates? ^■■P I CIIAPTKH Win IM.AM) WATKll THANSI'OiriAI'lON 1 Water frdnsjiortation as ti rctjn'.itlor of rafts. — 111 (Ic-.'iliii^- with the factors aflVctiiiu- railway ratts. various e\amj)Ies have ahvady htm «»i\tM of \\\v iiithi- cuce exercised hy water carriers on rail iiiov eiiicnts. In general, when thire is coiiipetitioii hetwi.n these two methods of transportation, thi rail rate can exceed the water rate only to the extent that it yives superior facilities. The following- are characteristic disadvan- tages of water transportation: marine insurance — the rail carrier is an insurer: liahility to salt water damage; longer time in transit, and consc(|uent greater interest on capital invested: uncertainty in date of arrival, etc. W'e should consider, also, the general convenience that the n.ilway affords, which is estimated as worth a premium of at least five per cent over water rates. The efHciency of water competition on ifiland waters is affected hy the locatioTi of cities and towns. Where these are adjacent to the water, the com|)etitive effects are more readily felt. Ihit even in the case of points some distance inland, for example, thruout the west- ern j)eninsula of Ojita.rio, the effect of the water route is felt. To cite ii particular example, on the all-rail ;!07 308 INLAND TRAFFIC movement of coal to I^tmdoii there is the competitive effect of the across-the-hike movement to Port Stan- lev anacritict' for the ffeneral safety : and (.'J) That these exceptions aie not to excust' him if lie has not been reasonably careful to avoid or <>iiard n^auist the cause of loss or damai«>Pli«P INLAND WATER TRANSPORTATION 31fJ livery by giving notice to a puljlie carrier that the company is i)repare(l t?? deliver the sliij)ineiit for further conveyance. And the company is not to he responsible for any loss, misdelivery, damage or de- tention of property carried by it, if such loss, etc., shall occur after such projjcrty shall have arrived at the station or [)lace on the conjoany's line nearest to the j)lace to which it was consigned. The Kail liulk-Cirain Bill has the same provision in regard to movements under a joint tariff' as is set out m Section Jj, Chapter XV. 1.5. Canadian lake and canal route -~Vvnu] the head of Lake Superior to Montreal the distance by the water route is 1,2U nnles. From Duhith atul Chicago to the same point the water distances are 1,33(» and 1.240 miles, respectively. Of the dis- tance between Port Arthur and Montreal, the canals to be traversed represent 79 miles, i.e., lockages are involved in six per cent of the total route. The Canadian "Soo" C\'uial has a lock \HH) feet in length and 19 feet .5 inches in depth. The vessels passing thru it can move, without breaking bulk, to the foot of Lake Erie. Last thi-u the AVellaTid Canal and the St. Ivawrence Canals to Montreal, the governing locks are 270 feet in leng-th and U feet in depth. This canal dcternnnes the cargo load and type of vessel using the lower portion of the route, and differ- entiates the type of vessel in use on it from that used between Lakes Superior and Erie. In general, on i'i 3U INLAND TRAFFIC the lower portion of the route, a vessel 2.)5 feet in length, 42 feet (> inches wide, drawing 13 feet and carrying 2,212 tons of cargo may he regarded as typi- cal of the ordinary vessel on this portion of the route. 16. The Wclland Canal— \n order to meet the rapid expansion of water-horne traffic and the in- creasing size of vessels plying on the Great Lakes it has heen necessary many times to eidarge and recon- struct the canal systems of Canada. Shipping has always exceeded canal capacity so that the Wetland Canal, coimecting Lake Erie with Lake Ontario, has never heen ahle to acconmiodate the larger vessels on the I^akes. The first Wetland Canal, built with private capital, was begun in 1824 and completed in 1833. In 1841 the Government of Upper Canada purchased the Canal and passed an appropriation for its enlarge- ment. Within twentv-five vears time the demands of navigation again made necessary the further en- largement of the Canal by the Dominion govern- ment. A new location was chosen which offered a straighter chaimel, reducing the length of the Canal from 27lii to 26'>4 miles. It extended from the Lake Ontario entrance at Port Dalhousie southward to Allanburg, about half the distance i)etwcen the lakes. The Canal was deepened to 12 feet, then to 14 feet and equipped with larger locks. The Wetland Ship Canal which is now under con- struction takes a straighter course than the present canal and shortens the length of the route to 25 miles. INLAND WATER TRANSI»OUTA TION .'{15 It is hein^ huilt on a new location for the 12 mile (listiuiee from Lake Ontario to Allanhur^ and from there to Lake Erie it very generally fcjllows the eoin-se of the ohl eanal. The Shij) Canal will enter Lake Ontario about 8 miles to the eastward of Port Dalhonsie, the present entrance, at a place named Port ^^'"eller. Ik'tween Allanhur^, the junction of the present and old Welland Canals, and Port Koh- inson the Canal will he deepened afid widened. From Port Robinson the Canal will follow the Welland River to the town of AVelland where the present canal will be entered and except where a curve is eliminated, followed thru to Port Colhurne on Lake P^rie. The new ship eanal will greatly shorten the time of operation. When the ship canal has been com- pleted a vessel will be passed thru in 8 hours instead of 15 to 18 hours as formerly. In heavy traffic it will be possible to pass several vessels thru the locks at once. The Canal when c()m])leted will be '25 miles long with 7 locks 800 feet long. 80 feet wide atid from 2.5 to 30 feet deep. The estimated cost of the Canal, according to pre-\ ir tigurcs is $.50,000,000. Work on it was suspended from .Tanuary 1017 to the cessa- tion of hostilities. Upwards of .$:J0,000,000 have been spent. 17. Trafjic on the WcUand Canal.— The Welland Canal is in operation about eight nuMillis in the year, from April until December. In 1023 over 4,700 :n(> INLAND TRAFFIC i vessels passed thru the Canal, a larger miniher tlian at any time previous to 11)1. 'i. In lt)2.'i a total of .■i.7o.">,in2 tons was eairied thru the Canal, of whieh amount 1 ,4'J.'t.()().'t tons, or .'J8 per eent. was iVmeriean freight. 18. Ottdxca st/sfi'iii. — The eanals of the Ottawa system with loeks 200 feet lon^ and feet in depth, are of limited importanee. On the liideau Canal system, the loeks are \IU feet lon^ and .5 feet deep; while on the Uiehelieu systein they are 200 feet in length and 7 feet deep. The Trent Canal, whieh is intended to eornieet Georgian Bay and the eastern end of Lake Ontario, affords a tortuous water route six times as long as the direet land route. The gov- erning depth is five feet. The route is heing eon- structed for the use of harges and is now in operation between Trenton and AVashago. at the head of I^ake Couehiching. A total of 800 miles of eanal and eanalized waters is now heing operated. 19. No canal tolls. — From an early date the con- struetion of improved transportation ways in Canada, both water and rail, has looked to partiei])ation in the trade of the western states adjoining the (ireat Lakes. Sinee 190.*} tolls have not been eharged. The advantage of inereased traffie, as reaeting on the general business of Canada, is ex])eeted to compen- sate for this additional charge on the general revenue of the country. Thruout, the aids to navigation and the deepening of harbors are charged against the gen- eral revenues of the country. INLAND WATKH rHANSPOKTATlON •n 20. Girui Lah'CH traljic. \ tiviiiiiKioiis vdlunu" of freight and vessel tc)n!ia«'e has developed on the (ireat Lakes. Without eompaiin^^ vahies, it may i»e said that in seven and a halt* months of tlie year there passes thru the two eanals at .Saiilt Ste. Marie tliree times the vessel tonna^n* that oiks thru the Suez Canal in a year. When to this there is a(lde C—J. jm 318 INLAND TRAFFIC freight traffic in 1923 ( 1 1,191),4:J4 tons), the Welland Canal car ied 33..) ])er cefit; tlie St. Lawrence Canals, 4().() per cent; and the "Soo" Canal, 20.1 per cent. Of the total capital expenditnre on canals in Can- ada, ahont two-thirds have l)een on the "Soo," Wel- land and St. I^awrence Canals. Between 1018 and 1023, the freight traffic passing thru the Canadian "Soo" Canal decreased by 51 per cent. In the same period, the traffic passing thru nil Canadian canals decreased hy 41 per cent. Of the decrease, 80 per cent was attril)utal)le .o the "Soo" Canal. As has been indicated, a deflection of traffic to the American "Son" canals decreased the total. The total tonnage passing thru the Canadian canals fell from .32.3 mil- lions in 1013 to 11.2 millions in 1023. With this gen- eral reduction in tonnage the percentage proportion of the Canadian "Soo" Canal has been reduced; it now has 20 per cent, while the Welland and the St. Lawrence Canals have respectively 34 per cent and 41 per cent. A significant fact in the develop .ent of lake trans- portation has been the increasin importance of the tapper Lakes. The great increase in the t"affic pass- ing thru the "Soo" canals is one index of this. With the development of the Ignited States, the west- ward moveme it of grain centers and the expansion of popu^ntion have lessened the transportation impor- tance possessed by the I^ower Lakes in the early days of the Canadian canal system. In the United States, the center of wheat production has moved w^est and north. In Canada, the more recent development of Pipp ■n MVP INLAND WATKH TUANSI'OH I'A TION liV.) f'e wheat areas of tlie Northwest has intensified the si^nifieaiiee of this northward and westward pnil. The ti'ansj)(»rtati()n si^nifieanee of tliese elian^es is that all the shortest lines of eonuuiinieation from the Northwest to the seaboard lie aeross Canada. 22. Character of frrif/ lit. —in the K^-neral trat!ie of the lakes, iron ore, coal and ^rain are of most impor- tance. The following figures — for a fairly active traffic year — show the movement hy percentages thru the "Soo" canals: KftstlMiiind Wrsthiiimd Iron ore lO.'.H .()(} Wheat 1H.4.') Grain, otlar than wluat ().4() .01 Flour ;MS .ooi Lumber 1.05 .0()()(} Merchandise and niiseelhincoiis freifrht .'{J) ;m)7 Copper 01) Stone 07 -j.HH Piff iron 001 .00.-) Manufactured iron and shel .... .OOOO^ .-Jo Coal, soft 77. i() Coal, hard l.'{.i)l Salt ..'}<) Oil 1.87 The distribution of traffic by percenta; Pnuhicts products products (urcs of f,,nsf, of min<"s "Soo"' Canal.. 7I.!)J .05 | .>.!)(; juo ]2.'iH \yehand Canal G0.91 — (i.(i(i 5^03 27 AQ St. Lawrence CauaLs oO.SO .13 7.92 9.72 31.42 P 1; J"^ .^r^Z^_. 320 INLAND THAiriC The tr.'illic handled thru the Cjumdinn e.inals, ex- pressed i»! pereeutu^es. is i^iven in the follow in^ tahle: .Xjjjricultiiral \> Aniui.il pr< Miiniif, tti. Fort'st ( Products i9ir. iniT i!)iH 1910 in.'o loji p«T i»'tit pt r (Tilt per cent per ct tit p»r _»» .01 .(Hi .r_' .Hi .l'{ It ... ;{..■.;» ;{.(•". 4.2.> H.j!» xr,H n.ai -.ST .-..'.'(i Mil. H.TI l_'.<>:l 7.HI . . (W.(iO l:i.H-2 7y.2.> .JU,!)H a.i,;j.> 27.7!) HKVIKW '•' s itr traiispDrtatioii regulatt- fruglit .' tHiiiriKV (tt inland watt-r transpdrla- To wli.V ratfs.' t ion } What li tiiMti* .shipuwnt'rs assunu- for t!u- frti^ht tlicv carry? 1' « r?c ,;. .iHerfiit bills of lading nuidify tli stem hut also on the fortunes of wheat-^rowin^. 'I'he wheat shipments out of Fort William and l*ort Arthur in the months of Oetoher and Xovemher are likely to e(|ual the total for the remainder of the year. ..As is pointed out in Mr. Sanford Evans" interim rep(Mt on the (ieor^ian 15ay Canal, the method of marketing' j^rain in West- ern Canada is "to thrust forward sharply, immedi- ately after the harvest, the greater paii o*' the surj)lus, reservin«»- something f.)r a seeray." It fui'ther happens that the heavy marketing' of wheat from Western Canada tends to happen at periods when the demand of the I iiite million bushels and at Fort William one with a capacity of 7.5 million bush- els. In Ontario the ])ublic elevators have a stor- age capacity of iiiiA millions and at M ntreal 4 ele- vators have a combined storage capacity of 9.0 million bushels. In all Canada there are about 3,900 grain elevators with a combined storage capacity of some 240 millions of bushels. 3. Method of doing hnmness under Grain Aet. — In 1912, the "Canada Grain Act" took the place of "The ]Manitoba Grain >iVct," which had been enacted in 1910 and which was concerned with the supervision of the grain industry. lender the Grjin Act, there are three methods of doing business — merchant, ware- houseman, and factor or agent. The first includes the track buyer and country elevator where the dealer exercises his function in buying grain outright; the second, the terminal elevator and the country elevator in the exercise of its function by doing a storage busi- ness only; and the third includes all commission mer- chants, lender the law, the terminal elevator is lim- ited to the liusiuess of a warehouseman, i.e., it can- not deal in grain. 4. lAeenses and innpection. — The public function TRAFFIC ON TIIK (JKKAT LAKES .'323 performed hy the elevators is subject to a Iiceiisiii«»- and iiispeetion system under the Hoard ot* (iram C"om- missioners, a body of tliree men apjxjinted to earry out the euforeement of the (irain Act. Licrnst's are subjeet to bonds bein«^- ^iven to eover the finaneial responsibilities ineident to the type of business en- gaged in. 5. Causes for car shortanc.—ln the handlin*^ of grain lorward from l!ie produeing point, the initial relation with the railway begins when aj)plieation is made for ears and the entry therefor j)laee(l ii> the car order book. DitHeulties in respeet of ear short- ages may arise from causes for whieh the railways are responsible, from difheulties for whieh shippers elsewhere are responsible by holding ears under load, or from ditiieulties attributable to the volume of the crop. So long as the present limited storage facilities exist upon the farm— the causes for this being in many cases the linn"ted finaneial resources of the farmer— wheat-farming will be a cause of constant heart burn- ings to the small producer. Mixed farming is be- ing much discussed and a fair start has been made in Alberta. From the railway standpoint, one ad- vantage of mixed farming will be more ecotiomical utilization of rolling stock and a steadier and a more efficient transportation service, since there will be a diffused burden instead of a sharply concentrated peak load.* iThe general (iescripfion jriven is siiiniiiariml from tlie lecture.' hy r Fl f si til r! immmvn 32-t INLAND TRAFFIC i 6. Documents in grain shipments. — The cars are billed forward from tlie shipping station under the bulk grain bill of hiding, which is made out in du])li- cate. The original bill when receipted by the railway becomes the commercial bill of lading which is used in financing against the grain. The duplicate l)ill is the railway's record. The face of the bill shows the ship- ping station, to whose order, to what station and ter- minal elevator the grain is shipped, who is to l)e ad- vised of its inspection and its outturn on unloading, the kind of grain and the approximate (piantity. The duplicate bill remains at the shipping statioti. The local station agent copies out the instructions from the bill of lading on a separate paper known as the "way-bill." This document goes forward with the shij)ment, under the custody of the conductor of the train. There are four d*icuments representing one car; (1) the bill of lading; (2) the inspection certificate is- sued in Winnipeg; (.3) the elevator outturn; {-l) the official weight certificate issued at Fort William. The surrender of the warehouse receipt properly indorsed is a condition precedent to the shipment of grain. The recei})t thus surrendered is sent to the Government registrar for cancelation, so complet- ing his records. The canceled rcceij)t is returned by him to the elevator company, in this manner complet- ing its record. Mr Piper, of the I'-nipire Klevator Company, before the Mnnitoha Agri- cultural College. ■WBF^ ^B^flB ■K TRAFFIC 0\ THE GREAT LAKES JJSr) 7. Statiitori/ gradcx of grain.— 'Vhv cars are shipped under seal. Provision is made for Ciovern- ment sampling' eii route, in ordei- to estahlisli tlie ^rade. A train ot" from forty to forty-five cars can be sampled in one hour. The statutory "grades of ^rain are 1 Hard, 1 Northern, '2 XortJicrn and li Northern. The statute also [)rovi(k's for further sub- division under tiie heading- of eommereial oradc, no ^rade, rejected, condemned. The commercial grades, usually three in luimbcr, are established yearly bv a })odv of experts known as the "Standards Board," appointed by the Grain Commission. This Board meets once a vear, usuallv in October, at Win- nipe^', to fix the commercial «»rades for tiie new crop. "No <>Tade" means ^rain which has excessive moisture, being tough or damp, 'ilejected' grain is that which is unsound, musty, dirty, smutty or sprouting, or wliich contains large admixtures of other kituls of grain, seeds, or wild oats, or which from any other cause is unfit to be classed under any of the recog- tiized grades. "'Condemned' grain is grain which is in a heating condition, or is badly i)in-burnt. Since the identity of grades has to be preserved at the terminal points, in the public terminal elevators by biujiing together all grain of tiie same grailc it is manifest that in a season when there is great sub- division of grades the etheiency of the general elevator facilities is much Icsserjcd. thereby slowing down the railway movement. 8. Special chargcH. — In addition to the thru rail- mm mm 326 INLAND TRAFFIC « way rate, there may be special charges covering, e. g., I)ulkheading, where a charge of one cent per hundred ])oun(ls is made to cover (himage to the car due to partitions heinp* built therein to separate different kinds of grades of grain; stopover, one cent per hun- dred, this being charged wheti car is stop])ed in transit and its contents unloaded and reloaded; a diversion charge of $3; and demurrage. 0. Utilization of elevator faeilifies'. — An economi- cal utilization of the elevator facilities at the head of the lakes is effected in connection with the movement eastward thru the I^ake Shippers' Clearance As- sociation. It is in effect a voluntary clearing-house. A shipper may have delivered to him warehouse re- ceipts covering grain located in various terminal ele- vators. Instead of having to go thus, perhaps, thru all the elevators, the Association, thru the exchange of warehouse receipts of others similarly situated, may be able to concentrate the cargoes in one or two ele- vators. 10. Anali/sis of grain movement. — As one of the great problems of the Canadian Northwest has been concerned with rushing the grain to the lakes before the close of navigation, the problem of how and to what extent the movement from the head of the lakes is water-borne is important. The movement of Canadian wheat thru the Cana- dian '*Soo" Canal has grown from one million bushels in 189.3 to 13.8 millions in 1921, the high point having h^en reached in 1913 when 101 billions of bushels TRAFFIC ON THF (JKKAT LAKES ;viT passed thru the canul. There is also to he considered the tlour movenient which in lU'Jl was licavier in amount than all other grains except wheat shipped Ironi Ft. William — Port Arthui-. This li^ure of 14 millions of hushels, countin«»- 4' ^ hushels to a bar- rel, brings the total up to 27.H millions. The percentage of Canadian wheat, exclusive of flour, shipped from various ports thru the Canadian and American "Soo" Canals for a period of years was: From Port .Arthur — I'ort Williiiiii, TO Montreal Gforjjian Bay ports .... Other Canadian port.s . . . Buffalo 19ir l.t :{;$.() I!».7 t,>.!» 1!)18 1..' (i2._' t.l 19_'0 O.H :u.:{ _'(».T ,V{.S 1921 :{H.2 •M):2 m:{.1 11. Grain traffic diverted to United States:— The Evans' report, already referred to, points out that the traffic diversion to United States' routes appeared to he concerned with the seasonal peaks of the grain business of Western Canada; that is, the regular movements tended to be over Canadian routes, the surplus moving over United States' routes. The distribution of the movement is indic'tive of the importance of short-rail route methods ' com- munication with the seaboard, either across Ontario or via Buffalo. Of the 20..*} millions of bushels of elevator capacity in the public elevators of Ontario, east of Port Arthur Bay i)orts, the distribution in point of capav'ity is as follows: Georgian liay ])orts, 60.8 per cent; other Canadian ports, i. e., La've Huron 'i I wm rsBT 328 INLAND TRAFFIC and Lake Erie to Port Colborne, 25.1 per cent; enst of Port Colborne, 14.1 per cent. 12. Upper Lake traffic encourages specialised vessel construction.— The relatively simple nature of the traffic of the I'pper Lakes and the large bulk of the individual items thereof have encouraged spe- cialized vessel construction. Cirain and Hour furnisli a considerable amount of cargo for the smaller ves- sels, such as the wooden steamers in the three hun- dred and three hundred and fifty foot classes. Lum- ber is handled to a large extent by wooden steam barges which tow loaded barges. Schooners are also to some extent still engaged in this traffic. It is in the traffic in ore, grain, and coal that the large bulk freitihters are used. In this traffic, the tramp or "wild" l)()ats are of importance as a regulative factor. Tank boats are also used in the carriage of oil— for example, by the Imperial Oil Company— to the head of the lakes, where supplies of oil are stored to be shipped on further west in the winter season. L'3. Package freight. — Vhe ])ackage freight of the lake includes general merchandise, such as silks and woolen fal)rics and manufactured goods, canned goods, fine furniture, bar iron and steel, etc. Here the traffic is carried mostly by line boats. The rates of the line boats are usually lower than those of the rail carriers by an agreed difference. While the Northern Xavigation Company and the Dominion Transportation Company enter into thru rate ar- rangements with railways, there are various thru all- MHW^W mmmsm THAiFic ON Tin: ghi:a r lakes a29 water independent lines operatin- to the head of the lakes, c.^r.: the Canada Steamship Li,Kvs, Limited operating- from Montreal, Toronto, and Hamilton to Sault Ste. Marie. Ont.. Fort William and Port Ar- thur, and the Dominion Transportation C.unpanv- Limiteil. U. Influences affect inrj lake rates. The rates on lake-borne trafiie are aft'eeted l>y the bulk of the mo\ e- ments and the speeiali/ed types of eonstruetion. The balanee between the trattie in different direetions is also a faetor in intlueneino- rates. For example, the large bulk of eargo nun ing east thru the •'S(H)" eanals leaves a large amount of empty vessel spaee moving westward to handle this eargo. This in turn reaets on the rates on west-bound eoal, the oidy traffie offer- ing in large amount moving westward. 15. Load factor in lake traffic—Aw iiistructive analysis of the load faetor in lake trathe is eontained in the interim report on the (Georgian Hay Canal, published in 191(). In the movement eastw.ird thru the Canadian and the Tnited States "Soo" eanals in 1913, there were earried 'I.m tons of eargo for every net registered ton of vessel eapaeity. On the trips west-bound, the amount averaged about one-third. Both the east-bound and the west-bound trattie move- ments are regular, and do not show the same extreme peaks as appear in the rail-borne grain trattie. In the ease of traffic of Tnited States origin, the ratio was 2.09 to 1 : while m the ease of traffic of Canadian origin the disparity was much greater, the ratio being 7.91 to 1. The disparity between the HPSRV 330 INLAND TRAFFIC Canadian and the Ignited States movements is due to the much greater hulk of traffic-ottering west-hound in tlie case of traffic of United States origin. In the case of Canada, the hulk of grain moving eastward is the predominating factor. The traffic of Canadian origin, from Lake Superior, is not as e(iually dis- trihuted as in the United States traffic'. The iron ore from the ore ranges of Minnesota moves forward with fair regularity. The rushing forward of the Cana- dian grain before the close of navigation makes a peak load. In Octoher, 191.5, there were loaded out by water from Fort William and Port Arthur .52,- 850,000 bushels of grain. In the traffic with Lake Huron and Georgian Bay ports, Canadian vessels carried 5.20 tons east-bound for 1 west-bound. In the traffic with Lake Michigan, which 'i of minor importance, the bulk of the move- ment was westward, the ratio here being 1 eastward to 2.15 westward. From the standpoint of compara- tive utilization of vessel space, the most satisfactory movements are to Lake Ontaiio and St. Lawrence River ports, where there Mere 1 .76 tons east-bound to 1 west-bound and Lake Eric ports with a ratio of 1.09 to 1. 1(5. Movement of traffic.— An annlysis of the traf- fic of Canadian origin moving in eithi lirection gives the i' .illovving percentage distribution , ^ t These computations are from the Evans repor*. TRAFFIC ON THF (iUKAT LAKFS iiiil Last U.tmul West- Mound To or from Lake Erie 54.01. .j.oj) To or from Lakf .Mitlii/ran 1,;JS To or from I.aki- Huron and (ii-or^nari ^ , ""v iiii.H\) 45.H1 To or from Lake Ontario and tin- St. l.awriiicc Uivcr 11. (iM r,],{)\) xVs hearin*'- on the traffic fortunes not only of the proposed (ieoigian liay Canal hut also of the ex- pansion of the existing canal system a percentage analysis showing- the direction of the nioveinent of the total traffic, whether of Canadian or of Tnited States origin, passin^r in either direction thru the "Soo" Ca- nals is of value: Kast-Hoiiiul Wpst-nound To or from Lake Erie H'.iAH 94.07 To or from Lake Michigan lO.TT l.oj) To or fronj Lake Huron and (ieorgian Bay ports 4 14 o 14 To or from Lake Ontario and the St. Lawrence River ports 1.(51 ^.\H 17. Formation of Cdiiada Trausportntion I/iues, ^^^f^- — 1» June, 11)1.*}, an anial^aniation was formed to control various freight and passenger services, wherehy a new company with a cai)ital of $-J.">,()()().()()(), tlie Canada Transportation Lines, Limited, took over the Uichelieu and Ontario Navigation Company, the Inland Lines, Xorthern Navigation Company, St. Lawrence Kiver Steamboat Company, Quebec Steamboat Company, Canada Inlerlake Line, On- larii* and Quebec Navigation Company, Merchants' f9r^s^r^sBmm% ;j;3a INLAND TRAFFIC Montreal Line S. S. IladdinM'ton, Tlu.usuml Island SteaiMl)oat C'()nii»an>. Thr UiflRlki- and Ontario Company already eon- trolled l.v puirhase, or by st..ek (uvnersliip. Hie Inland Lines, Northern Navioation Company, Niagara NavioalK.n Company, St. Lawrenee Uiver Steam- boat C"ompanv, Tlumsand Island Steaml.oat Com- pany and Mereliants' Montreal Line. The Quehee Steamship C.Mnpanv operated a service between Que- bee and the maritime provinees, as well as between Quebec, New York and the West Indies. The C an- ada Interlake Line had already consolidated the in- terests oi)cratino- under the name of the Merchants Mutual Line. The consolidation is now known as the Canada Steamship Lines, Limited. 18. Asities from the standpoint of naval architec- ture, have great carrying capacity. Ihe J. l lei- pont Morgan," which is (505 feet .5 inches m length, can carry in a single yoyage a cargo equal to the com- bined caVgo capacities of every vessel alioat on Lake Superior in 18(51. On the day this boat was launched, its captain to 10 hours. An ore boat returnin^r lioht can make 30 round trips in a season between Superior and Cleveland. If it takes back c(»al, it can make 20 round trips. 10. Lofulinc/ and unload inf/.'Vhv loading- and nidoadin^ of ^rain can be carried on with ^n-eat ex- pedition. At the new government elevator at I'ort William, 100,000 bushels can be unloaded from the cars in an hour, while a (JOO-foot boat caii be loaded in less than 4 hours. In one day in 1012, fourteen boats took on at Fort William and Port Arthur :J.- 000,000 bushels of ^rrain. At the end of Septenjber. 1013, one , this was <(|iiivaUiit to (i.'j train loads. The la!<'est Canadian lake t'rei^fiter. the '• W. (irant Monlen," was lannehed in iVpiil, IlUi. 'I'lie vessel is 02.3 I'eet lon^'. .V.> feet JMain, and :i'2 leet deep. Slu has an estimated eanyin/^- eapaeity of oHO.OOO hushels of wheat. On S«i)teinl,er 17, r.n4, this vessel car- ried out of Fort William a ear^'o of 4.>l,2l"t hushels. This is the e(|uivah'nt of 10 average grain trains. As- suming a Western townsiiip to have an average yield of 20 hushels per acre, this cargo eciualled a|)pr()xi- mately '»H per cent of this yield. At Port MeXicoll, the Canadian Pacific port on (;e()rgian Bay. on August 11, IDK), there were un- loade(' 382,700 hushels in 13 hours. At the same tmie tiie railway loaded out 141 cars, or 220,100 hushels, in 10 hours. 20. Combined inland and ocean traffic. — It is at times urged that the improvenient of the St. Lawrence canals, if this follows the improvement now under way on the Welland Canal, or the construction of the (Georgian Bay Canal, will lead to ocean-going vessels carrying their cargo in to lake ports, without hreaking hulk, and receiving there export freights. W^ithout going into earlier experiences, reference may he made to the fortunes, in 1001, of the vessels huilt for the Counselmen Syndicate hy the American Shiphuild- ing Company. Altho they jounieyed under their own steam from Cliicago to Europe, the venture was ■■I TH.M'FIC ON i'lll (.1(1 ■VV I.AKI.S .'i.n so iiiij lofitahlc that it was privet, „,, ...ftt i our s.-a-ui,. 'i'lie fat't tliat tin- vessels n^iUi imt |,,a,| to tluii- full depth of tut'nty tVct tiiiiil Monhval was naelud uas peculiar to the existiiin^ t-anal uii* >o pc-r .-cht to the cost. The lake vessel, on a(<..unt ui' the snialier amount of coal needed to be carried, lias «Tra(er car^A. space in pro- portion to size than the oreafi-^r,,incr vessel. In n -n- crul, the latter costs ahou^ twice as nnich j>er t' i ,1 car^o ca])aeity . s the former. A nunhiiud ■ :;. . m;! ocean tyi)e of vessel would lack the eeouon.. ta^'cs attachin^r to the more sixciali/.ed typ 21. I^ahr rates.- V\iri\rvs collected hy d' ways and Canals Department ^ive the followiiv " mile rate data for wheat for the years ll>l7-li)21. H!- elusive: I'ort Williiin- Montrr/il I'ort Willi, nil Georgian H;iv l'«rt Willi. iiii— Other Canacri.iii pmt I'ort WilliJMii — Huff,il..! I!»I7 I!'IM IftlO 1020 Ifl.'i :{"'» Jlij .:{|fi ._"»-, ■-'77 .-.'fH .j.-.o iM .'<»•. .IVI ISO |_>. • i> .11; ._>.',! (IS ; This may he compared with the all-rail ton-mile rate on grain, on the normal hasis, from Fort William 3ti6 INLAND TRAFFIC t„ Montreal, vi/., .401 cents. On the lake rate to Montreal, in lin.>, one toi» would be moved 7.37 mdes for one dollar, while all-rail tlie ton wonhl he earned 24S n.iles. During the suiuiner ol' IDKJ, there was a lower all-rail rate ^nving a ton-mile rate of :M\ cents. On this a ton would he carried 277 nnles lor one dollar. 22. Ton-mile rate in icatcr-honw and rail-home ,,.,,y^V.— In making comparisons between the ton-nule rate on water-boriie traffic and rail-borne traffic, it must be remembered that, in the ton-niile rate on the former, there is included no char-c by way of con- tribution to the capital cost of the canals, as well as of the improvements in harbors and aids to navifration. it is a vessel rate only. In the -ase of the rail rate, there is not only a pay- ment for the out-of-pocket costs of the actual haulage movement; there is also, of necessity, a payment to- ward the maintenance and operation of the railway a. ' a return on capital. Owing to the difference in factors concerned, the water ton-mile rate (pioted is not, in strictness, comparable with the rail ton-mile rate. The canal system has cost \VU) milhons ot dollars. The maintenance charges on this in li)15 wcvc 1.4 per cent. A computation has been made that, taking interest at '6h per cent on the capital and adding thereto mnintenance charges, it will be found that this contribution figures out .14(5 cents ])er ton per mile. This does not take into consideration the cost of aids to navigation, harbor improvements, etc. TRAFFIC ON TIIF (IK FAT I.AKFS :i;JT Keco^iiiziii^- the limitations of the mctliod um(I. it would appear tliat the eorreeted water ton-mile rate on grain. Fort William to Montreal, would tor liMT he .411 eents. On this hasis, i^\ would earry a ton 243 miles. In 11)12, figures eolleeted hy the Department of Railways and Canals indieated that Tuited .States traffie using Canadian waterways, had a ton-mile rate of .007 eents against the Canadian rate of .i;)4 eents. The eomputations are not now presented in this form. The disparity hetween the Cana«lian and the Amer- iean lake ton-mile rates indieates the .> eents per toT», or .0(58 cents per ton-mile: on the return movement there is a large amount of empty cargo space and coal is carried at exceedingly low rates — during 1012 at W cents per ton, or .04<5 eents per ton-mile. 23. Variations on rcatcr-lxn'nc (/rain rates. — In the matter of rate" i water-horne grain, there are varia- I I ;i.*j8 INLAND TRAFFIC tions from year to year, as well as from season to season. In 11)21, the average ton-mile rate from Fort William to (ieor^ian Bay ports was .184, while the spread was .14.3 eents. In 1!)2(), the averai^e was .2")}), while the spread was only .204'. The following table gives the average ton-mile rate and spread for the year 1921: Fort Williatn — .Muiitrc-al Fort William— (jf(»r{riiin li.iy Fort Wllliiiiii— Port Colbiirnc Fort William— Buffalo Averape Spread .205 .071 (April ami October) .1S4 .U.I (Jnm* and Dfcmiber ) .12:$ .(»Ki (April ami Aii{riist) .()8:j .120 (May ami Dwtiiibfr) 24. Comjmrlsou hcticeen lake and canal movcn ntn. — In 1920 and 1921 the ton-mile rates from Fort \Villiam to Bnfi'alo were .223 eents and .083 eents respeetively. These low average rates on traifie to Hnffalo are, in the ease of ore and eoal, held down by a highly specialized traffic and the necessity of obtain- ing cargo for backloading on the westward and north- ward movement. The grain rates aH'ord a more fairly comparable basis. In the movement to Buffalo, there is large bnlk in large freighters. These are able to obtain some cargo on Lake Erie either of coal or a certain amount of ])ackage freight. In the movement tiini the Welland Canal and on to Montreal, the physical features of the canal system limit the maxi- mum thru cargo to 80,000 bushels, so the economies of bulk handling are not so largely present. The traffic may either go to Montreal or be transshij)j)ed at Kingston. In either case, there is the disadvantage TRAFFIC 0\ THE (iHKA'j I AKKS iMH that little westbound car^o is oftVred on Lake On- tario. In the lake movement, short tnps with niiniim^m coal eonsinK^)tion are the most profltahh'. Kven in the ease of a vessel whieh is ahle to i)ass thru the Welland Canal, the loekin^ thru takes about nineteen hours. In the same length of time a \ essel eould, aftei- delivering its cargo at the foot of Lake Kiie, take it back as far as the Detroit Uiver. As between the movement to C amidian points and tiu iiiovcnicnt to Buffalo, it must also be remembered that while, lor example, in 1012, in the carriage of grnin bel\vc« ii Canadian and Tnited States ports, the average ca- pacity of the Canadian boats was 102,()()0 bushels, in the same movement the average capacity of United States boats was 22(),000 bushels. In 1921, the in- surance rate oji the insurable value of steel hulls, cov- ering all risks from the head of the lakes to the foot of Lake Erie, was 3] per cent. An additional one per cent is charged on the movement east to Montreal. REVIKW Describe the metliods i>i' (hmit^ l)iisiru-,s under tlic "Canacli Grain Aft." What are some causes of car short.iffc ? What docunu'iits are used it> gr.iin >hipnients.' Trace the d<'velopment of j^Tain shi|)iinti»s thru the "S,.,." Canals. Why is the traftic heinir (lix.rtfd to the I iiitcd Static" What influences affect rat* s on Like Iriflic.- i340 INLAND TRAFFIC Mow has specialized traffic on the lakes affected the type of boats used? Why have vessels built for combined lake and ocean service proved unprofitable? What causes the disparity between Canadian and American lake ton-mile rates? Note: Xumerous questions of business practice and procedure are discussed in detail in the Modern Business Reports. The current list wil! show those which are especially related to this volume. Among tlu-ni may be mentioned 9. The Industrial Traffic Manager 'ii. The Motor Truck in Highway Traffic INDEX Adams Express Company. 270 Agriculture, and Railva> Truftic. 47-60 American Express Company, l'i>iiiid.-(l in 1x50, 27, 270 Anomalies, Import Rate, Meaning of. 192; Canadian Pacifir on. l!»:i : Influences on iiuport ratp.i, 194 Baggage, Rules for. 233; Disney d'fine>. 2;tH : Railway's liability for, "j:!:! : Stur age rliarges for. 234: Initial rar Tier liable for, 234 : Handling of, in Toronto, 235; Carried by rail- wnvs, 23.5 Bill of Lading, Conditions of, 24.5; Comjiany lialiil ity, 2«6-48; Forms of the. 2,">o- 53; I)ol; Order bill, 251, Ini form in United States. 251-52; Kxernptions prohibiti'd in. 31" , Contrnts of, 310; I'rovi.'ons of grain. 31 1 Board of Railway Commissioners, Rpcoinmeniipd by Railway Committee, 37; Membership of, 37; Qualitioa tlon«, 37; Powers of, 3'^; .Turi^ diotion over rates, 3^; Traf^ii' fa ciliii'« and methodii. 39; Procedurf of, 41; Divisions of, into two sec fion», 41; Procfdure informal. 42. Findings of, on law and fart. 42 ; A)i|ieals. 43; Accom|ilisliments of. 43 ; Ai>pliOBtions and romplaints. 44; Freiu'ht classification and. 96 99; .Indgment of, in Western Rntrs CaM-. 120 Bond Ouarantees, 33 Box Car, 269 British North American Act, lutcrculonial Railwa.' . 9. ronliol under, 22 Canada, ( 'iiiM|iarlson bewcen pa'-'-enger an>4 f' Mght reciijits in 213-14 Pas senger travel tcnd-i to increase m the same ratio as population in. 21fi Hail»a,v Art of, and pa^sen ger rates, 227; Kxpre^s eompaiiie< in. 2H0; Oram elevators aii'l grain trathc in. llJl ;!J:'i. Canada • irain Act, 322 Canada Transportation Lines, Ltd., Formation of, '■'•'M Canadian Car Service Bureau, 256-58 Canadian Express Company, 2 ho Canadian Freight Association, 175 Canadian Freight Classification. Karly condition^, t>0 , Minhaudise elnsses, 67; .SiilidiviMons, tiri; In ternational trallic and, 6rt ; Husi iiess expansion, 69-71 ; Quantity and rating, 71, Canadian Freight ,\ssociation on minimum weights, 74 . Car ni. -.surements, 74 ; Ship- ment costs, 77, I'niformily in, HO; Mixing privilege, 81; KtTect of mixing privilege on shipi>ers and I onsumers. «:! , Divergent trade in teresis secure compromise rlas'titi cation, M4 . New distribution fen ters, H5, Long and short hauls for prairie ceiiti r-", hi5 : .lobbing busi iiesses and. )*{>: Kdmonton object" to extension of mixing privilege H7. Distributive business, a question of balai-.ie, fix; I'actors nffeiting. r*K; Value of the arti> , l'J-i:5; Kast ern conucclions. i;!, lirand Trunk oi'pOMtion. l:i-14, .Monoiioly clause in chiirti r. 14; WIichI trunsjiorta- tion, 14-1"); Crows N'est I'a-s ex tension, 15; Suli~i(Jy I'rovisiofig, 15-lG : Govcrnint'iit and, 2:i ; Mile- age "Jfi; Switching costs on 138, Hlution co^ts, 20i) . Tt-ndcncy to increase weiglit and cost. "J'Jl ; Kinds of iiassciigir ticket', in, 2-11 ; Agreement hi tween Uoininion Kx- liress Coiiiimny and, 'Jt<2-8-l <3anadUu Transportation, Waterways. I , Early settlements, 1 ; Trade routes, 2 . Highway improve mcnt. 3 ; Freight rates. 3-4 , Tir-t railroads. 5; Chartia-i gianid 5-0. Guarantee Act. ti ; Uevelop luenl period, 6; Great Western Ituilroad, ii 7, f<, 10-11; Grand Trunk Kailwaj, ti, 7 H. 10, 11. 1.1-14, Water comjietition, 7, Gov ernment loans. 7, Hailwa.v mileage. H, Intercolonial <-ailway. H ; Untisli North America Act. 9; Amalga niation of roads, 11 ; Transconti- nental road. lU. Caiiiidian Pacific. I'J ; Monopoly. 14, Wheat trans portatiOM H, .Subsidy and Cana (lian I'aciiic. 15. MacKeiuie and Mann line 16; Northern I'acitic, It) Grand Trunk I'acitic, 17-20, Hill lines, '_>0, Operation m On tiirio 21. Railway Association. 21; Exiiansion of the Govunnient railway system. 22. Conceiiii ation of railway control. 25 •S'- <■ Facilities and Equiiiment Canals, EftiiieiKv of, 'AOA: Terminals, 303- Oi); "Soo" Canal, :ti:t, 317, nin. ;U9; Welland Ship Caniil. 314 ir>; Ottawa System. 31ti: Hideaii Canal, .llll; Trent Canal. 316: No foils, 31ii; .'^t Lawrence triifTic, 317: Percent ;M.;es of iraftic. 317; Tiitr=. r;:>.« Carriage, Common law ohlie.itions of the rail- ways. 243: Hutchinson defines common carrier. 24:! ; Carrier-its an insurer — liable for all ktooils he uv.dertook to carry, except in tive Carriage — continued I'ases, 24;j t4. Kill of ladini: and its condition^, 24 5; Liahilil.^ , 2 4t>- 4'*, Insurance. 2J~; Liability as a warehouseman. 24."! . Warehouse detined. 24'J, .'■^iHrage and demur ras^e charge. 241*. Loss or dam a«e. 249 ; Payment of charges, 250. Forms of the lull of lading, 250-5:1; Order bills of lading, 251 , Due diligence. 25.!; Conditions of, 2SH; Carver on carriage of goods at sea, :!n<»; Water, 309-12 Carriers, Common, Sie Carriage Cars, Size of freight, 53 ; Loading of 5:i ; Capacity of. 21's; Traveling lu Pullman and sleeping cars, 21^, Additional weight in, 219; Kela tion between weight and co^t of jiassenger servu i', 219-22 ; Ho\ <'ar called a 'legal tender" car, 2t)9. Sf Car Shortage Car Shortage, Demurrage rules. 258; Embargoes, 259; Time results. 259; Higher demurrage. 261-62; Georgia Com mission on, 265. Klapp on aver age agreement. 265 : Walsh on rec iprocal demurrage. 266; Amer'tan Railway Association rules, 2ti'<- 70, Causes for, 323 Cartage Service, Rates for 202, 204. Railways and. 202 ; Service performed by Do minion Transport Company and Shedden Conijiany. in East (^aii ada. 202 Contentions held by rail ways, 20.!: Charges for, not under Hoard s jurisdiction, 204 Claims Department, Work of 27;i, Delay in settlem'-ni, 274; Adjustments made, 275 C. L. and L. C. L. FreiL'lit classification, ti2-64 ; 6«-77; Contention of railways 62. Classes in I lilted States 66: In Canada. 67. 71. Quantity difTpiences 71- 7:!, Minimum weights, 73. .Ship ment costs. ,T: Freight claHsiticR tion. 83-93 C.".?Tinnitation, I".:irnings. 223: Motor traffic at''' ■■ 's. 224. Coniiiiiitation tickets, 231 Competition. Rad and wafer, 7 104, Lines of 10. Rate- aiil different b'ni:l!i INDKX a4jj Competition— colli I iiiiimI M'i. WuiiT. iiirtiifiici- oil ruif^ !.•(', rroiliirtmii fi'iittTs cliaujic. l.'.J. I'oit trallic, \:,l. Markets « iiiiipt'ir, 1')'), Siigur and oil. 1 "iti ; loiii|ilt uii'iilury ('uiiiiiKi. IJB, Tfriiaiml rulfs uiul. 170, Hi'tut'cii wutiT und port trutlii', 'JOti; Com iiiiilation liiiMru'>s sulijcct lo. '^-4; KfiiiiriK'v of water, ;i07 Concentration Rates, Advantage to i.hii>in'r, -00 Cost of Service, Kati! making. 11'), Distntmtioii of, 11 >: llll••r^ti^t«■ Coiiinifrrc Com ini-Msion on, ll'>: What it covers 116, Ri|il.y iuialy-i- of 117. Val u»'s a factor in Hit; AllocaiinK ex peiises. 120 . Western rate case>. 120, 1;J6; CiiUora Committee re .I>ort, 121; What tlie traffic will Irtur, 121 123. Kink on, 122, I'as^euger rates. 20^. 210. 221 Cowles, Mr., on Railway Kates, lii9 Crow's Nest Pass Agreement, 172, \>*f> CuUom Committee, 121 Demurrage, Sitorage churRes, 249, 2."i,j-2<)« , Car service bureau. 2.5(i-j'< , Kules a\> J. roved by Hoard. 2.'>t). Anioiini of claims. 2'ir* ; Car sliortaife anil 2.08; Controversy over 2'>!»-61 Increasid cliariies 'J61 . I'acitic Car Demurrape Hureuu on 262 Average, 26,'J -6"> ; Demurrage rules of the United .States. 26:! .lames O Klapii 1111, 2t).'> l{e( ipiocal, 265-6", .1 r. Walsh on 266 Destination, Chan-in:;. Ill Transit. lO!" Dlherential Bates, ('iiiii|M iitive ciiiriers 11(1; Ciiiiada Ir. iL'ht 1 »',! Disney, Delimlion oi Ba^gase. 2:i:t Distance, A f.ii liir In freiiitil rates. 140, As a factiir in passen'rer rates. •jijV . Ha-is of rati s in otViiial Classlii, a ■ Hill tirritor\ 111 Distributive Tariff, ' h L'ln of 1-1 lle.'IsOMs for 1 ■* I Dcicir.ioQ Exprass Company, jnu Equipment of Railways .Sf. Facilities anil Kq . iHnent. Uevel ■ ij)' lint of Erlckson, ronimi-sion. on Kailwa.'. Hates, U- -120 Evans, Sanford, on Gra-.u Shipiueni lu ( Hiiiiila. !. 1 ^.^'; Excess-Fare Trains, jotf Export and Import Kates. lu C'anaila, lii'i. Coiiimoilily rate, on stapl-s, 191; K-xpoit trattic in Chicago New Vnrk base I HI I in iMirl rale anomalies, li'j, Atlj tiiilc 111' rail«a\s loward. 1^:1 Im |iorl lull' liiiw goMrneil, 1(U Express Companies. •Vt'f K.vprcs, .slerviie Express Rates, .V-'.' Kates i:\pr.-s Express Receipt, l.iaiuinv iiiit. Cl.is-iiicalioii. 2-''i; Vulua- foil 1 li.irc's 2'<7. Weight and space 2s7 I.ialiilit.v . :;->s 90, Ui reipts ami contracts, 2M9-90. Standard mileage fanfTs, ^91. Traffic londilioiis a basis of rates, 29J. Four sian.laril larilTs. 'JO.'). Local tariflfs. 29.'i , Transfers. 29.'i . (^iianlity and rales, JliT; First class freight rate. U99 ; Special cir iMilars. 29',i . l>ivisions, 'j;i9 . I'ack ace rates. :)oii Kate basis not Kcientitio, 301. Thru rates, yo4 Facilities and Equipment, Development of, Kxpaiision of Canadian railway s>s teiii 46: |)i-triliiilion of railway niileage, 46; I'oli-ntial railway traf lie. 47, Ki lalioii of agnciilliire to railway Iralhc, 47, Adniil Ir.illic 49: Kreighl traftic. i'.l . ( uiiiiiio ilities carried by railvva>s, '>o . Tonnai;e sources ."iii ; Kailway iiiilea;;!-. .11: Iinprov.nicnts in roadbed and rolliiiL; stoi k. ,'i2 : in creased si/e of freight 'd , Car loading. Ct'A ; Advantag's of electric traction ovi-r sicnn ."I'l, }',. ofiomy ir. opi r.ition. '•>, , How eariiiiikTs ate measured. ^H Fink. Albert, Tr.ifTic co-ts nnal.\7ed 122 Freight Business. Kreitfht tr.itVic in Canada between 1907-1917. 49 Comparisons of tri ight Irartic, i;;:! , Movement a :}44 INDEX fri'itjlit rp- Iii Caiiailu. tariff class- Freight Business — continued onowuy one, 'Jll; DifftTfiin- in liasspngrr and, 'Jll, 'Jt7; Cuti nertion with puMscngi-r linsinox. '-'12 l.t; Mr. W. 1'. Hinton on. 2l;j; I'iisscnK'T and reiptfi rompari'd, °Ji:); 214 .SV^ Moving the Traffic Freistat Olassiflcation, Fundiwncntiil, tiO : Karly iflcation. CO; First tariff sheet in linitcd Stales, 60: Railway rate Rroniiinc. 01 ; Railway contention on ratinir. 02; Carload ratings, 6'J - 64; How tinilt. 0>; In the I'nited States, i'-i- Oflieial, .Southern and Western, O.'i ; Movement for uni form, in Tnited Stutes, 06; In ('anr ia. 07; International trafiii'. 68; KNiiansion of Canadian classi lication, 09; Quantity differenci'v 71; Spe<'iinen page from Canadian. 72; Follow Lot Rule, 73; Car measurements, 70; Cost of C. I... and li. C. L. shipments, 77; Win consin Commission, 7rt Sre Canadian Freight Classifications Freight Rates, Regulation of, 33 ; Railway (^lauses Consolidation Act, 33; Legislution on, 34; Rei>ort on rate grievances. Sf); .Turisdiction of Railway Com missioners over, 38; Railway rate f:rou]>in);, 01 ; Railway conten- tion on. 02 ; Carload. 02-04 ; Quantity differences, 71-70; Ini j)Ortance of freight traffic. 101 : Tonnage and mileage service, lOU : Rates of universal interest. Wl : Competition and. 104; ("ouiiiarnl with mercantile and manufactiir ing liusiness, 10.5; Kvils of panit IpI lines. 106; Class tariffs aucl commodity tariffs, 130: Articles on which carload commodity rates are fixed. 131; Class rates, 132; Com parisons of freight traffic, 133 ; Ton mile rates, 133; Difficulty of comparing foreign freight rates. IM.'i; Terminal charges separate from, 136; Two factors in. 13(1 ; Tf-rmina! c!iarj.'e. 136-"?^: Ilftn! age charge. 136-38; Switchiiisr costs at Winnipeg. 138; Terminal cost in Wisconsin, 139 ; Distance factor, 140; Percentage system. 142; Local and thru rates. 144: Airiving at a thru rate. 145 Sff Freight Classification ; Rate Mak- ing Oovernmeut and the RftUwajs, (ioverninent loans Orand Trunk. 7: Control of National Tranx-oiiti nenlal liy, 20; Railway War Hoard. 21; Rxpansion of (Jovein ment railway system, 22; ('oiilinl. how vested, 27; How the (ioveri ment aids, 27-29; Loans, 2"' 3 1: .Suhsidy (jolicies, 29-31; Doniin ion land grant, 31; {guarantees au- thorized, 33; Rate regulation. '■'•'.'•• (i. 38; Railway committei'. :!4; Itoard of Commissioners, 37: Tiaf lie facilities, 39 ; Provisions for ;:rain movement, 40; Ca^es of ap- peal. 42 Grain, I'rovision in Railway Act of (anada for movement of the, 40; Millini; in-transit arrangements and read- justments in flcur milling, 1!>0: .VrrangrmentR in shipment of. to elevators, 198; Grain products. 198; Provisions of grain hills of lading, 311; Claims for loss or damage, 311; Lake-Grain Hill. 312; Grain traffic on the Great Lakes. 3:'l; Canada Grain Act. :122; Klevators, 322; Four docu ments in shipment of, 324; Stat utory grades of, 325; Special charges on, 325 ; Analysis of move ment of, 326; Traffic in diverteil to United States, 327; Variations on grain rates, 337 Grain Act, 322 Grain Shipments, .vcc Great Lakes Traffic Grand Trunk Pacific, I'roject of, 17; Terms of charter. 1>*; (Jrand Trunk stoc'cholders dissiit- isfied with, 10; Heiomes political issue, 19 Grand Tru ik Railwtjr. I'i'osiiectus issued in 1853. 0; (.'om petition with Great Western, 7 : Government loans, 7; Mileage, f^ ; Compared with Great Western. 1"; Absorbs Great Western. 11; Lliiet. controlled by. 11; Friction with Canadian Pacific, 13-14: Grand Trunk I'acific, 17-20 3reat Lakes Traffic, Ib'velopnit lit of, 317; Grain ship- ments, 321 ; Elevator capacities. 322: Canada Grain Act, 322; Li- censes ,nd inspection. 322 : Cai- shortage. 323; Documents nere^ sary. 324 ; Statutory grades of srain. :'.2"): Rulkhead charge. 325; fc ■•jW™.' INDKX ;u.i OrMt Lakc» Traffic — cuntiinied StoiioviT cliariTf, :JJU; Itivi-r-ion < liurKr. .tJti; MovfDifiit |irulilcni^ :i2e; Trurtir Uiverti'd ti) I nili'M Stat<^ .'1U7; I'pix'r I.uk>-o inillii :JU8; I'urkagc fr-ijcht. ;fJH ; lUn-. :fJ9. :i;t,">-;iH, aaU: Load faiior :J21>; 1 TCfnlugc analv-is of. :t;i1 ; Cnnnda Transportation Lnif- Ltd.. I!.n : Ciiipuiity of vis-m'K, :t:rj . Loading and iinloailine. .'1:1'! . (»i'»'an v;'s«<'ls to Inkf I'ort*. .I'.H : Ton mill' rati' di.->|'ariti»'s. ):iti WatiT hornt- grain r.ilcs, :i;i7. Canal and lako moveuii-nt-. .'JiJH Oreat Northern Railway, 'Jo Great Western Railway. (>|i<>nin); of, (i; Coiniictition witli (irand Trunk, 7; MilfaBt- in lfs, II First Pullman put into opcratum on, 'j:i(; Guarantee Act, Canadian lit Hu-ir -J 1 : Hutchinson, Dctinitiun i>t Conn i r.,r ri>r. .■4:t Import Rates N. < h^xport and Iiniiiit Rates ItUand Water Transportation, Ai a rijriilator of V'ii;h|s, ;!()": ]>\^ advantagi'.s of. ;10T; Conipitiiio' and I'rticifnc.v, ItO.-t ; CanaK. .J"- :!l'i l)ant:frous shipnii-nts. ,'!11: (irain bills of lading. 31>. Liens. :il'J : Comi'lPtP d^!iv»ry. 'M'J; CanadiiP' ".Soo" Canal. :!l:i: (ieorcian Hh.v routr. 314; Ottawa -y-tnii. :ilii Tolls. :!10; (inat Lukes tratle :!17: rpper LaNes traflii . :il7: ConniiiKlitie.s handled J 15* Insurance. ',^48 Iiiterchaiigliig TraAic and Other Traffic Services, Tian-il ai laii,'' ii" nt - I'.'fi: Millinu in transit, lltii 1»7 . lie^hipnieni. nt-*; .stopover arrangement, I'.i"* Consignments stoj.ped in transit I'.'it. Destination eliaiis;ed in Iran -It. 199; Coneentratioii ral's. JOd, S|ii( lal rate redni iimis. jol. I'uri age -erM( e. 'JiiJ. (arl.ige I hargK not under lioard- juri-iln ii ui. Jul Intercolonial Railway, lioTeriinii lit aid- ■< ; lirili-h .Norlli .Vineiiea Aet, '.I; Coii-lnn I Ion and operation of, 9. l-.xleiismn ar quired. II.; Finan\ ■ lassiliration. I-<'J, .Sehed ule .\ . !■<.!; Nei ••s-it\ for re grouping rate i.oinis, l«;i; Road justini nt l-*!! Interstate Commerce Commission, .Mistraet from report on express Inisi ne-s. 1*77 InterswitchiJig, Provision liv the Imard •J7K; t li.irg's for. ■J7ii Jobbing Bu.sinexses, Classliieatiiui- and. Ml Klapp. James, O., nn Xviuage heniur- lai.''-, Jii'. Lake-Grain Bill, ::t'j Livestock, imlI irartie ^7 Local T;ifilTs. ■.■:'.■. Loss 01 l>araage. in Carriage. I'ouipul.il 1,11 tlu lia-i- of tie- valu>' of 111.. :.'.mmI-. j J!i ; .Vn'ii. inii-t !..• given to lie- loiiipan; ol. .'49 MacKeiizie and Mann Railways, b, Mileage, Karlv railH;i,\s ii\ C.inada .^ ti . • irand Trunk, II 'JO; Canadian -Northern Hi; (ir>at NDriluTn. 'jn ; II! < >!it;il :■•. 11 , Cain: :;i :t • \pa:i si.it!. 41); l>i-triliiitioi of. 4(i ; !{.■ lalion between population and. 47: In Canada. .'I'J ; Ton mileage, r>l! : Tonnage an. I niil.ag'' -.ivi..- 101; .■siamliird miliag. tarilT-, 191 Mileage Tickets. 1 :i IIP SMI INDKX MlUag-ln-TransIt, Trattio wrvii' , I'.Hl-'.lT Mlxtnt Prtvilese, In (imadii. M; I.i i.it:iti<)np« .1. f^'J: Kffprl on !ii|>r>«TM iinil fnhsUin'TK, Xi; ('(.rn|iinil:-<- I'lawKltiriiliuii. M; Jobliiiiit ciiriiiili' itiiiiiM, V), Olijtc- liDMS In l.lm.iiii .n, HV Moving the ! raffle, Aotuil ' ir iiiovi'in-iil-i, L'.'.l; Krci«lif cHr .-luii^tui, :;."il: Miiiiifrst firiyht riltaiii.- hiirh sp^ ■ Is, J">'>; l), M.'>; l{"ii|iroi'iil (li'iiiurrairr, _">"i •iH; lliiilwiiy int'TrthifioiiH iiml |ki tlieiii chiirKi', 'i>'>X: Aiiiprinin Kinl- wiiv Awoi iiitiiiii, -'US; Int'TMwilrli- iiig, 270; Indusiri.il "iilinu.s, -'71, Work of till' i-liMMi- cli'imrtiiiciii, 273; AdjustiMi 111-, 27') official Classification, i>'>. i>>'- iiiiirriiiri' l{;itf. 2ti2 Parallel Lines, Kvil> of, loii Passenger Rates, Kllrit of .|i>tiiiiii' on. 207; Tiiiir • li- iin-nt in, 2n7 0; I'n^st iinr f:ir<- a !iiutti|>li- of nitc Mini ili>t;inii', J'.o Riiilwuy Art of ( 'una l:i iiiiil, 227: .■^tiiiiiliird taritTti, 227; Si>i'fi:il lai- ifft), 227: Stiiiidiird latiM in rfTi. i . 22S; DitTcrcnt kinds of |ms.s<'imi' lirkcl.s, 2:iO; Milfuao tirki-ts. JU; f 'oinnnitation tirkris, 2:U ; I'lovi- uioii for iiirisiil liikt'ts, 2:12; Uiil'> for litiKifakri', 2 if. Dismv ditiiir> liUKKiiiii", 2.i.i; Uailw.i', s liuliilitx for 'oa)j){aKi', 2:t.{; .^turaiic i. iiniiiti i ai I it i lialiii' for hanNTat;'', 2U Hayiram' handled in Toronio, 2:{."); Hait;riii:i- carrii'd l)V niilwavs, 2H.-); SlccpiiiL' "•ar >i'i\iii-, 2:iii; ( las.-itifd, 2:( i I'assciiirrr ila— - in laiiniif. 2:i>. Avnaisr hauls in forri>;n ioiiiiiiii-». Pascenger Ratea— i-oniiim.il 2 ill; I'lisKifmirn |x'r train m iir- I'lUll roiiTH rli'w, 240; Zotn lanlf wysli'in, 241; MciIkkIb uwd in l.u- i|H'an |>a»-i ir»- 11 nd, 217; Car caiimit.v . 21**; I'lllliimn -vrvuf. 21H; - I )< :td " ttiiljlit iiadinti. 21'.t; lnrr«>a-i in vM'iicht and cost of pasisrnarr f"|iiip- iin'iil, 21'<; Ki-lation iMtwrrn wfiitlil of vein !(' and nturns on robt, 221. Wiinlit and rost n la- «urfd ill rapiKii 221; Ocnipainy of slcrpMnr i-ai . 222; Siilniilian traffic, 22it; < '011111 iitnlion l>ii»«. 2.' '• (■oiiiiinitalioii liusiiMhrt sulijccl h. competition. 221; \utoiiioliilrs ai- fi-ct rivinuo, 221 .AvcraRf jiui- liiy. 22.'i; Differences Ixtw-ii - fn milt and piisseniter Lnsines- 2-'' Per Diem Charge, 2tis "Postage Stamp" Rates, C.sl of service, lOd. loiiiil n li. i^e theory, 110; Suniniar> of ",• 'ii-- advnlitaues of. Ill Prnirie Distributing Centers, s.-i Prairie Standard Tariff, I'l.'i Prouty, Mr , on Hailway Wate-. I ' « Pullman Service, I'ravel in, 2IS; L)ead wciidit. 21'.'. Occupancy, 2'22; Canadian I'ltlic: 220; First car on local \\.-i.iii, 2:f»'.; Hate bat-is. 2:iii Quebec Resolutions oi 1864, 9 Uailway Act of Canada, Canadian Pacific 'h. it.r, 1' liatc itric\ allies and, •>•'"; l{c\ i-ioii ol rates t'l. Provision for t"aiii iiiii' 1 It, 40; Thr ,1 rate.- iHiiler th 44; l'a!i.-einr' r rat'- and 2'J , - I'rovision payii'tii ol INDIA ail Railway Act of Canada iiiTitiiiiif>ii i'\|in«^ i l,i>>iti cation, '.'x"! Hallway and Express Compantas, A'-ningfiniivt'* ln'twpfii. j*!, In Ciin ada. '.'"l; rmviMniiH of an iiisii'i' iiimt IwtwiTii. """J h4. .\rriirji' nii'iits with fr*'ik;lit nt;ciit!', -"i, Kxpri"*s I'liis-'jtiriiticin 'J»"i Railway Clause!) Coniolldatloii Act. :; i Railway Committee, Minit..T!, l'M>; CowlcH thror\ of. liMl: l>isiiiii,i. rnti'S. 110: Kqiinl iiiili'Uk:i- tlifor> 110: raiiitHli/.itloii plan of. Ill i'lix-'icHl valiialHin ll'J: ('iinip)'ti ;ion. Il.I: I>i-tnl>iition of ■.•■rvicf •ost. ll.'i; Wtiat < it-t of s, •■\\r,- iMfan». 11(1. ( i>riiiniv«ioiiiT I'.ii'k >on on. Il^t, II!*: Allorutioii of railwa.v co^t". I JO: Avciaiii- Im^i^ of coKt". 120: Wliut III.- Irartic will tx'ar. I'Jl-'Jti: I{alt« in (iiriiian> 12."> ; CaiiHiliHn MainifaituriT^' A- •"Ooiation t'-'tl: Ki ,i-onaMi'iii'»- ol ratiK 127 Rata Making, Competitive Factors in, rompetition amoni; Ijnrs of iliff.'iinl length. 147; UiITiT' ntial rati«. 149; Wat.T conipililioii. l.")0 ".:t. i'rodui'lioii rinicr^ churif:*'. l')!. Competition of eourt traffic. ir>4 Markets eompete. !.">'. ; Siiirar an. I oil rat*";, ir>f); <'imiplcniiiitar.\ • mn nioiiilii-., l.">^ : .-I I. p.' of 111.(1 kel • oinpttition. l.")9 Rates and Tarlffa, Phases of. CU-seg of freiiilit tarifTs. Hil. Hail uay Act iiul. IT.l : .'^taiiilaid t.ir iffs Uil !>:; : .Scales in tlic U.st. li>:: I'rairi.- Staiidanl laritT. in.'i. Pa. itic .StiH lard. HU) ; Uritisli <'o lunihia J.alies. 167: Rate si-alis dif fer. \GX; Inirease in. from litli !<»1«. !*•": Special and coinpc'i tive tarilTs. 17:i. Traiiscoiitincntal rates. 17,"): Canadian Frci;;ijt As soi'iation tiles tariff. 17."), %Vater compctilion. 170; Maying oint. 176; Class rates. 177: <«roiipintf. 17« . I. as anci rail routes 179. Commoditie- east bound. l-'O Rates. Espre.is. .\lVe. i.-d In i|iiiiitiiv 297. I'reiitht rate a lia-i- .;". .spe. i.il eiriMi lar- I oiiiiiiikIii\ tale-. .!'>',< . i'»r I'lts iPMi. I'ai kaue ral)'. :iiiO , (•radiiate lalde. :pmi Not iinitoMu. iiil Sinijle ilini :;i»4 Renhipment, TliIIic -ITMH'. IP- Ripley, W. Z.. K\pi ndiliir.' aii.il «i- hv , 117 Schedule A., !>; Sidings, Hate to |.riMili , 11111 liaii:;ed 2TI. Ad vanla;;e- m, Jil. A::riement forms 2 7'.' Southern ClaKsltication. •;'. r,:i Standard Mileage Tariffs, 2:<1 Standard Tarlus, development of lill (12, .Scales in West It)!! I'r.iiri. Siainl.ird ltl.'>, I'aiilic Slatidaiil t'iti. liritisli Co- luinliia l,.ik., 1117. \\ tiut i- e.\ I lulled I'is. .MaMiiniiii rate> ol I'ai ilii |tis : ( 'oialiiiialion rales. liiM: W li> „ .1.. ditr.r. ItiH Ma\ imiini rail- Hi!*. I'asseiii;er rates 227 .ill; hoard rules, 227. In elTect. 22- Stop-Over .Arrangements, Tradir S' 'HI e. 1>.I>» Storage, Batfitaj;!' rules 2;!'l : Charges 2^4; I)emiirra:.'e i liar^'e- and. 249 Subsidy. Canailian I'm itii- ayr.-. iiient l.'i. 29; I'roviiii la! lines, 29. Hailway* and till- iiiv, policj. :!0: In cash and loan- ::j Suburban Traltlc. 22:'. Sugar, Hale- tur. i.'.o Tariffs. Slandard mileage. 291 : Four stand aril 292 9."); Local and transfer 2'' "» .s.c Hates and TuritT-, Phases of; Town Tariffs Terminal Charge.-: l<'-tinct from haula^'e. IMIi: Grain • arsoes. i:!s Wi-ionsin CiMimi.s -ion conipiit- i:!9 Tickets. Mill i;;e. 2'!1 < iiinriiiitatioii. 231; I'rovi-ions fur unused. 2^2 Tiffany, C. H., 127 :U8 INDKX TUna EUmatit, m l'u«><>ni{rr Trunic. Tonuuge Sources, 'iii Town TsrlnM, l»i-tiil>iili\> r.ii' >, l-"!. liiliTnittionHl Half Cum. 1"^. < lu^sitic.itiiMi ii( fills lutf, I'J, S. Ill (lull- A , I ■'.J, Kutc ri'iiiljiisiiiii'iit iKi, I : III ilii' Kii«l. |H|. Siiiiif oliji'i lioiix ovfrii.iin-, IM.'i; Kcliitiiili 111 rail- rrilinlioiis. !'<♦>, \\t>.lfrii Kiiti - Cut iiiiisi« tarift riiirrHiii:> iiKiii l""7. Tij« n |K>iii|s III I'liiiachi, liH Traffic, Interchanging. .Si f ltilirrliaiij;mK 'I'lJirtir, auU Oilier .S« r\ II IS Traffic, Moving the. .Sir .Mu^iiit; thr 'I'laftii Transcontinental Railway, 1,: Transfer Tarlils, ■2, 1-4, Kail> silllv iiii'iits III I'aiiaila. I :i . I'unaN |'i>> iiHili' traiii-, -~;i: KuiIuh) roiiiiir lilioii. 7, HI. Coiiipi'tiiivi' lull's, I'i'l; ('olii|>rlitioii Hii'l l mtt J ,1 ■• ./ /; . ;/ n J i v. t ht I '. .S'. ,-/, /' V KINT.SPORT l'Ri:SS, KiM.sn.KT, TrNNr.ssFF.