The Atlantic Port Differentials The Important and Official Documents pertaining to the ADJUSTMENT OF FREIGHT RATES Between The West and the North Atlantic Ports 1877-1917 With Full and Complete Index By JOHN B. DAISH, A. B. L., L. M. Member of the District of Columbia Bar^ Author of Procedure in Interstate Commerce Cases, ^^ etc., etc. W. H. LOWDERMILK & CO. Washington Copyriglit, 1918 By John B. Daish hi h J 7)/U' TO MY FATHER UNDER WHOSE CONSTANT INSTRUCTION BUSINESS PRINCIPLES WERE INSTILLED AND UNDER W^HOSE CONTINUAL ENCOURAGEMENT THE PRACTICE OF LAW HAS BEEN CONDUCTED \ 463558 CONTENTS Foreword i Introduction vii Differential Rate Agreement, April 5, 1877 1 Report on Adjustment of Railroad Transportation Rates to the Seaboard 1881, Albert Fink 5 Preamble and Resolutions of Trunk Lines Executive Committee, appointing . the Thurman-Washburne- Cooley Commission, 1882 65 Report, Thurman-Washburne-Cooley Commission, 1882 69 Matter of Export Trade of Boston, (1 I. C. C. 24), April 23, 1887 105 Boston Chamber of Commerce v. L. S. & M. S. Ry. et al., (1 L C. C. 436) February 15, 1888 " Ill The Toledo Produce Exchange v. L. S. & M. S., and Kemble v. Same, (5 I. C. C. 166) April 6, 1892 .... 137 New York Produce Exchange v. B. & 0. R. R. et al., (7 I. C. C. 612) April 30, 1898 157 Kemble v. B. & A. Ry. et ah, (8 L C. C. 110) March 7, 1899 231 Differential Rates to and from North Atlantic Ports. Memorandum of Auditor, Interstate Commerce Commission, May 12, 1904 243 In the Matter of Differential Freight Rates to and from the North Atlantic Ports (11 I. C. C. 13), April 27, 1905 283 Saginaw Board of Trade v. Grand Trunk Ry. et al, (17 I. C. C. 128), June 8, 1909 " 343 Board of Trade of Chicago v. Atlantic City Ry. Co. (20 I. C. C. 504), April 4, 1911 \ . /. 357 Chamber of Commerce of the State of New York v. N. Y. C. & H. R. R. Co. et al. (24 I. C. C. 55), June 4, 1912 377 In the Matter of Import Rates (24 I. C. C. 78), June 4, 1912 403 V vi ATLANTIC POET DIFFERENTIALS. Chamber of Commerce of tlie State of New York v. N. Y. C. & H. R. R. R. et al., Supplemental Report (24 I, C. C. 674), October 14, 1912 409 In the Matter of Import Rates, Supplemental Report (24 I. C. C. 678), October 14, 1912 415 Chamber of Commerce of the State of New York v. N. Y. C. & H. R. R. Co. et uL, Supplemental Report on Rehearing (27 I. C. C. 238), June 5, 1913 419 In the matter of Export Rates, Supplemental Report on Rehearing (27 I. C. C. 245), June 5, 1913 429 Appendix : Part of First Annual Rei)ort of the Internal Com- merce of the United States, by Joseph Nimno, Jr., Chief of Division of Internal Commerce 435 Inter- and Intra-Territorial Bases of Rates in Official Classification and New England Territories, in- cluding the Atlantic Port Differentials 463 Table of Cases Reported 487 Table of Cases Cited 489 Index 491 FOREWORD In tlie preparation of this book, the author has not lieen un- mindful of the fact that on several occasions he has had the honor to represent as attorney one of the ports vitally inter- ested in the subject of Atlantic Port Differentials and on other occasions interests subject to freight rates based on differentials. He has reason, therefore, to studiously avoid the insertion in this work of any biased excerpts from docu- ments or of his personal views, and to contine himself en- tirely to the historical method. This has necessitated the printing of documents in full, except where matter occurs wholly irrelevant to the subject. Such complete reproduction of documents may seem unnec- essary and tedious on account of occasional repetition but the reader will find connected with the subject of Atlantic Port Differentials, particularly as shown in the older and rare documents, a large volume of transportation fact and law, which well repays the consideration and study given it. Acknowledgment is made of the courtesy of The Lawyers' Co-Operative Publishing Company of Rochester, N. Y., for permission to use its headnotes in several of the reports of the Interstate Commerce Commission. Also to Mr. Charles England, of Baltimore, for valuable suggestions and advice concerning the work. The Authoe. Washington, October, 1917. Vll INTRODUCTION Tlie importance of the relation of freight rates which shall prevail as between the North Atlantic ports can hardly be overestimated. The volume of tonnage which moves under these rates, the amount and kind of business which the several ports can and do jirofitably handle, the tonnage of the car- riers to particular ports and many other matters are largely influenced, if not governed, thereby. Historically, the present rate fabric is the oldest iu the country; it is the result of many rate wars (now happily ended), compromises, competitions, arbitrations and strifes of carriers and ports. * * * The beginning of low rail rates between the West and the Atlantic ports came primarily from a report made by a num- ber of influential citizens of Baltimore on February 19, 1827, appointed a week before, on the feasibility of a steam rail- road from that city to the West.* The legislature of Mary- land on the 28tli of the same month chartered the Baltimore and Ohio Railroad. The corner stone of this carrier was laid by the venerable Charles Carroll, of CarroUton, the only sur- viving signer of the Declaration of Independence, July 4, 1828. Harpers Ferry was reached in 1834, Cumberland in 1842, the Ohio River in 1853, and Chicago in 1874. Since the last mentioned date the Baltimore and Ohio has been a con- sistent advocate of less rates between Baltimore and the *The report was exhaustive, consisting of thirty-four printed pages; it dealt with the then existing commerce of the port of Baltimore, referred particularly to commerce with the Susquehanna Valley and pointed out the possibilities of trade with the West; the advantageous location of Baltimore was stated in the follow- ing language: — "But important as this trade is to Baltimore [trade with the Susquehanna Valley], it is certainly of minor consideration, when compared to the imnienfe commerce which lies within our grasp to the West, provided we have the enter- prise to profit by the advantages which our local situation gives us in reference to that trade. Baltimore lies 200 miles nearer the navigable waters of the West than New York and about 100 miles nearer to them than to Philadelphia, to which may be added the important fact that the easiest, and by far the most practicable route through the ridges of mountains which divide the Atlantic from the western waters, is along the depression formed by the Potomac in its passage through them. * * * The only point from which we have anything to apprehend is New Orleans; with that city, it is admitted we must be content to share this trade because she will always enjoy a certain portion of it." ix X ATLANTIC PORT DIFFERENTIALS. West than prevail for the northern ports — and less rates, either on a percentage of distances or, in compromise, by agreed and fixed differentials. * * * The principle of making less rates to certain Atlantic ports and the crystallization in 1877 of fixed differentials as the measure of differences in rates seems to have been duly ap- preciated by the then railroad fraternity. The Differential Eate Agreement of April 5, 1877, was one of the causes of and prominent in an investigation by the Hepburn Committee ap- pointed by the New York Legislature.* Before this Committee, as is shown by their testimony, the railroad officials justified the differences in rates to the ports by fixed amounts. (Proceedings of the Special Committee on Railroads, appoint- ed under a resolution of the Assembly to investigate alleged abuses in the Management of Railroads chartered by the State of New York. New York, 1879.) The President of the New York Central road (Mr. W. H. Vanderbilt), when asked concerning the Grand Trunk, said: ''They are trying to compete with us on 200 miles greater distance — the same as you would have us do with the Balti- more & Ohio" (p. 1258). Later he said, ''I think the railroads have done their full share towards the prosperity of the commercial interests of the State and the City of New York, from the very fact we are transporting goods in competition with other roads, 200 miles further for two cents more— 300 miles further than Baltimore is ; and the great demand, as I understand, and the principal demand, made by the merchants of the City of New York was, that we should do the business and carry their goods to New York at the same price they would to Baltimore and Philadelphia" (p. 1675). The President of the New York, Lake Erie & Western Rail way Company (Mr. H. J. Jewett), was interrogated: "Haven't you agreed on behalf of the Erie Railway Com- *Special Committee on Railroads appointe operation of free competition, uninfluenced by any fixed adjustment of transportation rates. Another very important conclusion must l)e drawn Ironi the facts presented, viz.: That the constancy with which this disti-ihntion has taken place under the free competition of the transportation lines, must be ascribed to the existence of certain laws and conditions that deter- mine the distribution of traffic under free competition, as such con- stancy in results could hardly be expected from mere accidental causes. It, therefore, becomes of great interest to determine, if possible, what are these conditions that influence and control the distribution of traffic between the rival Railroad Companies and rival commercial comnnnii- 1 ies ? Upon this point I wish to present the following views : THE PRIMARY CONDITIONS THAT CONTROL AND LIMIT THE DISTRIIU'TION' OF TRAFFIC UNINFLUENCED BY TRANSPORTATION RATES. First. — One of these conditions is: The relative carrying capacity of the Railroads and Transportation Lines, and the extent of theii- Terminal Facilities. The carrying capacity of the Trunk Lines is, during a portion of tli" year, taxed to its full extent ; at least this has been the case in the last two years, during which statistics have been kept in this office, showing the tonnage carried by the Trunk Lines while they were taxed to their fullest capacity. If any one of the Trunk Lines had carried freight for nothing during that period, it could not have increased its tonnage at the expense of its competitors. The question of the adjustment of rates, under these circumstances, has, therefore, no practical bearing upon the distribution of traffic be- tween the Trunk Lines; and as this distribution alfects, in a measure, the distribution between the cities, it has no bearing upon tlie latter. The statistics of the relative amount of traffic carried by eaeii Tnnik Line, show the important fact, that the relative amount of business transacted during the period when the Trunk Lines were taxed to then- fullest extent, and when the adjustment of rates could have no inllii- ence, did not materially differ from the relative amounts of tonnage carried during the whole year ; which shows that there are certaui laws and conditions M^hich regulate the distribution of traffic even at times when there is not as much business as the railroads can ean-y. This is further proven by statistics, showing that fnmi .linic 1'). to November 1, 1881, during the present war of rates, when <':ich road 16 ATLANTIC PORT DIFFERENTIALS made such rates as it saw fit, the distribution of the competitive traffic- between the Trunk Lines has not materially changed, as compared Mdth the preceding twelve months, ending June 1, 1881, during which period there was a nearer approach to a maintenance of rates than at any previous time. It appears from these statistics, that the variations in percentages of total tonnage carried by the four Trunk Lines during the war of rates, as compared with the previous year, when the railroads received reasonable compensation for their services, were as follows : The N. Y. C. & H. R. R. R. gained— 1 . 1 per cent. The N. Y., L. E. & W. R. R. gained— 1.1 per cent. The Penns.ylvania R. R gained — 0.5 per cent. The Bait. & Ohio R. R lost— 2.7 per cent. The reduction in the percentage of the Baltimore & Ohio Railroad was, no doubt, due to the failure of the grain crop in the territory which is especially tributary to that road. It may also be partially due to the policy of the Baltimore & Ohio, during a war of rates, not to carry freight at a loss. These statements, it may be remarked here, prove how unprofitable are wars of rates. They do not change the distribution of traffic be- tween the competing lines or even between competing cities ; their only effect is a general reduction in the revenue of the roads engaged in them. To prove more conclusively that the relative carrying capacity of the Trunk Lines, and their terminal facilities, primarily control the relative amount of traffic received by each city, Statement D has been prepared, showing the grain receipts at the five Atlantic seaboard cities during the last fifteen years, from 1865 to 1880, inclusive; also including the year 1860. Immediately after the war, in 1865, the Baltimore & Ohio Railroad commenced to enter into competition for the grain carrying business, by establishing lines of steamers from Baltimore and by extending their railroad system and connections in the West, through leases, and by constructing new roads. Its main line was extended to Chicago in 1874. Meanwhile, the Pennsylvania Railroad Company had also extended its railroad system in the West, and controlled or owned most of its Western connections. It had acquired the Northern Central Railroad, and had improved its terminal facilities in Baltimore and Philadelphia. We notice, on Statement D, consequently, constant increase in the re- ceipts of grain at Philadelphia and Baltimore. The receipts at Phila- delphia increased from 8.6 per cent, in 1865, to 12.3 per cent, in 1870. FINK: ADJUSTMENT OP SEABOARD RATES 17 and to 17.4 per cent, in 1876. The Baltimore receipts increased fr 11.4 per cent, in 1865, to 16.9 per cent, in 1876. It was during the war of rates in 1876 that the re('eii)ts at lialtiiimn. increased 4.7 per cent, over the previous year, showiiii; tlie elTcct of the improvements made in transportation and terminal facilities, durinj? a year of free competition between the transportation lines, uninfluenced by any arbitrary adjustment of rates. In the meantime New York had not been idle. Improvements in its terminal facilities were commenced, and increased efforts were made to maintain its grain trade ; and we find from Statements A, li and D, that since 1877, during which period the terminal and transportation facilities have remained relatively about the same in the various cities, the distribution of the traffic between those cities has not materially changed. Another illustration of the correctness of the above assertions as to the controlling power of terminal facilities, is furnished by tlu' ex- perience of 1881. During the last year, great additions have been made to the terminal facilities at New York, by the erection of elevators for the New York, Lake Erie and AYestern and Pennsylvania Railroads. while the terminal facilities of the Southern ports have remained sta- tionary. We already see the practical effect during 1881 in the grain receipts in the City of New York. While the canal has not brought much more than one-half the proportion of grain to New York which it carried last y-ear, the increased rail receipts have made np the de- ficiency, so that the relative amount of grain received at New Yoi-k during this j^ear is about the same as last year. Without these in- creased terminal facilities, New York would, no doubt, have received less grain, because the competition between the railroads lias rrdnccl to such a great extent the receipts by canal. This was the case during the war of rates in 1876, when the relative grain receipts in New York were less than in any year since 1865. From these facts, showing the controlling influence of tlu' rehttiv" carrying capacity of the railroads and of the terminal facilities ui)om the distribution of traffic, the conclusion must be drawn, that any arbi- trary adjustment of rates which might be agreed upon, could not be maintained for any length of time, if it would have tb.^ cfT.-ct of coun- teracting these more powerful controlling agencies. The past history of competition between the Trunk Lines fully establishes the fact, that arbitrary differentials have been maintained only so long as it suited the interests of the competing roads. The dis- tribution of the grain traffic during the last fifteen years between tlic five cities, as recorded in Statement D, must be considered as the result 2 18 ATLANTIC PORT DIFFERENTIALS of free competition between the railroad companies, and the result of their efforts to improve their transportation and terminal facilities, nnintliienced by any arbitrary adjustment of rates. It is important to keep this fact in view, as it will aid in answering the question, "What constitutes just and equitable adjustment of trans- portation rates ? ' ' viz. : That adjustment is the proper one which does not interfere with the natural distribution of traffic as influenced by the transportation facilities of the competing roads. The railroad companies and the commercial communities must rely upon their own efforts to improve the conditions that legitimately influence the distri- bution of traffic, rather than upon the efforts of competing roads to maintain an arbitrary adjustment of rates, or to undercut rates one against the other. As a second condition which influences the distribution of the grain traffic (constituting about 73 per cent, of the total Trunk Line East- bound tonnage to the seaboard cities), may be mentioned the storage capacity of private warehouses in the various cities, which limit the business transactions, regardless of transportation rates, in the same way as the carrying capacity and terminal facilities of the railroads. The great influence which this storage capacity exercises over the distribution of traffic, is illustrated by the experience of Baltimore during last summer. Baltimore, having only a storage capacity of one- fifth of that of New York, could not, under the then existing circum- stances, have received more than a certain amount of grain, even if it had been carried to that city for nothing. The limiting influence of the storage capacity is mostly felt during times when there is no, or a small demand for export grain. After the storage capacity is ex- hausted, the railroads can only carry sufficient grain to supply the demand from day to day. Emergencies of this kind frequently occur, and form a strong element in influencing the final results of the distri- bution of traffic between the seaboard cities, regardless of adjustment of transportation rates. The effect of temporary restrictions of the trade of a city, extends far beyond the time during which they exist. Frequent blockades, caused by want of storage capacity, are a permanent injury, and can only be avoided by large additional outlay of capital.* *The correctness of these views, and the effect of limited storage capacity in restricting the distribution of traffic between the rival cities, is shown by the fol- lowing extract from a letter, published in the American Exchange, January 3, 1882. The letter was written by a New York grain merchant, who also does business in Baltimore, in answer to an inquiry whether a certain difference in rates in favor of Baltimore would overcome the advantages which New York possessed. It says: "Yes, we believe that if Baltimore will simply increase her storage facilities, and give reasonable guarantees that she will hereafter refrain from the suicidal policy FINK: ADJUSTMENT OP SEABOARD RATES 19 Third.— Other conditions tliat inHiionce the distribution of traflfie are, the established commercial relations of each city in tliis and foreif^n countries, the capital employed, the enterprise of its iiuTchants. tii.- shipping facilities, especially as influenced by the import trade, and even by the current passenger and emigrant business— all tiicsc .-Ic- ments exercise the strongest influence in determining the curri'iit of trade. The advantage which one city may possess in this respect cannot in- readily counteracted by others less favorably situated; at least, any change in these conditions that influence the amount of business trans- acted, must necessarily be of but slow growth. The older and estab- lished markets should and generally do keep up with the improvements made by their younger competitors, and it is, therefore, rea.sonable to expect that their relations in this respect will remain pernuuient. Hut if changed, the change is certainly a legitimate one, and should not )>>■ counteracted by any arbitrary adjustment of transportation rates. Fourth. — One of the most important controlling conditions affecting the distribution of trafSc between the Trunk Lines, and, in a measure therefore, between the Atlantic seaboard cities, is, the location of tli" competing railroads, and of their connections relative to the territory from which they draw their business. There seems to be a general impression that the bulk of the traflRe of the Trunk Lines is drawn from the principal points of competition where the products of the country are collected, such as Chieago. St. Louis, Cincinnati, etc. That this is not the fact, will appear from Statement E, which shows the sources from which the traffic that passes over the four Trunk Lines is derived; it also shows the relative amount of traffic obtained from each of these sources. From this statement it appears that the principal jwiuts of competi- tion, Chicago, Peoria, St. Louis, Indianapolis, Cinciniuiti. and Louis- ville, furnish only 26.25 per cent, of the whole amount of traffic carried by the four Trunk Lines. The traffic from these cities has heretofore been apportioned between the terminal roads, and the question of the adjustment of rates is, therefore, of little importance, as far as the railroads are concerned, if the agreement in regard to division of traffic is perfected and carried out. Four other important points, IMilwaukee, Cleveland, Detroit and Toledo, furnish 9.76 per cent, of the total traffic. At Toledo the \\.\ bash, St. Louis and Pacific Railway traffic is already divided. .\t of exorbitant storagre charges" , '• ■ i' v' v u • • "She conld live and hold her own even upon an eonal freie-ht basis with .N.-w ^ ork. This means, if Baltimore had the same facilities of transactinn business as New York (the increased storage charges being the result of want of stnraT .apacit) ). Baltimore could hold her own at even transportation charges. 20 ATLANTIC PORT DIFFERENTIALS Detroit a division has been contemplated, and if the agreement is per- fected, the question of an exact adjustment of rates will be eliminated from this portion of the competitive traffic. From fifteen other less important points (enumerated in Sec. Ill of Statement E), where there is comparatively a small amount of business, and the competition is confined to fewer roads, only 6.99 per cent, of the A\hole Trunk Line Traffic is derived. It would not be difficult to also agree on a division of traffic from these sources. The terminal points of the Trunk Lines furnish 13.64 per cent., to which Buffalo alone, where there are practically only two competing lines, contributes 9.83 per cent. Outside of the competitive points enumerated in this statement, 43.36 per cent, of the total traffic is derived from places not enumerated in the first four sections of the statement, and which are classified ac- cording to States in Sec. V. The bulk of this traffic must be looked upon in the nature of local traffic, as it is gathered up by the railroads along their lines, and for which there is practically little or no com- petition. The distribution of this traffic between the Trunk Lines i^ practically determined by the location of the connections of the Trunk Lines, regardless of the adjustment of rates, as this business is, or can be, controlled locally by the roads to which it is directly tributary. For example, the traffic of the Pennsylvania Railroad, with its sys- tem of connecting roads, owned and controlled by it, comes, one-half from other sources than the points of competition named in the three first sections of Statement E. It comes from local points along its lines. Only one-fourth comes from the principal competitive j)Oints named in Sec. I., and the other fourth from the smaller competing points as well as from the terminal points. This readily accounts for the constancy in the relative proportion of the business received by the Pennsylvania Railroad, as well as by the other roads, re- gardless of rates, whether there is a war of rates or an agreement to maintain rates. The same feature as controlling the distribu- tion of traffic is also strongly marked in the Baltimore and Ohio Railroad. Fifty per cent, of its business is derived from the States of Illinois, Indiana, and Ohio, outside of the competitive points spe- cially enumerated in the statement. Only twenty per cent, is derived from the principal competitive points; about five per cent, from the States west of the Mississippi River, and the rest is gathered up from the smaller points of competition and terminal points. Ninety per cent, of its total business is derived from points east of the IMississippi River and south of Chicago, including Chicago, showing how the loca- tion of the road influences the traffic it receives. FINK: ADJUSTMENT OF SEABOARD RATES 21 Although the Baltimore and Ohio Railroad has the same connections as all the other Trunk Lines with the Northwest, its capacity seems ti\]\y taxed by the business from the territory which it immediately serves. I have given as a probable cause of the reduction of the percentage of the business received by the Baltimore and Ohio Railroad during tlic present war of rates, the fact that the grain crop was a failiicc in Southern Illinois, Indiana and Ohio, It will now be ch'ar how iiiiirl' such a local failure of crops must aft'ect the traffic of that rojid. In other years, when there is a large crop in that section of the country, and a failure in the Northwestern States, the Baltimore and Ohio Rail- road would get relatively larger proportion of grain ; and tiierefore no argument should be based upon the actual amount of tonnage carried by each road as to the operation of any particular adjustment of rates, without taking into consideration the sources of tiie traffic and the con- ditions under which it is obtained by each road.* The fifth and last condition which I will mention that influences the distribution of traffic between the Trunk Lines is, the result of the practice of each competing railroad attaching to itself in the course ol time a certain number of shippers, and retaining the same. These shippers become accustomed to the road, and prefer it to othci's npon equal terms. During a contest, or war of rates, each of the competing roads assures its regular patrons that it will do as well by them as any other road, and thus their business is retained. It is only in this way that the constancy in the relative amount of business carried by a nnm- ber of roads from competing points, whether rates are maintained or not, can be fully explained. Take, for example, Chicago. In June, 1879, it was agreed that the Eastbound traffic from Chicago should be divided between the terminal ^Although not directly bearing upon the question under consideration, I will here call attention to the interesting fact exhibited in Statement E, bearing upon the Trunk Line competition with the Mississippi River route. It will be seen from this statement, that 83.81 per cent, of the total Trunk Lnu- traffic is derived from points east of the Mississippi River and south of Clncago, including Qiicago. From Wisconsin only 5.72 per cent, is received; from Iowa, 4.79; from Missouri, 5.20; from Arkansas and Texas, etc., ().4S i)er cent. This traffic, combined, amounts to 1G.19 per cent, of the total Trunk Line trajhc. The traffic that is taken from Chicago and Milwaukee, anuninting to 1/ per cent, of the whole, comes, no doubt, from the Northwestern States, but is gathered up by the roads whose interests are centred at Chicago, and can hardly be diverteM to the Mississippi River route. The 16.19 per cent, from States west ot nncago and the Mississippi River, which is sent direct to the seaboard, is also brought to Chicago and St. Louis bv roads whose interests are adverse to the Mississipi-i lUwr route, and which will seek to retain this traffic in competition with that route Attention is also called to Statement F, showing the distribution of Westboumi traffic from seaboard cities. Although it has no bearing upon tiie subject ol n«e adjustment of terminal rates, a comparison with Statement L may I t •^"""' '" terest. 22 ATLANTIC PORT DIFFERENTIALS roads centering at that point, in certain proportions. The statistics for the four preceding years were produced, and they revealed the fact that each road had carried, during that time, and under free competi- tion, about the same proportion each year. The new agreement was based upon past experience, with some modifications, which were deemed just, as decided by the Board of Arbitration; and it is now found, after two years, that, during that time, without any artificial effort having been made to change the traffic from one road to another, each of the roads has carried about the proportion of traffic that was assigned to it. During the two j-ears, 4,700,000 tons were carried from Chicago, and only 56,000 tons, or ] .2 per cent., would have had to be transferred between the roads in order to carry out the agreed division. Rates were not strictly maintained during this time, but the distribu- tion of traffic being satisfactory, the question of any nice adjustment of rates loses its importance. The proper plan, as suggested by these facts which I have presented in the foregoing, is : To distribute the traffic at its source, and then let it take its natural course to the seaboard. It is much easier to deter- mine the relative amount of business that should be carried by each of the Trunk Lines, from the points at which the traffic originates, than to determine what shall be the amount of traffic to be delivered at each of the seaboard cities. The latter operation could be compared with an effort to determine the amount of water that a river shall discharge into the ocean, without regard to its source and the extent of territory it drains. The great Trunk Lines are nothing but great arteries of commerce like rivers; only, with this difference, the rivers never run across each other, the territory from which they draw their supplies is distinct and well defined. Where railroads cross each other or a num- ber terminate at the same point, it is only necessary that special agree- ments should be made at these points as to the relative amount of traffic to be carried by each competing road, and then the territory' that each railroad company is to serve would be practically defined. It is much easier to make these divisions at the point of origin of the traffic than to pre-determine, without regard to the source and origin, the amount of traffic to be delivered at the termini of the Trunk Lines, or to at- tempt by the establishment of arbitrary transportation rates to dis- tribute the traffic between the competing roads or competing cities. In fact, the latter is utterly impossible, and all attempts that are made in that direction must fail. The expensive contest that is now being waged over the question of a nice adjustment of rates, by which is to be determined the distribu- tion of the traffic between the seaboard cities, is, therefore, more of a FINK: ADJUSTMENT OP SEABOARD RATES 23 theoretical than a practical nature. No agreement that runs coiiiit.'r to the natural distribution under the conditions wliich I have coiii- mented upon, can ever be carried out. The contest for the competitive traffic should be settled at its source, and the traffic should then be al- lowed to flow to the seaboard, uninfluenced by arbitrary rates. All these considerations may, at first sight, seem irrelevant to the subject of determining the adjustment of transportation rates over the Trunk Lines to the seaboard cities; but they have a very important bearing upon the question : AVhat is a proper distribution of tlic com- petitive traffic? which question must be answered before jn-oceeding to the second part of the inqury : How can rates be practically .idjiisted so as not to interfere with the proper distribution of traffic, as ('oiidi- tioued by the natural and legitimate elements of competition? GENERAL PRINCIPLES INVOLVED IN THE ADJUSTMENT OF TRANSPORTATION RATES. The principle is generally recognized, that the rates between the same competitive points via different competing routes, should be the same for the same service performed, and that the rates between differ- ent points of competition should be based upon their relative distance. This principle is carried out in the whole territory in which the roads represented on the Joint Executive Committee are located. The rates between New York and Western competing points, say Chicago, St. Louis and Cincinnati, are based upon the relative distances of these cities from New York. The same principle was recognized in the tariff of April 13, 1876, when the rates from common points West to sea- board cities were based upon these relative distances; but this tariff was never adhered to. The pro rata principle, correct as it is, ab- stractly considered, cannot be applied in all cases. Other principles control the adjustment of rates, and have to be recognized, and they are frequently in direct conflict with the pro rata principle, and the most powerful factor, which overrides all other considerations, is com- petition. If there was no competition for the export traffic between the Trunk Lines or seaboard cities, the pro rata principle applied to domestic traffic would work satisfactorily to all parties. But as the through rates through the various cities to foreign destination nnist be made with a view to meet competition in foreign markets, that is, must be substantially the same via all routes, and the Trunk Lines are simply links in the through route between the common points of competition in this and foreign countries, the proportion of the through rates, or that portion of it which the Trunk Lines can charge, must be deter- mined with regard to the competition in export trade, and that proper- 24 ATLANTIC PORT DIFFERENTIALS tioii may and does greatly differ from the domestic rate established upon a pro rata principle. Further complication arises from the fact, that over one link in the through route — over the ocean — the rates can- not be predetermined or cannot be adjusted by agreement, but are al- ways open and always changing. The difficulties of the adjustment of rates to the seaboard cities arise, therefore, from the dual position of the Trunk Lines as carriers of domestic traffic to the seaboard cities and as competitors for through European trade, having the ocean as a link in the through route. The agreement of December 18, 1876, which was the result of long and care- ful deliberation by Trunk Line officers (see testimony of Mr. George R. Blanchard before the "Special Railroad Committee of the New York Assembly," from page 3155 to page 3156), recognizes the correct prin- ciples upon which the adjustment of rates should be based. It pro- vides that, "In order to settle all questions now at issue between them (the Trunk Lines) witli regard to rates to and from competitive points beyond the Western termini of their roads, and to and from competitive points East of their Eastern termini, and to establish equal rates to and from the seaboard upon all competitive business, and adjust upon an equitable basis business purely local, do agree as follows: "First. — * * * * that all competitive freight shipped on through bills of lading to Europe * * * * shall be at the same through rate to destination, whether through the cities of Baltimore, Philadelphia, New York, Boston or Portland. "Second. — That all freight shipped to Baltimore, Philadelphia and New York, and afterwards exported, shall be deemed competitive. ' ' Third. — That on freight from all competitive points in the West and North- west to Baltimore, Philadelphia and New York, intended for local use and consump- tion, the rates shall be thirteen (13) per cent, less to Baltimore, and ten (10) per cent, less to Philadelphia, than to New York from Chicago ; and from Southwestern points to Baltimore fourteen (14) per cent, less, and to Philadelphia nine (9) per cent, less than to New York. ' ' This agreement is, however, only of a declaratory character. It establishes the correct principle upon which rates should be adjusted, and merely shows what it would be desirable to accomplish. It was never executed, and can never be, for the following reason : It is im- practicable to determine at any one time the lowest ocean rate at the several ports and establish in connection with it the same through rate through all ports. Several attempts were made to carry out the part of the agreement contemplating equal rates on all shipments under through bills of lading. A committee of foreign freight agents was appointed in 1876, and again in 1880, to receive daily the quotations of ocean rates from all ports, and to give the lowest quotations jointly to all Western soliciting agents, upon which they were to establish the same through rates through the different ports. But the ocean rates change from day to day, even from hour to hour, and in order to make the same through rates through all ports at the same time, it would be necessary FINK: ADJUSTMENT OP SEABOARD RATES 25 that the rates once established should at least be inaiiiliiiiicd for som ■ period of time regardless of these changes. This would not lie satis factory to the exporter, because, should the ocean rates fall, after through rates had been established, he could not take advantngc of it. and would have to pay higher rates than he could secure on his own account. It was for this reason that the Chambers of Commerce of a iimnhcr of the western cities, who feared that the railroads intended to secur" control of the ocean rates, entered a violent i)i-otest when it was at- tempted in ]\Iarch, 1880, to carry out the plan (see Cireulai- No. 15;^ Joint Executive Committee) of making the through rates the same ria all ports. To the railroads this plan is equally objectionable. They would have to adopt and guarantee for a certain period of time certain ocean rates, and in case of an increase in the ocean rates, they would have to reduce their land rates accordingly. The ocean lines would not be slow to avail themselves of this feature, and the railroads would have to assume all the risk of, and therein^ destroy the coiu|)etition be- tween the ocean carriers, which, if left free, might be relied ui)ou to adjust ocean rates to the inland rates, and to bring about the desired equalization without any effort on the part of the railroads. In the ordinary course of competition betw-een the ocean cai-riers, it is certainly reasonable to expect that the rates from Baltimoi-e ami Philadelphia should always be greater than from New York. Th.' ocean routes are much longer than from New York; the length of time and cost of transportation from these ports must necessarily be greater on that account, not to mention the great advantages New York pos- sesses in controlling return cargoes, and its larger amouut of i)assenger and emigrant traffic and other commercial advantages. I'lider ordi- nary circumstances, therefore, according to the law's of free conqieti- tion, the rate from New York should always be lower. But shouUl it be found that this is not the case, it would be strong proof that the competition of Philadelphia and Baltimore is not felt by the large shipping interest identified with New York, or that there exist other disturbing causes. However this may be, any attempt by the railroads to interfere with the free competition of the ocean carriers fi-om the different cities, would result in greater evils than the evils which th.y seek to remedy. The difficulties encountered, therefore, in attemi)tiiig to niaUe the same rates at the same time through all ports on through bills of lading, based on the lowest ocean rate from any port, nuist be considered as insurmountable from the very nature of the transaction. The difficulties of dealing with the export business shipped to the 26 ATLANTIC PORT DIFFERENTIALS seaboard under domestic bills of lading are equally as great. State- ment C shows that the grain and flour traffic is 72.58 per cent, of the total business carried by the four trunk lines to the seaboard and in- cluding provisions, nearly 85 per cent. Statement A shows that 80 per cent, of the receipts of flour and grain at New York are for export, from Philadelphia, 64.6 per cent, and from Baltimore, 84 per cent. ]\Iuch the larger portion of the grain carried by the Trunk Lines to the seaboard is therefore export grain. The grain shipments to Philadelphia, for 1880, were 49,000,000 bushels, of which 32,000,000 bushels were exported, leaving only 17,- 000,000 bushels for home consumption. The shipments under through bills of lading from Philadelphia (see Statement A) were 7.3 per cent. It follows, that 58 per cent, of the total receipts at Philadelphia were shipped there under domestic bills of lading and afterwards exported. At New York the rail receipts were 95,000,000 bushels, 80 per cent, of which was exported, and of this only 18.7 per cent, was exported under through bills of lading, leaving 61.3 per cent, of the total amount of grain brought by the Trunk Lines to New York shipped under do- mestic bills of lading that was afterwards exported. A similar condi- tion of affairs is shown to have existed at Baltimore. This shows the difficulty of readjusting the inland rates after ship- ments have been made under domestic bills of lading, so that the through rates would be the same via all competing seaboard cities, and at the same time the lowest that is made via any of these cities ; and the conclusion must be formed that the only practical plan to carry out as near as may be possible the principles recognized as correct in the contract of December 18, 1876, is to agree upon fixed inland rates upon the whole grain traffic, domestic and export, and to determine the through rates by adding the ocean rates, whatever they may be, from time to time, from the different cities to points of destination, and that the adjustment of the inland rates to the seaboard must be made more with the view to the export trade than to the domestic traffic. The agreement of April 5, 1877, recognizes the principle that fixed differences in rates should be adopted, based upon the prevailing ocean rates. It is said that a difference of three cents in favor of Baltimore and two cents in favor of Philadelphia, corresponded at that time with the increased cost of ocean carriage from those ports, but that changes have since taken place in the ocean rates which make a readjustment of differentials necessary. It becomes, therefore, necessary to examine the facts, to ascertain what were the ocean rates, as well as the through rates via the different cities since this agreement was made, and what changes have taken place. FINK: ADJUSTMENT OF SEABOARD RATES 27 AVERAGE OCEAN RATES DURING THE LAST FOUR YEARS, AND COMPARATIVE ESTIMATES OF COST OF TRANSPORTATION TO AND THROUGH SEA- BOARD CITIES UNDER PREVAILING RATES IN 1880. Statement G has been prepared to show the quotations of oeean rates during the hist four years, and from it it appears that the oeean rates via steam from Philadelphia to Liverpool, whieh were four eents hi^'ller than from New York in 1877, were only 1.7 cents higlier in 1880. and from Baltimore they were 4.6 eents higher in 1877, and 2.6 cents higher in 1880. But the rates via sail (to Cork, for orders) have not elmngcil to so great an extent. They were more nearly the same than steam from all points in 1877, and remain so. At Philadelphia, in 1877, they were 0.2 cents less per hundred pounds, and in 1880, 0.7 eents less than from New York; and at Baltimore 0.3 cents higher in 1877, and in 1880, 0.5 cents higher than from New York. To ascertain the average rate from the three ports, the relative quantities exported by steam and sail have to be taken into considera- tion. Statement K contains an estimate of the average rate during the whole of the j^ear 1880, and also during the first and last six montiis of the year. The average oeean rate during the year, and the dilTer- ences in the rates between Philadelphia and Baltimore and New York, were as follows: Average Oce.vn Eates, Steam and Sail, per Hundred Porxos ix ISSO. From New York. Philadelphia. Baltimore. 22.81e. 23.79e. 24.71c. Higher thau from New York, 0.98e. 1.90c. It is an important point in the consideration of this whole subject, whether it is proper and right that the actual differences in tiie ocean rates during a year from the different ports should be taken as the exact differences in the inland rail rates, with a view of making the through rates the same through all ports. If this point were conceded, the problem would seem to be easily solved, by ascertaining the differ- ences as above, and making the inland rates as much lower as the ocean rates are higher. But this solution is really not quite so simple av it jit first sight appears. First. — The changes in ocean rates cannot be predetermined. The serious question arises, for what particular periods in tiie past shall the actual rates be taken as a guide, and for what particular periods in the future? From Statement G, it appears that great changes hajv taken place relatively in the ocean rates from tlie three cities since 1877. Are the differences in ocean rates for one year to be taken as the differ- ences in inland rail rates for the succeeding year before it can be known 28 ATLANTIC PORT DIFFERENTIALS what they actually will be ? Even during- certain periods in the same year there are marked differences in the ocean rates. For the last six months of 1880 (see Statement K), the rates from Philadelphia were only 0.26c. higher than from New^ York, while in the first six months they were 1.71 cents higher. From Baltimore they were 1.54e. higher than from New York in the last six months of the year, while during the first six months they were 2.30 cents higher. No one can antici- pate the differences in ocean rates during the w^liole, or during the dif- ferent seasons of the coming year. If differences in ocean rates upon which inland rates were based were less than the actual difference, it would be unjust to New York ; if more, it would be unjust to Philadel- phia and Baltimore ; and thus the distribution of traffic betAveen com- peting roads and competing cities, if sought to be regulated solely by tlie adjustment of inland rates upon the differences in ocean rates, for fixed periods of time, would be at best a mere matter of guesswork. The average rates during a whole year may never prevail at any one time, but the actual, and not the average, which is a mere hypothetical rate, control the traffic at the time. Second. — The quotations, as reported in these statements, are only of rates to Liverpool by steamer, and to Cork, for orders, by sail. They therefore apply only to a small proportion of the export business. To what extent appears from Statement J, which shows the destination of the export grain from New York, Philadelphia and Baltimore. The grain destined to Liverpool from New York (about 11,000,000 bushels) constitutes only 10 per cent, of the total export grain from New York, while from Baltimore to the same destination 3,500,000 were sent, con- stituting only 61/0 per cent, of its total exports. The grain shipments to Cork, for orders, by sail from New York, Avere 19,000,000 bushels of the total exports, or 17.4 per cent., and from Baltimore to Cork about 9,000,000 bushels, the same percentage of the total shipments as from New York. The rates are, therefore, practically, only ascer- tained for about 27 per cent, of the New York, and 2-1 per cent, of the Baltimore exports. The question arises: Is it just and proper to take the rates on so small a portion of the competitive traffic as the standard for the whole export grain? It may be assumed, perhaps, that the rates to Liver- pool by steam and to Cork by sail, guide, in a measure, the rates to all ports in Great Britain ; in that ease they apply to 57 per cent, of the export grain trade from New York, to 49 per cent, from Philadelphia, and to 50 per cent, from Baltimore. I have not been able to procure the ocean rates charged to other countries and to ascertain what are the differences from different ports ; FINK: ADJUSTMENT OP SEAROAKH RATES 120 and whether there are any settled relations between those rates and the rates to Liverpool and Cork, or whether tliey are made accidentally from day to day as there may be a supply of tonnage in tiic Aincri<-aM ports for export to these countries. All this inforinaticiu should 1>.' had, in order to determine deiinitely to what extent it is i)ropcr and right that the quotation of Liverpool and Cork rates should be made absolutely the basis of the difference in inland rates over the TrnnI; Lines for the whole export grain.* In view of the facts just presented: the instability of ocean rates, and the want of exact information in regard to the rates to all points of competition, the impossibility of determining the exact differences in the rates that may prevail at any one period, it nnist be conc'ded that even if the principle to adjust inland rail rates on the exact basis of differences in ocean rates were adopted as correct, it would i)e im- practicable to carry it into practice with justice to all parties. To at tempt it may work injustice to those who advocate it as well as to those who oppose it. It would be a mere accident if the interests of all parties were guarded alike under this plan of adjusting rates. THE EFFECT OF THE COMPETITION BETWEEN THE GRAIN MAKKKTS l|'(i\ RELATRT] AD.JUSTMENT OF RAIL RATES. The adjustment of railroad transportation rates has. so far. been considered from the standpoint of the railroad companies. The i|nes- tion at issue concerns in an equal degree the connnercial coMninniitie> competing with each other for the export grain trade. It is, therefore, necessary to consider it from the broader standpoint of the merchant-; or the commercial communities engaged in the trade. The railroad companies, in the settlement of this question, must necessarily repre sent not only their particular transportation interests, but also the in terests of the cities with which they are closely allied: in faet. with which their interests are identical. This introduces a new element, still further com])licating this already greatly complicated problem. The mere addition of the iteean rates *Statement J possesses some interest,- as showing llic relation of the different seaboard cities to the grain trade with foreign countries. It sliows the percentage of total grain exported from the three cities to the varions countries, and the prcv portion this constitutes of each city's actual export. For exanii-le: New ^ ork sends 57 per cent, of its total export grain to Great Britain, which forms M per cent, of the total received by Great Britain from these three ports; Phila-h-Iphi.-i sends 48.7 per cent, of its export grain, which constitutes only 14 per cent, of the total received from these three ports; Baltimore sends ore-half of its exjiort gram. which constitutes 2.5 per cent, of the total received from these three j...rfs. To Germany, New York contributed 65 per cent., Ph.hideli.hia 1 . 4 and H:i f'- more 17.6. To France, New York contributed .-52.1 per cent., I h,]:.d.I|.hia lb.,» per cent., and Baltimore 51 per cent. 30 ATLANTIC PORT DIFFERENTIALS to the rail rates, making the same rates through all ports upon traffic carried to the seaboard by the railroads, even if it were practicable, is not sufficient to solve the problem. There are other means of trans- portation, by which export grain is brought to the seaboard, and there are also conditions of a commercial nature, which necessarily affect the competition between the different markets in the same trade. It is not merely a question of railroad transportation rates, although that is, no doubt, a very important element. Assume, for the sake of illustration, that one of the ports possessed great commercial advantages, which, with equal transportation rates, would give it a decided preference, to such an extent that the whole export business would seek this port. Could it be expected that the other ports, less advantageously situated, and the railroads identified with them, would be willing to allow themselves to be debarred from participating in the commerce of the world ; that they would allow their railroad facilities, their warehouses and elevators, their capital and investments, to lay idle, out of mere respect for the abstract prin- ciple that transportation rates to and through all ports must be the same, regardless of any and all other considerations that control trade and commerce? That New York possesses great commercial advantages, such as I have mentioned heretofore as influencing the distribution of competi- tive traffic (see page 19 of this report), is generally admitted. One of the principal grain merchants of New York testified before the ' ' Spe- cial Committee on Railroads" of the New York Assembly (page 704), that these advantages Avere worth to the grain trade of New York one cent per hundred pounds. This, of course, is a mere individual judg- ment, and its correctness cannot be mathematically demonstrated ; but, that these advantages are worth something, cannot be denied. Some light is thrown upon this subject b}^ the experience of Boston as a grain market. While the inland rates to Boston are nominally the same as to New York (there are reasons to suppose they are even lower), the ocean rates from Boston are, as a general rule, much lower than from New York, thus making the through rates through Boston less than through New York; and yet, notwithstanding these condi- tions, which have prevailed for years — notwithstanding that the rail- road and terminal facilities at Boston have of late years been greatly improved — we find that the grain receipts at Boston have remained relatively the same, during the last twenty years. Boston has only kept pace with the other ports, notwithstanding lower transportation rates through that port. In 1860 it received 10.4 per cent., or about nine million bushels ; in 1880, 10,88 per cent, of grain, or thirty-seven FINK: ADJUSTMENT OP SEABOARD RATES 31 milliou bushels; showing that P.oston, as a grain market, must hil)()r under some disadvantages, whatever they may be, tluit make h)\V('r rail rates through that port to foreign ports necessary, in onii-r to enable it to retain a share of the grain trade. Whether these disad- vantages are purely of a commercial nature, or whether the shijipiiig facilities and storage capacity of the port are such as to limit its ca- pacity to transact business, the facts stated are sufificient to indicate that Boston could not maintain its proportional share of the grain trade, at the same through rates as are made on rail shipments through New York. Besides the commercial advantages of New York, that may mak.- these lower rates through Boston and other ports necessary, ami whidi cannot be readily estimated in dollars and cents, it possesses in the canal advantages of cheaper transportation, of which some more definite esti- mate can be formed. The Erie Canal brings to New York, in the seven months, during which it is generally in use, a large proportion of tlic total grain receipts at this port. In 1880, it brought sixty-nine million bushels, or 40 per cent, of the New York receipts, or 20 per cent, of tli • total receipts at the five Atlantic ports, as shown in Statemeiil D. It makes no difference to the merchants in Boston, Philadelphia and liai- timore, competing in the grain trade, how New York receives its gr-aiii. whether by canal or rail; they can only consider the cost at wliicji tlif grain is brought to New York, regardless of the method. Tf tlicy can- not secure transportation as cheaply, the}^ ma.y be de])arrcd from cmn- peting Avith New York. In this view of the case, the cost of transiiort- ing grain to New York by canal as well as by rail becomes a factor in the adjustment of rail rates to other competing cities, wliich have not the advantage of water transportation. The effect of the cheaper canal transportation upon the average cust of transportation to New York, and relatively to other citi(^s. will ap- pear from Statement L, which gives an estimate of the cost of trans- porting grain to and through New York, Philadeljihia or Baltimore via all routes,* including, also, the cost of ocean transpoi'tatif)n from these cities, based upon the statistics of 1880. The following is the resnll : During the whole Year of 1880. New York. Philadelphia Average Inland Eates per 100 lbs., allow- ing agreed differences Less to New York Less to New York at even rail rates from all cities 25. 69c *No estimate can be made of the cost of transportation through Bo.ston, as tlic statistics of grain carried there by the Grand Trunk Railway are not known. 32 ATLANTIC PORT DIFFERENTIALS This statement shows that in case rail rates had been the same in 1880 to the three cities, grain could have been delivered at New York for 3.58 cents less per hundred pounds than to Philadelphia, and 3.74 cents less than to Baltimore ; and allowing- differences of two and three cents less to Philadelphia and Baltimore, respectively, New York still had the advantage in rates of 1.58 cents over Philadelphia, and 0.74 cents over Baltimore. Adding the average ocean rates for the year 1880 to the cost of in- land carriage, the total cost (on the basis of Chicago to Liverpool by steam, and Cork by sail, for orders) has been as follows: Through rate, allowing differentials Through at even rail rates Diffei'ence in favor of N. Y., allowing differentials Difference in favor of N. Y., at even rail rates . . . N.Y. 48.. 50c. 48 . 50c. Phila. 51.06c. 53.06c. 2.56c. 4.56c. Bait. 51.14c. 54.14c. 2.64c. 5.64c. This represents the results of the whole year's operation; but as the canal competition only exists during the navigable season, an estimate has been made of the average rate during that season, and also during the j)eriod when navigation is closed. The following are the results : N.Y. Phila. Average inland rate per 100 pounds, allowing differ- entials Difference in favor of N. Y. over Phila Difference in favor of Baltimore over N. Y Difference in favor of N. Y., at even rail rates Total through rate, adding the ocean rate, during the last six months of the year, allowing differentials . In favor of N. Y., allowing differentials In favor of N. Y., at even rail rates 24.21c. 49.82c. 25.07e, 0.86c. 2.86e. 50.94c. 1.12c. 3.12e. Bait. 24.14c. 0.07e. 2.93c. 51.29c. 1.47c. 4.47c. After allowing a difference in rates of two and three cents to Phila- delphia and Baltimore, New York had the advantage in rates of 1.12 cents over Philadelphia, and 1 .47 cents over Baltimore, during the sea- son of navigation. This results from the lower cost of transportation by canal. During the time of closed navigation, when grain was transported only by rail to the three cities, the average ocean rates (see Statement K) were as follows: FINK: ADJUSTMENT OF SEABOARD RATES 33 From New York Philadelphia Baltimore. 20.01c 21.72c 22..'? 1c. In favor of N. Y. . . . . — .... 1.71c. .... 2.30c. Allowing the differences in rail rates of two cents to Philadelphia and three cents to Baltimore, the average through rates on e.xport grain during the season of closed navigation were : In favor of Philadel]ihia . 29c. In favor of Baltimore 0. 70c. While during the navigable season they were : In favor of New York over Philadelphia 1. 12p, In favor of New York over Baltimore 1 . 47c. These are the facts furnished by the experience of 1880 in regard to transportation rates on export grain, as bearing upon the general competition between the cities apart from the special railroad interest. To what extent the advantages in rates in favor of New York during the season of navigation (they were less 1.12 cents than via Philadel- phia, and 1.47 cents less than via Baltimore) are counterbalanced by the slower method of canal transportation — whether this is or is not a disadvantage, the other ports receiving grain by rail during the whole year, or to what extent the difference in rates in favor of Baltimore and Philadelphia during the close of the canal (they were 0.29 cents and 0.70 cents less per 100 lbs. respectively via these two cities), are counterbalanced by the commercial advantages of New York, are ques- tions that must be left to individual judgment, as no arithmetical esti- mate can be made. Upon the whole, looking at the results during each of the two periods of the year (the average of the whole year cannot be used as a cri- terion), it would seem that the differences in rates agreed upon on April 5, 1877, are certainly a remarkably close approximation to th<> actual results of the year 1880, if equality of through rates through all ports upon the whole export grain is considered the end to be at- tained. OCEAN RATES ADJUST THEMSELVES TO INLAND RATES. The near approach to an equalization of through rates through all ports, including the grain brought by canal to New York during all seasons of the year, is not altogether accidental. There is a compen- sating principle at work in ad.iusting ocean rates to the inland rates, which has the natural tendency to equalize through rates without the aid of the railroads. The law upon which this principle works sc.mus to be fullv revealed by the facts recorded in the accompanying state- ments, a study of which will throw a great deal of light upon the whole question, and greatly simplify its solution. 3 34 ATLANTIC PORT DIFFERENTIALS During the first and second six months of the year 1880, correspond- ing nearly with the periods of closed and open navigation, the average ocean rates, per 100 lbs., were as follows : From New York. Philadelphia. Baltimore. During the first six months of 1880 During the second six months of 1880 .... Increase in the second six months 20.01c. 25.61c. 5.60c. 21.72c. 25.87c.] 4.15c. 22.31e. 27.15c. 4.84c. "With the lowering of the inland rates via rail and canal, the ocean rates from the three cities advanced, and were higher during the season of navigation than they were during the season of closed navigation. This increase in the ocean rates had the effect of making the through rates from Western points to European points through all the cities (taking the inland and ocean rates together), very nearly the same during the season of navigation as the average of the whole year, al- though the inland rates were much lower during the season of naviga- tion. The through Eates were from New York. Philadelphia. Baltimore. During season of navigation Average during the year 49.82c. 48.50c. 50.94c. 51.06c. 51.29c. 51.14c. This shows that the reduction in the inland rates during the summer months via canal and rail benefited only the ocean carriers (a fact that should be kept in view, in considering the wisdom of the contemplated abolition of tolls on the New York State canal) . But a more important fact is brought to light by these figures, viz. : That the ocean rates ad- vanced a great deal more during the season of navigation from New York than they did from the other two cities. The advance in New York was 5.60 cents, Philadelphia 4.15 cents, Baltimore 4.84 cents per 1 00 pounds. The greater increase from New York made the difference in the ocean rates between the three ports during the season of navigation much less. Philadelphia. Baltimore. During the last six months They were during the first six months of 1880 .... 0.26c. 1.71c. 2.30c. 1.54c. FINK: ADJUSTMENT OF SEABOARD RATES 35 Showing plainly that either the reduced rates of inland transporta- tion by canal (the canal rates were 5.3 cents less than the all rail rates) or the greater demand for tonnage on account of the increased receipts of grain at New York, caused a greater increase in the ocean rates from New York than from the other cities, and more nearly equalized the through rates through these cities, still giving to New York the ad- vantage of 1.12 cents over Philadelphia and 1.47 cents over Baltimore. It is of course impossible to state to which of these two causes the increased ocean rates must be ascribed ; but, in either case, it is due to the fact that New York possesses a canal and cheaper transportation facilities than the other cities. It is not positively known that the differences of two and three cents were fully maintained during 1880. If it be true, as it is stated, that concessions were made by the New York roads, it might explain the fact that the ocean rates at Baltimore were during the winter season only 2.3 cents higher, corresponding to a probable reduction of 0.7 cents per one hundred pounds in the inland rate to New York, or re- duced elevator charges. This, of course, is a mere conjecture. The fact, however, seems to be established, that the ocean rates adapt them- selves to the inland rates, during navigation, when lower rates prevail to New York, as well as during closed navigation, when lower inland rates prevail to Philadelphia and Baltimore. These conclusions, however, are based only upon the experience of the year 1880. But, as during that year the agreed rates were more nearly maintained than in any previous year, the results obtained may be considered more reliable than in other years, during which violent changes in rates took place, and no clear knowledge of the rates actually charged during all periods can be obtained. But the year 1880 is not the only year in Avhich the facts just men- tioned were developed. During the first four months of 1881, when inland rates were still maintained, the ocean rates from Baltimore were 2.74 higher than from New York (see Statement H), while during the succeeding seven months they were only 0.3 cents higher. The latter were the differences in ocean rates during the railroad war, when prob- ably there was a nearer approach to equality in the inland rates via all routes to all cities (the canal rates being nearly the same as the rail rates) , showing that whether differentials are maintained or not, free ocean competition acts, at least in a great measure, as an equalizer of the through rates. From Statement G, it also appears that the difference in ocean rates between New York and Baltimore followed the same law in previous 36 ATLANTIC PORT DIFFERENTIALS years. The differences in favor of New York, in rates to Liverpool by steam, were : First six months of 1887, 5.9c. Second six months, 3.3c. " " " " 1878, 4.7c. " " " 2.7c. " " " " 1879, S.Oe. " " " 1.9c. Sail rates to Cork for orders, from Baltimore, were : First six months of 1877, 1.7c. more. Second six months of 1877, 1.0c. less. " " " " 1879, 0.8c. " " " " " 1879, 0.7c. " Tlie year 1878 was an abnormal year, as the rail and canal rates during the first half of the year were lower than during the last half ; consequently, we see from Statement G, that the ocean rates were higher during the first six months than during the last six. There were by Steam to Liverpool from ' N. Y. Phila. Balk During the first six months of 1878 27.3c. 29 . 7c. 26.7c. 32.0c. During the second six months of 1878 23.0c. 25.7c. Although apparently these results are contradictory to the general rule, according to which ocean rates should be lower in the winter season than in the summer, they really establish its correctness. Besides the evidence of these statistics, we have the testimony before the "Special Railroad Committee" of the New York Assembly, to the same effect. IMr. William Volkens, a member of one of the largest shipping firms in the country, saj^s, on page 665 : " Ansirer. — Grain freights from Baltimore to European ports are generally from 3d. to 6d. (1.25 cents to 2.5 cents, per 100 lbs.) higher; 1 have known instances of 9d. to a shilling (3.75 to 5 cents per 100 lbs.) higher than from New York; but now in the summer time, when the canal brings so much more stuff to New York, the rates are about the same as from Baltimore. "Question. — In the summer the rates from Baltimore are about the same as from New York? "Answer. — Not always, but sometimes; frequently in the height of summer." Mr. David Bingham, in his answer to the question, how much higher the ocean rates are from Baltimore than from New York (page 702) saj's : "By steam about a penny a bushel (3.3 cents per 100 lbs.), and perhaps a penny half-penny a quarter (0.6 cents per 100 lbs.) by sail, but ,inst now (June 23, 1879,) the rates are lower in Baltimore than they are in New York, owing to the increased quantity of grain coming this way. ' ' There can therefore be no doubt that the cheaper canal transpor- tation to New York, either directly or through the consequent increase in grain receipts at New York, affects the differences in ocean rates from the different cities, and in an adjustment of rail rates to these FINK: ADJUSTMENT OF SEABOARD RATES 37 different cities, if it is to be based upou the differences in the prevailing ocean rates, the influence of the canal as a competing element cannot be ignored. If the difference in ocean rates from the competing cities are wiped out by the canal influence in directing the grain to New York, as it appears to be the case, it does not follow that the differences in the inland rail rates to these cities should also be wiped out. The very conditions that give to New York the preference in inland rates, as well as establish it as the first grain market of the country, cannot justly be assigned as a reason for depriving Baltimore and Philadel- phia of such advantages as they may possess in a shorter and cheaper inland carriage. The estimates of the average cost of transportation, submitted in Statement L, are based upon the rates that actually prevailed during the year 1880, by all routes, including the canal, and are believed to be substantially correct. ' But for the present purpose it does not matter whether they are exactly correct or not, as I merely wish to use them as an illustration of the facts and principles involved in this problem. These estimates show that the average cost of transporting grain to New York during the navigable season, was 24.21 cents per 100 pounds, and to Baltimore 24.14 cents, assuming that the differences in rate of 3 cents in favor of Baltimore had been strictly maintained. The all- rail rate to New York is estimated at 27.5 cents (the nominal tariff' was 30 cents). Assuming, for the sake of argument, that the ocean rates were the same from both ports, and that the Baltimore merchants would have had to pay the same all-rail rate as to New York, 27.5 cents, when the average cost to New York merchants, including canal trans- portation, during the season of navigation, did not exceed 24.21 cents per hundred pounds, the question may well be asked : Whether Balti- more could under such conditions have secured a share of the grain trade? Considering further, that the average ocean rate by steam and sail during the navigable season of 1880, was 1.54 cents higher, and consequently the through rate via Baltimore 4.47 cents higher than via New York, it could hardlj^ be expected that with equal inland rates Baltimore could have competed with New York in the grain market. The principle, that the through rates from common points in the West to common points in Europe, should be the same via all ports, which is insisted upon by New York merchants as correct, would cer- tainly not have been carried out. There can hardly be any doubt that in the adjustment of transportation rates, the effect of the lower rates of transportation via canal to New York upon the relative price of grain in the different markets, must be taken into consideration b}- the merchants in the competing cities. 463558 38 ATLANTIC PORT DIFFERENTIALS But a more difficult question arises between the railroad companies themselves. The adjustment of the rail rates to Baltimore and Philadel- phia upon the basis of the average rates to New York, including the canal rates, necessarily result in lower rail rates to Philadelphia and Baltimore than to New York. The question may well be asked : " If the New York railroads can carry grain in competition with the canal, at certain increased rates over the canal rates, why cannot the Philadel- phia and Baltimore roads do the same, assuming ocean rates to be the same from all ports?" Looking upon the subject simply in this light, disregarding all other facts which have a bearing upon the adjustment of competitive rates, the New York roads have a right to objec* to differentials in favor of Baltimore and Philadelphia. But is it possible to deal with this question as simply one of railroad competition, when it is complicated with so many other conditions that act and react upon it, and which in the practical solution of the prob- lem cannot be ignored? The New York railroads must, in the first place, adjust their rates with the view of directly meeting the canal competition. Experience shows that they can charge more than the routes via lake and canal, including the insurance on the water routes. Were the New York railroads to attempt to make their charges the same, it could only lead to ruinous competition, which would make the business unprofitable, both to the railroads and to the canal, and practically wipe out the advantages of the canal to New York. We find that during the navigable season of 1880, when rail rates were kept unusually high, (5.3 cents higher than by lake and canal, 2.25 cents higher than by lake and rail) the railroads were enabled to carry 46 per cent, of the grain to New York — the canal carrying 54 per cent. ; while in 1876, during the war of rates, when rail rates were very low — perhaps as low as the canal rates, if not lower — the railroads carried 65 per cent., and the canal only 35 per cent. But the total receipts at New York, by all routes, were less during that year than during any previous year since 1865. It is therefore evident that it is the true policy of the New York roads to keep their rail rates sufficiently above the canal rates, to secure for themselves a reasonable remuneration for their services, and at the same time to secure to New York some of the advantages of canal transportation. Having adjusted the all-rail rates to New York with this end in view, the question next arises : What shall be the rail rates to Phila- delphia, Baltimore, and Boston, which will enable these cities to secure a reasonable share of the traffic, proportionate with their facilities of PINK: ADJUSTMENT OF SEABOARD RATES 39 transportation and their commercial ability to transact the business? The transportation rates to the other cities must, of course, be adjusted to meet the combined influence of rail and water transportation upon the price of grain in New York. No mathematical solution of this question is possible, but this conclusion may be fairly drawn from these considerations: Assuming the ocean rates to be the same from all cities, then, if the railroads were to charge the same inland rail rates to Baltimore and Philadelphia as are charged to New York, it would leave the full advantage of the lower canal rates to New York, and would wipe out entirely the natural advantages which Baltimore and Philadelphia possess in the shorter and cheaper railroad transportation to the seaboard. In connection, however, with this question, it must also be considered that the cheaper rates of canal transportation are due to the inferiority of the services rendered by the canal, and for this reason certain allow- ances should be made for the greater length of time, and such other disadvantages as may exist, on canal transportation, as compared with transportation by rail. It would be difficult to estimate these disad- vantages in dollars and cents, as it is not unfrequently the case that shippers prefer canal to rail transportation, the additional time required, during which storage room is provided for the grain, is some- times an advantage. Grain that is brought by the canal to New York at the rate of five cents less per hundred pounds than by rail, after it has been stored in a warehouse, awaiting export, is certainly worth as much in the market as grain that has been carried to New York by rail. These are all subjects for consideration, and I merely wish to call attention to them, without, of course, being able— and I suppose no man is able— to fix, precisely, in dollars and cents the advantages or disadvantages to New York of canal transportation as compared with all-rail transportation. GENERAL CONCLUSIONS. I have endeavored to examine carefully the nature of the disagree- ment between the Trunk Lines upon the question of differences in transportation rates to the seaboard cities, in the hope that the conflict- ing views, each of which may be correct in itself, might be reconciled, and the subject could be dealt with from some general principles, upon which all parties could agree. The conclusions at wliich I arrive are the following : The claim of the Baltimore and Ohio and Pennsylvania Railroad Companies for lower inland rail rates is based upon the general prin- 40 ATLANTIC PORT DIFFERENTIALS ciple that the transportation charges should be regulated, at least to some degree, in accordance with the length of the competing routes. While this is perfectly correct so far as the domestic traffic is con- cerned, it will be admitted that in regard to all competitive traffic the ■distance forms no element. The lowest through rates established by any one competing route establishes the through rates by all others, regardless of distance. If it were true that grain could be transported from common points West to common points in Europe at lower total rates through Balti- more than through New York, assuming that all routes possess the same advantages to the shipper, and that the ocean rates are the same from all ports, the position of the Baltimore and Philadelphia railroads that they must have lower inland rates, simply because their inland routes are shorter, could not be maintained, no matter how short their routes might be. This general principle was fully recognized in the convention of December, 1876, and in the agreement of December 18, 1876, It is difficult to see how any other rule could lead to any other result than continual warfare between competing transportation lines. On the other hand, the New York railroads, while insisting upon the practical enforcement of this principle, do not go far enough in its application. They intend to restrict it simply to the competition be- tween the railroads, disregarding other transportation routes affecting the competition between the commercial communities. But if the New York railroads insist that the railroad competition alone shall be taken into accovuit, the claim of the Philadelphia and Baltimore railroads for lower transportation charges on account of their shorter and cheaper routes to the ocean, would thereby be justified. The principle of ad- justing rates with the view of enabling the different cities to compete with each other upon equal footing, must either be adopted throughout, or need not be adopted at all. The only common ground that all parties to this contest can occupy, would seem to be that the through rates on all competitive business should be made alike, or as nearly so as may be practicable, upon the whole competitive traffic, and not only upon the railroad traffic. This principle being once acknowledged, then the question would arise as to the practical adjustment of rates upon that basis. If it were true that the ocean rates from all the ports were the same, then there should be no objection that the average inland rates by all routes (water and rail) should also be the same, making allowance, of course, for the disad- vantages of routes, if they exist. It has been taken for granted in the late discussion of this subject, FINK: ADJUSTMENT OF SEABOARD RATES 41 both in railroad and commercial circles, that the ocean rates from the three cities are now practically the same, and this is the foundation for the claim that the inland rates should be the same. But are the ocean rates really the same? The statements herewith submitted do not show that they are. INIisapprehension has been created by dealing with the average ocean rates for the whole year. It will be readily seen, that if the ocean rates during six months of the year were three cents lower from Baltimore or Philadelphia than from New York, and for the other six months they were three cents higher, the average for the year would show that the rates were the same. Yet as competition is carried on from day to day, and under different conditions during different seasons of the year, the rates prevailing each day, and not the average rates for the year, which may never be charged, control the business. During the first four months of this year (see Statement H) the average ocean rates, steam and sail, were 2.74 cents higher from Balti- more than from New York. It is not probable that Baltimore, during those four months, could have secured any business at the same inland rate and adding the higher ocean rate. From May to November of this year the average ocean rates, steam and sail, were only 0.3 cents higher from Baltimore than from New York; while in 1880 they were 1.54 cents higher ; and yet we do not find that the reduction in ocean rates in 1881 gave to Baltimore more than its usual proportion of the grain business, in fact its grain receipts have been considerably less. The great fluctuations constantly taking place in the ocean rates at different seasons of the year, under the ever changing conditions of commerce, make it entirely impracticable to vary the inland rates from day to day as the ocean rates may vary. No man, be he ever so wise, can foretell what will be the difference in the ocean rates during any par- ticular period in the future, and the plan of equalizing the through rates, based upon the sum of ocean and inland rates, can never be suc- cessfully carried out. It is therefore fortunate that we have evidence that the ocean rates adapt themselves to the inland rates with more pre- cision than human wisdom could devise. This is the one redeeming feature in this whole intricate problem, and which may be relied upon, in a great measure, for an equalization of the through rates through the different cities. From this view of the ease it would seem that too much stress has been laid upon the necessity of a nice adjustment of inland rates, from the operation of which it is expected that each of the railroads and each of the cities should get exactly that proportion of the competitive traffic to which it may consider itself entitled. This expectation is 42 ATLANTIC PORT DIFFERENTIALS entertained in face of the fact that differential rates heretofore have never been observed whenever they came in conflict with the more legitimate conditions of competition ; and there is not the least prospect that they ever will be maintained, nor ought they to be, if they operate unjustly toward any of the railroads or communities affected by them. Relying, in a great measure, upon the ocean rates to adapt themselves to the inland rates, and bearing in mind that the distribution of traffic between the Trunk Lines and cities is controlled by other conditions than mere agreements as to rates, a fact that is well established by the constancy with which this traffic divides itself, regardless of trans- portation rates, the true plan evidently is, to agree upon a proper dis- tribution of that traffic at its source, if possible, and then to allow it to flow to the different cities according to the natural laws of trade. The rates should be sufficiently flexible, and might be changed from time to time, so as to secure to the competing lines the agreed amount of traffic based upon the distribution of traffic as it took place under free competition. This is a much more direct and practical way of securing justice to each road, than to attempt to predetermine and enforce rates, under the impression that this could bring about a satisfactory division of traffic. There is no danger that under this plan any one city would be dis- criminated against. None of the Trunk Lines are exclusively identified with any one of the cities ; they are interested in the traffic of all, and they desire to serve all. The New York Central and Hudson River Railroad forms part of lines to Baltimore, Philadelphia and Boston, as well as to New York. The New York, Lake Erie and Western Railroad is interested in Boston and Philadelphia, as well as in New York ; and the Pennsylvania Railroad serves the four cities. The Baltimore and Ohio Railroad, more exclusively a Baltimore railroad, is seeking for a separate entrance into New York. Forty per cent, of the Eastbound tonnage received at Philadelphia is carried there by the New York roads ; 80 per cent, of the Boston business is carried there by the New York roads ; 7 per cent, of the Baltimore business is carried there by New York roads, and 40 per cent, by the Pennsylvania Railroad. The Pennsylvania Railroad contributes 20 per cent, to the New York business. The idea that any one of these railroads, after having made large investments to secure business to all cities, is working exclusively in favor of any one and against all others, is not borne out by the facts in the case. They are interested in the prosperity of all ; and although each may show a natural preference to the city with M^hicb it is more closely identified, it is not in a position to discriminate unjustly against PINK : ADJUSTMENT OF SEABOARD RATES 43 the others, except at a loss of a large amount of revenue. The control- ling principle of each of the Trunk Lines is to do all the business it can secure for any city. The Pennsylvania Kailroad certainly would not continue to carry freight to New York if it were an injury to Phila- delphia; nor would the New York Central and Erie roads carry to Baltimore, Philadelphia and Boston if it were an injury to New York. They could easily confine their business to any one city if they desired to discriminate in its favor, by charging higher rates to the other cities ; but each company carries (as common carriers should do) business wherever it is wanted, and to the full extent of its capacity ; and the fact that they do this is alone sufficient evidence that they have no desire to discriminate in favor of or against any one city, but propose to allow the traffic to flow according to the laws of trade and commerce. I regret that this report has extended to so great a length : but it will be admitted that the subject is one of the most complex and intri- cate nature, upon which there maj^ jvistly be a great diversity of judg- ment aeording to the different standpoints from which it is viewed. It will also be admitted, that so far the problem has only been dealt with upon its surface indications, and a more exhaustive examination and analysis seemed justified by its great importance, and the great losses that are incurred by a continued failure to agree upon its final solution. If I have been able to call attention to some of the facts which have heretofore received only partial if any consideration, and if this leads to a fuller examination and to a final settlement of this vexed question upon a permanent basis, the object of this report has been fully at- tained ; and in that case I need not apologize for its great length. ALBERT FINK, Co')nmissioner, POSTSCRIPT. The question of marine insurance has not been considered above. I recently called upon Mr. Frank Firth, President of the Erie and Western Transportation Company, for information on this subject, and he has made some estimates and written a report, in which he gives the following general conclusions. I have, however, had no time to examine into the matter. First. — The cost of marine insurance constitutes an important ele- ment in comparing the total cost of movement by ocean from different seaboard cities. Second. — The differences in cost of ocean marine insurance by differ- ent classes of capacity, and for important periods, greatly exceed the present differentials in rail rates. 44 ATLANTIC PORT DIFFERENTIALS Third.— A differential rate that might overcome the increased ocean cost, due to an inferior insurance class of ocean capacity, and permit a movement of corn by a given port, might not, owing to the higher in- surance cost per 100 pounds, similarly permit a movement of wheat. Office of Commissioner, New York, Dec. 1, 1881. STATEMENT A. Sliotving the Total number of Bushels of Grain {includinq Flour) Beceived at and Exported from the Four Atlantic Ports, during the Years 1878, 1879 and 1880. Compiled from Produce Exchange L'eports. RECEIPTS. EXPORTS. RECEIPTS IN EXCESS OF EXPORTS. P^ 1- o <» a c y. 1-5 o . S.I O O few I.— For Tear 1S78. New York: Canal 63,905,872 85,350,079 3,606,219 23.4 SI. 3 l.i Rail Coast 1 Total, New York . . .. 152,862,170 27,291,781 45,474,650 47,075,240 56. ( 10. C 16.7 17.3 107,819,044 12,941.359 29,876,327 39,724,954 56.6 6.8 15.7 20.9 70.5 47.4 65.7 84.4 45 043 126' 9*> fi Boston 14,350,422 15,598,323 7,350,286 52 6 Philadelphia Baltimore 15 6 Total, Four Ports 272,703,841 57,044,406 101,929,243 4,151,241 100.0 18.4 32.9 1.3 190,361,684 100.0 69.8 82,342,157 30.2 II.— For Year 1879. New York: Canal Rail Coast ! Total, New York 163,124,890 32,798,829 47,398,455 66,799,926 52.6 10.6 15.3 21.5 124,350,932 15,774,076 32,310,473 55,629,594 54.5 6.9 14.2 i 21-4 76.2 48.1 68.2 83.3 38,773,958 17,024,753 15,087,982 11,170,332 23.8 51.9 31.8 16.7 Boston Philadelphia Baltimore Total, Four Ports 310,122,100 lOO.O 228,065,075 100.0 73.5 82.057,025 26.5 III. -For Year 1880. New York: Canal 69,440,901 95,414,882 4,236,820 21.9 30.2 1.4 Rail Coast Total, New York Boston 169,092,543 36,827,476 49,370,273 60,642,146 53.5 11.7 15.6 19.2 135,204,800 20,449,864 31,894,362 50,957,415 56.7 8.5 13.4 , 21.4 80.0 55.5 64.6 84.0 33,887,743 16,377,612 17,475,911 9,684.731 20.0 Philadelphia 44.5 Baltimore 16.0 Total, Four Ports 315,932,438 100.0 238,506,441 1 100.0 75.5 77,425,997 24.5 FINK: ADJUSTMENT OF SEABOARD RATES Eecapitulation in Percentages. 45 YEARS. PER CENT. OF RECEIPTS. PER CENT. OF RE- CEIPTS EX- PORTED. o ^ PER CENT. OP EXPORTS. PER CENT. OP RE- CEIPTS IN EXCESS OF EXPORTS. O -^ ftO P 1878 1879 1880 66.0 34.0 70.5 47.4 63.3 36.8 76.2 48.1 65.2 34.8 80.0 55.5 65.7 84.4 63.4 36.6 29.5 52.6 34.3 68.2 83.3 61.4 38.6 23.8 51.9 31.8 64.6 84.0 65.2 34.8 20.0 44.5 35.4 15.6 16.7 16.0 Statement shotving Tonnage of 8th Class FreigM foriuarded to the four Atlantic Cities over the four Trunlc TAnes durinei the year ending December 31, 1880 ; also provortion of same exported on Through Bills of Lading. BOSTON. NEW YORK. PHILA. BALTIMORE. OVER THE FOUR TRUNK LINES. p 03 a •M a o o a p ? so 03 e •H a o o a o Eh a d «H a o •- d o y Id c »-. C c — 111 593,732 293,713 300,019 50.5 2,380,7821 1,117,990 81,588 1,086,402 '"i'.k 92.7 1,332,091 24,776 1,307,315 Shipped cin Foreign B. L Shipped on Domestic B. L 446,279 1,934,503 IS. 7 81.3 1.9 98.1 STATEMENT B. Sho^cing the relative amount of West and. East Bound, and Export Tonnage (under through bills of lading), of all classes, of the Four Atlantic Cities, during the periods named below: West Bound Tonn.\ge. Forwarded from the Four Atlantic Cities, including a portion of New England, over the Five Trunk Lines. Periods of Time. Total Tons from four Atlantic Cities. Percentage of Each City of Total Tonnage. New York. Boston &N.E. Phila. Bait. Total. I. — For the year of 1878 . II.— For the year of 1879 . III.— For the year of 1880 . IV. — For the 8 months end- ing Aug. 31, 1881, . 1,274,858 1,534,923 1,871,480 1,297,563 58.1 16.2 15.5 10.2 54.2 16.3 16.1 13.4 54.6 16.5 16.0 12.9 56.3 18.9 13.6 11.2 100.0 100.0 100.0 100.0 46 ATLANTIC PORT DIFFERENTIALS East Bound Tonnage. Over the Four Trunk Lines, exclusive of Live Stock. Total Tons to four Atlantic Cities. Percentage op Each City Total Tonnage. OF Periods of Time. New York. Boston &N.E. Phila. Bait. Total. I.— For the year of 1878, II. — For the 12 months end- ing July 31, 1880. III. — For the 12 months end ing July 31, 1881, . 7,318,000 8,934,000 8,973,000 42.8 43.2 44.3 22.0 19.. 5 23.3 17.6 18.4 16.1 17.9 18.9 16.3 100.0 100.0 100.0 Export under Through Bills of Lading. Over the Four Trunk Lines. Periods of Time. Total Tonnage. Percentage of Each City of Total Tonnage. ^ew Boston York. 1 Phila. Bait. 1 Total. 1 I. II.- —August 1, 1879, to July 31, 1880, —August 1, 1880, to July 31, 1881, 1,293,030 1,329,826 56.1 57.1 29.0 32.0 10.9 7.4 4.0 3.5 100.0 100.0 Note. — The four Trunk Lines when mentioned means the New York Central and Hudson River, the New York, Lake Erie and Western, the Pennsylvania and the Baltimore and Ohio Railroads; when the five Trunk Lines are referred to, the Grand Trunk Railway of Canada is included. C5 g W 25 « ^J ■« >< CM g Ah fM >. (H .0 ^ a s S^ d > w ■a . 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CO as SSSS MtO W« ^ i.l to M M'J' :z; I-H S8g!2 oof -*3 »] M Q^ H ^gOOlM S""* g^03g ^00 r^ " to 00 10 C« CO rH rl CO 00 ;> rH 03 03 rH 00 03 rH 23 rHgOO > 00" rH > rH CO 1-4 inc3 lo ION -' '"' «(N rH rH« ■>1> 00 " " «<1 CO 1 W H ■ ■o >. ■ M 03 :^ • X w Yo ston iladd Itimo *J <; O.C 03 Eh t ^acina 1 > Ah 1 47 FINK: ADJUSTMENT OP SEABOARD RATES 49 STATEMENT D. Total Eeceipts and Exports of Flour and Grai;^. At the five Atlantic cities, New York, Philadelphia, Baliimnrc, Bosfnn and Montreal during the years named below; also, Percentages of each City of Total Receipts. ' RECEIPTS, TOTAL RKCEIPTS OF THE FIVE ATLAN- TIC CITIES. PERCENTAGES OF EACH CITY OF TOTAL RECEIPTS. TEAR. NEW YORK. Phila. Bait. Bost'n Canal. RaiL Coast. Total Montr'al. 1860 85,427,151 93,753,6iO 97,522,166 87,112,779 1 63.5 57.5 61.2 .55.3 .57.9 55.0 56.2 56.4 53.4 52.8 55.8 52.3 45.8 50.3 52.06 49.06 49.51 7.3 8.6 7.7 8.8 11.7 12.3 12.3 12.7 14.2 14.3 12.8 15.7 17.4 12.5 15.49 14.25 14.43 11.2 11.4 8.6 13.1 11.6 11.7 11.1 11.0 12.1 11.2 12.9 12.2 16.9 16.9 10.4 14.3 11.6 12.5 11.0 10.0 10.5 9.6 10.0 10.3 9.3 10.2 10.9 11 .^ 7 6 1865 8 2 1866 . 10.9 1867 10 3 1868 106,769.295 118,268,9*26 124,461,841 158,805,433 170,234,499 174,525,321 192,452,3=53 179,875,321 209,082,401 205,420,366 293,576,061 332,485,424 341,349,702 7 8 1869 11.0 1870 27.9 33.1 29.7 24.5 24.6 21.1 15.6 23.5 21.76 17.15 20.33 25.9 21.7 22.4 27.5 30.0 30.1 28.2 24.8 29.07 30.66 27.95 2.4 1.6 1.3 0.8 1.2 1.1 2.0 2.0 1.23 1.25 1.23 9 9 1871 10 3 1872 10.3 1873 11.4 1874 9.2 1875 9.6 1876 9.0 1877 9.0 1878 16.04 9.29 20.09 9.86 17.76 10 88 7.12 1879 6 74 1880 7.42 EXPORTS. YEAR TOTAL EXP'RTS OF THE FIVE ATLANTIC CITIES. PERCENTAGES OF EACH CITY OF TOTAL EXP'TS. New York. Phila. Bait. Boston. Montreal. 1873 87,407,846 104,994,100 90,313,244 125,771,730 124,582,116 212,497,231 249,942,748 265,383,823 62.10 62.94 £6.12 44.13 50.10 50.74 49.75 50.95 5.50 6.36 9.80 17.50 10.82 14.06 12.93 12.01 10.35 2.45 19.60 1874 11.96 12.63 19.69 20.74 18.69 3.03 4.42 4.80 4.79 6.09 15.71 1875 17.03 1876 13.88 1877 13.55 1878 10.42 1879 22.26 6.31 8.75 1880 19.20 7.71 10.13 NOTE.— The above Statement was compiled from Annual Reports of the New York Produce Exchange, with the exception of the Percentages of New York, via Canal, Rail and Coast, respectively, of the Total Receipts for the years 1870 to 1875, inclusive, which were pr^ pared from Statement on page 198 of the Railroad Gazette of April 19, 1878, O ito ^5 V. ~ Is 2 fen Oi ^ r^&H E-, <» ^ '^ ^ t-a S-^ •kT"^ s 1^ s o *. S^H "*^ oo ^ 5i !^v-r rS O^rS o T3 i~ ^ t^ s o S <3 'w O -w ^iH'3 ,«05 o Rh <;j e s Oi S s s -t^ ■ii 5^ Oi S K 'S; ^ o c\S O S eS S <0 fi F?fe p s^ <3 S 'W "S C 2 g3gS???;iSSggS3sgS CO 8 coojciooooco>-iOi-'iNto>-iOO ^ 1 SI CO 00 CD .-I o O Ir^ > -I< -^ 00 CO O I-- lO i-HOOOiCO'^iOCS'^ ir-tOr-ir-Qilf^COOSCOOSrHOiCOCOl COOit^COQOCOi-HtOOOjySOCOOC CO Gvi OT 00 r-l i-« CO CO r-t O 03^ tJO tuO , > PL, K a til! o (~i a S ss *j «*-( a o. o M 3J 03 rj I • C3 -'' !U ■*SS£5'S •2.2 ^— 2 o eof^* W CO rH C5 CO GO l^ l^ ift COCO (N r-l O Tl* ■* rH CO OCOl^ cieirHCo' 8O'*00 00 «o COI^ co'-i"*c'oo J^ rH -:?< 00 C^ W i-t CO IlOi^MjOOOiftCiC^Oi-Hi-Ht^cOOO s 2! >= - joOfHi— tmcoc^cocor-t-^o* codddddddddddddd cC)W«0005^0505^J^*MiOco<: CO CO !-< Q C» O ■* t 1 r-l O to 1-1 ■* t~ CO 00 in -w 00 o CO • i-l i-H CO CO C* CO CO r ■C< (MOO 00 OS o "J o O.G CD E20Ph 5 £•=*= M C3~.' ■E2 PLI > sa; !Cxa^X'fcrf*--^S-|C5t-'*-i . . «sd-2S.«^o > o a S.Hoa S£SSfflcBOW&^WPHHJrH>00 I 50 -« «J as 53 • ^ W s =0 O "^ ^ i H .5 ) in Q ^ (MOO > C^ CD t^ (N -35 ■^ to CO Oi -rt* in I r-< -r tc & O t t 00 C^ O CO 00 cc c »-H 00 r~ 'Ti -rj' (M ; -1* C«i C^ r^ Ot) C^ ' ■ 03 : : : : S3 '3 : : : : ^t '■ '■ ' '■'■ ^ >. '^^^ : : o □ 53 03 c3 : : o a i^ o o 5 > ;n *-- -M -tJ<4-. a 3 £ £ is S^'S o t> t> ^ t> ,°* 5 1 03 O 00 rH in CO tH VOinrHCiOOSt^CM glfr CO Ol 1?i C^ CO ^ CO CO 00 Oi CO -^ CT Oi c^ »n Oi I— I 03 o^ ^j in S 10 00 r-l i-H Sag ' 2 .2 5 o 51 52 ATLANTIC PORT DIFFERENTIALS STATEMENT F. Shoivina tliP- Distrihntwn and Per Cent, of Total Tonnafje to each Destination of Traffic originating at the Four Atlantic Cities and Eleven Interior New Eng- land Competing Points, carried to the West by the Four Trunk Roads {the N. T. Central, N. Y., L. E. 4" Western, Pennsylvania cf Bait. <|' Ohio). Also in- cluding Traffic carried iy Central Vermont and Grand Trunk from JBoston and New England Competing Points. During the Year Exding December 31, 188U. NOTP-.— The New England Competing Points, the Tonnage of which is embraced in this State- ment, are Lowell, Nashua, Worcester, Springfield, Providence, South Framingham, Nor- thampton, Holyoke, Westfleld, Salem, and Fitehburg. DESTINATIONS. Tonnage. iPerCent. Chicago Peoria St. Louis Indianapolis Cincinnati Louisville Total Milwaukee Cleveland Detroit Toledo Total Mississippi River Points Missouri River Points Bloomington Springfield Cairo Evansville Port Wayne Lafayette Terre Haute Columbus Dayton Sandusky Total Buffalo , Pittsburgh Wheeling Parkersburg Total Wisconsin and North West . Iowa Illinois Missouri Ark., Tex., La. and Ind. Ty. California Michigan Western Canada New York State Pennsylvania Ohio Indiana South of Ohio River West Virginia Total Grand Total 346,582 18.52 11,012 0.59 115,77tj 6.18 30,955 1.65 118,768 6.35 37,069 1.98 660,162 35.27 45,299 2.42 82, -288 4.40 74,955 4.01 30,374 1.62 232,916 12.45 16,927 0.91 37,629 2.01 3,739 0.20 8,048 0.43 929 0.05 9,104 0.49 8,865 0.47 5,730 0.31 8,012 0.43 22,707 1.21 14,845 0.79 5,853 0.31 142,388 7.61 57,587 3.08 260,722 13.93 22,576 1.21 4,592 0.24 345,477 18.46 83,149 4.44 29,045 1.55 28,324 1.51 4,511 0.24 7,681 0.41 48,369 2.59 41,552 2.22 25,383 1.36 8,884 0.47 31,453 1.68 128,954 6.89 26,006 1.39 25,979 1.39 1,247 0.07 490,537 26.21 1,871,480 100.00 FINK: ADJUSTMENT OF SEABOARD RATES 53 Statement shotving the Percentages of Tonnage Destined to the several States, classified according to their Destination in States. DISTRIBUTION BY STATES. Tonnage. Per Cent Wisconsin Iowa Missonri Ark., Tex., La. and Ind. Ty. Illinois Indiana Michigan Ohio South of Ohio River Pennsylvania West Virginia New York State Western Canada California Total 1,871,480 128,448 6.86 39,613 2.12 164,275 8.78 7,681 0.41 398,634 21.31) 88,672 4.74 116,507 6.22 406,789 21.57 63,048 3.37 292,175 15.61 28,415 1.52 66,471 3.55 25,383 1.30 48,369 2.59 o » «i §? SI o S O S « o w ^ o o ■^>, o v> g t~ o s: la K _<» a.. Si, TS .o rCl CO §2 s 2t- <=■, 2: < -~ W o >< rC: 03 H M 6S a 14 » W O o s s "" (^ o:) ^ ii CO "^ S 02 CO CO w O n « O 03 O e1 is .2 S3 ^1 S.2 SS« as OH 1-1(33 00 00 63 u:j CO C*5 l^ © Oi cc en i/^ M ^ (?i r-t (M i-i c t»© ■^ W r-^ 03 t' t^ CO c t-Q0 33 t aoooooi 1 pS ;aO^-; 0^ oi: •rH^a> ^ a 02 ^0 h^ a ■ M t» W ■ ^:: ; > 5 •1CO0-* 0-5 Z 3 £ \oia-iai << 02 »;. , . (» £ tj" " " W c 03i>-in 00 „ X/1 « w a « . Si ^ - - - 03 oi; ^t~t-o ^ ^^ ,-( CCt-t^ .10 CM . ^ 0>H eiNNi^ SgggJ P^ -s- z •d -*-» ■• _ 03^ E it • T' CO £g(^ ■ -oo* : :«" S.2 > 1 tr- . - Ill rHOCOCft I- u'5 00 (N COIN o»(>3 03 s S < • ^ - » w . w H m ; ■* •* H ^s ;(N ojc* p4 g ^2^3 2n g Ost^cor- 03 OiO-s>in w ^^■5 CON «« > n 3 «. . , d H fl u Eft Ot-« ^2. s. |i( (»- - . ^ 0" ' " fS ;o 0-* Otx t- CO e^ CO 1^1 ^ 03 <; w (« 1 b-OI 30:0 ;>^ m- - eS in 00 00 0:3 rHOiOQ eoo^Sl Pho a ^ to. u Eg 00 C-. t-ec-* ^2 03 go ,r in r-i 00 n E3 g-S 1^5 o;h gSo £gf^ S.5 Ui Q »-" « 05 c 00 ^ '^ (N Eg o E 1*^ « 00 c o CO C cj in oC C CO t-^ooco ej CM 0»^ « si^i o-^ hJ rx.S O *^n o Ah « W C^ > I-? s s o 03 x: SB s-s fe^ ^ PM « •^ W H ; o -^ '^ t^ CC 00 C5 r-i c d d + ]+ + (>i -^ o t^ + 1 I lA "* 00 ift u^ ad '-*' d + + + + 00 '* O 00 l-H i-H O -* + + + C <3^ (M I I -r in ■* c<3 oi + + + + t^ 00 Ol c boooooc I 5 ^ C P5 £ *^ ti ^ 3 SAh S.S ; :o >t^ iC •cioj T-i ; + + + I 1 I r^ OOO I + I + dd.-ip <0 CO oo«o r^d--^ ■^ CO ■* o + + + I phS g-s S.5 Co-" 5 £ n c ^^ I I CO i— ©la d d d d + + + (MU5 00 t^ tttt 00 Ci -* -^ d d -*' d CO C; CO CO lO d -^ ei + + + + 1f •WOOMrH + + + + ooSoiioc 55 7)Q ATLANTIC PORT DIFFERENTIALS STATEMENT H. I, — Quotations of Bates on Grain via LaTce and Canal and Lake and Bail, from Chi- cago to New York, during the year 1880, as per report of Board of Trade of Chicago. II. — Average Ocean Rates at New York and Baltimore, for each of the 11 months ending November 30, 1881. III. — Estimate of Average Ocean Bates on Grain exported by Steam and Sail, from New York and Baltimore, from January 1 to November 30, 1881. RATES ON GRAIN VIA LAKE AND CANAL AND LAKE AND RAIL. NOTE.— The estimate for insurance— 0.6 cents per 100 lbs.— is based upon the charges of 1881 apphed to the value of grain trans- ported during 1880. DATE. LAKE AND CANAL RATES. a K ^-^ .9 ^ m 2° ^•§1 a o O be B a S CK P513 q 5Ss 4,5 ^ 03 a J3 « « li h-l o O ►-? Cts.per cts.per Cts.per Cts.per 100 lbs. 100 lbs. 100 lbs. 100 lbs. April May 9.9 8.2 6.3 5.2 July August September October November Average rate Lake Ins. ... Av'ge + Ins. 15 7.7 22 9.0 29 10.2 ^ 10.8 12 13.2 19 12.3 26 11.5 3 10.0 10 9.5 17 7.6 34 7.2 31 8.0 7 9.8 14 10.1 21 9.1 28 8.7 4 7.8 11 7.1 18 6.9 2.5 6.8 2 7.5 9 9.9 16 11.9 23 12.5 30 12.2 6 12.8 13 12.1 20 10.9 27 11.2 12.5 12.5 11.6 9.8 9.6 10.2 10.1 9.9 10.5 11.2 11.7 11.9 11.5 10.8 9.5 9.1 9.7 9.2 9.4 9.8 10.5 9.7 9.6 9.6 9.7 10.1 10.4 10.1 11.1 13.1 14.3 13.9 13.0 23.7 22.0 19.3 16.3 17.5 19.2 20.5 21.4 22.6 25.7 25.4 24.7 22.8 21.5 18.4 17.6 18.9 20.3 20.8 20.2 20.5 18.5 18.4 18.2 18.2 19.3 22.0 23.8 25.4 27.1 28.8 27.7 25.8 28.6 28.6 28.2 27.5 26.7 25.1 27.3 27.3 27.5 26.7 27.2 26.7 26.7 24.8 24.8 23.9 25.0 26.3 25.0 23.0 25.5 22.5 22.7 22.5 22.0 23.0 257^ 26.7 26.7 26.7 26.5 28.0 29.5 25.9 AVERAGE OCEAN RATES AT NEW YORK AND BALTIMORE. For each of the 11 months ending November 30, 1881. STEAM, TO LIVERPOOL. ^ o o r-i 5 ji ^ !z; " Per Per Bushel. Bushel. SAIL, TO CORK FOR ORDERS. Per Per Quar'r. Quar'r. January February March ... April May ■lune July August . . September October . November Average for 11 months end- ing Nov. 30, '81, in s. and d In cents per lOO lbs. ... d 7 + 51/2— 5 — 41/8 2V2 3l^- 4%- 5 + SVs-h 3 41/3 d. 71/3 + 6,^ s. d. 4 51/2 )- 4 n + 6Vi- 4 6 + 5% SV2- 4 -f 5%- 4 — 3% 5y« 4 6% 4 4% 4 4% 4 7% 5 1 + 4 8 4 5 4 6V2 S. (1 5 6-1- 4 11 + 4 5 — 4 S% 3 9 + 3 9 + 4 3 -t- 4 8 + 4 3 4 OV3 4 9 + 4 7Va 23.0 4 5%+ 22.3 ■SQI OOT -13(1 sjnao ■* CO S S o ni 3;Ba uBaoo a^BjaAy ir IN • o d 5 1 •^ 1 ; 1 g^ P3 •s;joaxa JO •in3Q ia* ^ -* a 5 C •sjiodxa JO -jnao jaj ^ If ^1.' ■sqi OOl lad sjnao a 6^ H ^ ^ 03~ fc ■S iS >• 05 cc ■< 1 I IN w 57 58 ATLANTIC PORT DIFFERENTIALS STATEMENT J. Destination of Export Corn and Wheat front New York and Baltimore during Crop year ending August 31, 1880, and from Philadelphia during Calendar Year ending De- cember 31, 1880. DESTINATIONS. New York— Bushels. 6 o "a o « o ^ O gB.a 4) » n 1 .5 2 ft -c 03 3 "3 o II 2-S O 03 H ^ _ O 03""^ u ■w 5^ OS Baltimore— Bushels. s o o H o ^ 1- 2S _ C C8 '^ «£ a as c (1) «. Great Britain: London 9,234,783 11,278,805 4,485,581 4,255,559 3,091,014 389,982 448,931 242,740 19,727,255 799,238 374,193 10,175,351 8.1 9.9 3.9 3.8 2.7 0.3 0.4 0.2 17.4 0.7 0.3 9.0 806,394 3,456,210 95,915 619,582 513,323 1,586,576 1,344,029 405,285 9,29<^),455 701,140 208,6 8 7,695,917 1.5 6.5 0.1 1.1 1.0 3.0 2.5 0.8 17.4 1.3 0.4 14.4 Liverpool Glasgow Hull Bristol Dublin Belfast Gloucester Cork and Queenstown 1 ■ ■ ■ New Castle Cardiff Other British ports 64,503,462 7,756,377 4,723,139 1,611,484 2,861,890 164,340 9-25,902 56.7 6.9 4.2 1.4 2.5 0.2 0.8 60.8 5«.l 5.0 1.0 G'.r., Dutch and Belgian Ports: Antwerp 2,668,449 541 532 Hanilnirg 1 Bremen 646 716 Rotterdam 964826 1 »' Amsterdam Other German ports 45,295 0.1 Total Ger., Dutch & Belg. pts. Denmark 18,043,132 2,830,798 731,528 4,241,523 1,577,841 64,202 1,273,631 1,332,509 1,030,791 680,181 596,475 1,494,714 16.0 2.5 0.6 3.7 1.4 0.1 1.2 1.2 0.8 0.6 0.5 1.3 65. o! 4,812,248 15.8 80.3 46,-, 216 1.5 87 2' if>7 4J0l n 4 17.4 13.3 12.8 4,886,818 227,822 9.2 0.4 17.6 6.4 Sweden and Norway France: Havre 1 1,716,647 28,200 625,910 1,734,738 3,318,614 1,039,191 2,653,916 4,517,723 3,854,706 3.2 0.1 1.2 3.2 6.2 Marseilles 1 Bayonne Dimkirk Rouen Calais 1.91 St. Nazaire 5.0' Bordeaux 8.5 7.2 Other French ports Total French ports 12,291,867 960,811 lt>8,457 100,338 10.8 0.8 0.2 0.1 32.1 6,484,104 21.4 16.9 19,489,645 24,585 128,619 36.5 0.1 0.2 51.0 Lisbon Other Portuguese ports Total Portuguese ports Vigo 1,259,606 10,056 290,945 366,32.5 30,262 1,475,54C 1.1 0.0 0.2 0.3 0.1 1.3 36.6 2,026,939 6.7 58.9 153,204 0.3 4.5 Barcelona Gibraltar Cadiz 1 Other Spanish ports 1 Total Spanish ports Italy: Genoa 2,173,128 28,20f 1,108,524 1,721,78' 1.9 O.C l.C l.E 53.0 1,072,48€ 3.5 26.2 851,505 1.6 20.8 Naples 733,936 91,545 1.4 0.1 Other Italian ports 1 \ Total Italian ports 2,858,51S > 2.E 68.7 478. 38C 1.6 11.5 825.481 1.5 19.8 FINK: ADJUSTMENT OF SEABOARD RATES STATEMENT J— Continued. 59 DESTINATIONS. 3 n 1 o t a o o 5 " 2 « *3 ** _ _p £ ^5 . ° . c *- ■lj,G CO ^£ s n 1 6 1- ft CO |s ^ "3*^ s fell "3 n £ B 2 °£ 03 P4 B-g _ p £ ■ex: « All Other Forts: Geneva 83,660 7,574,351 700 62,746 252,560 622,609 3.639 18,197 377,200 0.1 6.7 1 1 Other Continental ports 49,698 0.2 Brazil 0.0 10,000 0.0 Argentine Republic 0.1 0.2 0.5 0.0 0.0 0.3 Other South American ports West Indies 71 64,769 0.0 22,183 0.2 , 24,321 0.0 0.1 Central America British North American Colonies 7,735 142,141 0.0 0.3 Other Countries ■. 8,995,662 7.9 96.6 114,538 0.4 1.2 206,380 0.4 2.2 Total export, corn and wheat 113,687,702 100.0 57.6 30,347,274 100.0 15. 453, 373, 359 1 i 100.0 27.0 NOTE.— The New York statiiiient was compiled from New York Produce Exchange Report for 1880, pages 352 and 353; the Philadelphia statement from the Forty-eighth Annual Report of the Philadel- phia Board of Trade, pages 75 to 95 inclusive; and the Baltimore statement from the Report of the Baltimore Corn and Flour Exchange for 1S80, pages 93 and 94, and 111 to 113 inclusive. STATEMENT K. Estimate of Average Ocean Bates on Grain Exported by Steam and Sail from New York, Philadelphia and Baltimore, during the year, and during the periods of Open and Closed Navigation of the Year 1880. DURING THE YEAR. NEW YORK. PHILADELPHIA. BALTIMORE. Bushels. a O in « fe Bushels. a Bushels. a O §5 . 48,893,855' 61,a06,96! 44.4 55.6 19.7 25.3 7,390,000 22.067,000 25.1 74.9 21.4 24.6 12,804,529 28,383,410 31.1 68.9 22.3 25.8 Total 110,160,821 100.0 29,457,000100.0 41,187,939 100.0 22.81 23.79 24.71 Ave. Rate higher than from N. T. 0.98 1.90 DURING OPEN NAVIGATION. NEW YORK PHILADELPHIA. BALTIMORE. Tons. a 6 fc « fe < Tons. g O UKa Tons. a 93 4-1 !r, " aS < 1,302,369 1,630,895 44.4 15.6 23.0 2r.7 143,857 429,279 25.1 74.9 22.5 27.0 265,5951 31.1 588,407; 68.9 25.7 27.8 Total 2,933,264 100.0 573,136 100.0 854,0O2ilftft-O 25.61 25.87 27.15 Ave. Rate higher than from N. Y. 0.26 1.54 DURING CLOSED NAVIGATION. NEW YORK. PHILADELPHIA. BALTIMORE. Tons. 1 g| . IB jS . !r, « fe < Tons. a to «•- o CO 4-^ . Tons. a S CO n S • °«; 0)— § !n « fc <1 245,000 306,802 44.4 55.6 16.4 22.9 37,421 111,665 25.1 74.9 20.3 22.2 82,401 182,553 31.1 68.9 19.0 23.8 Sailing Vessels Total 551,802 100.0 149,086 lOO.O 264.954 100.0 Average Rate 20.01 21.72 22 31 Ave. Rate higher than from N. Y. 1.71 2.30 60 FINK: ADJUSTMENT OF SEABOARD RATES 61 NOTE 1.— The rates during the year are on the basis of Steam to Liverpool, and Sail to Cork for orders, for entire year of 1880: the rates during open navigation are taken from the last six months of 1880, and the rates during closed navigation for first six months of 1880. See Statement "G." NOTE 2.— The Statement for the year shows the quantities of Corn and Wheat exported by Steam and Sail from New York, as per N. Y. Produce Exchange Annual Report for 1880. page 3il; from Philadelphia for the year ending December 31, 1880, as furnished hy Messrs. Peter Wright & Sons; and from Baltimore for the Crop year ending August 31, 1881, compiled from the Paltimorc Journal of Commerce of September 3, 1881. NOTE 3.— Estimate of P^xports of Grain during seasons of Open and Closed Navigation, are based upon the receipts of grain at New York, Philadelphia and Baltimore during the respective periods, assuming that the percentages of receipts exported during each period were the same as for the entire year, viz: New York, 80 per cent., Philadelphia, 64.6 per cent., HaltiuKjre, 84 per cent. The amounts estimated as exported by steam and by sail during each period, were assumed to be in the same proportion as the exports during the whole year. 62 ATLANTIC PORT DIFFERENTIALS STATEMENT L. Estimate of Average Bate per 100 lbs. for Transporting Grain to and through New York, Fhiladelphia and Baltimore, by all Routes, during the year 1880. Also, during Open Navigation of same year. Lake iind Canal Lake and Rail Rail— Through NEW YORK. Totals— Tonnage and Estimated Revenue Average Inland Rate Average Ocean Rate Lake and Rail Rail— Through Average Through Rate PHILADELPHIA. Totals— Tonnage and Estimated Revenue Average Inland Rate Average Ocean Rate Average Through Rate Lake and Rail Rail— Through BALTIMORE. Totals— Tonnage and Estimated Revenue Average Inland Rate Average Ocean Rate Average Through Rate DURING THE TEAR 1880. IDURING OPEN NAVIGA- TION, 1880. ■n s 0) o •^ rf) ^ a ^^ S) a g u 03 > « P. < 3 ?. a o m 1 x: a a s bl il- a ea a3 > ta a < 3 1,975,552 712,257 1,668,525 4,356,334 171,377 946,613 1,117,990 1,332,091 RECAPITULATION. Average Inland Rate Less or more to N. Y., allowing Differentials Less to New York without Differentials ... Average Ocean Rate Less from New York Average Through (Inland and Ocean) Rate Less via New York, allowing Differentials ., Less via New York, without Differentials . DURING THE YEAR 1880. N. T. Phila. Bait. DURING OPEN NAVIGA- TION, 1880. N. T. Phila. Bait. 25.69 cts. 22.81 Cts. 48.50 cts. 27.27 cts. 1..5S " 3.58 " 23.79 " 0.98 " 51.06 " 2.56 " 4.56 " 26.43 cts. —0.74 " 3.74 " 24.71 " 1.90 " 51.14 " 2.64 " 5.64 " 25.61 Cts. 49.82 cts. 23.07 cts. —0.86 " 2.86 " 25.87 " 0.26 " 50.94 " 1.12 " 3.12 " 24.14 cts. -f0.07 " 2.93 " 27.15 " 1.54 " 5159 " 1.47 " 4.47 " FINK: ADJUSTMENT OF SEABOARD RATES 63 NOTE I.— The average Rail rate during the year 1S80, according to tariff, was 32.5 cents per 100 lbs., Chicago to New York, but as this rate w'as not always fully maintained, .30 cents has been estimated as the average rate during the whole year. During open navigation tlie tariff rate was 30 cents, but for same reasons has been estimated at 27. .i cents. NOTE II. — The average Lake and Rail rate, as reported by the Ohicago Board of Trade, was 25.9 cents; on account of probable reductions in rail proportion, it has been assumed 1.2.") cents less, making it 24.65 cents + 0.6 cents insurance, — 25.25 cents. The rates on grain from Buffalo were probably less, on account of reduced rail rates, but have been estimated the same as lake (steam) and rail. The grain shipments originating at Buffalo, were 479,505 tons to New York, and 18,646 tons to Philadelphia. NOTE III. — No estimate has been made of the average rate to Boston, as the reports of rail re- ceipts at Boston do not include the receipts via the Grand Trunk Railway, and are therefore incom- plete. NOTE IV.— The estimate of average rates is based upon grain carried to seaboard by the Trunk Lines from their Western termini and beyond. In the Produce Exchange reports of total receipts at seaboard cities, there is included grain from points East of Western termini of the Trunk Lines, as well as grain from other transportation routes. A comparison of Trunk Line and Produce Exchange Statements will show that New York re- ceived from these sources 290,450 tons, or about 10,(;K)0,(WXI bushels; Philadelphia, 217,350 tons, or about 7,000,000 bushels; Baltimore, 388,921 tons, or about 12,000,000 bushels. Expressed in percentages of the whole receipts, this grain, for the transportation of which the Tnmk Lines do not compete, amounts at New York to 6.4 per cent.; at Philadelphia to 16.3 per cent., and at Baltimore to 22.6 per cent of the whole receipts. PREAMBLE AND RESOLUTIONS APPOINTING ADVISORY COMMISSION. 1882. 65 PROCEEDINGS OF MEETING OF THE TRUNK LINE EXECU- TIVE COMMITTEE, HELD AT THE OFFICE OF THE COM- MISSIONER, JANUARY 24, 1882, AT 11 : 30 A. M. APPOINTMENT OF AN ADVISORY COMMISSION. The following Preamble and Resolutions were unanimously adopted : Whereas, The New York Central and Hudson River Railroad Com- pany, W. H. Vanderbilt, President; the New York, Lake Erie and Western Railroad Company, H. J. Jewett, President; the Pennsyl- vania Railroad Company, G. B. Roberts, President; and the Baltimore and Ohio Railroad Company, John W. Garrett, President, have agreed that the differences in rates which should exist both Eastwardly and Westwardly, and upon all classes of freight, between the several termi- nal Atlantic ports, be submitted to a Commission consisting of three competent and disinterested persons, before whom the Chambers of Commerce or other authorized and interested Trade bodies of the sea- board cities involved may, by duly accredited representative's, present and argue the bearing of such differences in rates upon their several cities and interests ; said Commission to procure such other information as it may desire, and report their conclusions to the said Railway Com- panies. Therefore, it is Resolved, That the Commissioner of the Trunk Lines is herebj^ di- rected to notify the gentlemen, who may be selected as members of the Commission, of their appointment, and solicit their acceptance, and also to furnish them with a copy of this preamble and resolutions, and after the Commission is formed, to give notification to the various com- mercial organizations of the several Atlantic cities, and to request them to appoint committees or representatives, for the purpose of meet- ing the Advisory Commission, at such times and places as may be mutually agreed upon, to carry out the object of the foregoing agree- ment. Resolved, That Hon. Allen G. Thurman, Hon. E. B. Washburne, Hon. Thos. ]\I. Cooley, constitute the Commission. C. W. BuLLEN, Albert Fink, Secretary. Commissioner of Trunk TAnes. 67 Report op Messrs. Thurman, Washburne & Cooley Constituting an Advisory Commission on Differential Rates by Railroads Between the West and THE Seaboard. fi9 REPORT UPON DIFFERENTIAL RATES. PRELIMINARY. In January, 5882, the undersigned were notified that they liad been selected by the New York Central and Hudson River Railroad Company, W. H, Vanderbilt, President ; the New York, Lake Erie and Western Railroad Company, H. J. Jewett, President ; the Pennsylvania Rail- road Company, G. B. Roberts, President, and the Baltimore and Ohio Railroad Company, John W. Garrett, President, to act as an Advisory Commission upon ' ' the differences in rates that should exist, both East- wardly and Westwardly, upon all classes of freights between the several terminal Atlantic ports, ' ' and to report upon the same. Accepting the appointment, the undersigned met and organized as a Commission, at the City of New York, on February 13, 1882, by desig- nating ]\Ir. Thurman to act as Chairman and selecting Mr. Thomas C. Moore, of Indianapolis, as Secretary. On conferring with Mr. Albert Fink, who on that occasion represented the several railroads named, we were informed that it was not the purpose or desire of the railroad managers to take part in the proposed inquiry after setting it on foot ; but that they proposed to leave it exclusively in our hands, in the ex- pectation, however, that other parties interested in the problems of railroad transportation would make before us a full showing of the facts supposed to have a bearing upon the question, and that we would then express our opinion, unintluenced by the wishes or interests of the railroad companies. The managers informed us, however, that they held themselves ready to furnish any such information as might be peculiarly within their knowledge, at any time when we might call for it. Having this understanding of our commission, and desirous of acting intelligently and with full information, we caused circulars to be sent to all the commercial organizations of the cities of New York, Philadelphia, Baltimore and Boston, and to such like organiza- tions in the interior as it was thought would be inclined to respond, inviting them to appear before the Commission and present their views; and whenever a desire to be heard was expressed by any one of them, time and place were designated for the purpose. From the Produce Exchange, the Board of Trade and Transporta- tion and the Chamber of Commerce of the City of New York, and from the corresponding organizations of the cities of Philadelphia and 71 72 ATLANTIC PORT DIFFERENTIALS Baltimore, letters expressive of a desire to be heard were received, and public meetings were accordingly held in those cities, at which the question referred to us was very fully considered and discussed. For the purposes of such discussion, we found that in every instance careful and thoughtful preparation had been made, and the arguments, either in full or in substance, were put in print for our subse(|uent review. Statistics were also collected for us, so far as was thought important. Under the guidance of the commercial bodies, we also visited and in- spected the railroad terminal facilities, under circumstances most favor- able to a full understanding of the manner in which they concerned the general subject. The leading commercial organizations of St. Louis, Louisville and Toledo also appeared before us at public sittings held in those cities respectively, and presented their views in print, supplementing them with oral arguments and explanations. We were also favored at Philadelphia with discussions by representa- tives of the Board of Trade of Newark, New Jersey, and at St. Louis with the views of the Board of Trade of Indianapolis, presented by one of its members. The Chamber of Commerce of Cincinnati communi- cated its views to us in formal resolutions, without deeming it neces- sary to request public sittings in that city, and single individuals, not representing any formal organizations, have also in some cases been heard. We have also sought and obtained information independently wherever we have found it available, and have made use of the pub- lished reports of the railroad companies for that purpose. Our en- deavor has been to view the subject from the standpoints of the various interests concerned, and to reach a conclusion that overlooked the just claims of no interest and no locality. THE QUESTION. The subject referred to us is that commonly spoken of under the designation of Differential Rates. In the reference, however, and in the paper which follows, the term is made use of in a somewhat re- stricted sense, being applied not to the differences in rates generally, or as between the several classes of freight as they are arranged in the tariffs of freight charges, but to the differences in rates which are made by the railroad companies as between the several Atlantic seaport cities, and the interior points where the freights are taken up or delivered. It appears that the four railroad companies mentioned, and which, with the Grand Trunk of Canada, are commonly called the Trunk Line roads, have generally been accustomed to make higher charges for the transportation of freights between New York and Boston, as eastern REPORT UPON DIFFERENTIAL RATES 73 termini, and the leading towns of the interior, than between Phila- delphia and Baltimore and the like towns; and that at the present time they seem to agree in the policy and propriety of making these differences. An idea of the extent of the differences is indicated by the statement that, taking the charges for the transportation of eastward bound freights from Chicago to New York as the standard, the charges to Boston are made the same, and those to Philadelphia two cents, and to Baltimore three cents per hundred pounds less. On westward bound freights the differences are not uniform, but are made higher in the case of those classes of property which are rated highest in the freight tariffs. As between the seaboard cities and St. Louis, Cincinnati, To- ledo and other Western towns, the rates are proportioned to the Chi- cago rate according to mileage. This is the existing rule or practice. Whether it is right or proper to make any such discrimination in the charges for the transportation of property between the Atlantic cities and the cities of the interior, and if so, to what extent, is the question that we understand was referred to us, and nothing more. We, therefore, limit our discussion to that question, and pass by many sub- jects of interest in railroad transportation that were more or less touched upon in the public discussions which took place in our hearing, but which can interest us only as private citizens. Whatever opinions we or any of us maj^ have respecting controverted questions in railroad policy and railroad management, which do not fall within the scope of our present inquiry, it would not become us to intrude them into this discussion. THE PARTIES CONCERNED. Although the invitation to us came from the Trunk Line railroad companies, we have not understood that this was because the subject was one over which they had rightfully any exclusive authority. It is, indeed, a subject with which they, first of all, are called upon to deal, for they and their affiliated roads enforce the charges which come under consideration, and establish the differentials if any are established at all. But the railroads constitute a single class only of the many whose interests may be affected, and it may appear, perhaps, that they are not the class most largely concerned. In all the discussions before us it has been assumed that the people of Boston, New York, Philadelphia and Baltimore, and especially all those who are engaged in the exchange of commodities with the interior and with foreign countries, are largely interested, and that their prosperity is to some extent involved in the relative adjustment of rates. The railroads of the interior, which act as feeders to the Trunk Lines, and divide with them the charges on freights moved between the interior and the seaboard, are also inter- 74 ATLANTIC PORT DIFFERENTIALS ested to the extent that the differentials affect their proportion of the charges. We have found also that the people of the interior consider their interests to some extent involved in the question ; and they cer- tainly are concerned in having such tariffs of charges upon the roads over which their traffic is conducted as will give them the advantages of any and all the Atlantic markets, without subjecting their dealings with any one of them to unfair conditions or burdens. It is therefore evident that the question is one of very general interest ; and it may almost be said that the question of relative equality of rates, as be- tween Chicago and the Atlantic ports, when those between the other Western towns and the same ports are measured by them, is one of national rather than of local concern. THE SITUATION, Tliree distinct views of the differential rates were taken and urged before us, which may be shortly stated as follows : The New York view, that the differences made in the rates in favor of Baltimore and Philadelphia were wholly wrong and should be abrogated; the Balti- more view, that the differentials were right in principle, but if any- thing too small; the Philadelphia view, that the differentials should continue, but that they ought not to discriminate as between Phila- delphia and Baltimore. In the interior we encountered much differ- ence in opinion, but no views distinctly peculiar. The discussion was open at New York, where it seemed to be assumed that the parties chiefly concerned were the three cities of New York, Philadelphia and Baltimore, and that the differentials operated to build up the business of the two last to the prejudice of that of New York. On this assumption it was then said they were unjust, and that it was the duty of the New York railroads to force their abrogation. It was also assumed that two of the Trunk Line railroads were peculi- arly New York roads, whose managers ought to be expected to labor especially in the New York interests, and to enter into the rivalries of that city, so far, at least, as might be necessary to protect the com- merce of New York against injury through the more favorable rates which might be offered by the Philadelphia and Baltimore roads to the people of those cities respectively. At Philadelphia a somewhat similar view was taken of the obligation of the Pennsylvania Railroad to pro- tect Philadelphia interests, and at Baltimore a corresponding pro- tection appeared to be looked for at the hands of the Baltimore & Ohio Railroad. Thus the several Trunk Line railroads were spoken of as New York, Philadelphia and Baltimore roads respectively, and claims of a local nature were made upon them as being such roads. REPORT UPON DIFFERENTIAL RATES 75 Nothing, however, in our investigation of the subject has struck us more forcibly than the fact that the growth of railroad business has been such as to take from the several Trunk Line roads nearly all of purely local character which they formerly possessed. The time ap- pears to have gone by when the interests of any one of them can be concentrated upon and bound up indissolubly with the interests of any one city, so as to constitute it either the dependent or the champion of that city as against the rest of the Union, or even as against any other commercial centre of the Union. The arms of every one of these roads reach out in ever}- direction to embrace and gather in the business of the country, and to distribute impartially according to need and de- mand. States and cities have called particular railroads into being, but they cannot circumscribe their operations, or make exclusive ap- propriation of their benefits. Once constructed, they belong to a pub- lic which pays little regard in business matters to State lines, and business reasons, which have general influence and force, control their operations, in spite of local sympathies or desires. It is true that two of the Trunk Line railroads — the New York Central & Hudson River, and the New York, Lake Erie & Western — hereinafter spoken of as the Central and the Erie respectively — find the largest share of what is called their through business directed to or originating at the City of New York, and it may be that their managers desire to bring to that city all the business they can control. In common parlance, there is certainly nothing misleading in speaking of these two as New York roads ; for the major part of their interests center in New York, and whatever benefits or injures the business of New York, must, to some extent, benefit or injure them also. But these roads do not refuse freight to Baltimore, Philadelphia or Boston; on the contrary, they enter into competition for them, and through the assistance of affili- ated roads, endeavor to make it for the interest of the people of those cities to avail themselves of their facilities in the transportation of goods and supplies. They thus make themselves part of a system of competitive roads, which offers to the business community of every Atlantic seaport a choice of traffic routes and traffic agencies, and they solicit business on the necessary understanding that they shall respect the just rights and claims of all localities, and not sacrifice to New York the interests which are confided to them elsewhere. It is also not misleading to speak of the Baltimore & Ohio Railroad as a Baltimore road, for its interests, in the main, centre in the City of Baltimore; its bonds and stocks are supposed to be maiidy held or con- trolled there, and its traffic is mainly between that city and the in- terior. But this road, no more than the New York roads, consents to 76 ATLANTIC PORT DIFFERENTIALS stand apart from the railroad system of the couDtry, as a road limiting its business to a single Atlantic terminus, and declining general com- petition. On the contrary, it solicits business at the seaports to the north of Baltimore ; and that its efforts in that direction have a fair measure of success is evidenced by the fact that in the year 1880 it carried of the westward bound freight moved by the Trunk Line roads from New York more than eight per cent., from Philadelphia more than nine per cent., and from Boston about five per cent., and these proportions are fairly representative of the general run of its traffic. These facts are sufficient to show that neither the New York roads nor the Baltimore road are so exclusively linked to the business interests of those cities respectively as to be either unable or unwilling to share in or contribute to the prosperity of rival cities. And it is now publicly said and seems to be understood that the Baltimore & Ohio is seeking to obtain an independent line into New York, that it may make its competition at that point still more active and efficient. It certainly cannot be claimed, with much appearance of plausibility, that the Pennsylvania Railroad is the road of any particular city. The company which owns it is indeed a Pennsylvania corporation, its officers are in the City of Philadelphia, its stocks and bonds are largelj^ held there, and perhaps not largely held elsewhere in this country, and it is not improbable that the feelings and s^'mpathies of those who manage its concerns would incline them to desire specially the growth and prosperity of Philadelphia above other places. But the road has its eastern terminus, not at Philadelphia, but on the harbor of New York, where it has made large and costly preparations to compete with the Central and the Erie for New York business. That it does compete with those roads successfully is shown by the enormous amount of freight which it moves from and carries into that city, and by the fact that the merchants of New York have come to look upon it, with entire justice, as one of the most important channels of communication with the West. In the year 1880 this road took out of New York twenty-six per cent, of the westbound freight carried by the Trunk roads, and delivered to it nearly twenty per cent, of the eastbound. While thus successfully bidding for the custom and favor of New York, it is plain that the Pennsjdvania Railroad cannot antagonize the interests of New York unfairly, and must refrain from any attempt to subordinate them to the rival interests which it also endeavors to serve. It is a necessary condition of its competition for the trade of New York, that it shall make its services beneficial, and that it shall offer facilities which are not surpassed by those offered by other roads. But the Pennsylvania also, through its association with the Northern REPORT UPON DIFFERENTIAL RATES 77 Central, competes with marked success for the trade of Baltimore, and took away from that city in the year 1880 twenty -throe per cent, of the westbound freight carried by the American Trunk Line roads. Its share in the eastbound freight Avas still more considerable, being forty per cent. What is said of its relations to New York business may therefore with equal truth be said of its relations to the business of Baltimore ; it must hold itself above the rivalries of locality, and assume the attitude of an impartial carrier, desirous of the favor and custom of the whole country, and willing and anxious to serve all localities on such terms as are relatively equal and substantially just. It is not likely that this reaching out of all the Truuk Line roads to compete with each other in the several Atlantic cities was contemplated when the roads were originally constructed: but as the several lines have pushed their connections in the West in competition, it has been found desirable for each to offer to its patrons the advantages of as many markets as possible, and to carry for them, without breaking bulk, whatever they have had for carriage in an eastward or westward direction. Competition has thus made roads national which were once local, and it is vain to expect that so important a subject as that of differential rates will be settled on the local preferences or prejudices of those who may have authority in railroad circles. It must, there- fore, be settled either arbitrarily, by the fiat or agreement of the trans- portation companies, or it must be determined by some underlying principle. We agree with what was said in the New York discussions and elsewhere, that any arbitrary adjustments in disregard of such principles as would naturally influence prices of transportation when untrammeled, would not, could not, and ought not to be upheld. There should be — and as we think there must be — some principle by which to determine such a question, or perhaps two or more principles acting upon and qualifying each other. It has been assumed in the discussions we have listened to, that busi- ness would be invited to a city by low rates upon its railroad lines, and that the prosperity of the city would bear some relation to these rates. How far this assumption is likely to be well founded, we, of course, have no more means of judging than has the general public. But the fact that each of the Trunk Line roads has its relations to all the cities, and each city receives benefits from all the roads, is sufficient to suggest some question, whether low relative rates and large relative business will necessarily go together. Though it is true, as we think and have said, all the roads which compete for the business of a place must treat its interests fairly, and not subordinate them to the interests of rival places ; yet it must be expected that they will at all times Have 78 ATLANTIC PORT DIFFERENTIALS primarily in view their own interests, and that their zeal to procure business will bear some proportion to the anticipated profits. If New York business is most remimerative, it will be sought most eagerly ; if not, the railroad managers will direct attention to that which is. Re- ducing the New York rates relatively to those of Philadelphia and Baltimore, seems, therefore, to invite the roads to favor particularly the business of the two cities last named. Establishing differential rates in favor of Philadelphia and Baltimore holds out inducements to the railroads to favor the New York trade. The Pennsylvania Com- pany may be expected to desire to carry freights past Philadelphia to New York if it can be paid for the additional haul, but to prefer to leave them in Philadelphia, if for the considerable distance from there to New York it will be paid nothing for the transportation. Thus what each city asks, appears to have some tendency to enlist the selfish inter- ests of the railroad companies against it. "We mention this among other circumstances affecting the question, without deeming it neces- sary to remark upon it further. THE PRINCIPLES THAT SHOULD CONTROL. It seemed to be taken for granted, in the arguments presented to us, that the existing differentials had not been determined on any prin- ciple, but that they were the result of a compromise between the rail- road companies, whereby they had purchased peace between them- selves. Three different principles, however, were suggested by differ- ent parties, as those which should control, and these found advocates in different localities, according as, it was thought, those localities would be favored by their operation respectivel.y. These three prin- ciples may be designated respectively : the distance principle, the cost principle and the competitive principle. It is, however, proper to say that those who advocated the first and the second of these principles, generally agreed that the third should not be discarded ; but that it had its legitimate place, and must have its legitimate influence also. Brief notice will be taken of these three principles respectively. THE DISTANCE PRINCIPLE. It was contended by the commercial representatives of Philadelphia and Baltimore, that freight charges on like classes of freight between the interior and the seaboard cities ought to be proportioned to dis- tance. We understood them to mean by this, that the shortest line from Chicago to each of the Atlantic cities should be taken as the standard for measuring the freight charges between Chicago and that city, and that the charges for all the cities should then be determined REPORT UPON DIFFERENTIAL RATES 79 by the mileage. By referring to the accompanying note, it will be seen that if the mileage standard were adopted, the freight charges between New York and Chicago would be abont ten per cent, greater than those between Philadelphia and Chicago, and about thirteen per cent, more than those between Baltimore and Chicago. Those between New York and Cincinnati would be about twenty-eight per cent, more than between Philadelphia and Cincinnati, and about thirty-eight per cent, more than between Baltimore and Cincinnati.* According to the average rates on grain and provisions this year, the differentials have only been about six and two-thirds per cent, in favor of Phila- delphia, and ten per cent, in favor of Baltimore; and the distance principle would, therefore, on an average, increase them greatly. It was urged that it was by this principle that the several roads, consti- tuting a competing line, are accustomed to apportion their joint charges, and that these very Trunk Lines adopt it in dividing the charges upon through freights with the roads from which they receive the freight, or to which thej^ deliver it. The New York representa- tives, on the other hand, contended that the distance principle could not with any justice control, for the reason that distance does not meas- ure either the cost or the value of the service ; so that if adopted as the standard of charges, it would be an arbitrary standard, and the element of equity in the rates would be disregarded. If there were between each of the Atlantic cities and the interior towns only a single line of railroad communication, some of the diffi- *DISTANCES VIA THE SHOETEST RAIL ROUTES TO Boston. New York. Phila. Baltimore. Chicas:o 1,009 900 823 80L' BurUngtou, la 1,216 1,106 1,030 995 Cincinnati 927 743 667 576 Columbus, 807 623 547 512 Cleveland 671 580 504 483 Detroit 724 673 682 661 Indianapolis 951 810 735 700 Kansas City 1,487 1,324 1,248 1,192 Louisville." 1,161 870 794 706 Memphis 1,438 1,247 1,171 1,083 Milwaukee 998 947 908 887 Omaha 1,503 1,393 1,317 1,294 St. Louis 1,212 1,050 973 917 St. Paul 1,418 1,308 1,232 1,211 St. Joseph 1,478 1,356 1,280 1,223 Toledo 784 693 617 596 Taking Boston as the standard, New York averages twelve per cent, nearer to these towns, Philadelphia eighteen and Baltimore twenty-two per cent, nearer. Between New York and Cliicago the line of the Pennsylvania Railroad is forty- seven miles shorter than that by the Erie and its connections, fifty miles shorter than that by the New York Central and its connections, and one hundred and four- teen miles shorter than that by the Baltimore & Ohio and its connections. 80 ATLANTIC PORT DIFFERENTIALS culties iu the way of the application of the distance principle, which are now obvious, would be wanting. But, as has been said already, every one of those cities has several lines, and would be content with no less. The supposed distance principle ignores this fact : selecting the shortest line to each city, to the disregard of the rest, and esti- mating the charges in proportion to its length. It might thus happen that the charges on freights from Chicago to the several seaboard cities, with all their roads taken into the account, would bear no proportion whatever to the distance; and it is certain that as between the roads serving the same city, the supposed principle could not be applied at all, for they, irrespective of distance, must conform to the lowest rates: The distance apportioned would, therefore, not be an apportionment of principle, but only of expediency; and whether expedient or not, must depend somewhat on other considerations, which present themselves in the practical administration of railroad affairs. It cannot be said, however, that distance is a circumstance without value in the determination of railroad tariffs ; it is, on the other hand, one of much importance. Nearness to the producers and consumers of the articles which it handles is a great advantage to any city ; and so far as the rivals of New York are possessed of this advantage, they are justified in expecting that it will be recognized. But the value of this advantage is a question that must be determined with many other things taken into the account, and can only be fully solved in the tests of competition. The general fact now is that distance does not deter- mine railroad charges, and that where competition is most active it in- fluences them the least. The distance principle does not, therefore, stand the test of competition, and so far as we can perceive, there is no possibility of establishing it except by subordinating competition alto- gether, to it. But to do this would require an exercise of arbitrary authority which we do not understand those who advocate the dis- tance principle to advise or desire. We must conclude, therefore, that distance cannot supply for us the controlling principle, nnd that its proper influence upon transportation charges cannot be determined either arbitrarily or as a matter of antecedent computation or estimate. THE COST PRINCIPLE. New York parties who rejected the distance principle were inclined to favor the grading of rates by the cost of service ; and if this were done, they claimed that the differentials would disappear altogether.' Cost of service is here employed as synonymous with the phrase cost of moving freight, which is most commonly used. The latter phrase, however, is used in two very different senses, which it may be ira- REPORT UPON DIFFERENTIAL RATES 81 portant to distinguish in order to avoid misconception. Railroad com- panies use the phrase for their own purposes when making reports to their stockholders or for the public under the requirements of State laws. In such reports cost of moving freight will be understood to be the actual outlay by the railroad company in moving its freight over a completed and equipped road. This outlay will embrace the cost of fuel, the compensation to the regular freight agents, to freight so- licitors, if any, to the servants employed to handle the freight and govern and move the trains. It must also embrace the necessary ex- pense of keeping good the freight equipment, and it should include a fair proportion of all such expenses of the company as are incurred for the freight and passenger traffic in common, such as repairs of track, taxes, official salaries, legal expenses, office expenses, general advertising, etc. To all these must be added the cost of insurance against losses to freight and freight equipment by casualties of all descriptions, or of making good such losses. If all these items are added together and the sum total is divided by the number of tons of freight moved one mile upon the road, we have as the result the aver- age cost of transporting a ton of freight for one mile of distance. The report which gives these items will also give others that, as be- tween the railroad company and its patrons, must be understood as constituting a part of the cost of service. If the compan.y owes debts, the interest paid upon these should be included; if it has made divi- dends to its stockholders, the amount should be included also. Indeed, it is generally conceded that the cost of service should rightfully and equitably be made to inelude a fair return in interest or dividends on the cost of the railroad investment ; though as to what return is fair and reasonable, differences in opinion are held and expressed. But for our present purposes it is sufficient to leave any such differences out of view, and to speak in general terms of the cost principle as that which would measure the railroad charges by the cost of service, and which would make the cost of service embrace the actual outlay of the railroad company as above explained, and a fair return in interest or dividends on the cost of the road and its equipment. To show that the cost principle would be to the advantage of New York, it became necessary to show that the cost of transporting freight between New York and Chicago was or ought to be less than the cost between Philadelphia and Chicago, or Baltimore and Chicago, or at least that it was not greater. But upon this point, unfortunately, the information that was produced before us did not appear to be very precise or very accurate. The expressions of opinion were indeed clear and strong, but they were generally supported by argument and in- 6 82 ATLANTIC PORT DIFFERENTIALS ference rather than by evidence. Onr attention was not directed to official reports or figures, where or b}^ which tlie actual cost was set forth, but rather to the topographical features of the country between New York and the head of Lake Michigan, Avhich it was said offered admirable facilities for the construction of railroads, which would be economical in original outlay, and economical also in their operation. No such economical road, it was said, had been or could be constructed further to the south, and the unfavorable gradients and curvatures on the Pennsylvania and the Baltimore & Ohio roads more than deprive them of all the advantages which they possess in shorter distance. It was also urged that another important circumstance should be taken into the account when the cost is being estimated. By far the larger portion of all the freight carried by the Trunk Lines is eastward bound. When cost is considered the probability of return freights must be taken into the account, since to whatever extent the cars which convey freight to the seaboard must be returned without loading, the cost of the return must be reckoned as part of the cost of transporting the east- bound freight. And it was confidently asserted than the probability of obtaining remunerative return freights was much greater at New York than elsewhere on the Atlantic coast. To make out the case of more favorable lines and gradients between Chicago and New York, the route is required, after it leaves the shore of Lake Erie, to follow substantially the course of the Erie Canal to the Hudson, and thence down that river. By that route a road has been constructed Avith few unfavorable grades and curves, and this road no doubt is or can be operated with much greater economy than would be possible if its line were through a mountainous region. But if we take this as the route for freight transportation between New York and the interior, and compare it with the routes to Philadelphia and Baltimore over the roads which carry most freights to those cities respectively, we commit the mistake of directing our attention exclu- sively to the one road which possesses this favorable line, and ignoring altogether the fact that New York has other roads which it is desirable for its interest should live and prosper, and that over each of them the active and energetic merchants and manufacturers of that city are seeking the business of the interior and inviting its jpustom. Every one of those roads brings to New York a large amount of trade which would not be obtained without its facilities; and it seems certain that New York cannot afford to ignore any one road, any more when it is settling its grievances with rivals than when estimating advantages over them. If, therefore, it be demonstrated that the New York Central and its connecting roads can transport western products from the interior to REPORT UPON DIFFERENTIAL RATES 83 New York as cheaply as the more southern roads can move them to Baltimore or Philadelphia, it may not follow tliat tlie interests of New- York would be subserved by the adoption of the cost principle and the bringing of the charges on freiglit transportation to and from New York to the test of what the Central could afford. Prudence would re- quire that at least the probable consequences should be considered ; and if among these consequences should be the possibility of some other line to New York being found unable to endure the test of the cost prin- ciple, this of itself ought to raise some doubt whether the city of New York could be interested in establishing it. Now, the very claim that is made in behalf of the New York Central route, as one of remarkable economy, assumes that the Pennsylvania route is less economical ; and the assertion that the C antral can carry from Chicago to New York as cheaply as the Pennsylvania can carry from Chicago to Philadel- phia, contains within it — since the less is contained in the greater — that the Central can carry from Chicago to New York cheaper than the Pennsylvania, which only reaches New York by carrying past Phila- delphia, can possibly do. The application of the cost principle, if made under such circumstances, must force the Pennsylvania to this alternative : that it must carry at rates which will not give to the com- pany a fair return in profits, or it must give up competition for New York business ; and the Erie, whose line is also assumed to be less favorable than that of the Central, might be compelled to face the same alternative. It probably would not be contended that either the Grand Trunk or the Baltimore & Ohio, whose lines to New York, through con- necting roads, are so much longer than those of the Pennsylvania, could compete at all for New York business under a strict application of the cost principle. The natural tendency of its application wouhl, therefore, be in the direction of throwing upon one of the existing lines to New York the bulk of the New York business, to the destruction of the others, and to the final destruction of competition. It is not to be assumed that this is what New York desires. Eveiy great city finds it conducive to its prosperity to secure as many of these avenues of trade and travel as possible; and it is certainly not more important to gain a new line than to preserve one already in existence, and already equipped with all those powers of usefulness which a new project can only promise at some time in the future. If, therefore, the cost prin- ciple were to be adopted for regulating the charges as between the com- peting cities, it would seem that New York ought to bring into the cal- culation not one road only, and that the one most economical in con- struction and operation, but all the roads which contribute to its pros- perity, and which it desires to retain. 84 ATLANTIC PORT DIFFERENTIALS At Philadelphia and Baltimore it is asserted with great coufidence that over no one of the New York roads can freights be conveyed as cheaply, from Chicago to New York, as they can be over the Pennsyl- vania and the Baltimore & Ohio roads to Philadelphia and Baltimore respectiveh\ For this confidence certain facts are stated which are supposed to be sufficient to produce the result, and official reports are cited as evidence that the result has followed. The favorable lines of the New York Central, and its affiliated roads, are admitted ; but it is contended that all the advantage of these is more than neutralized by greater distance and the greater cost of fuel to the New York roads ever those to the south of them. The Penns^ylvania and the Baltimore & Ohio roads find the coal, which represents their motive power, in beds at various points on their lines, and can take it up for use at little more than the cost of handling; while the New York roads, on the other hand, and especially the Central, must transport the coal for a long distance at a cost two or three times as great. "This cost consti- tutes a very considerable part of the total expense of moving freight, and it cannot be overlooked or treated as of little moment. The official figures to which attention was called to show the greater cost on the New York lines are to be found in the reports of the New York Central, the Erie and the Pennsylvania, made by the directors to the stockholders, to show the operation of the roads for the years 1880 and 1881. In those reports estimates are made of the cost to the companies respectively of moving one ton of freight for one mile of dis- tance, omitting from the calculation the items of interest and profits. The reports, as will be seen on referring to the note in the margin, make a very unfavorable showing for New York;* and if the figures told the whole story, and if we could be assured that they were made by each company on the same basis, they would go very far toward justifying the other cities in the claims they make. But, unfortunately, these reports are, for our purpose, of little value. They cover too much in some respects, and too little in others, to give us the information we need. 1. The Trunk Line companies report the cost over their own roads only, and do not include the cost over the feeder roads; but what we need to know is the cost of transportation over the whole line from western points to the seaboard. 2. The companies in their re- ports do not discriminate between the cost of transporting local freight *Cost of moving freight per ton for one mile of distance: On the New York Central, 1880, 5.41 mills. 1881, 5.62 mills. On the Erie, " 5.34 " " 5.29 " On the Pennsylvania, ' ' 4.74 " " 4.37 ' ' No corresponding figures are given in the reports of the Baltimore & Ohio E. R. Co. REPORT UPON DIFFERENTIAL RATES 85 and through freight, but endeavor only to give the average cost of moving both. But here the reports embrace too much for our purposes, for on this inquiry we are interested only in the cost of moving through freight. If the freights over all the roads were similar in kind, and if the proportion of through freight to way freight were nearly the same on all, the report of average cost might be accepted as indicating the proportionate cost to each road of its through freights. But we must take notice of the fact, which is matter of common knowledge, that the character of local freight is exceedingly diverse on the diflferent roads, and that the cost of handling is far from being uniform. If one com- pany, for example, handles coal in large quantities as way freight, loading a train completely at one station, and moving it to another for complete unloading, the cost of such business would furnish very un- safe and unreliable means of comparison with that of the local freight of miscellaneous articles, which another road might pick up in small quantities at many way stations, and deliver at as many more. But these railroad companies, unfortunately, have as yet agreed upon no uniform method of keeping accounts, whereby they may determine, by the same standards, the actual outlay of the roads in moving their freights. It would seem that there ought to be no differences in this particular ; but the official reports sometimes disclose on examination that the diversities are very considerable, and are not infreciuently met with in the accounts of the same company. One company, for example, when it is able to make such betterments as station houses, warehouses and side tracks from its current receipts without increas- ing its indebtedness, may charge the cost to operating expenses, while another under similar circumstances would charge them to construc- tion account, and still another would include them in operating ex- penses for the time being, and at the end of several years perhaps transfer them to construction account for the purposes of a new issue of stock. Evidences of these different methods of procedure appeared in reports of different companies, which were made use of for their information or for the purposes of illustration before us. It is no doubt undesirable that there should be this diversity in practice ; but while it exists it is necessary to take notice of it. If concert of action among railroad managers could bring about a uniform system of ac- counts, so that the official reports based upon them, which are made periodically for the information of shareholders, might give valuable and reliable information and means of accurate comparison to the pub- lic as well, the change in methods would be likely to prevent many misconceptions and misconstructions of corporate action which now 86 ATLANTIC PORT DIFFERENTIALS arise in the public mind, and which lead to both public and corporate annoyances. For all the reasons assigned, we are without reliable information by whicli to apply the cost principle in the regulation of charges of trans- portation between the Atlantic cities and the interior, and we cannot say that the application would be to the advantage of New York. Prima facie the case seems to be against New York, especially when the Pennsylvania Railroad, which constitutes one of its most important lines, is taken into the account. It is very manifest that that railroad can leave freights at Philadelphia more cheaply than it can transport them the additional eighty-seven miles to New York, and probably it can deliver them for still less at Baltimore, since the unfavorable grades of the road, to which much importance was attached in the New York arguments, are all passed before Harrisburg is reached, and from that point the line made use of by the Pennsylvania to reach Baltimore, is shorter than the line to Philadelphia. The favorable influence which the concentration of foreign com- merce at New York ought to have upon railroad rates between that city and the interior, may perhaps be something, for freight tariffs ought to be, and will be, arranged with regard to the probability of compensating freights in both directions. When a railroad company can have freights in one direction only, and must return its cars empty, it must necessarily make the freights pay for the cost of the return. In the eastern and western transportation we have an illustration of this state of things. It is matter of familiar knowledge, that much the largest proportion of freight is eastward bound, and that large num- bers of unloaded cars are constantly being sent west over all the roads. If the course of trade were such, that any one of the Atlantic cities sent out by rail as much freight as it received, its advantage over the others would be obviously very great. Railroad companies could af- ford to make much better rates upon all freights bound to the city from which they were certain of compensating return loads. It is proper, therefore, that railroad companies should take into considera- tion the condition of things in this regard, and every participant in foreign commerce has a right to expect that this will be done. We have therefore directed our own attention to the differences in the freights received and those sent out by the four leading Atlantic sea- board cities over the four American Trunk Lines, and have given in a marginal note the aggregates for the year 1880, which will be suffi- cient for the purposes of approximate comparison.* The table shows *Freight Tonnage by the four American Trunk Line roads for the year 1880 : Received. Sent. New York 4,266,830 1,022,612 Boston 913,887 309,232 REPORT UPON DIFFERENTIAL RATES 87 that the proportion of freiglit sent out from New York over these roads, when compared with that which is received from them, is considerably greater than the proportion at either Baltimore or Philadelphia, but it is nevertheless only as one to fonr and a quarter, and it is manifest that not only must a large proportion of all the ears which go loaded to New York return without loads, bnt that a much more considerable number must so return from New York than from either of the other cities. While, therefore, New York has an advantage over its rivals, in the larger proportion of westbound to eastbound freight, the advantage, if estimated by the bulk, is not very great. And it must be borne in mind that these four cities do not by any means furnish to the roads all their westbound freight, but that they take large quantities from other towns along their line. It may be that New York westbound freights average highest in the freight tariffs, but even then the relative ad- vantage of New York will probably be less considerable than some of its advocates have supposed. And on a careful examination of all the arguments advanced at New' York, we are not satisfied that a strict ap- l)lication of the cost principle, if it should be found susceptible of ap- plication, would be likely to benefit the trade of that city in its rivaliy with the other Atlantic cities. But if the exact cost of transporting freight by rail were attainable, could it be made the standard whereby to measure the charges as be- tween competing cities? We do not consider now what might be just and right as between a railroad company and its patrons if the ease of any railroad company could be taken up and considered by itself apart from all others, but of what is practicable in view of existing facts. If the cost principle could be applied, we do not see how the railroad companies of the country could justly complain of it. If they could all receive for the transportation service the cost of the service, as above explained, they would benefit their average condition very greatly by accepting it, for they are not now receiving on an average anything near the average legal interest of the country on the cost of their investments.* Many of the companies — perhai)s the majority of . Philadelrhia 1,553,381 299,474 Baltimore 1,559,251 241,600 As the business with the Grand Trunk of Canada is not covered by this state- ment it will be readily understood that the statement is not so favorable to Boston as it should be, as its business with the Grand Trunk is very large. *Tn Poor's Manual the aggregate cost of the railroads of this country and their equipment to ISSl, is given at $4,653,609,297. The railroad companies paid in 18S0 in dividends, $77,115,410; and for interest on bonded debt, $107,866,328. To 1SS2 the cost was $5,577,996,931. There was paid in 1881 in dividends, $93,344,200, and for interest $128,587,302. It will be seen that the dividends and interest together 88 ATLANTIC PORT DIFFERENTIALS them — in order to realize cost would be compelled to increase their charges very considerably, while others, including perhaps some of these Trunk Lines, might be called upon for a reduction. The general result would be, not a diminution of charges, but an increase ; and it is hardly probable that the country at large would be satisfied with the change, though it might affect particular localities favorably. More- over, we are to consider that the question of the application of the cost standard to railroad charges arises for discussion and settlement after cities have been built, routes established, canals made and railroads constructed ; and that the solution of the question may affect all these beneficially or otherwise to an extent that is beyond present calcula- tion. We have not an unsettled country before us to plan and make laws for, whose people when they select their homes and places of busi- ness can calculate the result of existing rules and regulations upon the towns they build, or the industries they establish ; but the towns al- ready exist, and have been created at immense cost in view of ad- vantages which were supposed to make them attractive and desirable as locations for trade and commerce ; and their existing importance as the homes of great numbers of people, and as the centres of vast manu- factures and immense exchanges, gives them claims upon the country and upon those who have in any degree the material interests of the country in charge, and gives them powers of defence also when assailed in the rivalry of business which are not to be overlooked or lightly re- garded. These several towns, it is true, came into existence under circum- stances which may be different from those which now surround them -. and in view of advantages, which in many cases have been rendered comparatively unimportant by subsequent improvements and inven- tions — as canal and river navigation in many parts of the country has been rendered unimportant by the invention of the locomotive and the iron road — but the towns themselves, their people and their business, remain as great and sturdy facts, which neither the country can over- look, nor the government of the country, nor any of its public agencies. The continued existence of these towns is to be assumed, and their wel- fare is to be calculated for when laws are made, or regulations having the effect of laws are established. It would be as inadmissible and as unjust deliberately to plan and arrange for the gradual destruction of a great city through the slow but certain annihilation of its business, as it would be to bring destruction upon it by fire or pestilence ; and are about four per cent, on the cost of the roads and equipment; the dividends being much the smaller part. No doubt there is much "watered" stock, and a large al- lowance may be made therefor, without afPecting the accuracy of the statement in the text. REPORT UPON DIFFERENTIAL RATES 89 we are not to contemplate with conii)laeency an offence of that nature against organized soeietr. AVhile it is not the province of government to build up cities for its people, it is its plain duty to permit the cities the people built to live; and it should so shape its own action as to allow every town, as far as possible and reasonable, to avail itself of all its natural and acquired advantages in adding to the prosperity, happiness and comfort of the local community. This seems too plain and indisputable a proposition to be contested by any official authority or public agency. In a certain sense railroad companies are public agencies, and in some degree they exercise powers which are quasi governmental. They make regulations for their business to which the general public are ex- pected to conform; and these regulations are, in some respects, as im- portant as the police laws established by the State itself. Among these are the regulations respecting charges for railroad service. Ac- cording as these are heavy or light upon the traffic of a particular lo- cality, its trade is likely to decline or prosper, and so dependent is com- merce upon railroads that the growth of a town is likely to bear some proportion to the extent of its railroad facilities, and the liberality with which it is treated by railroad managers. We should consider then what might be the effect of a strict applica- tion of the cost principle as between the competing Atlantic cities, say, for illustration, the cities of Baltimore and New York. Baltimore is now a large and prosperous city ; it is the chief business centre of a territory larger than any one of the States, and millions of people find their business favored, and their prosperity and comforts enhanced by its existence. One of the most costly roads of the country, with ex- tensive connections and feeders, has been created with almost exclusive regard to Baltimore business; and the road will prosper if the city prospers, and lose its importance if the city decays. A great number of private individuals and public and private corporations are inter- ested in the stock and indebtedness of this railroad company, and would be subjected to embarrassment or suffering if it were to be forced into bankruptcy. For all these reasons the welfare of Baltimore is a matter cf national importance, and it is so connected with the trade of the in- terior that its existence modifies beneficially all the markets. But its relations to the foreign trade are also such as to render it important to the whole civilized world. But New York has some most decided advantages over Baltimore, of which its people have availed themselves with great ability and energy. The growth of that city has not been checked by the marvel- ous prosperity of other towns, and its relative superiority in both for- 90 ATLANTIC PORT DIFFERENTIALS eign and domestic commerce has been substantially maintained. Though Baltimore is much nearer the grain fields of the West, New York still draws to itself much the larger share of the harvests, and it has done this in spite of the fact that, with temporary and unimpor- tant exceptions, the differential rates have at all times been largely against that city. Suppose now that under an application of the cost principle the differentials could be abrogated ; what would be the effect upon Baltimore ? Would it deprive that city of the share in the trade of the country, which its location, its great expenditures and the skill and enterprise of its people have hitherto secured for it? Would it check the growth of the city, sap its prosperity, and bring ruin upon those everywhere whose business arrangements and investments have been made with a view exclusively or mainly to the trade of that city? And if so, would the result be one that the countrj- could contemplate vrith satisfaction as the just result of the proper application of a sound Ijrinciple, and that those having influence in railroad affairs could justly and properly plan for, labor for and shape their tariffs to ac- complish ? On the other hand, suppose the strict application of the cost prin- ciple should be found to require that the differentials against New York should be doubled ; would it be admissible to double them irre- spective of all consequences to the trade and prosperity of that city? That these consequences might prove disastrous if the principle could be upheld and enforced, seems certain, for it would give advantages to the town most favorably located for cheap commercial intercourse for vv'hich the others could have no compensation. But this very fact — if there were no other impediment — would render the application of the principle impossible. A great citj^ possesses great powers of self- protection, and it must exercise them to the fullest extent when the need comes. Great railroad corporations cannot, in their rivalry with each other, accept principles of action which must necessarily im- poverish them. If the Baltimore & Ohio Railroad would lose its busi- ness under the application of the cost principle as between it and the roads north of it, it must accept less returns upon its business, and it must continue the struggle even though no more than operating ex- penses be realized, rather than submit to destruction without an effort at self-preservation. This or something like it must be the inevitable result ; for neither cities nor transportation companies can or will accept a principle which it can be seen in advance must build up some on the ruin of the others. But when it comes to applying the cost principle to the several lines which serve the same city, it is at once perceived that the difficulties REPORT UPON DIFFERENTIAL RATES 91 are insurmountable. The application must of course be made on esti- mates of probable results, and the estimates will have in view a per- centage of profits which it is expected or hoped will be realized. But with four or more lines of very ditferent length competing for the same business, it is evident that cost must have, when applied to their business, very different meanings. If the shortest and cheapest line makes its charges on a calculation of say ten per cent, profit, the longest and most expensive must conform to the charges, even though they be such as will insure no profit at all. One company may then carry at a cost which ineludes ten per cent, profit, another at a cost which in- cludes say two per cent, profit, while a third barely paj's its operating expenses and repairs, but still obtains the cost of moving the freight. Competiton obliges the companies to take what they can get, and to satisfy the demands upon them from it ; but when the cost standard is so uncertain and elastic that it may include profits when they can be earned, and must exclude them when they cannot be, it is evident that it cannot be a standard of general or just application. It is im- possible that anj'thing can be a governing principle, which, in the na- ture of things, cannot have the same meaning to the several parties who are to be affected by its application. That the cost to the roads themselves of moving their freights, irre- spective of profits to shareholders, has much to do in determining the charges, is we think, unquestionable. It certainly must have infiuence so long as competition between lines exists, for the most economical line may fix rates on a consideration of what its favorable circumstances will enable it to endure, and all others nuist accept them whether they prove satisfactory or otherwise. One cheap line may thus give to a town the benefits of cheap transportation, not as an application of the cost principle, but because its favorable circumstances enable it to do so consistent with its own interests. The idea was not put forward in any of the arguments that the ap- plication of the cost principle could be made universal, and that every railroad company should apply it in its own business as between the different kinds and classes of freight. The difficulty in doing this as a mere matter of accounting would be very serious ; but there would be other difficulties which would be more important to the general public. The chief of these would be this that very many articles would not bear transportation for the very considerable distances for which they are now carried, if the charges upon them were graded strictly by the cost. If their bulk or weight is large in proportion to their value, they must be carried cheaply or they cannot be carried at all ; and freights are therefore classified in the tariffs so that the lighter, [y2 ATLANTIC PORT DIFFERENTIALS but more valuable, articles are made to bear a burden out of propor- tion to the cost of carriage, in order that the roads which carry them may be enabled at the same time to serve the public in the exchange of articles and products whose value will not admit of like charges. Some discriminations of this sort are essential to enable railroads to answer the expectations and meet the needs of the public. It must often happen, also, that where two or more roads are competing for a particular business, one of them must carry what it gets of it without profit, and must find its profit elsewhere. If the competition under such circumstances leads to the road carrying one kind of traffic at a loss, which is made up by an increase of burdens on the remainder, a wrong is done of which complaint may justly be made ; but there is no inherent wrong to any one in a road conveying without profit, but also without loss, a business which it must accept on those terms or decline altogether. THE PRINCIPLE OF COMPETITION. If neither distance nor cost gives us the governing principle, we must next see whether we are to find it in competition. In nearly every other kind of business the competition of those engaged in it is the great regulator of charges, and the operation of natural and fa- miliar laws of trade prevents extortion and brings about substantial uniformity. Will competition do this in the business of transporting property by rail ? If so, is not the competitive principle the true prin- ciple? And will not the competitive principle make cost and distance elements in the determination of rates, and allow to each its just value, according to the circumstances? We should be glad to feel able to give to these questions an unhesi- tating answer in the affirmative. AVe have found, however, in the course of our investigations, that a species of competition has prevailed from time to time which has brought satisfaction to few persons, if any, and which has resulted in inequalities and disorders greatly detri- mental to trade. Such competition exists when the railroad companies, or those who are permitted to solicit business and to make contracts on their behalf, set out with the determination to withdraw freights from their rivals, and secure them for themselves, at all hazards, and re- gardless of gain or loss; and when acting upon this determination they throw to the winds all settled rates, and in the desperate strife for business offer any inducement in their power which will secure it. The country not long since had experience of such a season, and everj^where we listened to complaints of the injury which legitimate business suf- fered from it. It Avas said by parties interested in transportation that REPORT UPON DIFFERENTIAL RATES 93 the inauguration of such a strife put an end for the time to all possi- bility of calculating from day to day what would be the cost of car- riage, and what could be safely paid or wisely accepted for gi'ain, pro- visions, or other articles, destined to another market by rail. The con- trol of railroad rates, and, to a large extent, of all railroad business, then passed out of the hands of the legitimate and regular corporate managers into the hands of solicitors for fast freight lines and other agents, who made from day to day, and from hour to hour, such terms with those having business as would secure it, but generally made secret terms — that the bargain with one man might not prevent their driving a better bargain with another, as they might find opportunity. Under such circumstances persons were favored and localities were favored, when the object to be immediately accomplished seemed to require it — regardless of the just maxims of legitimate business, and of the rules of the common law, which enjoin upon common carriers that they shall deal with all customers upon principles of equity and relative fairness. Legitimate business, it was said, necessarily passes into an unsettled and speculative state while this condition of things exists; safe and close calculations are impossible ; transportation becomes cheap, but neither producer nor consumer is certain to reap the profit, for the mid- dleman cannot calculate upon steadiness in low rates, and as he takes the risk of their being raised upon him, so he is in the best position to appropriate the benefit while they continue. Meantime, railroad profits disappear, and dividends cease to be paid, to the great distress of thousands who rely upon them for their living ; and every interest, in any degree dependent on railroad prosperity, must participate in the depression and disaster which accompanies the ownership of railroad shares. The mere statement of these results is sufficient to show that this is not what in other business is known and designated as competition. Competition is the life of trade, but this is its destruction ; competition brings health and vigor, and secures equality and fairness, but this l>aralyzes strength, and makes contracts a matter of secrecy and double dealing. In competition, the sound dealer, operating upon his own capital and upon well established credit, has the best chance of success ; but in the sort of competition we have mentioned, it is found that the bankrupt corporation has the advantage, for its managers, having nothing to lose, may offer rates which solvent roads cannot meet with- out being dragged into bankruptcy with them. Railroad managers do not concede that this state of things is properly designated competi- tion, but they speak of it as an unnatural condition of railroad hos- tility; as unreasoning railroad warfare; as competitive strife, rather 9-1 ATLANTIC PORT DIFFERENTIALS than competition. It is a state of things that, like a war between na- tions, from its very destruetiveness, cannot be a normal condition, but must speedily terminate in peace or in disaster. It has usually been terminated by some common understanding between railroad managers npon a tariff of rates. But this common understanding, it is urged, in some quarters, elimi- nates competition from the sphere of railroad business, and we escape the evils of competitive strife by embracing those of monopoly. This is denied by railroad managers, who insist that understandings respect- ing the reasonable management of their business are not only entirely consistent with competition, but that the}" are the only means whereby the excessive competition at soijie points can be prevented from operat- ing oppressively at others. It is no doubl true that competition tends to produce some great inequalities, and that care ought to be taken to prevent this. It should never be forgotten that the transportation of property and persons by railroad is not exclusively a private business, but is carried on under franchises granted by the State, which confer upon the owners functions of a semi -public nature, and charge them with certain public duties. The railroad manager, operating under such a franchise, must harmonize the interest of his road with the pub- lic duty, and he cannot make self-interest the exclusive guide, as a merchant may, or a farmer. One of the chief of these public duties is to make only reasonable charges, and to regulate and apportion these among the customers of the road, on principles of equity and relative equality. But the operation of competition is perpetually in conflict with this duty; it is felt unequally along railroad lines; it will be active at points where several lines can compete; it will be moderate at others where there is little to excite it, while at still others there can be no competition, because there is but a single road. But the capital of a railroad company is planted on a certain line ; it must be made available to its owners there or nowhere ; it cannot be removed when found unprofitable, as a merchant may remove his stock of goods ; ani be !>.• .i From o~0 R TO s m to 6th 6th 6th 6th 6th 6th Class Class Class Class Class Class Rate. Eate. Rate. Rate. Rate. Rate. Cleveland, Ohio 8 171/2 221/2 Erie, Pa 6 Toledo, Ohio 10 11 191/2 24% Detroit, Mich 10 12 191/2 24 Vj Peoria, 111., 13 13 17 91/2 17 9 27 Va 19 321/2 Columbus, Ohio 24 Indianapolis, Ind 10 11 14 13 23 28 East St. Louis, 111 14 14 18 1/9 18 29 34 Buffalo, N. Y 13 151/2 Pittsburgh, Pa 15 Chicago, 111 09 09 15 15 25 30 TOLEDO PRODUCE EXCHANGE V. L. S. & M. S. RY. CO. 153 [188] From the rates given in this table it will be seen tiiat the com- binations based on Buffalo produce lower rates from western points to Boston and New York than a combination of the rates via Detroit and Toledo. For example : Chicago to Toledo 9 cents Toledo to Boston 241/^ cents Total 331/2 cents Chicago to Buffalo 15 cents Buffalo to Boston 151/^ cents Total 301/2 cents Chicago to Toledo 9 cents Toledo to New York 1 91/2 cents Total 28I/2 cents Chicago to Buffalo 15 cents Buffalo to New York 13 cents Total 28 cents Although the combinations through Buffalo are shown to be some- what lower than the combinations shown through Detroit or Toledo, it should be borne in mind that the through rate from each western point in the territory in question to New York and Boston, whether the traffic is routed via Toledo, Detroit, or Buffalo, is in all cases lower than the combined rates via either of these points as shown above. The various combinations may be made from the table, which also shows the through rates. It is suggested that the share of the through rate accruing to the different roads in the route need not be here considered ; the complaint involves the whole rate. Upon this point attention is invited to page 453 of the decision in the case of The Boston Clunnber of Commerce v. The Lake Shore d; Michigan Southern Ihj. Co., et al. {ante, p. 126). "Such adjustments may not be on the exact basis of cost of service in any case, and many other considerations may influence the parties in making them. The fact may be, therefore, that the Lake Shore road and the New [189] York Central road may each receive more in amount of the through rate to Boston from Chicago than to New York for the respective hauls to Albany, although the service to that i)oint is identi- cal, but the through rates are charged for the entire haul to the final destination and are not governed by the service to some intermediate point in the line or where the line diverges to different destinations." 154 ATLANTIC PORT DIFFERENTIALS The question involved appears to be the through rate as affected by the arbitrary differential and it is not apparent that the question of rate combinations are pertinent or properly comparable with the through rate, except for limited purposes. The question of lighterage at New York has been made quite promi- nent in the arguments, and it is urged that as lighterage at New York to certain station points of the New York Central is 3 cents per hun- dred pounds and paid by the carrier, that the real rate to New York is 25 cents per hundred less 3 cents lighterage or to the shipper 22 cents, and that the comparison ought to be between a 22 cent rate to New York and a 30 cent rate to Boston making the differential to Boston 8 cents and not 5 cents. This position is not believed to be tenable. The three defendants carrying on a continuous line made up of their three several lines fix a through rate for the shipper. If lighterage becomes necessary to complete the carriage they pay it out of the freight money paid by the shipper and then diyide or allot what is left. The rate to the shipper is 25 cents and it seems it can make no difference to him or to the public as to the method by which the carriers adjust this common expense of lighterage in settlements between themselves. The conclusion, therefore, is reached by the Commission that the arbitrary differentials of five cents per hundred on all classes of freight below second class, of six cents per hundred on second class and of ten cents per hundred on first class are excessive, unjust, unreasonable and partake of the nature of an unjust discrimination against Boston and New England points [190] and against shippers of the character of freight included in the six classes from points east of Chicago and west of Buffalo to Boston and New England points and that the dift'erential should no longer be made by an arbitrary sum added to the New York rate, but that said differential should be made b}- adding a percentage to the New York rate. In the two cases under consideration some reference has been made to the equal charges from interior points to New York and Boston when articles are intended for export, and also to the extension of the Boston rate to Portland and points east of Portland, and to the allow- ance of a reduction to Boston dealers in grain and flour equal to the excess of the domestic over the export rate to Boston when they reship the same articles to Portland and points east of Portland, but nothing has been determined as to those matters, it being deemed desirable to consider the difference in charge to Boston in excess of the charge to New York alone and upon its own merits, entirelj^ disconnected from any question which might arise from considerations not necessarily in- TOLEDO PRODUCE EXCHANGE V. L. S. & M. S. RY. CO. 155 volved in an inquiry as to the Boston difference, styled in this record the Boston differential. It is plainly seen that the effect of the proposed change may be far reaching and ma}' att'ect places and rates in a manner not now antici- pated and it appears that many other lines tlian those operated by the defendants are interested in and may be seriously affected bj' the pro- posed change. In Rend v. Chicago & Northivestern R. Co., 2 Inters. Com. Reports, p. 313, it is said with reference to the proposition that the law is satis- tied when a rate is reasonable and fair that : ' ' An exception arises, when rates are so constructed that injustice is wrought by reason of their relation to other rates notwithstanding that the rate challenged may not of itself be unreasonable," but it is added: "The (luestion, however, of relative injustice * * * must be viewed upon broader grounds than a mere balancing of one rate against another. The entire field likely to be affected by any proposed change must be kept in view and if upon the whole, more injustice and trouble are \\ke\y to result from making the change than from declining to make it the Commission should hesitate to interfere. ' ' The evidence is to the effect that a change in this rate will [191] affect the rate at a great many different points both eastern and west- ern. It would be unfortunate if in seeking to bring about equality the result should be to bring about injustice and greater ineciuality. To the end therefore, that every interest involved may be fully protected and that the fullest possible light may be brought to bear upon the question, it is ordered that a copy of this report, and the conclusion of the Commission with reference to the Boston differential be served upon the respondents and each of them and upon the other roads interested, namely upon the : Michigan Central Railroad, Lake Shore & Michigan Southern Railway, Chicago & Grand Trunk Railway, Grand Trunk Railway, Chicago & Erie Railroad, Pittsburgh, Fort Wayne & Chicago Railway, Pittsburgh, Cincinnati, Chicago & St. Louis Railway, Pennsylvania Railroad, Wabash Railroad, New York, Chicago & St. Louis Railroad, New York Central & Hudson River Railroad, New York, Lake Erie & Western Railroad, West Shore Railroad, 156 ATLANTIC PORT DIFFERENTIALS Delaware & Hudson Railroad, Delaware, Lackawanna & Western Railroad, Canadian Pacific Railway, Canada Atlantic Railway, New York, New Haven & Hartford Railroad, New York & New England Railroad, Rome, Watertown & Ogdensburg Railroad, Central New England & Western Railroad, New York, Providence & Boston Railroad, Fitchburg Railroad, Boston & Albany Railroad, Boston & Providence Railroad, Central Vermont Railroad, Boston and Lowell Division Boston & Maine Railroad, Cheshire Railroad, Boston & Maine Railroad, [192] — and that they or either of them, or any other carrier subject to the law regulating commerce, affected by the proposed change, be given twenty days from the service of this report to show cause by answer why an order should not be made commanding them, and each of them, and all carriers engaged in interstate commerce subject to the law regulating commerce, to desist from charging, on all classified freight carried by them from Chicago and intermediate points between Chi- cago and Buffalo to Boston, an arbitrary differential above the New York rate of 10 cents per hundred pounds on first class freight, six cents per hundred pounds on second class freight, and five cents per hundred pounds on the third, fourth, fifth and sixth class freight, and that hereafter the Boston rate from Chicago and points west of Buffalo to Boston and New England points shall be made by adding to the New York rate (as differential) an increase of 10 per cent., and that if within the time named in this order no such answers are filed, then an order shall issue fixing the Boston differential at 10 per cent, increase over the New York rate as herein outlined and indicated. NEW YORK PRODUCE EXCHANGE V. THE BALTIMORE & OHIO RAILROAD COMPANY, ET AL. 7 L C. C. 612. 157 NEW YORK PRODUCE EXCHANGE V. baltimore & ohio railroad company, et al. Decided April 30, 1898. (7 I. C. C. 612.) Eailway companies may make whatever rates, from whatever lines, and estab- lish whatever differentials they deem best for the purpose of securing and con- ducting transportation, provided the just interests of the public are not sacri- ficed thereby, and whether in so doing they act wisely or unwisely, fairly or unfairly between themselves, is not for the Commission to determine; the jurisdiction of the Commission is confined to inquiring whether the situation which the carriers have created is in violation of the Act to Regulate Com- merce. Railway com])anies are not prohibited by section three of tlio Act from pre- ferring one locality over another unless the preference is undue or unreasona- ble, but a preference which is without legitimate excuse is, in and of itself, undue and unreasonable. Under decisions of the United States Supreme Court, — Import Rate Case, In- terstate Commerce Commission v. Texas ^ P. B. Co., 162 U. S. 197, 40 L. ed. 940, 5 Inters. Com. Rep. 405, and the Troy Case, Interstate Commerce Com- mission V. Alabama Midland E. Co., 168 U. S. 144, 42 L. ed. 414, — railway com- petition may, but it does not necessarily, justify a preference to a particular locality or commodity; and therefore, granting that discrimination against a locality which is based on such competition is excusable in theory, the question still remains whether under the third section it is undue or unreasonable; and that question is one of fact in each case. Carriers frequently disregard distance in making their rates, and they may lawfully do so under some circumstances; but distance should be regarded whenever possible, and no previous decision is authority for a ruling that a carrier may be compelled to disregard it for the purpose of }>lacing two com- munities upon a commercial equality. Upon complaint brought on behalf of New York City, and alleging that differ- entials, allowed by the defendant carriers on grain, flour and provisions from Chicago and other western points, of 2 cents to Philadelphia and 3 cents to Baltimore below the rates to New York, are unlawful under Section 3 of the Act to Regulate Commerce, — Held, That the differentials are legitimately based upon the comjietitive relations of the carriers, that it does not appear upon the present record that the carriers have exceeded the limit within whicii they are free to determine for themselves, and, accordingly, that the differentials com- plained of do not result in unlawful preference or advantage to Philadelphia or Baltimore over the City of New York. [614] John D. Kernan and Baldwin tf; Blackmar, for complainant. Hugh L. Bond, Jr., for Balto. & Ohio System and Receivers. James A. Logan, George V. Massey, John G. Johnson and Evarts, Choate cf: Beaman, for Penna. System. H. T. Wickham, for C. & 0. Ry. Co. R. W. de Forest, for Central R. R. Co., of N. J. Samuel Hoar, for Boston & Albany R. R. Co. S. E. Williamson, for N. Y. C. & St. L. Ry. Co. 159 160 ATLANTIC PORT DIFFERENTIALS Frank Loomis, for N. Y. C. & H. R. R. R. Co. Ashhel Green, for West Shore R. R. Co. Francis I. Go wen and F. H. Janvier, for Lehigh Valley R. R. Co. George C. Greene, for L. S. «& M. S. Ry. Co. John B. Kerr, for N. Y. 0. & W. R. R. Co. Henry Russell and AsJiley Fond, for Mich. Cent. R. R. Co. J. D. Campbell, for Phila. & Reading R. R. Co. and Receivers. G. M. Cumminc), for Erie Sj^stem. E. W. mrong, for B. & 0. S. W. Ry. Co. T. J. O'Brien, for Grand Rapids & Indiana R. R. Co. Silas AV. Fcttit, for Trades League, Board of Trade and Commercial Exchange of Philadelphia. Sherman Hoar, for Boston Chamber of Commerce. William, A. Fisher, for Baltimore Chamber of Commerce. REPORT AND OPINION OF THE COMMISSION. Prouty, Commissioner: The New York Produce Exchange, the complainant in this matter, is a corporation under the laws of New York, composed of merchants residing in the city of New York and interested largely in the handling of grain and other produce at that point. No question is made as to its competency to commence and maintain this proceeding. The defendants are various railroad companies engaged in the inter- state transportation of freight, including grain and other produce, to New York and various other points upon the Atlantic seaboard. They admit that, with respect to such transportation, they are subject to the Act to Regulate Commerce. [615] The complainant attacks by its complaint certain differentials in freight rates upon the ground that they unduly prefer Boston, Philadelphia, Baltimore, Newport News and Norfolk as localities to the locality of New York. The Boston Chamber of Commerce, the Balti- more Chamber of Commerce and certain trade organizations in Phila- delphia have intervened upon the ground that the commercial interests which they represent are or may be affected by the proceeding. Nor- folk and Newport News have not been represented at any of the hear- ings. Upon the trial the issue apparently narrowed itself to one between New York, Philadelphia and Baltimore. The Boston Chamber of Com- merce appeared upon the first hearing in New York, but did not ap- pear at any subsequent hearing, nor did it ask to be heard upon final argument. This seems to have been upon the assumption that the com- plainant made no question as between itself and Boston. That is. New NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 161 York does not ask to bo allowed a differential upon export traffic as against Boston. Neitlier do we understand that it has been suggested in this case that a different differential should be applied to Norfolk and Newport News than is applied to Baltimore. The controversy is reall}^ between the three cities, New York, Philadelphia and Baltimore. Whenever facts with reference to Boston, Newport News and Norfolk are stated, thc}^ are only given to make the statement complete as bear- ing upon the controversy between these three localities. It incidentally appears that Boston has two rates, — an export and a domestic rate. The legality oi; proprietor of these different rates was not referred to in the discussion of the case, and is not considered in its disposition. The dift'erentials in question are those upon east-bound freight traffic to the above-named cities. There is no dispute as to the rates. Taking the rate to New York as a basis, the rate to Philadel- phia is 2 cents per hundred pounds lower, all classes; and to Baltimore ■i cents per hundred pounds lower, all classes. Norfolk and Newport News take the Baltimore rate, and upon export traffic, Boston takes the New York rate. The rate itself frequently varies, but the differentials are at all times and upon all classes the same. The rates complained of in this pro- ceeding are those upon grain, flour and provisions, and [616] these rates from Chicago at the time of the filing of the complaint were as follows : To Grain. Flour. Provisions. New York 20 cts. 20 cts. 30 cts. Boston (for export) 20 cts. 20 cts. 30 cts. Philadelphia 18 cts. 18 cts. 28 cts. Baltimore 17 cts. 17 cts. 27 cts. Newport News 17 cts. 17 cts. 27* cts. Norfolk 17 cts. 17 cts. 27 cts. For the purpose of making the rates from various points in the mid- dle west to the Atlantic seaboard, the Chicago-New York rate is taken as a basis, the rate from the other points being a per cent, of this rate. Thus the rate from Detroit, J\Iich., is 78 per cent., from Indianapolis, Ind., 93 per cent., from East St. Louis, 111., 116 per cent, and from Rock Island, 111., 122 per cent. The rate from any one of these points to Philadelphia, Baltimore, Norfolk or Newport News is made by sub- tracting from the New York rate the fixed differential above given. The territory within which rates are computed upon the basis of the New York-Chicago rate is that bounded, roughly speaking, by the Mississippi River upon the west, the Ohio River upon the south, a lim' drawn about due north from Pittsburgh upon the east, and the Great Lakes upon the north, excluding most of the State of AViseousin. Not only do the differentials affect all traffic which originates in this terri- 11 162 ATLANTIC PORT DIFFERENTIALS tory, but also all traffic which passes through this territory upon its way to the Atlantic seaboard. The complaint also attacks what are knoM^n as the ex-lake differ- entials. Large quantities of freight, especially grain and flour, are brought through the Great Lakes to various points upon the southern shores of Lake Erie and Lake Ontario, from whence they are trans- ported by rail to the Atlantic seaboard. Upon this a differential is ap- plied of 1 cent per hundred pounds in favor of Philadelphia and Balti- more as against New York. This differential does not seem to apply to provisions. At the time of the filing of this complaint the rates from lake ports to Boston, New [617] York, Philadelphia and Balti- more respectively per hundred pounds were as follows : To Grain. Flour. Provisions. New York 11 cts. 11 cts. 16 cts. Boston (for export) 11 cts. 11 cts. 16 cts. Philadelphia 10 cts. 10 cts. 16 cts. Baltimore 10 cts. 10 cts. 16 cts. Special commodity rates by the bushel Avere also in effect from these lake ports to the above named cities. They were in lots of 8,000 bushels and over, to one consignee and one destination, as follows : Wheat. Corn. Barley. Oats. New York 5 cts. i% cts. 4% cts. 3V2 cts. Boston (for export) . 5 cts, 4% cts. iV^ cts. 3% cts. Philadelphia 4 cts. 3% cts. 33-4 cts. 3 cts. Baltimore 4 cts. 3% cts. 3% cts. 3 cts. It will be seen from the above tables that the regular differential upon grain when shipped in carload lots by the hundred pounds is 1 cent in favor of Baltimore and Philadelphia ; when shipped under the special commodity tariff by the bushel it is considerably more, being i cent per bushel in the case of wheat and corn and ^2 cent per bushel in the case of barley and oats. Grain for export would, of course, al- ways be shipped under the commodity tariff. Some knowledge of the history of these differentials is necessary^ to an understanding of the situation. The earliest agreed differential of which the testimony gives any account was that of 1869, by which Bal- timore enjoyed an advantage of 10 cents per hundred pounds over Nevv' York, It does not appear what the differential in favor of I'hiladelphia was. In 1870 a war of rates occurred, with the result that the Balti- more differential was reduced to 5 cents per hundred pounds on grain and the lower classes of freight, while upon the higher classes of freight the differential was 10 cents per hundred pounds, and these differen- tials seem to have continued until about 1876. It does not appear what the differential of Philadelphia upon east-bound traffic was, but Second Third Fourth Special Class. Class. Class. Class. 9 cts. 8 cts. 6 cts. 5 cts. 7 cts. 6 cts. 4 cts. 3 cts. NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 163 a tariff of November, 1875, gives tlie differentials upon west-bound traffic as follows : First Class. Baltimore 10 cts. Philadelphia 7 cts. [618] In March, 1876, this system of an arbitrary differential was abandoned and the lines agreed upon a system of percentage differ- entials based upon the relative distances from Western cities to Balti- more, Philadelphia, and New York, respectively, taking New York as the basis. Under this agreement the rate from Chicago to Baltimore was 13 per cent, and to Philadelphia 10 per cent, less than to New- York, and from Cincinnati to Baltimore 24 per cent., and to Philadel- phia 12 per cent, less than to New York. After a few wrecks 'experience, the New York Central and the Erie withdrew from this agreement upon the assertion that it was too favor- able to Baltimore and Philadelphia. Thereupon another rate war en- sued, w^hich terminated in an agreement of April 5, 1877, by which fixed differences in rate were re-established in place of differences based upon relative distances. Under this agreement east-bound differentials from western points were 3 cents to Baltimore and 2 cents to Philadel- phia upon all classes. On west-bound traffic the differentials in favor of Baltimore and Philadelphia differed with different classes, and were as follows : First From Class. Baltimore 8 cts. From Philadelphia 6 cts. 6 cts. 2 cts. 2 cts. It would seem that the contentions between the carriers which had given rise to these differentials were mostly over export traffic, and that the differentials were insisted upon and were allowed for the pur- pose of permitting the various carriers to enjoy a portion of that traffic. The agreement of April 5, 1877, seems to have been made upon the idea of equalizing the cost of carriage from various interior shipping points to foreign ports. It recognized the fact that ocean freight rates from Baltimore and Philadelphia to such foreign ports were higher than from New York and that inland freights must be correspondingly lower so that the total freight might be the same. The agreement provided that, upon the giving of certain notice, any party to it might withdraw, and in June, 1880, the New York Central gave notice of withdrawal, stating that the differentials were originally based upon supposed differences in ocean rates, that such differences no longer existed, that there- [619] fore the reasons for the differentials Second Third Fourth Class. Class. Class. 8 cts. 3 cts. 3 cts. 164 ATLANTIC PORT DIFFERENTIxVLS had ceased to exist and that the differentials themselves should also cease. The Pennsylvania and the Baltimore and Ohio insisted upon the differentials, and the action of the New York Central apparently led to another rate war, which terminated in the latter part of 1881 by a restoration of the differentials of April 5, 1877. It Avould seem that the various Atlantic seaports which were served by these different railway lines had taken more or less interest in this subject of differentials. New York insisted that the differentials should be abolished; Philadelphia that there should be no difference between that city and Baltimore; and Baltimore that the differential of 3 cents allowed in its favor was too low ; and each city strenuously contended that it was the duty of the railway lines serving that particular lo- cality to insist upon and obtain an adjustment of these differentials in accordance with its views. Apparently for the purpose of considering the claims of these differ- ent communities and perhaps placating the public rather than of set- tling the question for the carriers, the New York Central, the Erie, the Pennsylvania and the Baltimore & Ohio joined in requesting Allen 6. Thurman, Elihu B. Washburne and Thomas M. Cooley to act as an advisory commission for the purpose of investigating and reporting upon the general matter of these differentials. These gentlemen ac- cepted the invitation and entered upon their work in February, 1882. In their investigation the railroad companies themselves declined to participate further than by furnishing to the commissioners whatever information might be asked for. This commission lield sittings in New York, Philadelphia and Baltimore in the east, and in certain cities in the west, heard statements and arguments from the representatives of these various localities, collecting whatever information it could bear- ing upon the subject, and finally in July, 1882, made a report. This report seems to have been very carefully considered by the commis- sioners, and, while it deals largely in theory and generalities, it appears to be, as was to have been expected from the character of the gentlemen who signed it, an able and comprehensive review of the situation. The conclusion at which they arrived was that distance could not be used as a measure of these differentials; neither could [620] cost of service. Competition, which embraced these two, and all other factors, if properly conducted through a series of years, was the most reliable guide. Competition, after many years, had resulted in fixing the dif- ferentials in force. Those differentials were justified to a certain ex- tent by distance and to a certain extent by cost of service. The pur- pose of the differential was to eciualize the cost of exporting grain and other merchandise through the various ports to which they were ap- NEW YORK PRODUCE EXCHANGE V. B. & 0. K. R., ET AL. 165 plied. A difference in ocean freight rates from those respective ports, corresponding generally to the inland differentials, was found to exist. Upon the whole, therefore, the commission declined to recommend that the differentials which had been agreed upon should be disturbed. It will be seen, therefore, that in 1882 the fairness and reasonableness of the present differentials were approved by that board, and those dif- ferentials have ever since been in effect. Manifestly, however, the conditions which determine the fairness of a differential are continually varying. That fact is clearly stated in the above report, in which it is said that if in the future the operation of these differentials should become burdensome to any one of the lo- calities interested, they should be readjusted or abolished. The com- plainant insists that since 1882 conditions have so changed that, as- suming them to have been just then, they are unjust to-day. The com- plainant's case attacks, first the general fairness of the differential, and seeks to show, second, that the arguments which justified the dift'eren- tials in 1882 do not justify them to-day. The complainant asserts at the outset that this difference in rate can- not be justified upon the score of a corresponding difference in distance. It so happens that the shortest distance from Chicago to New York, Philadelphia and Baltimore is in every instance by the Pennsylvania lines, being : To New York 912 miles. Philadelphia, 822 " Baltimore 802 " Merchandise is transported from Chicago to all three of these cities by man}^ other lines, and the distances by these lines vary greatl}'. It is not deemed essential, however, to state these various distances, in the view we have taken of the application of distance to the disposition of this case. [621] One thing should, however, be noted in this connection. The distances above given are from Chicago, but by no means all of the traffic involved moves from Chicago, and if distance were to be re- garded as a controlling factor and these differentials were to be ad- justed upon the basis of distance, it would be necessary to know the relative distances from the point of origin of the traffic. Thus, spring wheat is raised mainly in the States of Wisconsin, Minnesota and the two Dakotas. Now, the complainants say that this section is naturally tributary to New York, and that the spring wheat crop is properly exported through that port. The corn belt lies farther south, and em- braces Indiana, Illinois, Missouri, Kansas, Nebraska and Towa. This territory, the advocates of Baltimore insist, is naturally tributary to 166 ATLANTIC PORT DIFFERENTIALS that city, so that the greater amount of corn exports ought properly to go out through that port, and the testimony upon the part of Balti- more tends to show that it is the effort of her merchants to intercept this corn before it ever reaches Chicago and bring it to Baltimore, and that this effort is very largely successful. For the purpose of showing the point of origin of this traffic as bear- ing upon the question of these differentials, a statement prepared under the direction of Mr. George R. Blanchard, commissioner of the Joint Traffic Association, was introduced by the complainants. This state- ment shows the origin of east-bound dead freight which originates at and west of the trunk line termini, including both all-rail and lake and rail traffic, and which is carried to the eastern termini of those lines. It is not deemed material to encumber this finding of facts with that statement. It embraces all the dead freight, and not merely that which is involved in this proceeding. This fact may, however, be noted, that the origin of dead freight is not fixed in its proportions, but continually varies from year to year. This table extends from 1888 to 1896 inclusive. From it, it appears that in 1888, 15.6 per cent, of such freight originated at Chicago, while in 1896 onlj^ 10 per cent, originated there. In 1888, 2.7 per cent, was classified as "unknown and local," while in 1896 this class embraced 14.3 per cent., much more than any other one class. It has already been noted that in this table the traffic in question is so intermingled with other traffic that no definite information is furnished as to it. [622] The complainant further insists that these differentials cannot be justified upon the basis of cost of service. No direct testimony was introduced upon this branch of the case. The complainant showed from the reports of the Penns^dvania Railroad Company- that the cost of movement of all freight upon its lines in the year 1880 was 4.74 mills per ton per mile, and in 1895, 4 mills per ton per mile. Treating this as the cost of moving the commodities in question it would have cost in 1880, 2.13 cents per hundred pounds less from Chicago to Philadel- phia than to New York, and 1.80 cents less per hundred pounds in 1895 ; in 1880, 2.60 cents per hundred pounds less to Baltimore than to New York, and in 1895, 2.20 cents less per hundred pounds. Upon this basis, therefore, the following differentials should have been al- lowed : 1880 1895 Philadelphia 2 . 13 cts. 1 . 8 cts. Baltimore 2.6 " 2.2" No computation of this sort can be of anj^ value without knowing whether the basis of the computation is correct, or, in other words, whether the cost of moving the grain is as assumed. NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 167 lu this connection one subject which was much discussed in the testi- mony may be referred to, since, if it has any force whatever, it is as bearing upon the additional cost of service. This subject is that of lighterage and terminal charges at the port of New York. Export grain upon arriving at any of these seaports, is either placed in an elevator for storage or transferred directly to the vessel. At all the ports except New York the mode of proceeding seems to be to trans- fer the grain directly from the car to the elevator upon its arrival, and from the elevator to the vessel, when it is desired, the vessel being brought alongside the elevator for the purpose of receiving the grain. In New York, upon the other hand, the grain is put in barg(.'s and towed to the side of the vessel, where it is transferred by a floating elevator from the barge to the vessel. It seems sometimes to be trans- ferred directly from the car to the barge, but in the great majority of cases it is taken into the elevator in the first instance and from the ele- vator spouted into a barge in exactly the same way that it would be into the hold of the vessel. [623] The railroad company is at the ex- pense of towing the barge to the side of the vessel, where the owner of the grain receives it and transfers it at his expense into the vessel. There was considerable testimony as to the cost to the railroad com- pany of lightering grain ; that is, towing the barge from the dock to the side of the vessel and giving it the four days' storage to which it was entitled, and this testimony is not altogether harmonious. We find that the expense of this service is about y^ cent a bushel. It costs about the same to transfer the grain directly from the ears to the barge as it does to transfer it into the elevator and thence discharge it into the barges. What this cost is did not appear. By the agreement of April 5, 1877, it was provided that the tei'ininal charges for the storing and loading of grain should be the same at ail the ports, and this charge was then fixed at V-/^ cents per bushel, which has been the charge ever since. As a rule the railroad companies own the elevators in Boston, Philadelphia, Baltimore and probably at Nor- folk and Newport News. When, therefore, the carrier transports grain from Chicago to Baltimore and puts it aboard a vessel there, it receives for that entire service the regular freight rate, and in addition the terminal charge of \y^ cents. At New York the carrier takes the grain into its elevator, discharges it into barges and then tows those barges to the side of the vessel, receiving therefor merely the freight rate. The 11/4 cents per bushel paid for elevating at New York is received by the floating elevator compan3^ It follows, therefore, that the car- rier at New York renders for nothing the same service for whicli it is 168 ATLANTIC PORT DIFFERENTIALS paid 114 cents at all the other ports, and in addition incurs lighterage expenses of i/^ cent per bushel. The interveners strenuously insisted that this additional burden under which the carriers rested at New York in the handling of grain for export justified the imposition of the differential. It is indicated above that grain is only lightered at the port of New York. This is not quite the fact. Considerable quantities are light- ered at Philadelphia, just how much did not appear, and some at Bos- ton. In these cases, as at New York, the expense of the lighterage is borne by the carrier. The agreement of April 5, 1877, by which these differentials were originally fixed, recognized as their justification the fact that [624] the ocean freights to European inarkets were less from New York than from Baltimore and Philadelphia, and that the inland rates to New York ought to be correspondingly higher in order to equalize the through rate. The Advisory Commission of 1882 found this same con- dition of things and made that, in some measure at least, a reason for recommending that the differentials be not disturbed. The complain- ant says that whatever the condition maj" have been in 1877, or what- ever it may have been in 1882, at the present time ocean freights upon grain, flour and provisions are substantially the same from all the ports. The testimon}^ in this case shows that grain is exported in two \\ays : first, by full cargo ; second, by berth rates. The ocean carriage is said to be by full cargo when the ship is loaded entirely' with one kind of merchandise and carries no other freight. It did not appear that flour or provisions were ever exported in full cargo lots, although that mas' be rarelj' done. Grain, especially corn, is frequently exported in that way. Sometimes the ship taking the full cargo of grain comes from a foreign port to this country in ballast entirely for that purpose. Of- tener it arrives here loaded or partly loaded with some kind of mer- chandise and seeks a return load. The testimony was that vessels for full cargo business could be chartered at practically the same price to load at either New York, Baltimore, Philadelphia, Norfolk or Newport News. If the vessel comes to the Atlantic coast for the purpose of obtaining and carrying away a cargo of corn, it is difficult to see any reason wh}' it would not transport that corn at the same price per bushel from either of these ports. Nor did the defendants or the in- terveners seriously contend that this was not ordinarily the case in full cargo business. It was alleged, however, upon the part of the inter- venors that there were certain advantages at New York in doing a full cargo business, and upon the part of the complainants that there were certain advantages at the other ports in this class of business. NEW YORK PRODUCE EXCHANGE V. B. & O. K. R., KT A1-. 109 The great bulk of imports land at New York. If a ship is at New York, having come there with a load of merchandise, it naturally pre- fers to take its return cargo at that point rather than- be to the expense of proceeding to some other port. The testimony showed that it would proceed to any of the other ports from New York, or from any outport to any other Atlantic out- [625] port for about % of one cent per bushel in the freight rate. Since more vessels seeking return cargoes are con- signed to New York than to the other ports this would perhaps consti- tute a slight advantage in favor of that port. Upon the other hand. It appears that what are called the i)<)rt charges are higher at New York than at either Baltimore or Pliiladclpliia. Just what these port charges consist of and just liow great a burden they are did not appear, but it costs a vessel more by some tiegrce to enter and load at the port of New York than it does at its sister poi'ts, and to that extent New York rests under a disadvantage in tins full cargo business. So, also, it was claimed that vessels loading at Baltimore, Norfolk and Newport News had during the winter months a certain advantage, in that they could load more deeply than if they cleared from Philadel- phia or a port north. It seems that the insurance companies require that the vessel shall not load below a certain line, which is fixed by the Board of Trade of England. This line is the same for all ports dur- ing the summer months, but during the winter months vessels are per- mitted to load deeper when they clear from ports south of Philadel- phia than when they clear from Philadelphia or a port north, the line to which they are permitted to load in case of the latter ports being known as ' ' the north Atlantic winter load-line. ' ' It did not appear just what the value of this privilege available at the southern ports was. It would, of course, depend ui)()n the size of the vessel. The testimony tended to show that with the ordinary tramp steamer which engages in this full cargo grain business, the difference would be from $200 to $600 a cargo. Baltimore and Philadelphia asserted that they were under disad- vantages as compared with New York in the matter of distance and in the ease with which a ship put to sea from these respective ports. Thus, it is from Baltimore to the ocean something like 150 miles, and after the ocean is reached, somewhat farther to the foreign port. In the case of Philadelphia low water interferes with a ready passage out to sea, so that the time consumed in waiting for a proper tide is from ten to twenty-four hours. Now, while this is not a serious matter, neverthe- less, it does constitute a certain disadvantage in case of these two ports, which is not experienced at New York. 170 ATLANTIC PORT DIFFERENTIALS [626] Upon the whole we are of the opinion that, so far as the full cargo business is concerned, there is no appreciable difference in cost, and no appreciable difference in the ocean rate from the three ports, New York, Baltimore and Philadelphia. There might be exceptional cases or exceptional times when the rate would rule a trifle lower from one port than from the other, but we are satisfied that, taking the whole 3'ear together, or a succession of years, the expense and the rate must be substantially the same. Nor are we able to find that the conditions in respect to full cargo ocean rates were different in 1882 than they are to-day. Merchandise is said to be carried at berth rates when it does not con- stitute the entire freight cargo of the vessel, but only a portion of it. Regular lines of steamships ply between all the ports in question and European grain markets. These steamships sometimes carry passen- gers, but always carry freight, and their cargoes are made up of mis- cellaneous articles. Some articles are regarded in ocean carriage, as well as in carriage by rail, as of a higher class than others, and take a higher rate, although there does not seem to be the same difference upon the ocean as upon the railroad. In each case, however, grain is regarded as one of the lowest classes of freight, and bears a correspond- ingly low freight rate. The testimony showed that fluctuations in berth rates were very great. Taking the rate on wheat for an illustration, the rate might fluctuate in a single year from 2 to 12 cents per bushel. This varia- tion is occasioned by the law of demand and supply. The regular line steamer is advertised to leave at a certain date. It has a certain amount of freight space, and the expense of running the steamer is practically the same whether loaded with freight or not. Indeed, until modern construction provided a water ballast, it was necessary to have a certain amount of freight for ballast in order to navigate the vessel. This steamship, as the time for sailing approaches, will manifestly sell its space for whatever price it can obtain. It follows, therefore, that the same vessel may often carry freights of the same kind at different rates, that the quoted price and the price actually paid maj^ be entirely diff'erent, and that the price to-day may be no indication of the price a week hence. The interveners insist [627] that while New York may not have any advantage in the matter of cargo rates, it has an enormous advantage in the matter of berth rates, and several reasons for this are shown. In the first place New York has a great many more lines than either Boston, Baltimore or Philadelphia, indeed a great many more than all three of these cities taken together. These lines reach many foreign NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 171 ports at which American grain is bought which cannot be reached from the "outports" so-called. Steamers sail much more frequently from New York to all foreign markets than from either Baltimore or Phila- delphia. The result is that New York offers much better facilities in the way of ocean transportation than do any of the outports. These additional facilities attract, first of all, the higher classes of freight, but w^hen that freight is absorbed the residuum of the berth space which is available for the transportation of lower grades of freight, of which grain is the principal one, is always large, so that there are usually offerings of berth space in New York much in excess of those at any other, or at all other ports for the transportation of grain. That is, not only can grain be exported from New York by berth rate to many ports not available to Baltimore and Philadelphia, but it can usually be transported at lower rates than can be had at either of these cities. Still another advantage is that at New York cargoes of different commodities can be more easily made up than at the outports for the reason that the offerings of freight at New York for a particular place are much larger. As already indicated, the great bulk of berth rate business is done by regular line steamers, but considerable business of that sort is done by steamships sailing at irregular intervals whenever a load can be obtained. These vessels take various kinds of commodi- ties but usually require them to be consigned to the same port. It is evident that in New York a steamer of this kind would be able to ob- tain a cargo for a particular foreign port much more readily than at either Baltimore or Philadelphia, since, as w'ill be seen hereafter, the great bulk of our exports, other than grain and flour, move out through the port of New York. A great deal of testimony w'as introduced, both by the complainant and by the interveners, as to relative berth rates from the four ports, Boston, New York, Baltimore and Philadelphia. [628] The complain- ant introduced three tables, showing the average quoted rates in cents per bushel on wheat from these four ports, covering the years 1882 to 1896, inclusive. The first table is from December 1st to April 30th, that being the season when the canal is closed ; the second from May 1st to November 30th, that being the canal season ; and the third table covering the entire calendar year. These tables are given below, and are numbered Tables No. 1, No. 2 and No. 3: 172 ATLANTIC PORT DIFFERENTIALS Table No. 1. Average Ocean Freights^ Quoted ox Wheat from the uudermentioned ports to Liverpool, for the Non-Canal Season. December 1st to April 30th. Non- Canal Season. 1881-82 1882-83 1883-84 1884-85 1885-86 1886-87 1887-88 1888-89 1889-90 1890-91 1891-92 1892-93 1893-94 1894-95 1895-96 1896-97 New York. Per 60 lbs. Boston. Per 60 lbs. Philadelphia. Per 60 lbs. Baltimore. Per 60 lbs. cents. *6 5% 8% 5% 61/2 7% 8% 4% 7% 2% 5% 41.4 5% cents. t5% 91/4 4% 71/2 3% 6 4 61^, 8% 41/0 6% 21/2 4% 3% 4V2 6 14 cents. 8% 1214 6% *4i/8 6^8 5% 5 674 cents. *7V2 121/, TVs 9% 71/4 71/4 3% 10 101/2 61/4 8% 41/4 61/i 5% 51/^ ^January 1st to April 30th only. fJanuary 1st to March 31st only. JReduced from sterling quotations on the basis of Id. =2 cents. Table No. 2. Average Ocean Freights! Quoted on Wheat from the undermentioned ports to Liverpool, for the Canal Season. May 1st to November 30th. Canal Season. New York. Per 60 lbs. Boston. Per 60 lbs. [Philadelphia. I Per 60 lbs. Baltimore. Per 60 lbs. 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 cents. 778 7% 71/2 5% 6% 4% eys 778 278 678 4% 51/2 278 478 61/2 cents. ^7% 514 5 4 4% 37s 51/2 6% 2% 5 4 4% 178 2% 3% cents. 6% 3% 41/4 672 cents. 10% 914 SVs 6 71/2 51/4 7y8 8% 2% 7 6 1/2 578 3% 4% 6% *July 1st to November 30th only. fRedueed from sterling quotations on the basis of ld.z=2 cents. new york produce exchange v. b. & o. r. r., et al. Table No. 3. 173 Annual Average Ocean Freights! Q^^oted on Wheat from the undermentioned ports to LiVERFOOL for the Calendar Year. Calendar Year. New York. Per 60 lbs. Boston. Per 60 lbs. Philadelphia. Per 60 lbs. Baltimore. Per 60 lbs. 1882 cents. 7% 8% 7 6% 6% 5 5% 7% 4% sy* 4% 3%- 5Vs cents. cents. cents. 10 1883 6M> 5 5 4% 4 V:. 51/2 6% 478 5% 4V. 3% 3 3% 414 10 v^ 1884 778 7% 188.5 1886 7% 6 1887 1888 9 1889 1890 5% 1891 6% 1892 6% 1893 1894 1895 1896 5% 4% 4% 5% 5% 4% 4% 674 fEeduced from sterling quotations on the basis of Id. =2 cents. [630] We do not regard these tables as altogether reliable, although they are probably the best that could be furnished under the circum- stances. In most instances they represent the quoted rate ; in some, particularly in case of New York, they stand for actual engagements, and show the price actually paid. It has already been suggested that the quoted price and the actual price often vary considerably. No data at all are available apparently in case of Philadelphia until the year 1893, and those from Baltimore are extremely unreliable. We are inclined to think, taking the whole testimony in the case to- gether, that it fairly appears that there is, as a rule, between Boston and New York a difference in the berth rate upon grain in favor of Boston, and that this difference amounts at the present time to some- thing in the vicinity of 1 cent per hundred pounds; that there is a difference in favor of New York between New York and Philadelphia M'hich amounts, perhaps, to from ly^ to 2 cents per hundred pounds; and that about the same difference exists against Baltimore. We are unable to find that there is any appreciable difference in the ocean berth rate from Baltimore and Philadelphia. We are inclined to think also that since 1882 this difference between New York and the outports has been gradually diminishing. The rates, from Boston differed f roin those in New York rather more in 1882 than to-day, and the same thing appears to have been true of Baltimore and Philatlelphia. From the very nature of the case, however, no definite finding in this respect can be made. 174 ATLANTIC PORT DIFFERENTIALS It did not appear why the rate at Boston should be lower than at New York, save that the dockage expenses and other port charges were somewhat less at the former port. The Boston steamers are inferior in speed and in capacity to New York steamers. No testimony was introduced showing exactly what cargo rates had been at any time or during any period. It appeared generally that they were ordinarily higher and much more stable than berth rates, and that a cargo business could not be done until the berth space had been exhausted or until the berth rate had risen to a point above the average. We have no information from which it can be stated what the rela- tive amount of cargo and berth business in grain has been for any length of time since 1882. [631] With the exception of cargoes from New York to a particular point which is hereafter referred to, wheat is very seldom exported by the cargo. Cargo business is almost entirely confined to corn. The complainant introduced a table showing the relative amount of berth rate and cargo exports for the years 1895 and 1896 in wheat and in corn. This table is given below, and is No. 4 : Table No. 4. (Where steamers carried both wheat and corn, they have been counted under each head.) WHEAT. Exports, Bushels. 1895. CARRIED IN GRAIN CARGOES. Exports, Bushels. CARGOES. CARRIED IN GRAIN 189fl. PORTS. Bushels. a u S' o cs o 6 Bushels. a o cs O o 6 4,810,384 20,339,263 1,537,226 3,977,261 165,765 1,185,400 9,838,955 18,476,263 4,863.8^ 6,589,856 Boston 6,707,934 461,165 33.0 30.0 66 5 4,056,878 2,831,017 2,085,199 21.9 58.2 31.6 55 Philadelphia 29 Baltimore 22 Norfolk 165,765 361,431 100.0 30.5 2 6 17,327 Totals 32,015,299 7,696,295 79 39,786,287 8,973,094 106 CORN. New York 19,626,817 5,320,083 3,307,413 9,645,758 3, .545, 363 4,866,335 892,051 4.6 10 19,100,190 5,893,209 8,829,376 26,382,182 12,891,28i 10,376,625 1,797,082 9.4 24 Boston Philadelphia 524,818 1,896,452 incomplete 2,278,872 15.9 19.7 46.8 5 18 22 4,947,789 10,297,059 8,977,802 5,042,104 56.0 39.0 69.6 48.6 46 Baltimore Norfolk 81 Newport News Totals 46,311,769 •5,592,198 •55 83,472,867 31,061,836 300 •Exclusive of Norfolk for 1895, which cannot be given from any data In our possession. NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AIj 175 It will be seen from an examination of the above table that tiie ex- ports for 1896 M^ere somewhat larger in wheat and almost twice as great in corn as in 1895 ; that what may be called the excess [632] ex- ports of 1896 over those of 1895 went mostly hy cargo shipments, and that these excess cargo shipments were almost entirely from Philadel- phia, Baltimore, Norfolk, and Newport News. The complainant in- troduced another table showing the number of cargoes of corn ex- ported from New York, Philadelphia and Baltimore for the years 1893 to 1896, inclusive. This table is designated as No. 5 and is as follows: Table No. 5. New York. Cargoes. Corn. Philadelphia. Cargoes. Corn. Baltimore. Cargoes. Corn. Totals. Cargoes. Corn. 1893 1894 1895 1896 1 2 7 19 11 7 41 7 17 13 77 19 24 27 137 Totals 29 cargoes. 64 cargoes. 114 cargoes. 207 cargoes. New York shipped 29 cargoes corn, equal to 14%. Philadelphia "64 " " " 31%. Baltimore "114 " " " 55%. 207 cargoes. From this it appears that in the four years New York shipped 29 cargoes; Philadelphia, 64; and Baltimore, 114, which gives New York 14 per cent, of the entire cargo business for that series of years. Mr. Neal, a witness for the interveners, testified from records in his possession that from 1878 to 1896 there had been exported from the three ports in all 1,357 full cargoes of corn, and that of these 187 had gone from New York, 499 from Philadelphia, and 671 from Baltimore. This, too, would give New York in that series of years just 14 per cent, of the full cargo business. It may well be inquired how, in view of the differentials and in view of the fact that full cargo rates are the same from all these ports, New York manages to do any full cargo business. It appears that Boston under the operation of the same condition of things does not. It is im- possible to answer this question with certainty. New York has much the largest storage capacity. It has a corn market and a wheat market, and stocks of corn and [633] wheat are carried for delivery. The re- sult is that a full cargo can be loaded and shipped from New York quicker than from the other ports, and very often cheaper, as the price fluctuates upon the Chicago market. 176 ATLANTIC PORT DIFFERENTIALS It appears, too, with reference to the full cargo business in wheat, which was considerable from New York in both 1895 and 1896, that most of it consisted of cargoes for Lisbon, Portugal. The trade at that point requires a New York bill of lading, and for this reason shipments to fill those orders are made from New York, although the same grade of wheat could, perhaps, be obtained somewhat more cheaply at some other port. The complainant claimed that if the object of these differentials was to equalize the cost of exporting grain through the three ports, then the cost of grain in Europe should be the same by each port, whereas, in point of fact, it was and had been less through the outports than through New York. It appeared that this export business was largely done by grain brokers. These people do not as a rule own the grain themselves nor carry stocks from which their orders are filled. Upon receiving an order, they go into the market and fill it at the least price possible. They sometimes sell the grain on board the vessel on this side, but or- dinarily it would appear that their price includes a delivery in Europe. Agencies are often maintained by them in Chicago, and it appears that they purchase grain to fill export orders in one of three ways. They may purchase the corn in the West, paying themselves the transporta- tion charges to the seaboard and so across the water. They may buy the grain F. 0. B. the vessel at some American port. This embraces all the charges which are necessary to deliver the grain upon the vessel, including the freight rate and the terminal charge ; or they may pur- chase the grain what is called C. I. F. Europe. These three letters signify cost, insurance and freight, and that kind of a contract calls for the delivery of the grain in Europe, or its equivalent in insurance money if the grain is lost. It appeared that these brokers themselves in recent times had almost exclusively confined their operations to the jiurchase of export grain either F. 0. B. at the Atlantic seaboard or C. I. F. Europe. Although their agencies still continued to be main- tained in some instances in the West, little or no business was trans- acted through them. This [634] was for the reason that they could purchase the grain F. 0. B. or C. I. F. cheaper than they could buy it in the West and pay the transportation charges themselves. The testimony of these gentlemen showed that the price of grain F. 0. B. or C. I. F. was not at all times the same through the different ports. Sometimes it could be exported cheaper through Baltimore; sometimes through Philadelphia ; and sometimes through New York ; but, on the whole, the preponderance of this testimony was that in the year 1896 prices had ruled cheaper through the outports than through New York. NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 177 We attach veiy little impoi'tance to this testimony. These brokers have no stock in trade. They have no expensive plant which they must utilize at a particular point. While for the most part they reside and have their principal place of business in New York, they can, with al- most equal convenience do business through any one of the three ports. It was conceded bj' all that a difference in cost of from i/s to y^ of a cent a bushel Avould divert grain from one port to the other, and these brokers always know what grain can be purchased for at each one of these three ports. The conclusive answer, therefore, to the inipiiry, through which port at a particular time was the price of grain C I. F. Europe the cheapest is found in observing through what port grain at that time actually moved. The complainant claimed that the operation of these differentials had been growing more and more burdensome to New York ever since 3882, and that matters had come to that pass that they were a menace to the commerce of that port, and in confirmation of this they insti- tuted a comparison of the exports of the commodities in question through the different ports for the years 1895 and 1896, from which a very striking falling off at New York appears. The interveners replied that while a comparison of the year 1896 with the year 1895 might show unfavorably to the port of New York, no comparison of any two single years could be a fair test, that the differences in those two years were no greater than might be observed between some other two preceding years if properly selected, that New York had not lost absolutely but only relatively, and that the loss to New York was not owing to any gain by Baltimore and Philadelphia, but to the fact that Norfolk, Newport News, Galveston and New Or- leans had become new [635] factors in the export situation, owing to the opening up and improvement of new lines of transportation to these ports. As bearing upon these contending claims a great mass of statistics was introduced upon both sides. All of this matter has undoubtedly some bearing upon this question. Much of it is interesting, but to re- produce it all, or to even consider it all in any finding of fact, giving to each piece of testimony its due weight, would be utterly impossible. We reproduce here sufficient of the tables introduced by the respective parties to show what their claims were and the nature of the testimony upon which they relied, and to also show in a general way the actual situation at these respective ports. The following is a table showing the total receipts and the total ex- ports of flour, wheat and corn in bushels at New York, Boston, Phila- delphia, Baltimore, Norfolk and Newport News for the years 1873 to 1896, inclusive. It is marked No. 6 ; 12 178 ATI.zVNTIC PORT DIFFERENTIALS o X o ■s,tt9js[ jiodAvax •Jliojjo^; •ajouiiJiBg •B!t[Cl[apBi!iid: ■Jiaoi A\8N Tji »-l . • ■«** OO t^ OS (M l^ t^ . . i. ) ,-1 C4 5q »Hr-li-((MC«<>*00«0-^OOi-HOCO«Olfttr5?C^i-tCsc^Oi-H05^W^OO!CH>rH ^- I-' I- i^ I' I- l>- og GC cc X ao X^ X GO cc a; c. r: Ci C:^ C; C; c:) > 00 00 :ft 00 00 oo 00 :c £» X «:- ':c X 00 'X 'jr- X X GO X X) » vj o; Jli ■etj O M 03 ■s.tt9N jJOdAvaxI ■JHOJJ0X+ •ajotuiJiBal •BiiidiapBiiilcl TBlox •J3JBAi pnB iBOBO iSg mn ^Q *1'-1<:DCOi-m^OiOSOOOOOOiOircOOCO OOOOCOi-HOOi-lcoe^-^O^Ot^Wi-i POC^COI^OCOOO-*rHi-*-^i-HrHCO-*-^-^QOOiat^rHt*rHf-H COlO-i^rH^OSC-lOC^COOOQOodoOOsCi-^COOOOiadQOI-^C'i^- t-Hi-ti-H(MC*i-i(M'Mr-it-H»-tf-(f-li-li-HrH(M(Mi-Hr-if-t.-ti-li-li-H CO^COt-tCOIMC^CSCOmOOIMOOWOOOt^COlCQOOOCOt^?©!-) *rPC^io05-*t-^:Old-«OOC50o6f-Ho6odt-^^o6w^r-4COCO 05t~OOC000X-*"»1^t^GNi^»ftlC03^O-^'^l^Si»ftCC)CC>0« COIfTClC-ltrM^COr-O-^O^-^CDIMOOi-HCOOinOOC^CO^ e^osM'Qoeoccci-^cdoDoooOM^cooL'icooooooifttoOJ COOi-IOTOCiOOT-'^OSir^t^rH-rt*f>ci^OO(X)COc>]CCt^^cii-»C:OOrHOOcit^T-(Oci (MCCCOC^WfNCO'MCOCOCCCOCOCOC^COCOtM'^OOC^fM-^COCO NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 170 [637] The table below, marked No. 7, states the relative i)roportioiis oi' the total receipts of tloiir and all kinds of grain, including oats, rye and barle}^ in bushels, including receipts of wheat, corn, oats, rye and barley, at the four named Atlantic ports for the years 1878 to 1896, inclusive : TABLE NO. 7. During year. New York, per cent. Boston, per cent. Philadelphia, per cent. Baltimore, per cent. Total per cent. 1878 55.7 10.0 16.9 17.4 100 1879 52.7 10.6 15.4 21.3 100 1880 53.4 11.8 15.9 18.9 100 1881 56.4 14.4 11.9 17.3 100 1882 59.3 15.7 10.9 14.1 100 1883 56.1 17.0 10.9 16.0 100 1884 56.3 17.5 10.6 15.6 100 1885 58.1 15.2 11.5 15.2 100 1886 57.3 16.3 9.8 16.6 100 1887 56 . 5 14.9 11.5 17.1 100 1888 57.6 16.5 9.8 16.1 100 1889 54.9 15.2 9.5 20.4 100 1890 51.5 13.3 15.7 19.5 100 1891 59.7 12.7 11.6 16.0 100 1892 52.2 12.1 18.0 17.7 100 1893 54.6 15.2 13.0 17.2 lOU 1894 52.6 16.5 14.6 16.3 100 1895 .53.6 16.6 12.9 16.9 100 1896 50.1 14.7 13.1 22.1 100 Average . . 55.1 14.5 12.8 17.4 Below is given the same table with the addition of Norfolk and New- port News, which shows the extent to which those ports have become a factor in the situation of recent years. It must be remembered that the exports do not necessarily correspond with the receipts. There is at New York for example an enormous domestic consumption, while at Newport News there is practically none. 180 ATLANTIC PORT DIFFERENTIALS Table No. 8. During New York, Boston. Phila. Baltimore, ♦Norfolk, ♦Newport News, per cent. Total year. per cent. per cent. per cent. per cent. per cent. per cent. 1878 . . . 55.7 10.0 16.9 17.3 0.1 100 1879 . .. 52.7 10.6 15.4 21.2 0.1 100 1880 ... 53.3 11.8 15.9 18.9 0.1 100 1881 ... 56.3 14.4 11.9 17.3 0.1 100 1882 . . . 59.1 15.6 10.9 14.1 o.'s 100 1883 ... 55.8 17.0 10.9 15.7 o!2 0.4 100 1884 . . . 56.1 17.4 10.5 15.5 0.5 100 188.5 . . . 57.8 15.1 11.5 15.1 0.5 100 1886 ... 55.8 15.9 9.6 16.2 2.5 100 1887 ... 55.7 14.6 11.4 16.9 0.2 1.2 100 1888 . . . 57.2 16.4 9.7 16.0 0.7 100 1889 . . . 54.5 15.1 9.5 20.3 0.6 100 1890 ... 50.6 13.0 15.4 19.3 1.8 100 1891 ... 57.4 12.2 11.2 15.4 0.9 2.9 100 1892 ... 50.4 11.7 17.4 17.1 0.6 2.8 100 1893 ... 52.7 14.6 12.5 16.6 0.4 3.2 100 1894 . . . 50.0 15.7 13.9 15.5 0.5 4.4 100 1895 ... 49.8 15.5 12.0 15.7 1.7 5.3 100 1896 . . . 44.7 13.2 11.7 19.7 4.1 6.6 100 *Total receipts at Norfolk and Newport News not procurable, hence the quantity exported has been taken as the quantity received. A statement was prepared under the direction of ]\Ir. Blanchard, Commissioner of the Joint Traffic Association, showing in tons the dead freight forwarded by the defendants to the points named for the years 1888 to 1896, inclusive. From that statement the following statement is taken, showing these facts with reference to flour, grain and mill stuff, provisions and lard, and also showing the grand total of all kinds of freight. This table is designated as No. 9 : NEW YORK PRODUCE EXCHANGE V. B. & 0. R. R., ET AL. 181 Table No. 9. FLOUE. Total Tons Forwarded by All Roads to Years. Balto. & Vicinity. Boston & Vicinity. N. York & Vicinity. Phila. & Vicinity. Norfolk, N. News, Kiehmond & Vicinity. 1888 105,324 25,812 34,173 26,235 39,094 33,530 25,953 32,126 30,423 42,402 21,350 19,818 21,857 31,193 47,284 27,179 33,101 29,818 62,437 41,923 37,334 45,966 57,932 73,275 54,299 85,565 82,043 39,754 29,995 25,144 34,595 40,861 45,377 25,953 29,345 31,420 1889 1890 1891 1892 . . . . 1893 .... 1894 1895 1896 . . . . 19,516 13,833 64,484 73,297 GRAIN AND MILL STUFF. 121,116 140,578 185,717 96,003 143,411 106,184 143,992 129,153 260.127 179,073 136,167 175,200 159,151 149,263 211,727 223,426 361,949 365,172 344,158 319,292 450,705 457,912 476,626 415,450 302,358 410,433 510,491 155,528 167,424 382,923 231,380 265,353 227,306 230,179 233,738 172.876 31,022 35,510 37,603 161,556 PROVISIONS AND LARD. 29,506 45,177 74,743 61,357 55,367 58,463 70,140 77,172 74,862 49,623 130,744 68,313 206,473 84,813 217,292 55,681 158,440 52,753 151,419 60,123 183,551 78,075 236,996 104,861 297,255 101,913 201,358 47,900 49,260 55,825 48,751 51,782 51,682 53,932 52,215 57.424 15,574 15,476 20,054 46,244 GRAND TOTAL. 349,695 341,150 441,736 306,965 390,515 353,568 376,240 380,496 497,561 381,237 354,227 412,593 358,997 370,169 496,359 .533,067 743,900 751,936 792,647 893,706 1,021,768 956,948 969,132 1,086,996 1,023,372 1,290,876 1,293,663 387,823 410,384 666,345 451,348 497,469 466,719 437,909 464,842 395,983 81,808 81,215 140,763 328,928 182 ATLANTIC PORT DIFFERENTIALS The complainant introduced a statement showing the number and tonnage of vessels in the foreign trade which entered at and cleared from the ports named during each year from 1882 to 1896, inclusive. The following are for the years 1882, 1886 and 1896 : Table No. 10. 1882. New York . . . . Boston Philadelphia . . Baltimore .... Norfolk Newport News No. Entered. Tonnage. No. Cleared. 6,525 3,018 1,313 915 53 7,360,843 1,416,231 1,055,961 852,575 51.728 6,180 2,950 1,156 856 140 Tonnage. 7,263,174 1,305,172 969,163 802,627 137,106 1886. New York . . . Boston Philadelphia . Baltimore . . . . Norfolk Newport News 5,719 2,595 1,348 541 63 33 5,558,938 1,184,108 1,155,066 521,470 56,483 23,712 5,388,335 1,018,921 895,486 607,868 145,092 224.568 New York . . . . Boston Philadelphia . . Baltimore . . . . Norfolk Newport News 1896. 4,378 2,194 1,070 613 50 6,911,782 1,757,291 1,421,081 895,093 63,095 159,719 4,065 2,182 936 685 154 372 6,552,614 1,523,096 1,214,683 1,067,543 203,058 607,265 The years 1882 and 1896 were selected by the complainant in its brief for comparison. Of all the years between 1882 and 1896 the tonnage at New York was the largest in 1882 and the smallest in 1886. These three years give a fair idea of the way in which the tonnage has averaged, and the entire statement need not be reproduced. The interveners upon the part of Baltimore and Philadelphia also introduced various tables showing the movement of the articles em- braced in this proceeding from all ports upon the Atlantic coast as well as from these ports in controversy. Table No. 11 shows the total export of wheat, corn and oats from the ports named for the years 1878 to 1896 inclusive and the percentage of the whole for each port and also for each commodity. It will be no- ticed that this table includes all the Atlantic and Gulf ports and also the port of Montreal. 1-1 t-r-|01 Ol'W If Oit- I~ WIN 00 C-W 00 CI-; ■-; c>n ■^ i^cJli-i ooi o i--^tD i^ odo> 00 c'td o6 r^oj o ceo t^o LT to 00 oT Ego CO 00 O* 00* ^o :f5 CO Oi feO ^" >n r-t l^ l-H CO 00 rHoT SIM CO 50ft c lf5 O 00 t-- Tji "^ CO CO 01 t- f- lO GO '^ oi oTco" CO 1-- '^ OlOi COOtH c>eo O ooco • t^ CO O C5 Ol -^ cc «OOl IS CO CO 05 oi co"co" cc o CO 00 ^o CO I~ CO S8S »0 CO CO ^o 6i d) CO CO "18 iH CO ^oo ^o ^o ^o coco M CO S§5 g:0 CO 00 ^Q CO in 00 g'^oco' ■* rH 00 U7; <0 CQ ^oo ^oo •rti I Ci i-H Ci CO CO CO CO CO IN l-H Oj-* QO t^ t^ OOO CO CO CO CCtk' ur^ LOCO CO GO IC C ir^ ■^ OiOOl^ ■^ O r- •-^t-oo woe-* O CO W CO (M ^OO CO lo ■* l~ oi in 0pO3 o t^coco citdoi CO 05 00 if> ooej •* woo (M 05 t- 888 ^QO sss '* OOO r-l "* CO O C5 50 c lf3 t^ in r-t doi coo i-c S^ T-H CO ^oo ITS r-H CO -* -wo lO o t^ ^oo 05 o CO 05 1ft CO 1-, -rt- O CO ic -* CO i^_^ '- i-t C: CO 1-H <0 O; CO SS8 184 eowr oc «•»<•» ac ^ o 1 ^ o| & c & c ^«(r ■<» 00 h- r- tc ? 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O r ao I ? ^" oc \r^ aj t^ CB O PL, z c c c c c o c C c 1, c , c c a c , e -^ y >' X fc^ p. pL t fc u- M ■^ "o 'a "o "n c c c C C o c i- u i- ^ C-1 uo- - 1= = 00 00 •• 1= 1^ 1= 1 = f- 185 '^ o m < cu ' •M r-l in CM ^o ^o [so ^o ^? CO Ci t-i CO S3S I— o ;0 CO ■^ CO Oi ^O SS ^2 ^-S ^o 00 CM CM CO CO i-t CO CD cot-' gJ2 tr: * 3 cs QC r- [goo IS to :^ ^ « 2§ 1 i-O lO O CO CO S5 il 1 rH "^ "^ r~t CO to 05 rHOin la •weooc CO cow lO r- ii §8 T-H sii S COI- M< CO rl 1- -^ N tfiOi r^ CO ift t~ t-00 rH t-oo •M CO 1^ CO S lOCO 00 rH^ 05 to © S >oc feOC f%:OC ^oc kOC — < ■* 33 i m CO 05 CO 00 3 00 t- 3 coS 00 11 CT> CO ~r LO 00 O -11 05 CO o< o* to lO lo o 00 CO IM -* t~ 00 o 00 CO t c c 5 .1 5 H t4 o n a o 4J o a X a o Ut o O. X a o i ; tH o a X '■A a o : o ft "a o 1 t4 o o. iil a o rH fc-i o a X a o O a a o H 00 O a X a o 1 o a X W a o 1 : o a X a o 1 O a X a o H si 2 tH o a X Ui a o Eh CO in 3D o 1 o a X W "a o a 8 00 O 189 190 ATLANTIC PORT DIFFERENTIALS [643] Table No. 13 is a recapitulation of the average percentages for these different ports for the periods named: Table No. 13. Recapitulation. Ports. Summary of Percentages. 1878 to 1881 (inclusive) 1882 to 1895 (inclusive) 1882 to 1896 (inclusive) Portland Boston New York . . . . Philadeliihia . . Baltimore . . . . Norfolk Newport News 0.91% 7.00% 51.76% 15.13% 25.05% .15% .00% 100.00% 1.08% 8.18% 53.00% 10.95% 22.95% 0.76% 3.08% 100.00% 1.01% 8.. 53% 51.16%, 10.76% 23.20% 1.-59% 3.75% 100.0070 Table No. 14 shows the exports of wheat, corn and oats from Boston, New York, Philadelphia and Baltimore from 1878 to 1896, inclusive, together with the percentages, in each case, of the total shipments from these four ports. Table No. 15 shows the value of all exports from Bos- ton, New York, Philadelphia, Baltimore, Norfolk and Newport News for the years 1878 to 1896. together with the percentage of each port to the whole. These tables follow : NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL 191 Table No. 14. Shipments of Wheat, Corn, and Oats from Boston, New York, Philadelphia and Baltimore from 1878 to 1896, inclusive. Representing I'fiilnilcliiliia roniinercial l':xchange Philadclphin Oil Trade A.=soeiatioii Hardware Merehants' and I'hiiadclphia Hoar<) of 'I'rade Mastpr Builders' ICxeliange Manufiieturors' Association, Grocers' and Importers' I';xchange Mamitacturers' Club W. B. TUCKKR, Sec'y, Fliiiadelpliia l^roduce ExcliaDge 'J'lic 'I'radcs League of Philadelphia The Bourse, Room 248. BOSTON. NKW YORK. PHILA. 1 BALTIMORE. TOTALS. IST.s 1 1 53 510,363W 65.071 8,954,449W 19,6.52,8260 10.89 31.54 19,766,074W 16,543,8120 24.01 26.55 82,230,886 26,118,8920 41.91 62,315,580 1 Totals 10,r)02,388 6.77 79,629,255 51.36 28,607,275 18.45 86,309,886 23.43 155,045,804 1879 60, 541, 234 W 84,357,0570 55.94 49.38 16,814,572Wi15.53 30, 869, 104 W 21,155,4220 28.52 30.42 108,224,910 1 14,039,2280 20.18 69,551,707 I 1 Totals 11,057,454 5.85 94,898,291 50.25 80,858,800 16.34 52,024,526 27.55 188,834,071 18Sn 11,263,79SW 8.. 51 74,863,083W 56.. 56 ]1,312,.590W 16,579,6450 8.54 23.99 34,923,152Wi26.38 14,604,3640 21.18 132,362,623 3,275,6650 4.74 34,646,0890 50.13 69,105,762 Totals 14,539,463 7.22 109,509,172 54.35 27,892,234 I3.84I 49,-527,516 24.58 201,468,385 18S1 3,162,540W 8,006,0950 4.52 14.89 38, 366, 185 W 27,554,0770 54.91 51.26 8,892 260W 1?. 79 19,453,676W 12,097,3760 27.84 22.50 69 874 661 6,099,4340 11.34 58,756,982 Totals 11,168,635 9.08 65,920,262 58.32 14,991,694 12.12i 31,551,052 25.52 123,631,643 18S2 2 843 493 W 4.54 36,670,191Wj58.58 7,253,8950 '63.79 5,852,951W 808,5990 9.35] 7.10 17, 238, 469W 27.53 1,132,4070 9.96 62,600,104 2,174,3200 19.12 11,369,221 Totals 5,017,813 6.78 48,924,086 59.38 6,661,550 9.01 18,365,876 24.83 73,969,325 1883 1 989 748W 4 79 20,046, 29iw'48. 22 22,849,5200 ,53.14 4,096,297W 5,304,9430 9.85 12.34 15, 4.34, 689W 37.13 10,285,8750 28.92 41,567,025 42,995,347 4 555 009C po n9 Totals 6,544,757 7.74 42,895,811 50.72 9,401,240 11.11 25,720,564 80.41 84,562,872 1884 1,639,, 596 W 4,156,4830 3.26 20.44 26,767,296Wi58.32 9,442,2000 46.67 5,o66,173W 1,744,2520 11.09 8.57 16 217 600W R9 SI 50,190.667 20,385,945 4,948,0100 124.31 Totals 5,796,061 8.21 36,259,496 51.41 7,310,425 10.36 21,160,610 30.00 1 70,526,612 ]8S> 1, 680,022 W 3,778,8230 6.24 7.41 17, 111, 294W 63.60 27,214,1890 j53.39 3, 532. 192 W 13.18 5,929,2440 11.63 4 581 261 W T^ 0.'? 96 904 769 14,048,2870 27.56 23.92 50,970,543 Totals 5,458,&i5 7.01 44,325,483 56.92 9,461,436 ll2.15 18,629,548 77,875,812 1886 2,376,298W 3,025,6730 4.65 7.75 32 090 610W fi9 «S 6,079,146W 11.91 1,857,3530 4.76 10,475,395W 13,138,2290 •20.58 33.67 51 0^1 449 20,996,7050 53.81 39,017,960 Totals 5,401,971 6.00 53,067,815 58.96 7,986,499 8.81 23,613,624 26.23 90,089,409 1887 3,963,925W 2,313,9580 6.06 9.74 41, 886, 049W 63.75 12,306,2720 51.85 8,774,174Wil3.35 1,996,5830 8.41 11,057,290W 7,115,8140 16.83 29.98 65,701,488 23,732,627 Totals 6,297,883 7.04 54,192,321 60.59 10,770,757 12.04 18,173,104 20.32 89,434,065 1888 1,210,666W 3,245,8200 6.4: 14. 6£ 12,609,242W:66.88 949.844W 859,3710 5.08 3.89 4, 082, 508 W 8,741,9140 21. 6t 16.94 8,852.260 14,236,1810 64.46 22,083,286 Totals ...... 4,456,486 10.8J 26,845,423 65.58 1,809,215 4.42 7,824,422 19.11 40,985,546 1889 459,111W 7,135,9330 2.74 12.61 10,784,303W > 28,786,9770 64.41 51.05 1,110,606W 3,640,8160 6.63 6.45 4,389,790W 16,822,8080 26.21 29.8C 16,743,810 56,386,034 Totals 7,595,044 10. 3f ! 39,571,280 54.11 4,750,922 6.49 21,212,598 29.01 73,129,844 1890 525,287W 4,500,7030 515,8780 2.K 6.8« 4.9; 12,569,286W 67.8? 61 7, 876 W 16,735,5210 12,5870 3.33 25.63 0.12 4,803,453W 19,447,1440 617,0530 25.9 29.7^ 5.9( 18,515,902 ) 24,600,1470 37.68 5; 9,301,0460 89.04 65,283,515 <> 10,446,564 Totals . 5,541,868 5.8 H 46,470.479 149.31 17,365,984 18.42 24,867,650 26.3. . 94,245,981 192 ATLANTIC PORT DIFFERENTIALS Table No. 14 — ( Continued) . BOSTON. NEW YORK. PHILA. BALTIMORE. TOTALS. Igf)l 2,787,125W 3,897,5650 35.4060 3.85 16.56 0.98 46,957,113W 64 98 6,840, 503W 2,606,6770 300,8570 9.46 11.08 8.70 15,673, 334W 3,852,9110 5480 21.69 16.36 72,258,075 13,180,3980 3,205,4660 55.99 90.25 23,539,546 ,. 3,. 551, 277 Totals 6,720,096 6.76 63,342,972 63.75 9,759,037 9.82 19,526,793 19.65 99,348,898 1892 7,501,903W 2,971,8580 73,7450 8.86 4.85 1.64 50,813,295W 18,786,8010 3,742,8120 60.03 30.67 84.37 9,762,594'W 19,779,8760 446,4780 11.. 53 32.29 10.06 16,567,652Wjl9.57 19,707,2570 132.16 172,2710 3.88 84,645,444 61,245,792 • > 4,435,306 Totals 10,547,506 7.02 73,342,908 48.79 29,988,948 19.95 36,447,180 24.24 150,326,542 1893 5,275,276W 5,241,1700 3,6510 8.48 18.05 0.05 38,047,932W 61 18 5,723,510W 3,865,6330 103,4000 9.20 13.31 1.54 13,141,293W|21.13 7,122,3500 |24.53 1,380,2-550 j20.64 62,188,011 12,802,0390 5,197,0070 44.09 77.75 29,031,192 6,684,313 Totals 10,520,097 10.74 56,046,978 57.24 9,692,543 9.90 21,643,898 j22.ll 97,903,516 1SH4 .5,S12,828W 3,823,6350 2,3500 13.21 15.00 0.61 25,141,494W 11,406,7110 382,8050 57.16 44.76 99.34 4,487,496W 2, 577, .5400 1690 10.20 10.11 8,543,685W,19.42 7,676,8620 30.12 43,985,503 25,484,748 <• 460 385,370 Totals 9,638,813 13.80 36,931,010 52.88 7,065,205 10.11 16,220,593 23.22 69,855,621 \f--5 '^ S O Pm ^ Z Q :z; o ^ >H J CO OS !S -M H O) ^ r^:: J -M <; a ■^i-l O M o o •1-^ m f^ o CQ c3 o6 1—1 g "S o (/J CI n ^ ;h w ■^ fl J < »-^ P3 X a; ^ o ^ H CS -tj § O -*-> 2; CO i? H -t-' ^ u o O ft O) ^ S -^ o o M SH o R O M ^ O OJ O) (Ih 3 > ;^ 03 ;» h-H > ^ o «— 4 o .s -t^ cr> > o c^ r^ QO •l-> I—I m o Oi -M > t/) be t^ 00 GO 1—1 I— 1 02 o ai >j H) ^ ca -t-i H u o w -' c -^ o S •»0 Jaj •?0 aaj ■40 J3 ^ 1-* "^i lo ic ic cj5 CO 2> «5 1- »ra CO «o (M~M< (MOSCOlCCOCOODOrHCMCOXCOOWO ur>(^<£>t-^i-iQ6<»o6cooadcdw )i-HCiCpCi<©COO>COOSi-H«[li^Oc* 'tNiCf-Htn»ftMOcoeoi— iCO*" Oi -* ^ CO c l- l-H OT O I CCI>-'^Qg00CCiCr-'*^i0l-CN'^»ftdoi;OOi-«'^»-Ha:coco r-iC0r-i6lr-ir-i r-( r-KMCN eocci>oo<0'^r^ooo©i-i'*Oir-Hi>.!?jOTOO':o oioiodoicoQQoiQOodoiododf^oocooo OicocoTr'r*'^CCCtNi-'-»'r;-cpr-(Mc t- C5 r- Q c Oi t CO ic < t^ CO CI -^ <: 'i^osi:^G05pcoco';0;ococOiCrtW '0'-'i>coK(^iln<^iQOcooC;'<»'^?o ' o r- o CO CO 'O' i-H -- ■- ■- --^ -■ - — ^ lo r- t- Oi i -^ -V ■^ -^ lO lO I OiCOt^CO'^OOiOC^i-lt^OOi-HXCOiftXMtCC'CQ OOrHi-HrHrHrHr-IrHdOrHoioOi-HaSrHC^* 'jr"®S2*^'^'~'*^fe:^^S?^ ^f-HOOinoit^cob- CO 1^ i-(CDe^3Qb-QiO5Oi CO'^Q^QiircC'^^'-'ClCOt^i— 'OOLOOOOt^ Oi"^iCCiiOl-O00"^'^OG0t-00C'iI--C0CO00'--i ;QOi— lOiC^i^COQO'-'CtJ^OCirH iCOcOcOi^COi040«Dcococot"- T\* r-H rH Ci O < trtt^T^O'^iOOiCOJC^C'iAOOOCOCOOr-* '^*cococo«e^o4'oic^'oic>ieie^w6^ ift ^ Oi CO CO Ol »ft < a0^OSG0-<6 (Jii^it^CiQOOicoOscOiOi-'co'dinoOQoOO'O O;T-i;^000pOlC^'*OiC0'*C^'^»OrHlftI--COIr^ oOOOif-i05u^Tfooco»ni--Wr--< "I-l CO - 198 ATLANTIC PORT DIFFERENTIALS [648] We have caused to be compiled from the government records the following table, marked No. 19, showing the total value of all im- ports and exports through the Atlantic and Gulf ports for the years 1895, 1896, and 1897, together with the percentage of each port to the entire group for the year 1897, and also the percentage of each port to the total imports and exports of the United States for the same year : Table No. 19. IMPOKTS. Ports. 1895. 1896. 1897. P.Ct. Total. P.Ct. Group. Boston New York . . . . Philadelphia . . Baltimore . . . . Norfolk Newport News New Orleans . . Galveston . . . . Total Boston New York . . . Philadelphia . . Baltimore . . . . Norfolk Newport News New Orleans . Galveston ... Total $66,889,118 477,741,128 48,802,676 12,260,706 268,330 1,032,849 13,861,507 369,575 $79,179,864 499,932,792 43,840,836 13,476,630 219,350 1,131,628 13,471,142 602,770 $90,178,419 11 80 480,603,580 62 85 48,072,672 6 29 11,371,193 1 49 121,858 02 1,169,315 15 16,618,727 2 17 779,101 10 $648,914,865 84 87 13 89 74 06 7 41 1 75 02 18 2 57 12 100.00 EXPORTS. $85,505,196 325,580,062 35,043,093 61,938,991 7,792,572 13,469,541 68,413,362 41,886,651 $95,851,004 354,274,941 39,567,376 66,398,905 6,761,484 14,850,117 80,986,791 36.397.091 $100,857,281 391,679,907 47,305,273 85,692,651 18,581,532 22,109,575 101,494,120 58.198.174 $825,918,513 9. 37. 4. 8. 1. 2. 9. 5. 60 12.22 27 47.43 51 5.72 15 10.37 77 2.25 10 2.68 66 12.29 54 7.04 60 100.00 The complainant contends that an inspection of all these statistics shows that since 1882 the export business in grain and provisions has been gradually leaving the port of New York and that this is especially marked in the year 1896. In explanation of this last named fact, it further contends that during most of the time the differentials, while existing nominally, have not in reality been maintained, but that be- ginning with 1896, they were rigorously maintained and that for that reason the result in 1896 [649] is a fair test of what differentials will do, and conclusively demonstrates their unfairness. Several witnesses were introduced who testified that rates generally were not maintained, and that probably means that the differentials were not maintained. For the purpose of showing, however, that they NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 199 were maintained in 1896, the complainants introduced George R. Blancliard, commissioner of the Joint Traffic Association, who testified, in substance, that after the taking effect of the Joint Traffic Associa- tion agreement, on the 1st of January, 1896, rates were better main- tained than tliey had been at any time for a kmg period except for something like a year or a year and a half after tiie Act to Regulate Commerce went into effect, which was April 1, 1887. Mr. Blanchard did not profess to say that at the time of the giving of his testimony, about IMarch 16, 1897, rates were being maintained, nor did he dis- tinctly state how long they had been maintained, nor the extent to which they had been maintained, but simply gave his impression in general that they were better observed in 1896 than at any other period, except a year or thereabouts immediately following the enactment of the Interstate Commerce Law. There is no testimony in this case, and we have no information from which we can form even a reasonable conjecture as to the extent to which these differentials have been on the whole ignored from 1882 down. It seelns to be tacitly admitted that they have been to some ex- tent, some witnesses thought to a great extent. The testimony upon this subject was only fragmentary. It applied to no definite time and it gave no definite figures. It was simply an impression. There was, however, tey cimony in the case which tended to show that during the year 1896 and in the early part of the year 1897 these rates were not maintained. Witnesses testified that corn F. 0. B. the vessel could be and had been bought at Baltimore and Philadelphia for between 3 and 4 cents a bushel less than it could be bought for in New York. Other Vvitnesses testified that at times corn could be purchased F. O. B. New York cheaper than it could be at the outports. The differential is 2 cents per hundred in favor of Philadelphia and 3 cents in favor of Baltimore. This would, roughly speaking, amount to 1 cent a bushel on corn to Philadelphia and l^^ cents a bushel to Baltimore. The dif- ferential, therefore, would not [650] account for the difference in price between those ports and New York, nor would anything else account for it, except the fact that a better freight rate was obtained to those ports for the time being. The fact that export dealers, having houses in Chicago where they could buy the corn and pay their own transpor- tation charges and where in past years they had to a very considerable extent transacted this business, did not during the year 1896 buy corn there at all, because they found it cheaper to buy it upon the seaboard, indicates that the rate charged was not the open and published rate, but that the persons of whom tliey purchased corn at the seaboard en- joyed certain advantages in the way of transportation facilities which 200 ATLANTIC PORT DIFPER]ENTlA"Lg they did not enjoy. The Joint Traffic Association was formed for the purpose among others, of maintaining the published rates, and the members of that association undoubtedly entered upon the execution of that agreement with the resolution that rates should be maintained. That, together with the machinery of the association, undoubtedly re- sulted in the better maintenance of rates for a time, but for how long a time it is altogether impossible to say from any testimony before us. There is nothing in this case upon which any finding of value as to the maintenance of rates at one time and their non-maintenance at another time can be based, and we cannot undertake to make any finding of that sort. The testimony upon the part of Baltimore tended to show that the Baltimore & Ohio Railroad during the years 1893, 1894 and 1895, and possibly some preceding years, was so crippled financially that it was in no position to compete actively with other lines for this business, but that in 1896, owing to large expenditures by the receivers, it did be- come able to enter such active competition. The probability would seem to be that these different lines leading from the West to the sea- board have felt themselves entitled to about a certain part of this busi- ness. When they have been able to obtain that at the tariff rate the tariff rate has been maintained. When, in order to obtain the busi- ness, it has been necessary to reduce the tariff rate, it has been reduced. When the Baltimore & Ohio Railroad was in shape to do the business it got the business to do, and every other line in the same way. The complainant alleged that New York enjoyed certain [651] ad- vantages which entitled it to the larger share of this export business. The interveners insisted that the port of New York labored under cer- tain disadvantages. Some of these relative advantages and disad- vantages have been referred to. New York has the largest and most accessible harbor, but, upon the other hand, its port charges are heavy. Its advantages arising from the great accumulation of wealth and con- centration of business at that point need not be referred to here. They are matters of common notoriety, and the extent to which New York enjoys those advantages abundantly appears from the tables herein- before given. There are certain elements which may be peculiar to the handling of grain and which perhaps ought to be especially referred to. The first of these is the elevator storage capacity. That of the four ports is, in bushels, about as follows : New York 30,075,000 Boston 4,550,000 Philadelphia 3,925,000 Baltimore 5,350,000 NEW YORK PRODUCE EXCHANGE V. B. & 0. R. R., ET AL. 201 Practically all the storage capacity at Boston, Philadelphia and Bal- timore is owned by the railroad companies, while at New York private companies own 24,075,000 bushels. This great storage capacity in and around New York enables the carrying by private parties for innne- diate delivery of very considerable stocks of grain, and the testimony showed that grain, especially wheat, was so carried to a very considera- ble extent. New York, as already said, has a grain market of its own, and it is possible to buy there at almost any time for immediate de- livery. The great storage capacity at New York also permits the bring- ing of grain during the canal season and the storing of it against the time when it must be brought in upon the higher all-rail rates. The canal gives New^ York another advantage to the benefit of whieli it strenuously insisted it was entitled. It is well known that grain can be brought via the Great Lakes and the Erie Canal to New York by water, and that the cost of transportation by this means has heretofore been ordinarily considerably less than by rail. The comparative water and rail rates from 1878 to 1896, inclusive, appear in the following tables. The first of these. No. 20, states the rates per bushel by lake from Chi- cago to Buffalo [652] and by canal from Buffalo to New York on wheat and corn. The second. No. 21, gives a combination of these two rates, showing the total rate per bushel by water from Chicago to New Y'^ork. This last rate is exclusive of elevator charges. The third table, No. 22, gives the average rail rate for the same period from Chicago to New York by the bushel, while No. 23 states the same rates by the hun- dred pounds. 202 ATLANTIC PORT DIFFERENTIALS Table No. 20. Season Averages of Lake and Canal Freights from 1878 to 1896, INCLUSIVE. Chicago to Buffalo. Buffalo to New York. Lake. Canal. Wlieat, 60 lbs. Corn, 56 lbs. Wheat, 60 lbs. Corn, 56 lbs. Cents. Cents. Cents. Cents. Season 1878 . . . 3.07 2.85 6.08 5.46 1879 . . . 4.74 4.27 6.86 6.17 1880 ... 5.76 5.34 6.51 5.80 ' 1881 ... 3.44 2.97 4.75 4.30 1882 ... 2.50 2.29 5.39 4.94 1883 ... 3.41 3.10 4.96 4.56 1884 . . . 2.18 1.94 4.13 3.70 1885 . . . 2.02 1 . 83 3.85 3.55 1886 . . . 3.68 3.42 5.03 4.56 1887 . . . 4.13 3.82 4.38 4.06 1888 . . . 2.56 2.32 3.37 3.09 1889 . . . 2.51 2.26 4.38 3.93 1890 . . . 1.96 1.69 3.89 3.41 1891 ... 2.38 2.20 3.. 58 3.16 1892 . . . 2.19 1.94 3.42 3.09 1893 . . . 1 . 66 1.45 4.65 4.26 1894 ... 1.27 1.13 3.17 2.86 ' 189.5 . . . 1.92 1.76 2.19 1.95 1896 . . . 1.58 1.42 3.71 3.51 Table No. 21. Season Averages of Lake and Canal Freights prom 1878 to 1896, inclusive. Chicago to New York, VIA Buffalo. Wheat 60 lbs. I Corn, 56 lbs. Cents. 1 Cents. Season 1878 9.15 8.31 1879 11.60 10.44 " 1880 12.27 11.14 1881 8.19 7.26 1882 7.89 7.23 " 1883 8.37 7.66 " 1884 6.31 5.64 1885 5.87 5.38 " 1886 8.71 7.98 1887 • 8.51 7.88 " 1888 5.93 6.89 5.41 1889 6.19 " 1890 5.85 5.10 " 1891 5.96 5.36 " 1892 5.61 5.03 ' ' 1893 6.32 5.72 1894 4.44 3.99 " 1895 4.11 3.71 " 1896 5.29 4.93 NEW YORK PRODUCE EXCH-tiNGE V. B. & 0. R. R., ET AL. 203 Table No, 22. Statement showing the average rail rate on wlieat and corn from 1S78 to 189G, inclusive. Kates in cents per bushel. From Chicago to New Yoek VIA All Eail. Year. Wheat. Corn. 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 17.62 16.44 17.36 16.20 19.65 18.34 15.02 12.84 14.66 12.85 16.18 15.10 13.57 12.67 12.89 12.03 15.09 14.08 15.67 14.63 14.71 13.73 14.85 12.69 14.39 11.35 15. 14. 14.09 13.15 14.74 13.75 12.38 11.56 12.17 11.36 11.11 10.37 Table No. 23. Statement showing the average rail rate on wheat and corn from 1878 to 1896, inclusive. Rates in cents per hundred pounds. From Chicago to New York via All Rail. Year. Wheat. Corn. 1878 29.36 28.93 32.75 25.03 24.43 26.96 22.62 21.48 25.15 26.12 24.52 24.75 23.99 25. 23.49 24.56 20.64 20.29 18.52 29 36 1879 28.93 1880 32.75 1881 22.92 1882 22 95 1883 26 . 90 1884 22.62 1885 21.48 1886 25.15 1887 26.12 1888 94 52 1889 22.66 1890 20.26 1891 25. 1892 23.49 1893 24.56 1894 20.64 1895 20.29 1896 18.52 204 ATLANTIC PORT DIFFERENTIALS In comieetioii with the subject of the canal and canal rates, it is proper to notice the testimony of I\Ir. Depuy, the owner of a fleet of canal boats, who asked leave to appear before the Commission in this matter, Mr. Depuy stated that the elevator charges at Buffalo and at New York were a most serious handicap to the transportation of grain by canal, and that these charges were to a very considerable extent illegal and excessive. The statute of New York fixes % of a cent per bushel as the charge for elevating grain in that State. It is not possil)le, however, to obtain the transfer of grain at Buffalo from a lake vessel to a canal boat for that price. In addition to the % of a cent a charge of I/4 of a cent for storage and $1.65 per thousand bushels for trimming is made. These amount upon a hundred thousand bushels to $415. The legal charge for rendering that service, according to the claim of Mr. Depuy, would be $625, while the actual charge for transferring 100,000 bushels from the vessel to the canal boat is $1,040. At New York, the grain is sometimes stored in private ware- [655] houses and sometimes placed directly upon the vessel. If stored not to exceed ten days in a private warehouse, and from thence taken and put into the vessel, the cost per 100,000 bushels, according to Mr. Depuy, is $1,812.50. If it goes directly from the canal boat into the vessel the cost for the 100,000 bushels is $1,250, which is the charge made by the floating elevator for transferring the grain from the canal boat to the vessel. Of this charge Mr. Depuy says that $625 is legal and the balance illegal. The floating elevator charges % of a cent for elevating, % of a cent for trimming and I/2 cent per bushel for moving the elevator from place to place, making in all a charge of II/4 cents per bushel as against the statutory charge of % of a cent per bushel. The terminal charges, therefore, necessarily incurred in taking 100,- 000 bushels of grain from the vessel at Buffalo and putting it upon the vessel at New York are $2,290, of which Mr. Depuy says $1,010 are il- legal. He further insisted that the railroad companies themselves owned the elevators at Buffalo and made from their operation by transferring canal grain at this price a very large sum, insisting that the actual cost of elevating grain did not exceed 1-32 of a cent per bushel, and that the statutory charge of % of a cent per bushel was 21/2 times what the elevators had previously charged in open competition before the elevator trust at that place was formed. We should hardly base any finding of fact upon this testimony, nor does the subject seem to be very material to the disposition of this case. NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 205 We refer to it as an item of some importance in determininji; possibly vrhy the canal brings less grain to New York now than in former years. The average rate of transportation by canal from Bnft'alo to New York in the year 1895 was about 2 cents a bushel, so that the terminal charges upon 100,000 bushels during that season must have considerably ex- ceeded the total freight money. It was contended by the interveners that the system of grain inspec- tion at New York worked to the disadvantage of that port. It ap- peared that grain which graded No. 2 at Chicago would take the same grade at Boston, Philadelphia or Baltimore, while at New York it might grade as "Steamer," that being the next [656] lower quality. The principal difference between Steamer Corn and No. 2 seemed to be that the former was somewhat damper than the latter. The ele- vators at the port of New York in the process of elevating subject the corn to a blowing operation by which it is dried, cooled and to some extent relieved of foreign substances. It appeared to be admitted that corn which graded in as Steamer after being subjected to this process almost invariably graded out for export as No. 2. It did not appear exactly what the difference in price between No. 2 and Steamer was. It seemed to be generally understood that Steamer Corn at New York was available for export as No. 2, after being treated in this manner, and the price may ver}^ likely have been affected by that understand- ing. At times there was a difference of 2 or 3 cents a bushel. At times there was practically no difference, and the rule seems to have been that the difference was slight — not usually exceeding 1 cent or 11/^ cents a bushel. Whether this worked to the disadvantage of New York did not clearly appear. It did seem that it was generally understood that the inspection at New York was more rigid upon inward grain than at other ports, so that the seller in the West did not always obtain at that port the grade to which he conceived himself entitled, and this operated to render New York unpopular as a market. Upon the contrary, if the merchants at New York can pay for Steamer Corn and export the same corn as No. 2, that must be a considerable advantage to them. CONCLUSIONS, The questions presented by this record upon the foregoing facts are of very considerable importance. The differentials in case of every locality except Boston apply not merely upon freight intended for ex- port, but upon all traffic forwarded to these points. In order to abolish the differentials it would be necessary either to raise the Baltimore and Philadelphia rates, or to reduce the New York rate. If the New 206 ATLANTIC PORT DIFFERENTIALS York rate were to be reduced it would amount, upon all the traffic to which that differential applies, to the loss of nearly $1,000,000 per year. If the Baltimore rate were to be raised to the basis of the New York rate, that would add about the same amount to the revenues of the lines serving localities south of New York, and in each case this [657] would mean an addition to or a subtraction from the net revenues of the com- panies. This is upon the assumption that the volume of traffic con- tinues the same ; but the purpose of a differential is to influence the flow of traffic and the abolishing of these might divert to the New York lines such quantities of freight as to seriously deplete the revenues of the southern lines. It is, therefore, from the standpoint of the car- riers, a most delicate matter to attempt to modify these differentials, and this is sufficiently shown by the fierce contests which resulted in the adoption of those now in force. Upon its part the complainant insists that some relief of the kind asked for is of vital consequence to New York. In 3882 something more than 50 per cent, of all the wheat, corn and oats exported through the Atlantic and Gulf ports went out from the port of New York, while in 1896, this per cent, had fallen to a little more than 25, and the de- cline from 1895 to 1896 was shown to be more than three-fourths of the total shrinkage. Now, the complainant says that while New York may for a single year, or for two or three years, continue to hold its import trade, notwithstanding the loss of its exports, eventually imports will flow in through the same ports from which exports go out, and that if the larger part of grain exports are diverted by these differentials from New York, the result will eventually be the loss to that city of a cor- responding amount of its foreign trade, so that this condition of things becomes a most serious menace to the commerce of that port. Philadelphia and Baltimore, upon the other hand, strenuously insist that to abolish these differentials would take from them the little for- eign trade which they are now enabled to obtain. It should be noticed in the outset exactly what the relation of the Commission is to the questions presented. It seems to have been more or less assumed upon the hearing and discussion of this matter that the Commission was vested with authority to revise the action of the de- fendants in the making of these differentials, and that the same con- siderations would address themselves to us in passing upon their cor- rectness that the defendants ought to have considered in putting them in force. This is entirely wrong. Our function is not that of the Advisory Commission of 1882. We are not discharging the duties of arbitrators selected to determine [658] between the different carriers upon the fairness of these differentials. Our only jurisdiction is to NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 207 iiKliiire whether the Act to Regulate Commerce has been violated. That law does not seek to infere with the business operations of carriers sub- ject to its provisions until those operations contravene the provisions of the act itself. Take the situation presented by this case. Here is a vast amount of freight to be transported from the West to the Atlantic seaboard, and here are these various line of railway so situated that they can par- ticipate in that transportation. Now, considering this as a business proposition from the standpoint of the carrier, we have nothing what- ever to do with it. The railways may make whatever rates, form whatever lines, establish whatever differentials, they may deem best for the purpose of securing and conducting that transportation. AA^hether in so doing the3^ act wisely or unwisely, fairly or unfairly between themselves, we do not inquire. Our only inquiry is, does the situation which the carriers have created violate the Act to Regulate Connnerce. That this is the extent of our authority is now settled b}^ the decisions of the United States Supreme Court. Interstate Commerce Commis- sion V. Baltimore & Ohio R. Co., 145 U. S. 263, 36 L. ed. 699, 4 Inters. Com. Rep. 92; Texas ct- P. R. Co. v. Interstate Commerce Commission, 162 U. S. 197, 40 L. ed. 940, 5 Inters. Com. Rep. 405; Interstate Com- merce Commission v. Cincinnati, N. 0. & T. P. R. Co., 167 U. S. 479, 42 L. ed. 243 ; Interstate Commerce Commission v. Alabama Midland R. Co., 168 U. S. 144, 42 L. ed. 414. The question before us for consideration is, therefore, whether these differentials are in violation of the Interstate Commerce Act. The complainant alleges that they are in contravention of the third section of that act, for the reason that they discriminate against the locality of NcAV York and in favor of the localities of Baltimore and Philadel- phia. It should be noticed in this connection, upon the authority of the cases above cited, that it is not sufficient to show the fact of such a discrimination. Railway companies are not prohibited by the third section from preferring one locality to another unless that preference amounts to an undue or unreasonable one. This phase of the law does not seem to have been nmch dwelt upon in the argument, but it [659] is important that it should be fully appreciated. It is insisted that these differentials give an undue preference for the reason that they are without excuse or justification. If the assumption of fact em- braced in this statement is true, the conclusion probably follows. A preference without legitimate excuse would be in and of itself an undue and unreasonable one. It is therefore proper to consider at the very outset upon what alleged pretext the defendants have instituted these differentials. 208 ATLANTIC PORT DIFFERENTIALS A good deal has been said in various parts of the case about differ- ences in distance and differences in cost of service, and these alleged advantages in favor of Baltimore and Philadelphia have been earnestly relied upon by the representatives of those localities in justification of the preference which they receive. An examination of the whole ease plainly shows, however, that while these elements may have to some extent entered into the determination of the question by the de- fendant carriers, the controlling purpose of the differentials is to dis- tribute between rival railway lines the export traffic which moves from the West to the Atlantic seaboard. Very large quantities of grain and provisions are exported from the United States to foreign countries. This traffic originates in the West and the defendant lines are so situ- ated that they can carry it to the ports of export. If it passes over one line it is exported through the port of New York ; if it passes over another line it is exported through the port of Baltimore. Now, the primary purpose of these differentials is, not to do justice to a par- ticular port, nor to recognize the advantages of a particular port, but to enable the various competing lines to obtain a fair proportion of this traffic. In other words, the reason for these differentials is competi- tion between railways. Cost of service and distance are very likely taken into account by the defendants in determining whether under the operation of the differentials a particular line has obtained more than its share of the traffic, but the underlying principle is competition. Upon no other theory could Boston, which is 88 miles farther from Chicago than New York, be given the same rate with New York, while Norfolk, which is 72 miles farther from Chicago than New York, has a rate of 3 cents per hundred pounds less. Do these competitive conditions justifj' the preference of one locality to another? It is clear under the recent decisions of the [660] United States Supreme Court, not that they necessarily do, but that they may. It was held in the Import Rate Case, Interstate Commeree Commission V. Texas & P. R. Co., 162 U. S. 197, 40 L. ed. 940, 5 Inters. Com. Rep. 405, that competition might justify a railway line between New Orleans and San Francisco in carrying merchandise as a part of a through shipment from Liverpool to San Francisco at a rate which yielded to that company for its division less than one-third of what it received for carrying the same kind of merchandise from New Orleans to San Francisco. In the Troy Case, Interstate Commerce Commission v. Alahama Midland R. Co., 168 U. S. 144, 42 L. ed. 414, it was deter- mined that railway competition did justifj^ the defendant in making a lower rate to a more distant point. Railway competition may, there- fore, excuse the giving of a preference to a particular locality or a par- NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 209 ticular commodity, i)rovi(led the interests of the public are not unduly sacrificed to those of the carrier. In the light of these cases it is difficult to see why it is not perfectly legitimate for carriers to make differentials like those in question. The Baltimore & Ohio Railroad extends from Chicago to Baltimore. It comes into competition with the lines running to New York for this export grain traffic. There are many kinds of traffic in which other facilities, like expedition, are of more importance than the mere ques- tion of rates, but in the case of this traffic where a change of Ys cent a bushel in the cost determines through which port it shall be exported, the rate is practically the only medium of competition, and the only way by which the Baltimore & Ohio Company can secure a share of this traffic is by making a rate in competition with the rate to New York which will secure it. If a lower rate is necessary it may make that lower rate, and it might make it even though the distance from Chicago to Baltimore was greater than the distance from Chicago to New York, and even though the cost of transporting that grain to Baltimore was greater than the cost of transporting it to New York. We think, therefore, that the prijiciple, upon which these differentials are made is legitimate, but it does not by any means follow that the differentials themselves are legitimate. A given preference may be justitiable under some circumstances, and not under others; to some extent, and not to a greater extent. Grant[661]ing that a discrimina- tion against a locality is excusable in theory, the question still remains whether under the third section it is undue or unreasonable, and that question is one of fact in each individual case. Upon the whole situ- ation, is the preference justifiable? This seems to be the rule of the cases above referred to. Evidently in applying this rule to a particular case the just interest of the carrier should be considered. Carriers are allowed to prefer one locality to another under stress of competition in some instances, for the reason that the interest of the carrier requires it ; but every prefer- ence is to a degree a hardship upon the community against which it is enforced, and that hardship should be, in a way, set over against the interest of the carrier. In this connection, what the Supreme Court of the United States, in United States v. Trans-Missouri Freight Assa., 166 U. S. 290, 41 L. ed. 1007, said of the relation of the railways to the public, "that they all primarily owe duties to the public of a higher nature even than that of earning large dividends for their share- holders," must be borne in mind. Still it is plain that the interest of the carrier is an important factor to be considered, and that in order 14 210 ATLANTIC PORT DIFFERENTIALS to justly estimate a given case it is necessary to know how the carrier as well as the public stands affected by the preference. In this case we have no information from the carriers' standpoint. The defendants appeared at the opening hearing, but gradually with- drew from participation in the proceedings until finally the contest be- came one between the three ports, New York, Philadelphia and Balti- more. We onlj^ know that the defendants have established and are maintaining these differentials, and we assume that tliey are satisfactory to them, and that any disturbance of them would be against their wish and against their interest. This is, perhaps, equivalent to saying that the complainant assumes the burden of establishing the fact that there is an undue preference. The complainant alleges tbat an examination of the basis upon which these differentials are constructed and the history of the differentials themselves show them to be manifestly unfair to the port of New York for the reason, first, that the pretended difference in cost of ocean freights from the various ports does [662] not exist, and, secondly, that, asuming the differentials to have been fair when they Avere first agreed upon in 1877, the changed conditions render them gros.sly un- fair at the present time. We will examine briefly these claims. The rates complained of are at the present time recognized and main- tained by most of the defendants through the medium of the Joint Traffic Association. Mr. George R. Blanchard, the commissioner of that association, stated in his testimony before the commission the theory upon which these differentials were fixed. As we understand bis testimony upon that point, it was this: A considerable part of the grain in question is actualh^ shipped from the city of Chicago. Al- most all of it is purchased upon the basis of the Chicago market price. Chicago may therefore be treated as the point of origin. The largest foreign market is Liverpool, and that, for the purpose of illustration, may be treated as the point of destination. Now, the object of these differentials is to make the cost transporting this grain from Chicago to Liverpool the same through all these ports. Perhaps, more accu- rately speaking, Mr. Blanchard testified that the purpose of the differ- ential was to equalize the advantages of transportation through these several ports, but inasmuch as in the exportation of grain, cost is the principal element, it comes to substantially the same thing. Now, if the purpose of the differential is to make the cost of exporting through the different ports the same, it is evident that in case the cost of carriage from the various domestic ports to the foreign ports is the same, then the cost of placing the grain on shipboard at the domestic ports should also be the same, but that any difference in the expense of NEW YORK PRODUCE EXCHANGE V. H. & O. R. R., ET AT.. 211 ocean carriage should be equalized by a c()rfespondin>i' (lirt'ci'cnce in the cost of inland carriage. Assuming that the cost of ocean carriage from Baltimore to Liverpool is 3 cents per liundred more than from New York, then the inland rail rate from CyJiicago to Baltimore must be 3 cents per hundred less, so that the total rate may be the same. This Mr. Blanchard says, is the theory upon which the differentials are de- termined. There are certain minor considerations, but, broadly speak- ing, the differential is supposed to correspond with and make good a difference in the ocean freight rate. In order to determine whether the present differentials are consistent [663] with that theory it is only necessary to inquire whether the existing difference in ocean rates cor- responds to the established differential. It will be seen by referring to the findings of fact tliat grain is car- ried either in full cargo shipments or at berth rates. It will be further seen that the full cargo rate is the same from each one of these three ports. There are certain minor differences in favor of New York and certain minor differences in favor of Baltimore and Philadelphia; Imt taken altogether, we are satisfied that i)ractically there is no difference in the expense of the ocean carriage of grain in full cargo lots from New York, Philadelphia and Baltimore. With berth rate business this is different, and New York enjoys very important advantages over either Baltimore or Philadelphia. In the first place the lines of steamship from that port reach more grain markets than can be reached from either Baltimore or Philadelphia. Then, the lines to all the principal grain markets are much more numer- ous and the sailings very much more frequent. All this gives the port of New York, in berth rate business of all kinds, a great advantage over either of her competitors in this proceeding, and we have found that this difference amounts to about 2 cents per hundred pounds as to both Baltimore and Philadelphia. From this alone it would follow — assum- ing this to be the only question involved in the establishment of the differential- — that there ought to be no differential upon full cargo business, and that the present differential is substantially right as to berth rate business. But there is no way in which full cargo grain can be distinguished in the matter of the freight rate from berth rate grain, and it is necessary to find some figure which will properly adjust the two. The articles involved in this proceeding are provisions, grain and flour. Provisions and flour are entirely shipped upon the bertii rate. Wheat, except in exceptional cases, is exported by l)erth rate. Corn more frequently goes by full cargo shipments. An idea of the relative amount of grain shipped by berth rate and full cargo can be obtained from tables 4 and 5. 212 ATLANTIC PORT DIFFERENTIALS The berth rate is very much less stable than the full cargo rate and, as a rule, lower than the full cargo rate. As a result, little or no full cargo business can be done until the berth space has been [664] ex- hausted. As was well said by counsel for one of the interveners, a full cargo business is only possible when the berth business has come to the point of saturation. It follows, therefore, that in years when grain exports are light the full cargo business is small, while in years Miien exports are heavy that business is larger ; and from this it further fol- lows, inasmuch as the full cargo business can be done more advantag- eously at Baltimore and Philadelphia than at New York, that in years of large grain exports Philadelphia and Baltimore ouglit to obtain much more of this export traffic than they do in years when the total amount of exports is small. This rule is not an invariable one, however, since other traffic conditions may make the supply of berth space larger in years of large exports than in years of small exports. It should be observed further that any finding of fact as to the rela- tive berth rates from these three ports for any one year or for any succession of years, especially for a series of years in the past, must be extremely unsatisfactory. The rate which is quoted and the rate paid for actual engagements are not by any means the same, so that it cannot be stated within the limits of perhaps a cent per hundred what the relative berth rates from New York, Philadelphia and Balti- more are. It will be seen, therefore, that any attempt to determine exactly the relative cost of ocean carriage from New York, Philadelphia and Balti- more of the commodities embraced in this proceeding is, for the reasons above stated impossible. It is possible to give the relative cost in the case of full cargo shipments. It is possible to give, within reasonable limits, the relative berth rates; but to combine the two and to say what will for a series of years be the difference in the cost of carrying flour, grain and provisions, and to make that the basis of a differential which will be strictly fair, is out of the question. Assuming that the differential is intended solely to equalize the dif- ference in ocean rates, we should be of the impression that there is no ground for a different differential at Baltimore than at Philadelphia, for we do not find that the cost of ocean carriage from those ports differs materially, and we should be of the further impression that the present Philadelphia differential just about equaled the difference in berth rates and M'ould be some[665]what too high as applied to both berth and cargo business. It should be observed, however, that New York enjoys certain advantages in reference to its berth business in addition to the mere difference in rate. Many ports can be reached in NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 213 this waj^ from New York which are not accessible at all from the out- ports. The sailings from New York are much more frequent than from the outports, so that it is possible to deliver small quantities of grain more frequently from that port than from the outports and to sell in many localities which cannot be reached from the outports at all. Just what the measure of advantage to New York in the fraction of a cent per hundred pounds on all the grain exported is, cannot be even intelli- gently' surmised. Taking this whole situation together, we do not think it could be fairly determined in advance what differential would be required to offset the advantages of New York over its rivals in the matter of ocean facilities. About all that can be done is to determine within probable limits what that differential should be and then decide from an observ- ance of the actual operation of the differential whether its eff'ect is a fair one. These differentials were established in 1877, and re-established, and approved by the Advisory Commission, in 1882. The complainants insist that assuming them to have been perfectly fair upon either of the above mentioned dates, they have, owing to changed conditions, be- come grossly unfair at the present time. Since the differentials are arbitrary, the rates differ b}' so many cents no matter what the New York rate may be. An examination of table No. 22 shows that in 1878, that being the year after the present differentials were fixed upon, the rate on corn from Chicago to New York was about 30 cents per hundred pounds. This would make the Baltimore rate 27 cents, or 90 per cent, of the New York rate. In 1882 the New York rate had fallen to 23 cents ; and the Baltimore rate would be 20 cents, or about 87 per cent, of the New York rate. In 1896 the New York rate was 18.5, and the Baltimore rate 15.5, or 84 per cent, of the New York rate. In other words, the gradual lowering of rates since these differentials were established has operated to make the Baltimore and Philadelphia rates relatively less in comparison with the New York rate than they were in 1878 or 1882. If the purpose be to establish a fixed relation between these rates and that relation was cor- rect then, it is wrong now. [666] So, too, in the matter of ocean rates. It seems to be pretty well established that the agreement of April 5, 1877, fixed the differen- tials at the present figure for the purpose of equalizing the difference in the cost of ocean transportation. The Advisory Commission in 1882 found a difference in the cost of such transportation which approxi- mately equaled the amount of the differentials. The testimony before us shows that this difference in the cost of ocean transportation has been 21-1 ATLANTIC PORT DIFFERENTIALS gradually growing less since 1882. "While no change has taken place in reference to full cargo shipments, the difference in berth rates in favor of New York is less now than it was then, so that if the differential is to be determined upon that basis it would seem that, if right then, it is wrong now. Again, a given differential has more effect now than when these were fixed. The price of grain in 1882 was more than in 1896. Corn sold in 1882 upon the Chicago market for about 62 cents as against 25 cents in 1896. It appeared in testimony that at the present time a difference in the total expense of exporting corn of i/s cent a bushel was sufficient to divert it from one port to the other, but it was said that in 1882 this would not have been so, since competition in this business had increased and the margin upon which the business was done had grown smaller so that % cent a bushel had become a more important factor. We think this contention of the complainant is well taken. The gradual lowering of rates, the shrinking of values, the increase of com- petition, have all operated to make the differentials in favor of Balti- more and Philadelphia mean more to-day than they did when agreed upon. A difference of 3 cents per hundred pounds was more effective in drawing export grain traffic through Baltimore in 1896 than in 1882. Just how far this makes out that the present dift'erential is un- duly preferential against New York will be considered farther on. The interveners earnestly insist that the preference granted to Balti- more and Philadelphia is justified by the fact that those localities are nearer the point from which this traffic originates, and that the ex- pense of rendering the service covered by the transportation rate to Philadelphia and Baltimore is less than at New York. For the purpose of determining to what benefit, if any, [667] these localities are entitled upon the score of distance, the short line to each port must be con- sidered. In this case the short line from Chicago to New York, Philadelphia and Baltimore is in all eases by the Penns^dvania Railroad, and is 912 miles to New York, 822 miles to Philadelphia and 802 miles to Balti- more. The distance from Chicago to Baltimore is 88 per cent, of the distance to New York, and that, when these differentials were first adopted in 1877, was almost exactly the percentage which the Baltimore rate was of the New York rate. At the present time the Baltimore rate on corn is about 84 per cent, of the New York rate. The complainant says that distance should not be considered as a justification for these differentials because it is habitually disregarded by the defendants and it instances the rates which are made by the defendants in this very case. Thus, the distance to Boston is NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 215 1 ,000 miles while the rate for export is the same as that to New York. Newport News is y-t miles farther from Chicago than is Baltimore, but it takes the Baltimore rate. Norfolk, Va., is 72 miles farther from Chicago than is New York, but it takes a rate 3 cents lower than New York. Now, the complainant says, since these defendants have dis- regarded the element of distance in the making of these very rates complained of they cannot be allowed to set it up as a justification in the case of a particular one of these rates. Distance is frequently disregarded by carriers in the making of their rates. The Commission has held that it may be under some circum- stances properly disregarded to some extent. It has been repeatedly said, however, that distance ought, when possible, to be regarded, and we have never held that a carrier would be compelled to disregard it for the purpose of putting two communities upon a commercial equal- ity. Commercial Cluh of Omaha v. CJiicago, B. I. t£- P. R. Co., 6 Inters. Com. Rep. 647 ; Freight Bureau of Cincinnati Chamher of Commerce V. Cincinnati N. 0. & T. P. R. Co., 7 Inters. Com. Rep. 180. It must be remembered that carriers are allowed a certain latitude in this respect. They may within certain limits regard or disregard distance, as their interest demands. If the Pennsylvania Railroad Company, by reason of competitive conditions saw [668] fit to make the same rate to New York and Philadelphia, it is possible that Phila- delphia could not insist that such a disregard of distance w^as unduly preferential, but it is clear to us that if the Pennsylvania Company elects to make a lower rate from Chicago to Philadelphia than to New York, it may show in justification of that rate that traffic for New York must be hauled through and 90 miles beyond Philadelphia. We also think that when New York asserts that the ditt'erential in favor of Philadelphia unduly prefers that locality, Philadelphia may reply that its advantage of distance entitles it to a lower rate. Distance is recognized as an element in determining the amount of a rate upon the assumption that it corresponds in a degree with the cost of service. It does not, however, necessarily follow that the greater cost of service necessarily goes with the greater distance. It is certain that the expense of transporting grain from Chicago to New York by the Pennsylvania lines is more than from Chicago to Philadelphia, for, by those lines, the transportation is through Philadelphia; but it is quite possible that it might cost less to transport grain from Chicago to New York via the New York Central than to Philadelphia, even, by the Pennsylvania. Nothing of that has been gone into in this case, and we are left to assume that the cost of transportation is measured by 216 ATLANTIC PORT DIFFERENTIALS the distance, for as a general rule, in the absence of exceptional con- ditions, the greater the distance the greater that cost. One subject has, however, been considerably discussed both in the testimony and in the argument which bears upon the cost of service, and that is the terminal charges and service at the various ports. It will be seen by referring to the findings of fact that the carrier at Baltimore or Philadelphia ordinarily receives V/i cents per bushel in addition to the rate for performing a somewhat less service than is performed at New York for the rate. The carrier to New York for putting the grain upon a barge and towing it to the side of the vessel receives the rate, whatever it may be, while the carrier to Baltimore or Philadelphia for a service equivalent to putting the grain upon the barge, without the added expense of lighterage, receives the rate and in addition 1^ cents per bushel. This li/4 cents amounts to more than the differential at Philadelphia, and, if the cost of lighterage be [669] added, to nearly the differential at Baltimore. Apparentl}^ this has the same bearing upon the questions involved as has the element of dis- tance. The defendants do not justify these differentials upon the ground either of distance or cost of service. We do not express an opinion that they could be justified to their full extent upon either of these grounds. They certainly could not in the case of Norfolk and New- port News. But we do think that in this inquiry between the three localities. New York, Philadelphia and Baltimore, in determining whether there is an undue preference, the advantage which Philadel- phia and Baltimore possess in the way of distance should be considered, and that the same is true of the additional expense of delivery at New York. The Advisory Commission of 1882 was apparently of the opinion that the most satisfactory test of these differentials was the result of their operation. Such must be the opinion of anyone who gives the matter careful attention. The problem is so complex, the factors which enter into it are so numerous and so impossible of exact esti- mation, that it is difficult of solution by any a priori process. Actual observation of the effect of these preferences is the best if not the only means of determining their fairness or unfairness. Complainant un- hesitatingly accepts this test and asserts that from this phase of the case more plainly than anywhere else does the justice of its contention appear. Indeed it was the very marked falling off in exportations of grain through the port of New York which alarmed the complainant and led to the prosecution of this proceeding. It is to this aspect of the case that the testimony has been largely addressed upon both sides. NEW YORK PRODUCE EXCHANGE V. B. & 0. R. R., ET AL. 217 In 1882, about 65 per cent, of all the exports from the United States exported through the Atlantic and Gulf ports passed through the port of New York. The same year 80 per cent, of all tlie imports into the United States by way of these same ports came in at the port of New York. It will be seen, therefore, that during that .year, being the year when the Advisory Commission pronounced upon the reasonableness of these differentials, New York practically engrossed the foreign trade of this country. A preliminary question is how far is the port of New York "entitled," or how far can that port expect to continue, to enjoy that commercial supremacy. [670] Plainly not to the same extent. It would be in accordance neither with the theory of our institutions nor with the history of the development of our nation to permit any one port upon our vast ex- tent of seacoast to monopolize the trade with foreign nations. Within recent years the United States government has expended in improving navigation to and at the port of Philadelphia about $9,- 500,000; at Baltimore $3,600,000; at Galveston $8,500,000; and at New Orleans, or upon the Mississippi River, of which New Orleans takes the benefit, about $8,000,000. These vast sums have not been appropriated and expended certainly upon the theory that it was desirable for the foreign trade of this country to tlow through the port of New York alone. Rather does this recognize it as the policy of our government that its foreign commerce should be distributed between various ports. Such is also the inevitable tendency of the developmeut of our coun- try. Hitherto that development has gone on in such a way that New York has been enabled to seize more of our export and import trade than would naturally belong to it. The lines of transportation leading to New York and the pecuniary interests concentrated at that point have been so strong as to divert both export and import traffic to that port which might naturally go to some other port. These same in- fluences will unquestionably continue to have the same effect in the future, but not to the same extent. Other strong influences are begin- ning to operate in favor of other ports. The distance from Chicago to New York is about the same as to New Orleans, and the water communication between Chicago and New York will, during certain seasons of the year at least, give New York an advantage as to traffic which fairly originates at Chicago. But a glance at the map of the United States shows that the grain-producing territory, much of it, lies between New Orleans upon the south and Chicago upon the north, and is most of it nearer New Orleans than New York. When this export corn moves to Chicago it moves away 218 ATI^ ANTIC PORT DIFFERENTIALS from New Orleans, or at least not towards it ; and the same thing is true of much of the export wheat. The distance from Kansas City and St. Louis to New Orleans is less than two-thirds that to New York. The Mississippi River and its tributaries give access to all this region. [671] A year ago the Commission inspected the terminal and har- bor facilities at New Orleans. Its docks are alread.y extensive and are capable of almost unlimited extension. There is no place in the United States, with possibly one exception, where grain can be transferred from the car to the vessel more cheaply than here. The grade from the grain fields to these elevators is an easy one. The corporations whicli operate the lines of railway leading to them are strong and aggressive. They will undoubtedly demand a larger portion of that traffic which is tributary to them, and will gradually acquire more and more of it, and this in its turn will bring to New Orleans a certain amount of those importations which now reach New York. The same thing is and will be true of Galveston and other ports. New York cannot expect, therefore, to occupy the same relative position of supremacy with ref- erence to our foreign commerce in the future that it has in the past. This is indicated b3' actual results up to the present time. In 1882, of all wheat, corn and oats exported through Atlantic or Gulf ports, 51.1 per cent passed through New York and 5.8 per cent through the ports of New Orleans, Norfolk, Newport News and Galveston ; while in 1896, 26.9 per cent, passed through New York, and 31.3 per cent, through the four ports above named. From one-half the whole, New York has fallen to one-quarter, and from practically nothing, these four ports have risen to about one-third. It would, however, be unfair to the position of the complainant to state that it was insisting in this proceeding upon tlie right of New York, as against the whole country, to retain the proportion of the export grain traffic which that port has formerly done. In 1896 of the grain and flour exported through the six Atlantic ports, Norfolk had 7.5 per cent, and Newport News 10 per cent. Until 1890 practi- cally nothing had gone through these ports. Export business is done through them now because lines of transportation have been opened up and strengthened from the West to these points and extensive terminal facilities provided. Now it does not seem to be the contention of the complainant that a portion of the export grain ought not to pass over these lines and through these ports ; nor is there any claim that these two ports should not be allowed the same differential, if any, as Balti- more. The com[672]plainant insists that each port is entitled to what it can fairly obtain, and that these differentials give to the southern ports an unfair advantage. The evidence of that is not that Norfolk NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 219 and Newport News, owing to recently provided facilities, have in- creased their grain exportations, but that Boston, Philadeli)hia and Baltimore have, under the operation of these ditferentials and without the assistance of any new advantageous conditions, gained as against New York. In other words, the complainant says that tlie fair test of these differentials is their actual working as observed at these four ports where the conditions have remained the same, and it is to these ports that they direct attention. For the purpose of comparison the complainant has selected the years 1882, 1895 and 1896. The alleged reason for this is that 1882 was the year of the Advisory Commission when the present differentials were approved, and 1895 and 1896 the last two years next preceding this investigation. The last half of Table No. 6 gives the percentages of exports of wheat, corn and flour, from New York, Boston, Philadelphia, Balti- more, Norfolk and Newport News for the years 1873 to 1896, inclusive. Those percentages for the years in question are as follows : 1882. 1895. 1896. 13altimore 9.6 61.5 7.5 20.7 13.7 47.6 7. 19.8 12.7 Philadelphia 33.7 New York Boston 9.5 26.6 The complainant says that a comparison of 1882 with 1896 shows, roughly speaking, that New York has lost one-half its export business, that Boston has gained one-third, Philadelphia one-fourth, and Balti- more one-fourth. While that is the showing which results from a com- l>arison of these two years, it is not a fair deduction from the table itself. In the first place 1882 is, of all the years since 1875, that year in which the percentage of New York was the largest, that year in v/hich the percentage of Philadelphia was smaller than it had been for eight years before, and smaller than it was again for five years to fol- low; the percentage of Baltimore smaller than it had been for six years preceding, [673] and smaller than it ever has been since, except in the year 1895, when it was a trifle lower. Excluding from our consideration the year 1896, we observe that the percentage of New York in 1895 w^as larger than it had been in 1894, 1892 or 1890, and but 12 per cent, below the average from 1873 to 1896; that the percentage of Philadelphia in 1895 was smaller than it had been in an}' year since 1875, except the years 1888 and 1889, and 36 per cent, below the average ; that the percentage of Baltimore 220 ATLANTIC PORT DIFFERENTIALS for that year was smaller than it had been since 1875 and about 13 per cent, below the average. The percentage of Boston was more than it had ever been except in the years 1888 and 1884, and about 42 per cent, above the average. If, therefore, this case had been tried in the spring of 1896 instead of 1897, the tables being brought down to the close of 1895, instead of to the close of 1896, it would hardly be claimed that those tables dis- closed any undue diversion of traffic from New York to either Phila- delphia or Baltimore. Baltimore could have with truth asserted that its percentage for that year was smaller than it had ever been before and more below the average for the last twenty years than that of New York, while Philadelphia might well have said that its percentage for 1895 was less than one-half what it had been in 1878 and 36 per cent, below the average for the last twenty years. Boston alone would have been the gainer, but Boston has never enjoyed a differential. But a comparison of the year 1896 with 1895, or indeed with almost any previous year, makes an entirely different showing, and the com- plainant insists that in this proceeding the results for the year 1896 are entitled to more conseciuence than those of any one or indeed all the previous years. Its position apparently is that while these differentials nominally existed from 1877 down to January 1, 1896, they never were actually maintained until the latter date. Of course, the mere existence of these differentials, if they were not in fact collected, could have no effect to divert traffic one way or the other, and if we were satisfied that there had been no differentials in effect down to January 1, 1896, and that these differentials had gone into effect on that date and had since that time been rigorously enforced with the result upon the export traffic of these various [674] ports which that year apparently exhibits, it would certainly present a strong case for the complainant. We are not, however, as indicated by the findings of fact, satisfied that this is true. The testimony of the complainant conclusively shows that rates were not maintained in the year 1896. From that testimony it appears that grain could be purchased at Philadelphia and Balti- more at times for more than 3 cents per bushel below the price at New York, while at other times the price would be practically the same or occasionally in favor of New York. Now, the price of grain is de- termined by the Chicago market, and the price in these various ports is obtained by adding to that price the freight rate. The Baltimore differential is less than ly^ cents per bushel. It follows, therefore, almost of necessity that these fluctuations indicate manipulations in the rate. When corn is worth the same price in Baltimore and New York NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 221 the presumption is that the differential is not maintained, and wiien corn is worth 3 cents a bushel less in Baltimore tlian in New York the presumption is that a greater difference than the differential has been made. In support of its proposition the complainant relies mainly upon testimony of iNIr. Blanchard, the commissioner of tlie Joint Traffic Association. Mr. Blanchard testified that he had been familiar witli freight rates since before 1878 and that in his opinion those in question were better maintained beginning January 1, 1896, when the Joint Traffic Agreement went into effect, than they had been at any previous period except for the year or year and a half following the enactment of the Act to Regulate Commerce. This Act went into effect April 1, 1887, and if we were to give Mr. Blanchard 's testimony its full effect it would still remain that rates were as well maintained in 1887 and the first part of 1888 as they were during the year 1896. This being so, and no reason being suggested to the contrary, it is fair to assume that the maintenance of the differential would have produced the same effect of 1887 and the year following that it did in 1896. We should expect to find, therefore, the same remarkable falling oft' at New York and the same increase at Baltimore and Philadelphia. But upon turning to complainant's Table No. 6 we find that the percentage of New York in 1887 was 53.9, an actual increase over the preceding year, and just about the average from 1873 to 1896 inclusive ; that the percent [675] age of Philadelphia was 10 per cent., an increase over the previous year but below the average; while that of Baltimore was 23.3 per cent., a falling off as to the previous year. During the year 1888, while the salutary effect of the Interstate Commerce Law may be presumed to have still lingered, we find that New York had further increased its percentage to 54.2, while Philadelphia had fallen to 6.2, the lowest in her history, and Baltimore had risen to 24.5. The effect of enforcing the differential in 1887 and 1888 was apparently to raise rather than to lower the percentage of New York. We see no reason for giving the year 1896 any greater prominence than is given to every other year. For the purpose of comparing the four ports Table No. 14 is per- haps the best. That does not include exportations of flour, but it has been already observed that flour and provisions are exported entirely by berth rate and an examination of the tables covering those articles shows that New York has little if anything to gain by an investigation into the movement of these commodities. From the nature of the case the differential produces the most effect in the movement of grain. This table, therefore, which embraces only wheat, corn and oats, is as favorable to New York as any can be. The years covered are 1878 to 222 ATLANTIC PORT DIFFERENTIALS 1896, inclusive, so that the movement of these articles is exhibited over substantially the whole period during which the present differentials have been in operation. An examination of this table shows in the first place that the per- centages of these four cities vary from year to year, and that this variation, so far as can be observed, does not obey any rule or law. It might be thought, inasmuch as the differential operates especially in the case of full cargoes, and as full cargo shipments are more numer- ous when exports are large, that the percentage of New York and Boston would decline and the percentages of Philadelphia and Balti- more would rise in those years when the total exports were the largest, and this may be to some extent the case ; but it appears that in 1890 and 1891 the total volume of exports through these four ports was almost identical while the difference in the percentage between New York, Philadelphia and Baltimore was nearly as great as in any other two years down to 1896. A study of these fluctuations emphasizes what has already been said in the findings of fact, namely, that [676] the conditions governing the price of ocean freights and the movement of this grain are so complex that it is impossible to predict from the knowledge of any one factor, like the quantity of the exports, what channel they will take. It is apparent in the second place that it is altogether unsatisfactory to compare any single year with any otlier year and that any deduc- tion from such a comparison is almost certain to be misleading. Suppose the port of Philadelphia in 1888 had complained that the differentials in its favor were not sufficient and had cited in illustra- tion the fact that its exports had fallen from 12.04 the previous year to -4.42 per cent, that .year, and that the exports from New York had risen from 60.59 to 65.58 per cent, its case would have been almost as strong as that made by the complainant, and yet in the year 1890 the percentage of New York had fallen to 49.31, while that of Phila- delphia had risen to 18.42, and that of Baltimore to 26.38. In 1891 New York had again risen to 63.75 while Philadelphia had fallen to 9.82 and Baltimore to 19.65; and in 1892 New York had once more fallen to 48.79, while Philadelphia had risen to 19.95 and Baltimore to 24.24. A comparison of averages is somewhat more satisfactory. Table No. 13 embraces the ports of Portland, Norfolk and Newport News in addition to the four under consideration, and states the percentage of each to the group for the period of 1878 to 1881 inclusive, and from 1882 to 1896 inclusive. By reference to this it will be seen that the percentage of New York for the first period was 51.76 and for the NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 223 last period 51.16; of Philadelphia for the first period 15.1.3 and for the last period 10.76; of Baltimore for the first period 25.05 and for the last period 23.20. These averages do not indicate any falling off in the case of New York and do indicate a very large falling off in the case of Philadelphia and a slight decrease in the case of Baltimore. None of these tables are absolutely correct, nor are they in all cases ([uite consistent with one another. It is also possible to marshal these figures in such a way as to point to radically different conclusions. Generally speaking, however, the tables do agree in their main fea- tures, and the trend of all these statistics is to the same conclusion. Taking the whole period together from 1878 down to the end of the year 1896, it is pretty apparent that [677] of these four ports as com- pared with one another Boston has been a decided gainer, Baltimore has made a small gain, while New York and Philadelphia have both lost, and as between these two, Philadelphia has been the greater loser. Compared with the entire group New York has lost. If, instead of considering the entire period, we were to take the year 1896 alone, the result would be entirely different, but it has been already said that no special prominence can be given to that year over any other year, certainly not over the years 1887 and 1888. One very great embarrassment in disposing of this case arises "from the feeling that these rates have not been maintained, and that there is no reliable indication in actual practice of what the effect of the differen- tials would be if strictly enforced. This is no reason why we should not alter the differential if it was found to be wrong, for we must as- sume that the published rate is collected, but when the effect of the differential is relied upon to show the wrong, and it is claimed that the differential has been enforced in a particular year and has not been enforced in other years, that fact must be clearly established. The results of the year 1896 show a very unusual iiercentage in favor of Baltimore and a large increase in favor of Philadelphia, and it is our impression that these two ports will perhaps obtain in the future rather more than their average for the last twenty years. But this impression is based not upon any deduction from these tables but upon the further impression that the lines leading to Baltimore are in a position to demand more of this traffic than they have obtained at least in recent years, and that the port of Philadelphia will not, when the improvements in the Delaware River give it deep water to the ocean, and perhaps ought not to rest content with the small amount of foreign trade which it has en.ioyed in the past. If these ports gain, it must be largely at the expense of New York. Now, uppi] the whole situation, does the complainant make out a 224 ATLANTIC PORT DIFFERENTIALS case? Can it be said that these differentials unduly discriminate against the locality of New York? We have stated it as our impres- sion that the difference in ocean freight rates at the present time was something less than the amount of these differentials, and that the gradual change of conditions since 1877 makes the differentials of more effect to-day than when they were instituted. [678] These two circumstances would point strongly to the conclusion that they ought to be modified. There is, however, one other circumstance that should be noticed in this connection. These differentials apply upon all classes of freight and accordingly upon all commodities. In the very nature of the case they cannot be abstractly just, but only fair in the aggregate result. Their purpose is to give to each line its fair share of export business. INIany other com- modities are exported besides those embraced in this proceeding. In case of grain the freight rate is a very large factor in its value, while in case of other exports it may be insignificant. A differential which de- termines the route by which grain shall be exported would have no effect Avhatever upon some other article. These higher grade exports go almost entirely to the port of New York, from which they find quicker service to all parts of the world, and from which they can only find communication with many parts of the world. Now, if the quan- tity of these exports, which the differential does not divert to Baltimore or Philadelphia, has been increased in late years, it is manifest that this offsets to that extent any increased diversion of grain to the outports. The freight rate which these other exports pay is higher, and it is therefore more for the interest of the carrier to transport them. The ocean rate is also higher, and the advantages to the port of New York in the way of attracting shipping are probably greater than arise from the exportation of grain. So it is by no means certain that more grain ought not to go through the outports to offset the increased exports of other kinds from New York. That this may be so is indicated by Table No. 9, which gives the total quantity of traffic forwarded by all lines to these four localities for the 3^ears 1888 to 1896 inclusive. From this it appears that during these eight years the total number of tons had increased 42 per cent, in the case of Baltimore, 97 per cent, in the case of Boston, 63 per cent, in the case of New York, and but 2 per cent, in the case of Philadelphia. These figures include both domestic and foreign traffic and are not therefore of great significance as bearing upon this question, but they show that traffic over the lines leading to New York has, during the last eight years, increased more in proportion than that over thos'B leading to Baltimore and Philadelphia. NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 225 [679] Table No. 15 perhaps bears more directly upon this sugges- tion. This table gives the percentages of the value of all exports from Boston, New York, Philadelphia, Baltimore, Norfolk and Newport News from 1878 to 1896 inclusive. From this it appears that New York exported in 1878, 69.26 per cent, as against 60.34 in 1896; Phila- delphia 9.-1:2 as against 7.68; and Baltimore 9.63 as against 11.63; it further appears that the percentage of New York in 1892 was but 59.97 while in 1896 it was 60.34. From this it seems that New York exported in 1896 almost the same proportion in value that it did in 1878, and that its percentage that year notwithstanding the very great falling ofif in grain exportations, was more than it had been in at least one previous year and substantially the same as it had been since 1890. It seems to be true that New York is in a measure losing its export grain business. But does it follow upon the testimony in this case that this is due to the operation of these differentials? It must be borne in mind that the grain of New York does not reach that port from the interior exclusively by rail. The canal has brought in the past a very considerable portion of that traffic, and it is to this water communication between the West and the East that New York has largely owed its predominance in the foreign trade. Now, these dif- ferentials have nothing to do with grain moving by canal. Their pur- pose is merely to divide fairly between the different competing lines the export business which moves by rail. If for any reason the canal were to be entirely shut up so that no grain could be transported by it, it would by no means follow that all the grain which had formerly come to New York by canal ought now to come there by rail. Quite the con- trary. This canal traffic ought now to be distributed in the same pro- portions over the various lines leading to the different ports. New York has no vested right in the having of so much grain shipped to that port. The canal has been a most important element in her com- mercial supremacy. If that element drops out, she must expect to lose that portion of her supremacy which was due to it. The first half of complainant's table No. 6 shows the percentage of all wheat, corn and flour in bushels transported to the six ports in question, from the year 1873 to the year 1896, inclusive; and with reference to New York these percentages are stated [680] both by rail and by canal. Thus, in 1877, when these differentials were agreed upon, the rail carriers transported to New York 25 per cent, and the canal 26.5 per cent, of the entire amount going to all the ports, and for the whole series of years the rail lines have averaged 32.4 per cent, and the canal 19.6 per cent. In the year 1896 the rail lines carried 30.3 15 226 ATLANTIC PORT DIFFERENTIALS per cent, and the canal 6.8 per cent., that is, of the great falling off at New York, the bulk of it was in canal carriage. If the canal had transported in 3896 the same percentage that it did in 1877 the grain exports through New York would have been relatively larger that year than the average, and if it had transported even the average quantity, they would have shown no remarkable falling off. As already suggested, these differentials are intended to secure to the rail lines a proper distribution of this traffic, and we find that under their operation in 1895 those lines carried to New York a larger per cent, of all the traffic to these six ports than they had ever carried save in the year 1891, which was substantially the same. Can it be said, therefore, that their operation as applied to the traffic which they properly affect, has been unfair in the result? The great supremacy of New York in the past has been measurably due to its canal. If it would hold that supremacy in the future, it must give attention to that same waterway. The testimony of Captain Depuy as to excessive elevator charges upon canal grain is not material to this investigation, but it is extremelj^ suggestive in connection with the facts above referred to. If the canal were to be restored to-day to the same position in this carrying trade that it has occupied in the twenty years past, the com- merce of the port of New York could not suffer. The Baltimore differential presents the most difficult question. To every practical intent the cost of ocean freights from Baltimore is no greater than from Philadelphia ; nor did it appear that Philadelphia afforded other advantages over Baltimore in the transaction of this export business. What ground is there then for a distinction between those two ports ? The representatives of Baltimore strenuously insisted that the proximity of that port to the corn area was such that, by reason of the greater advantage in the way of distance, it was entitled to more of this business. An examination of Table No. 14 shows that in recent years at least the percentage of corn exports through [681] Baltimore has been larger than of wheat. The great advantage of Baltimore in 1896 rested in the very great increase of corn shipments. It is a significant fact that the distance differentials Avhich were in force for a short time in 1877 seem to have been unsatisfactory to the New York lines, not because the difference in the percentage of the distances from Chicago gave to Baltimore too great an advantage, but because the distances from other points were in favor of that city. The differential which Baltimore obtained upon the Chicago rate by the distance differential was almost exactly what was obtained under the arbitrary differential, but when the distance differential was applied to all points from which NEW YORK PRODUCE EXCHANGE V. B. & O. R. R., ET AL. 227 traffic originated, I^altiiiior(> seenis to have profited to sneli an extent tliereb.y that this system only remained in force for a very few niontlis. This would indicate that possibly the traffic does orio'inate at points relatively nearer Baltimore than is Chicago. I Tow far this fact may be recognized in the present system by which rates from western point;^ are based upon a percentage of the New York-Chicago rate, does not appear. The testimony tended to show that the corn exported at Baltimore did not come from Chicago, but was intercepted before it reached that market. If, in point of fact, Baltimore is in closer proximity to the corn fields from whieh these exports come, and if the lines leading to that port have secured recognition of that fact in these differentials, we certainly should not disturb them, for they are a recognition of an advantage in location to which Baltimore is fairly entitled. No claim is made as between Baltimore and Philadelphia, that the present relation should be disturbed. As between those two cities and New York, it might not be altogether easy to say whether, on the case presented, the Philadelphia differential should be raised or the Balti- more differential lowered. It might be that in justice to the city of Philadelphia we ought to make that differential more rather than the Baltimore less. It must be remembered, moreover, that to the solution of this rpies- tion no absolute standard can be applied. In recognizing competitive conditions of this kind the carrier has a certain latitude within which this Commission cannot interfere It is only when that limit is ex- ceeded and when the action of the carrier becomes undue that we can net. In the last utterance of [682] the United States Supreme Court on this subject. Interstate Cotnmerce Commission v. Alahamn Mie dismissed. 233 234 ATLANTIC PORT DIFFERENTIALS Edward Kemble for complainant in person. George C. Greene for L. S. & M. S. Ry. Co. Frank Loomis for N. Y. C. & H. R. R. R. Co. Samuel Roar for B. & A. R. R. Co. REPORT OF THE COMMISSION. Prouty, Commissioner: The defendants in this proceeding, the Lake Shore & Michigan Southern Railway Company, the New York Central & Hudson River Railroad Company, and the Boston & Albany Railroad Company, con- stitute a through line for the transportation of merchandise from Chi- cago to Boston. The two first-named defendants constitute another through line from Chicago to New York. The lines are identical from Chicago to Albany, N. Y., where they diverge, the route from there to New York being by the New York Central & Hudson River Railroad, and to Boston by the Boston & Albany Railroad. The Lake Shore & Michigan Southern Railway Company and the New York Central & Hudson River Railroad Company are parties to joint tariffs from Chicago to New York, and the three defendants pub- lish joint tariffs from Chicago to Boston. By these tariffs the rate on grain and sixth-class merchandise is 2 cents per hundred pounds higher from Chicago to Boston than from Chicago to New York when such merchandise is for domestic consumption ; but if intended ' ' for ex- port" the rate to Boston and New York is the same; that is, the de- fendants make two rates to Boston, one if the commodity is for local consumption, which is 2 cents above the New York rate, and another if the commodity is for export, which is the same as the New York rate. The lawfulness of this practice is attacked by the complaint. [112] The defendants insisted in their answers and upon the hear- ing that the question thus presented had already been considered and decided by the Conunission, and that this decision, if not a technical estoppel, ought to be controlling of the present controversy. This claim of the defendants is hardly warranted by the facts. The question of relative rates from Chicago, which may be taken in this discussion as representative of western points generally, to New York and Boston, has been, first and last, the subject of much contention. Previous to 1870 all merchandise transported to Boston, whether for export or domestic consumption, took a higher rate than the corre- sponding New York rate. The ocean rate from Boston and New York to foreign ports was substantially the same. If, therefore, the inland rate to Boston was higher than to New York it resulted that the through rate to the foreign port was correspondingly greater, with the further KEMBLE V. B. & A. R. R. CO., ET AL. 235 result that export merchandise would move by the clieaper route through New York, rather than by the more expensive one through Boston. For the purpose of placing these two ports upon an equality in the matter of the export rate, an agreement was made between the carriers serving them, in 1870, by which merchandise for export was given the same rate to Boston as to New York, although domestic mer- chandise still paid the higher rate to Boston. It would appear that under this arrangement all traffic was billed to Boston at the higher rate, but that the carrier refunded to the shipper the difference between the New York and Boston rate upon whatever was subsequently exported. When the Interstate Commerce Act took effect in 1887, certain of the carriers who had become parties to and were then participating in this arrangement conceived that it was for- bidden by that Act, and declined to further continue it. Thereupon, the Fitchburg Railroad Company, the Boston & Albany Railroad Com- pany, and some other railroads which were interested in the export trade at Boston, applied to the Commission by petition for leave to continue the payment of this rebate. This proceeding is entitled In the Matter of the Export Trade of Boston, 1 I. C. C. Rep. 24, 1 Inters. Com. Rep. 25 {ante, p. 105). Upon final hearing the petitioners them- selves concluded that the Commission had no power to grant the relief prayed for, and leave was given to withdraw their several petitions. In disposing of the matter, Cooley, [113] Chairman, intimated that the practice referred to was not in violation of the Interstate Commerce Act, but from the very nature of the case no decision could be made. In 1887 the Boston domestic rate upon sixth-class merchandise and grain was 5 cents per hundred pounds higher than the New York rate ; and one of the first proceedings instituted before the Interstate Com- merce Commission had for its purpose the abolishing of this differ- ential. In this case, Boston Chamber of Commerce v. Lake Shore rf' Michigan Southern Baihvay Company and Others, 1 I. C. C. Rep. 436, 1 Inters. Com. Rep. 754 {ante, p. Ill), the entire subject of these differ- entials was gone into, much testimony was taken, exhaustive arguments were made, and the case carefully considered. A decision was pro- mulgated in February, 1888, which was to the effect that conditions justified a higher rate to Boston than to New York, and that the exist- ing differential should not be disturbed. In January, 1890, another complaint was filed which attacked this same differential. In this case, Edward Kemble v. Lake Shore & Mich- igan Southern Railway Company and Others, 5 I. C. C. Rep. 16fi, 3 Inters. Com. Rep. 830 {ante, p. 137), the whole subject was again fully considered, and a decision promulgated in April, 1892. By this deei- 236 ATLANTIC PORT DIFFERENTIALS sion the Commission in a measure reconsidered its earlier conclusion, holding that the differential against Boston should not be an arbitrary one, but that the Boston rate should not exceed 110 per cent, of the New York rate. This conclusion was substantially accepted by the carriers, and had the effect to reduce the differential against Boston upon grain and sixth-class merchandise from 5 cents per hundred pounds to 2 cents per hundred pounds, as it has ever since been and now is. At the time both these cases were heard and decided the Boston ex- port rate was the same as the New York rate, and differed, as it now does, from the domestic rate. This fact was fully developed upon both hearings, and was earnestly pressed upon the attention of the Com- mission as a reason why the carriers ought not to charge a higher local rate to Boston than to New York ; but in each case the complainant expressly stated that it did not desire to disturb or question the export rate, its complaint being directed solely to the unreasonableness of the local rate ; and the Commission in delivering its opinion in both cases, while refer- [114] ring to the fact that these two rates existed, express- ly stated that it did not consider either the propriety or legality of that practice. It can hardly be said, therefore, that this question is res judicata. It was in terms excepted from consideration in the last two cases, and could not have been decided in the first case above referred to. While, however, the question itself has never been passed upon, the principle which must control its disposition is no longer matter for discussion. The subject of export and import rates, and the relation which should exist between the inland division of such rates, and rates upon corre- sponding traffic when intended for domestic consumption, is an im- portant one, and early received the attention of the Conmiission. On March 8, 1888, the Commission, having under consideration the subject of tariffs on export freight, promulgated a general order, di- recting, among other things, that carriers engaged in the transporta- tion of merchandise for export should, in case such merchandise was taken upon a through rate to the foreign port, indicate, not onlj^ the entire rate, but the inland division which the carrier received, and that where the through rate, by reason of fluctuation of the ocean rate, could not be known, the carrier should specif}^ by its tariff the inland rate which it received. Subsequently this matter of export rates was brought to the atten- tion of the Commission in the case of New York Produce Exchange v. New York Central & E. R. Railroad Company and Others, 3 I. C. C. Rep. 138, 2 Inters. Com. Rep. 553. In that case it was alleged and ap- KEMBLE V. B. (fe A. R. R. CO., ET AL. 237 peared in proof that the defendant carriers made rates from interior points in the United States to varions foreign ports throngh the port of New York, under which their division was less than the rate charged for the transportation of similar merchandise from the inland points to New York. This was alleged to be in violation of the Act to Regu- late Commerce, as an unjust discrimination against the port of New York. The facts involved in this proceeding were fully developed, and the questions raised elaborately discussed and carefully considered. The decision of the Commission, promulgated June 19, 1889, was that the practical way of making export rates was by adding the fluctuat- ing ocean rate to a fixed inland rate; that the inland rate when ap- plied to export traffic should not discriminate against traffic for do- mestic consumption, "unless justifiable conditions existed for a dif- ference;" that no such conditions were [115] shown to exist at New York ; and therefore that the inland rate for export and for domestic consumption must be the same at that port. While this case holds that ordinarily the inland rate should be the same upon domestic and export traffic, it intimates that conditions might justify a difference. March 23, 1889, the Commission, having under consideration the sub- ject of import traffic, made a general order that all imported traffic should be transported from the port of entry to the interior point of destination upon the same tariff applied to domestic freight. In the case, New York Board of Trade & Transportation v. Penn- sylvania Railroad Company and Others, 4 I. C. C. Rep. 447, 3 Inters. Com. Rep. 417, the question of import rates as affected by this order came under consideration. It appeared in that case that various rail- way carriers in the United States were accustomed to make joint through rates from foreign ports to different points in the interior of the United States, under which the division received by the railway for its portion of the service was much, and often very much, less than the charge made for a corresponding service from the port of entry to the interior point. Thus, the Pennsylvania Railroad Company, in con- nection with some steamship line, would transport tin plate from Liver- pool to Chicago through Philadelphia upon a through rate of 24 cents per hundred pounds, of which it received for its service from Philadel- phia to Chicago 16 cents per hundred pounds, when its regular tariff for the transportation of tin plate originating at Philadelphia from Philadelphia to Chicago was 26 cents. This case, like the export case previously referred to, was fully considered both upon the facts and upon the law. A decision was announced January 29, 1891, by which the practice complained of was declared to be illegal. The defendant carriers had sought to justify the making of such through rates upon 238 ATLANTIC PORT DIFFERENTIALS the ground that competitive conditions demanded it, and that they must take the traffic at such rates or abandon it altogether. It was said by the Commission that these competitive conditions, so far as they existed abroad, could not be considered by it; that the Interstate Commerce Act applied to the regulation of commerce only within the territorial limits of the United States, and that the conditions existing beyond those limits could not be taken into account; that when mer- chandise arrived at a port of entry it thereupon [116] became, for the first time, subject to the operation of the Act, and must be treated as though it had originated at that point. It followed that the rate ap- plied to such merchandise must be the same as the rate applied to similar merchandise originating at the port of entry; or, otherwise stated, that the division received by the carrier for the inland trans- portation of imported merchandise must be in all cases the same that was charged for the transportation of a like kind of merchandise originating at the port of entry. It will be noticed that, while the export case was considered and de- cided as a question of fact, the later import case was decided as a mat- ter of law. In the export case it was intimated that conditions abroad might justify one inland rate for export and another for domestic traffic ; but in the import case it was finally held that these conditions, if they existed, could not be considered. There is probably no sound distinction between import and export traffic, and the later case must be taken as expressing the final opinion of the Commission as applied to both kinds of traffic. If the carrier must in all cases, as a matter of law, charge the same inland rate upon imports as is charged upon domestic traffic, then it would follow that in all cases, as matter of law, the same rate must be charged upon export traffic to the port of export as is charged upon similar domestic traffic to that point. If this view of the Commission had finally prevailed, the contention of the com- plainant in the present case would be well taken, for the defendant carriers could not then maintain one rate when merchandise was in- tended for domestic consumption, and another rate when it was in- tended for export. That view has not, however, finally prevailed, but a different inter- pretation has been put upon the Act to Regulate Commerce, in that respect, by the Supreme Court of the United States in Texas & Pacific Railway Co. v. Interstate Commerce Commission, 162 U. S. 197, 40 L. ed. 940, 5 Inters. Com. Rep. 405. The Texas & Pacific Railway Company made in 1892 through rates from Liverpool and other foreign ports to San Francisco, Cal., the car- riage being by steamship from Liverpool to New Orleans, and by rail- KEMBLE V. B. & A. R. R. CO., ET AL. 239 way over the lines of the Texas & Pacific Company, in connection with those of the Sonthern Pacific Company, to San Francisco. The amonnt of these through rates was less, sometimes not more than one-third of the rates charged by [117] the Texas & Pacific Company for transport- ing similar traffic from New Orleans to San Francisco. It might hap- pen that for earrjung the same merchandise in the same car from New Orleans to San Francisco the rail carrier wonld not receive more than one-sixth as much when the merchandise was imporled throngh the port of New Orleans as if it had originated or been manufactured at that point. The reason for this was alleged to be that the through rate from Liverpool to San Francisco was determined by the price of transportation either by sailing vessel around Cape Horn, in the case of certain kinds of commodities, or by steamship and rail across the Isthnms of Panama, in the case of other commodities. The Texas & Pacific insisted that these through rates were absolutely fixed, and that it must either take the traffic at that figure or abandon it altogether. This condition of things had been developed in the ease of New York Board of Trade & Transportation v. Pennsi/Ivania Railroad Company above referred to, and the Commission had ordered the Texas & Pacific Compan^^ not to transport imported merchandise at any other or dif- ferent rate than it charged for transporting the same kind of domestic merchandise from New Orleans to San Francisco. This order the Texas & Pacific had declined to obey, and thereupon the proceedings were begun to compel a compliance with such order, which finally re- sulted in the case coming before the Supreme Court of the United States. It will be remembered that the Commission had based its decision and order upon the assumption that under the Act to Regulate Com- merce conditions at the foreign port could not be considered, and that, as matter of law, the inland rate on imported and domestic traffic must be the same. The Supreme Court held that conditions abroad as well as conditions existing in the United States should be considered; that the interest of the carrier and the consuming community as well as the producing community must be taken into account ; and that there was no hard and fast rule which prohibited the carrier, in furtherance of its own interests and the interests of its patrons, from accepting a less sum for the transportation of imported merchandise from the port of entry to an interior point than it charged for the transportation of domestic merchandise between the same points. To apply the decision to the exact case before the court, there was nothing in the Act to Regulate Commerce [118] which, as matter of law, prohibited the Texas & Pa- 240 ATLANTIC PORT DIFFERENTIALS cific Railway Company from participating in a through rate from Liverpool to San Francisco via New Orleans, which was one-third the rail rate from New Orleans to San Francisco, and of which its division must be materially less than the whole rate. From this decision it must follow that carriers are not prohibited from making rates from points in the United States to points in foreign countries, or from points in foreign countries to points in the United States, of which the inland division is less than the tariff rate for the transportation of similar commodities when intended for local domestic consumption. This being the law, what are the practical conditions that give rise to the two rates in question ? They can be stated in a word. Taking Chicago as the point of origin, Liverpool as the point of destination, and grain, which is the most important item of export, as the subject of traffic, it is evident that grain can pass from Chicago to Liverpool, either through the port of New York or through the port of Boston, and that in so doing it is transported to such port by rail and from such port by ship. It is also evident that it will choose the route by which it can go the most cheaply. Investigations in other cases before the Commission show that a difference in the freight rate of between one-fourtli and one-eighth of a cent per bushel determines the route by which grain shall be exported. Now, the ocean freights from Bos- ton and New York are substantially the same. It follows, therefore, that the inland rate must also be the same. It lias been decided that a differential of substantialh- 2 cents per hundred pounds may be properly made on domestic grain against Boston, but if the export rate were 2 cents higher to Boston than to New York, no traffic would move through the port of Boston. The object of these two rates, therefore, is to equalize the export rate between the ports of Boston and New York. The export rate to Boston is not in reality a Boston rate at all, but is in essence the inland division of a through rate through that port to foreign ports. That the inland carrier may receive in such case for its division a sum less than the domestic rate has been, as we have just seen, determined by the Supreme Court of the United States; hence the thing accomplished by the making of these two rates is not, as a matter of law, illegal. But if the thing itself is not prohibited, is not this manner of [119] 'effecting that thing forbidden ? Here is not a through rate of which the inland division is less than the corresponding domestic rate, but here are two different rates published and maintained to the same point, by which a greater sum is charged for the same service in one case than in the other. Is not this an unjust discrimination or an undue preference which is forbidden by the Act? "We think that KEMBLE V. B. & A. R. R. CO., ET AL. 241 under the circumstances of this case it is not. It is true that the rate in both cases terminates at the port of Boston, but the movement under the export rate is part of a through movement. Traffic to which that rate is applied is not and cannot be Boston traffic ; it merely passes through Boston on its way abroad. When the traffic starts it may not be certain by what agency it will be carried from the port of Boston to its foreign destination, but it is certain that it will go there by some agency. That carrier is not subject to the Act to Regulate Connnerce, nor can the through rate usually be determined and published agreea- bly to the sixth section, owing to the fluctuation in ocean rates. Under these circumstances, if the inland carrier publishes and maintains its division of the through rate, apparenth^ it does all it can do, and all it is required to do under the Act which we are administering. If the inland rail carriers, instead of receiving a fixed inland divi- sion, make through rates in fact of which their division fluctuates, an- other question arises as to the publication of such rates, which is not here passed upon. This case is not at all that decided in Neiv York, New Haven d- Hart- ford R. R. Co. V. Thomas C. Piatt and Another, Receivers, 7 Inters. Com. Rep. 323, where both carriers were under the jurisdiction of the Act to Regulate Commerce, and where the petitioner had expressly refused to join in the through rate which the defendants were pub- lishing and under which they were operating. The decision of the United States Supreme Court in Texas cC- Pacific Railway Company v. Interstate Commerce Commission, supra, has been understood in some quarters as virtually removing import and export traffic from the jurisdiction of the Commission. Such is not by any means its scope or effect. That decision simply broadened the power of the Commission in reference to such traffic. If any individual or locality feels itself aggrieved by the rates made upon export or im- port business as compared with domestic business, the Commission has full authority to consider and pass upon that grievance. The pro- priety, as [120] a matter of fact, of the rates maintained by the Texas & Pacific Railway Company has never been upheld by the decision of any tribunal. It has never been decided that that company may trans- port boots and shoes for the English manufacturer from New Orleans to San Francisco for one-sixth the amount charged the American manufacturer for the same service, but merely that, in determining whether such rate constitutes an unjust discrimination or an undue preference, the interest of the carrier and the consumer should be taken into account as well as that of the producer. In the present case, merely the legality of these two rates as matter 16 242 ATLANTIC PORT DIFFERENTIALS of law is passed upon. Whether as matter of fact the domestic rate is unreasonably high either of itself or in comparison with the New York rate, or whether the export rate unduly discriminates against Boston, has not been considered. These questions of fact are virtually involved in the cases referred to in the early part of this opinion. The Boston export rate must be the same as the New York export rate, and the present domestic differential against Boston is substantially that fixed by the Commission. This would not probably prevent a review of these matters at any time, but no facts were developed upon the hear- ing of this case which would warrant such reconsideration here. The petitioner did insist, as a matter of law, that to charge two rates for the same service was in contravention of the first, second and third sections of the Act to Regulate Commerce, and did thereby present a new question which had not been decided. The petitioner also insisted that the rates in question were in viola- tion of the fourth section. The docks at which this merchandise is de- livered by the rail to the ocean carriers are at East Boston, and the export rate applies in fact to East Boston alone. East Boston is a few miles farther from Chicago than Boston, and the complainant in- sisted that by charging the higher domestic rate to Boston and the lower export rate to East Boston the defendant violated the fourth section. The rate to East Boston for domestic consumption is the same as the rate to Boston. The export rate, as we have already seen, is essentially the division of a through export rate. It is not made under the same circumstances and conditions with the domestic rate to Boston, and is not, therefore, within the prohibition of the fourth section. For the reasons above indicated the petition will be dismissed. DIFFERENTIAL FREIGHT RATES TO AND FROM NORTH ATLANTIC PORTS. MEMORANDUM OF AUDITOR, INTERSTATE COMMERCE COMMISSION. 243 DIFFERENTIAL FREIGHT RATES TO AND FROM NORTH ATLANTIC PORTS. INTERSTATE COMMERCE COMMISSION, auditor's OFFICE, Washington, D. C, May 12, 1904. EAST-BOUND, ALL-RAIL — DOMESTIC TRAFFIC. The differentials between North Atlantic ports on traffic originating in the territory known as Central Freight Association territory, which may be described briefly as the territory lying north of the Ohio and east of the Mississippi Rivers, east of Lake Michigan, and west of a line drawn from Buffalo, N. Y., to Pittsburgh, Pa., are as follows: The rates to New York being the basis, the rates to Philadelphia are 2 cents per hundred pounds and to Baltimore, Newport News, and Norfolk 3 cents per hundred pounds less than the rates to New York. These differentials apply in connection with all class and commodity rates. The rates on domestic traffic to Boston, Mass., and Portland, Me., are higher than New York (except on live stock and dressed meats), as follows : [In cents per 100 pounds.] Classes. Differ- entials. Classes. Differ- entials. 1 2 .... 3 .... 7 6 5 4 . 5 . 6 . 4 3 2 These differentials have been in force since August 15, 1892. Prior to that date they were as follows : [In cents per 100 pounds.] Classes. Differ- entials. Classes. Differ- entials. 1 2 3 10 6 5 4 !5 6 5 5 5 With the exception indicated in the case of Boston and Portland the class differentials as above stated have been in force since the pas- 245 246 ATLANTIC PORT DIFFERENTIALS sage of the Act to Eegulate Commerce, and also appear to have been in force for about ten years prior thereto. On live stock and dressed meats the domestic rates to Boston and Portland are the same as to New York. With respect to live stock this basis has been in use since April, 1887, and possibly prior to that date. On dressed meats this appears to have been adopted as a per- manent basis January 9, 1890. Prior to that date the rates were at times the same, and at other times the differential higher than New York. Rates to Montreal, Province of Quebec, and Halifax, Nova Scotia, do not appear to be published from all points in the territory described, and even where published are not in all cases on the same differential basis. It is thought, therefore, to be sufficient at this time to state the manner in which the rates from Chicago to these points have been made. From April 5, 1887, to the present time the class rates on domestic traffic from Chicago to Montreal have been the same as from Chicago to New York. There is no information at hand as to the basis for these rates prior to the date named. To Halifax the rates do not ap- pear at any time to have been made on any regularly established dif- ferential basis. From April 5, 1887, to the present time the rates from Chicago to this point have been higher than from Chicago to New York, as follows : [In cents per 100 pounds.] Classes. 1. 2. 45 3. 40 4. 45 5. 10 6. Apr. 5, 1887, to and including Jan. 15, 1888 . . 65 10 Jan. 16, 1888, to and including Mar. 4, 1888 . . 55 45 35 30 13 12 Mar. 5, 1888, to and including Oct. 21, 1888 . . 55 45 35 2614 10 10 Oct. 22, 1888, to and including Dec. 31, 1899 . . 40 30 24 19 13 10 Jan. 1, 1900, to and including present date . . 20 18 16 14 12 10 EAST-BOUND, ALL-RAIL — EXPORT TRAFFIC. The differentials as between North Atlantic ports on east-bound, all- rail traffic for export are the same as on domestic traffic, with the fol- lowing exceptions : On export traffic Boston and Portland take the same rates as New York. Where there are no special export rates to New York the points named take the New York domestic rates on traffic exported through those ports; but where there is a special export rate in force to New York, Boston and Portland take the same rate on export traffic. This basis has been in force since April 5, 1887, and was probably also in MEMORANDUM : DIFFERENTIAL RATES 247 force for some time prior to that date, though upon this point there is no definite information available. On export traffic to Montreal the rates have been the same as to Philadelphia (except as indicated below) since December 17, 1888. Prior to that date there appears to have been no provision for special export rates to Montreal on regular classified traffic. On grain and grain products the bases for export rates to this point have been as follows : From April 1887, to June 1, 1901, same as Philadelphia; from last- named date to October 21, 1901, same as New York, and from October 21, 1901, to present date same as Philadelphia. As will be seen, with the exception of a few months in the year 1901, the basis for export rates to this point has been the same as to Philadel- phia, Prior to May 11, 1903, there appear to have been no special export rates on traffic of any description to Halifax, On the date mentioned the rate on grain and grain products from Chicago and Chicago junc- tion points to Halifax for export was made 1 cent per hundred pounds higher than New York, which is the present basis. On or about February' 1, 1899, special differentials were adopted to apply on export grain (onl^O to Philadelphia, Baltimore, Newport News, and Norfolk, These differentials were just one-half the regular differentials, being as follows : To Philadelphia 1 cent, and to Baltimore, Newport News, and Nor- folk 11/2 cents less than New York; Boston and Portland taking the New York export rate. These special differentials are still applied on grain exported through the ports named. It should be stated that since May 2, 1902, there have been two export rates on grain from the territory above described to the North Atlantic ports. The first or higher rate applies when the grain is billed to the port for export. The second or lower rate applies only when the grain is consigned to a foreign port, or to the care of a foreign freight agent at the port of export, or so consigned as to secure delivery at shipside, or to elevators or warehouses at tide water having facilities for export. It is only in connection with this lower export rate that the special differentials apply, WEST-BOUND, ALL-RAIL DOMESTIC TRAFFIC, On west-bound, all-rail, domestic traffic from North Atlantic ports to the territory before described Boston and Portland take the same rates as New York, while from Philadelphia the rates are the following differentials less than New York : 248 ATLANTIC PORT DIPPERENTIALS [In cents per 100 pounds.] Classes. Differ- entials. Classes. Differ- entials. 1 6 6 2 4 2 2 ... 3 . .. 5 . .. 6 ... 2 2 The rates from Baltimore, Newport News, and Norfolk to the same territory are lower than New York, as follows : [In cents per 100 pounds.] Classes. Differ- entials. Classes. Differ- entials. 1 2 8 8 3 4 5 6 3 3 3 3 These differentials have been in force since the passage of the Act to Regulate Commerce, and probably for a number of years prior thereto, though upon this point there is no definite information in the posses- sion of the Commission. From Montreal the rates appear to have been for many years the following differentials below New York : [In cents per 100 pounds.] Classes. Differ- entials. Classes. Differ- entials. 1 10 8 6 4 5 6 4 2 3 4 3 From Halifax there appear to have been no established differentials above the New York or Boston rates. On April 5, 1887, the rates from Halifax to Chicago were the following figures higher than the rates from New York and Boston : [In cents per 100 pounds.] Classes. Differ- entials. Classes. Differ- entials. 1 2 3 45 35 30 4 5 6 25 10 10 Since December 11, 1899, the rates from this point to Chicago have been : On classes 1, 2, and 3 respectively 11, 9, and 3i/^ cents less than MEMORANDUM : DIFFERENTIAL RATES 249 New York, while on classes 4 and 5 they have been one-half cent per hundred pounds higher, and on class 6 the same as New York. WEST-BOUND, ALL-RAIL — IMPORT TRAFFIC, At the present time the lines operating from North Atlantic ports publish and file rates applying on import traffic. These rates are, in nearly all cases, commodity rates, and so far as it has been practicable to make comparison of these rates with the domestic class rates, the differentials as between the ports are the same as on domestic traffic. RAIL-AND-LAKE — EAST AND WEST BOUND. Where through rates are published applying via rail-and-lake, either east or west bound, they are made certain agreed differentials below the all-rail rates, and the differentials between the ports are, therefore, the same as on all-rail traffic. EX-LAKE RATES ON GRAIN FROM LAKE ERIE PORTS TO BOSTON, NEW YORK, PHILADELPHIA, AND B.VLTIMORE. It has been the custom for a number of years past, of the lines oper- ating from Lake Erie ports — Buffalo, N. Y., Erie, Pa., and Fairport, Ohio — to make what are termed "ex-Lake" rates from these ports to Boston, New York, Philadelphia, and Baltimore, on grain reaching such lake ports by water from Chicago and other western points. The grain is carried in bulk, and the ex-Lake rates made to apply thereon are in cents per bushel, and where the grain is for export usually apply on cargo lots of 10,000 bushels of oats, and 8,000 bushels of other grain. From a comparison of these rates to the several Atlantic ports named, on file with the Commission, it appears that there have been no regularly established differentials as between the Atlantic ports on this traffic, at least no uniform differentials have been maintained. At times the rates were the same to all of the ports. The accompanying tables, numbered 1 to 7, inclusive, show the rates on this traffic as published and filed with the Commission by the sev- eral carriers operating from the Lake ports named, from the earliest date such tariffs have been filed to the present time. In this connec- tion it should be stated that from an examination of the tariff's apply- ing on this traffic it seems evident that all of these ex-Lake rates have not been filed with the Commission. This appears to be especially true of the rates to New York for export. Tables numbered 8 to 13, inelu- 250 ATLANTIC PORT DIFFERENTIALS sive, show the differences between the rates to the Atlantic ports named on stated dates. Respectfully submitted. J. M. Smith, Auditor. Table No. 1. Statement showing changes in rates on grain, ex-LaTce, domestic, from Buffalo, N. ¥., to Boston, Mass., from 1896, to date, via New York Central and Hudson Eiver Railroad. DOMESTIC. [Rates in cents per bushel.] DATE. FROM BUFFALO, N. T., TO BOSTON , MASS. -^ n .o <£> .Q tn /-^ Ui 8 -O 00 -.o £ n a X £ a "^ m ^ 03 o >. a ^ cq O W O TARIFFS. 1896— Apr. 27 May 23 Aug. 3 Oct. 9 1897— Apr. 13 July 12 Aug. 27 Sept. 15 1898— Apr. 11 1899— Apr. 29 Nov. 1 1900— Mar. 5 Nov. 29 1901— Apr. 1 June 1 Oct. 7 1902— Apr. 14 Nov. 15 1903— Apr. 1 to date. 61/2 SVz 6% 61/2 61/2 6 6 61/2 7 7 61/2 81/^ 61/2 61/2 61/2 6 6 61/2 7 71/2 MV4. 7 5% 51/2 5 5 5y2 6 6 •r% •7% t7% 71/8 7y2 7% 71/2 5% 8% 5% 5% 6 5% 51/2 6 6y2 6% *7% t7% 7% 7% 6 8% 51/^ 5% 6 61/2 61/2 "41/2 H^k 41/2 31/2 4% 31/2 3% 4 3% 4 4 414 41/4 I. C. C. No. 97 S. 1-97 S.2-97 S. 3-97 339 S. 1-339 S. 2-339 S. 3-339 732 1100 1425 1727 2201 2451 2606 B. 80 B. 384 B. 948 B. 1402 I. C. c. 97 S. 1-97 S. 2-97 S. 3-97 339 S. 1-339 S. 2-339 S. 3-339 732 1100 1425 1727 2201 2451 2606 B. 80 B. 384 B.948 B. 1402 •Expired December 31, 1896. tExpired January 20, 1898. MEMORANDUM : DIFFERENTIAL RATES 251 Statement showing changes in rates on grain, ex-Lake, for export, from Buffalo, N. Y., to Boston, Mass., from 1897 to date, via New Yorl; Central and Hudson Fdver Bailroad. FOR EXPORT. [Rates in cents per bushel.] DATE. FROM BUFFALO, N. Y., TO BOSTON, MASS. In cargo lots of 8,000 bushels. Cargo lots, 10,000 bush- els. o X! ^^ « .Q (A ^^ J3 ^^ 00 J2 ■c ■^ s >. a «o cs o >. f^ « O « TARIFFS. I. C. C. No. I. C. C. No. 1897— Mar. 20 *5 ♦5 *4y4 •4% •4% *zv-, 300 300 Oct. 20 *t>% ♦t5% ♦+5 *t5y2 *t5% •t4 526 526 1898— Mar. 15 *t5 *t5 ♦14% n4% *t4% *X3Vz 697 697 1899— Apr. 29 *4 •3% ♦314 1104 S 1 1104 *3y2 S. 1-1104 S. 3-lKM 1297 June 16 . . .. •3 •314 S 3-ll(M Aug. 18 Aug. 26 Oct. 9 *4 ♦4 ♦3% 1297 *3% ♦3% •3% ♦3 1331 1331 *4 *4 ♦3% ♦4 •3% •4 ♦3% ♦4 ♦sy* *3y4 1384 1413 1384 Oct. 26 1413 Nov. 1 *5 ♦5 *4y4 *4y2 •4y2 ♦3 1420 1420 1900— Mar. 5 *4 *4 ♦3'^ •3% •3% ♦3 1726 1726 May 10 *31/2 ♦4 ♦3% •3y4 *3y4 ♦2% 1881 1881 Nov. 16 •4 »4 •3V^ ♦3% ♦3% •3 2180 2180 Dee. 6 ♦4 ♦41/2 ♦4 *4 •3% *4y4 ♦3% ♦4y4 ♦3% *3y2 ♦3 2225 2497 2225 1901-Mar. 30 2497 June 1 *3V2 ♦3V2 ♦3 *3y4 *3y4 ♦2y2 2585 2585 July 16 *3V2 *sy2 ♦3 ♦sy* *3y4 ♦2y2 2693 2693 Aug. 1 *3% ♦3% ♦3% *3y2 ♦3% *2% 2703 2703 Oct. 1 *W2 •3% ♦4 ♦4 ♦4% ♦4 ♦4y4 *3y4 *3y2 B. 70 B.157 B. 70 Nov. 18 B. 157 1902— June 24 ♦3.9 ♦3.9 ♦3.5 ♦3.7 •3.7 ♦3.2 B. 591 B. 591 Sept. 1 *4.5 *4.5 ♦4 •4.25 *4.25 ♦3.5 B. 754 B. 754 1903— Jan. 1 •5 *5 *4% ♦4% *4% ♦4 B. 1076 B. 1076 Apr. 9 ♦5 ♦51/2 *4% •4% •4% ♦4 B. 1446 B. 1446 Sept. 1.5 *i ♦4 ♦SVz *3% *3% ♦3 B. 1946 B. 1»46 Nov. 16 *4V2 ♦iVa ♦4 *4y4 ♦4y4 •3V^ B. 2120 B. 2120 1904— Jan. 1 *5 ♦5 *4y2 ♦4% ♦4% •4 B. 2220 B. 2220 Feb. 8 *4.6 *4.6 ♦4.1 ♦4.35 •4.35 ♦3.6 B. 2331 B. 2331 Feb. 9 *4.2 ♦4.2 ♦3.7 ♦3.95 ♦3.95 ♦3.2 S. 1-B. 2331 S. 1-B. 2331 Feb. 13 *3.8 ♦3.8 ♦3.3 ♦3.55 ♦3.55 ♦2.8 2-B. 2331 2-B. 2331 Feb. 13 *3.4 ♦3.4 ♦2.9 ♦3.15 ♦3.15 ♦2.4 3-B. 2331 3-B. 2331 Feb. 18 *3 ♦3 ♦2.5 •2.75 ♦2.75 ♦2 4-B. 2331 4-B. 2331 Feb. 22 •2.6 ♦2.6 •2.1 ♦2.35 •2.35 ♦1.6 5-B. 2331 5-B. 2331 Feb. 27 ♦2.2 ♦2.2 ♦1.7 ♦1.95 •1.95 ♦1.2 6-B. 2331 6-B. 2331 Mar. 2 ♦1.8 ♦1.8 ♦1.3 •1.55 ♦1.55 •0.8 7-B. 2331 7-B. 2331 Mar. 10 ♦1.4 ♦1.4 •0.9 •1.15 *1.15 •0.4 8-B. 2331 8-B. 2331 Mar. 17 -1 ♦1 ♦0.5 ♦0.75 ♦0.75 ♦0.4 9-B. 2331 9-B. 2331 Mar. 21 ♦0.6 ♦0.6 ♦0.5 ♦0.35 ♦0.35 ♦0.4 10-B. 2331 10-B. 2331 Mar. 28 ♦0.2 ♦0.2 ♦0.1 ♦0.35 •0.35 •0.4 11-B. 2331 11-B. 2331 Apr. 30 to date *4 ♦4 *3% *3% *4% •3 12-B. 2331 12-B. 2331 •In cargo lots 8,000 bushels, oats lO.OOO bushels. tExpired January 15, 1898. ^Expired January 15, 1899. 252 ATLANTIC PORT DIFFERENTIALS Statement showinff changes in rates on grain, ex-Lake, domestic, from Buffalo, N. Y., to New York, N. Y., from 1894 to November 29, 1900, via New York Cen- tral and Hudson River Railroad. DOMESTIC. [Rates in cents per bushel.] TARIFFS. DATE. FROM BUFFALO, N. T.. TO NEW rORK, N. Y. ^^ '-^ .2 ^_ £ g £ .o m S "O 00 eo £ e* J3 e o ^ Ph P9 U IS o 3894— Apr. 21 May 15 May 15 1895— May 18 May 18 tNov. 11 +Nov. 11 1896— JMar. 9 189<>— JMar. 9 jjune 1 1899— Apr. 20 Nov. 1 . 190O— Mar. 5 . 7 *5 6% •5 6V4 6% 5 6% 5 51/2 My* »4y4 5y2 My* 6% 6 *4% 6 •4% *4% 4% 6 4% 6 *4% 6 •4% 6 •4% 6 •4% 41^ 6 4% Pile No. 2892 2912 2912 3272 3272 3386 3386 I. O. C. 23 23 S. 4-23 1105 1426 1728 1528 1584 1534 1774 1774 1870 1870 I. C. C. 23 23 S. 4 to 23 1105 1426 1728 ♦In cargo lots— 10,000 bushels oats, 8,000 bushels other grain. tExpired January 10, 1896. tExpired December 31, 1896. Rates withdrawn November 29, 1900 (as per I. O. C. 2,200); no rates published since that date. MEMORANDUM : DIFFERENTIAL RATES 253 Statement showinn chanpes in rates on prain, ex-Lake, domcatie, from Buffalo, N. Y., to Philadelphia, Pa., from 1894 to date, via New York Central and Hudson River Eailroad. DOMESTIC. [Rates in cents per bushel.] DATE. PROM BUFFALO, N. Y., TO PHILADEL- PHI A, PA. ^ ^ .Q ^^ ' ' m '"^ x-v £1 w •^^ 03 5 £ g s s X a ^^ m an ^ N M o as o TARIFFS. 1894— Apr. 21 May 15 May 15 Oct. 1 6% *4% 5% ey* *4y4 3% 5 •3% 5 3y2 *3y2 f5 *t3% *5 *:3% 6y4. •4% 5^ ey4 ♦4y4 5V6 4y4 •3% 4y4 2892 2912 2912 S. 2-2975 S. 3-2975 3191 3191 3379 3379 3386 3386 I. C. C. No. 23 23 S. 2-23 S. 3-23 S. 3-23 S. 4-23 1105 1426 1728 2200 s. 1-2200 S. 2-2200 26a5 B. 79 S. 1-B. 79 B. 395 B. 946 B. 1048 B. 1403 B. 1453 B. 1582 S. 1-B. 1582 B. 1979 B. 2122 B. 2222 1-B. 2222 2-B. 2222 3-B. 2222 4-B. 2222 5-B. 2222 6-B. 2222 7-B. 2222 8-B. 2222 1528 1534 1534 1575 Oct. 1 1575 1895-Mar. 18 Mar. 18 Oct. 28 Oct. 28 Nov. 11 Nov. 11 1896— Mar. 9 Mar. 9 May 15 *4% 5% 4 ♦4 15% *t4% *:4 ■■■■js" *J5 •4y4 5% 3% •3% t5y2 *t4y4 J5 *t3% *4y4 3% ♦3% t5y2 *t4y4 t5 *t3% *3y4 4y4 3y4 ♦sy* t4y4 *t3% J4 *J3y2 1722 1722 1866 1866 1870 1870 I, C. C. No. 23 23 S. 2-23 S. 3 23 S 3-23 •J3 2y2 3 2y2 3 3y4 3y2 3 3y4 3y2 3y2 3y2 •* 4 4 23 1899— Apr. 30 Nov. 1 1900— Mar. 5 Nov. 29 Dee. 24 41/2 6 41/2 4V2 41/2 6 4% 4% 4 sy* 4 4 4 5% 4 4 4 5y2 4 4 1105 1426 1728 2200 S. 1-2200 1901 Jan 23 4y4 4y4 4% 4% 4y4 4y4 S 2 2200 June 1 Oct. 7 Dec 7 4y2 41/2 41/2 4y2 4 4 2605 B. 79 S. 1-B. 79 1902— Apr. 21 Nov. 15 1903— Jan. 1 Apr. 1 Apr. 9 May 1 41/2 5 51/2 51/2 4% 5 5y2 6 6 ♦5 ♦6 *4 •4y2 ♦5 •4.6 *4.2 *3.8 *3.4 •3 •2.6 •2.2 •4 4 4% 5 5 5 4y4 4% 5y4 sy* 4y4 4% 5y4 5y4 5y4 B. 395 B. 946 B. 1048 B. 1403 B. 1453 B. 1582 Sept. 21 Sept. 28 Nov 16 S. 1-B. 1582 B. 1979 B. 2122 1904_jaii. 1 B. 2222 Feb. 12 1-B. 2222 Feb. 15 2-B. 2222 Feb. 15 . . .. 3-B. 2222 Feb. 19 4-B. 2222 Feb 22 ,5-B. 2222 Feb. 29 ... 6-B. 2222 Mar 4 7-B. 2222 Apr. 30 to date 8-B. 2222 •In cargo lots— oats 10,000, and other grain, 8,000 bushels. fExpired January 10, 1896. tExpired December 31, 1896. 254 ATLANTIC PORT DIFFERENTIALS Statement showing changes in rates on grain, ex-Lalce, for export, from Buffalo, N. ¥., to Philadelphia, Pa., via New YorJc Central and Hudson River Railroad. FOR EXPORT. [Rates in cents per bushel.] DATE. FROM BUFFALO, N. Y., TO PHI LADE L- 1 PHIA PA. ^ '^ .0 ^^ S /-^ m ,.-^ ^ «e> w X! ^ t» s n ^ g 00 ^ ;Q C3 >? a >. ^ es >i 93 ^ a D3 TARIFFS. 1899— May 8 . . Nov. 1 . . 1900— Mar. 13 . Aug. 38 . Nov. 13 . Dec. 6 .. 1901— Mar. 30 . Oct. 11 . Nov. 18 . 1902— June 24 Sept. 1 . 1903— Jan. 1 .. Apr. 9 . . May 4 .. Sept. 15 Nov. 16 . 1904— Jan. 1 .. Feb. 8 . . Feb. 9 .. Feb. 13 . Feb. 13 . Feb. 18 . Feb. 2a . Feb. 27 . Mar. 2 .. Mar. 10 . Mar. 17 . Mar. 21 . Mar. 28 . Apr. 30 to <1ate *3V2 *3% *2% ♦2% ♦3y4 •2y2 *t5 •t5 *t4y4 *t4% *HV2 *t3 41/2 4% 4 4 4 2% «3 *3 *2i^ •2% ♦2% ♦2 *4 *4 *3y2 •3% ♦3% ♦3 *4% *4y2 •4 ♦4y4 ♦4y4 ♦3% *4 *4 *3% ♦3% •3% ♦3 ♦4V4 *m *3% ♦4 ♦4 *3y4 *W2 *4% *4 *4y4 •4y4 *3y2 *3.9 •3.9 •3.5 •3.7 ♦3.7 ♦3.2 •4.5 *4.5 •4 •4.25 ♦4.25 ♦3.5 *5 *5 •4.5 •4.75 ♦4.75 ♦4 *5 •5% *4% •4% ♦4% ♦4 •5 *5 *4y2 ♦4% ♦4% ♦4 ♦4 *4 •31^ ♦3% *3% •3 *4% *4y2 *4 *4y4 •4y4 ♦3% •5 *5 *4i^ ♦4% •4% ♦4 *4.6 ♦4.6 ♦4.1 ♦4.35 •4.35 ♦3.6 *4.2 *4.2 •3.7 ♦3.95 •3.95 ♦3.2 *3.8 *3.8 •3.3 ♦3.55 ♦3.55 ♦2.8 *3.4 *3.4 ♦2.9 ♦3.15 ♦3.15 •2.4 •3 *3 ♦2.5 ♦2.75 ♦2.75 •2 *2.6 *2.6 •2.1 ♦2.35 •2.35 •1.6 *2.2 *2.2 •1.7 ♦1.95 •1.95 •1.2 *1.8 *1.8 •1.3 ♦1.55 ♦1.55 •0.8 *1.4 *1.4 •0.9 ♦1.15 •1.15 ♦0.4 *1 *1 ♦0.5 •0.75 •0.75 ♦0.4 *0.6 *0.6 ♦0.5 ♦0.35 ♦0.35 ♦0.4 *0.2 *0.2 ♦0.1 ♦0.35 ♦0.35 •0.4 »4 4 3% 3% 3% 3 I. c. c. 1108 1419 1739 2029 2178 2224 2496 B. 83 B. 158 B. 592 B. 755 B. 1077 B. 1447 B. 1.584 B. 1947 B. 2121 B. 2221 B. 2332 S. 1-B. 2332 2-B. 2332 3-B. 2332 4-B. 2332 5-B. 2332 6-B. 2332 7-B. 2332 8-B. 2332 9-B. 2332 10-B. 2332 11-B. 2332 12-B. 2332 ♦In cargo lots— oats 10,000, other grain fExpires March 13, 1900. . C. C. 1108 1419 1739 2029 2178 2224 2496 B. 83 B. 158 B. 592 B. 755 B. 1077 B. 1447 B. 1584 B. 1947 B. 2121 B. 2221 B. 2332 1-B. 2332 2-B. 2332 3-B. 2.'^32 4-B. 8998 5-B. 2332 6-B. 2332 7-B. 2332 8-B. 2332 9-B. 2332 10-B. 2332 11-B. 2332 12-B. 2332 8,000 bushels. Statement showinfj chanpes in rates on prnin, ex-Lake, domestic, from Buffalo, N. Y., to Baltimore, Md., from 1804 to November 11, 1S95, via New York Central and Rudson Elver Railroad. DOMESTIC. [Rates in cents per bushel.] FROM BUFFALO, N. Y., TO BALTIMORE, MD. TARIFFS. 1894- -May 15 May 15 May 24 May 24 June 12 June 12 -Oct. 28 Oct. 28 51/2 *4y4 ey* *5 5% *4% 4 *i •4 6 *4% 5y2 •4y4 3y2 *3y2 5% *4 6 *4% 5y2 *4y4 3% ♦4% sy* syg 4 •3% 6 4y2 4% *4 5% 4y4 ►4y4 3% a% 3y4 ^3% *3y4 File No. 2912 2912 2929 2929 2975 2975 3379 3379 1534 1534 1543 1.543 1575 1575 1866 1866 *In cargo lots, 10,000 oats, other grain 8,000 bushels. No rates in effect since November 11, 1895. See File No. 3386. Table No. 2. Statement showing changes in rate on grain, ex-Lake, domestic, from Buffalo, N. Y., to Boston, Mass., fr&m 1896 to date, via Dela\care, Lackawanna and West- ern Bailroad. DOMESTIC. [Rates in cents per bushel.] FROM BUFFALO, N. Y ., TO BOSTON MASS. ■^ £1 ^^ £1 • ^ ,*—, to .Q «i ^ l» s ■o 2§ to 5 C3 tf >. ^-^ X ^ a (» Si ca tH >. 03 fN « Q « TARIFFS. 1896— Apr. 29 May 14 May 14 Aug. 4 Oct. 12 1897— Apr. 20 July 12 Aug. 28 Sept. 15 Oct. 30 1898— Apr. 11 1899— Jan. 28 Apr. 29 May 8 Nov. 1 190O— Mar. 8 Nov. 27 1901— Apr. 1 June 1 Oct. 7 1902— Apr. 25 May 14 Nov. 15 1903— Jan. 1 Apr. 1 to date 6\i 6% 6% 6 6% 7 7 7 7% t7y4 116% §6% 5y2 5y4 7 5y4 5% 5 5 5 5% 7y2 ma 7% 7y8 7y2 7% n% \nv2 §7% 5% 5% sy* 5% 6 5% 5% 5% 6 6y2 6% 7% 7% 7y8 7y8 7y8 fn/s Ii7y2 §71^ 6y2 6 6 6 5% 5% 5y2 6 6y2 6% 4y2 {4% nyz §4y2 syz 31/2 4y2 3y2 3% 4 3% 4 4 4 4% 4y4 4y4 I. C. C. No. 1-36 S. 2-36 . S. 2-36 S. 2-150 S. 3-150 .568 S. 1-620 S. 2-620 S. 3-620 S. 1-766; S. 1-9021 1179 1227: S. 1-1227; 1364 1555, S. 2-1555; 1891 1933 2028 S. 1-2163 2416 2490 2594 I. C. C. No. S. 1-36 S. 2-36 S. 2-36 S. 2-1. ")0 S. 3-150 568 S. 1-620 S. 2-620 S. 3-620 S. 1-766 S. 1-902 1179 1227 5. 1-1227 ]364 1555 3. 2-15.55 1891 1933 2028 2]a3 5. 1-2163 2416 2490 2594 *In cargo lots, oats 10,000, other grain 8,000 bushels. tRate expires September 15, 1896, JRates expired January 15, 1898. §Rates expire January 15, 1899. Ij Rates expire Aprj) 5.5, 1899. '' • ■ -r 255 256 ATLANTIC PORT DIFFERENTIALS Statement shoiving changes in rates on grain, ex-Lake, for export, from Buffalo to Boston, Mass., from 1896 to date, via Delaware, Lackawanna and Western Rail- road. FOR EXPORT. [Rates in cents per bushel.] FROM BUFFALO, N. Y., TO BOSTON, MASS. TARIFFS. DATE. CO y. i 05 a d d 1 E 6 -a CO D3 1897— Mar. 18 Apr. 20 Oct. 20 1898— Mar. 15 1899— Jan. 26 5 5 *5% 41/2 *5 4% 4% *5y2 t4% J4% 4% 4% *5V2 t4% J4% 31/2 3% »4 tSVz 131/2 I. C. C. No. 435 568 766 902 1179 I. C. C. No. 4.35 568 766 902 1179 *Expires Jan. 15, 1898. fExpires Jan. 15, 1899. tExpires Apr. 15, 1899. Statement showing changes in rates on grain, ex-Lake, domestic, from Buffalo, N. Y., to New York, N. Y., from 1896 to date, via Delaware, Lackawanna and Western Railroad. DOMESTIC. [Rates in cents per bushel.] PROM BUFFALO, N. N. Y., TO Y. NEW YORK, TARIFFS. ^-^ o s ^^ •A £ DATE. JO n £1 ^ .0 'a s ■a 2? to £ ^ d 03 1 y. 03 (-* 03 s •A 03 ^ n w K I. C. C. No. I. 0. C. No. 1896— Mar. 9 *5 *iV4, •4% *4% •4 30 30 Mar. 9 6y4 51/2 6 6 4y2 30 30 May 14 May 14 June 1 *6 71/4 S. 2-36 S 2-36 S. 2-36 S. 2-36 *5 *4y4 «4% *4% •3y2 150 150 June 1 6% 6y2 6 6 4y2 150 150 1897— Apr. 20 5 4% 4% 4% 3y2 568 568 Oct. 20 5% 5 5y2 5y2 4 766 766 1898— Mar. 15 5 4y4 4% 4% 31/^ 902 902 1899— Jan. 26 5 4V4 4% 4% 3y2 1179 1179 Apr. 29 t5 t4y4 t4% t4y2 t3 1227 1227 Nov. 1 61^ 5% 6 6 syz *1364 1364 1900— Mar. 8 5 4^ 4% 4y2 3 •1555 1555 Nov 27 . 3y4 3y2 S. 2-1555 *1891 S. 2-1555 1901— Apr. 1 5 4% 4y2 4^ 1891 June 18 5 4% 4% 4% sy* *1948 1948 Oct. 7 5 4y4 4y2 4y2 3y2 •2028 2028 1902— Apr 22 3% 3% S. 5-2028 ♦2163 S. 5-2028 Apr. 25 5 4y4 4% 4y2 2163 Nov. 15 51/2 4% 5 6 3% 2416 2416 1903— Jan. 1 6 5y4 5% 5y2 4 •2490 2490 Apr. 1 to date 6 6>/2 sy* 5% 6% 4 •2594 2594 tRates expire April 15, 1899. *In cargo lots; oats, 10.000 other grain, 8.0O0 bushels. MEMORANDUM : DIFFERENTIAL RATES 257 statement showinn chanqes in rates on (jroin, ex-Lahe, for export, from Buffalo, N. Y., to New York, N. Y., from 1896 to date, via Delaware, Lackawanna and Western Bfiilroad. FOR EXPORT. [Rates in cents per bushel.] FROM BUFFALO, N. Y., TO N. T. NEW YORK, TARIFFS. ^ d O A ^.^ ^ ;£ tn ^~N ..-^ DATE. Eg £ ^ to a i -a s i ^ « o 6 a 1 1) a ^ 6 S5 ■a 03 P5 o O >< 03 O 1 o O 1S97— Mar. 18 Oct. 20 189&— Mar. 15 1899— Jan. 26 Nov. 1 1903— Apr. 1 May 4 Sept. 16 Nov. 16 1904— Jan. 1 Feb. 16 Feb. 24 Mar. 3 Mar. 9 Mar. 14 Mar. 21 Mar. 28 Apr. 30 Apr. 30 to date 5 5% 5 5 61/2 5 4 41/2 5 3.4 3 2.2 1.8 1.4 1 0.6 0.2 4 51/2 5 4 i^A 5 3.4 3 2.2 1.8 1.4 1 0.6 0.2 4 4^4 5 iV* 5% 41/2 3% 4 41/2 2.9 2% 1.7 1.3 0.9 0.5 0.5 0.1 3.5 4% 5% 4% 4% 6 4% 3% 414 4% 3.15 2% 1.95 1.55 1.15 0.75 0.35 0.35 3.75 4% 5^/2 4% 4% 6 4% 3% 4% 4% 3.15 2% 1.95 1.55 1.15 0.75 0.35 0.35 3.75 3V2 4 3% 3y2 4 3 31/2 4 2.4 2 1.2 0.8 0.4 0.4 0.4 0.4 3 I. C. C. No. 435 766 902 1179 1364 S. A-S. 1-2594 S. B-S. 2-2594 S. OS. 4-25M S. D-S. 5-2.594 S. E-6-2594 S. H-8-2594 S. 1-^2594 S. J-10-2594 S. K-1 1-2594 S.L-S. 12-2594 S.M-S. 13-2594 S. N-14-2594 S. 0-15-2594 S. P-16-2594 I. C. C. No. 435 766 902 1179 1364 S. A-S. 1-2594 S. B-S. 2-25»4 S. C-S.4- 2594 S. D-S. .5-2594 17 statement showing changes in rates on grain, ex-Lake, domestic, from Buffalo, N. Y., to Philadelphia, Pa., from March 9, 1896, to date, via Delaware, Lacka- wanna and Western Railroad. DOMESTIC. [Rates in cents per bushel.] FROM BUFFALO, N. T., TO PHILADEL- PHIA, PA. TARIFFS. DATE. i Si £1 i 03 i a pq d 5 >> 03 m S3 6 « a a s 6 iz; •a 93 1896— Mar. 9 Mar. 9 May 14 *4 5% *3% 5 ♦3% 5 •3% 5 *3% 4 I. C. C. No. 30 30 I. C. C. No. 30 30 May 14 June 1 June 1 1897— Mar. 18 *4 5V4 *3% 5 *3% 5 ♦3% 5 *3 4 150 150 150 150 Apr. 20 Oct. 20 1898— Mar. 15 1899— Apr. 29 Nov. 1 1900— Mar. 8 Nov. 27 5 5% 5 4% 6 4% 41/4 5 iV4, 4 sy* 4 4% 5% 4% 4 5y2 4 4% 5% 4% 4 4 31/^ 4 3% 2V^ 3 2y2 3 3y2 3 3y4 3Vi: 3% 31^ 4 4 568 766 902 1227 1364 1555 S 2 1555 568 766 902 1227 1364 15,% S 2 1555 1901— Apr. 1 June 18 Oct. 7 Dec. 20 41/2 41^ iV2 4 4 4 4y4 4y4 4y4 4y4 4y4 4y4 1891 1948 2028 S 1 2028 1891 1948 2028 S 1 2028 1902— Apr. 25 Nov. 15 1903— Jan. 1 Apr. 1 to date 5 51/2 5% e" 4 41/^ 5 5 4% 4%l sy*: 5y4 4y4 4% 5y4 5y4 2163 2416 2490 2594 2163 2416 2490 2594 *In cargo lots, oats 10,000, other grain 8,000 bushels. Statement showing changes in rates on grain, ex-Lake, for export, from Buffalo, N. Y., to Philadelphia, Pa., from 1896 to date, via Delaware, Lackawanna and Western Eailroad. FOR EXPORT. [Rates in cents per bushel.] FROM BUFFALO, N. T., TO PHILADEL- PHIA, PA. TARIFFS. DATE. 5 § 03 ID y. a 00 a ca a La g >> 6 :?; a S E 6 a as 1896— May 14 *5 6y4 4 4% 5 5 6 t3.» t3.9 I. C. C. No. S. 2-36 S. 2-36 435 766 902 1179 1364 S. 2-2163 S. 3-2163 I. C. C. No. 2-36 May 14 .... 2-36 1897— Mar. 18 Oct. 20 1898— Mar. 15 1899— Jan. 26 Nov. 1 1902— June 30 Aug. 1 4% 4% 4% 5% t3.5 J3.5 3% 4% 4% 4% 5% t3.7 13.7 3% 4% 4% 4% 5% t3.7 13.7 3 3% 3% 3VS 3 tS.2 t3.2 435 766 902 1179 S. 2-2163 S. 3-2163 *In cargo lots, 8,000 bushels, oats 10,000 bushels. tRates expired July 15, 1902. JRates expired Aug. 15, 1902. 258 MEMORANDUM: DIFFERENTIAL RATES Table No. 3. 259 Statement shotting changes in rates on grain, ex-Lake, from Buffalo, N. Y., to Boston, Mass., via Erie Eailroad. DOMESTIC. [Rates in cents per bushel.] DATE. TARIFF. FROM BUFFALO. N. T., TO BOSTON, MASS. 1896— Apr. 21 May 4 . Sept. IS Oct. 8 . 189S— Apr. 9 . 1899— Apr. 24 Apr. 27 Nov. 1 190O-Mar. 8 . Nov. 27 1901— Apr. 1 . June 1 Oct. 13 1902— Apr. 28 Nov. 15 1903— Apr. 1 . I. C. C. No. 195 S. 1-195 406 S. 1-406 1353 1774 1775 1945: 2200 2552 2711 2817 2939 3144 3229 3481 7 8% 61/2 6 6 6V2 7 7 61/2 81/2 6y2 6% 6y2 6 6 6% 7 71/2 7y4 6% 5% 7 5y4 514 5y2 5 5 5V2 6 6 7y2 6 5% SV4, 5% 5% 6 5% 5y2 6 6V2 &V2 6 8V4. 6 5y2 5% 6 6y2 6y2 4y2 '4% 4y2 4 3y2 4% 3y2 3% 4 3% 4 4 4y4 4% FOR EXPORT. 1896— Mar. 7 Mar. 7 May 4 . May 4 . June 1 June 1 1897— Mar. 16 Oct.. 20 1898— Mar. 15 Aug. 29 1903— Apr. 1 Sept. 16 Nov. 16 1904— Jan. 1 Feb. 9 Feb. 15 Feb. 18 Feb. 23 Feb. 27 Mar. 5 Mar. 8 Mar. 15 Mar. 21 Mar. 28 Apr. 2 Apr. 30 72 72 1-72 1-72 271 271 705 10!"i8 1333 1486 348-2 3679 3742 3794 3852 3863 386i 3877 3877 3892 3901 3911 3916 3925 3929 3953 *5 ey* *5 6% 5 5% 5 4y2 5 4 4"^ 5 4.6 3.8 3.4 3 2.6 2.2 1.8 1.4 1 0.6 0.2 4 ♦6 7y4 •6 7y4 5 5% 5 5y2 4 4y2 5 4.6 3.8 3.4 3 2.6 2.2 1.8 1.4 1 0.6 0.2 4 *4% 5y2 *4y4 5y2 4y4 5 4% 3% 4y2 3y2 4 4y2 4.1 3.3 2.9 2.5 2.1 1.7 1.3 0.9 0.5 0.5 0.1 3y2 '4% 5y2 4% 4y4 4% 3% 414 4% 4.35 3.55 3.15 2.75 2.35 1.95 1.55 1.15 0.75 0.35 0.35 3% ♦4% 6 *4% 6 4% 5y2 4% 4y4 4% 3% 4y4 4% 4.35 3.55 3.15 2.75 2.35 1.95 1.55 1.15 0.75 0.35 0.35 3% •4 4V4 *3% 4% 31^ 4 3y2 3 4 3 3y2 4 3.6 2.8 2.4 2 1.6 1.2 0.8 0.4 0.4 0.4 0.4 3 *In cargo lots, oats 10,000, other grain 8,000 bushels. 260 ATLANTIC PORT DIFFERENTIALS Statement showing charges in rates on grain, ex-Lake, from Buffalo, N. ¥., to New York, N. Y., via Erie Bailroad. DOMESTIC. [Bates in cents per bushel.] DATK. TARIFF. FROM BUFFALO, N. Y., TO NEW YORK, N. Y. 1896— Mar. 7 Mar. 7 May 4 May i .June 1 .Tune 1 1897— Mar. 16 Oct. 2U 1898— Mar. 15 Aug. 29 1899— Apr. 29 Nov. 1 1900— Mar. 8 Nov. 27 Dec. 24 1901— Apr. 1 June 1 Oct. 14 Dec. 20 1902— Apr. 25 Nov. 15 1903— Jan. 1 Apr. 1 Apr. 23 May 21 Sept. 16 Nov. 16 1904— Jan. 1 Feb. 8 Feb. 15 Feb. 18 Feb. 23 Feb. 27 Mar. 5 Mar. 8 Mar. 15 Mar. 21 Mar. 28 Apr. 2 Apr. 30 I. C. C. No. 72 72 S. 1-72 S. 1-72 271 271 705 1158 1333 1486 1779 1944 2199 2553 S. 1-2553 2712 2816 2938 3014 S. 2-3014 3328 3356 3479 3480 S. 1-3480 3678 3741 3792 3848 3860 3867 3874 3885 3894 3903 3910 3914 3923 3980 3954 •5 6V4. *5 6% 5 5% 5 41/2 5 GV2 5 5 5% 6 4 t4 t4% t5 t4.6 t3.8 t3.4 t3 t2.6 t2.2 tl.8 tl.4 tl tO.6 tO.2 t4 m *6 5 5% 5 4% 5 6% 5 5 5% 6 61/2 iWz 15 t4 t4% t5 t4.6 t3.8 t3.4 t3 t2.6 t2.2 tl.8 tl.4 tl to. 6 to. 2 t4 •4% 5V2 *4% 414 5 4% 3% 4% 5% 4% 4% 4V4 4V* 4% 5V4 t4% t3% t4 t4% t4.1 t3.3 t2.9 t2.5 t2.1 tl.7 tl.3 to. 9 to. 5 to. 5 tO.l t31/2 «4% 6 4% 51/2 4% 4V4 4% 6 4% 4% 41/2 4% 4V4 4% 5 5% 5% t4% 6 4% 51/2 4% 414 4^ 6 4% 4% 4% 4% 4% 41/2 5 51/2 5% t4% t3% t3% t4V4 t4i4 t4% t4% t4.35 t4.35 t3.55 t3.55 t3.15 t3.15 t2.75 t2.75 t2.35 t2.35 tl.95 tl.95 tl.5S tl.55 tl.l" tl.l5 to. 75 to. 75 to. 35 to. 3=; to. 35 to. 3'= t3% t3y4 *4 4% •3Vi 4% 3% 4 3V2 3 3 W2 3 3% 31/2 3% 3V4 SVz 3 3% 3% 4 4 t4 t3 t3% t4 t3.6 t2.8 t2.4 t2 tl.6 tl.2 to. 8 to. 4 to. 4 to. 4 to. 4 t3 FOR EXPORT. 1807— Oct. 20 1898— Mar. 15 Aug. 29 11.58 5% 5% 5 51/2 5% 1333 5 4y4 4% 4% 14S6 4% 41/2 3% 41/4 4V4 4 31/2 3 »In cargo lots, oats 10,000, other grain 8,000 bushels. tTo Jersey City. MEMORANDUM : DIFFERENTIAL RATES 261 statement showing charges in rates on grain, ex-Lake, from Buffalo, N. Y., to Philadelphia, Pa., via Erie Eailroad. DOMESTIC. [Bates in cents per bushel.] DATE. TARIFF. FROM BUFFALO. N. Y., TO PHILADEL- PHIA. PA. ^^ w /•^ o CIO ''■^ X! VJ £1 a to a o >. « u « 1806— Mar. 7 Mar. 7 May i May 4 May 19 May 19 June 1 June 1 July 20 July 20 1897— Mar. 16 Oct. 20 1898— Mar. 15 Aug. 29 1899— Apr. 29 Nov. 1 1900— Mar. 8 Nov. 27 Dec. 24 19t)l— Jan. 23 Apr. 1 June 1 Oct. 14 Dec. 20 1902— Nov. 15 1903— Jan. 1 Apr. 1 C. C. No. 72 72 S. 1-72 S. 1-72 247 247 271 271 328 328 705 1158 1333 1486 1779 1944 2199 2553 S. 1-2553 S. 2-2553 2712 2816 2938 3014 3328 3356 3479 •4 *i 5V4 *4 5Vi 5 5% 5 41/2 4% 6 41/2 6% •5 6% •5 6V4, *5 ev* 5 5% 5 4y2 6 iV2 5 4% 4y2 4% 4% 5 5% *3% 5 •3% 5 *3% 5 4% &% 4% 4y4 4 5y2 4 4 4% 4% 4y4 4y4 4y4 4% sy* •3% 5 *3% 5 •3% 5 4% 5% 4% 4y4 4 5% 4 4 *3% 4 4 ♦3 4 •3 4 3% 4 3% 3 2% 3 2% 3 3y4 3% 31/4 3 3V4 31^ 3% 4 4 ♦In cargo lots, oats 10,000, other grain 8,000 bushels. 262 ATLANTIC PORT DIFFERENTIALS Statement showing charges in rates on grain, ex-Lake, from Buffalo, N. Y. to Philadelphia, Pa., via Erie Bailroad— Continued. FOR EXPORT. [Rates in cents per bushel.] DATE. TARIFF. FROM BUFFALO. N. Y., TO PHILADEL- PHIA, PA. 1897— Mar. 16 Oct. 20 189&-Mar. 15 Aug. 29 1902— .Tune 24 Nov. 22 1903— Jan. 1 Mar. 31 May 21 Sept. 16 Nov. 16 1904— Jan. 1 Feb. 9 Feb. 15 Feb. 18 Feb. 23 Feb. 27 Mar. 5 Mar. 8 Mar. 15 Mar. 21 Mar. 28 Apr. 2 Apr. 30 S. 3- 3326 S. 2- S. 3- I. C. O. No. 705 1158 1333 1486 -3014 Cor. 3345 3345 ;-3S45 3680 3743 3795 3851 3862 3868 3875 3886 3893 3902 3908 3915 3924 3928 3952 4 4% 5 3.9 41/2 5 4 41/2 5 4.6 3.8 3.4 3 2.6 2.2 1.8 1.4 1 0.6 0.2 4 4 4% 5 4% 3.9 41/2 5 W2 5 4 4y2 5 4.6 3.8 3.4 3 2.6 2.2 1.8 1.4 1 0.6 0.2 4 3% 41/2 4% 3% 3.5 4 4y2 3y2 4 4y2 4.1 3.3 2.9 2.5 2.1 1.7 1.3 0.9 0.5 0.5 0.1 syz 3% 3% 4% 4y2 4% 4% 4V4 4y4 H.7 3.7 4y4 4y4 4% 4% 3% 3% 4V4 4y4 4% i% 4.35 4.35 3.55 3.55 3.15 3.15 2.75 2.75 2.35 2.35 1.95 1.95 1..55 1.55 1.15 1.15 0.75 0.75 0.35 03.6 0.35 0.35 3% 3% 3 3y2 31^ 3 3.2 4 3 3% 4 3.6 2.8 2.4 2 1.6 1.2 0.8 0.4 0.4 0.4 0.4 3 MEMORANDUM : DIFFERENTIAL RATES Table No. 4. 263 statement shoiving changes in rates on grain, ex-Lake, from Buffalo, N. Y., to Bos- ton, Mass., via Erie and Western Transportation Company {Pennsylvania Rail- road Company). DOMESTIC. [Rates in cents per bushel.] a o B B o U FROM BUFFALO, N. Y., TO BOSTON, MASS. DATES. i Si £ i 00 P3 a o 03 s CO d si File No. 18S9— July 22 .'^37 9V2 8% s% 8% 8 7V^ 8% 81/4 8y4 8% sy* 8 71/2 7 7% 7% 71/2 61/2 71/2 5% 5% 5% 5% 23 July 22 . 350 366 368 382 390 391 402 403 417 441 475 24 Oct. 7 •30 Oct. 7 30 1890— Apr. 11 5 May 12 5% 51/8 11 May 16 12 Aug. 18 21 Aug. 23 '» 1891— Mar. 19 8% 5 1 June 7 19 1892— Apr. 11 8%, 8% 7i^ 71/2 5 4 1889— July 22 Aug. 23 Sept. 16 Oct. 7 1890— Apr. 2 Apr. 7 May 12 June 5 1891— Mar. 19 Nov. 6 1892— Apr. 11 May 6 . May 7 . Sept. 20 Sept. 21 Sept. 23 Oct. 17 Oct. 28 Nov. 5 Dec. 4 . 1893— June 17 July 5 . 1894— Mar. 20 1895— Apr. 11 1897— Mar. 15 357 364 365 366 374 381 390 394 417 465 475 485 488 533 534 535 543 550 555 564 585 5S9 624 682 I. C. C. No. 2 61/2 5% 578 61/^ 5% 5% 6 5% 4% 41/i 4% 4% b SVz 6 7 6 5 5 6 5% 4% 41/9 4% 4% 5 5% 6 7 6% 5% 5y2 414 4y4 4y2 4% 4% 5% 5% 6%' 6y4, 5% I 51/2; 4%, 4%l iVi\ 51/2 5 5% 5% 3y4 31/2 3% 4y4 5y4 5% 5Vi 4 3% 5% 5% 5y2 4% 4y4 4% 4% 4% 5y4 5% 6% 6y4 6 5% 4% 4% 4% 5% 51/2 41/2 4y4 41/2 4% 4% sy* 5% 6% ey* 6 5% 4% 4% 4% 4 4" 3% 3 3y4 31/2 31/2 4 41^ 51/2 5 4 4 3% 23 28 29 *30 2 3 11 15 1 39 4 11 14 39 40 41 46 52 56 64 6 9 2 1 I. C. C. No. 2 "Corrected. 264 ATLANTIC PORT DIFFERENTIALS Statement showing changes in rates on grain, ex-Lake, domestic, from Buffalo, N. Y., to New York, N. Y., from 1889, via Erie and Western Transportation Co. DOMESTIC. [Rates in cents per bushel.] DATES. 03 "^ PROM BUFFALO, N. Y., TO NEW YORK, N. Y. ^ ^ B ^ S % ^ £i s ^^ 00 j= to CO 0) >1 a J5 Oj o >> 03 ^ u m O pj o 188*-July 22 July 22 Aug. 23 Sept. 16 Oct. 7 . 1890— Apr. 2 . Apr. 7 . 1891— Mar. 19 Oct. 14 Nov. 17 1892— Apr. 11 May 6 May 7 Sept. 1 Sept. 2 Sept. 3 Sept. 21 Sept. 23 Oct. 17 Oct. 26 Nov. 5 189S— Apr. 4 . June 17 July 5 . 1894— Mar. 20 1895— Apr. 11 1897— Mar. 15 Pile No. 357 359 364 365 1 366: 374' 381 417 462 466 475 485 488' 526 523 524 534 535 543 547 555 569 585 589 624 682 [. C. C. No. 2 6V2 5% 578 6% 5% 5% 6 5% 4% 41/2 4% 4% 5 51/2 6 7 6 6% 6 5 5 5% 6 5% 4% 4% 51/2 6 7 41/2 4% 4% 4% 51/4 5% 6% 51^ 5% 51/2 4% 4y4 4% 51/2 51/2 5 5% 5% 51/4 sy* ay* 5y2 5% 5y2 4y2 4y4 4y2 4y4 4% 43/4 5y4 5% 6% 5% 6 5% 4% 4% 4% 5y2 5% 5y2 4y2 4y4 4y2 4y4 4% 4% 5y4 5% 6% 5% 6 5% 4% 4% 4% 3% 3% 3y2 3% 4y4 4 4 4 4 4 3V6 3 3 4 3y2 3y2 4 4y2 5y2 4 4y4 4 4 4 ayz 23 24 28 29 •30 2 3 1 36 40 4 11 14 34 33 33 40 41 46 49 56 1 6 9 2 1 I. C. C. No. 2 EXPORT. 1897— Mar. 15 I. C. C. No. 2 4y4 4% I. c. c. 3y2 2 •Oorrected. MEMORANDUM : DIFFERENTIAL RATES Table No. 5. 265 statement showincj rates on grain, ex-Lake, domestic and export, from Buffalo, N. Y., to Philadelphia, Pa., from 181)9 to date, via U'csiern New ¥ork and Penn- sylvania Bailroad. DOMESTIC. [Rates in cents per bushel.] DATE. TARIFF. FROM BUFFALO, N. Y., TO NEW YORK, N. Y. XI w j:3 s s a 1^ o >, O M J90O-NOV. 27 1901— Mar. 9 June 1 Dec. 24 1902— Jan. 4 Apr. 21 Nov. 15 1903— Jan. 1 Jan. 10 Apr. 1 , May 12 to date I. C. S. s. 4% 4% 4% 4% 4y4 4% sy* 5% 5V4 5y4 4V2 4y2 4V2 iVz 4y2 4V^ 4y2 41/2 4% 4% 5 5 5y2 5% 5% 5y2 5y2 5y2 5% 5y2 3 3% sy* 3% 3% 3% 4 4 4 4 Statement showing rates on grain, ex-Lake, domestic, and export, from Buffalo, N. Y., to Plnladelplna, Pa., from 1899 to date, via Western New York and Pennsylvania Bailroad. DOMESTIC. [Rates in cents per bushel.] TARIFF. FROM BUFFALO- N. PHIA Y., TO PHILADEL- . PA. DATE. 03 •a 1 ca 00 >. ca c 05 1899_May 14 I. C. C. No. S. 1-390 S. 2-425 S. 4-425 S. 5-S. 22 S. &-S., 22 S. 7-S. 22 • S. 75 S. 143 S. 145 S. 207 S. 221 S. 297 S. 323 S. 2-S. 323 S. 4-S. 323 S. 5-S. S2;b S. 6-S. 323 S. 7-S. 323 S. 8-S. 323 S. 9-S. 323 S. 10-S. 323 S. 11-S. 323 S. 12-S. 323 6 iV2 4y2 6 4y2 4 4 4 4y4 4^ 4y4 4y4 4y4 4y4 4% 5y4 sy* 5y4 4 5y2 4 4y4 4% 4y4 4y4 4y4 4% 4% 5y4 5y4 sy* 2% Nov. 1 3 1900— Mar. 11 2% 1901— Mar. 9 3% Apr. 1 3% May 1 3% 4y2 4y2 4y2 5 5V2 5y2 4y2 4% 4y2 5 5y2 6 6 4 4% 5 4.6 4.2 3.8 3.4 3 2.6 2.2 4 4 4 4% 5 5 6 3 Dec. 24 3% 1902— Jan. 4 3% Nov. 15 314 1906— Jan. 1 4 Apr. 1 4 May 12 4 Sept. 24 Nov. 25 1904— Jan. 1 Feb. 8 Feb. 13 Feb. 13 Feb. 17 Feb. 19 Feb. 26 Mar. 3 Statement showing rates on grain, ex-Lake, domestic, and export, from Buffalo, N. ¥., to Philadelphia, Pa., from 1899 to date, etc. — Continued. FOK EXPOKT. DATE. TARIFF. PROM BUFFALO. N. Y.. TO PHILADEL- PHIA, PA. 1904— Jan. 18 Feb. 8 Feb. 13 Feb. 13 Feb. 17 Feb. 19 Feb. 26 Mar. 3 Mar. 9 Mar. 15 Mar. 21 Mar. 26 C. C. No. S. 418 S. 4261 S. 429! S. 431 S. 436 S. 438! S. 442 S. 444 S. 448 S. 453 S. 456 •S. 457 4.6 4.6 4.1 4.35 4.2 4.6 3.7 3.95 3.8 3.8 3.3 3.55 3.4 3.4 2.9 3.15 3 3 2.5 2.75 2.6 2.6 2.1 2.35 2.2 2.2 1.7 1.95 1.8 1.8 1.3 1.55 1.4 1.4 0.9 1.15 1 1 0.5 0.75 0.6 0.6 0.5 0.35 0.2 0.2 0.1 0.35 4.35 3.95)» 3.55 3.15 2.75 2.3a 1.95 1.55 1.15 0.75 0.35 0.35 3.6 3.2 2.8 2.4 2 1.6 1.2 0.8 0.4 0.4 0.4 0.4 *NOTK.— Export rates withdrawn by the Pennsylvania Railroad from Buffalo, April 30, 1904, by S. 1 to I. C. C. 457. For domestic rates see I. C. C.-S. 323. DOMESTIC. DATE. TARIFF. FROM BUFFALO. N. Y., TO BALTIMORE, MD. 1899— May 14 Nov. 1 1900— Mar. 11 1901— Mar. 9 Apr. 1 May 1 June 1 Dee. 24 1902— Jan. 4 Nov. 15 1903— Jan. 1 Apr. 1 May 12 I. C. C. No. S. 1-390 S. 2-425 S. 4-425 S. 5-S. 22 S. 6-S. 22 S. 7-S. 22 S. 75 S. 143 S. 145 S. 207 S. 221 S. 297 S. 323 41/2 6 4% 4% 41/2 4% 5 5% 5% 5% 4y2 6 41/4 4% 4y2 4V 5 4 5V2 4 414 414 4% 4% 4% 5% 5% 5Vi 4 5M! 4 4% iV- iVi 4% 4% 4% 4% sy* 2% 3 2y2 3% 3% 3Vi 3 3% 3V4 3% 4 4 4 FOR EXPORT. 1904 — Jan. 18 S. 418 S. 426 S. 429 S. 431 S. 436 S. 438 S. 442 S. 444 S. 448 S. 453 S. 456 S. 457 4.6 4.2 3.8 3.4 3 2.6 2.2 1.8 1.4 1 0.6 0.2 4.6 4.6 3.8 3.4 3 2.6 2.2 1.8 1.4 1 0.6 0.2 4.1 3.7 3.3 2.9 2.5 2.1 1.7 1.3 0.9 0.5 0.5 0.1 4.35 3.95 3.55 3.15 2.75 2.35 1.95 1.55 1.15 0.75 0.35 0.35 4.35 3.95 3.55 3.15 2.75 2.35 1.95 1.55 1.15 0.75 0.35 0.35 3.6 Feb. 8 3.2 Feb. 13 2.8 Feb. 13 2.4 Feb. 17 2 Feb. 19 1.6 Feb. 26 1.2 Mar. 3 0.8 Mar. 9 0.4 Mar. 15 0.4 Mar. 21 0.4 Mar. 26 0.4 NOTEj— Export rates from Buffalo were withdrawn by the Pennsylvania Railroad by S. 1 to I. C. O. No. 457, effective April 30, 1904. For domestic rates see I. C. C.-S. 323. 266 MEMORANDUM : DIFFERENTIAL RATES Table No 6. 267 Statement showing changes in rates on ex-Lake grain, for domestic use and export from Erie, Pa., to Boston, Mass., via Erie and Western Transportation Com- pany (Pennsylvania Railroad Company.) DOMESTIC. [Rates in cents per bushel.] FROM ERIE , PA., TO BOSTON, MASS. ^^ •^ Xi ,-, 'A DATES. o % £ £1 .D s a o -a to . ^ B ^ ja % 4% 5% t> 4 4% 5 5 4 4% !>% 5% 4% 5% ►5.25 *7.50 •4.875 6.25 5.5 6 5 5 4y4 4% 5% 5% 5 5y2 5 5 4y4 4% 5 5 4y4 4% 6'/i! 61^ 5% 6 5 5 4y4 4y2 a 5 4y4 4V^ 5 5 4 4y2 5 5 4y4 4% 6 5 4y4 4% 5 5 4y4 4y2 5% 5% 4% 5 6 6.5 5.25 5 6 6.5 5.25 5.5 678 6% 5% 6% 5% 5% 4% 4% *4.875 6 4% 5% 4% 4y2 6 4y2 4y4 4y2 4y2 4% 41^ 5 5 5.5 sys 4% 4y8 4% 3% 3% •4.125 4.50 3.5 4 3% 3 3% 3 4 3% 3% 3% 3y4 3% 3% 4 4 I. c. c, File No. 558 562 565 570 586 590 625 683 711 722 725 No. 1 1 1 21 23 52 87 90 94 m 96 99 101 108 111 112 116 I.e. C. No. 1 1 1 21 23 52 87 90 94 t94 96 99 101 106 111 112 116 EXPORT. 1897— Mar. 15 Oct. 20 1886— Mar. 15 1903— Sept. 17 Nov. 16 1904— Apr. 30 •5 •5 *4y4 •4% •4% *3y2 •5% •5% •5 •5% •5% •4 •5 *5 *4% •4% •4% •31/2 4 4 3.5 3.75 3.75 3 4.50 4.50 4 4.25 4.25 3.50 4 4 3.5 3.75 3.75 3 I. C. C. No.il. ll 21 i 23 117 118 132 C. C. No. 1 21 23 117 118 132 ♦In cargo lots, oats 10,000, other grain 8,000 bushels, t Corrected. MEMORANDUM: DIFFERENTIAL RATES 269 Statement showing changes in rates on grain, ex-Lake, domestic, from Erie, Pa., to Philadelphia, Pa., via Erie and Western Transportation Company. [Rates in cents per bushel.] DOMESTIC. DATES. 1889— June 17 . June 19 . July 22 . Aug. 23 . Oct. 7 .. 1890— Mar. 19 . June 5 . 1891— Mar. 19 . May 20 . June 12 June 13 Aug. 1 . Aug. 15 . 1892— Apr. 15 . May 6 .. May 13 . May 18 . May 30 . June 10 . June 13 . Aug. 8 . . Sept. 1 . Sept. 1 . Sept. 24 Oct. 17 Oct. Oct. Nov. Nov. Nov. Nov. 1893— Apr. June 17 . July 5 . 1894— Mar. 12 Mar. 20 1895— Apr. 11 . Aug. 24 Nov. 1 . Nov. 27 1896— Mar. 28 Mar. 28 1897— Mar. 15 Oct. 20 . 1898— Mar. 15 1899— Apr. 27 . Nov. 1 . 1900— Apr. 10 . Nov. 10 . Dec. 4 .. 1901— May 13 , June 1 . 1902— Apr. 21 , Nov. 15 1903— Mar. 21 May 4 . 26 . 29 . 5 . 8 . 23 28 4 , FROM ERIE, PA., TO PHILADELPHIA, PA. ^~, ^ JD ^ s £ J2 m 1 00 1 ■<*< CO o S5 4* >> ^^ w X 03 e o >, OS ^ 1^ a Q « O 4% 4% 5 5 41/2 4% 4 4 31/2 3^4 31/2 41^ 4 4' 5 SVz 6 6-_ 6 ^ 5% 5 5% 5% 5y2 4 4y2 5 5 4y2 4% 4 4 3 314 3% 4 _ 4 4% 5 r>% 6 6% 6 5 4% 4% 3% 4 4% .4 5 5% 5 4y2 6 41^ 4% 4% 414 4y2 4y2 5 5y2 5% 4% 4 41^ 4% 4% 4% 4% 4 4 3% 3% 3 3% 4y4 3% 4% 4% 5% 5% 6y4 5% 5y4 4% 5 sy* 5 5 5% 5% 4% 6 4y2 4y2 4y2 4% 5 6 4y4 3% 3 3y2 3% *3% 5 4% 5 4y4 4 5y4 4 4 4 4 4 4 4% 5 5 4% 4% 4% 4y4 4 4 3% 3% 3 3V4 iV4 3% 4y2 4% sy* 5% ey* 5% 514 4% 5y4 5% 5y4 414 4y4 4y4 3y2 3% 4y4 ♦3% 5 4% 51^ 4% 4 5% 4y4 4y4 4y4 4y4 4% 5% 5>4 4% 4% 4% 4y4 4 4 3% 3y4 3 3y4 4y4 3% 4y2 4% 5V4 5% eVi 5% 5y4 4% sy* 5y2 5% 4y4 4y4 4y4 3% 3% 4% •3% 5 4% 4% 4 5% 4 4 4y4 4y4 414 4y4 4% sy* 5y4 3y4 3 3% sy* 4 3% 3% 31^ 3% 3% 3y4 3 3 3 3 3 3 4 3 3% 3% 4 4% 5 4^^ 4 3% 3% 4 3% 3% 3 3% 3% •3y2 4 3% 4 3% 2y2 3 21^ 3% 3V^ 3»^ 3 3>4 3^! 4 4 File No. 345 346 358 363 367 373 395 418 436 444 446 454 457 461 486 490 493 500 505 507 515 519 529 536 544 548 551 556 558 562 565 570 586 590 623 625 683 711 722 725 I. C. C. No. 1 1 1 21 23 52 LC. C. No. 90 94 101 108 111 112 116 116 15 22 27 31 1 16 2 15 21 22 29 32 1 12 15 18 21 23 25 27 30 37 42 47 50 53 57- 59 62 65 2 7 10 1 3 2 4 6 1 1 1 21 23 52 86 90 94 96 99 101 108 111 112 116 •In cargo lots, oats 10,000, other grain 8,000 bUBhels. 270 ATLANTIC PORT DIFFERENTIALS Statement showing changes in rates on grain, ex-Lalce, domestic, from Erie, Fa., to Philadelphia, Fa., etc. — Continued. DATES. FROM ERIE, PA., TO PHILADELPHIA, PA. y«-N -: 5 ^ J2 CC S 1^ -T ^ o 00 £ j2 X3 "S -<*' to «5 . ca a -- ^ 03 o t». 03 fH pq O « O EXPORT. I. 0. C. No. 1897-Mar. 15 *4 »4 *3% *3% *3% *3 1 1 Oct. 20 *i% »4% *4y2 *4y2 *4y2 *3y2 21 21 1898— Mar. 15 *5 *5 *4V4 *4% ♦43/4 *3% 23 33 1899— Apr. 27 SVz 3y2 2% 2% 3V4 2% 52 52 Aug. 7 3>^ 3% 2% 2% 3 2 74 74 Oct. 1 3% 31/2 3 SVi sy* 2y4 80 80 Nov. 1 5 5 iV4 41/2 4y2 3 86 86 1900— Apr. 10 3 3 21/2 2% 2% 2 90 90 Nov. 10 4 4 31/2 3% 3% 3 94 94 Dec. 4 41/2 i% 4 iVi 4y4 3% 96 96 1901— May 13 4 4 31/2 3% 3% 3 99 99 June 1 31/2 31/2 3 sy* sy* 2y2 101 101 1902-Apr. 21 41/2 41/2 4 4y4 4y4 3% 108 108 June 20 3.9 3.9 3.5 3.7 3.7 3.2 109 109 Sept. 1 4.5 4.5 4 4.25 4.25 3.5 110 110 1903— Mar. 21 5 W2 41/2 4.75 4.75 4 112 112 May 4 5 5 41/2 4.75 4.75 4 116 116 Sept. 15 3.6 3.6 3.1 3.35 3.35 2.6 117 117 Nov. 16 4.10 4.10 3.60 3.85 3.75 3.10 118 118 1904— Feb. 8 4.20 4.20 3.70 3.95 3.95 3.20 119 119 Feb. 12 3.80 3.80 3.30 3.55 3.55 2.80 120 120 Feb. 15 3.4 3.4 2.9 3.15 3.15 2.4 121 121 Feb. 18 3 3 2.5 2.75 2.75 2 122 122 Feb. 20 2.6 2.6 2.1 2.35 2.35 1.6 123 123 Feb. 26 2.2 2.2 1.7 1.95 1.95 1.2 124 124 Mar. 4 1.8 1.8 1.3 1.55 1.55 0.8 125 125 Mar. 9 1.4 1.4 0.9 1.15 1.15 0.4 126 126 Mar. 15 1 1 0.5 0.75 0.75 0.4 127 127 Mar. 21 0.6 0.6 0.5 0.35 0.35 0.4 128 128 Mar. 26 0.2 0.2 0.1 0.35 0.35 0.4 129 129 Apr. 30 to date . . 4 4 3.5 3.75 3.75 3 132 132 *In cargo lots, oats 10,000, other grain 8,000 bushels MEMORANDUM : DIFFERENTIAL RATES 271 Statement showing changes in rates on grain, ex-Lake, domestic, from Erie, Pa., to Baltimore, Md., via Erie and Western Transportation Company. DOMESTIO. [Rates in cents per bushel.] DATES. 1889— June June July Aug. Oct. 1890— Mar. June 1891— Mar. May June Aug. Aug. 1892— May May May May June June Aug. Sept. Sept. Sept. Oct. Oct. Oct. Nov. Nov. Nov. Nov. 1893— Apr. June July 1894— Mar. 1895— Apr. Aug. Nov. Nov. 17 19 22 . 23 . 7 .. 10 5 . 19 20 . 12 1 . 1.5 13 . 18 . 30 . 10 13 8 . 1 . 1 . 24 17 . 26 . 29 . 5 . 8 . 23 28 4 .. 17 5 . 20 11 . 24 1 . 27 189G— Mar. 28 Mar. 28 1897— Mar. 16 Mar. 15 Oct. 20 . 1898— Mar. 15 1899— Apr. 27 . Nov. 1 . 1900— Apr. 10 , Nov. 10 . Dec. 4 ., 1901— May 13 , June 1 . 1902— Apr. 21 , Nov. 15 1903— Mar. 21 May 4 . FROM ERIE, PA., TO BALTIMORE MD. ^-« ~ s ^ o s X3 £ s s ■a CO (M as 1 IS e 4) CO ^ >i a Ph « o cs O 41/2 4 41/2 5 41/2 4V4 4 4 31/2 31/2! 41/2 4 4% 5 51/2 6 6^'2 6 51/2 5 5% 5% 51/2 41/2 41/2 3% 4 41/2 *4 51/4 5 5 5% 5 41/2 41/2 5 41^ 4% 4 4 31/2 3V4 3% 41/2 4 4% 5 5V^ 6 6% 6 5% 5 4% 41/2 41/2 4% 4% 4V^ 4% 5 6 6 3% 41/2 4% 4% 4 4 3% 3y4 3 sy* 4y4 3% 4y2 4% 5^4 5% 6% 5% 5% 4% 5 5Vi 5 4y4 3% 3 3y2 3% »3% 5 4y4 4% 5 4y4 4 5y4 4 4 4 4 4 4 4% 5 5 4% 4% 4y4 4 4 3% 3y4 3 3y4 4y4 3% 4% 4% 5y4 5% ey* 5% 514 4% 514 5y2 514 4y4 4y4 3y2 3% 4y4 *3% 5 4% 4% 5y2 4% 4 5y2 4 4 4y4 4% 4% 4^ 4% 5y4 5V4, 3% 4y4 4% 4y4 4 4 3% 314 3 3y4 4% 3% 4y2 4% 514 5% 6y4 5% 5y4 4% 5% 5y2 5% 4% 414 3y2 3% 4y4 *3% 5 4% 4% 572 4% 4 5y2 4 4 414 414 4y4 414 4% 5y4 6y4 3y8 3V4. 3 3% 3 3% 3% 3 31/^ 3% 4% 3 3 3 3 3 3 4 3 31^ 3% 4 4y2 5 4% 4 3% 3% 4 3% 3% 3% 3 sy* 3% *3y2 4 31^ 3y2 4 3% 3 2y2 3y2 3y2 3% 3 3y2 3% 4 4 File No. 345 346 358 363 i 367 373 395 418 436 444 454 457 486 490 493 .500 505 507 515 519 529 536 544 548 551 556 558 562 565 570 586 590 625 I. C. C, I. C. C. 711 722 725 No. 1 1 1 1 21 23 52 86 No. 90 94 96 99 101 108 111 112 116 116 15 22 27 31 1 16 2 15 21 29 32 12 15 18 21 23 25 27 30 37 42 47 50 53 57 59 62 65 2 7 10 3 2 4 6 1 21 23 53 86 90 94 96 99 101 108 111 112 116 »In cargo lots, oats 10,000, other grain 8,000 bushels. 272 ATLANTIC PORT DIFFERENTIALS Statement showing changes in rates on grain, ex-Lake, domestic, from Erie, Pa., to Baltimore, Md., via Erie and Western Transportation Company — Continued. DATES. FROM ERIE, PA., TO BALTIMORE, MD. FOR EXPORT. I. 0. C. No. I. C. C. No. 1897— Mar. 15 »4 *4 *3% *3% *3% *3 1 1 Oct. 20 *4% •4% *4y2 *4y2 *4i^ *3% 21 21 1898— Mar. 15 *5 ♦5 *4y4 *4% *4% *3l^ 23 23 1899- Apr. 27 31/2 31^ 2% 2% 3y4 2% 52 52 Aug. 7 31/2 3y2 2% 2% 3 2 74 74 Oct. 1 Wz 3y2 3 sy* 314 2^ 80 80 Nov. 1 5 5 Wi 4y2 4% 3 86 86 1900-Apr. 10 3 3 V-k 2% 2% 2 90 90 Nov. 10 4 4 3y2 3% 3% 3 94 94 Dec. 4 *% 41/2 4 4y4 4% 31/^ 96 96 1901— May 1.3 4 4 3y2 3% 3% 8 99 99 June 1 3V^ 3y2 3 3% 314 2% 101 101 1902— Apr. 21 i% 4y2 4 4% 4% 3% 108 108 June 20 3Vz 3y2 3y4 3y4 3^4 3 109 109 Sept. 1 4.1 4.1 3.6 3.85 3.85 3.1 110 110 1903— Mar. 21 4.6 5.1 4y2 4.35 4.35 3.6 112 112 May i 4.6 4.6 4.1 4.35 4.35 3.6 116 116 Sept. 15 3.6 3.6 3.1 3.35 3.35 2.6 117 117 Nov. 16 4.10 4.10 3.60 3.85 3.85 3.10 118 118 1904— Feb. 8 4.20 4.20 3.70 3.95 3.95 3.20 119 119 Feb. 12 3.8 3.8 3.3 3.55 3.55 2.8 120 120 Feb. 15 3.4 3.4 2.9 3.15 3.15 2.4 121 121 Feb. 18 3 3 2.5 2.75 2.75 2 122 122 Feb. 20 2.6 2.6 2.1 2.35 2.35 1.6 123 123 Feb. 26 2.2 2.2 1.7 1.95 1.95 1.2 124 124 Mar. 4 1.8 1.8 1.3 1.55 1.55 0.8 125 125 Mar. 9 1.4 1.4 0.9 1.15 1.15 0.4 126 126 Mar. 15 1.0 1.0 0.5 0.75 0.75 0.4 127 127 Mar. 21 0.6 0.6 0.5 0.35 0.35 0.4 128 128 Mar. 26 0.2 0.2 0.1 0.35 0.35 0.4 129 129 Apr. 30 to date . . . 3.6 3.6 3.1 3.35 3.35 2.6 132 132 *In cargo lots, oats 10,000, other grain 8,000 bushels Table No. 7. Statement showing changes in rates on grain, ex-Lake, domestic and export, from Fairport, Ohio, to Netv York, N. Y., via Pittsburgh and Western Railroad. DOMESTIC. [Rates in cents per bushel.] FROM FAIRPORT, OHIO, TO NEW YORK, N. T. TARIFFS. ^-^ ^ DO X! ,_^ DATES. JD CO .2 ^ '-^ 2 ;^ o £ j2 .Q -a TP s m to a 0) CO g a "A OS ^ .2 Si >. a P4 pq Q 0^ « I. C. C. No. [. C. C. No. 1899— May 1 31/2 *3y2 5 3% 2% 2% Zhi 2% 225 225 *3y2 5 *2% *2% *Wi, *2y2 3 226 226 May 4 4y4 4% 4% 226 226 FOR EXPORT. 1899— May 15 3y2 3y2 2% 2% sy* 2y2 229 229 *In cargo lots, oats 10,000, other grain 8,000 bushels. Statement showing changes in rates on grain, ex-Lake, domestic, from Fairport, Ohio, to Philadelphia, Pa., via Pittsburgh and Western Railway and Baltimore and Ohio Eailroad. DOMESTIC. fRates in cents per bushel.] TARIFFS. FROM FAIRPORT. OHIO, TO PHILADEL- 1 PHI A., PA. 1 ^ ^ £1 ^ .Q M 4^ o t*, ^-' w- -"-^ ^ a «) £ ^ a cS o >. C3 f^ m O « O d ^; d o .S A p ■a c 03 o O O Oh 1899— May 1 . May 4 . May 4 . 190O— Nov. 30 Dee. 24 , 1901— -Tan. 29 , Oct. 7 ., Dec. 20 1902— Apr. 7 . Apr. 21 , June 16 Nov. 15 , 1903— Jan. 1 . Apr. 1 . 3% 3y2 2% 2% 3y4 21^ *3% *3% *2% *2% *3y4 *2y2 4y2 4% 4 4 2y2 4y2 4% 4 4 3 4% 4% 4 4 4 3y4 4% 4% 4y4 4y4 3y2 4y2 4y2 4y4 4y4 3y4 4y2 4y2 4% 4y4 3% 3% 3% 4y4 4y4 3% 3% 3% 4y4 4y4 3% 4% 4V2 4 4^ 4y4 3% 5 5 4y2 4% 4% 3% 5y2 5V^ 5 5y4 5y4 4 5% 6 5 sy* 5y4 4 C. C. No. 225 226 226 345 351 363 406 S. 1-406 499 S. 1-422 B. and 3636 3822 3876 4113 I. C. C. No. 225 226 226 345 3.51 363 406 S. 1-406 422 S. 1-422 O. R. R. 3636 3822 3876 4113 *In cargo lots, oats 10,000, other grain 8,000 bushels. FOR EXPORT. (Via Pittsburgh and Western Railway.) 1899— May 15 Nov. 6 18 3y2 3y2 2% 2% sy* 2y2 6 6 sy* 5y2 5y2 3 229 261 229 261 273 274 ATLANTIC PORT DIFFERENTIALS Statement showing changes in rates on grain, ex-Lake, domestic, from Fairport, Ohio, to Baltimore, Md., via Erie and Western Transportation Company, Pitts- burgh and Western Eailway, and Baltimore and Ohio Eailroad. DOMESTIC. [Rates in cents per bushel.] DATES. FROM FAIRPORT, OHIO, TO MD. BALTIMORE, y^ ^ E ^ CO JD (n • QQ .Q .c s ^^ SS -o i S 4^ OJ >. ^.^ c m £ ^ 09 C3 o Si ea fe ffl O K O 6 z o o M o .^ ^, E 53 o o o « 1891— Apr. 13 May 18 June 12 Aug. 1 . Aug. 15 ISg?— Feb. 29 Apr. 30 May 6 . May 13 May 18 May 30 .Tune 10 .Tune 13 Aug. 8 . Sept. 1 Sept. 1 Sept. 24 Oct. 17 Oct. 26 Oct. 29 Nov. 5 . Nov. 8 . Nov.. 23 Nov. 28 1893— Apr. 4 . June 17 July .5 . 1894— Mar. ?0 1895— Apr. 11 Aug. 24 Nov. 1 Dec. 1 . 1896— Mar. 28 Mar. 28 1897— Mar. 15 1899— May 1 . May 4 . May 4 . May 15 1900— Mar. 15 Nov. 30 Dec. 24 1901— Jan. 29 June 3 1911— Oct. 7 . Dec. 20 1902— Apr. 7 . Apr. 21 June 16 Nov. 15 1903— Jan. 1 . Apr. 1 . 4 4 4% 5 5 4% 4% iVi 4 4 3% 3V4 3% 4% 4 4% 5 5% 6 6>/2 6 5% 51^ 5% 51/^ 4% 4V^ 3% 4 j 4% I *4 I 5 3% *3% 4% 4y2 4% 4% 4y2 4% 4y2 4y2 4% 3% 3% 4% 5 5y2 5% 4% 4 4 4y2 5 5 4' 4% 414 4 4 31^ 314 3% 4y2 4 4% 5 5V^ 6 evz 6 5y2 5 4y2 5 3y2 *3y2 4y2 4% 4y2 4y2 4y2 4y2 i% 4y2 4y2 3y2 3>^ 4% 5 5% 6 1 File No. 4y, 4y2 4y2 3y2 427 3% 3% 3% 3y4 436 3% 3% 3% 3 444 4y4 4y4 4y4 31/4 454 4% 4% 4% 3% 457 4% 4% 4% 3% 470 4y, 4y2 4y2 3% 484 4y4 4y4 4y4 3y4 487 4 4 4 3 491 4 4 4 3 494 3% 3% 3% 3 501 3V4 3% 3y4 3 506 3 3 3 3 508 3y4 3y4 3y4 3 516 4y4 4y4 4y4 4 520 3% 3% 3% 3 580 m 4% 414 3y2 537 4% 4% 4% 3% 545 5y4 5y4 5y4 4 549 5% 5% 5% 4y2 552 ey* 6% 6y4 5 557 5% 5% 5% 4y2 559 5y4 5y4 5y4 4 563 4^, 4% 4% 3y2 566 5y4 5y4 3% 571 5y4 5y2 5% 4 587 5 5y4 5y4 3% 591 4y4 4y4 4% 3% 626 3% 4y4 4y4 3% 684 3 3y2 3% 3 712 3i/<. 3% 3% 3y4 723 3% 4y4 4y4 3% 726 I. C. C. No. '3% *3% *3% *3% 2 5 5 5 4 2 4y4 4% 4% 3y2 163 2% 2% 3y4 21/2 225 •2% *2% *3y4 •2V2 226 4 4 2y2 226 4 4 2y. 229 4 4 2y2 307 4 4 3 345 4 4 3y4 351 4y4 4y4 31^ 363 4y4 4y4 3 395 I. C. C. No. 4y4 4y4 3y4 406 4y4 4y4 31/2 S. 1-406 4y4 4y4 3y2 422 4y4 4y4 3% S. 1-422 4y4i 4y4 3% 3636 4y, 4% 4% 3y2 3822 5 5y4 5y4 4 3876 5 sy* 5y4 4 4113 4 15 21 29 32 2 10 13 16 19 22 24 26 28 31 38 43 48 51 54 .58 60 63 66 3 8 11 4 3 5 7 9 C. C. No. 2 2 163 22") 226 226 229 307 345 351 363 395 I. C. C. No. 406 S. 1-406 422 S. 1-422 3636 3822 3876 4113 *Id cargo lot.s-, oats 10,000, other grain 8,000 bushels. MEMORANDUM : DIFFERENTIAL RATES \To Statement showing changes in rates on grain, ex-La'ke, domestic, from Fail port, Ohio, to Baltimore, Md., etc. — Continued. DATES. FROM FAIRPORT, OHIO, TO BALTIMORK, MD. --^ o X! ^ CO vi y-s ^.^ ^v (S ^ CO • o x; £ -a ^ o S? 4J OJ >. '^^ w Cj v; a C3 O ? a P. n O K O TARIFFS. 6 y. c O C/J o Vv y, s s •3 C3 o O o W (Via Pittsburgh and Western Railway and Baltimore and Oliio Railroad.) EXPORT. 18E)7— Mar. l'> 1899— May l.i Aug. 2 Sept. 25 Oct. 7 Nov. 1 Nov. 6 Nov. ti Nov. 6 190O-Mar. 15 Nov. 12 Dec. 8 1901— Apr. 2 -Tune 1 Oct. 1 1902— June 20 Sept. 1 1903— Jan. 1 Mar. 10 May 4 Sept. 15 Nov. 16 1904— Jan. 1 Apr. 30 tJ date ,, ,^ 4y4 4% 434 3y2 SVz 31/2 2% 2% SVi 2y2 *3y2 *3y2 *2% *3 ♦3 *.-> *4V^ *4y2 *3% *4 *4 *2^A *3V^ *3i^ ♦3 *3y4 *3y4 *2V* *5 *5 *41/4 *4y2 *4y2 *'Z *6 *6 *5y4 *W2 *5y2 *3 ■"5 *n *4y4 *4y2 *4y2 *3 fi 6 5y4 5y2 5y2 3 »3 *3 *2y2 *2% *2% *2 *i •4 *3y2 *3% *3% *3 *W2 ♦4y2 ♦4 *4y4 *4y4 *3% *i *4 *3y2 *3% ♦3% *3 *3% *3% *3 *3i4 *3y4 *2y2 *4V4 *iV4. *3% *4 *4 *33/4 *3y2 *3y2 *3y4 *3y4 *3y4 *3 4.1(1 4.10 3.60 3.85 3.85 3.10 4.60 4.60 4.60 4.60 5.10 4.60 4.10 4.10 4.10 4.35 4.35 4.35 4.35 4.35 4.35 3.60 3.60 3.60 3.60 4.10 4.«) 3.60 4.10 4.60 3.60 3.10 3.60 4.10 3.10 3.35 3.85 4.35 3.35 3.35 3.85 4.35 3.35 2.60 3.10 3.60 2.60 3.60 P. and 163 220 S. 1-229 S. 2-229 S. 3-229 S. 4-229 S. 5-229 261 261 306 340 347 382 392 405 B. and 3642 3730 3871 4002 4204 4398 44.57 S. 1-4457 4460 . Rwy. 163 229 S. 1-229 S. 2-229 S. 3-229 S. 4-229 S. 5-229 261 261 306 340 347 382 392 405 R. R. 3642 3730 3871 4092 4204 4398 4457 S. 1-4457 4460 *In cargo lots, oats 10,000, other grain 8,000 bushels. 'A s Rye. Oats. s ^ ;|: ;:? ;^ ;?! J? S ^ y* ^ CO g g N t ^ ^ I-l tH d o o g eo IN IN ^ ^ s^ ^ ^ ^ «1 CO : - 6: g^ CO CO CO s IN ^ S -■ ^ -> -■ 30 C4 o >> t^ CO t^ '^ t^ iO t^ -^Or^ ^ f£> ^ OO ^ '^ ^ ^ ^ iO -^ to IOSCO to lO d o tr-CO r-^t^lQt-'*t--<* i .c 1^ c c a c c c p: 4< t- a c c p: 1 a c c c > c c c c > 5 < c J c .1 > a c J c C > 5 s * c J c .p: t- C >■ a 'y r c c a c c c p: c > 1 c c c c '^1 S. 1-36 30 S. 2-36 568 766 S. 1-902 902 1179 1227 1364 1555 1891 2028 2163 2416 2490 2594 cr C < . 1 a- c ■< , c 1 c I- CM a CO a o < I- > o s CO 03 1 o i o 1 Q > o 1-5 o 276 f^ '—' ^ Si. a e o O K N >> kH OJ 1^ 03 Q n d I-" I 05 O ;}? ; : :itS :s« : : ::^ :;^ a«;f? ;^;^ ;?si« • c 'E r r r r r .2 r «3 5 n QO^^S^^rH^^*^ 277 Sfc! ;?; ^ i2 <»r « J^ e4 d o o « w >. f>H P^ (-< S« :a* :;is :^ u Kt, ft^ Oh a;5a5ci.2aiHft2p.5a2a3aSot3 a'S a'2 a ^H13>^■cJ>^'C>^3>l3>^O>^■3>^■3?^■3>^-3>^■3>^73H■0>^•3>^T3tH■0 S s ' S 3 2« «J5 r-l O f-H ^ S § O 5P !!? 3 I-H i-H l-H O) ob O* ob Oi 1-H Cj r-l i-H Cl C5 rl s a < < ;z; S z < 278 o < ;z; Rh ;f« :;^ => H ^ « fei r-. O Ph ■—I 1—1 >i 03 O J i< i "« s e « fSi (%l » >« o •^ « « w. r-, n o a &H M ^ 3 w cJ c ^ « 1^ t-* o c p. 1^ % s a M fel w _! a <; g 1-1 R o (^ J S s o "" > « -^ Tjf S iH ^ O o ^ o O ;^ ^ 6 N ►j CS o m — -* ■* (li-d rH ■H o o «aj p^m •^ f r-i rH o o J5 ^ ^ vSJv^-^ ^ '^ '^ ■2 coco-^oocowcoc^coco 33 O s«j?;S;S^^'^^^^ U ■*coiOTP'«»«'«*inTX-a<->rc<303->», ;S^ ;S;^;?'^'t ^ v TttCOu^'*'*'*C0CO"^C0 S3 n S«Si4 ^^* K-O la-^io-'iiioio-^cc**-^ 03 0) ^« 9 O js^ '^ '-1 -: +^ ei) in-^iri'.siir^iftTjicO'^-^ V a ^ 1 O H < P4 W : 53 ! 03 : ss : as : os S ,i< -S a: -S J* -S .a -5 .i< -S w 0*3 C^ 0~^ Cc; 0*0; ?< H -O^ -C Ph ~ tH ■c >H T3 03 cj 03 33 03 o « 1^ ;z;fLi;2;PL,:2;SL|2;fl<;^;PU • 5rr !* VI w i 15, 1897. 20, 1897.. 15. 1898. 17, 1903. 16, 1903. 03 1 03 4.3 a a; > o 280 Jfci PQ R. ;? SS ;? ■.^ :s? ;:? C3 o ;j« >. w « s? S« ;|! :;fJ. :s« s« o f^ o O tA .'; : s« Ph (U Ph (d Q « ;f! ^■6 • *• . w « t/J a*;:?;^? ;!?;:?; s*;^ s« 1.,^ a in-«('j(-*iO'H-a'-*TSco ^ tr. 32 o o >. :::::::::: s« - ^ CO Q « 03 K M O :•::::::: :^ (I, K-O -v ■* w' M 1^ • ;:SpS;:j«f^S?;^ ;?; S«;3« ii^- 05 i-H i-H 1 ^ t 3 % 1 281 IN THE MATTER OF DIFFERENTIAL FREIGHT RATES TO AND FROM NORTH ATLANTIC PORTS. 11 I. C. C. 13. 283 IN THE MATTER OP DIFFERENTIAL FREIGHT RATES TO AND FROM NORTH ATLANTIC PORTS. Decided April 27, 1905. (11 L C. C. 13.) Rates on freight articles from tlie West to Baltimore, Philadelphia and Boston are adjusted according to the following differentials below or above the rates to New York : Domestic traffic — 3 cents less to Baltimore and 2 cents less to Philadelphia ; 7 cents, first class, to 2 cents, sixth class, more to Boston. Ex- port traffic — same as domestic traffic to Baltimore and Philadelphia, except on grain and iron and steel articles, which are IVj cents less to Baltimore and 1 cent less to Philadelphia ; same rates to Boston as to New York on this traffic. On ex-lake grain received at Buffalo, Fairport and Erie, there is pending the disposition of this case, a differential in favor of Baltimore of 4-10 of a cent per bushel below tlie rate to New York, but no dift'erential in favor of Phila- delphia. It was contended by New York and Boston that the differentials favoring Baltimore and Philadelphia should be abolished. Upon voluntary submission of the controversy to the Commission by all parties, domestic traffic was excluded from consideration. For reasons stated no opinion is expressed concerning the relative rates on import traffic. With respect to exjjort differ- entials, — Held: 1. That the differential per 100 pounds on flour, all-rail and lake and rail, should be reduced to 2 cents at Baltimore and 1 cent at Philadelphia. 2. That the existing differential on ex-lake grain should be reduced to 3-10 of a cent per bushel and be allowed both to Baltimore and Philadelphia. 3. That otherwise the present export differentials should remain in force. John G. Carlisle, Ben. L. Fairchild and Abel E. Blackmar for New York Commercial Interests. C. S. Hamlin for Boston Commercial Interests. Silas W. Pettit for Philadelphia Commercial Interests. [14] Arthur Geo, Brown and John B. Daish for Baltimore Com- mercial Interests. Nathan Guilford for N. Y. C. & H. R. R. R. Co. Geo. v. Massey, Francis I. Gowcn and John B. Thaijrr, Jr., for P. R. R. Co. Hugh L. Bond and John G. Wilson for B. & 0. R. R. Co. J. D. Campbell and Chas. Heebner for P. & R. Ry. Co. Geo. F. Broirnell for Erie R. R. Co. Walter W. Boss and B. D. Caldwell for D., L. & W. R. R. Co. F. H. Janvier and Frank H. Piatt for L. V. R. R. Co. John B. Kerr for N. Y., 0. & W. Ry. Co. B. W. DeForest for C. R. R. of N. J. E. L. Somers for N. Y., N. H. & H. R. R. Co. Edgar J. Bich for B. & M. R. R. C. A. Hight for G. T. Ry. System. G. M. Bosivorth for C. P. Ry. Co. 285 286 ATLANTIC PORT DIFFERENTIALS REPORT OF THE COMMISSION. Trout Y, Com missioner : In the early part of 1904 the rate on wheat from Buffalo to the various Atlantic ports for export had fallen to two mills per bushel. This was owing to the existence of a rate war between the lines leading from Buffalo to Baltimore, Philadelphia, New York and Boston, grow- ing out of a dispute between those lines as to the proper relative rates to those various ports. There was very little wheat at Buffalo which could move under these rates and the practical effect of the tariff dur- ing the winter and early spring was not serious, but, as the opening of navigation approached, it became evident that this condition, if it continued, would lead to a general demor?lization of grain rates in all parts of the country, which would in turn unsettle commercial and in- dustrial conditions so far as they related to the handling of grain, and especially to the manufacture and distribution of the products of grain. For this reason business interests both upon the seaboard and at in- terior grain handling and milling points were anxious that some ad- justment should be reached, and to this end the commercial organiza- tions of Boston, New York, [15] Philadelphia and Baltimore applied by petition to this Commission, asking that it examine the whole sub- ject of differential rates to and from these four cities and determine Avhether the present differentials should be abolished, or, if retained, modified. It seemed to us that the gravity of the situation at least justified a full investigation. A proceeding of inquiry was accordingly insti- tuted April 11, 1904, and hearings were held at New York, Philadel- phia and Washington. The commercial interests of these cities, to- gether with those of Boston, assumed the burden of conducting the pro- ceedings, but many organizations at various interior points were rep- resented, as well as all of the railway lines involved. Nearly three thousand pages of typewritten testimony have been taken, a great number and variety of exhibits have been introduced, and extended written and oral arguments have been made. We are now required to examine this record with a view to expressing some opinion in the premises. The order of the Commission was sufficiently broad to include the ap- plication of these differentials to all kinds of traffic to and from the several ports, but by agreement at the opening of the first hearing the inquiry has been limited entirely to export and import traffic. The question presented is not a new one and perhaps there is no way in which the exact nature of that question can be better understood than by a brief resume of w^hat has already occurred. IN THE MATTER OF DIFFERENTIAL RATES 287 The development of our agricultural resources in the West has for many years produced a large surplus of grain over that required for domestic consumption and this grain has sought a market in European countries. In the early 70 's most of the commerce between the United States and Europe was through the four ports involved in this pro- ceeding, more especially through New York. The New York Cen- tral lines reached Chicago in 1852; the Erie and Pennsylvania soon afterwards, and, in 1874 the Baltimore & Ohio first entered Chicago over its own rails. This grain could be transported through any one of the four ports and the port of export determined the rail line which should carry it to the seaboard. The Erie and New York Cen- [16] tral served New York i:)rimarily ; the Pennsylvania, Philadelphia, and the Baltimore & Ohio the port of Baltimore. ]\Ir. Fink states in his report, which is subsequently referred to, that in 1881 seventy-tliree per cent, of the entire tonnage carried by these lines of railway from the West to these four cities was grain, and this percentage must have been even larger ten years before. The distribu- tion of that traffic between the different lines was, therefore, a matter of the greatest consequence to these railways and seems to have been from the first a source of bitter controversy. The Baltimore & Ohio insisted that the distance to Baltimore was much less than to New York and that for this reason the rate should be lower. It also seems to have been true, in those days, that the ocean rate from Baltimore and Phila- delphia was much higher and the ocean facilities much poorer than from New York. To obtain, therefore, a part of this traffic it was es- sential that the inland rate should be lower to Baltimore and Philadel- phia than to New York. The first differential of which we have any accurate account was ten cents per one hundred pounds, but this seems to have been reduced as early as 1870 to five cents per hundred on grain. The New York lines insisted that even this was too great and finally, after numerous rate wars, an agreement was made in 1876 that rates to Baltimore, Phila- delphia and New York should be established upon the basis of actual distance from the point of origin to the several ports. This agreement continued in effect only six weeks, the New York lines withdrawing at the end of that period upon the ground that the rates so established were unduly favorable to Baltimore and Philadelphia. Another period of rate disturbance now ensued which was termi- nated by an agreement dated April 5, 1877. This agreement was in Avriting and was signed by the New York Central, the Erie, the Penn- sylvania and the Baltimore & Ohio. Considerable discussion has arisen in the COnrse of this investigation as to the proper mode of es- 288 ATLANTIC PORT DIFFERENTIALS tablishing these differentials. The New York and Boston interests con- tend that the inland rate should be so adjusted that when combined with the ocean rate the through rate from the point of origin to the point of destination will be the same through all the ports, while Bal- timore and Philadel- [17] phia insist that this method of rate adjust- ment would be unfair to those localities. As bearing upon this, the view which was taken of this matter in the earlier days of the contro- versy is interesting. The first paragraph of the agreement may be cited : "To avoid all future misunderstandings in respect to the geo- graphical advantages or disadvantages of the cities of Baltimore, Philadelphia and New York, as affected by rail and ocean trans- portation, and with the view of effecting an equalization of the ag- gregate cost of rail and ocean transportation between all competi- tive points in the west, northwest, and southwest, and all do- mestic or foreign ports reached through the above cities; it is agreed : ' ' This agreement provided that export rates to Boston should be no higher than those to New York ; that rates to Philadelphia should be two cents, and to Baltimore three cents per one hundred pounds lower than to New York upon all classes and commodities. The above ex- tract shows that the purpose of the signatory parties was to produce the same through rate via all the ports and that these differentials were established upon the theory that they would produce this effect. The agreement of 1877 provided that any one of the parties might withdraw by giving three months' notice, and in the year 1880 this notice was given by the New York Central. A period of disturbance again ensued and the matter seems to have been referred for solution to Albert Fink, Commissioner of the trunk lines, who made an elabo- rate report. This report of Mr. Fink's is a most luminous discussion of the entire subject and must be a classic to every one interested in this problem. His conclusion was that there should be a lower inland rate to Baltimore and Philadelphia than to New York, but that it was impossible to say with any certainty what the differentials ought to be or what their effect upon properly competitive traffic was. He recom- mended that the lines seek to divide this traffic at its source rather than attempt to control it by differential rates. The report of Mr. Fink (ante, p. 5) does not seem to have settled the controversy and in the spring of 1882 the whole subject was re- ferred [18] to the arbitration of Senator Thurman, ex-Senator Wash- burne and Judge Cooley. This board, known as the Advisory Com- IN THE MATTER OP DIFPERENTIAI. RATES 289 mission, organized soon after its appointment and proceeded to hear statements and arguments at the various ports and also at different in- land points. Its report {ante, p, 69), made July 20, 1882, stated that distance could not be relied upon to determine these differentials, nor could cost of service be made the test. The opinion was expressed that some differential must be accorded Baltimore and Philadelphia and that the proper measure of that differential was the actual result of competition. Since competition, acting through several j^ears, had brought about the differentials then in force the Commission recom- mended that they should be observed for the present. 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LO cc cc Tjl LO 300 I-- \n (M C5 m (M OiO OS on t^ lO O i» V> O Tj< « ^ r~i (o -r ^H ■^ |» o CO IM «5 <» QO ■* i-H CO '-0 Oi O I- lO CO -t< Oi -r -# to O ^ Ol '^ (M CO 1^ CO «5 OS CO CI O 1^ t- C-] ^ CO O CO CO lO QO CO Tf 00 t-H CO LT Oi 35 00 O O' o t^ l^ "* CC O a; I- CO o o o o o t~ t-H Oi o ira CO c» 00 (M o O «3 LO CJ t^ C^ lO t~ lO CO 05 !0 o^ 00 rH (>l '^^ rH lO P-, •— 1 >— 1 CO CO CO o to 1-1 CM CO C-l CO i-~ lO ?o O CO CM CO CO (M CO 00 00 05 1-t Cvl CO o Ol lO t)h rH «5 C-J i-H 1— I Oi .-1 CO (M GO O OS C-J OJ ^ o o o (~> T— 1 o o 1^ CO T— 1 -V Ol 03 •^ -^< CO C-l O Ttl t-^io" LO rH OO -# O rH C>f r-T O QO o; o oTim'" QO OJ CO 00 o CO Ol l~ lO Ol rfH rH__ 01_ ccToT CO O-l lo o; ^c Oi t- I— lO O QO •^ CO t^ 00 ^ --H -*< I-- 05 oT '^ lO 05 00 ^ CO o'o" PL, (O o Oi o Ol Ol «0 03 to'or Ol -tl 05 03 00 O lO rH O Oi OJ o__o.i QO 'O (» CO Ol ^ -* QO OI_^ rH of «r C: CO O Ol CO t~ o t^ C0__O5 ac 00 o fll CO rH OJ TfH CO o O! OJ oo' 6.24 7.41 o lO LO CD t- tH t^ O o o t^ CO 05 o Ol Oi 't' CO CO -1^ 00 00 -* lO t^ CO Ol Ol QO CO Oi QO LO Ttl Ol CO c-l Ol o o6~ 00 t- CO I- CO CO Oi I- Ol^CO co'lo' l^ 0^1 CO^O^ c^Tco*^ to 00 Ol LO co'"co'~ 00 I-H Ol^CO^ CO*" of CO o CO 01 co__oc O^LO" rH TtH OJ Ol 1^ i^ ~P t~ O lO OJ^ LO CO lO (M lo ira ■* (M CD ^ CI o -*_l-;^ co_^ LO-^lfT lo"" •^ -"tl CO CC (M Ti<^ GO CO CO .-H -* CO CO CO >-l O CO CO 00 o C rt< l-- LO^l-_^C0_^ Lo'^-^'^Lo" CO CO OD C3 •<* CO 25.91 29.78 5.90 00 CO CO Si CO CO CO .-H CO LO CO Oi I— 1 19.57 32.16 3.88 21.13 24.53 20.64 1— 1 CI CO • Tt< r-H cr. d • ■-H CO CO T)< CO LO ^ lO co'"i>-*'t--'" O -* ^ OT)^'^ CD ^OO Tt* rH 00 CO ^ rJH CO 05 LO CO Ol r- lo CO 00 (M t~ T-l lO lO l^ co^w o.\^ CO O l^ lO l— 1— ( CO O lO 03 lO lO (>]^CO_^(M_^ ■^ (M CO .-H i-H CO lO C-] CO CO CO ^ I, lO CO 3.33 25.63 0.12 go' I-H 9.46 11.08 8.70 00 oi 11.53 32.29 10.06 >o 03 9.20 13.31 1.54 o o o 1—1 I-H CO ^ t^ l~ O] 00 CO^^IO LO t^'^Lo'^c— I CO o lO CO ^ co'~w'co'~ W CD O t-^ 00^ I-H Lo'co" CO o cj -( o CO — o LO CO CO CC CO CO 1— C5 CO 1— CO ^ ^oo CO CO C-l rH 00 -* CC l^ l^ C^) o; t^ CC CO o Tf< C Oi O 00 r- ^UO in Ol ^ o tT l-__00__ ■-T^D^ca ^ O 00 1-1 Tf CO LO 1—1 C-l .-I a< CO o; CO CO CO Oi CM CO ■* 00 LO 3.85 16.56 0.98 CO CD CO in tJ< GO 00 CD 00 -rfi 1— ( ca o 8.48 18.05 0.05 I— o 13.21 15.00 0.61 I— CO 00 CO o i-~ Ol^l^ CO L0"o'lo" Ol O --I lO lO lO ^ao l^ 1^ LO GO o: CO I- 00 ^ O O CO on 1^ o lO ^ Ol 00 t- I— 1 .-^ CC o t— l~ lO 03 ^oc LO ^M CO Ol CM 00 LO O CM CO LO 0C_^CO CO_^ cm' CO* cf rt Ol 302 lO OO lO 00 I— I -•- lO CM 00 O CO o ■* cc t^ CO C>] LO O CO rH CO "O CO CO C^l "-I i-<^CO_^0^ o^-^'co" 05 ^ --I -# CO lO co''ooo" CO rJH lO CO lO CO ■* Ol l-^CM_^Oi^ CO CC 00 co_^o_o_ ■-Tco"^" OJ CM -rfl 00 -rt* 00 O 1^ i-H lO CO l^ Cvl 'IH CO T— I 1-1 >o o t^ CM CO CO t~ 05 CO O-l ■* C^l O CO lO lO Ol 00 CO rH ira CO O OO 00 "— < --H t- O i-H CO O CO O lO t^ t^ ira CO i>- CO CO 00 o 00 O lO r-l CO CO lO C^l 1-1 CM 1— 1 rH ■* CM CO CM CO i-H CJ CM CO i-l CM I-H CO r-l CO CO QC CO LO T—l OO^l-^CO^ ccTira"-*" I- -* CO CTl^CC_^i-l co'^gT CS CO Ol LO C3^ I-H lO CO LO GO cfaT X '~ r-{ LO CO 05 L^ 00 CO CO O Oi '*"ao''o'" O rfH I--. CO O CM Tt< l^ CO CO I- 00 O^tJH^CO^ c.rco'aT Tf OS lO io_^o^co__ 00*10" ■*" O t- I- t^ C>l o C-]_^rH_rH_ "* 00 o 10 l^ o CO 01 rH OS CO LO -* CO CO GO CO 11.38 15 . 06 1.74 05 7.82 22.67 4.95 05 I— 1 6.21 23.65 13.44 1-1 00 10 1—1 6.76 21.92 24.85 00 o o 01 Cl C1 10 Oi ■*! ^00 rH O] T^ X ~ c^ rH_^^_^ CO O CO CO ^'■oo" ^00 CO 00 r-l rH LO C» cf CTS ci O CM O -# ^00 CO o» C^l CO 00 CI co'^co'co" O rH CM t--_^00__O5_ Lo' Oi" Lo" O 05 CO 05 CO C-J^'^^t- co'b-'o" LO Oi 00 av_ cvi^ oo_^ co" a-' i~ CO rH I- LO t- GO -*"co'"t>-" LO 05 05 10 CO -f o -t o LO 05 LO OS L^ rH ^00 C C-1 -* rfl O t^ CO C^l CO CO 10 CO O rH CO o_CD_oq^ o'co"-*" O t^ CO CO_^C0__>O_^ '*^"o^^" 10 CO CM on ic 00 -* 10 CO 05^t>-__0^ rH^rn'^rH'^ t^ 10 05 19.52 13.98 0.09 05 CO 22.73 10.09 7.62 CM 00 CO 18.26 8.54 11.28 Oi 14.17 9.36 19.78 00 CM 22.10 13.04 16.52 rH 05 O 05 CO CM C0__O LO O^rH^rn" 00 GO CO C-l ^00 O b- t^ to OJ t^ C.]^C0_^CO_^ rn" o^oT GO O; rH t- 05 05 •rit CO \n O CO (^ C\)_^rH 0\^ Co'-^'rH*" -* CO t^ rH rt* -# ^00 05 Ira rH CM CO CO CI OJ 05 rH^oTo" CM Oi CM o t^ t- CM CO t^ CO CO ^ Oi^'+^C^J^^ cm'^i^'^lo" 303 •^ m rH- O or ^H CO C J (35 l-_lO -^^^ co'-h'-*" rf CO 0<1 t~ 00 t|( x> -* t^ -^'co't"-" t- -X) CQ (X: t^ Oi ire o >o c-i o o GO i-^ --H 00 CCi GO CO Tt< O CO 00 1— I 10.36 30.82 16.09 CO 24.44 33.14 18.15 o i^ 15.17 41.49 2.69 rH O oo I— 1 11.73 32.87 1.82 o 03 2.95 27.34 1.11 ^OO OJ lO C>1 IM CO l^ ire lo oi t^ o o CO Ci ^ l^ t~ CO oTtiTco'' (M ire ire I— I ire o o ire ire Oi ro r-t 00 o ire t^ ^ ire CO i-H (M l^ O ?0 CO -O o^i^oi ire '^ O C3 t~ iM CO -* ire -* CO CO l^ TfH ire -^ t- r-i 00 ■ CO 00 00 Oi y-i ^ CO (M Tt* rt •^ O Oi o Oi t- CO -t< r-< rH • Oi CO 00 ire CO CO (M ire i^ ci -* o ^ CO CO (M rH t^ 0-1 l~ • -* CO rH (M 00 1-H y-l oq 0-1 0-1 rH Ol rH rH rH (M rH r-t T-l rH r-( (M 1—i Ql, ^oo ^OO ^'OO ^0 : ^00 • ^ ire ire o «o r-t ] •y^ CO rH Lre CO 01 • GO (01 l^ Oi p ^ O rt^ rH rH CO 'i' CO t- 00 I- Oi • CO (3i ire rh -* 51 rH CO CO CO Lre -* ire ^ ^ -i< 00 r-^ 01 '(^ ^ Ol T-H "TJ CO Oi CO '^l (M CO CO C-l 00 rt< Lre oi ■ •* 00 CO ire rt 1— 1 CO -* l^ •* ■* CO 00 (Ji rf TTti ire -* -* 05 ■ -t< rH r— ( ^ -'Th ^^ ire CO 'x> ire rH ire C\l Ci cq CO CO Ol • COi CO CD ^ -v CO -* T-t rH Cvl rH rH rH Ah t- ire ci oo ire M t- ire (M CO 05 01 (M CO 01 00 Tf< (03 CO +» L— i-H rH ■H^ ic 0:00 t~ ire 00 t- ire 00 00 (M Tf 00 ire ■* O CO' O CO CO r~ CO rH oo ire co 00 ire CO 01 t- og TtH CO ire eg CI CO LO CO CO CO CO CO tJ( CO ■rti eg t^ ■<*< ire CO oi ■* CO CO (3i CO fM ^OO ^00 ^00 ^00 ^00. -M ire 00 CO rH i^ Oj 01 (M eg CO CO 5W 516,2300 7.8 4.3 801, 612 W 11,9480 1.0 2,843,493W 2,174,3200 3.8 17.1 36,670, 191W 7,253,8950 49.6 60.4 5,852,9.51W' 7.9 808,5990 6.7 Total Exports 6,313,387 7.3 813,. 560 .9 5,017,813 5.8 43,924,086 51.1 6,661,550 7.7 1^ ..: 3,518,127W 4,122,1820 7.1 7.1 1,347, 067 W 296,6700 2.7 .5 1,989,748W 4,555,0090 4.0 8.0 20, 046, 291 W 22,849,5200 40.7* 4,096,297W 39.6 5,304,9430 8.3 9.2 Total Exports 7,640,309 7.2 1,643,737 1.6 6,544,757 6.1 42,895,811 40.1 48.0 34.0 9,401,240 8.8 1881 3,426,885W 2,036,0500 6.1 7.4 263, 161 W 1,283,6000 .5 4.7 1,639,598W 4,156,4830 2.9 15.1 26,767,296W 9,492,2000 5, 566, 173 W 1,744,2520 10.0 6.4 Total Exports 5,462,935 6.5 1,536,761 1.8 5,796,081 7.0 36,256,496 43.5 7,310,425 8.8 1885 3,372,160W 1,94 '5,8980 10.5 3.2 8.54, 538W 458,. 5810 2.7 .7 1,680,022W 8,778,8230 5.3 6.2 17,ni,294W 27,214,1890 53.4 44.4 3,-532, 192 W 5,929,2440 11.0 9 7 Total Exports 5,318,058 5.7 1,313,119 1.4 5,458,845 5.8 44,325,483 47.5 9,461,436 10.1 1886 5,885,662W 3,910,2090 9.8 7.3 960,882W 411,5550 1.6 .8 2,376,298W 3,025,6730 3.9 5.7 32,090,610W 20,996,7050 .53.0; 6,079,146W 39.4 1.857.3530 10.0 3 5 Total Exports 9,795,871 8.6 1,372,437 1.2 5,401,971 4.7 53,087,315 46.7 7,936,499 7.0 1887 7,434,716W 1,263,1080 9.2 3.8 1,333,456W 1.7 3,983,925W 2 313 9580 5.0 V n 41,886,049Wi.52.1 12,396,2720 j37.3 8,774,174Wil0.9 1,996,5830 i 6.1 Total Exports 8,697,824 7.7 1,333,456 1.2 6,297,883 5.5 54, 192, .321 47.8 10,770,757 9.5 1888 2,157,548W 2,660,0030 9.6 8.8 176,160W . .8 1,210,666W 3,245,8200 5.3 10.7 12,609,242W 14,236,1810 56.0 47.0 949, 844 W 859,3710 4.2 ■> 8 Total Exports 4,817,551 9.1 176,160 .3 4,456,486 8.5 26,845,423 50.8 1,809,215 3.4 1889 2,356,494W 6,601,9890 11.7 8.5 w "'.8 459,111W 7,135,9330 2.3 9.1 10, 784, 303 W 28,786,9770 53.6 36.9 1,110,606W 3,640,3160 5 5 641,6830' 4 7 Total Exports 8,958,483 9.1 641,683 .7 7,595,044 7.8 39,571,280 40.3 4,750,922 4.8 1890 2,156,807W 4,849,0240 210,0009 9.6 5.7 1.9 65, 21.3 W 323,3760 O .4 .4 525, 287 W 4,500,7030 515,8780 2.3 5.3 4.4 12,569,286W 24,600,1470 9,301,0460 56.0 29.1 79.7 617,876W 16,735,5210 12,587 2.8 19 8 11 1 Total Exports 7,215.831 6.1 388,589 .3 5, .541, 868 4.6 46,470,479 39.2 17,365,984 14.7 1891 6,090,114W 2,173,0700 744,2870 6.5 7.7 13.2 7C0,157W 500 .8 2,787, 125WI 3.0 3,897,5650 13.8 35,4660 .6 46, 9.57,1 13 W 13,180,3930 3,205,4660 50.3 46.5 56.8 6, 840,. 503 W 2,608,6770 309,8570 7.3 9.2 << Total Exports 9,007,471 7.1 700,207 .5 6,720,096 5.3 63,342,972 49.7 9,759,037 7.7 1892 8.489,698TV 1,764,8590 5,020,1400 7.6 2.5 45.4 l,01O,545W Q .9 .50, 81 3, 295 W 18,786,8010 3,742,8120 45.4 26.1 33.8 9, 762, 594 W 19,779,8760 446,4780 8.7 27.5 4.0 2,971,8580 73.7450 4.1 .7 >i Total Exports 15,274,697 7.8 1.010,545 .5 10,547,506 5.5 73,342,908 37.7 29,988,948 15.4 IN THE MATTER OF DIFFERENTIAL RATES TABLE NiO. S— Continued. 307 BALTIMORE. NEW ORLEANS NORFOLK. NEWP'T NKW.S. (Known as York town previous to 1889.) tJALVKSTON. TOTALS. 19,766. 074WI.... .... ' 16,543,8120 .... 265,7950 2,7370 36,309,&6 20.8 7,144,488 j 4.1 255,795 .1 2.737 174.589,726 30,869, 104W .... 21,1^,4220 .... 240,6,00 2,553C 52,034,526 '23.8 6,318,605 2.9 240,670 .1 2,553 219,059,790 34,923,ir)2W23.6 5,5O5,020Wi 4.1 8,855,5790 10.3 W 147,130,913W 86,549,8000 14,604,3640 16.9 192,9030 .2 49.527,516 21.2 14,360,599 6.2 192,903 .1 233,680,713 19, 453, 676 W 24.2 4,349,575Wj 5.4 7,692,2590 11.8 8,980W 263,3160 456W 80,799,950W 12,097.3760 18.5 .4 65,155,.514C 31,551,052 21.5 12,041,834 8.2 272,296 .2 456 145 955 464 17,233,469W 23.5 4,609,033Wj 6.2 253,7900 1 2.1 154,859W .2 1,048W n 73,943,811W 19 11^1 ison 1,132,4070 i 9.4 ' 18,365,876 21.4 4,862,823 | 5.6 134,859 .2 1 048 ( . . Sfi 095 000 .7 ' 15,434,689W,31.4 10,285,8750 17.8 2,622,717W 9,856,0410 5.4 17.1 W 384,1830 176, 541 W c .4 28,043W .... 2,6450 |.... 49,259, 520W 57,657,0680 25,720,564 24.0 12,478,758 11.7 384,183 .3 176,541 .2 30,688 106,916,588 16,217.60fl'W 29.1 4,943,0100 18.0 1,346, 01 9W 3,975,6260 2.4 14.4 W 300C 535,350W c 1.0 2,120W c 55,';64,202W 27,631,5210 21,160,610 '25. 4 5,321,645 6.4 300 535,350 .6 2,120 83,395,723 4,581 261Wil4 3 678 283 W <> 1 W 21 4S60 227,165Wi -7 32.036,915W 14,048,2870 22.9 7,302,9100 11.9 618,3500 1.0 61,317,7630 18,629,-548 20.0 7,981,193 8.6 21,486 845,515 .9 93,354,678 10, 475, 395 Wi 17. 3 1,041,141WI 1.7 7,896,3390 14.8 W 53,0210 '"!i 1,638,250W 1,962,5980 2.7 3.7 W 60,547, 384W 13,138,2290 (24.7 1,2600 53,252,9420 23,613,624 20.7 8,937,480 7.9 53,021 3,600,848 3.2 1.260 .... 113,800,326 11,057,290W 13.7 7,115,8140 j21.6 4,299,242WI 5.3 7,301,0110 22.1 193,838W 199,2420 .2 .6 1,501,477W 1-0 1.... 80,464, 167W 505,4810 1.5 33,001,4690 18,173,104 16.0 11,600,253 ,10.2 393,080 .3 2,006,958 1.8 113,465,636 4,082,508W 18.1 3 741 9140 12 3 1 027 322W ^ (^ W "!3 322,309Wi 1.4 22,535,599W 5,055,5120 16.7 82,6740 427,1100 1.4 30,308,5850 7,824,422 14.8 6,082,834 11.5 82,674 .2 749,419 1.4 .52,844,184 4,389,790W,21.8 16,822,8080 |21.6 991,184W 13,469,7540 4.9 17.3 2,982W .... 27,9030 j.... 31, 885 W 880,2510 .2 i!i 20,126,355W 78,007,6140 21,212,596 21.6 14,460,938 14.8 30,885 .... 912.136 .9 98,133,969 4 8f>3 4.53W 21 4 1,308,710W 12,768,4220 O 5.8 15.0 16 OOOW 1 365, 643 W 1,331,2790 1,006,7020 1.6 1.6 8.6 W "i 22,428,2('5W 19,447,1440 23.0 617,0530 j 5.3 22,7280 o 36,0120 o 84,614,3560 11,663,2660 24,867,650 20.9 14,077,132 11.9 38,728 .... 2,703,624 2.3 36,012 i.... 118,705.897 15,673, 334W 16.8 3,852,9110 13.6 5480 1 10,497, now 1,843,8690 o 11.2 6.5 1,492, 024 W 83,617C 1.6 .3 1,814,024W 682,2600 1,345,4870 1.9 2.4 23.9 587,395W 12,7410 O .6 93, 438, 899 W 28,335,1530 5,641.0510 19,526,793 15.3 12,340,979 9.7 1,575,641 1.2 3,841,771 3.0 600,136 .5 127,415.103 16,567,652W 14.8 19,707,2.57c 27.4 172 2710 1 6 14,4.50,811W 7,044,0440 12.9 9.8 628,247W 598,5520 .6 .8 2,323, 824W 1,026,0980 1,604,3290 2.1 1.6 14.5 377,885W 144,7750 O .31 111,926,454W .2 71,824,1200 ....j 11,059,7750 36,447,180 18.7 21,494,855 11.0 1,226.799 .6 4,954,251 2.5 522,660 .3 194,810.349 308 ATLANTIC PORT DIFFERENTIALS TABLE NO. 3 — Continued. YEAR. MONTREAL. PORTLAND. BOSTON. NEW YORK. PHILADEL'IA. jg93 6,909,337w| 7.9 9.6W,544C 20.0 3,119,2400 31.6 1,050,049W 24,7050 1.2 5,275,276W 5,241,1700 3,6510 6.0 10.9 38,047,932W 12,802,0890 5,197,0070 43.7 26.6 52.6 5,723,510W 3,865,6330 103,4000 6.6 •• Total Exports 19,679,131 13.5 1,074,754 .7 10,520,097 7.3 56,046,978 38.6 9,692,543 6.7 1894 5,337, 455W 9.7 1,969,417C 5.0 77,5690 16.7 395,961W 623,5780 O .7 1.6 5,812,828W 3,^3,6350 2,3500 10.5 9.7 .5 25,141,494W 11,406,7110 382,8050 45.6 28.9 82.8 4,487,496W 2,577,5400 1690 8.2 6.5 " Total Exports 7,384.441 7.8 1,019,539 1.1 9,638,813 10.1 36,931,010 38.8 7,065,205 7.4 3,795,00OW 8.7 2,4.58,0000 i 4.1 10,7500 .6 W '".8 7,380, 391W 5,281,0690 1,5200 16.9 8.9 .1 24,554,7.58W 19,693,4710 1,497,5870 56.2 33.2 82.8 1,885,598W 3,140,9200 59,4200 4.3 456,5050 5.3 3.3 Total Exports 6,263,750 6.0 456,. 505 .4 12,662,980 12.1 45,745,816 43.'. 5,085,938 4.8 1896 6,877, 846W 12.0 73,322W 565,8360 .1 .5 9,781,250W 5,990,3970 1,919,6770 17.1 4.9 6.1 21,766,950W 18,801,7940 15,880,1500 38.0 15. £ 50.4 4,902,181W 8.6 6,658,9440 2,631,7850 5.5 8.3 8,934,4020 7.4 " 438,8240 1.4 Total Exports 16,168,575 7.7 639,158 .3 17,691,324 8.4 56,448,894 26.9 14,275,407 ] 6.8 1897 9,924,029W 9,224,3640 5,231,9030 10.2 5.1 9.0 1,108,884W 154,0970 745,6420 1.1 .1 1.3 12, 143, 204 W 9,464,1630 5,471,27.50 12.4 5.2 9.4 33, 840.. 506 W 33,202,4960 35,374,0610 34.7 18.3 60.6 5,202,416W 25,129,6580 2,402,7810 5.3 13.9 ■1 4.1 Total Exports 24,380,296 7.2 2,008,623 .6 27,078,642 8.0 102,417,063 30.," 32,734,8.55 9.7 1898 9,132,771W 6.9 19,252,8250 ! 9.7 6,798,8170 11.8 3,356,818W 2.5 13,021,229W 11,799,26.50 8,720,9310 9.9 5.9 15.1 54, 600, 006 W .39,376,6150 24,584,8860 41.4 19.8 42.6 5,706.466W 4.3 2,070,8330 j 1.0 2,132,7820 3.7 29.816,8890 115.0 « 5,923,4220 10.3 Total Exports 35,184,413 9.0 7,560,433 1 1.9 33,541,425 8.6 118,561,507 30.5 41,446,777 10.7 1899 9,909,15aW 13,276,3500 3,991,1640 9.7 6.7 8.2 5,313,328W 1,928,9560 4,202,2990 5.2 1.0 8. '7 12,931,292W 17,438,8130 5,241,6770 12.7 8.8 10.8 32,071,942W 40,151,7560 14,591,0380 31.5 20.3 30.1 3,956,290Wi 3.9 29,297,4190 14.8 >• 7,880,7660 16.3 Total Exports 27,176,673 7.8 11,444,583 3.3 a5,611,782 10.2 86,814,735 25.0 41,134,475 11.8 1900 10,596,361Wil3.3 11,180,23.50 1 6.1 5,026,4040 13.8 4,677,96>Wi 5.8 1,781,2660 1 1.0 2,818,7350 1 7.8 11,925,415W 13,893,5250 4,518,1680 14.9 7.5 12.4 21,934.963W 43.645,9630 9,505,4910 27.4 23.7 26.2 5,342,215W 33,451,1700 6.7 18.2 6,703,2460 18.4 Total Exports 26,803,000 8.9 9,277,966 | 3.1 30,337,108 10.1 75,086,417 25.0 45,496,631 15.1 1901 13,626, 071W 4,068,6420 2,667,1160 9.2 4.2 8.9 7,408, 140W 593,0860 2,732,0220 5.0 .6 9.1 20,084, 378W 11,044,1970 3,979,0840 13.6 11.3 13.3 30,161,250W 23.162,8.500 9,671,1590 20.3 23.8 32.4 ll,466,402w' 7.7 15,645,1110 16.0 << 2,824,1210 i 9.5 Total Exports 20,381,829 7.4 10,733,248 3.9 35,107,659 12.7 62,995,259 22.9 29,935,634 10.9 1902 17,394,S86W 14.4 256,3920 1 1.6 2,397,5780 ,26.8 9,233,016W 7.6 77,0750 .5 857,6370 9.6 15,307,351W 798,0970 514,7410 12.7 4.9 5.8 27,1.36,272W 3,124,4820 3,871,.5960 22.5 19.3 43.3 10,434, 434W 8.6 2,424,6170 115.0 <• 584,7560 6.5 Total Exports 20,048,&56 13.7 10,167,728 7.0 16,620,189 11.4 34,132,350 23.4 13,443,807 i 9.2 1903 ]6,055,004W 18.8 6,884,7240 , 7.8 8,258,526W| 9.7 1,631,6820 ! 1.8 1,621,3470 27.3 6,738,533W 7,063,8550 185,5420 7.9 8.0 3.1 15,181,840W 21,985,8160 2,892,6120 17.8 24.8 48.8 3,451,763W 4.0 9,990,9230 11.3 «< 1,138,2610 19.2 Total Exports 24,077,989 13.4 11,511,555 t 6.4 13,987,980 7.8 40,060,268 22.2 13,442,686 7.5 1904 7,.514,616W 35.1 3,773,6950 ' 8.5 1,311,7020 33.3 3,692,982W 17.2 777,1840 1.8 536,1260 13.6 2,671,786W 4,296,0950 78,7220 12.5 9.7 2.0 1,750,628W 10,018,8850 1,875,2720 8.2 22.5 47.6 184,00OW 6,164,9250 52,5740 9 13 9 •• 1 3 Total Exports 12,600,013 ,18.1 1 5,006,292 7.2 7,046,603 10.1 13,644,785 19.5 6,401,499 9.2 IN THE MATTER OF DIFFERENTIAL RATES TABLE NO. 3 — ContinuedL 309 BALTIMORE. NEW ORLEANS NORFOLK. NEWP'T NEWS. (Known as York- town previous^ to 1889.) GALVESTON. TOTALS. 13,141,293W 15.1 7,122,3500 14.8 1,380,2550 jl3.9 13,530,944w!l5.5 6,344,3750 |l3.2 105,672W 510,3070 . .1 1.0 2,079, (MOW 2,560,0880 80,2260 2.4 5.3 .8 1,310,950W 98,5080 1.5 .2 87, 174, 003 W 48,219,7290 9.883,7790 21,643,898 14.9 19,875,319 13.7 615,979 .4 4,719,354 3.3 1,409,458 .9 145,277,511 8 543 ()85W lf> 5 2 901,531W 5 3 w 's'.i 2, 365, 402 W 4.3 135, 137 W 5,412C .2 55, 120, 989 W 7,676,8(320 460 19.5 5,341,5170 13.5 1,228,9620 4,822,7380' il2.2 .... 39,476,3720 462.9390 16,220,593 17.1 8,243,048 8.7 1,228,962 1.3 7,188,140 7.5 140,549 .2 95,060,300 3,976,S38W 9,645,7580' 134,3180 9.1 16.3 7 4 762,878W 8,756,7660' n 1.7 14.8 163,265W 3,716,0810 .4 6.3 1,185,400W 4,866,3350 104,9820 2.7 8.2 5.8 W '2!i 43, 704, 128 W 1,233,4770 59,248,3820 1,808,5770 13,756,914 il3.1 6 588 559W 11.5 9,519,644 9.1 3,879,346 3.7 6,156,717 5.9 1,233,477 1.2 104,761,087 .q S51 .'i.S7W 6 7 w 10.6 17,327W 10,376,6250 3,750,0540 "s.6l 11.9 3,43S,939Wi 6.0 57,297,711W 25^602^6930 '21.1 25,301,5300 6,919,5190 21.9 20.8 12,923,8200 6,207,7140 5.1 121,363,7550 31.540,0090 39,110,771 ,18.6' 29,152,867 jl3.9 12,923,820 6.1 14,144,006 6.7 9,614,653 4. el 210,201,475 15,3O4,0S7W 15.7! 10,356, 248W 43,048,0080 ,23.7| 27,714,4720 5,270,0960 9.01 1,294,5180 10.6 15.3 2.2 987, 691 W 12,427,3730 1.0 6.9 1,465,465W 16,772,5390 2,655,9000 1.5 9.3 4.5 7,355,636W 7.5 97,688, 116W 4,073,0210 2.2 181,210,1910 .... 58,446,1760 63,622,141 I8.9! 39,365,238 11.7 13,415,064 4.0 20,898,904 6.2 11,428,657 3.4 337,344,483 18,542,034W 14.0 12,795,542Wl 9.7 45,096,4770 22. 6i 20,735,5690 10.4 4,859,6860 i 8.4 1,662,9560 2.9 600, 791 W 9,383,3250 .5 4.7 2,937,312W 16,115,3750 3,038,7370 2.2 8.1 5.2 11,288,278W 8.6 5,565,6000 2.8 1,6680 .... 131,981,247W 199,212,7730 57,723,8850 68,498,197 17.6; 35,194,067 9.1 9,984,116 2.6 22,091,424 5.7 16,855,546 4.3 388,917,905 9,549,270W 46,786,1270 4,005,1070 9.4 11,562,812W 23.6 21,939,5860 8.3! 923,7290 11.4 11.1 1.9 148,882W 5,829,6420 2800 .2 2.9 503, 897 W 14,170,1310 7,558,0040 .5' 15,713, 400W 7.2' 7,049,6970 15.6J 68,8140 15.5 3.6 .1 101,66O,272W 197,868,4760 48,452,8780 60,340,504 17.3: 34,426,127 9.9 5,978,804 1.7 22,232,0S2 6.4! 22,821,911 6.6 347,981,626 4, 529, 811 W 40,535,0230 3,972,8100 5.7 8,059,677W 22.0 23,403,4530 10.9j 1,569,1920 10.1 199W 12.7 4,445,0890 4.3 3,3590 '2.4 .1 1,675, 294 W 8,702,3130 2,227,3180 2.1 11,188,056W 4.7 3,073,5250 6.1 550 14.0 1.7 79,929,956W 184,111,5620 36,344,7780 49,037,644 16.3 33,032,322 11.0 4,448,647 1.5 12,604,925 4.2 14,261,636 4.8 300,386,296 19,962,737W 24,711,7900 13.51 24,410,979W 25.31 12,832,1390 12.2 1,510,2510 16.5i 660,590W 13.2 2,214,6840 o.lj 7480 .4 2.3 4,785, 596W 3,172,5730 2,824,5660 3.2 3.3 (* 5 15,714,465W C 10.6 148,280,608W 97,465,0720 29,861,8770 48,327,337 17.5 38,753,369 14.1 2,876,022 1.0 10,782,735 3.9 15,714,465 5.7 275,607,557 9,46O,012W 4,501,5550 137,5050 7.8 27.8 1.5 15,643,745W 2,454,1280 357,2680 12.9 15.2 4.0 128,00OW 386,8400 2!4 5,021, 667W 1,184,8160 223,8370 4.2 7.3 2.5 11,081,326W 963,2050 9.2 6.0 12O,840,709W 16,171,2070 8,944,9180 14,099,072 9.7 18,455,141 12.6 514,840 6,430,320 4.4 12,014,531 8.2 145,956,834 3,373,689W 19,113,5660 56,9510 4.0 21.6 11,989,273W 13,332,2080 14. ol 26,319W 15.01 840,3970 .6' 334,448W 3,535,9660 .4 4.0 20,089,633W 4,274,0910 5000 23. 4; 85,449,028W 4.8| 88,653,2230 ....! 5,931,1480 ! 22,544,206 12.5 25,357,411 14.1 866,716 .5 3,870,414 2.1 24,314,224 13.5 180,033,399 140,262W 7,706,2370 22,5600 e' 1 «oi fifiixiyi R « W W sA 3,582, 104Wil6.7 21,427,442W 17.4 .6 6!233!4170 14.0 61,5550 1.6 579,7950 1.3 1,394,5440 3,483,1760 40O 7.81 44,427,9530 .... 3,938,5510 7,869,059 11.3 8,186,066 In. 7 579,795 .8 1,394,544 2.0 7,065,320 10.1 69,793,946 310 ATLANTIC PORT DIFFERENTIALS Table No. 4 gives the exports of flour through Boston, New York, Phihidelphia and Baltimore, with percentages in each case to the group, from 1878 to 1904, inclusive. o _ ai Oi kO c ^ cS PQ w "— ' fM m 05 C5 >-l to r2 O C-J <» 00 ^ (MlCMr^'-ii0l>-O't'i-lr-.OOOt--lffC05T-icomco-H^ T-^" cc" "-T cT -^ ; ■■■ . cc CO o; ro o ^ .^ w. ^ .._-., ^ - _ . . _ lo^^ to 03 " u »^ ^ .~ .- — . _ . . -, . „ m r -viT t~r i>r o" co" t--" x oT co oi' c-f oT oT oT o" i-T r-T r-T o" r-" i rp i-H r-lr-lrl rtr-lr-li-Hi-(i-l lOi^o^O'^TjHTfioioicoooGCoeoasTjicoot-t-tMt^tocyDciwo OqlOCOQOt^COCCtMyS^lrttMlOCOTjHC^r-llOfCiCOlCt-CClOOOtO CJC Ci 0-1 l^ 1^ i-^ Ol O ^ l^ O 00 rH (M l^ O GO Tt" O «5 GO CC IC CO --- O COOiOiOD-^t^OlO OI^OO GO OJ t^ ^CO lOCSlCCOO^H-^t^ClCO^OO-l t— "lo'co'^co"'— Ti^ CO oi''-^ t^ (m' -* CO "—I i-Tco^ai' inric'co' t-'^co" ■*'■*'" gT'—'" rt«C'Q0T— COJ_ i-H r-T CO (M^oTc^Toi^CO fo'-Q0!0 >OCOCOtEi'-li:MCOt^MCOCiOO(Mt~-TH^lOt--t~T— it^T-H Cvli-(?Ci^HC;'-(Mt-lO OOCO»l-^CO'*LO'*«5?OC005i— lOCOIOceOOt— itoirri.Ot^rfiL'Oiffli— iCi-t— CO C' ^H CI CC '-C ^CJ_CI_^03 lO^i-H O__O^C0_^O d IC IC CO_^CT^Ci '-[^'-^ ■* t- Cl_^O^C0^t-^ ■-<_^C:__t~^ r t^' C r Lo" cT o" o" Co" <»" t-h' O^ o' Co'~ Go"^ ^"^ !>•" cf ^' t~-' oT 00°" •<*<" t^-"^ cf cT T-T of locoo; iccoo^cocod^^ascico-^oi'— <>— lOicodoooi-^GCi^ ^00_Ol^«5 ?0 C0_^Ci^t-^-*_rt<_^00_^t--_^>-H^O_O' Cl^LO 0D_^O l--^l>-^-*^0^ i-*^0J_«O^ r CO*" Co" Co" Co" ■*' Co" Co' Co' ■*'" Co" Co' Co" ■*" ^ O 5D~ ■>*" ■*" ■^'' ■*" TtT TtH~ ■*'' ■^jT TfT cT tMi-II:^C7iO5«Cai-*-*Clt^;CCl-*C0l:^O-C0<»-*l^i— ico-<*<-^ccio 1— It^OOOClClCOCli— lCOi-lt^COOi-H(Mt--?OiHt-t-lOOOlO'<*-^CI-fO .'~L'~l'^' C0_^i-H^Q0^C0__t--_C0^C0^00^Cl^®^l-~_^-*_^rtH_^'-^^lO^l--^O_C]^i-H^'--<_C0 ~^'— ^ "oo''oc'QC~ffl'tCrco'"orco'"cz''cj'"o.rcro"crio'"co"co'~l^'~OC Croo'"cD''j;'r-' l^'c" >— '^^OCDQCaiOOlOOidOOtDCilOOCOlOOl^dCC-. C;-.£'— OC 00 d l--^i-H^t-_0 O ■* d d 110^ O^ 00 r-1 ■*_^'<*< O IC^IC^CD -rp^CT. I~ O r^r^cTr-ici'oS'r-i'r^r-i'T-Toi'r^oSr-i'r^r-^T-^r^T-ir^ OOOlOi— l(MC0'*Tt '*_'0 lO lO l--_^'-H^r-< O Oi l^ •* i£) " r-T r-T r-T r-T i-T i-T i-T cT CsT cm" r-i' r-T i-T r-T OSCOOO;OQOmoO«C>t^CqCqOCOr-OlOlnOSOOSCOOiOO^Tt0' CO CI OS 00 C-I Ttl !— I lO » t^ O CO CO ■* t^ l>- t^ oi cc ' C0-*00-*CM1— It^OSlO--*"— ll^C~1005-^OCOOi CM c: O^J t^ IC lO r-l CO Tt< io-*?ot^OTti';c>oocc-CDQCQOt^COOSCDin'lO"^'^COlC'^CO-*'^COlOt>t~Ot^CD OlOt^l^OCDOSi-H-^lOCMO-^IOSCOOOrHOOOCMOlOlOCOOSlOr-l lO ODOOCOOSOOOlOCMOSCOOCOt-'— lOSi— lOOSOi-HOSi-toOt^lSt^-^ CO "^^o^^co^o OS o f-H^t^ '^■L'"' t^ CD CM cq^-* OS ^ ^^^ ®^**„<* CO ■* t^ '■■"■^o^ ^ CM CO ^H lo'i-^-'oTi— I io"os go" r-T lo" r-T CO o'co'co'co co' O CO lo" OS~ I--' I— I CO cT I-T CM O rt< CO Tf 00 OS -* ■^ CO OS OS t^ t^ C' O CO -^ C^l CJ QO lO CO CO l^ LO CO l-O OS^Ol 'JIOlO'-HlO-^l^i— lOOCOl^ OS__0D_Cq_Ol "* 'O ^^t^^t-^^ 1^ o co_^t- o >-ri-rco"os"c'i-~'cc'~io"co'"co~co"'**~c,f qo'"ijo"i>-"cd''co'co"co CO fo'"o'c'"or'-H~o' o' CMCOT-^CSOSCOl^COOSCOlOCOl^t-COt-COIOCOt^OOC]lC-<*l^i— Ir^ •— I I— II— ll— t I— ll-Hl— II—II— ll— (UO QOCOODCOr-lini^lCt^OQOOOT-ICOi— lOSOOlOt^rHin'— IC'li— It^OS CO OS lO l- l>-_^OS^ co^o" >-( O CO CO CM ^ GO C] CO CO lO IOGOt— It-.lO'-ICOCOt^CMCMCOOTtHOSOSCOOSOlOOSOS >— IOOOCOTt<'-HOCMCQCOOSLOOSt^t^t^»0'— ICOOr-i-* ^10'*lOCOCOOOOCMOOCOCOC.10':t-'~Co''c^rorGo'~lo'~C4 O CO i— I lO O i— I tJH ^c-ii^-^oosocoocO'-Hi^osos'ni'-H'— ii-H"— I'ocoos oa ini lo OS o CI o OS lo t~ OS i^ o OS lo 1— I Tti I— I o CO CO ^ O lO ■* ' lO CO CO ( 1— I T— I t^ I COCOlOi— 'lO'COlO-— lOSCOCOClt^^lOCOOSrHCM t^COlOI^'OCOl^TtiCOCMOOCCOSOS'— ICOOSOSOSQO t^ l^ t^ L^ t^ O O O 00 OS oo 00 OS O t-H O O OS GO OS OOt^r-HCD-^iOCOCOCOOOt^COCOCMCD-^lr^OSOO-^OOOCDTjiCDCD COCOOlOt—lOOSCOt^CClT— (t^i— (COOOOrJ. iO 1^ t^ lO t^ oo CM lO t^ t^ >— I CO »0 t- O CS t~ lO O C^l 00 ■* >-< C-l Tt< O O CO T-li— ICMCMi— li— lT-(r-lr-ICMi— ICMCO-*COCOCO-*-*-*CCCOlOtOTtlCOCO GOOSOi— ICMCO'*t>OCOt^OOc3sC>rHCMCO-*lOCOt^OOOsOrHO.]CO-O CO«5r-l.— IC^JClOi-*-— lrH— I O CO (M O Gi LT rf 05 Ol (M lO t^ O C: ^ CO ^OOt^^lOOii— lQOCOGCTt<;Ot-t^l^LOCOlOCniOTj:tic;«3i^c/:c;i^^ "*^^^'^is'*^^^^^'^^'~L'^ ^ '^^® Gi CO t^ "^.^ 00 CO ?0 l^ O ^ i-i Lo i~-'"«roq cT ■*'"co"io'ko~'-rco~o'"co'-'4H'"oD'"'-*"oo'"i-r«rLo'"Qo'"t--rL'T"«o ■rtiiot^t-coiOTii-<*ni'^iot^<©ajt^t^50«5cc'-'Oi-^c ■(H- r-1 1— I r-l 1— I ire o CD t^ t^ t^ C_^CO_^00^ co''i--'o C: IT CI lO 5C CC cT'— of 00 OC CO CO 00 C^ CO o CO OS o Oi 00 t^ r^ T-t ire O i-l C^l o 05 l^ l^ d CO •* oc o t^ cr. C5 00 t- 00 t- t^ 00 t^ t- CO CO t^ CO 0> Oi t^ 1^ 1^ l^ t^ oc Ci Oi o o C-. " II— icDiret^ooicot^cocooi-^oicoireococo^ iUj^i^TTOji— (cot^i— icoc\icoc.i-*'iocjire^c:ojocooioco i^iM^co r-it-ireccoo-*T}ioocooiTt. t-j'cq^i-- crar^co"i>-'oroc'c'^-*'^crG«3~c£rco'i^'"of Lre'cvTi-Ti-ri-^r (■'*ireC0CO"*i— iC0C0OC0C0C0l^00OC003CC'*ClrHireGrC0 ^i-J^OS^r^^-^^^CO^t^ co_^t>-_^t^ '-H,'* '^ '^^'^^^ '*„''i'~ '^^'^ 'H.^'^ "^^ r^ i>.'~ori>reo"ao'o; <::> -^ a^ v> (a c> cc a^ cT cc r-^ (i*cocococococoiMcqcocoire"*-<*cocoTj-_^i-l^t>-__0<]^t~ COOSOO'^OiCOLre'^ "R,^ ■* '■'"^ CO cr "^ cxTovi oc ciT 00 co'cfccToo^oc" cD~ire~ cTcfco'^ic'o' ciTr-Tc' oTco'^' lo^ C 1 0-. — IT O O ^ 1-1 03 ■* OO Ca CO O CO -* <3i O ire ■— 1 Cl C CO C 1 Oi t^ o Cl_l-^lO__tO^^^CO_^O^t--_'*^QO__-*_^03^Ca_a)^C'^0__i-<_^0-. CO_^CC' TJH C» OJ ^.^'"'^oc,'^., i^ i-'l- co' c r i~-' o" '^^ TfT co"" i-T o' o' i>r -f" of err !>■"-*" oa't-'cTt^'co" oT of CO*" CQciccoico-^oacooooi— (THcoocoirei— i-^ooco-^Oi— (t^oios cocococococococococococococO' ire ci of o" co" o -^^ co' Gc' go" go" ire' co" go" •*" <~ ^ ire" ■-<" ire" gc" i-T cT oT cf ire" of -rf oc" '+OC1O1— ii^cii^cit^octocoi-ii-HOiTjicocoirecioiirecrirecoco ire_^i-t_^O^i-1^CO_^Cl_ire_^CO__rtH__b-_Tll_^OO^CO_^t-_CD_^ire as co rJi^rH^ire C Ci t~-,"*,'=>„ co" 00' go' d I-T I-l ci" ^ co" t-" ire" 00" 0" co" co" -rti' cf ire" ■^" a^ co" ire" 0" c f ^' t-" cT Tfi'^irei^COCDCOCOlOireiOCCt^t^OCOCODOOOlO:'— iCIi-^'^CGCGC «■ 1-1 I-l rH I— 1-1 ' TO r^ 00050i-IC]CO"*ireCOt^OOO>C'i— IClCO'*ireCOt^CCO:CrHCJCO^ t^t-OOOOODGCOOOOQOGCOOOOOjOJOiO-.OiOJOlOiOiOiOOOOC' OOOOOOODCOOOOOOOODOOOOGCOOGCGCGCOC'GOOOOOOCOC01030105C5 315 316 ATLANTIC PORT DIFFERENTIALS Table No. 7 gives the total value of all imports through these four ports, from 1878 to 190-1, inclusive, with percentages in each case to the group and in case of New York to the total imports of the United States. 4 <^^-. pq t^CJOSOOOtOt^OOOOOTtl-^t^OOCOlOCOi— lOOCOQOOJi— loeoco I U5 «D I 00 CO j^oi^C5 oq^r-H^Oi coi— (0'-hoo(M(mio'-h050orLo Qc ^D~3rc^rco'~orT-H'(M'^o"ira'~ro^'--r-^'~io"t^'~Ttr-r)r ^05C'.IOC0C0l^G0-^aDt-(0if0 0]00ir0'*lO(M'— ito O^Cvl^O^OO^CO^^O^CO^OS^t^ rH_0O__^^-* OJ^O^O CO CO ^ CO o !0 lo ^ o t~ oj~o QC i-To i-Tltj o'o'^"* co^o^Lo'cTof lO^ l^ 1-- O] t^ OO O TjH 00 CO i-H CO C' CO CC (35 'O CC lO O Ol lO lO-*lO>niO«3COa50t^lOC£>C£>CO'*ilC>CO?CL^t^t^ OvlTtH(MO«OlOOOCOOOi— li— lTtOOOt~t^COt^t^l~COt^t^ to -H co^t-*" CO t^ CO CO O '-0 as to '-0 C35 CO 05 I— I O] LO O ^H t^ CO to >» Og l^ CO 01 CO (M -H ?0 oot-LO'— !'-'.-('*< oqot-foioi-^itDt— CO 1^ a; iMO'+-*coo lO'-^'OlOCvlOCOCO'— ItOCOCOl^t— lOitOCOtOailOO-^CO-^T-H 'THCOtOCOt^Ol'— lOaCOOOtOt^tOCvltOMOCMCn ■* CO CO CO LO i-H to lO t~ (M CO 'M O O] eg O -rtl t^ --I oiirat-Jt^toosLooit^Lraoi^Or-it^coooO'* C-.1 to CO (M to Tf< (M CO O C' lO o lO 0> <31 l-~ Oi CO COcOt~t~tOTj-'-IOC005i— lt^— I LO Ci >— I l^ LO O to OJ 05 Oi (M CO Tji to CO 00 to o l^ Oi L^ Oj ^ CO l-;^CO_^ai^ 05 O lO Cvl CO "* OOlOOit^OOOOtOCOtOtOOOCOLO'— ICMCOrHOit^Ci lOtOOi— ll^COOSCgiOO-lCOCOLOOi^COOCOLOCOLO 'iH^o^o^'-H_o^co_^tD_^^_^'— I Tfi^i-^-^io^^in^t^ "-""v^ ^^'-^ LO o] 00 Lo"" co' to^ L-^ o" oT to"" cT oT to' i>^ to" (xT Lo'~ t^-"" oT o^ o r 1 o" t-T tJ" CO Oi CR to GO --H lO l^ l^ T— I CO CO "^l ^H l^ Ci CJ C to CO OJ ^-*^THCO^'*''*-*LOLOLOLO-*'*^-#-H-tllOLO O L^ r- ( CO O l^ Oi L^ .-H Ci to l^ CO '^ t^ "* (M T-H L^ 05 r-i L^ CO L5 CI Ltl O ■* CO -* 1 to 't' CO Oi t^ o o 1—1 I— 1 ^,-(>-li— IrHrHi-HOOi— l0500i-IOi'-H(M-*Oa30C1000 i-Hi— li— li-(i-Hi— li— It— li— It— 1 t—li— IrH i— li— li— li— 1 i— 1 i— (t-Ii— 1 CO ^ Ol 05 O I- tOCOt^L0^05t^OOOCOtO'+la5-*'-HGO-HOi'*0050tDtOI^ COOLOt-LOO'JOCOl^C^ltO'-^CCL:)CO^tO^^C5itOCOl■-COaDa5 rHi-IOOIOOil'-COl^OtOtO-*tOCOi— ICO-*Oa-. 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It will be seen, therefore, that this traffic has been for many years and is still of very great volume. Flour shipped by the lake and rail route always moves from the point of origin to the Atlantic seaboard upon a through bill of lading at a through rate ; when the destination is a foreign one the shipment is usually upon a through bill to the foreign point. While, therefore, large (juantities of this flour are stored at Buffalo and other lake ports temporarily before being taken forward by rail, this storage is merely an incident to the carriage. The traffic in no sense originates at Buffalo. All these through lake-and-rail rates on flour whether for ex- port or for domestic consumption recognize a differential of two and three cents to Philadelphia and Baltimore. In the handling of grain this is entirely different. The shipment from the point of origin to the lake port is a local transaction. The transportation from the western lake port to Buffalo is another inde- pendent transaction and the grain is then taken from Buffalo to the seaboard, whether for export or for domestic consumption, at a new rate, which is usually termed an ex-lake rate, and which applies to grain which has reached Buffalo via the lakes. The actual rate at which this grain moves for export is one applicable to lots of 8,000 bushels and is so much per bushel. The question before us is, should this export rate be the same to all the ports, or should Baltimore or Philadelphia enjoy a differential upon this as they do upon all-rail grain ? This ex-lake business was not referred to in the agreement of 1877 nor was it mentioned in the Fink Report or the award of the Advisory Commission. The reason for this is not very clear. It appears from the table above given that in 1877 the receipts of flour at Buffalo were 700,000 barrels and of grain in round numbers 63,000,000 bushels, and we know from further evidence in the case that nearly 6,000,000 bushels of grain were [57] handled that year through the port of Erie where the Pennsylvania Railroad had constructed an elevator as early as 1869. Mr. Guilford indicates that this grain was carried mostly by canal in these early days, but the tables in evidence show that only 39,000,000 bushels of wheat and corn were received by canal at New York during the year 1877 against 63,000,000 received at Buffalo, and that in 1880, 68,000,000 bushels of wheat and corn reached New York by canal while the receipts at Buffalo were 104,000,000 bushels. It is IN THE MATTER OF DIFFERENTIAL RATES 321 possible that Philadelphia and Baltimore lines did not at that time have working arrangements by which they could reach Buffalo ; at any rate this ex-lake differential evidently was not a thing of importance until about 1890. ]\Ir. Guilford states that the railroads determined to compete with the canal for this Buffalo grain in 1891 and that this brought the differential into prominence. Mr. Thayer, testifying for the Pennsylvania Lines, states that an agreement was formed as early as 1889 b}^ which a differential was allowed to Philadelphia and Balti- more upon this ex-lake grain, not to exceed the amount of the all-rail differential. According to the testimony of Mr. Guilford the differ- ential from about 1891 to 1895 was one-half cent per bushel on heavy grains. In 1895 rates were badly demoralized and no fixed schedule was maintained, but in 1896 the Joint Traffic Association, which had been organized for the purpose of fixing and maintaining rates, estab- lished a differential of 1 cent per bushel on ex-lake grain in favor of Baltimore and Philadelphia. This continued in effect until 1898 when the Joint Traffic Association reversed its former holding and abolished the differential altogether. Witnesses for New York stated that from this time until the fall of 1903 no differential was allowed Philadelphia or Baltimore from Buffalo or Erie. Mr. Thayer states that the differ- ential was abolished on cargo shipments in 1898 but that it continued to be applied to berth shipments until 1900. We are inclined to think that a differential was insisted upon and generally taken, when rate conditions permitted, by the Philadelphia and Baltimore lines until the action of the Joint Traffic Association in 1898. It may be that this differential was still applied for some little time by Philadelphia and Baltimore [58] lines to berth business. For a time Philadelphia lines remitted the elevator charges at that port on ex-lake grain. From 1900 to the fall of 1903 no differential was claimed in favor of Baltimore and Philadelphia from either Buffalo or Erie, but it appears that the Baltimore & Ohio, which owns an elevator at Fairport, Ohio, took during all that time a differential of 4-10 of one cent per bushel upon Baltimore shipments through that port. It may be generally remarked with respect to these ex-lake rates that competition was strong and that rates were in consequence very much demoralized until the formation of what has been known as the Buffalo Grain Pool. This is an association of lines transporting grain from Buffalo to New York through which the traffic is divided in given proportions. It was said in this case, and had appeared in former in- vestigations by this Commission, that previous to the organization of this committee or association, grain had been carried from Buffalo to New York and Boston at as low as 21/2 cents a bushel, but since the es- 21 322 ATLANTIC PORT DIFFERENTIALS tablishnient of this arrangement rates have been advanced and well maintained. Philadelphia and Baltimore lines have at no time been parties to this organization but have apparently maintained the rates established by it. The distance from Buffalo to New York. Philadelphia and Baltimore is almost exactly the same being about 400 miles. Buffalo is not in differential territory and so far as we can learn no differential rates prevail to the various ports. Large quantities of ex-lake wheat are ground at Buffalo, but the product in all cases goes forward whether for domestic consumption or export at the same rate to the three ports. The Baltimore & Ohio Railroad Company owns and maintains an elevator at Fairport, Ohio, as just said, through which it handles a limited quantity of ex-lake grain. There appears to be considerable elevator capacity at Erie, Pennsylvania, and both the Baltimore & Ohio and the Pennsylvania handle grain through this lake port. The quan- tity so handled is considerable, having been as high as 16,000,000 bushels per year ; but this movement seems to have declined in recent years and was always insignificant in comparison with Buffalo. Fair- port and Erie [59] are both in differential territory, but it seemed to be the opinion of all witnesses that upon export grain the rate from the three ports should be the same. The table below gives in percentages the receipts from 1892 to 1903 inclusive, of ex-lake grain at New York, Philadelphia and Baltimore. TABLE NO. 9. To Ne\ii Year York From Buffalo To Philadelphia. Erie. Buflfalo. Total. To Baltimore. Erie. Fairport. Total. 1892 ... 74.8 9.4 5.1 14.5 1893 ... 65.7 14.4 7.2 21.6 1894 ... 67.1 10.6 14.5 25.1 1895 . . . 88.8 1.8 4.5 6.3 1896 . . . 68.9 5.7 10.7 16.4 1897 ... 75.4 5.1 6.2 11.3 1898 . . . 77.4 6.0 9.0 13.0 1899 ... 82.0 6.2 9.1 15.3 1900 ... 76.4 5.8 8.8 14.6 1901 . . . 84.7 2.2 10.2 12.4 1902 ... 77.0 2.0 16.4 18.4 1903 6 mos. 82.0 2.4 12.8 15.2 9.9 .8 12.4 .3 6.8 1.0 4.7 .2 6.6 8.1 6.4 6.9 4.1 3.5 1.4 1.3 4.5 4.5 .1 2.8 3.2 1.4 2.8 10.7 12.7 7.8 4.9 14.7 13.3 7.6 2.7 9.0 2.9 4.6 2.8 It was said on behalf of Boston that the elevation charges at that port were higher than at Baltimore and Philadelphia, and such appears to be the fact. The elevation charge at the two latter cities is three- fourths of a cent per bushel, including free storage for the first twenty IN THE MATTER OF DIFFERENTIAL RATES 323 days, while for the same service at Boston the charge is nine-tonths of a cent per bushel. Against this, however, is an offset which leaves a difference against Boston of .12 of a cent per bushel. We understand that the elevators at Boston are owned and operated by the railroads. On the part of Baltimore and Philadelphia it was urged that the cost of insurance was greater from those ports than from Boston or New York. It appears that the quoted rates are the same from all four ports, but from actual transactions it rather seems that in many in- stances marine insurance is higher from Baltimore and probably Phila- delphia than from the other two ports. This would be in the long run a real disadvantage [60] against these ports, but there is no testi- mony in this case from which we can place any exact figure upon that disadvantage. Considerable testimony was introduced to show that iji the past rates haxi not been maintained. This is a matter of common knowledge. It appeared in the former investigation before us that for a short time after the Act to Regulate Commerce took effect published schedules were fairly well observed and that for a few weeks and perhaps months after the organization of the Joint Traffic Association these grain rates were pretty well maintained ; but it was practically conceded that at all other times they had been more or less departed from. It is our impression, however, that there has at all times been a substantial dif- ference in favor of the differential ports. There was upon the pub- lished schedule an actual differential and lines leading to Baltimore and Philadelphia have probably departed as much from the rate as their competitors to New York. At the same time, as we observed in the former case, the fact that rates have not been maintained has made it impossible to determine the actual effect of these differentials upon the movement of this traffic. It is now said that since the spring of 1902 rates have been maintained and we are inclined to the opinion that these grain rates in the main have been. This investigation nominally covered import as well as export traffic and some testimony was introduced by the New York interests upon this branch of the inquiry ; but no evidence on this point was offered by the other ports and the subject has been scarcely referred to in argument. Under these circumstances it would not be profitable to attempt any discussion of that matter. CONCLUSIONS. The controversy before us relates to what are known as the "Port differentials" and is one of long standing. The dispute began when rival lines of railway, first connected the West with the four At- 324 ATLANTIC PORT DIFFERENTIALS lantie ports involved. It has produced numerous rate wars, has been the subject of arbitration, has been considered by this Commission upon complaint of one locality and is now [61] under investigation by us again at the general request of the four ports especially interested and of many interior shippers. The question itself is readily comprehended. That section bounded on the east by a line drawn from Pittsburgh to Buffalo, on the south by the Ohio River, on the west by the ]\Iississippi River and on the north by the Great Lakes and a line drawn west from Chicago to Dubuque is known as differential territory. Rates between points in this territory and New York city are based upon the Chicago-New York rate; that is, the rate between any point in this territory and New York is either the same as the Chicago rate or a certain percentage of that rate. To other points upon the Atlantic seaboard the rate is higher or lower than tliat to New York by a given number of cents per hundred pounds. Rates upon all classes and all commodities, with the exception of grain and iron articles, are 2 cents lower to Philadelphia and 3 cents lower to Baltimore than to New York. To Boston rates are the same as to New York on export traffic while on domestic traffic they are higher by arbitrary amounts ranging from 7 cents per hun- dred pounds on first class to 2 cents on sixth class and most, if not all, commodities. These arbitrarj^ differences above or below the New York rate are termed in this proceeding differentials. No question is made as to the propriety of these differentials on domestic traffic but it is insisted that they should not be allowed on export business. It should be observed that while these differentials apply in theory only to traffic from differential territory they in fact apply to all traffic which passes through this territory. A glance at the railroad map of the country shows that this includes virtually all traffic which, originating west of Buffalo and Pittsburgh, passes out through the Atlantic ports north of Norfolk : and it will further be seen by refer- ence to the tables given in the findings of fact that this embraces a very considerable part of the rail movement by which our entire exports reach the seaboard. "When the Commission examined this subject in the Produce Ex- change Case, 7 I. C. C. Rep. 612 (ante, p. 157), its only function was to determine whether the Act to Regulate Commerce had been violated. Our relation to the subject to-day is a broader one, certainly if [62] we comply with the request of the petitioners at whose instigation this proceeding was instituted. We are to say, not whether these differ- entials are lawful merely, but whether on the whole, considering the interests of all parties, they are fair. Counsel for the city of New IN THE MATTER OP DIFFERENTIAL RATES 325 York in commenting upon this remarked that this controversy might, therefore, for the first time be settled upon correct fundamental prin- ciples. We have endeavored to find some fundamental principle by the application of which this dispute might be laid at rest, but entirely without success. It is said that a fair differential is one which would give to these several ports the traffic to which they are entitled. It is also said that these several ports are entitled to what of this traffic they can obtain under a fair differential. New York urges that its facilities upon the ocean must not be interfered with, while Baltimore and Philadelphia assert with equal positiveness that they must not be deprived of their advantages upon the land. While there is no funda- mental principle, however, which can be applied there are certain fun- damental considerations which should be kept in mind. If it can be properlj^ done, these ports should all be kept open for the transaction of this export business upon such terms that each one may fairly compete for it. No marked advantage should be given, certainly not by the creation of artificial conditions, to any one port over the other. The ideal condition would be the establishment of such rates that enterprise at either port in the way of improvement in service or facilities might be rewarded by increased business and that there might exist that healthy struggle of locality against locality Viiiich is the best security for proper commercial development. This is justly demanded by the interests of the communities involved. In disposing of this question the interests of the carriers w^hich serve these communities should be none the less kept in view. If, again, it can be properly done, these rates should be so adjusted that this com- petitive traf^e will be fairly distributed between the different lines of railway W'hich serve these ports. Each one of these four cities is reached by two or more great railway systems. The prosperity of these cities and systems cannot be separated. The ability of a railroad to adequately dis- [63] charge its duty for a reasonable charge depends upon the business which it can obtain, and no one of these systems should be deprived of its fair portion of this enormous export traffic. The purpose of these differentials from the first has been to distribute this business betw^een the different carriers and we said in our former report that this w^as not improper unless the means used w-ere im- proper. It should be noted that this discussion is confined entirely to the four ports, Boston, New York, Philadelphia and Baltimore. While others are directly affected by these differentials they have not been represented upon this hearing and are not considered except in so far 326 ATLANTIC PORT DIFFERENTIALS as it may be necessary to keep in mind the effect of our conclusions here upon conditions elsewhere. No fact has been more persistently urged upon our attention than the location of Baltimore and Philadelphia, as compared with New York and Boston in point of distance. Baltimore is 111 miles and Philadelphia 90 miles nearer than New York to Chicago. The greater j>art of the traffic to which these differentials apply does not originate at Chicago, but we have seen that Chicago may be taken as a repre- sentative point of origin without injustice to New York, This differ- ence in distance, if there were no competitive conditions, would justify a lower rate to Philadelphia and a still lower rate to Baltimore. These differentials have undoubtedly been established in the past with a view almost entirely to their influence upon the movement of export business. It is, however, of importance that rates between these cities and the West should be fairly adjusted with respect to domestic traffic. If the supplies with which the artisans of Baltimore work and upon which the population of Baltimore lives are transported for a less cost from the West to Baltimore while the products of its factories are sent back at a less cost to be consumed in the West, this would be an important element making for the prosperity of that locality as compared with other localities where the cost of transportation was more. Now if there had been no export business in the past, if these domestic rates had been adjusted solely with a view to what was right between the communities, it is altogether probable that the differentials in favor of Baltimore and Philadelphia would have [64] been even greater than they are to-day. When the differential on grain Avas reduced in 1899 and again when that on iron articles was halved in 1904, the former differences on domestic rates were left in effect. There can be little doubt, and we have so stated in the findings of fact, that a fair recognition of the advantage of these two southern ports in the matter of distance would entitle them to as great a differential as three cents to Baltimore and two cents to Philadelphia. It should be further noticed that not only have these communities, when considered as points of final destination, a right to a lower rate than New York on traffic from this territory, but the carriers which transport that traffic may properly exact from shippers to New York a higher rate, if they see fit. The Pennsylvania Kailroad is the short line to New York. Traffic over that line for New York passes through Philadelphia and 90 miles beyond. The expenses of delivery at New York are materially more than in Philadelphia. There is no just prin- ciple which would compel this company against its will to apply at New York the same rate as at Philadelphia when the cost of rendering that IN THE MATTER OP DIFFERENTIAL RATES 327 service is distinctly greater. It might as a matter of competition see fit to do so, but it could not with justice be compelled to. If these differentials fairly recognize the advantages of Baltimore and Philadelphia, upon what theory can they be reduced or abolished ? It is said that these cities labor under certain disadvantages in the waj' of water transportation as compared with New York and Boston. Now, what can be more just than to give to each port the inland rate to which its location entitles it and to let it obtain such portion of this export traffic as its ocean facilities can win for it ? Does not this award to each locality the exact benefit of its location and is not any other rule to an extent unjust ? The answer is found in the fact that this traffic does not stop at the seaboard but is carried to foreign destinations. The port of export is but a single station as it were upon the through line. This traffic in point of fact originates at a great number of interior points and reaches numerous foreign destinations, but we may assume for the purpose of illustration that it all comes [65] from Chicago and all goes to Liverpool. It is apparent that it may be trans- ported between these points by any of the four ports in question. The distance by rail is somewhat shorter to Baltimore and Philadelphia than to Boston and New York. Upon the other hand the water dis- tance is somewhat less from Boston and New York than from Phila- delphia and Baltimore. The entire through distance does not greatly vary. In other words this traffic is fairly competitive and rates ought, therefore, to be so adjusted that rival routes can fairly compete for it. Apply for a moment the rule suggested by Baltimore and Philadel- phia to the movement of this traffic. The domestic rate to Baltimore IS three cents lower and to Philadelphia two cents lower than to New York. The domestic rate to Boston is two cents higher than to New York upon low grade freight and considerably more upon the higher classes. Now, what would be the result if carriers were compelled to charge their domestic rates upon export traffic? Plainly it would shut up the port of Boston. This fact has been obvious from the first, and it has always been conceded that export rail rates to Boston might be lower than domestic rates and not higher than export rates to New York, This was so specified in the agreement of 1877. It was recog- nized as necessary by the award of the Advisory Commission. It has been formally approved in two instances by this Connnission : In the Matter of the Export Trade of Boston, 1 I. C. C. Rep. 24, 1 Inters. Com. Eep. 25 {ante, p. 105) ; Kemhle v. Boston & Albany Railroad Company, 8 I. C. C. Rep. 110 {ante, p. 231). Nothing can be more 328 ATLANTIC PORT DIFFERENTIALS certain than that these inland rates upon export traffic should be treated as a part of the entire through rate. The real question is on what basis shall rates be equalized through the various ports. New York and Boston insist that the through rates should be made the same in amount by all the ports. The through rate is made by adding together the inland rail rate from the interior to the port of export and the water rate from the port of export to the for- eign destination. These localities contend that if the water rate from a given port is higher the rail rate to that port may be correspondingly lower, but only sufficiently lower to make the through rate the same. They further contend that water rates are in fact substantially [66] the same from Baltimore and Philadelphia as from Boston and New York, and that, therefore, the inland rail rates to those ports should also be the same. Baltimore and Philadelphia urge that there are certain ad- vantages at New York and Boston in the water route which upon the same through rate would attract traffic to those ports at their expense, and they urge that these advantages shall also be equalized so that not the through rate but the advantages of transportation through the several ports shall be made equal. The purpose is to permit these carriers and the ports which they serve to compete for this traffic. The rates are to be so adjusted that there can be fair competition for this business via all the ports, so that no one shall possess a distinct advantage over the other. To accom- plish this result Boston is allowed to charge a lower export rate than its domestic rate. New York is also permitted in some instances to apply a lower differential to export than is fixed for domestic traffic. Now, when New York is allowed to reduce this differential on export traffic there is taken away from Baltimore a part of its natural ad- vantages for the benefit of New York in order that New York may compete for this traffic. But just as Baltimore has an advantage in distance, so New York has certain advantages in ocean facilities. If now Baltimore is required to sacrifice its superiority upon the land for the benefit of New York why should not New York be required to give up some portion of its superiority on the water for the benefit of Baltimore 1 We do not wish to be understood as saying that this principle should be extended to the making of rail rates between competing lines. It may be that in such case the rate by every line should be the same and that each line should sustain whatever disability it has. If in this case it were possible to definitely establish the same through rate by all these ports, if it ever had been possible to do so, the advisability of such an adjustment would deserve serious consideration. It is, IN THE MATTER Op DIFFERENTIAL RATES 329 however, impossible to apply that rule in fact. The ocean rate from every port is eontinually Huetuating and is seldom the same for two days in succession. It even varies from hour to hour. The rate may be higher from Baltimore to-day and from New York to-morrow. [67] It cannot, therefore, be determined what inland differential would produce equal rates through all the ports. It would be impossible to make the same rate through all these ports unless some system like that applied by southern lines to the exporta- tion of cotton were adopted. Under that system there is a published inland rate to the several ports, but that rate is seldom observed. The ocean rate from the various ports is ascertained. To this rate is added the published inland rate from a given point to the various ports and the rate is said to "make" by that port which has the lowest combina- tion. Any carrier is no.w at liberty to apply this combination through any other port, paying whatever it maj' find necessary for ocean trans- portation from that port and retaining the balance of the quoted rate for its own service. In this way, rates are in theory the same via all the ports. No such system could be applied to this traffic through the ports in question without dire confusion. Under it there can be no such pub- lication of the rate as is required by the Act to Regulate Commerce. There can be no maintenance of a fixed inland rate. The traffic must in all cases be moved upon a through bill of lading and the destination must be known when the rate is quoted and the traffic billed. In actual practice grain moves to the seaboard for export before it has been sold abroad, and it was stated upon this hearing that the same was true of flour. There is no suggestion that such a system could or would be adopted, and without it an equal through rate is impossible until ocean rates are named and maintained in the same way that inland rail rates are. While, however, it would be impossible to secure by the application of any inland differential the same rate through all the ports it would be possible to say with confidence that if this were the proper basis of making the differential the present differentials are too high, for they imdoubtedly exceed the difference in ocean rates. In our o])iniou they always have from the very first. While the Thurman Commission re- ported that rates from Philadelphia and Baltimore were higher tiian from New York by an amount substantially equaling the differentials, Mr. Fink, a much closer observer, with much better means of informa- tion, [68] stated in his report of 1881 that the difference in ocean rates was only about one-half the differential from Philadelphia, and some- thing more than one cent less than the differential from Baltimore. 330 ATLANTIC PORT DIFFERENTIALS This Commission found upon the former hearing that the difference in ocean rates did not equal the differentials. We have now expressed the belief in our findings of fact that for the last seven years the differ- ence in ocean rates has been materially less than the differentials. During all this time the inland differential has been in effect and for the last two or three years it has been strictlj^ observed. It must fol- low, therefore, that the rate through Baltimore and Philadelphia has been distinctly lower than the rate through New York. During all this time the ocean rate has been the result for the most part of free competition. Ships from Baltimore have obtained the highest rate possible. If inland differentials were made the same now to all these ports what must happen ? Clearly the ocean rate must be lower from Baltimore and Philadelphia than from New York, for thi^ through rate must be lower. There is no reason to suppose that an equal rate would take traffic in the future which has only moved on a lower rate in the past. The real question is, therefore, whether ships would continue to come to Baltimore and Philadelphia if they were obliged to accept lower rates from those ports than obtained from New York. It is not to be supposed that every ship would leave Baltimore and Philadelphia at once, nor that every ship would ever forsake those ports. But vessels are not like railways ; they can be taken to the best market. It fairly appears that in order to attract shipping, the ocean rate must be somewhat higher from Baltimore and Philadelphia than from Boston and New York. The reasons for this have been stated in our findings of fact and need not be repeated. It has been said that equal rates through all tiie ports have never prevailed. To this the operation of the minimum freight agreement affords a brief exception. From January 1, 1902, until May 26, of the same year rates from all the ports to Great Britain were the same, so that the through rate was lower via Baltimore and Philadelphia by the full amount of the differ- [69] ential. On IMay 26, ocean rates from these ports were advanced by the amount of the differentials, thus making the through rate from the interior point to the foreign port the same, and this continued in effect for a few Aveeks. At the expira- tion of that time a readjustment of ocean rates was made so that the through rates via Baltimore and Philadelphia were lower than through the ports of New York and Boston by about one-half the differential, differing somewhat with different commodities. So far as this experi- ence proves anything, it seems to show that while rates were lower through Baltimore and Philadelphia by the full amount of the differ- entials, traffic was unduly diverted from Boston and New York and IN THE MATTER OF DIFFERENTIAL RATES 331 that when the through rate was made the same via all the ports there was ail undue diversion to New York. In view of the fact that Baltimore and Philadelphia have natural advantages in location, that Boston and New York have certain natural advantages in the way of ocean facilities, that it is impossible to make and maintain the same rate through all the ports, we think the true inquiry in adjusting this differential is, what will equalize the ad- vantages of transportation through these various ports. What part of the advantage which Baltimore and Philadelphia enjoy on the score of the inland haul shall they be allowed to retain to compensate them for their disadvantage in the water haul. The most important factor in determining the route is undoubtedly the rate. It was said in testimony upon the former investigation and has been repeated in this that a difference of from one-fourth to one- eighth of a cent a bushel will determine the port by which grain shall be exported. Other traffic is not equally sensitive, but it must follow with respect to this low grade freight that the through rate by all lines should be substantially the same. There are, however, other considera- tions. The item of insurance, quicker and more reliable service, more frequent sailings, the ability to reach a greater number of ports, su- perior banking facilities and better storage facilities all influence the movement of this traffic and in all these respects New York is superior to its competitors. The elements which enter into the problem are so various and so complex that it is mani- [70] festly impossible by any a priori process of reasoning to determine what inland differential will equalize all these advantages and disadvantages. This was the conclu- sion of Mr. Fink, of the Advisory Commission, and of this Commission upon the former investigation. It is our conclusion now. The best that can be done is to examine the effect of these differentials. They have been in operation for almost thirty years. They have not been during a large portion of that time strictly observed, during some por- tions of it probably not much observed; but there has been running through the whole period what amounts to an average observance, and for the last two or three years they have been well maintained. What does the result fairly show ? Does this competitive traffic move through these ports freely or do these differentials give to Baltimore and Phila- delphia a distinct and unfair advantage over New York and Boston? In the examination of the statistics showing this movement, certain things should be kept in mind. The total amount exported through these ports must decrease as compared with the total exports of the whole country. A glance at the map of the United States will show that the points at which these 332 ATLANTIC PORT DIFFERENTIALS exports originate are much nearer the Gulf than the Atlantic ports. In the early days of this business the South was prostrate from the ef- fects of the Civil War. It had no railroads worth the name. To-day many lines of railway connect the grain fields and packing houses of the West with Galveston and New Orleans and the gradients and cost of operation upon those lines are such that traffic can be transported almost as cheaply per mile as to the Atlantic seaboard. These rail- roads are bound to carry a large part of this traffic to the Gulf. An examination of Table No. 3 shows the extent to which our grain and flour exports are being diverted from the Atlantic seaboard to the Gulf ports. Again within a comparatively few years Norfolk and Newport News have become important ports of export. Strong lines of railway have reached deep water at these points, have provided extensive fa- cilities for the handling of this business, and will certainly insist upon a portion of it. The history of the Erie Canal has an important bearing upon this question. In the early days of the export grain movement [71] the Great Lakes and the Erie Canal formed the cheapest avenue of trans- portation to the seaboard. At one time more than half the grain which reached the city of New York came by canal. It was that which gave New York its prominence as a grain exporting port. To-day the canal has almost ceased to be a factor in this situation and the effect of this upon the exports of that port must not be overlooked. As we sug- gested in the former case, New York has no vested right to the handling of this grain. The railroads which serve New York can no more claim to carry the grain which formerly went by canal than those leading to Philadelphia and Baltimore. With the dropping out of the canal there disappeared a factor which made powerfully for the port of New York. When the improvements to the Erie Canal which are contemplated are completed so that that water-way becomes once more an actual carrier of traffic, the effect will undoubtedly be to greatly increase the exports of grain and flour from that port in comparison with the other three ports involved in this hearing. No comparison by single years is of much value. The causes which operate to induce a considerable movement of grain through one port and not through another are so various that no inference can be safely drawn from the history of a single season. The failure of a crop in a particular locality ; the presence of large quantities of other freight at a particular port may have this effect. The last year upon which we had the statistics on the former hearing was 1896. New York stood aghast at the falling off in its exports of grain for that season. The differential continued the same through 1897 and 1898, and yet we IN THE MATTER OP DIFFERENTIAL RATES 333 find that the percentage of New York had returned by tlie latter year to substantially its normal figure. Counsel for New York stated that the etfect of the ex-lake differential was especially noticeable and yet it will be seen upon referring to Table No. 9 that in 1897 when the differential of one cent a bushel established by the Joint Traffic Asso- ciation was in effect, Philadelphia obtained but 11 per cent, of the ex- lake grain, being the smallest with the exception of 1895 for the twelve years given in that Table. An examination of these statistics seems to show that, beginning with the year 1878, the first full year after these differ- [72] entials had been established by the agreement of 1877, and coming down to the year 1894, New York has sensibly declined in comparison with the four ports considered as a whole, and that each of the other three ports has somewhat increased in comparison with New York. Boston at first gained, but for the last eight years has lost ; Philadelphia at first lost and latterly has gained; Baltimore has fluctuated at different times, but on the whole is a substantial gainer. The decline of New York is, however, largely associated with the falling off in its canal traffic; thus, in the year 1878 the total number of bushels of wheat, corn, and flour, in bushels, exported through New York, Boston, Phila- delphia, Baltimore, Norfolk, and Newport News was, according to a table quoted in the brief of New York, 175,000,000, in round numbers. Of this New York exported 54.1 per cent.; Boston, 6.8 per cent.; Philadelphia, 16.7 per cent. ; Baltimore, 22.3 per cent. ; Norfolk and Newport News, nothing. In the year 1903 the exports through thi^ same ports were 135,000,000 bushels; of which New York had 37.5 per cent. ; Boston, 9.6 per cent. ; Philadelphia, 17.4 per cent. ; Baltimore, 28.1 per cent.; Norfolk. 1.1 per cent., and Newport News, 6.3 per cent. In 1878 the canal brought to New York 64,000,000 bushels, while in 1903 it brought only 13,000,000 bushels. New York is still well in ad- vance of any other one port. In the year 1903 it exported 44.4 per cent, of the grain, 38.2 per cent, of the flour, and 62.7 per cent, of the provisions passing out through the four ports. It should be remem- bered that the effect of these differentials is confined to low-grade traffic ; practically all of the higher classes of freight still moves ou1 through New York. It was said with truth upon the argument that the value of the exports and imports passing through a particular port has little weight as showing the amount of the traffic ; yet it is some- what significant that of all exports passing out through these four l)orts in 1893, New York exported in value 67 per cent., and that of the imports flowing in through these four ports New York had in value, that same year, 78 per cent. ; of the whole United States, 60.3 per cent. It can hardlv be said that there is any such marked diversion of traffic 334 ATLANTIC PORT DIFFERENTIALS from the port of New [73] York as would warrant the interference of Govornniont to prevent it. AVliile holding in the former case that there was no such arbitrary interference with the movement of this traffic upon the part of the carriers as would constitute a violation of the Act to Eegulate Com- merce, the Commission did feel that the differentials upon grain were probably too large. This mainly arose from the fact that from various causes set forth in that report a differential of three cents was nuich more potential in sending traffic through the port of Baltimore in 1897 than it had been in 1877 or in 1882, Had we been acting in that case in the capacity of an Advisory Commission, we should probably have recommended the reduction of those differentials. They were in fact reduced one-half by the voluntary action of the carriers in 1899, and we are satisfied that the differentials of one cent and one and one-half cents, which were then established and which are still in effect, are sufficiently large. We feel now that perhaps the differentials on flour should be somewhat modified. That commodity moves to the seaboard under substantially the same conditions and at practically the same cost as grain; but is probably somewhat less influenced by the ocean rate than grain. About the only thing which is made reasonably cer- tain by the statistical tables offered in evidence is that Boston has dis- tinctly lost and that Baltimore and especially Philadelphia have dis- tinctly gained in exports of flour. We are inclined to think that this differential should be made two cents at Baltimore and one cent at Philadelphia. We have no knowledge whatever as to the movement of iron and steel articles, in case of which these differentials were re- duced in 1904, and can, therefore, express no opinion as to their pro- priety. Boston insists that if Philadelphia and Baltimore are entitled to a differential against New York it is, for the same reasons, entitled to some consideration. We found on the former hearing that ocean rates from Boston had been lower than from New York, and since the inland rate has always been the same, this must indicate that the total through rate by the port of Boston, as well as by Baltimore and Philadelphia, must be lower than through New^ York. It appears from the evidence in this case [74] that at the present time ocean rates are substantially the same from both these ports. It is, therefore, possible that in the future it may become evident that Boston cannot fairly compete for this traffic upon the present basis ; but we do not feel that the record before us would justify that inference to-day. We desire to call espe- cial attention to the fact that these differentials have not been fully IN THE MATTER Op DIFFERENTIAL RATES 335 observed for a sufficient length of time to indicate exactly what their effect maj' be when strictly maintained through a series of years. The immediate cause of this investigation was the controversy over the differential on ex-lake grain. That question was incidentally re- ferred to in the former case, but not much considered. It was there said that this grain originated at the same point, whether it reached the port of export by the all-rail or the lake-and-rail route, and that since the purpose of the differential was to distribute the traffic between the different ports, the same reason which justified a differential in one case would apply in the other. It would follow from this reasoning, that the differential in both cases ought to be the same. Further reflection leads to the conclusion that the position taken in that opinion is not altogether tenable. The origin of the grain is the same in both cases and the traffic is therefore strictly competitive. It should not be regarded as originating at Buffalo since it is only there temporarily in transit ; but there is another feature of the case which deserves attention. Distance is important as already observed only in so far as it affords a measure of the cost of transportation. One point may be nearer another in miles, but more distant in cost of carriage. Now, the cheap- est route by which this grain can reach the seaboard from its point of origin in many cases is by rail to Chicago, by water from Chicago to Buffalo and by rail from Buffalo to the port of export ; and this is so if we entirely disregard the Erie Canal. It is a natural advantage of the port of New York to be located on this route. By this route the distance to New York, in cost of transportation, is no greater than to Philadelphia and Baltimore. When this grain arrives at Buffalo there is, therefore, no reason growing out of the greater proximity of [75] Baltimore or Philadelphia to the grain fields which justifies or requires a lower rate to those ports. It has been seen, however, that the pur- pose of the differential is to distribute this competitive traffic between the different ports. It has also been seen that the ocean rate through Baltimore and Philadelphia is somewhat higher, except on cargo busi- ness, of which none is now done, than through the ports of New York and Boston. If this grain reaches the seaboard by the all -rail route, the advantage of Baltimore is taken away in favor of New York and Boston to the extent of one and one-half cents per hundred pounds, and we think that when the same grain arrives at Buffalo it is proper for the same reason to take away something from the ocean advantage of New York in favor of Baltimore. This ex-lake grain may move through either Pairport, Erie, or Buf- falo. Fairport and Erie are in differential territory, so that rates 336 ATLANTIC PORT DIFFERENTIALS from these two points would be, upon the ordinary basis, lower to Philadelphia and Baltimore than to New York. But it was said in testimony that with respect to this ex-lake grain these three lake ports should be treated alike; and such is our opinion. To apply a lower rate to Fairport and Erie would be unjust to Buffalo. There is now in effect, pending the disposition of this matter by the Commission, a differential on this traffic of four-tenths of one cent per bushel in favor of Baltimore. We are inclined to think that this should be modi- fied a little and as modified extended to Philadelphia, and we believe that if this is done the differential so enjoyed by those two ports upon this traffic will certainly not exceed the average for the last fifteen years. It may be asked with some reason why a distinction should be made in the amount of this differential between this ex-lake traffic and that which reaches these ports by the all-rail routes. Our answer is : These four cities are all seaports. This is a fundamental advantage of loca- tion which entitles each and every one of them to participate in this export business and the public interest requires that this right shall be recognized. But each has certain subsidiary advantages peculiar to itself which should be preserved in so far as is compatible with free competition. It may well be, therefore, that Baltimore should be given a some- [76] what more favorable rate on all-rail than on rail-and- water traffic, for it possesses an advantage in the former case which it has not in the latter. New York insists that the effect of these differentials is to force traffic out of natural channels into unnatural and more expensive routes, and that the final effect is to impose an enormous burden upon the public. With respect to all-rail traffic this premise of fact is not well taken. The actual cost of delivering grain into the hold of the ship from the average point of origin is probably three cents per hun- dred pounds less at Baltimore than at New York. The cost of the ocean transportation from Baltimore may be somewhat greater al- though New York and Boston have strenuously affirmed the contrary. Hence traffic which passes through New York and Boston under the operation of these differentials is forced into a more expensive route than as though it passed out through Baltimore. With respect to this ex-lake grain, the assumption of New York may be correct, but we do not think this consideration should be controlling. To decree that traffic should always move by the cheapest route would be to entirely eliminate competition, which, within reasonable bounds, is for the interest of the general public. It was also strongly urged upon the Commission by the representa- I IN THE MATTER OP DIFFERENTIAL RATES 387 tives of New York and Boston that the desire of the lines serving those ports was to eliminate the present differentials by a reduction in the export rate to those ports, and it was said that this must, in the nature of things be a permanent reduction and that, therefore, it would result in a substantial saving to the public. It seems probable that if the differentials were to be wiped out at the present time this would be done by applying at Boston, New York, and Philadelphia, upon export traffic, the domestic rate to Baltimore. It is also true that this export rate could not be advanced without ad- vancing the Baltimore domestic rate, since it would be impossible to maintain at that port a higher rate on export than on domestic Inisi- ness. But what possible guaranty is there that the domestic rate at Baltimore would not be advanced? In 1902 domestic rates to all these ports were [77] raised, and although this Commission found that the advance was unjustifiable it has been kept in effect except during the season of lake navigation. The present export rate is four cents lower than the domestic rate at New York. If that domestic rate is too high it ought to be reduced, but we do not think it would be just to the com- munities affected nor to the lines serving those communities, nor that in the end it would benefit the general public to deprive the ports of Philadelphia and Baltimore of the ability to compete for this traffic. We have not considered westbound differentials applicable to import traffic since there are no facts in this record upon which to base an opinion. With respect to export differentials we conclude : that the differential on flour both all-rail and lake-and-rail should be 2 cents per hundred pounds at Baltimore and 1 cent per hundred pounds at Philadelphia ; that there should be allowed both Baltimore and Phila- delphia a differential of ^^o of 1 cent per bushel on ex-lake grain; that otherwise the present differentials should remain in force. This is not a proceeding in which the Commission could make an order, nor do we intend to intimate that the facts appearing would justify an order in any proceeding. Our impression is that the above modifica- tions would be fair to the various communities and lines of railway interested, and that it is in the public interest that these differentials should be so adjusted that all the ports and the various lines serving them may fairly compete for this traffic. Clements, Commissioner, dissenting : I cannot join in the suggestions of the majority, which are in effect recommendations for the avowed purpose of the fixing of differentials in freight rates on export traffic rnoving through the respective port:^ 22 338 ATLANTIC PORT DIFFERENTIALS in question and between the competing railroads leading thereto. It is said in the report, "it has been seen, however, that the purpose of the differential is to distribute this competitive traffic between the dif- ferent ports ; ' ' also ' ' the real question is, on what basis shall rates be equalized through the various ports." Again it is said, "when the Commission examined this subject in the Produce Exchange case * * * its only function was to determine whether the Act to Regulate [78] Commerce had been violated. Our relation to the subject to-day is a broader one, certainly if we comply with the request of the petitioners at whose instigation this proceeding was instituted. We are to saj', not whether these differentials are lawful merely, but whether on the whole, considering the interests of all parties, they are fair." If this were a proceeding against a carrier reaching by its lines all of the ports in question it would be within the jurisdiction of the Com- mission to deal with the differences in rates as discriminations between localities by such carrier and, if found undue, to condemn them. In the case of Kemble v. The Lake Shore & Michigan Southern Railway Company {ante, p. 231), referred to in the report, the complaint was against carriers making a through line both to Boston and to New York, so that the question presented was that of discrimination by the same line as between the two places, both being served by it. But there is a manifest and radical difference between a matter of discrimi- nation like that by a carrier between places on its line, and which is clearly covered by the provisions of the third section of the Act to Regulate Commerce and the fixing of differentials in rates to or through the various ports and over independent and competing railroads. In the latter case the law has undertaken to leave the free play of com- petition to adjust rates, subject only to the requirements made of each carrier that its rates shall be reasonable and just and shall not unduly discriminate between commodities or between persons and localities reached or served by it and that duly established and published rates be observed. The foregoing report proceeds upon the idea that there is some legitimate and ascertainable standard of fairness by which there can be fixed a limited and proper degree of competition and measure of distribution of the traffic between the ports and carriers other than that wrought by competition. The law undertakes to fix no such standard or limitation ; nor does it authorize the Commission to do so even for the purpose of putting to rest these questions so long and so often involved in competitive contests between carriers. The futility of the undertaking of the Commission to do so is illustrated in the following admission contained in its conclusions : IN THE MATTER OP DIFFERENTIAL RATES 339 [79] "We have endeavored to find some fundamental principle by the application of which this dispute might be laid at rest, but entirely Avithout success. It is said that a fair differential is one which would give to these several ports the traffic to which they are entitled. It is also said that these several ports are entitled to what of this traffic they can obain under a fair differential." The findings declare, "there is no testimony in this record whicli attempts to show the relative cost of handling this traffic," yet the Ciuestion of a differential in rates is intimately connected with the ques- tion of the reasonableness of the rates involved, and cost of service is one factor of too much importance in connection therewith to be ig- nored. It is not enough to say that equalizing the export rates is but taking into account the carriage from origin to destination and taking from the inland rate as compensation the post-terminal charges from the out-ports, for on this point the findings are no more satisfactory. They say, "it is therefore impossible to find with any degree of con- fidence what the rates from these ports have been." The higher in- surance rates to be compensated are quite as elusive. These it is said "would be in the long run a real disadvantage against these ports, but there is no testimony in this case from which we can place any exact figure upon this disadvantage," but the differentials are to be fixed to the fraction of a cent. The futility of the undertaking is further illustrated in the following declaration found in the opinion : "There is no just principle which would compel this company against its will to apply at New York the same rate as at Philadelphia, when the cost of rendering that service is distinctly greater. It might, as a matter of competition, see fit to do so, but it could not in justice be compelled to." It is further said : "If, again, it can be properly done these rates should be so adjusted that this competitive traffic will be fairly distributed between the different lines of railway which serve these ports. ' ' Thus it is seen the purpose and effect of the conclusions is to declare what differences in rates the railroads should make to the four ports for the purpose of distributing the business. Whether the carriers see fit to follow the suggestions of the Com- [80] mission, which they are, of course, in no sense bound to do, or decline to accede to the same will, in my opinion, leave the Commission in an embarrassing attitude. If they refuse we are powerless to enforce the recommendations, yet com- promised in any subsequent proceeding against finding other as rea- sonable rates. If they acquiesce we will have gone beyond our au- thority to interfere in the course of trade, determining the direction and destination of commerce, a matter with which we are not charged. 340 ATLANTIC PORT DIFFERENTIALS To-morrow we may be called upon to determine what share the Gulf ports may have, and the Gulf roads may carry ; the next day to fix the proportion to which the Pacific cost is entitled. While the situation justified the inquiry, the facts disclosed do not, in my judgment, justify the conclusions reached for the reason that I believe they do violence to the great principle of competition which the Congress and the Supreme Court have so jealously and consistently nourished as one of the fundamental rights of the public. In declar- ing as between competing lines and competing ports what differentials shall govern, assuming that they will govern, we hamper competition, and by this regulation of distribution effect in reality a division of territory, a division of traffic and a division of earnings, which in sub- stance and effect tend to defeat not only the purposes of the anti- trust act against the restraint of trade, but the pooling provision of the Interstate Commerce Act, Avith the enforcement of which the Commis- sion is charged. In this thirty years' contest over the traffic under consideration there have been truces and arbitrations before this; but when i\Ir. Fink was chosen it was by the carriers, and when Judge Cooley and his associates, the Advisory Commission, were called in 1882, it was by the carriers. When Judge Cooley was called in 1886 on western dif- ferentials it was by the carriers. And these arbitrators did what? They left, as they were doubtless expected and as they were bound to do, conditions as they found them. The carriers b}' competition and every device in economy human ingenuity could invent had reached in these years of struggle, competition and the natural course of trade, results which were not satisfactory to all of the communities and [81] to shippers, and to satisfy these, disinterested non-carriers were called in to give a lay opinion and pleading lack of information and sub- stantial justice they approved what they found and the differentials were accordingly left undisturbed while the truce lasted. May competing carriers lawfully effect through the agency of the Commission restraint of competition and trade by a division of traffic between themselves and the ports when to do the same thing through an agency of their own would be unlaAvful? I think not. The expectation of putting these questions to ultimate rest could spring only from a Utopian dream. Their permanent rest is perhaps neither practicable in view of the interests of the ports and carriers nor desirable in the interest of tlie public. The unmolested freedom of competition by lawful methods permit- ting the free course of traffic is more likely to give to each community and carrier the fair and just rewards of its enterprise and public spirit IN THE MATTER OP DIFFERENTIAL RATES 341 and just rates to the public than any devised plan of fixed differentials between competing carriers to compose conflicting interests by appor- tionment of the traffic and which in the nature of the case must be more or less arbitrary. It is at least safe to keep within both the spirit and letter of the law. MEMORANDUM, Filed June 23, 1905. Prouty, Commissioner: Soon after the promulgation of the opinion of the Commission in the above investigation a communication was received from the Boston Chamber of Commerce calling attention to the fact that the application of a uniform differential of three-tenths of a cent per bushel upon all kinds of ex-lake grain would result in allowing almost twice as great a differential per hundred pounds upon oats as upon wheat. It was also stated that whenever in the past differentials had been agreed upon by the carriers, they had been onl}' about one-half as much per bushel upon oats as upon wheat and corn. Upon receiving this communication we addressed to the different parties in interest a circular asking, first, whether the statements of the Boston Chamber of Commerce in reference to the amount of the differentials in the past were correct, and, second, whether a differ- ential by the hundred pounds could be applied to this ex-lake traffic. Replies from the various parties in interest have just been received. Baltimore states that the differentials given are not correct. Phila- delphia admits that in the past the differential by the bushel has been at times lower upon oats than upon wheat and corn, but does not admit the correctness of those given, and states that the differential of four- tenths of one cent per bushel applied to all grains. An examination of the record fails to disclose any evidence tending to show what differential has been applied to ex-lake oats. No allu- sion to this subject is found in any of the briefs which were submitted, nor was it referred to upon the oral argument. Upon having our at- tention called to the matter it seems proper to state : The Commission intended to recommend a differential upon this ex- lake traffic of approximatel}^ one-half a cent per hundred pounds. In- asmuch as the rates were uniformly named in cents per bushel, and inasmuch as the differentials in the past had usually, if not unifoi'mlj'-, been expressed in the same way, we inferred that the differentials found by us had better be so stated. In considering the equivalent of one- 342 ATLANTIC PORT DIFFERENTIALS half cent per hundred pounds by the bushel, we had in mind wheat and corn, and overlooked the great difference in weight between those grains and oats. The answers to our circular, together with what information we have, rather indicate that as a practical matter these ex-lake differentials should be named in bushels ; and, it is also our opinion that the differ- ential upon the heavier grains should be somewhat greater than that upon oats and barley. Since it is hardly practicable to state in case of the different grains the exact differential per bushel which would be equivalent to one-half a cent per hundred pounds, we think that the differential on wheat, corn, and rye should be three-tenths of a cent per bushel, while that upon oats and barley should be one-sixth of a cent per bushel. It may savor somewhat of de minimis to distinguish between a differential of three-tenths of a cent and one-sixth of a cent per bushel, but it must be remembered that upon the testimony in this case one-eighth of a cent per bushel often determines the route which this traffic shall take ; while, as appears from Table 8 in the original report, the quantity of ex -lake oats and barley is very considerable in volume. SAGINAW BOARD OF TRADE, ET AL., V. GRAND TRUNK RAILWAY COMPANY, ET AL. 17 I. C. C. 128. 343 SAGINAW BOARD OF TRADE, ET AL., V. GRAND TRUNK RAILWAY COMPANY, ET AL. Decided June 8, 1909. (17 1. C. C. 128.) 1. The percentage of the Chicago rates, adopted by defendants as a basis for fixing the rates from Atlantic coast territory to Saginaw, Flint, and other points in the Saginaw Valley, is not found, under the circumstances of the case, to be too high, when compared with the percentages that fix the rates enjoyed by other groups in adjacent territory. 2. The proximity of Detroit and Toledo to the great channels of through transpor- tation and their location on direct through routes where the density of traffic is very great and the general operating and traffic conditions are favorable, are elements that cannot be ignored by the rate maker and must necessarily tend to lower rates than can be accorded to communities that are removed from these great streams of traffic. 3. The general foundation upon which rests the whole structure of eastbound and westbound rates in the "percentage-basis" territory described and discussed. John B. Daish and Frank F. Kleinfeld for complainants. G. W. Kretzinger for Grand Trunk Railway Company and Central Vermont Railway Company. 0. E. Butterfield for Michigan Central Railroad Company; Boston & Albany Railroad Company ; Cleveland, Cincinnati, Chicago & St. Lonis Railway Company; Lake Shore & Michigan Southern Railway Company ; New York Central & Hudson River Railroad Company, and West Shore Railroad Company. James H. Campbell for Pennsylvania Company and Pennsylvania Railroad Company. Charles M. McPherson for Pere Marquette Railroad Company. Note: — The importance of this report lies in the description of the method of fixing the relation of rates between points in Central Freight Association Territory from and to which, the Atlantic Seaboard cities considered, differential rates apply. The method herein described was adopted in the same year as the Differential Agreement (ante, p. 1) was made. In a letter to the author, Mr. C. S. Wight, General Freight Eepresentative of the Baltimore & Ohio Railroad Company, who was in railway service at the time of tiie adoption of the differentials, states: ' ' When the present eastbound differentials of 3 cents per 100 pounds in favor of Baltimore and 2 cents per 100 pounds in favor of Philadelphia, as against the Port of New York, was first established, it was a compromise basis, for the reason that all eastbound rates to New York were based upon the McGraham Percentage Table and it would have been difficult and confusing to establish different differentials from different western territories; therefore, a general differential applying to all Central Freight Association territory was agreed to." 345 3-46 ATLANTIC PORT DIFFERENTIALS REPORT OF THE COMMISSION. Harlan, Com missio ner : The Saginaw Board of Trade, composed of merchants and shippers engaged in business in the city of Saginaw, in the state of Michigan, and organized for the purpose of promoting the growth of that com- munity and the extension and increase of its commerce, has joined in this complaint with the Flint Improvement League, an association performing a like function for the city of Flint, in the same state, with the object of securing reduced rates on all classes of freight and com- [129] modities between the Atlantic coast territory and the cities of Saginaw and Flint and other points within the counties of Saginaw and Genesee. These counties are hereinafter referred to as the Saginaw Valley and form a part of a rate group known as the 92-per-cent. zone. The proceeding was instituted not only in the interest of the members of the two associations, but also on behalf of all receivers and shippers of freight, manufacturers, jobbers, wholesalers, and consumers in the Saginaw Valley. Upon the hearing much testimony was taken before the record was closed ; but shortly after the case had been submitted on briefs and while it was under advisement bj^ the Commission, the complainants filed a motion asking that the record be reopened for the taking of further testimony. The motion was granted and the testi- mony of numerous additional witnesses was thereupon heard. The case was then again submitted on briefs. Its consideration has been delayed by an intimation from the IMichigan railroad commission in December last of its purpose to file a complaint praying for a general reduction in rates to and from all points in the lower peninsula of Michigan, including Saginaw and Flint. But as no such petition has been filed we proceed now to dispose of the complaint upon the record before us. No complaint is made of the inherent reasonableness of the Saginaw Valley rates when considered by themselves. The controversy involves only the relation of those rates with the class and commodity rates of other groups or zones in the same general locality. The groups whose rates are thus brought into comparison are a part of an extensive rate sj'stem originally established in 1877 by the lines serving the territory that lies east of the Mississippi River and north of the Ohio River, now frequently referred to as the percentage basis territory. This territory is practically coterminous with what is known as Central Freight Association territory and embraces Illi- nois, Indiana, Ohio, and the peninsula of Michigan. It also includes certain ports on Lake Michigan in the state of Wisconsin ; it takes in Louisville and the south shore of the Ohio River in northeastern Ken- SAGINAW BOARD OP TRADE, ET AL., V. G. T. RY., ET AI.. 347 lucky; it includes the northwest corner of the state of Pennsylvania, and extends to a portion of the province of Ontario lying- just north of Lake Erie and Lake Ontario. Within these boundaries there are about 8,000 railway stations which have been divided or segregated for rate-making purposes into what are called percentage zones. The rates to and from these groups are made up upon a system, commonly called the percentage zone system, that is not in use elsewhere in the United States. Under the plan first adopted the system embraced only junction or competitive points. The rate from Chicago to New York was taken as the unit or 100 per cent, basis, and the rates to Atlantic coast terri- tory were fixed at a percentage of the rate from Chicago to New York, the several junction or competitive points taking rates higher [130] or lower than the Chicago rate as they were less or more distant from New York, by the shortest route "worked or workable," than was Chicago. This made practically a distance tariff. But after several years of actual experience with it that plan was modified and the rates now in effect were worked out on the following general basis : From an assumed rate of 25 cents from Chicago to New York there v^as first deducted the sum of 6 cents to represent the fixed terminal expenses at the points of origin and destination. The remaining 19 cents represented the assumed charge for the rail haul exclusive of any service at either terminal. This rate being divided bj^ 920, that being the accepted short-line mileage from Chicago to New York, yielded a rate per mile of 0.0206 cents 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 rate 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 particular point to New York 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 the 6 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 point to New York, including the terminal charges. And the percentage which 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 par- ticular point would take on any given class of merchandise. That is the general foundation upon which rests the whole structure of eastbound and westbound rates in the percentage basis territory. The system has no official character — that is to say, its bases have not been filed with the Commission. It was simply a general understand- 348 ATLANTIC PORT DIFFERENTIALS ing intended as a guide to rate makers in establishing the specific rates that are published and filed with the Commission and govern traffic between the Atlantic coast territory and points in the territory, the boundaries of which have just been described. In order to avoid the charge that such rates were the result of a concert of action be- tween the carriers serving those territories, it was understood, as we are informed, that the system should be a minimum system of rates and not a maximum system. Theoretically it was also intended to apply onl}' in the construction of rates to and from junction and com- petitive points. The rates to and from noncompetitive points were made up originally by adding a local or arbitrary rate from such points to some nearby junction or competitive point to w'hich a rate percentage had been assigned. But in the progress of time the sj^steni was subjected to gradual modifications resulting in the extension to adjacent noncompetitive points of the rate to or from the junction or competitive point, thus eliminating the addition of the local or arbi- [131] trary rates just mentioned. Moreover, while the system was in- tended to afford a minimum basis only, as a matter of fact the mini- mum percentages in the course of time became the maximum rates. The extension to adjacent points of the rates to and from nearby junc- tion and competitive points resulted in the formation of rate zones or groups of arbitrary shape and varying size, in some cases projecting into two states, all points in a particular group taking the same per- centage of the Chicago-Xew York rate on traffic to and from the At- lantic coast territory. The general nature of the system may be illustrated by reference to one or two representative points. Springfield, in the state of Ohio, for example, is in the 82-per-cent. zone. Xenia is tlie basing point for that group. Its distance to New^ York at the time this system was es- tablished was 700 miles. If, now, we multiply the factor referred to, namely, 0.0206, by 700, we get 14.-12 cents ; and if to this we add the 6 cents representing the terminal expenses at both ends of the movement, we get 20.42 cents as an assumed rate from Xenia to New^ York, which is 81.7 per cent, of the assumed rate of 25 cents from Chicago to New York ; and under the application of a general rule for the disposition of fractions resulting from such computations, a fraction exceeding one- half of 1 per cent, is considered a full per cent. A percentage of 82 is thus arrived at as the basis for constructing the rates from that group, and the rates from Springfield are therefore 82 per cent, of the Chi- cago-New York rates. Again, Fort AVayne, in the state of Indiana, is in a 90-per-cent. zone. In arriving at that percentage, Muncie was taken as the basing point. The distance from IMuncie to Lima via SAGINAW BOARD OP TRADE, ET AL., V. G. T. RY., ET AL. 349 the Lake Erie & Western is 85 miles, and the distance from Lima to New York via the Pennsjdvania lines, before they were reconstructed east of Pittsburgh, was 713 miles, making a total distance of 798 miles by the shortest route "worked or workable." If the same factor be multiplied by 798 we get an assumed rate from Muncie to New York of 16.44 cents, exclusive of terminal charges. Adding 6 cents to cover those expenses, we arrive at an assumed rate between those points of 22.44 cents, including terminal charges, which is 89.76 per cent, of the assumed rate of 25 cents from Chicago to New York. The specific rates from Fort Wayne as published by the trunk lines are therefore made up on the basis of 90 per cent, of the Chicago-New York rates, the 0.76 of 1 per cent, being taken as a whole per cent. In building up the system efforts were made to avoid, so far as pos- sible, all infractions of the long and short haul clause of the act. The boundaries of the groups are the lines of railroads, and the point around which each group has been constructed as a basing point is or- dinarily the most distant point from New York in the group by the most direct workable route. Water competition and the participation by [132] north and south lines, such as the Monon, in the traffic be- tween the Atlantic coast territory and the percentage-basis territory, as well as other competitive elements, have naturally had some effect in the shaping of the several zones. New roads have been built and new routes established since the percentages of the several groups were orig- inally assigned, and this in some instances has resulted in material changes in rates. Newly developed traffic and other conditions have also been considered and from time to time have led to alterations in the percentages of some points. Although the effect of these influences on the form and boundaries of the percentage zones is not without interest, it will not be necessary to dwell here upon those features of the system. While it is not always a simple matter when examining a map of the percentage group territory to understand and at once comprehend the causes that have produced zones or groups of such irregular outline, nevertheless a careful study of particular groups, and some knowledge of the transportation conditions that surround and affect them, have given us the general impression that their bound- aries have been established upon substantial and presum.ably somid grounds. The fact that no group rates in this country have been subjected to less criticism than the rates to and from the percentage- basis territory and the Atlantic coast is some evidence of the care with which the system has been developed. So far as a cursory examina- tion of the records of the Commission has disclosed, there have been, until this petition was filed, but three other formal proceedings since 350 ATLANTIC PORT DIFFERENTIALS the organization of the Commission in 1887, in which complaint was made of the percentage assigned to a particular group: Detroit Board of Trade v. Grand Trunk Rij. of Canada, 2 I. C. C. Rep. 315; Pratt Lumber Co. v. C., I. & L. Ry. Co., 10 I. C. C. Rep. 29 ; Green Bay Busi- ness Men's Association v. L. S. & M. S. Ry. Co., 15 I. C. C. Rep. 59. Moreover, the enormous commerce that proceeds to and from Central Freight Association territory has not only adjusted itself to this sys- tem of rates, but shippers engaged in that commerce have thoroughly understood it for a score and more of years. While traffic and trans- portation conditions will doubtless change from time to time and thus necessitate alterations in the zone boundaries, such modifications must necessarily be made with deliberation and only upon adequate grounds. As heretofore stated, the complainants make no attack upon the reasonableness, in and of themselves, of the rates now offered by the defendants to the shippers, merchants, and manufacturers of Saginaw Valley. The claim is simply that the percentage adopted by the de- fendant carriers to fix the rates for Saginaw Valley is too high when compared with the percentage that fixes the rates enjoyed by other groups relativelj^ located and where the conditions of traffic and trans- portation, as the complainants allege, are substantially similar. The [133] comparison upon which the alleged discrimination is based is made more particularly with the Toledo-Detroit group or zone. The Saginaw Valley group, as stated, takes rates that are 92 per cent, of the Chicago rates. Toledo and Detroit are in a 78-per-cent. zone. The result, at the time of the first hearing of the complaint, was a relation of rates between the two groups that enabled the jobbers and whole- salers of Toledo and Detroit to distribute their merchandise at many points in northern and western Michigan at a slightly less cost for transportation than it costs the jobbers and wholesalers of Saginaw Valley. The more favorable percentage rates into Detroit and Toledo and the adjustment of the local rates out gave this advantage to De- troit and Toledo merchants. These differences in the aggregate through charges to points of con- sumption, when in favor of Detroit and Toledo, had to be absorbed by the jobbers and merchants of Saginaw Valley, at the time the com- plaint was filed, in order to enable them to compete with the jobbers of Toledo and Detroit in that part of the state of Michigan which the complainants regard as tributary to the distributing points of Saginaw Valley. But after the first hearing, as we were assured at the second hearing, these inequalities were corrected by the Pere ^larquette Rail- road by a readjustment of its local rates out of Saginaw Valley in such manner as to enable the wholesale merchants of Saginaw now to dis- SAGINAW BOARD OF TRADE. ET AL., V. G. T. RY., ET AL. 351 tribute their wares to points in northern and western Miehigan at an aggregate cost for the entire transportation from eastern territory that is no longer in excess of the total cost of transportation paid b_y the wholesale merchants of Detroit in order to reach the same destinations. The snm of the local rates from eastern points to the western points in question is now the same, as we are told, whether based on Saginaw or on Detroit. Assuming the accuracy of these statements and also of the statement that the Grand Trunk local rates were never out of alignment in that regard, much of the substance of the grievance al- leged by the complainants has already been removed. But counsel foi" the complainants denies that the corrections have been made as stated, and cites Lansing as an instance where the sum of the local rates via Saginaw is still higher than the sum of the local rates based on De- troit. We do not see, however, that Lansing may fairly be regarded as tributary to Saginaw; and as we are referred to no other instance of inequality the statement that a readjustment has been effected must be taken as well founded. There remains for examination the allegation that the percentage assigned to the Saginaw Valley group is too high when compared with the percentages assigned to other groups in ad.jacent territory. In this connection the complainants contend that, inasmuch as Saginaw Valley is situated between the eighty-third and eighty-fifth meridians, the Saginaw rates should be on a relatively equal percentage with all [134] other points between those meridians, including Detroit and Toledo and points in southeastern Michigan and western Ohio. The percentage sj^stem, however, was not based on longitude, and we need not stop to consider the reasonableness of the Saginaw Valley rates from a point of view that attaches no significance to transportation or traffic conditions, and concedes no importance to the other factors upon which the system largely rests. The record does not give us the history of the Saginaw percentage. Our own investigations indicate, however, that no specific percentage was used in connection with Saginaw rates until January 28, 1890, when the westbound rates from New York to that point were equalized with the rates to Chicago by being ad.justed on a 100 per cent, basis. Apparently the schedules were again revised in 1892, and on May 2 of that year the Saginaw rates were reduced to the present 92 per cent, basis. In the meantime, as is to be inferred from the information before us, the rates to and from Flint, which is some distance south of Saginaw^ and more adjacent to the direct through lines, had already been fixed on this percentage, arrived at on the basis of the mileage by the Flipt ^ Pere Marquette Railroad from Flint to Toledo and 352 ATLANTIC PORT DIFFERENTIALS thence via the Pennsylvania lines to New York. This route at that time involved a haul of 828 miles, and on the formula heretofore ex- plained gave to Flint rates that were 92 per cent, of the Chicago rates. The revision of 1892 resulted in the extension of this percentage to Saginaw. It is our understanding also that at that time the mileage of the Grand Trunk from New York through the Buffalo gateway to the Saginaw Valley was about the same through Port Huron as through Detroit, and involved a haul of 828 miles which, worked out on the formula, would put Saginaw practically on the 92-per-cent. basis. Since that time the Grand Trunk, having acquired a number of small Canadian roads, has through that means and by the reconstruction of old lines reduced its distance from Port Huron to Buffalo from 229 to 196 miles, and has otherwise shortened its route to Saginaw through Port Huron. Port Huron is therefore the gateway to Saginaw that now gives the short line over that road. It is interesting, however, in this connection to note that Durand, which is well to the south of Saginaw, was then in the 95-per-cent. group and was reduced to a 92- per-cent. basis in order that the Grand Trunk might use that route to and from Saginaw without violating the fourth section of the act. Such, as we understand the matter, is the history of the present Sagi- naw percentage. It is based on the mileage through Toledo and is in substantial accord with the old mileage of the Grand Trunk through Detroit. But the complainants contend that the short line at this time from New York is not through Toledo, but through the Niagara frontier, and involves a haul to New York of only 731 miles. It is also said [135] that a large proportion of the Saginaw tonnage takes that route. They insist that Saginaw is therefore entitled to a rate basis of 81 per cent, according to the general formula underlying the percentage basis system. Comparing the distance of Saginaw from New York by the Niagara short line with the mileage from Kalamazoo, Detroit, Muske- gon, Toledo, Dayton, Cincinnati, Marion, Middlefield, Indianapolis, Connersville, and other important centers in Michigan, Ohio, and In- diana, the complainants insist that Saginaw is entitled to that per- centage, and ought to be put on an 82-per-cent. basis, when its short- line mileage through the Niagara frontier is compared with the short - line mileage of Detroit and Toledo. That contention, however, is based on a single factor in the situation, namely, the present short-line mileage of Saginaw, and not upon a general view of the whole rate adjustment of which Saginaw forms only a modest part. The proximity of Toledo, Detroit, and the other communities named in the complainants' comparison, to the great channels of through SAGINAW BOARD OF TRADE, ET AL., V. G. T. RY., ET AL, 353 transportation, their location on direct through routes Avhere the den- sity of traffic is very great and the general operating and traffic con- ditions are favorable, are elements that can not be ignored by the rate maker and must necessarily tend to lower rates than can be accorded to communities that are removed from these great streams of traffic. The Saginaw Valley lies well to the north of the through lines between Chicago and New York and is more or less remote from the direct cur- rent of the great volume of interstate movements between the east and the west. While there is a substantial traffic to Saginaw and Bay City there is comparatively little traffic through and beyond either point. These facts ought to have and necessarily must have a material influ- ence when considering the relation between the Saginaw Valley rates and the other group rates to which the complainants refer. But in demanding an 84-per-cent. basis on behalf of Saginaw Valley the com- plainants have disregarded all such circumstances and have also failed to take into account the effect that such an order as they demand would have on the general rate adjustment in the peninsula of Michigan. Jackson, which is 769 miles from New York by its shortest lines, is in the 92-per-eent. zone with Saginaw, yet no complaint as to its rates has been made on its behalf. Nor has any complaint been made by the numerous other points in that zone. If its mileage alone be con- sidered Jackson ought to be on an 87-per-cent. basis. Lansing, which is 763 miles from New York by its shortest line, is in the 95-per-cent. zone next west of the Saginaw zone. No complaint has been made as to its rates, although the formula, on its exact short-line mileage, would give Lansing rates based on 87 per cent, of the Chicago rates. Throughout the 95-per-cent. zone, and throughout the 96-per-eent. zone [136] that intervenes before we reach the 100-per-cent. Chicago group, are numerous points of more or less importance, and with short-line dis- tances to New York greater than the short-line mileage of Saginaw by from onlj' 30 to 75 miles. And yet no complaint has been made as to their rates. Nothing can be more certain, however, than that a reduction of the Saginaw and Flint rates to an 84-per-cent. basis, as demanded, would throw all the peninsula rates into confusion and would be followed at once by demands from all these points for cor- responding reductions in their percentages ; for an examination of the zone map could not fail to lead the merchants and shippers of these other communities to the conclusion that the present rates are adjusted on a reasonable and a fairly logical relation and that any reduction in the Saginaw rates ought therefore to be followed by a like reduction in their rates. It may be well here again to call attention to the fact here- tofore stated that as a rule the extreme point in each zone is used as the 23 354 ATLANTIC PORT DIFFERENTIALS basing point for fixing a percentage for the whole zone. As in all group systems there is, therefore, an inequality in rates Avhen distance alone is considered, as between points on one side of a group and the points on the other side. This is particularly true of the 96-per-cent. zone to which attention has been called. Tt is no less true of the 92- per cent, zone in which the Saginaw Valley is located. If, therefore, Saginaw and Flint are to be dealt with separately and on the basis of their own short-line mileage regardless of all other considerations, we shall be forced to deal with each point in other groups separately, and thus lead to the gradual disruption of a rate system which is now quite •an old one and, as heretofore stated, has seldom been attacked before the Commission. There is still left for consideration the alleged discrimination in favor of Detroit and Toledo. When asked at the second hearing whether the percentage upon which the Detroit and Toledo rates are based was the result of water competition the rate experts for the de- fendants stated that they had not understood that water competition had at any time affected the rates to and from those points. Their view was that such competition was not the explanation of the 78-per- cent, basis on which those rates are established. "We are strongly in- clined to think, however, that in this they were mistaken. There can be no doubt that the location of Detroit upon the St. Clair River, in the very heart of lake navigation, is in part at least the explanation of the growth of that community to its present, dimensions and impor- tance. There can be scarcely less doubt of the favorable effect of its water facilities upon the growth and prosperity of Toledo. The his- tory of the percentage now enjoyed by both places shows, as we under- stand it, that it was the result, if not of actual water competition, at least of a very strong potential competition arising from their location on the lakes. On April 13, 1876, Detroit was on an 85 anfl Toledo on a [137] 78-per-cent. basis. On June 23, 1879, the basis as to both points was made 811/2 per cent., which on April 14, 1880, was reduced to 751/2 per cent. That, however, was regarded as too low, and on June 1, 1883, both points were put on a 78-per-cent. basis, which is still in effect. This level of rates was arrived at, as we are advised, by taking 714 miles as the distance of Toledo from New York, and putting Toledo on an exact mileage basis as compared with Chicago, then, as now, taken for rate-making purposes as 920 miles distant from New York. As a concession, as we understand it, to water competition or to a highly potential water competition, the formula, heretofore referred to as the underlying basis of the system, was departed from in this instance by ignoring the deduction of 6 cents for terminal charges, thus giving SAGINAW BOARD OP TRADE, ET AL., V. G. T. RY., ET ALi. 355 to Toledo a relation of rates in exact accordance with its mileage as compared with the Chicago mileage. This resulted in a percentage of 77.6, and following the rule for the disposition of fractions the 78- per-cent. basis was arrived at. And in view of the close alliance of the commercial interests of Toledo with those of Detroit that basis was also made effective at Detroit. This relation of rates was ques- tioned by the Board of Trade of Detroit in a proceeding before us against the Grand Trunk and other railroads (2 I. C. C. Rep. 315) ; but, upon a careful consideration of all the conditions, was sustained. It has recently been said that more tonnage passes to and from and beyond Detroit in twenty-four hours than enters and leaves all the great Atlantic ports together in the same length of time. In this statement there is more or less exaggeration if it was intended to in- clude the coastwise tonnage with the foreign tonnage of the Atlantic ports ; but in any event the traffic passing into and out of the St. Clair River is very large and must necessarily have no little influence on the rail rates to and from Detroit. The same conditions must also affect the rail rates to and from Toledo. Bay City, which is the near- est lake port through which Saginaw may forward and receive traffic by the Great Lakes, is at the extreme end of Saginaw Bay, and to reach that port and return to the regular channel of through lake navi- gation would require a steamer to diverge probably as much as 150 miles from its course. This disadvantage in location is a burden which, in the very nature of things, the shippers and merchants of Saginaw Valley must always bear. And it would be wholly improper for the Commission to attempt, by any order it might enter, to equalize those conditions with the advantages enjoyed by the merchants of De- troit and Toledo because of the superior location of those two points on the regular line of lake navigation. Enterprise Mfg. Co. v. Georgia K. R. Co., 12 I. C. C. Rep. 451. Upon the whole record and from a rather extended investigation outside the record, we are led to conclude, now that the distributing rates out of Saginaw Valley have been corrected, that no ground of [138] complaint is left that justly requires the disturbance of the rates between Saginaw Valley points and the Atlantic coast territory. The record makes it entirely clear that SaginaAV as a community is not now suffering and has not suffered materially in the past from an excessive cost for transportation. On the contrary, both Saginaw and Flint during the last ten years have enjoyed a prosperity that has been quite notable. Each of the two cities has grown rapidly both in population and in the number and variety of its industries, and the gross sales of the particular merchants who testified before us have shown a grati- 356 ATLANTIC PORT DIFFERENTIALS fying and healthy yearly increase. While the expense of conducting their business may have been greater during the last three or four years than formerly, this has been due to other causes than the cost of trans- portation, and has been the experience everywhere in all lines of enter- prise during the same period. For these reasons the complaint must be dismissed. It will be so ordered. I BOARD OF TRADE OF THE CITY OF CHICAGO V. ATLANTIC CITY RAILROAD COMPANY, ET AL. NEW YORK PRODUCE EXCHANGE V. NEW YORK CENTRAL & HUDSON RIVER RAILROAD COM- PANY, ET AL. 20 I. C. C. 504. 357 I BOARD OP TRADE OP THE CITY OP CHICAGO V. ATLANTIC CITY RAILROAD COMPANY, ET AL, NEW YORK PRODUCE EXCHANGE NEW YORK CENTRAL & HUDSON RIVER RAILROAD COMPANY, ET AL. Decided April 4, 1911. (20 I. C. C. 504.) Complaints herein attack what are known as ex-lake rates on grain from Buffalo to eastern points; in No. 3575 the complaint is directed against both domestic and export rates, while in No. 3319 export rates alone are involved; upon the facts disclosed by the record, and for the reasons given in the report, both the complaints are dismissed. Chester Arthur Legg and Tf. ill, Hopkins for Chicago Board of Trade, complainant. Baldwin, Wadhams, Bacon d- Fisher for New York Produce Ex- change, complainant. Arthur Geo. Brown and John B. Daish for Baltimore Chamber of Commerce, intervener. George A. Schroeder for Milwaukee Chamber of Commerce, inter- vener. George H. Evans for Indianapolis Board of Trade, intervener. 31. F. Doyle for Cleveland Grain Company, intervener. T. A. Grier for Peoria Board of Trade, intervener. L. Richards for Quaker Oats Company, intervener. J. L. Seager, Edgar H. Boles, E. A. Taylor, 0. E. Bntterfield, and Clyde Brown for Cleveland, Cincinnati, Chicago & St. Louis Railway Company and others. Ernest S. Ballard for New York Central Lines. REPORT OP THE COMMISSION. Prouty, Commissioner: Both the above complainants attack what are known as ex-lake rates upon grain from Buffalo to eastern points. In No. 3575 the complaint is directed against both domestic and export rates, while in No. 3319 359 360 ATLANTIC PORT DIFFERENTIALS export rates alone are involved. The two cases were heard together and may be disposed of in a single report. DOMESTIC RATES. Grain can move from the western field of production to the eastern point of consumption either by some all-rail route or by what is known as the rail-and-water route. In the latter case it is carried from the point of production to some port upon the Great Lakes, like Chicago or Duluth, by rail, is taken from the western lake port by water to some eastern lake port, of which Buffalo is the principal one, and is thence transported by rail to destination. When grain takes the all- rail route it may pass through Chicago or it may reach its eastern des- tination without entering that market. If it takes the rail-and-water route, it must move through some lake port, of which Chicago is the largest. It is therefore for the advantage of Chicago that such rates should be maintained as will permit grain to move by the water route. The board of trade of that city, which is an organization having in charge the grain interests of that community, insists that rates are now so constructed as to divert traffic from the water route to the all-rail route and that this results in undue prejudice against that locality. The position of the complainant will be best understood by an illus- tration drawn from the rates now in effect. The rate on wheat from Chicago to Boston is, at the present time, 18 cents per 100 pounds. If this grain moves by the New York Central lines it would pass through the city of Buffalo en route and would be transported from Buffalo to Boston by the New York Central & Hudson River Railroad. For this service that carrier would receive, under the present adjust- ment of rates, 7.9 cents per 100 pounds, that being its division of the joint through rate after all allowances have been made for terminal expenses, etc. This figure is taken from the brief of the complainant and is sufficiently accurate for the purpose of illustration. By ex-lake rates are meant those rates which apply upon grain reaching Buffalo from the west by w^ater. The present ex-lake rate on wheat from Buffalo to Boston is 13.3 cents per 100 pounds. This ex-lake rate includes elevation ; that is, the taking of the grain from the ship into the elevator and again loading it from the elevator into the car, for which the charge is one-half cent per bushel, or, in case of wheat, 0.83 of 1 cent per 100 pounds. When this absorption is deducted from the ex-lake charge the carrier receives [506] for han- dling the grain from Buffalo to Boston about 12.5 cents per 100 pounds. The cost of transporting to Boston the wheat which has reached Buffalo by lake is to every practical intent the same as that of transporting CHICAGO BOARD TRADE V. A. C. R. CO., ET .AL. 361 the wheat which has come to Buffalo b.y rail, and the complainant in- sists that when the New York Central charges for handling the ex-lake wheat 12.5 cents, while it handles the all-rail grain for 7.9 cents, it is guilty of an unjust discrimination against the lake grain, and there- fore against the city of Chicago, which is interested in moving the grain by water. The defendants reply that their ex-lake rate from Buffalo to Boston is reasonable; that the rate from Chicago to Boston is competitive, and that the division which they are willing to accept from Buffalo to Bos- ton as the price of engaging in this competitive business ought not to be used as the standard by which to measure the reasonableness of their ex-lake rate from Buffalo. In passing upon the validity of this defense we may first inquire whether the ex-lake rate to Boston is rea- sonable in and of itself. The present domestic ex-lake rate from Buffalo to Boston is 8 cents per bushel, equivalent to 13.3 cents per 100 pounds; from Buffalo to New York 6.5 cents per bushel, or 10.8 cents per 100 pounds. These rates apply not only to terminal points, but to interior destinations, which ordinaril}^ take the port rate. The movement from Buffalo upon the domestic rate is to some extent in large quantities to terminal points, but there is also an extensive distributing movement under which grain moves from Buffalo in single carload lots to the point of consumption. The ton-mile revenue pro- duced runs from 5 mills to 6.5 mills. The cost of moving this ex-lake grain is the same as the cost of moving local grain originating or re- ceived at Buffalo except that in case of business from the Lakes the carrier absorbs, as a part of its rate, the elevation charge of one-half cent per bushel, and therefore, in effect, performs this service in ad- dition to its transportation. If the reasonableness of this rate is to be determined by the cost to the carrier, there is no reason why the ex- lake rate should be lower than the local rate. In the Banner Milling case, 19 I, C. C. Rep. 128, to which reference is subsequently made in this report, we considered the rate upon flour from Buffalo to Boston and New York and finally reached the conclusion that a rate of 13 cents to Boston would not be excessive. Ordinarily the same rate ap- plies to the movement of wheat and flour, and if we are to adhere to this rule and to our decision in the Banner Milling case, we must hold that, while domestic ex-lake rates are liberal, they are not so high as to be pronounced unreasonable. This wheat moves from Chicago to Buffalo largely by tramp steamer, and the rate under which it moves is subject to the most active com- petition. While many attempts have been made to control this com- 362 ATLANTIC PORT DIFFERENTIALS [507] petition, they have never succeeded, and the resulting rate was during the season of 1910 perhaps lower than for any previous season. It was said that wheat had moved for about 1.25 cents per bushel. It will be seen therefore that the resulting through rate from Chicago to Boston b}' lake and rail is a reasonable one, and, furthermore, that it is materially lower than the all-rail rate. It also appeared that this avenue of transportation is available under the present rates, and that very large quantities of grain seek that avenue at the present time. It should be noted in this connection that the thing in which the public is primarily interested is the price of the transportation. It is for the interest of the consumer and the producer that the cost of car- riage should be reasonable ; it is not of nuicli importance by what route the traffic is handled, unless the eff^ect of the rate adjustment is such as to deprive the public of proper facilities or to shut up the water avenue and thereby perpetuate unreasonable rates b}' rail. While, however, it is of no special concern to the general public whether this grain moves through Chicago or through some interior market like Peoria, it is the right of each market to insist upon an adjustment of rates which is, upon the whole, just to it. The Chicago Board of Trade did not in the present case urge that the ex-lake rate was unreasonable, but it did insist that the adjustment of rates was undulj'^ discrimina- tory against that market. Its claim was that the ex-lake rate from Buffalo was a part of a through transportation from Chicago, and that the line east of Buffalo had no right to impose upon that through traffic which came by water a higher rate than was imposed upon similar traffic which came to Bufl^alo by rail; and this is the real question M'hieh we are called upon to decide in passing upon the domestic rate. It is well understood that rates on grain and grain products from Chicago to the various Atlantic ports from Norfolk north are competi- tive, and that whenever the rate to any one of these ports is fixed that to all the others must be and always is correspondinglj^ adjusted. Grain can be transported from Chicago to New York City via the Great Lakes to Buffalo and from thence via the Erie Canal and the Hudson River. This route originally fixed the grain rate from Chi- cago to the seaboard, and while in recent years the competitive influ- ence of the Erie Canal has to a considerable extent disappeared the existence of that waterway still produces a profound effect upon grain rates. It will not be challenged, certainly not by the gentleman who so forcibly presented the case of the Chicago Board of Trade, that all grain rates from Chicago to Atlantic-seaboard territory, including Bos- ton are highly competitive. CHICAGO BOARD TRADE V. A. C. R. CO., ET AI^. 363 The New York Central & Hudson River Railroad begins at Buffalo and first receives grain coming from Chicago at that point, but it is [508] part of a through route operated by the New York Central ^ya- tem, which handles the grain all the way from Chicago to Boston. If the grain moves by rail, this system has the entire haul from Chicago, while if it moves by lake to Buffalo and by rail from Buffalo, it only enjoys the haul from Buffalo to destination. It maj^ therefore be for the interest of this company to make such rate from Chicago as will move the traffic by rail, although that portion of the line from Buffalo to Boston receives less earnings than as though the grain were taken up for the first time at Buffalo. But what is even more significant is the fact that the New York Central system from Chicago through Buffalo to Boston must handle this business upon a rate made by some line from Chicago to the sea- board which does not serve Buffalo, or at least which can not handle grain from Buffalo to advantage by rail. This line obtains no part of the traffic which goes by the Great Lakes to Buffalo, and must make a rate in competition with the lake-and-rail rate in order to obtain a part of that traffic. A road like the Delaware, Lackawanna & West- ern, which is not financially interested in any railroad operating be- tween Chicago and Buffalo, and to which it is therefore a matter of in- difference whether it receives the grain at Buffalo from a water or a rail connection, is nevertheless compelled to join with some rail line west of Buffalo in making this through rate and to receive as its divi- sion a less sum than the local rate from Buffalo as the only condition upon which it can indulge in through-rail business from Chicago. It seems plain that the all-rail rate from Chicago east competes with the lake-and-rail rate, and that therefore the division of the line east of Buffalo can not be made the standard hy which to fix a reasonable rate from Buffalo. If the rate to Buffalo were reduced the effect would be to make the cost of transportation via the lake-and-rail route less than at present, which must lead to a corresponding reduction of the all-rail rate, pro- vided the rail carriers are to compete for that business ; but this would in no respect benefit the city of Chicago, and it is exactly this thing against which that market protests. The claim advanced by the traf- fic manager of the Board of Trade of Chicago in a great variety of forms was that the rail line east of Buffalo should charge the same for the further transportation of lake grain as for rail grain, the cost of the service being the same. Manifestly, this can not be so unless rail carriers from Chicago are to withdraw from this competition or unless the lines west of Buffalo will sustain the entire shrinkage, giving to 364 ATLANTIC PORT DIFFERENTIALS their connections east of Buffalo a division equivalent to the local from that junction point. This Commission has uniformity held that the division of a through rate was not a matter of concern to the public, and that while it might be looked to for certain purposes it should not ordinarily be made the [509] standard of reasonableness or the measure of discrimination. The total rate is the thing of consequence, not the manner in which that charge may be shared among the different parties to it ; and this could hardly be better illustrated than by the present instance. If lines west of Buffalo were to make the entire shrinkage, allowing to lines east of Buffalo divisions ecjuivalent to the local from Buffalo, this ground of complaint would be removed, but the complainant would be in no respect benefited. The true inquiry is whether, upon the whole, there be an unjust discrimination, and we are hardly prepared to find that such a discrimination does of necessit}' arise out of the fact that these all-rail carriers insist upon meeting the lake-and-rail rate. The complainant refers, in support of his contention that the ex-lake rate from Buffalo ought not to exceed the earnings of the rail line be- yond Buffalo, to Bighee d; Warrior llivers Packet Co. v. M. & 0. R. li. Co., 60 Fed. Rep. 545. The defendant in that case had a published rate of 80 cents per com- pressed bale for the movement of cotton from Mobile to New Orleans, and the relator presented 400 bales of cotton for shipment at that rate. The defendant declined to receive it for less than $1.25 per bale, stat- ing as a reason that the relator was a water carrier which had brought this cotton from Demopolis, a point on the Bigbee River, to Mobile, and that the defendant had agreed with the Louisville & Nashville Railroad Company and other rail carriers not to transport cotton reach- ing Mobile by water from points on Alabama rivers for less than $1.25 per bale. The court held that this agreement was in violation of the second and third sections of the Act to Regulate Commerce, and therefore un- lawful, and that the defendant must receive and transport this cotton for its established rate of 80 cents per bale. This case is in no respect an authority for the proposition contended for by the complainant. Under its doctrine there might be some ques- tion whether the defendants could apply a different rate to ex-lake grain from the established local rate from Buffalo, although the case does not in terms so hold, but it goes no further. If, for example, some railroad had led from Demopolis to Mobile and that railroad, to- gether with the Mobile & Ohio, had established a joint rate on cotton from Demopolis to New Orleans under which the Mobile & Ohio re- CHICAGO BOARD TRADE V. A. C. R. CO., ET AL. 365 ceived for its division a less sum than 80 cents per bale, this would have afforded no conclusive reason for reducing the local rate of 80 cents from IMobile to New Orleans, much less for requiring the Mobile & Ohio to transport the cotton of the packet company for the amount of its division. In the Banner Milling case, 14 I. C. C. Rep. 398, we considered an advance in the rate on flour from Buffalo to New York from 10 to 11 cents, and from Buffalo to Boston and New England points from 12 to [510] 13 cents. It was there held that the advance was unjustifiable, and carriers w^ere ordered to restore the 10-cent rate. This case rested largely upon the fact that the flour to which the advanced rate applied was ground from grain which reached Buffalo by water, that the rate on flour from Buffalo had been advanced, while there had been no cor- responding advance in the rate paid by the competitors of Buffalo, who ground flour at other points from the same wheat. Subsequently, in the Jennison case, 18 I. C. C. Rep. 113, the rates on flour from JMinneapolis, Duluth, and other northwestern points were brought to the attention of the Commission, the claim being that those rates had been advanced upon the Great Lakes until the rate charged for the transportation of the products of wheat was too high in comparison with that charged by the same carriers for the transpor- tation of the wheat itself from the western lake ports to Buffalo. After an exhaustive examination of the matters involved we reached the conclusion that this claim was well founded, and we ordered a reduc- tion of the lake-and-rail rate on flour from Duluth to the Atlantic sea- board. Thereupon a petition for rehearing was filed in both the Jennison case and the Banner Milling case. The carriers urged with great ear- nestness and produced evidence tending to show that to reduce the lake-and-rail rate as proposed in the Jennison case would have the ef- fect of reducing all flour rates, and consequently all grain rates throughout the West; and upon a further consideration of the whole question we w^ere impressed with the force of this claim, and we de- cided to reconsider our first conclusion in the Banner Milling case and to allow the establishment of the 11-cent rate from Buffalo to New York, with corresponding advances to New England points. Ex-lake rates have always been named by the bushel, while local rates from Buffalo are named in cents per hundred pounds. The pres- ent ex-lake rates, allowing for the differences which would arise from this method of stating rates, are substantially the same as the local rates on wheat and flour from Buffalo. The ex-lake rate on wheat to New York, for example, is 10.8 cents, as compared with 11 cents on 366 ATLANTIC PORT DIFFERENTIALS flour, while the ex-lake rate on wheat to Boston is 13.3 cents, as com- pared with a rate of 13 cents upon flour. It did not appear why ex- lake rates might not be stated in cents per hundred pounds, nor why they might not well be exactly the same as the local rates from Buffalo, instead of being, as at present, slightly lower in some cases and slightly higher in others; but no question was made upon this ground. As already observed and as fully stated in the Banner Milling case, flour ground at Buffalo is almost entirely from wheat received ex-lake at that port. It is difficult to see how this Commission, if it is to main- tain the parity of rate between wheat and flour which generally [511] prevails, upon the strength of which mills have been erected at Buf- falo and throughout all parts of the United States, and which has been generally approved by this Commission, could enforce or even i)ermit the charging of a rate upon grain from Buffalo materially lower than the rate upon the flour manufactured at Buffalo from that grain. To sustain the contention of the complainants would require us to estab- lish rates on wheat from Buffalo from 3 to 5 cents per 100 pounds less than the present flour rates. The effect of such a rate ad.justment would be not onl}' to injure the mills at Buffalo but to seriously affect those at all western points. While there is very great force in the con- tention of the complainant, we feel that, upon a view of the entire situation, it can not be accepted. If this rate from Buffalo were un- reasonably high, so that the cost of transporting grain or grain prod- ucts from the western point of origin via the Great Lakes to the eastern point of cojisumption was unreasonably high, it woidd be our clear duty to reduce this rate ; but where it is practically admitted that the transportation charge is not excessive, and where we are asked to take this action simply because more grain would thereby flow through a particular grain market, we are at -liberty, in just consideration of all interest, to decline to interfere with the present arrangement, which is, in the main satisfactory. Ex-lake rates were in fact for many years lower than corresponding local rates from Buffalo, and the complainants point to this as the most conclusive evidence that the maintenance of lower ex-lake rates to-day would not break down the rate structure. But it must be remem- bered that until about the time when these rates became substantially what they now are the published tariff was not observed, and that this was especially true of highly competitive business, like grain and grain products, where the rate was of vital importance. It should also be noted that Buffalo millers have always insisted that the charging of a lower rate upon ex-lake wheat than upon the flour ground from that wheat was a discrimination against Buffalo. Now CHICAGO BOARD TRADE V. A. C. R. CO., ET AL. 367 that published rates are actually observed, and that the margin of profit tends to decrease rather than increase, we can not assume that any locality can grind flour under a permanent rate disability. To make the rate on ex-lake wheat to New York City materially lower than the rate on flour from Buffalo would inevitably throw the grind- ing of flour consumed in the city of New York and that vicinity to the seaboard. EXPORT RATES. In former years the United States has been a large exporter of wheat and other grains. This grain has been produced in the middle west, from which it might reach the foreign destination either by way of the [512] Gulf ports like New Orleans and Galveston or by way of the North Atlantic ports. The cost of the transportation has usually de- termined the route which the traffic would take. Lower export rates have generally' been maintained through all the ports than the corresponding domestic rates, and the rail export rates through the North Atlantic ports from IMontreal on the north to Nor- folk on the south have borne a certain relation to one another, the rate to New York being somewhat higher than to the various outports, so called, except Boston, for the reason that the shipping facilities of New York are superior and the water rate from that port somewhat lower than from the others. During the season of navigation export grain moves largely via the Great Lakes. From the lakes to the port of export there have been in the past three possible routes: First, all water via the Welland Canal and the St. Lawrence River to Montreal; second, all water via the Erie Canal and the Hudson River to New York; third, from one of the eastern lake ports, of which Buffalo is the principal, liy rail to the port of export from Baltimore upon the south to IMontreal upon the north. The rail rate from Buffalo to New York has furnished the standard for rail rates from all other lake ports to all ports of export. Below is given a table showing, since 1889, ex-lake and local rates upon wheat from Buffalo to New York, both export and domestic, and also from Chicago to New York : 368 ATLANTIC PORT DIFFERENTIALS Year. Buffalo to New York. Local. Eate per 100 pounds. Ex-lake. Eate per bushel. Domestic. Export. Chicago to New York. Rate per 100 2:>ounds. Domestic. Export. Cents. Cents. Cents. Cents. Cents. 1889 13 6V2 6 1/2 25 25 1890 13 5% 5% 22 lA 22% 1891 13 51/2 51/2 25 25 1892 13 13 41/2 6 41/2 6 25 25 25 1893 25 1894 11 13 11 5 5 5 5 5 5 20 20 20 20 1895 20 1896 20 1897 11 11 5 5 5 5 20 20 20 1898 20 1899 11 5 5 17 12 1900 9 5 5 15 13 y2 1901 10 5 5 171/2 16 1902 10 5 5 17 y2 13 y2 1903 loyo 6 18 14 1904 10 6 4 17 Va 13% 1905 10 4i'o 41/0 17 1^ 13% 1906 10 5 5 i7y2 13 y2 1907 11 6 6 17^ 16 13 1908 11 61/2 51/2 13 1909 10 eV2 5y2 16 13 1910 10 6% 51/. 16 13 1911 11 6 1/2 5Vj 16 13 [513] The foregoing table docs not purport to give all the published rates which have been in effect during the period covered, but only what may be termed the prevailing rate for each year. In case of the ex- lake rate reference has been had to the season of open navigation only for the purpose of determining what was the prevailing rate. It should also be noted that until recently grain has not moved from Chicago to the seaboard upon the published rate, but rather under a transit privilege upon a balance of some through rate. At the pres- ent time there is in effect from Chicago what is known as a " reship- ping" rate, which applies to all grain loaded at Chicago, with the ex- ception of certain instances where the transit rate still applies. The published rate from Chicago is therefore to-day, both export and do- mestic, the rate which actually moves the traffic, and we have, for the first time, in the published tariff a statement of the actual rates of various kinds from Buffalo and Chicago. It should further be noted that until recently the published rate has not been maintained. The published ex-lake rate from Buffalo, for example, never fell for any considerable time below 4 cents per bushel CHICAGO BOARD TRADE V. A. C. R. CO., ET AL. 369 on wheat, but we know from investigations conducted by this Commis- sion that the actual rate, especially as applied to the export movement, fell as low as 2.75 cents per bushel, and did not probably average for the entire season much in excess of 3 cents. It will be seen from an examination of the above table that while there were temporary differences between export and domestic in the ex-lake rate before 1908, there was no settled practice until that year by which a different rate was applied. During that season of naviga- tion and since the export rate has been uniformly 1 cent below the do- mestic. When it is remembered that, as a rule, the published export rate had, previous to 1908, never exceeded 5 cents per bushel ; that it had some- times been as low as 4 cents, and that the actual rate had been less than the published rate, it will be seen that the cost of transporting export wheat from Buffalo to New York is very materially greater to-day than in the past. It has been already noted that grain afloat upon the Great Lakes may move all-water to Montreal. It was stated in the course of this hearing that at the present time ships carrying 80,000 bushels of wheat could load at the dock in Chicago and unload at the dock in Blontreal, and that the rate of transportation via this water route did not exceed 3.5 cents per bushel. Grain afloat may reach New York via the Erie Canal, and this for- merly was a most important factor in the grain-rate situation, since the cost of transportation to New York Harbor was largely determined by the cost of carriage from Buffalo via the Erie Canal, which fixed the [514] rail rate to New York and thus in fact made the rate to all other ports. At the present time the Erie Canal for practical purposes is out of commission. The state is expending a large sum of money in the improvement of that waterway with a view to making possible the use of very much larger barges than can at the present time be em- ployed and thereby cheapening the cost of transportation. Pending these improvements which are now in progress no one will buy equip- ment of the type which can now be used, since within a few years that must become entirely obsolete, and the present equipment is insufficient to provide any substantial competition by that route. It seems proba- ble that this decline in competition via the Erie Canal is largely re- sponsible for the increase in ex-lake rates, both export and domestic. The New York Produce Exchange claims that the effect of recent increases in ex-lake export rates, taken in connection with the all-water route to Montreal, which has been developed largely within the last few years, has been to so cheapen the cost of handling grain through 24 370 ATLANTIC PORT DIFFERENTIALS ]\Iontreal as compared with New York that the export business is leav- ing the port of New York for the port of jMontreal, and that in the very near future the export grain movement through New York will be reduced to a practical nullity. In evidence of this it introduces certain tables showing the comparative movement through these ports in recent years. The following table gives the percentage of total wheat exports through the ports named for the years named : Fercentage of total exports. Year. Montreal. ! New York. Boston. Philadel- phia. Baltimore. 1902 1906 1907 1908 1909 IPIO 28.36 33.34 30.99 43.38 52.34 54.16 28.69 30.57 30.57 23.09 19.35 15.98 12.33 14.52 13.30 6.62 9.78 8.47 11.46 12.59 9.44 9.88 14.56 10.02 14.03 11.83 11.41 6.89 10.73 10.66 The table below gives the total number of bushels handled for the same years through New York and Montreal, with the percentages for each year : Year. Quantity in bushels. Percentage. New York. Montreal. Total. New York Montreal. 1902 17,085,718 12,691,701 17,875,700 16,211,918 9,247,913 6,026,421 16,888,505 13,842,586 18,122,009 30,461,347 25,031,635 20,420,034 33,974,223 26,534,287 35.997,709 46,673,265 34,279,548 26,446,455 50.28 47.83 49.66 34.74 27.00 22.79 49.72 52.17 50.34 65.26 73.00 77.29 1906 1907 1908 1909 1910 [515] The exports of wheat grown in the United States are decreas- ing, owing to the fact that our home consumption is steadily increas- ing. Upon the other hand, the Canadian northwest is developing an enormous wheat acreage, which is increasing rapidly the quantity of wheat exported from Canada. Tt is urged that the location of this wheat is such that it should naturally move out through ^Montreal and not through an American port of export. As bearing upon this sug- gestion the following tables are given showing exports of wheat grown m the United States and also wheat grown in Canada through the ports of New York and Montreal. In examining these tables it should be borne in mind that during the year 1910 there was in effect through CHICAGO BOARD TRADE V. A. C. R. CO., ET AL. 371 New York an export rate of 4 cents per bushel from Buffalo applicable to Canadian wheat in bond, but not to American wheat. Wheat grown in the United States. Year. Quantity in bushels exported from — Percentage. New York. Montreal. New York. Montreal. 1906 1907 1908 1909 1910 10,454,682 15,252,783 13,902,028 7,411,214 1,303,696 949,155 4,774,267 10,908,195 10,731,498 3,882,885 91.7 76.2 56.1 40.9 25.1 8.3 23.8 43.9 59.1 74.9 Wheat grown in Canada. Years, Quantity in bushels exported from — Percentage. New York. Montreal. New York, i ^Montreal. 1906 I{t07 2,237,019 2,622,917 2,309,890- 1,836,699 4,732.725 12,893,431 13,347,742 19,553,152 14,300,137 16,537,149 14.8 16.4 10.6 11.4 22.3 85.2 83.6 1908 1909 89.4 88.6 1910 77.7 It is impossible to study the figures in the foregoing tables without the conviction that the trend of the export wheat business, even in wheat produced in the United States, is steadily from American ports to Montreal, and it is impossible to attribute this to any other cause than the inland rate of transportation. In every respect, except the cost of carriage to the port of export, New York has the advantage of Montreal. Montreal is a winter port, not available during several months of the year. At all times in the year the cost of insurance from that port is much higher than from New York, owing to the perils of navigation upon the River St. Law- rence. The shipping facilities of New York are much better than IMontreal. New York reaches many points of consumption to which [516] there is no direct service from Montreal, and the rate of trans- portation itself is usually lower from New York. In addition to transportation facilities New York is a great grain market, with large elevator capacity, where wheat can l)e stored dur- ing the period of lake navigation for export later in the season. All these circumstances, say the New York grain interests, shouUl give to 372 ATLANTIC PORT DIFFERENTIALS that port a large part of the export business. They have therefore earnestly appealed to the carriers to establish a rate which will permit them to handle a portion of that traffic, and not succeeding in that quarter have now come to this Commission with the same prayer. So far as the case of the complainant can be established by showing the necessity for the rate demanded the case of this complainant has been made out. We are impressed with the thought that New York can not permanently retain its export grain business in anything like the same relative volume as in years gone by upon the present adjust- ment of rates. It asks that the carriers establish, during the period of navigation, a rate of 4 cents per bushel from Buffalo. Whether this rate would enable New York to hold its own as against Montreal is doubtful, but it would certainly be much preferable to the present rate of 5.5 cents. The carriers decline to accede to this request for two reasons. They say that 4 cents per bushel is not a remunerative rate, and that they prefer to allow the business to go elsewhere rather than estab- lish this rate. The ex-lake rate includes elevation at Buffalo; that is, the cost of transferring the grain from the vessel to the elevator and from the elevator to the car, for which a uniform allowance of one-half cent per bushel is made by the carrier to the elevator. This leaves for the rate of transportation 3.5 cents per bushel. The rate also includes at the city of New York a delivery alongside the ship. At New York grain is not loaded from the elevator into the vessel as it is at most other ports, but is barged from the car to the ship, into the hold of which it is transferred by a floating elevator. The testimony indicates that this additional service costs from one-half cent to 1 cent per bushel, and the carriers insist that this is an extraordi- nary item which should also be deducted from tiie rate before the real transportation charge is reached. If it be assumed that the cost of lighterage in New York Harbor is one-half cent per bushel, we have left for the transportation charge proper, from Buffalo to New York, 3 cents per bushel, equivalent to 5 cents per 100 pounds, and yielding, for a distance of something over 400 miles, a return of 2.5 mills per ton-mile, which is, upon its face, an extremely low rate of transporta- tion. The complainants urge that this export wheat is moved in large lots from Buffalo to New York — usually in trainloads — to which the [517] carriers reply that this is not an advantage but rather a disadvantage, since they are obliged to provide facilities for the handling of this traffic at a particular time in order that connection may be made with CHICAGO BOARD TRADE V. A. C. R. CO., ET AL. 373 the exporting vessel. This necessitates the parking of ears at Buffalo and the handling of an unusual amount of traffic which may interfere with their other business. The average carload of wheat is about 1,000 bushels, jdelding, at 3 cents a bushel, $30 per car. Fifty cars can be moved in a train from Buffalo to New York by most routes, amounting, per traiuload, to $1,500. The mere cost of moving that train is much less than this amount. If no account be made therefore of the expenses other than those of the movement, there is a profit. The complainants point to the fact that in former years the published rate was but 4 cents per bushel and that carriers often accepted as low as 2% cents per bushel for handling this business. They further suggest that while the rate of 4 cents was in effect in 1908, applicable to all wheat, and in 1910, applicable to Canadian-grown wheat, these defendants were anxiously soliciting the business. It should also be noted that if lighterage in New York Harbor be disregarded the carrier of ex-lake grain from Buffalo would receive, at 4 cents per bushel, 31/0 cents after deducting elevation at Buffalo, and that this is slightly in excess of its division of the present export rate of 13 cents from Chicago, which the carrier voluntarily makes for the purpose of participating in that business. It seems probable that 4 cents per bushel yields, "all things consid- ered, a substantial profit over the cost of the movement. If the carrier has surplus facilities not otherwise demanded, it would find business upon that rate to its advantage; it may be doubted whether additional facilities could be provided for the handling of this traffic at that figure. The real reason why these defendants decline to accede to the request of the New York interests for the 4-cent export rate seems to be the fear upon their part that the result of complying with that request would be to disorganize the general rate structure upon grain and grain products from the West to Atlantic seaboard territory. In 1908 the defendants, upon the insistent request of the New York grain interests, did establish and maintain, for 57 days, an export rate of 4 cents per bushel. This rate was withdrawn because the defend- ants believed that its continuance would result in a reduction of the rates from the west upon grain and grain products. During the sea- son of 1910 a rate of 4 cents was applied to the movement of Canadian grain in bond, but the defendants are satisfied that no distinction can be maintained between Canadian and American wheat and, therefore, upon a view of the entire situation, have declined to restore the 4-cent rate. 374 ATLANTIC PORT DIFFERENTIALS [518] The difference between the domestic and export rate from Chicago at the present time is 3 cents per 100 pounds. The difference between the export and the domestic rates, ex-lake, at the present time is 1 cent per bushel, or six-tenths of a cent per 100 pounds. It will be seen, therefore, that the difference in export rates where the wheat moves by the Great Lakes from Chicago is much less than the difference where it moves all rail. At 4 cents per bushel the difference would still be in favor of the all-rail route. American millers insist that to make a rate of 4 cents on wheat with- out a corresponding rate upon the product of wheat is to discriminate against the home miller in favor of his foreign competitor. It can not l)e denied that the result of making a lower transportation charge on the wheat than upon the flour to foreign destination does operate in favor of the foreign miller, but it must also be recognized that the cost of transporting wheat by water is less than the cost of transport- ing flour by water, and that wheat will move to the foreign consumer in the form of wheat cheaper than it can be moved in the form of flour, unless the Government sees fit to make an arbitrary rule that whatever carrier transports wheat at a certain price shall carry flour at the same price, which is not suggested. This wheat will move abroad through the port of IMontreal if it does not move through the port of New York, and it is doubtful whether the claim of the miller and of the western railroad that the effect of this 4-cent ex-lake export rate would be dis- criminatory toward them is well taken. It would not materially in- crease the amount of wheat which will be exported; it would simply determine whether that wheat should flow through an American or a Canadian port of export. We are inclined to think that, under all the circumstances, these car- riers might well establish, during the period of navigation, a 4-cent ex-lake export rate upon wheat and corresponding rates upon other grain, but the rate itself is so low, the margin over and above the cost of operation is so narrow, that we do not feel warranted in making this requirement. Whether it shall be established is a matter of policy which must be left to the carriers themselves, and not a matter of right which may be demanded by the port of New York. When the improve- ments in progress upon the Erie Canal are completed that waterway will undoubtedly determine the rate at which grain shall be carried from Buffalo to tidewater. The grain interests of the city of Baltimore have intervened in this ])roceeding. They join with the New York Produce Exchange in ask- ing that a 4-cent rate be established from Buffalo to New York, but CHICAGO BOARD TRADE V. A. C. R. CO., ET AL. 375 they insist that the differential in favor of Baltimore wliich now exists upon this ex-lake business should be wider. Some years ago railroads transporting ex-lake grain from eastern lake ports to Baltimore, Philadelphia, New York, and Boston became [519] involved in a controversy as to the relative rate upon which that traffic should be handled to the various ports, which resulted in a seri- ous rate war. The question was finally submitted to this Commission, which, after careful consideration, expressed the opinion that a differ- ential of three-tenths of a cent per bushel should be allowed Baltimore upon this traffic. 11 I. C. C. Rep. 13 {ante, p. 283). The city of Balti- more now shows that under this differential no ex-lake grain moves through the port of Baltimore, and it asks that whatever the rate may be the differential in favor of that port be increased. All the ports interested were parties to the proceeding by which that differential was originally fixed, and all are interested in any change in the differential. We do not feel that we ought to reconsider the conclusion then reached, except upon some proceeding to which all these ports are parties, and in which a thorough reinvestigation of the whole subject is made. It was stated upon this hearing that the port of New York was also dissatisfied with the conclusion reached by the Commission touching these port differentials, and that a complaint was now being prepared by the New York Produce Exchange which would present the subject anew. However that may be, the intervening peti- tion of the city of Baltimore will be at this time dismissed without prejudice to the right of that locality to urge, in some subsequent pro- ceeding, the ground taken here. The petitions in both the cases are also dismissed. I CHAMBER OF COMMERCE OP THE STATE OF NEW YORK, ET AL., ■V. NEW YORK CENTRAL & HUDSON RIVER RAILROAD COM- PANY, ET AL. 24 I. C. C. 55. 377 CHAMBER OF COMMERCE OF THE STATE OF NEW YORK, ET AL., V. NEW YORK CENTRAL & HUDSON RIVER RAILROAD COMPANY, ET AL. (24 I. C. C. 55.) Decided June 4, 1912. \. Differentials under New York on all-rail and lake-and-rail export shipments from differential territory to Baltimore should not exceed 3 cents per 100 pounds, and to Philadelphia should not exceed 2 cents per 100 pounds, on the classes and on commodities other than grain. On all-rail and lake-and-rail export shipments of grain the differentials under New York should not exceed 1.5 cents per 100 pounds to Baltimore, and 1 cent per 100 pounds to Philadel- phia. 2. As to all this traffic the export rates to Boston should not be lower than to New York. 3. The differentials under New York from Buffalo, N. Y., Erie, Pa., and West Fairport, Ohio, to Baltimore and Philadelphia, on ex-lake grain from differ- ential territory for export, should not exceed two-tentlis of 1 cent per bushel on barley and oats, and three-tenths of 1 cent per bushel on wheat, corn, and rye. 4. Differentials under New York on import traffic, all-rail and lake-and-rail, from Philadelphia and Baltimore to differential territory should be no greater than those which existed in the latter part of 1908. 5. Import rates from Boston should not be lower than from New York. Benjamin L. Fairchild for complainants. Clyde Brown for New York Central & Hudson River Railroad Com- pany. George Stuart Patterson for Pennsylvania Railroad Company. W. Irvine Cross for Baltimore & Ohio Railroad Company. Charles S. Hamlin for Boston & Maine Railroad. Thomas Carmodu and Henry S eld en Bacon for state of New York. John T. O'Brien and Archibald R. Watson for city of New York. William M. Coates for Philadelphia trade bodies. Frank L. Ncall for city of Philadelphia. Harry E. Belles for United Businessmen's Association of Philadel- phia. Philip Godley and E. J. Lavino for Philadelphia Board of Trade. James Collins Jones for Philadelphia Board of Trade, Philadelphia Chamber of Commerce, Commercial Exchange of Philadelphia, and Philadelphia Maritime Exchange. James L. King for Commercial Exchange of Philadelphia. [56] P. D. Todd and P. F. Young for Philadelphia Maritime Ex- change, N. B. Kelly for Philadelphia Chamber of Commerce. 379 380 ATLANTIC PORT DIFFERENTIALS Robert Ramsay for commercial bodies of Baltimore. Arthur Geo. Brown and John B. Daish for Baltimore Chamber of Commerce and Board of Trade of the City of Baltimore. Ottmar Marcus for Old Town Merchants & Manufacturers ' Associa- tion of Baltimore. Andrew C. Trippe and James McC. Trippe for Merchants & Manu- facturers ' Association of Baltimore. S. S. Field for mayor and city council of Baltimore. Edgar Allen Poe for state of Maryland. Herbert Sheridan for Baltimore Chamber of Commerce. Charles S. Hamlin and D. 0. Ives for Boston Chamber of Commerce. James M. Swift for commonwealth of Massachusetts. H. C. Barlow for Chicago Association of Commerce. John C. Howard for S. E. Comstock & Company. REPORT OP THE COMMISSION, Clark, Commissioner: Complainants are associations of merchants located in the citj' of New York, organized for the purpose of fostering and furthering the interests of their respective lines of business and the commercial inter- ests of the state and city of New York. The complaint alleges that defendants maintain rates, charges, dif- ferentials, rules, and regulations to and from the city and port of New York, which are unjust and unreasonable in themselves, and relatively so as compared with competitive ports, more particularly Philadelphia, Baltimore, Newport News, Norfolk, and Boston. As presented on hearing, brief, and argument, the issue is the inland charges on import and export traffic having destination or origin in so-called "differential territory." That territory is bounded on the north by the great lakes and a line drawn west from Chicago, 111., to Dubuque, Iowa ; on the east by a line drawn from Pittsburgh, Pa., to Buffalo, N. Y, ; on the south by the Ohio River, and on the west by the Mississippi River. Complainants allege that higher rates to and from New York on this traffic than are contemporaneously charged to and from Boston, Phila- delphia, and Baltimore, are unjustly discriminatory against New York and unduly preferential to Boston, Philadelphia, and Baltimore. Norfolk and Newport News, Va., were named in the complaint, but practically no attention was paid to them in the trial. The Maritime Association of the port of New York, the city of New- York by its corporation counsel, and the state of New York by its at- torney general, intervened in support of the complaint. CHAMBER OP COMMERCE OF N. Y. V. N. Y. C. & H. R. R. CO., ET AL. 381 [57] The Boston Chamber of Commerce, the directors of the port of Boston, and the commonwealth of Massachusetts through its attorney general intervened asking affirmative relief, and that the rates to and from Baston be made no higher than to and from Baltimore. The Baltimore Chamber of Commerce, the Board of Trade of the city of Baltimore, the maj^or and city council of Baltimore through the city solicitor, the state of Maryland by its attorney general, the Philadelphia Board of Trade, the Philadelphia Chamber of Commerce, the Commercial Exchange of Philadelphia, the Philadelphia Maritime Exchange, and the city of Philadelphia b.y its mayor intervened in op- position to the complaint and in favor of maintenance of the former relative adjustment. The burden of the defense has been borne by the Pennsylvania Rail- road and its allied lines and by the Baltimore & Ohio Railroad, these defendants asserting the propriety and the right of maintaining lower rates to and from Philadelphia and Baltimore than to and from New York. The Erie Railroad, with a through line from Chicago to New York, filed no answer to the complaint. The other New York roads filed general denials. The Boston & Maine and the Boston & Albany Railroads joined with Boston in asserting the interests of the port of Boston and their right as carriers to make such rates to and from Bos- ton as the interests of that port and the carriers serving it demand. The Baltimore & Ohio and the Pennsylvania base their defense prin- cipally upon the fact that the rail haul to or from Baltimore or Phila- delphia is shorter than to or from New York, and that therefore lower rates to and from Philadelphia or Baltimore than to and from New York are fully justified. The issue is a long-standing controversy which originated in and has been kept alive by the competition of railroads serving the several ports and by the commercial interests at those ports. It is conceded by one of the principal witnesses for defendants that the so-called differential port adjustment is more or less arbitrary in its nature and is the result of compromise and arbitration resorted to to settle or avert rate wars. The rates in question are (a) via all rail; (b) via lake and rail; and (c) ex-lake— that is, from the lake ports to the Atlantic ports. All rates stated herein, unless otherwise specified, are in cents per 100 pounds. Our docket No. 3780, In the Matter of Import Rates, was heard and decided in connection with the instant case. The history of the all-rail differentials on export traffic was recited in In the Matter of Differential Freight Rates to and from North At- lantic ports, 11 I. C. C. 13 {ante, p. 283), and need not be restated here. 382 ATLANTIC PORT DIFFERENTIALS It is a matter of common knowledge that since that report was written the Baltimore & Ohio, if not the Pennsylvania also, has acquired new lines [58] which substantially strengthen its commanding and strategic position in the middle west. The present eastbound all-rail class rates, taking Chicago as a repre- sentative point, are as follows : Classes 1 2 3 4 5 6 To New York, domestic and export 75 65 50 35 30 25 To Philadelphia, domestic and export 73 63 48 33 28 23 To Baltimore, domestic and export 72 62 47 32 27 22 To Boston, domestic 82 71 55 39 33 27 To Boston, export 75 65 50 35 30 25 The present eastbound lake-and-rail class rates, taking Chicago as a representative point, are as follows : Classes 1 2 3 4 5 6 To New York, domestic and export 63 55 43 30 26 21 To Philadelphia, domestic and export 61 53 41 28 24 19 To Baltimore, domestic and export 60 52 40 27 23 18 To Boston, domestic 70 61 48 34 29 23 To Boston, export 63 55 43 30 26 21 The present ex-lake rates on grain to the ports, export and domestic, are as follows, in cents per bushel : Wheat. Corn. Eye. Barley. Oats. From Buffalo, N. Y., to— New York — Export Domestic Philadelphia and Baltimore — Export Domestic Boston — Export Domestic From Erie to — New York — Export Domestic Philadelphia — Export Domestic Baltimore — Export Domestic From West Fairport to — Baltimore — Export Domestic Philadelphia — Export and domestic 5.50 6.50 5.2 6.50 5.50 5.50 6.50 5.2 6.50 •5.2 6 5.20 6 6.50 4. 75 5.25 4.45 5.25 4.75 7.50 4.75 5.25 4.45 5.25 4.45 4.75 4.45 4.75 5.25 5.25 6 4.95 6.00 7.75 4.95 6 4.95 5.. 50 4.95 5.50 4.75 5.25 4.55 5.25 4.75 6.50 4.75 5.25 4.55 5.25 4.55 4.75 4.55 4.75 5.25 3.7 4 3.50 3.75 3.7 4.50 3.7 4 3.50 3.75 3.50 3.50 3.50 3.50 3.75 CHAMBER OF COMMERCE OF N. Y. V. N. Y. C. & H. R. R. CO., ET AL. 383 The westbound all-rail class rates to Chicago from the several ports are as follows : Classes 1 2 3 4 5 6 New York, domestic and import 75 65 50 35 30 25 Philadelphia, domestic 69 59 48 33 28 23 Philadelphia, import 67 57 47 32 27 22 Baltimore, domestic and import 67 57 47 32 27 22 Boston, domestic 75 65 50 35 30 25 Boston, import 67 57 47 32 27 22 [59] The westbound lake-and-rail class rates to Chicago from the several ports are as follows : Classes 1 2 3 4 5 6 New York, domestic and import 62 54 41 30 25 21 Philadelphia, domestic and import 56 48 39 28 23 19 Baltimore, domestic and import 54 46 38 27 22 18 Boston, domestic 62 54 41 30 25 21 Boston, import 57 50 38 27 23 20 The import rates from Boston. Philadelphia, and Baltimore are the same under a temporary arbitration decision, the final determination of which is announced in In the Matter of Import Rates, 24 I. C. C. 78 (pos^, p. 403). While little has been said as to Newport News and Norfolk, it is proper to saj- that they constitute in reality- one port, served from the west principally by the Chesapeake & Ohio and Norfolk & Western railwaj-s. It does not here appear that they are included in the dif- ferential agreement; but it is the established policy of the road serv- ing those ports to maintain there the same rates that are contempo- raneously maintained at Baltimore. It is also appropriate to say that the carriers between the differential territory and the Gulf ports com- pete with the carriers to the Atlantic ports for import and export traffic and that it is their established policy to maintain rates to and from the Gulf ports which bear a definite relationship to the rates to and from the Atlantic ports and which take into consideration the more expensive ocean service to and from the Gulf ports. The import and export traffic through the port of Montreal has in- creased largely in recent years, more especially with regard to the ex- port of grain and grain products. The ex-lake differentials are of prime importance in the movement of grain which is concentrated at the ports on Lake Superior and Lake Michigan and carried thence by water to Buffalo, Erie, Fairport, and other eastern lake ports, from whence it moves to the Atlantic ports by rail on rates that are wholly independent of the lake charges. About 1891 the railroads began to compete with the Erie Canal for this traffic, and in 1893 the question of differentials on ex-lake ship- ments arose, Certain of the New York lines entered into a joint agree- 384 ATLANTIC PORT DIFFERENTIALS ment to make certain rates on this traffic regardless of canal competi- tion, and a separate agreement was made which accorded differentials of one-half cent and three-quarters of a cent per bushel to Philadelphia and Baltimore, respectively, on shipments from Buffalo. In 1894 these differentials were reduced to one-half cent per bushel to both Philadelphia and Baltimore. In 1895 the railroad agreements were overthrown and the railroads entered into spirited competition with the canal. From time to time rate wars occurred which were tem- porarily composed by agreements and arbitrations. Every effort [60] made to maintain equal ex-lake rates to the several Atlantic ports failed. In the North Atlantic Ports case, supra, the Commission found that Philadelphia and Baltimore should be accorded a differential of three- tenths of a cent per bushel on ex-lake grain, which opinion was shortly thereafter modified by making the differential on ex-lake oats and barley one-sixth of a cent per bushel. Complainants allege violation of section 1 of the act in that the rates to and from New York are unjust and unreasonable. They say that the lower grades on the New York Central lines make the transporta- tion cheaper than to Philadelphia or Baltimore via the lines which cross the Alleghenies, and from this they argue that the rates to and from New York are unreasonable per se. This is answered by defend- ants in a general way by sa^dng that any difference in cost of transpor- tation due to the grades is fully or more than offset by the difference in cost of fuel which lies in abundance along their rights of way. No evidence has been presented which in any wise lays a foimdation for a finding that any particular rate is unreasonable per se. Violation of section 2 of the act is alleged in that that section pro- hibits charging one person more or less than another person for the transportation of a like kind of traffic under substantially similar cir- cumstances and conditions. AVe shall later consider whether or not the transportation is under substantially similar circumstances and conditions. Violation of section 3 of the act is alleged in that the differential adjustment gives an undue preference to Boston, Philadelphia, and Baltimore and subjects New York to unreasonable prejudice or disad- vantage. This will be referred to later. Violation of section 4 of the act is alleged, but as has been seen the rates at issue are those applicable on export and import traffic, and, while the record is not clear and specific on that point, it is not our understanding that this traffic is hauled to or from Baltimore or Phila- delphia via any line as to which New York is directly intermediate. CHAMBER OF COMMERCE OF N. Y. V. N. Y. C. & II. R. R. CO., ET AL. 385 Some of it may move throngli New York to or from Boston, but the amount so hauled must be small. The rates to and from differential territory are established in zones substantially on distance. It frequently occurs that a circuitous route hauls traffic through a zone which takes higher rates than that in which the point of origin or destination is located. This, however, applies to shipments to and from New York as well as to and from the other ports. This situation is protected by applications for relief from the provi- sions of the fourth section and is not here passed upon. Complainants contend that in exercising the power vested in the Commission to prescribe just and reasonable and nondiscriminatory [61] rates it must be controlled by the constitutional provision that in the regulation of commerce no preference shall be given to the ports of one State over those of another. They argue that New York has numerous advantages of location, harbor facilities, steamship sailings, market, etc., the benefit of which is in some degree taken from it by the differential rates, and that the maintenance of lower rates to the other ports is unlawful under the Act to Kegulate Commerce and in vio- lation of the constitution of the United States. If one railroad may not make lower rates to a given port than an- other railroad makes to another port in another state without violating the constitution of the United States it would seem necessarily to fol- low that railroad rates must be the same from a given point to every port in every state, regardless of distance, extent and termini of car- riers' lines, cost or value of the service, and of the discriminations which would be thereby created. One city or state prescribes certain harbor dues and charges, while another city or state elects to furnish harbor facilities free. All such considerations determine in some meas- ure the attractiveness of the port to shipping and 3'et so far as we know it has never been held that the exercise of those rights by municipali- ties or states is unconstitutional. Complainants aver that any excess in the rates on export and import traffic to and from the differential territory over that charged from and to Baltimore, Philadelphia, or Boston is imposed for the purpose of diverting traffic from New York to these other ports ; or, in other words, for the purpose of making a fair division of the traffic as be- tween the railroads and the ports and constitutes an unlawful addi- tional charge for the sole purpose of discriminating against New York. The record in the North Atlantic Ports case, supra, is stipulated into this record, and it there appears that former officers of some of the New York roads testified that they would be glad to transport this traffic to and from New York at as low rates as were contemporaneously 25 386 ATLANTIC PORT DIFFERENTIALS applied to and from Baltimore if they could do so. This meant that they would be glad to put New York on a parity with Baltimore if the roads serving Baltimore would maintain as high rates to Baltimore as were thus established at New York. The New York commercial interests contend that the New York rates should be reduced to the Baltimore basis and that the New York roads are williiig and anxious to so reduce them. The testimony above referred to was given several j^ears ago. No present responsible officers of the New York roads so testify, and in the light of present-day conditions, as shown in hi re Investigation of Advances in Rates, 20 I. C. C. 243, we can not say that we have here any clear expression of such desire. As has been seen, the differentials are the result of compromise, arbi- tration, and agreement, resorted to as the only means so far found of [62] averting rate wars. The railroads serving Boston have insisted at all times that the export and import rates to and from Boston should not exceed those to and from New York. The railroads serving Phila- delphia and Baltimore have always insisted that the rates on this traffic from and to those ports should be lower than those contemporaneously maintained from and to New York. The roads serving Baltimore and Philadelphia, as well as the com- mercial interests of those cities, aver that the differentials might law- fully and reasonably be, and in fact ought to be, wider than they are, and that to maintain them at as low figures as now obtain has the effect of giving New York an advantage to wiiich it is not entitled on any ground except the adoption of this means of averting rate wars. The Baltimore & Ohio Railroad denies that it should or may be re- quired to sacrifice its legitimate revenues by furnishing a service to and from New York at the same rates it receives for its service to and from Baltimore. It shows that its lighterage and other terminal services in New York cost it substantially more than the present allowance it re- ceives for that service out of the joint rates. On this account it shows a deficit for the years 1909-10-11 of more than $1,250,000. This defendant suggests that before the railroads were subject to regulation the control of a large volume of traffic was a potent influence in securing low rates from railroads ; that New York being the largest and strongest port, served by strong railroad lines, this wholesale prin- ciple worked steadily in New York's favor, and the rates to and from New York became more and more favorable as compared with other and less influential ports, which gave New York an advantage which it still holds; that, recognizing the long-established status and the business interests that had adjusted themselves thereto, the differen- tials were substituted for the differences in rates that might otherwise CHAMBER OF COMMERCE OP N. Y. V. N. Y. C. & II. R. R. CO., ET AL. 387 have been established, as some recognition of the substantial rights of the other ports. It replies to New York's allegations that the differ- entials penalized New York for her advantages by saying that the ar- bitrary differentials are merely substitutes for the more substantial and logical differences in favor of Philadelphia and Baltimore which would naturally exist, and that they are established not for the pur- pose of diverting traffic from New York but as a limitation upon the arrangement which New York had secured for diverting traffic from Baltimore and Philadelphia, and in an effort to prevent New York from acquiring all. The Boston interests assert that the Boston railroads are entitled by law and that it is their duty to meet the lowest export and import rates offered via an,y of the ports here considered, and in this position the Boston & Maine Railroad concurs. Boston asks, therefore, an order or an expression of opinion from the Commission to the effect [63] that the inland rates on import and export traffic from and to the ports of Boston, Philadelphia, and Baltimore should be the same, and that they should be lower than like rates to and from New York to the ex- tent of the present differentials at Baltimore. They state that it is conclusively shown that Boston can not live commercially without equal inland export and import rates with Baltimore. They ask "the boon of free competition" in order that Boston may secure an equita- ble share of the export and import traffic. It is somewhat difficult to see how the fixing of arbitrary and artificial differentials can be tanta- mount to ' ' the boon of free competition. ' ' They call attention to the long list of natural and acquired advan- tages existing at the port of New York, and from it argue that if Bos- ton is deprived of its advantage of lower ocean and through rates it can not compete on even terms with New York any more than can Philadelphia or Baltimore. The advantages referred to are, a natural port, unlimited capacity for future development, the Erie Canal, fast and frequent steamship service, option market, guarantee of quality of export tlour, banking facilities, credit market, ocean rates, and numerous established commercial and trade connections with foreign countries. Not doubting that New York has all of these advantages we inquire, Which of them has not come as a gift of Nature or as a result of judicious investment or commercial enterprise ? And which if any of them may, as a matter of law, be taken from New York or nullified by arbitrary rail rate adjustments that are not founded in reasonableness measured by the recognized standards, and the absence of unjust discrimination ? It is urged that the cost of delivering export traffic to and 1;iking 388 ATLANTIC PORT DIFFERENTIALS import traffic from the steamships at New York, which is borne by the railroads, is materially greater than at Boston, and that therefore the rates to and from Boston should be less than to and from New York. This suggestion seems to ignore the probable fact that the cost of the additional haul to and from Boston wonld perhaps offset and perhaps exceed the additional terminal cost at New York. It is said that Baltimore and Philadelphia have a tremendous ad- vantage over Boston in the exportation of grain raised in the states nearby to Baltimore and Philadelphia. Is this an advantage of which Philadelphia or Baltimore may lawfully or justly be deprived by rate adjustments ? It is urged that the all-rail differentials applying at Baltimore and Philadelphia, which are greater than the ex-lake differentials, give Philadelphia and Baltimore a practical monopoly of the all-rail export grain as against Boston. It is to be noted, however, that substantially all of the all-rail export grain reaching Philadelphia and Baltimore is transported from points of origin or from primary [64] markets over the Pennsylvania and Baltimore & Ohio systems, neither of which reaches Boston. Boston suggests that New York had little to say as to diversion of export traffic from New York to Boston "for the very good reason that the inland export rates are the same to the two ports," and that on equal export rates, inland and ocean. New York "is cutting the ground from under Boston." It is difficult to see how any unjust discrimina- tion against Boston can be found in an adjustment which for a sub- stantially longer rail haul gives it the same rates as New York, and it is equally difficult to see upon what basis we would find that Boston is entitled to lower inland rates on traffic to or from differential terri- tory than is New York. It is said that under equal inland rates to New York and Boston any change in the relative movement of this traffic caused by change in the ocean rates simply manifests the need of the steamship lines which have lines common to both ports for the particular traffic at the respec- tive ports. Manifestly this is so and it ought to be so, and in a modi- fied degree it is true where differentials exist, for the ocean rates to and from the differential ports are fluctuated in order to accommodate the needs and wishes of the steamship lines. Each of the ports con- tends that its traffic is "diverted" to one or more of the other ports, but inasmuch as no fixed proportion of the traffic has been assigned to any port and as the records show that the percentages of traffic moving through the different ports varies from year to year and from period to period, it would seem more accurate to sav that the rate ad- CHAMBER OF COMMERCE OP N. Y. V. N. Y. C. S: H. R. R. CO., ET AL. 389 justiiieiits are made for the purpose of attracting traffic to the several ports. In recent years certain steamship lines have arranged their sailings so that their vessels land at Boston or Philadelphia on the westward voyage and proceed thence to Baltimore to leave part of their cargo and to secure cargo for the eastward voyage. The exportations of grain from Baltimore have greatly increased in recent years. It may be that this is to some extent due to the differential rates, but to some extent it is because of attractive port facilities for the handling of that traffic, and in part it comes from the large quantities of near-by grain which could not under any reasonable rate adjustment find outlet through the other ports. Boston experiences some difficulty in getting steamers to come there with imports which it needs because the vessels are unable to there secure eastbound lading. But it can not be that in law the duty de- volves upon the railroads to so adjust their rates as to equalize those conditions, or that it is within the reasonable and proper exercise of the powers of this Commission to require such adjustments. If cer- tain imports would naturally move to Boston and certain [65] exports would naturally' move from Baltimore, why should the railroads or this Commission so adjust the rail rates as to equally divide that ton- nage and insure equal steamship sailings to and from those ports ? Of the imports through Boston only 22 per cent, are for differential territory. A large portion of the export tonnage through New York moves to foreign ports to which steamship lines have direct sailings from New York and no sailings from the other ports. As we have seen, Baltimore and Philadelphia export large quantities of grain grown in territory tributary to those ports and the surplus of such crops or the attractiveness of the export market for them would necessarily affect that movement from year to year. It appears that dissatisfaction of exporters with the inspection at a certain market may and does affect the exportations from that port. Looking at the geography of the principal railroads serving these several ports, we find that the New York Central lines constitute a system which reaches many of the important commercial centers in the differential territory, with termini at New York, Boston, Chicago, and St. Louis. Traffic moving to and from Boston via this sj^stem would not move through New York, but would go via Alban\^ and the Boston & Albany line. The Boston & Maine Railroad has lines west and north from Boston and connects with the Canadian Pacific, which has its own line to Detroit ; with the Grand Trunk, which has its own Ime to Chicago and other important centers in differential territory; 390 ATLANTIC PORT DIFFERENTIALS and with the New York Central and other lines at or near Albany. The Lehigh Valley has a line from Buffalo to New York and reaches Philadelphia in connection with the Philadelphia & Reading. The Del- aware, Lackawanna & "Western has a line from Buffalo to New York and has connections with the Pennsylvania Railroad to Philadelphia and to Baltimore. The Erie Railroad has a line from Chicago and other important centers in differential territory to Buffalo and to New York. The Pennsylvania Railroad, Avith its allied lines, has main lines from Chicago, St. Louis, and many other important points in differen- tial territory to Baltimore, Philadelphia, and New York. Its line from the West to New York passes through Philadelphia. It has lines to Buffalo, Erie, and Cleveland, on Lake Erie, and traffic moved by it be- tween those ports and New York goes via Philadelphia. The Baltimore & Ohio system has lines from Chicago, St. Louis, and many other im- portant places in differential territory through Baltimore to Philadel- phia. By arrangement with the Philadelphia & Reading and the Cen- tral of New Jersey its through route is extended from Philadelphia to New York, at which point the Baltimore & Ohio has and operates its own terminal facilities. This system reaches Toledo, Sandusky, Lo- rain, Cleveland, and Fairport, on Lake Erie. [66] Every railroad desires to get the longest possible haul on the traffic which it transports, and therefore the Boston & IMaine, the Grank Trunk, and the Canadian Pacific naturally prefer to see the traffic move through Boston. The New York Central, the Lackawanna, the Lehigh VaUey, and the Erie prefer to see it move through New York. Philadelphia is the home city of the Pennsjdvania system and it is to its interests to have the traffic move through Philadelphia. Baltimore is the home city of the Baltimore & Ohio system and it is to its interests to see the traffic move through Baltimore. The haul via the Pennsylvania system is substantially the same to Philadelphia and to Baltimore and is some 90 miles greater to New York than to Phila- delphia. The haul via the Baltimore & Ohio system is 90 miles farther to Philadelphia than to Baltimore and 186 miles farther to New York than to Baltimore. As stated, these systems assert their right to charge more for the longer haul and the extra service. In addition to this the Baltimore & Ohio shows that its earnings on a shipment to or from Baltimore are greater than on the same shipment to or from New York, due to the fact that on the New York business it must di- vide the earnings with its connections and must perform a substantiallj-^ more expensive terminal service. Tlie traffic being that which moves to and from recognized competi- tive territory, all of the carriers that are in a position to do so join CHAMBER OF COMMERCE OP N. Y. V. N. Y. C. & II. R. R. CO., ET AL. 391 with their connections in moving such of it as they can secure to any and all of the ports under the so-called differential rates. The carriers whose lines reach the points of origin and destination of this traffic and all of their connections compete for it, and, in so far as the differ- ential adjustment is observed, distance is largely disregarded. As a matter of fact the diff'erential adjustment is not adhered to. This is evidenced by the facts developed in Federal Sugar lie fining Co. V. B. tO 0. R. R. Co., 17 I. C. C. 40, and by the fact, incidentally brought out in this case and investigated from the records of the car- riers by examiners of the Commission, that upon eight cargoes of agri- cultural implements exported through Baltimore between Jan. 1 and April 1, 1911, the delivering line at Baltimore and its connections paid the agent of the shippers approximately $35,000 allowance "in lieu of lighterage and floatage," when in fact no such service was performed as to any of the tonnag-e making up those cargoes. The allowance was made on the strength of a tariff' of the terminal line at Baltimore which applied only at Baltimore and the existence of which was not generally known. Complainants urge that the present proceeding differs from previous proceedings affecting the same issues in that now the Commission has been vested with rate-making power and must determine the inherent reasonableness of the rates in question. [67] A mass of statistics have been filed by the parties, each argu- ing from its statistics the conclusions which it thinks should be reached. Complainants say: "The statistics and the testimony relating to the movement of traffic are all immaterial except as they may have a bear- ing upon the historical facts relating to the origin and purpose of the differentials." Many of these statistical tables are of value only to that extent, for the reason that they are not confined to and do not as- sume to differentiate the traffic to which the differential import and export rates applj^ There is a heavy movement of import and export traffic through the several ports which has destination or origin at the ports or at points not situated in the differential territory. In mak- ing the differential agreement it was apparently conceded that the ter- ritory east of the Buffalo-Pittsburgh line was largely noncompetitive, and that the import and export traffic having destination and origin therein would and should find its way to the natural or most con- venient port. Numerous statistical tables measure the relationship of the ports and the effect of the rate adjustments upon the movement of traffic by showing the value of the imports or exports. Manifestly, such statistics, which include the value of precious stones, metal, bul- lion, and perhaps money, are of no help in determining the question here presented. 592 ATLANTIC iPORT DIFFERENTIALS One exhibit shows that of the total movement of import traffic through the four ports, New York secured for the period 1909 to 1911, inclusive, 39.6 per cent., as compared with 31.1 per cent, for the period 1906 to 1908, inclusive. The percentages of the other ports for the same periods, respectively, were: Philadelphia 19.1, 20.4; Baltimore 28.1, 34.4 ; Boston 13.2, 14.1. The total increase in tonnage was 815,- 098 tons, of which New York secured 513,868 tons. Another exhibit shows that of the import traffic in tons to differ- ential territory for 1911, New York secured 58.4 per cent, of that which moved under class rates and 28 per cent, of that which moved under commodity rates; Philadelphia secured 15.4 per cent, under the classes and 24 per cent, under the commodity rates ; Baltimore 18.1 per cent, under the classes and 32 per cent, under the commodity rates; and Boston 8.1 per cent, under the classes and 16 per cent, under the com- modity rates. On an exhibit it appears that of the exports of wheat, corn, and oats, New York secured in 1899, 25 per cent. ; in 1905, 25.8 per cent. ; in 1911, 24.4 per cent. Its highest percentage was 27.5 in 1907, and its lowest 16.9 in 1910. During the same period Philadelphia had 12.3 per cent, in 1899; 8.6 per cent, in 1905; 10.8 per cent, in 1911. Its highest percentage was 15.7 in 1900, and its lowest 7.5 in 1903. Balti- more had 17.4 per cent, in 1899; 13 per cent, in 1905; 14.6 per cent, in 1911. Its highest percentage was 17.6 in 1901 and its lowest 8.6 in 1909. [68] Boston had 10.2 per cent, in 1899 ; 10.5 per cent, in 1905 ; 11.3 per cent, in 1911. Its highest percentage was 12.3 in 1901 and its lowest 7.5 in 1903. It is thus seen that while the percentages of the several ports have fluctuated widely from year to year the differences between 1899 and 1911 are not striking. Each of the ports has a slightly smaller per- centage excepting Boston, which increased 1 per cent. During the same period the percentages of export flour secured by the several ports are stated to have been as follows: New York, in 1899, 28.4; in 1905, 36.4; in 1911, 36.4. Its highest percentage was 36.4, in 1905 and again in 1911, and its lowest 26.3, in 1901. Phila- delphia had 14.1 per cent, in 1899, 16 per cent, in 1905, 10.7 per cent, in 1911. Its highest percentage was 22,2, in 1907, and its lowest 10.7, in 1911. Baltimore had 20.8 per cent, in 1899, 15.2 per cent, in 1905, 9.9 per cent, in 1911. Its highest percentage was 21.8, in 1903, and its lowest 9.3, in 1910. Boston had 10.1 per cent, in 1899, 6.2 per cent, in 1905, 6.2 per cent, in 1911. Its highest percentage was 10.4, in 1900, and its lowest 5.1, in 1903. CHAMBER OF COMMERCE OP N. Y. V. N. Y. C. & H. R. R. CO., ET AL. 393 On this traffic it appears that New York has made a substantial gain, while the other ports have lost, the greatest loss being experienced by Baltimore, Another exhibit purporting to show the exports of Hour through those ports for the years 1906 to 1911, inclusive, shows that in 1906 New York had 42 per cent, and in 1911, 60.4 per cent.; that in 1906 Boston had 10 per cent, and in 1911, 6.4 per cent.; that in 1906 Phila- delphia had 27 per cent, and in 1911, 16.7 per cent.; that Baltimore had 21 per cent in 1906 and 16.5 per cent, in 1911, The differences in the percentages shown in these exhibits empha- size the difficulty of basing any conclusion upon the statistics, even if they were controlling. It Avas suggested before the hearing was had that the contending parties get together and agree upon a uniform basis and method of preparing the statistics, but that suggestion was not acceptable and each party has prepared its own from such sources and authorities and in such manner as it elected. Another exhibit shows that of the tonnage of export flour and grain products moving lake-and-rail for the years 1909 and 1910 New York secured 33 per cent., Boston 9 per cent., Philadelphia 28 per cent., and Baltimore 30 per cent. From this it would appear that this tonnage moved in quite equal volume to the ports of New York, Philadelphia, and Baltimore. Ob- viously it would require some unusual condition or some strong induce- ment to attract this business to Boston, especially in view of the fact that the main trunk lines reaching Baltimore and Philadelphia and New York have their own boats on the lakes. [69] Another exhibit shows the movement in bushels of export Cana- dian breadstuffs in bond for the period 1904 — 1909 and 1910 — 1911. In the first period Boston secured 6,800,000 and in the second period 8,200,000; Philadelphia secured for the two periods respectively 1,- 900,000 and 5,400,000 ; Baltimore, 460,000 and 2,020,000 ; New York, 5,600,000 and 11,400,000. From this it is argued that Boston secured an increase of 20.5 per cent., while the others secured increases in much larger percentages, but it is seen that although Boston had increased in the second period over the first 20.5 per cent, and Baltimore 333 per cent., Boston had for the second period 8,200,000 bushels, as compared with Baltimore's 2,020,000, and that, although Philadelphia had increased 184 per cent., it had for the second period but 5,400,000 bushels. An exhibit stating the percentage of tonnage of west-bound import freight destined to and beyond the western termini of the trunk lines, which, generally speaking, means Builfalo, Pittsburgh, and beyond, J^94 ATLANTIC PORT DIFFERENTIALS shows that in 1905 Boston had 9 per cent, and in 1910, 13.1 per cent. ; that in 3905 New York had 34 per cent, and in 1910, 36.1 per cent.; that in 1905 Philadelphia had 16.4 per cent, and in 1910, 18.2 per cent. ; and that in 1905 Baltimore had 31.2 per cent, and in 1910, 26.1 per cent. The original agreement for differentials was based on the fact that the ocean rates for freights to and from foreign markets were less from and to New York than from and to the other ports, and the effort was to equalize the entire through charge via the several ports. "Where there is steamship competition between two or more of our ports and the same foreign destination, the ocean freights are higher to and from Boston, Philadelphia, and Baltimore than to and from New York. It appears that the steamship lines plying from Boston, Philadelphia, and Baltimore absorb or "get" as much of the differen- tial inland rate as possible in their higher ocean rates. But this has the effect of giving these ports ocean service which otherwise they would not have. It appears that full cargo rates are. now the same from all of the ports, but that substantially no full cargo business is done except at Baltimore and Philadelphia. In some instances full cargoes are moved by independent tramp vessels, and in some instances by tramp ves- sels that have been employed by regular lines to move tonnage which they can not accommodate in their regular boats. Some contend that the. ocean rates are known and stable quantities. But that contention is, we think, overcome by a preponderance of testimony in this and other proceedings, and by the fact that one important ocean freight- carrying line in declining to comply with a request for [70] copies of its schedules of rates, stated that they were not tariffs in the sense that they would or could be maintained. The ocean rates fluctuate accord- ing to the spare room available as the time approaches when the vessel must sail. The lines sailing from Baltimore and Philadelphia know that the inland rates are lower to and from those ports than to and from New York, and that therefore they can get higher ocean rates at the out-ports. In other words, the differentials to some extent operate as a bonus to the ocean carriers to bring traffic to and seek traffic at the ports where the lower inland rates apply. But it is contended that the ocean haul is longer to and from the out-ports than to and from New York, and that therefore the ships will not serve the out-ports unless they can get somewhat higher rates there. It was testified in the 1905 proceeding and again in this record that it costs less to load boats at Baltimore and Philadelphia than in New York. Some wit- nesses say that, all things considered, the ocean transportation is less CHAMBER OF COMMERCE OF N. Y. V. N. Y. C. & II. R. R. CO., ET AL. 395 to and from the out-ports than to and from New York. Others, how- ever, contradict this. Representatives of the contending ports show elaborately their sev- eral natural and acquired advantages, the improvements that have been made and that are in contemplation, the number of ocean lines plying to and from the ports, and the number of sailings. The out-ports argue that the differentials are essential to their existence as import and export ports, and that if the differentials are not preserved the only part of this traffic which they can secure will be that which New York is physically unable to handle. New York's representatives say that the state and city have expended large sums of money to improve the harbor and enlarge its facilities and that the arbitrary differentials against New York and in favor of the other ports counteract or largely nullify the benefits which they ought to reap from those efforts and expenditures. The fact that the United States government has done much to im- prove these various waterways and harbors is referred to, from which it is only reasonable to infer that it is the policy of the government to have these several ports available and to encourage traffic through them. It is too well established to admit of further argument that neither the railroads nor the Commission may adjust rates in sucli way as to deprive a place of its natural advantages or give it artificial ad- vantages which are withheld from a competitor. If this is true as to natural advantages, it must be doubly true as to advantages acquired through enterprise and investment. Complainants allege that higher rates are imposed to and from New York to offset New York's advantages. Representatives of Baltimore and Philadelphia say that it is not the maintenance of higher rates at New York, but the maintenance of lower rates at Philadelphia [71] and Baltimore, to which they are entitled by their geographical posi- tion. Whether we say that higher rates are maintained at New York or that lower rates are maintained at Baltimore and Philadelphia we reach the same result. The difference between the rates is the same. Reference is made to an option market in New York as one of its advantages, and the absence of such market at the other ports as one of their disadvantages, which justify the differences in the rates. We do not think that the existence of an option market at one place and the absence of it at another place is a proper consideration in the rela- tive adjustment of rates. The short line from Buffalo to New York is 398 miles, to Philadel- phia 416 miles, and to Baltimore 890 miles. From Buffalo to these three ports there is no substantial difference in distance. The short 396 ATLANTIC PORT DIFFERENTIALS line from Erie to Baltimore is 424 miles, and to Philadelphia it is 436 miles; from Fairport to Baltimore it is 454 miles, and to Philadelphia 473 miles. Erie is a Lake port served principally by the Pennsylvania system and Fairport is served principally by the Baltimore & Ohio system, and, as has been seen, the traffic via either of these systems from Erie or from Fairport to New York passes through Baltimore or Philadelphia or both. Complainants ask what can justify the Commission prescribing greater through rates on traffic that moves between Chicago and Buf- falo by steamer and between Buffalo and New York by rail than upon the same traffic between Chicago and Philadelphia or Baltimore by lake-and-rail via the other lake ports, aside from supporting the all- rail differentials in the effort to parcel out a division of the traffic be- tween the several ports? While the rail haul from Erie or Fairport to the Atlantic ports is greater than from Buffalo the lake haul to Erie or Fairport is corre- spondingly less than to Buffalo. This question can not be determined upon the basis of distance alone. If it were, Baltimore would be given more advantage than it now has. The interests of all concerned and the matter of lawful and controlling competition must, as will appear, be considered. The great bulk of the high-class tonnage moves through the port of New York, and that moving through the other ports is largely the heavier low-grade commodities, such as grain, flour, ores, burlap, coal, etc. It appears both in the previous record and in this that a small difference in the freight charges on grain determine the port or market to which it will go and affect the price of the grain. A New York grain exporter testified that he could not export from New York in competition with Baltimore. "When asked by counsel for Baltimore interests why in that case he did not ship from Baltimore, he replied, referring to a rule of the Baltimore Board of Trade which [72] im- poses a penalty upon shipments made by others than the members of that board : Because we can not ship from Baltimore and pay you gentlemen down there a commission for handling our grain. Apparently the steamship companies prefer to handle the heavy traffic through Baltimore or Philadelphia, and they adjust their rates with that in view. To some degree, at least, the inland differentials contribute to that result. In 1881 Mr. Albert Fink, then commissioner of the trunk lines, stated in a report (ante, p. 5) on this subject: Whether the differentials are maintained or not free ocean competition acts at least m a great measure as an equalizer of the through rates. CHAMBER OF COMMERCE OF N. Y. V. N. Y. C. & H. R. R. CO., ET AL. 397 If this is not true, manifestly it ought to be. And if the inland rates are free from artificial adjustment the steamship lines must com- pete on the ocean. Witnesses testif}^ that generall}- ocean rates from foreign ports to Boston, Philadelphia, and Baltimore are lower than to New York, and that the ocean rates from the various ports to a given foreign port are such as, in some instances, make it impossible to move the traffics through New York. It seems that rates from foreign destinations to the out-ports are generally so much per 100 pounds, while to New York they are on a measurement or space basis, which makes an exact comparison difficult, if not impossible. In many instances the ocean rates from the out-ports are lower than from New York, although in other instances they are higher. One witness testifies "last year as well as this year the steamship lines from the United Kingdom have made the same rates to New York as to the out-ports in most cases. ' ' It appears that whenever there is a readjustment of the inland rates the steamship lines take up the shrinkage by adjusting their rates to and from the several ports. In January, 1902, a number of the ocean carriers entered into a minimum freight agreement not to contract for carriage by steamships under their control any shipments of the commodities named in the agreement from the United States or Canada to ports in Great Britain or Ireland at lower rates of freight than those specified, and that they would not make or allow made au}^ rebate to shippers or consignees. This agreement was made in Liverpool and gave no recognition to the inland freight differentials in the United States. It was to stand for 14 days, at which time any party thereto might withdraw, and such withdrawal would release the others. In ]\Iarch, 1902, the parties to the agreement resolved that the bene- fits of the minimum rates should be maintained, but that owing to dif- ferentials on inland rates, insurance rates, differences in steamer hauls, etc., it was desirable to elaborate and revise the agreement, [73] and a committee was appointed for that purpose. This committee reported about a month later, and a majority were in favor of adjustment of ocean rates by taking the inland differentials into account. We pause here to remark that the adjustment of inland differentials to compensate the ocean disabilities, followed by an adjustment of ocean rates which takes into consideration the inland differentials, would constitute an endless chain or be tantamount to moving about in a circle. In May, 1902, a report of the committee was adopted which fixed certain minimum ocean rates on a number of commodities. The vari- 398 ATLANTIC PORT DIFFERENTIALS Oils ports were grouped together under the same rates as follows : New York, Boston, and Portland; ]\Iontreal, Quebec, and Philadelphia; Baltimore and Newport News. This schedule was to stand for a trial period of 3 weeks, and was afterwards extended subject to 14 daj^s' notice of withdrawal. In June, 1902, withdrawal of certain commodi- ties and trafSc began, and in an effort to preserve the agreement the committee in July recommended concessions on certain commodities to the ports of Philadelphia and Baltimore which amounted to about one- half of the inland differentials to those ports. Thereupon notice of withdrawal from the agreement was recalled. In July, 1903, on a request that the steamship lines from Philadel- phia, Baltimore, and Newport News advance their rates to equalize through rates with Boston, it was agreed that the minimum ocean rates on flour to Liverpool originating in differential territory should be : From Boston, New York, and Portland, 8.44 ; from Quebec and Mon- treal, 30.44; from Philadelphia, Baltimore, and Newport News, 9.44. For September shipments the rates were to be : From New York, 8.44; from Philadelphia, 9.44; from Baltimore, 9.94. The effort to maintain any permanent agreement among the ocean lines appears to have failed because of the insistence of one of the Bal- timore lines upon lower rates from and to Baltimore. The territory contiguous or local to the several ports would afford each of them control of more or less of the export and import traffic, and in the competitive territory much of the traffic is so controlled by the originating or delivering lines that it would naturally move to such port as they prefer. One importer testified that he had found the service through Baltimore more satisfactory and that even on equal rates he would not use the port of New York. Each port has certain attractions for particular classes of traffic, and it appears that the heavier commodities can be handled more economically and expe- ditiously at some of the out-ports than at New York. Ocean-going steamers can be loaded with grain directly from the elevators at Balti- more. A great part, if not all, of the traffic has to be lightered at New York. [74] The Baltimore interests assert that in the former hearing it was shown that Baltimore was the only one of these ports that was on a natural rate adjustment, inasmuch as the domestic rates and the inland rates on export traffic through Baltimore were the same, while at the other ports the export rates were lower than the domestic rates, and that from this it follows, as appeared in the former hearing, that the export rates to Baltimore can not be advanced without at the same time advancing the domestic rates. CHAMBER OP COMMERCE OF N. Y. V. N. Y. C. & H. R. R. CO., ET AL. 399 Under the tariffs now in effect the domestic and export all-rail class rates from Chicago are the same, respectively, to New York, Philadel- phia, and Baltimore, and the export rates to Boston are lower than the domestic rates. The export rates on grain are lower than on domestic shipments to the several ports as follows : Boston, 5 cents ; New York, 3 cents; Philadelphia, 2 cents; Baltimore, II/2 cents. In the former hearing the Commission found that the cost of deliv- ering grain into the hold of a ship from the average point of origin was approximately 3 cents less at Baltimore than at New York. The dif- ferential in favor of Baltimore is iy2 cents. It is clear that the differential agreement was originally made in an attempt to equalize the total charges on import and export traffic through the several ports, as gateways. We have no jurisdiction of the ocean rates and must deal with this question as though the ports were destinations instead of gateways. This does not mean that the carriers may not take into consideration the previous or further trans- portation of the traffic on the ocean and thus differentiate it, reasona- bly, from domestic traffic, but the rates to and from the ports must be reasonable, must be published as independent from the ocean transpor- tation, and are subject to all of the provisions of the act : Cosmopolitan Shipping Co. v. Hamburg- Atnerican Packet Co., 13 I. C, C. 266; Armour Packing Co. v. TJ. 8., 209 U. S. 56. It is our duty to see that shippers are accorded reasonable rates and that undue discrimination is not practiced against shippers, commodities, or communities. It is also our duty to consider the interests of all of the shippers and com- munities affected and to refrain from condemning discriminations which are not unjust. J\Iuch weight has always been given to rate ad- justments of long standing to which commercial conditions have ad- justed themselves, and in this connection it is to be noted that Balti- more and Philadelphia have had lower rates than New York for more than 40 years. Each railroad was originally constructed to reach certain points and to serve certain territories, and they have expanded by construction, purchase, and lease of other lines as it has seemed to their interests to do. Each of them owes a duty to the entire public and each of them owes a peculiar duty to the persons and communities [75] which it di- rectly serves and which are dependent upon it. In addition to serving the places and territories directly reached by it, each system endeavors to increase its total revenues by securing as much competitive, traffic as is possible. It is urged that Boston is as dependent as is Philadelphia or Balti- more upon the differential territory for its exports and imports, and 400 ATLANTIC PORT DIFFERENTIALS the Boston interests join in the contention that the railroads should so adjust their rates as to insure movement of a certain or substantial part of the traffic through those ports. Neither the carriers nor the Commission has any right to undertake to so apportion the traffic be- tween rival ports or cities. While recognizing the right of the carriers to conserve the interests of the ports and territories served by them, we can not consider the carriers as one great and single system : In- vestigation and Suspension Docket No. 26, 22 I. C. C. 604. The Baltimore & Ohio and the Pennsylvania systems, reaching by their own lines so many of the important commerciar centers in the middle west and so many of the lake ports and having their own boats on the lakes and hauling all of their New York traffic through either Philadelphia or Baltimore or both, control the rate situation between the territory here considered and Baltimore and Philadelphia. The competitive conditions at Baltimore and Philadelphia are created by these systems, and the rate situation to and from those ports is con- trolled by them. It Avas this control by these systems that led to the making of the differential agreement. We do not recognize such an agreement as lawful, but the conditions which brought it about are as strong to-day as they ever were and we find now, as we found in the North Atlantic Ports case, supra, that the Pennsylvania and the Balti- more & Ohio have the lawful right to maintain lower rates to and from Baltimore and Philadelphia than they contemporaneously maintain to and from New York. They would probably also have the right to make these rates the same to and from all of those ports if they chose to do so. The Boston lines have an undoubted right to make such rates to and from Boston as their interests demand, subject only to the limitations that the rates must be reasonable ; that they may not carry that traffic at less than the cost of the service and so unduly burden other traffic, and may not unjustly discriminate against other points which they serve or in whose traffic they participate. The New York Central and the Erie, having their own lines from Chicago and Buffalo to New York and no lines to Philadelphia, Baltimore, or Boston, have a right to make their rates to and from New York as they choose, subject to the same limitations. The Lehigh Valley and the Lackawanna directly serve New York, and, through established connections, serve also Phila- delphia and Baltimore. Thej^, of course, may not vmjustly discrimi- nate against either of these ports. [76] If the New York lines and other connections of the Baltimore & Ohio and the Pennsylvania systems participate in the haul of traffic to and from Philadelphia or Baltimore, they must do so under the CHAMBER OP COMMERCE OF N. Y. V. N. Y. C. & H. R. R. CO., ET AL. 401 competitive conditions created by the Baltimore & Ohio and the Penn- sylvania at Baltimore and Philadelphia which the other lines are unable to control, and under these conditions we do not think it unlawful if they participate in the movement of traffic to and from Philadelphia and Baltimore under competitive rates even though at the same time they maintain higher rates to and from New York: Railroad Commis- sion of Kansas v. A., T. cO aS'. F. By. Co., 22 I. C. C. 407 ; Indianapolis Freight Bureau v. C, C, C. d' St. L. Ry. Co., 23 I. C. C. 195. As to lake and rail traffic through Buffalo and ex-lake traffic from Buffalo, the distance and the service via the short lines is substantially the same to Baltimore and to New York, but if the New York lines were to withdraw from participation in that traffic to and from Baltimore or Philadelphia, it could and doubtless would move in the same volume via the other lines, and, in any event, that which reaches Buffalo must move there in competition with the other lake ports, such as Erie, Fair- port, etc. The theory of the law is that carriers shall establish and maintain through routes and joint rates so that there may be the freest move- ment of traffic without the necessity of reshipment. In the formation of these through routes, however, the law recognizes the right of a carrier to protect its own long haul, and a carrier may not be required against its will to participate in a through route between any two points which does not include all or substantially all of its line or lines between those points, except when an unreasonably long or circuitous route would otherwise be created. The law also recognizes the right of the shipper to dictate the intermediate routing of his shipments over available through routes. We therefore think that it is not unlawful and not unjustly discriminatory against New York for the carriers which serve it to participate in the competitive traffic to Philadelphia and Baltimore at the lower rates fixed at those points by the carriers whose lines control those situations. As before stated we neither recognize nor consider the differential agreement as lawful. The law contemplates free competition and con- demns any combination which restrains such competition. We repeat that defendants Baltimore & Ohio and Pennsylvania s.ystems have a lawful right to maintain lower rates between this differential territory and Baltimore and Philadelphia than they contemporaneously main- tain to and from New York. The New York lines and their connec- tions have a right to meet the competition so created at Philadelphia and Baltimore and which is beyond their control, while [77] at the same time maintaining higher rates to and from New York. We think that as to this traffic, it would not be unjustly discriminatory for de- 26 402 ATLANTIC PORT DIFFERENTIALS fendants to maintain the same rates to and from New York and Bos- ton. We are not to be understood as holding that the present rate adjustment will for all time or for any particular period of time be just and reasonable, but we can not find that reasonable differences in rates as between Philadelphia and Baltimore on the one hand and New York on the other hand unjustly discriminate against New York. We find no justification for lower rates to and from Boston than to and from New York, We are of the opinion : (a) That differentials under New York on all-rail and lake-and-rail export shipments from differential territory to Baltimore should not exceed 3 cents per 100 pounds, and to Philadelphia should not exceed 2 cents per 100 pounds, on the classes and on commodities other than grain. On all-rail and lake-and-rail export shipments of grain the differentials under New York should not exceed 1.5 cents per 100 pounds to Baltimore, and 1 cent per 100 pounds to Philadelphia. (6) That as to all of this traffic the export rates to Boston should not be lower than to New York. (c) That the differentials under New York from Buffalo, N. Y., Erie, Pa., and West Fairport, Ohio, to Baltimore and Philadelphia on ex-lake grain from differential territory for export should not exceed 0.2 of a cent per bushel on barley and oats, and 0.3 of a cent per bushel on wheat, corn, and rye. (d) That differentials under New York on import trafific, all-rail and lake-and-rail, from Philadelphia and Baltimore to differential territory should be no greater than those which existed in the latter part of 1908, to wit, in cents per 100 pounds : Classes 1 2 3 4 5 6 Commodities. Philadelphia differentials 6 6 2 2 2 2 2 Baltimore differentials 8 8 3 3 3 3 3 And that the import rates from Boston should not be lower than from New York. On the understandings and submission filed in In the Matter of Im- port Rates, 24 I. C. C. 78 {post, p. 403), heard in connection with this case, we understand that defendants will promptly adjust their rates in conformity with these views, and therefore no order will now be is- sued. The case will be held open for the entry of such order as may here- after be found necessary. IN THE MATTER OF IMPORT RATES. 24 I. C. C. 78. 408 IN THE MATTER OF IMPORT RATES. Decided June 4, 1912. (24 I. C. C. 78.) For reasons given in Chamber of Commerce case, ante, page 377, Philadelphia and Baltimore allowed certain differentials under New York on import traffic, but held that the import rates from Boston should be the same as from New York. William M. Coates for Philadelphia trade bodies. A. 8. Crane and Edgar J. Bich for Boston & Maine Railroad. J. B. Thayer, George D. Dixon, and George Stuart Patterson for Pennsylvania Railroad Company. Charles S. Hamlin and D. 0. Ives for Boston Chamber of Commerce. George F. Randolph, W. Irvhie Cross, Hugh L. Bond, Jr., Robert B. Ways, and C. 8. WigJit for Baltimore & Ohio Railroad Company. Robert Ramsay for commercial bodies of Baltimore. Frank L. Neall for joint committee of trade bodies of Philadelphia. C. F. Daly, Clyde Brown, Chas. C. Paulding, and W. 8. Kalhnan for New York Central lines. N. B. Kelly for Philadelphia Chamber of Commerce. John F. Auch and Charles Heeiner for Philadelphia & Reading Railway Company. T. N. Jarvis and Walter T. Moore for Lehigh Valley Railroad Com- pany. Harry E. Belles for United Business Men's Association of Philadel- phia. Arthur Geo. Brown and John B. Daish for Baltimore Chamber of Commerce and Board of Trade of city of Baltimore. W. L. Divine and A. P. Gilbert for Chesapeake & Ohio Railway Com- pany. Philip Godley for Philadelphia Board of Trade. John C. Howard for S. E. Comstock & Company. James Collins Jones for Philadelphia Board of Trade, Philadelphia Chamber of Commerce, Commercial Exchange of Philadelphia, and Philadelphia Maritime Exchange. James L. King for Commercial Exchange of Philadelphia. E. J. Lavina for Philadelphia Board of Trade. [79] Ottmar Marcus for Old Town Merchants & Manufacturers' As- sociation of Baltimore. Wm. A. Porcher for Trunk Line Association. 405 406 ATLANTIC PORT DIFFERENTIALS P. D. Todd and P. F. Young for Philadelphia IMaritime Exchange. Andrew C. Trippe and James McC. Trippe for Merchants' & Manu- facturers' Association of Baltimore. Herbert Sheridan for Baltimore Chamber of Commerce. B. D. Caldwell, J. L. Seager, and John II. Crawford for Delaware, Lackawanna & Western Railroad Company. REPORT OF THE COMMISSION. Clark, Commissioner: In 1908, and for a period prior thereto, the inland import rates on shipments destined to points in the so-called "differential territory" from the several ports were, taking Chicago as illustrative, as follows, in cents per 100 pounds : All-rail ; classes. Lake-and-rail ; classes. 1 70 75 69 67 2 61 65 59 57 3 47 50 48 47 4 33 35 33 32 5 28 30 28 27 6 1 57 62 56 54 2 50 54 48 46 3 38 41 39 38 4 27 30 28 27 5 23 25 23 22 6 Boston 23% 25 23 22 90 New York Philadelphia Baltimore 21 19 18 Under commodity rates, all-rail and lake-and-rail, Baltimore and Philadelphia had differentials under New York, respectively, of 3 cents and 2 cents per 100 pounds. Early in 1909 the Boston roads reduced these rates and that action was followed by corresponding reductions from the other ports. Still further reduction was made from Boston, and that also was met by the lines from the other ports. As a means of terminating the rate war thus inaugurated, the rail- j'oads serving the ports of Boston, New York, Philadelphia, and Balti- more and the commercial bodies of Boston, Philadelphia, and Balti- more requested the Commission in May, 1910, to decide or advise as to the adjustment of the inland import rates from the several ports, (o), temporarily, until the Commission could render a final decision ; and {h), finally, after full hearing and investigation. Under submission {a) the Commission decided that temporarily the inland import rates from Boston, Philadelphia, and Baltimore should be lower than from New York, and the same as then applied from Bal- timore. Shortly thereafter, complaint was filed by the New York interests alleging unreasonable import and export rates to and from New [80] York and unjust discrimination against New York in the maintenance i IN THE MATTER OP IMPORT RATES 407 of lower export and import rates to and from Baltimore, Philadelphia, and Boston, These two eases were heard, briefed, and argued together and the conclusions of the Commission have been announced in Cham- ber of Commerce of the State of Neiv York v. N. Y. C. tfc H. R. R. R. Co., 24 I. C. C. 55 {ante, p. 377). Those conclusions are controlling in the instant ease. We are therefore of the opinion that differentials under New York on this traffic, all-rail or lake-and-rail, from Philadelphia and Balti- more should be the same as, and in no event greater than, those which existed in the latter part of 1908, to wit, in cents per 100 pounds: Classes 1 2 3 4 5 6 Commodities. Philadelphia differentials 6 6 2 2 2 2 2 Baltimore differentials 8 8 3 3 3 3 3 and that the import rates from Boston should be the same as from New York. CHAMBER OF COMMERCE OF THE STATE OF NEW YORK, ET AL., V. NEW YORK CENTRAL & HUDSON RIVER RAILROAD COM- PANY, ET AL. 24 I. C. C. 674. 409 CHAMBER OF COMMERCE OF THE STATE OF NEW YORK, ET AL., V. NEW YORK CENTRAL & HUDSON RH^R RAILROAD COMPANY, ET AL. Decided October 14, 1912. (24 1. C. C. 674.) Prior decision herein, in regard to import rates from Boston and New York and rates over certain ditferential lines, explained and modified. Appearances same as in original report {ante, p. 377). SUPPLEMENTAL REPORT OF THE COMMISSION. Clark, Commissioner: The original report in this case is in 24 I. C. C. 55 {ante, p. 377). No order was entered. It now appears from further investigation that some modification of the original findings is proper and necessary. At page 77 of the original report {ante, p. 402), we said: We are of the opinion that differentials under New York on all-rail and lake-and- rail export shipments from differential territory to Baltimore should not exceed 3 cents per 100 pounds, and to Philadelphia should not exceed 2 cents per 100 pounds on the classes and commodities other than grain. On all-rail and lake-and-rail ex- port shipments of grain the differentials under New York should not exceed 1.5 cents per 100 pounds to Baltimore and 1 cent per 100 pounds to Philadelphia. It was not the intention to change the differentials on flour for ex- port. Nothing was said in the hearings as to export rates on iron ar- ticles, and it was not intended to change the differentials thereon. That portion of the original report above quoted is therefore hereby- modified so that it will read : We are of the opinion that differentials under New York on all-rail and lake- and-rail export shipments from differential territory to Baltimore should not exceed 3 cents per 100 pounds, and to Philadelphia should not exceed 2 cents per 100 pounds, on the classes and on commodities other than grain, flour, and iron articles. On all-rail and lake-and-rail shipments of grain the differentials under New York should not exceed 1.5 cents per 100 pounds to Baltimore and 1 cent per 100 pounds to Philadelphia. On all-rail and lake-and-rail export shipments of flour the dif- ferentials under New York should not exceed 2 cents per 100 pounds to Baltimore and 1 cent per 100 pounds to Philadelphia. [675] The present export differentials on iron and steel articles, under New York to Baltimore and Philadelphia, respectively, from representative points are generally as follows: From Chicago and Chicago rate points, to Baltimore 3 cents per 100 pounds where rates are stated per 100 pounds, and 60 cents per ton, net or gross, where rates are stated per ton ; to Philadelphia, 2 cents per 100 pounds where rates are stated per 100 pounds, and 40 cents per ton, net or gross, where rates are stated per ton. From Detroit and points taking the same rates, to Balti- more, 3 cents per 100 pounds where rates are stated per 100 pounds, and 55 cents 411 412 ATLANTIC PORT DIFFERENTIALS per ton net or gross, where rates are stated per ton ; to Philadelphia, 2 cents per 100 pounds where rates are stated per 100 pounds, and 40 cents per ton, net or gross, where rates are stated per ton. From Pittsburgh and points taking the same 'rates, from Cleveland and points taking the same rates, and from Youngs- town and points taking the same rates, to Baltimore, 1.5 cents per 100 pounds where rates are stated per 100 pounds, and 30 cents per ton, net or gross, where rates are stated per ton; to Philadelphia, 1 cent per 100 pounds where rates are stated per 100 pounds, and 20 cents per ton, net or gross, where rates are stated per ton. These differentials should not be exceeded. There are other points of minor importance from which the export differentials on iron and steel articles are somewhat different from those which we have named. Without specifying such points, it is sufficient to say that those differentials should not be made greater than they are. In the original report, page 77, we found that the import rates from Boston should not be lower than from New York, and in In the Matter of Import Rates, 24 I. C. C. 78 {ante, p. 403), we decided that they should be the same. We are now asked as to what import rates should apply from Boston, "in view of the fact that there are certain differen- tial lines, respectively, from Boston and New York. The standard all-rail rates from New York are the same on both do- mestic and import shipments. The same is true as to the standard rail-and-lake rates and as to the ocean-rail-and-lake rates via New London, Conn., and the Canada Atlantic lines. The standard all-rail domestic rates from Boston are the same as from Ncav York, and the same is true as to the standard rail-and-lake domestic rates. The do- mestic ocean-and-rail rates from Boston via Philadelphia, Baltimore, Norfolk, or Newport News are higher than the domestic ocean-and-rail rates from New York via Norfolk or Newport News. Adhering to our original finding as to the general relationship of import rates from Boston and New York, but modifying and giving more specific application thereto, we hold that via the standard all-rail lines, the standard rail-and-lake lines, and the ocean-and-rail lines via Philadelphia, Baltimore, Norfolk, or Newport News, the import rates from Boston should not be lower than from New York. There is a differential ocean-and-rail route from New York via New London, Conn., and the Central of Vermont and Grand Trunk roads. Via this route the domestic class rates to Chicago are on a scale of 65 cents, and the import rates are on a scale of 62 cents, [676] first class. If this route is open or opened to import traffic from Boston, import rates from Boston should not be lower than from New York. There is a differential river-rail-and-lake line from New York via the Hudson River, the Rutland Railroad, and the lakes. There is no route from Boston that is fairly comparable with this one. Via this route the domestic and import class rates to Chicago are on a scale of 52 cents, first class. We do not understand that this route is open CHAMBER OF COMMERCE OF N. Y. V. N. Y. C. & H. R. R. CO. 413 to Boston traffic, but if it should be, the import rates from Boston should not be lower than from New York. There is a differential route from New York, river-canal-and-lake, via the Hudson River, the Erie Canal, and the Lakes. There is no similar route from Boston. Via this route the domestic and import class rates to Chicago are on a scale of 42 cents, tirst class. We do not understand that this route is open to Boston traffic, but if it should be, the import rates from Boston should not be lower than from New York. There are differential rail routes from Boston via the Boston & Maine and Boston & Albany roads in connection with the Canadian Pacific and National Despatch lines. Via these routes the domestic class rates to Chicago are on a scale of 70 cents, first class, and at the present time the import rates are the same as from Baltimore. The New York, New Haven & Hartford and Canadian Pacific Despatch publish the same scale of import rates, but not the same domestic scale. The domestic rates via the Boston & Maine and Boston & Albany roads, in connection with the Canadian Pacific and National Despatch lines, being on a recognized differential scale, it is obvious that if these routes did not publish any import rates the domestic rates would be available on import shipments if such traffic were cleared at Boston. We see no reason for imposing that additional trouble upon the shippers and we hold that via these routes the import rates from Bos- ton may be the same as the domestic rates. There is a differential rail-and-lake route from Boston via the Bos- ton & Maine, Grand Trunk, and Canada Atlantic Transit Company's lines through Depot Harbor which publishes domestic class rates to Chicago on a scale of 57 cents, first class. There is no route from New York that is exactly comparable with this one. The domestic rates via this route being recognized differentials under the standard rail- and-lake rates, Ave see no reason why import shippers should be obliged to clear their traffic at Boston in order to avail themselves thereof, and we hold that via this route the import rates from Boston may be the same as the domestic rates. [677] All that we have said as to the relationship of import rates as between New York and Boston applies to both class and commodity rates. As stated in the original report, the understandings and submission filed in In the Matter of Import Bates, supra, were relied upon to bring about a prompt adjustment of the rates in conformity with the views which we expressed, and no order was issued. As hereinbefore indi- cated, differences of opinion arose as to just what changes it was in- tended to effect. It was not possible at that time to bring the matter 414 ATLANTIC PORT DIFFERENTIALS before the full Commission, and the parties were therefore advised to hold the readjustment in abeyance until the Commission could give it further consideration. We understand that defendants are now prepared to adjust the rates in conformity with our findings, and will therefore not now enter an order. It is a common practice for the shippers to make yearly contracts with ocean steamship lines on their import traffic. It was understood in In the Matter of Import Rates, supra, that our decision would not fix an effective date that would in- terfere with such yearly contracts. Pursuant to that understanding and to what we believe to be the best interests of all concerned, we shall now expect the carriers to make their readjustments under our findings effective on January 1. 1913, and on not less than 15 days' notice to the Commission and to the public in the manner required by law. IN THE MATTER OF IMPORT RATES. 24 I. C. C. 678. 415 IN THE MATTER OF IMPORT RATES. Decided October 14, 1912. (24 1. C. C. 678.) Prior decision herein modified upon the findings in Chamber of Commerce case, ante, p. 377. Appearances same as in original report {ante, p. 415). SUPPLEMENTAL REPORT OP THE COMMISSION. Clark, Conitmssioner : The original report in this case is in 24 I. C. C. 78. We there held that the import rates from Boston should be the same as from New York. Questions were raised as to what import rates should apply from Boston in view of the fact that there are certain differential lines respectively from Boston and New York. It was not possible at that time to bring these questions before the full Commission and the par- ties were therefore advised to hold the readjustment in abeyance until the Commission could give them consideration. We have considered this question in supplemental report in Chamber of Commerce of the State of Neiv York v. N. Y. C. & H. R. R. R. Co., 24 I. C. C. 674 {ante, p. 409). Applying to the instant case findings there made, we decide : (a) That via the standard all-rail lines and the standard rail-and- lake lines the import rates from Boston should be the same as from New York. ( h ) That if the New York differential ocean-and-rail route via New London, Conn., and the Central of Vermont and Grand Trunk roads is open or opened to import traffic from Boston, the import rates from Boston should be the same as from New York. (c) That via the differential rail routes from Boston via the Boston & Maine and Boston & Albanj^ roads in connection with the Canadian Pacific and National Despatch lines, the import rates from Boston may be the same as the domestic rates. {d) That via the differential rail-and-lake route from Boston via the Boston & Maine, Grand Trunk, and Canada-Atlantic Transit Com- pany 's lines through Depot Harbor, the import rates from Boston may be the same as the domestic rates. [679] All that we have said as to the relationship of import rates as 27 417 418 ATLANTIC PORT DIFFERENTIALS between New York and Boston applies to both class and commodity rates. For the reasons stated in supplemental report in Ckaml)er of Com- merce of the State of Neiv York v. N. Y. C. tf^ H. R. R. R. Co., supra, we here decide that the readjustment of import rates in accord with our findings shall be made effective January 1, 1913, and on not less than 15 days' notice to the Commission and to the public in the manner required by law. CHAMBER OF COMMERCE OF THE STATE OF NEW YORK, ET AL., V. NEW YORK CENTRAL & HUDSON RIVER RAILROAD COM- PANY, ET AL. 27 I. C. C. 238. 419 CHAMBER OF COMMERCE OF THE STATE OF NEW YORK, ET AL.., V. NEW YORK CENTRAL & HUDSON RIVER RAILROAD COMPANY, ET AL. Decided June 5, 1913. (27 I. C. C. 238.) After exhaustive consideration of all the matters presented on the rehearing the Commission is of the opinion that the conclusions announced in the original and supplemental reports are correct. B. L. Fairchild for complainants. C. S. Hamlin for commonwealth of Massachusetts and attorney- general thereof, port directors of Boston, Boston Chamber of Com- merce, Boston & Maine Railroad, and Boston & Albany Railroad Com- pany. Arthur Geo. Brown and John B. Daish for Baltimore Chamber of Commerce and Board of Trade of Baltimore. G. S. Patterson for Pennsylvania Railroad system. J. C. Jones for Philadelphia Board of Trade, Philadelphia Chamber of Commerce, Commercial Exchange of Philadelphia, and Philadelphia Maritime Exchange. W. I. Cross for Baltimore & Ohio Railroad Company. A. C. Trippe for Merchants & Manufacturers' Association of Balti- more. F. L. Neall for certain commercial interests of Philadelphia. J. M. Swift, attorney-general, for commonwealth of Massachusetts and port directors of Boston. SUPPLEMENTAL REPORT OF THE COMMISSION ON REHEARING. Clark, Chairman: The original and supplemental reports in this case are at 24 I. C. C. 55 and 674 {ante, p. 377, 403). Motion for rehearing presented by the Boston commercial interests and the Boston & Albany and Boston & Maine railroads was granted on the sole question of the relationship of the inland rates on import shipments destined to the so-called differ- ential territory, as between Boston and New York. [239] In the original report we held that the import rates from Bos- ton should not be lower than from New York. Tn the supplemental report we held that via certain differential routes from Boston which 421 422 ATLANTIC PORT DIFFERENTIALS carried recognized differential rates on domestic traffic, the import rates need not be higher than the domestic rates, for the reason that such an adjustment would simply impose upon shippers the necessity of clearing their import shipments at Boston in order to ship them under the lower domestic rates. In the petition for rehearing one error is pointed out in that one of the exhibits filed by the Baltimore interests was referred to as indicat- ing the effect upon traffic under the different adjustments as between contending ports, when in fact the exhibit covered a six months ' period for one year and a 12 months' period for another year. This exhibit was one of several that were referred to in our report. It was in no sense controlling, and correction of the error would not in any way affect the conclusions reached. Petitioners state that our conclusion that lower rates from Boston than from New York would be discriminatory against New York was "upon the express finding that the cost of the additional haul from Boston to differential territory would probably offset and perhaps ex- ceed the additional terminal cost at New York." What we said was: It is urged that the cost of delivei'ing export traffic to and taking import traffic from steamships at New York, whicli is borne by the railroads, is materially greater than at Boston, and that therefore the rates to and from Boston should be less than to and from New York. This suggestion seems to ignore the probable fact that the cost of the additional haul to and from Boston would perhaps offset and perhaps exceed the additional terminal cost at New York. In the rehearing petitioners show that the carriers from New York provide in their tariffs for a drayage charge from piers to terminals of 80 cents per ton on certain classes of freight, and $1.60 per ton on certain other higher classes. They estimate that certain other services performed by the carriers at New York increase this cost to an ap- proximate average of $1 per ton on the lower classes and $2 per ton on the higher classes. The estimated item of 20 cents per ton for the cost of loading into cars is also incurred and applicable at Boston. Referring to the line haul from Boston, it is urged that the grades over the Berkshires between Boston and Albany are substantially less than the grades on the Baltimore & Ohio and Pennsylvania lines. It, however, appears that none of the import traffic from Boston moves via New York, and that practically all of it moves through the Albany or so-called Hudson River gateway. The question is one of relation- ship as between New York and Boston. The conditions west of the Hudson River gateway are identical as to this traffic from both [240] ports. The distance from New York to Albany is about 142 miles. From Boston to Albany it is about 201 miles. The tracks and facilities in connection with which the terminal ex- CHAMBER OF COMMERCE OP N. Y. V. N. Y. C. & 11. R. R. CO. 423 penses in New York are incurred are not devoted particularly to this traffic. The rates to and from New York apply to and from many terminals or loading and unloading points, one of which necessarily involves more terminal work and expense than another. It is admitted that it Mould not be desirable to have the rates to and from a com- mercial center like New York or Boston made different for every terminal or unloading point where the service may be different from that at some other loading or unloading point. It is suggested that during the season of closed navigation ocean- and-rail rates are available from New York lower than those from Boston. During the season of open navigation the rates are the same. It is to be noted, as pointed out in our supplemental report, supra, that Boston has certain differential rail routes. These questions are worthy of mention, although they do not go directly to the question here considered, which is the rates via the so-called standard lines. It is said that it is impossible for Boston to secure an adequate share of the imports to differential territory via the ocean-and-rail routes for the reason that the soliciting organizations for Boston have worked for many years solely for the all-rail routes, and it would be difficult for them to compete in Europe for western import business, and then have to give it to steamship lines via which the Boston railroads do not operate to be hauled over lines against which they have been competing for it. The Boston interests urge that if the standard rail lines may not charge lower rates on import shipments from Boston than are charged from New York it will be a serious blow to the import traffic through the port of Boston. The principal point relied upon in support of this contention is the fact that the Boston & Albany and Boston & Maine railroads have a long-standing arrangement under Avhicli the American Express Company solicits this business in Europe for rout- ing via Boston. In this work the American Express Company com- petes with the soliciting organization of the Canadian roads, and it is urged that if the inland rates from Boston must lie not lower than from New York it will be necessary for the Boston lines to perfect some new soliciting arrangement. We have no desire to unnecessarily disturb any established and lawful organizations or arrangements, but in considering, as a question of law, whether or not lower rates from Boston are unjustly discriminatory against New York we can not per- mit the fact that removal of the discrimination would interrupt some such arrangement to be conclusive. We have made no inquiry as to the propriety or lawfulness of the arrangement in ques- [241] tion. As has been stated, the import shipments from Boston via the lines of the Boston & Albany and the Boston & Maine roads move through the 424 ATLANTIC PORT DIFFERENTIALS Hudson River gateway where connection is made with the New York Central and other of its controlled lines, and from there it moves via lines which serve or participate in the same traffic from New York. We do not think that the fact, if it be a fact, that the American Ex- press Company will cease soliciting this business in Europe for the Boston lines if the rail rates from Boston are as high as from New York is justification for lower rates from Boston than from New York when the conditions of transportation from Boston and from New York are so substantially similar. Attention is called to statement in our original report that it is the established policy of the railroads serving Norfolk and Newport News to maintain there the same rates that are contemporaneously main- tained at Baltimore, and it is stated that this is not true as to rates on import traffic. The statement in our report was illustrative of the gen- eral competitive situation in the middle west, was general in its char- acter, and, as a general statement, is correct. Petitioners say that in our previous reports we did not undertake to fix any relation of rates as between Boston, Philadelphia, and Balti- more, but confined ourselves to fixing the relation of import rates as between Boston and New York. In In the Matter of Import Kates, 24 I. C. C. 78 and 678 {ante, p. 403, 415), which was heard, argued, and decided in connection with the instant case, we said, at page 80 {ante, p. 407). We are therefore of the opinion that differentials under New York on this traffic [import], all-rail or lake-and-rail, from PhiladeliDhia and Baltimore should be the same as and in no event g^reater than those which existed in the latter part of 1908, to wit, in cents per 100 pounds: * * * and that the import rates from Boston should be the same as from New York. In our original report in this case we found : That differentials under New York on import traffic, all-rail and lake-and-rail, from Philadelphia and Baltimore to differential territory should be no greater than those which existed in the latter part of 1908, to wit, in cents per 100 pounds * * *. And that the import rates from Boston should not be lower than from New York. Petitioners urge that there can be no unjust discrimination as be- tween two ports unless the carrier in question serves both ports, and that as the Boston & Maine and Boston & Albany roads do not serve New York lower rates from Boston than from New York do not un- justly discriminate against New York. We have repeatedly held that a carrier which participates in the transportation to or from competing points is responsible and answerable for unjust discrimination even though its own lines do not reach both points. [242] Neither the Bos- ton k Albany nor the Boston & Maine can carry this traffic beyond the Hudson River gateway, and, as has been seen, from that point to CHAMBER OP COMMERCE OF N. Y. V. N. Y. C. & H. R. R. CO. 425 the west it moves under identical circumstances and conditions and via the same lines as like traffic from New York. The lines that handle this traffic west of the Hudson River gateway can not be permitted to unjustly discriminate in favor of Boston and against New York. In the original hearing a witness for Boston testified that officials of the New York Central lines had stated to representatives of the Boston interests that the expense of this service from New York was greater than from Boston. Counsel now argues that it was "conclu- sively proven" that the cost of the haul is less from Boston than from New York when proper allowance is made for terminal costs at both ports. Estimates of the terminal costs made by a witness were pre- sented and, after deducting those estimated costs, computations of the return per ton-mile to the railroads were reached. Counsel for the New York interests insists that these estimates are not proof as to costs. But assuming that they are correct, there is not in our judgment suffi- cient difference to warrant lower rates from Boston than from New York. Many minor costs and minor extra services are and should be ignored in an effort to do substantial justice to competing points, and they are necessarily ignored by carriers in competing with each other. The domestic class rates from Boston to the West are the same as from New York. Aside from differences in terminal costs, if any, the serv- ice rendered by the railroads on domestic shipments is the same as that rendered on import shipments. If the terminal services at each port are to be accurately estimated and the returns per ton-mile yielded after deduction of such expenses are to be conclusive as to import rates, it is difficult to see how we can avoid applying the same principle to domestic rates. The Boston interests strongly and very naturally urge the long con- tinuance of lower rates on import traffic from Boston than from New York, resulting from agreements which have been made by the rail- roads from time to time, and which, we understand, had for their pur- pose effecting a certain distribution of the traffic between the several ports in order to avoid rate wars. In our original report, supra, we said, on this point : We neither recognize nor consider the differential agreement as lawful. The law contemplates free competition and condemns any combination which restrains such competition. In our supplemental report, supra, we tnentioned differential rail rates from Boston, via the Boston & IVIaine and Boston & Albany roads, in connection with the Canadian Pacific and National Despatch [243] lines. It is now stated, and apparently accurately, tliat the Boston & Albany has no such connections. 426 ATLANTIC PORT DIFFERENTIALS The Boston & Albany is a part of the New York Central system which reaches, via its own rails, a great many of the important points in differential territory. The Boston & Albany has a differential route over the Rutland Railroad, which has certain general officers in com- mon with the New York Central, but it is argued that this route is 8 per cent, longer than the longest of the differential routes and 12i/^ per cent. longer than the shortest ; that its route is therefore so cir- cuitous, its territory in the West so restricted, and the physical condi- tion of part of it such that it can not successfully move this traffic. Much is said as to certain rights which Boston reserved for itself in some of the differential agreements between the carriers, and as to the responsibility for the rate war which led to the presentation to the Commission of the subject treated in In the Matter of Import Bates, supra, v/hich in turn, presumably, caused the complaint herein. It is unprofitable to further discuss the question of how or why those differences were precipitated. The fact is that a rate war was in progress which the representatives of the carriers serving Boston, New York, Philadelphia, and Baltimore, and the representatives of the commercial interests of Boston, Philadelphia, and Baltimore, were anxious to terminate, and the offices of the Commission were sought on the representation that no other means of terminating the confiict and determining the issues involved therein were possible. While stress is laid upon the fact that for many years import rates from Boston were, by agreement between the carriers, less than from New York, and many figures have been submitted showing the movement of traffic under such agreements at various times, it is admitted that the figures as to periods prior to 1906 can not be accepted as reflecting the effect of the rate adjustments, for the reason that published rates were not adhered to. The commercial interests of New York, Philadelphia, and Baltimore and the railroads serving Philadelphia and Baltimore strongly protest against Boston being accorded lower rates than New York, and point out that if that were done there is every probability that roads serving Philadelphia and Baltimore and not serving Boston would correspond- ingly reduce the rates from Philadelphia and Baltimore, thereby re- storing the present parity. If that should occur it would simply be a repetition of what did occur shortly prior to the origin of this com- plaint. It is asserted that there are no differential rates via any standard all-rail line from New York, Philadelphia, or Baltimore, and no dif- ferentia] all-rail rates from either New York, Philadelphia, or Balti- more. CHAMBER OF COMMERCE OF N. Y. V. N. Y. C. & H. R. R, CO. 427 [244] As stated, it is strongly urged that unless the import rates from Boston are lower than from New York, it will be harmful to exist- ing conditions and make it difficult for Boston to retain the import business which it now has. However much sympathy we may have with that argument we can not make it the basis of a finding as to un- just discrimination such as is prohibited by the act. AVe have given exhaustive consideration to all of the matters that have been presented and are of the opinion that the conclusions announced in our original and supplemental reports, supra, are correct. IN THE MATTER OF IMPORT RATES. 27 I. C. C. 245. 429 IN THE MATTER OF IMPORT RATES. Decided June 5, 1913. (27 I. C. C. 245.) Prior decision herein adhered to upon the findings in Chamber of Commerce case, ante, page 419. Appearances same as in the Chamber of Commerce case (p. 421). SUPPLEMENTAL REPORT OP THE COMMISSION ON REHEARING. Clark, Chairman: Our original and supplemental reports in this proceeding are at 24 I. C. C. 78 and 678. On petition from the commercial interests of Boston and the Boston & Maine and Boston & Albany railroads, re- hearing was granted in this proceeding and in Chatriber of Commerce of New York v. N. Y. C. & H. R. R. R. Co., original and supplemental reports at 24 I. C. C. 55 and 674 (ante, p. 377, 408), on the single ques- tion of the relationship of rates on import traffic from Boston to dif- ferential territory versus like rates from New York. We have dis- cussed the matters presented on rehearing in supplemental report on rehearing in the Neiv York case, ante page 419, and it is not necessary to repeat that discussion. The conclusions there reached are controll- ing here. We consented to decide or advise as to the adjustment of the inland import rates from the several ports in the capacity of arbitrators, upon urgent representation that no other means were open to terminate an existing rate war and settle the contentions as between the different ports. It seemed at the time the proper thing for us to do, but mani- festly we can not make a decision as arbitrators which is contrary to the adjustment which we of necessity make in discharging our duties under the law. After full consideration of all the matters presented on the rehear- ing, we are of the opinion that the conclusions reached in our original and supplemental reports, supra, are correct, and are not prepared to change those findings. 431 • APPENDIX. 28 ' 433 APPENDIX Part of First Annual Report on the Internal Commerce of the United States, by Joseph Nimmo, Jr., Chief of Division of Internal Commerce, being Part Second of the Annual Report of the Chief of the Bureau OF Statistics on the Commerce and Navi- gation OF the United States for the Year ending June 30, 1876. THE COMPETITIVE FORCES WHICH EXERT A CONTROLLING INFLU- ENCE OVER THE COMMERCE BETWEEN THE WEST AND THE SEABOARD WITH RESPECT TO THE COMMERCIAL INTERESTS OF BOSTON, NEW YORK, PHILADELPHIA, AND BALTIMORE. The conditions under which competition exerts a restraining influ- ence over freight-charges may be more clearly understood by consider- ing the forces which exert a controlliag influence over commerce be- tween the West and the seaboard. Soon after the year 1850 the railroads extending toward the West from the several Atlantic seaports began to compete with the Erie Canal for the immense and rapidly-increasing commerce of the West. At first the through traffic of the roads was confined to the carriage of provisions, live animals, and general merchandise, but by the year 1873 the railroads had become in the fullest sense highways of commerce for nearly all classes of commodities, even in direct competition with the lakes and the Erie Canal. Coal, iron-ore, and other minerals, chiefly the products of the mines of Pennsylvania, are transported to the West almost exclusively^ by lake, as return cargoes for vessels en- gaged in the transportation of grain eastward. These heavy mineral products are generally transported on water-lines wherever such fa- cilities exist. The transportation of grain is now the most important branch of the through traffic from the West to the East, grain and flour constituting about 50 per cent, of the entire eastward movement of through freights. The relative importance of the railroads, and of the Erie Canal as highways of commerce for the transportation of grain may be inferred from the following statement showing the receipts of grain at Portland. Boston, New York, Philadelphia, and Baltimore during the year ending December 31, 1876 : 435 436 ATLANTIC PORT DIFFERENTIALS Bushels. E^ceived at New York by canal 32,853,839 Eeceived at New York by rail 59,047,953 Eeceived at Portland by rail 3,999,181 Eeceived at Boston by rail 22,753,698 Eeceived at Philadelphia by rail 35,546,845 Eeceived at Baltimore by rail 37,564,536 Total by rail 158,912,213 N. B. — There appears to have been about four million bushels of grain received in New York, coastwise, which does not appear in the above table. It appears that only 17 per cent, of the grain shipped from the West reached the seaboard by the Erie Canal and that 83 per cent, by the competing railroads, or about five times as much by rail as by canal. It is proposed to consider briefly and in a somewhat general manner the more important features of this diversion of commerce from the Erie Canal, or more properly speaking the development of commerce on railroads, and the questions which have arisen with respect to the interests of the rival trunk roads and the rival seaboard cities. In this connection attention is called to the various lines of transport connect- ing the West with the seaboard, as delineated on maps 1 to 7, inclusive, at the end of this report. These lines are the Lake and Canadian Canal route to Montreal, the LaJie and Erie Canal line to New York City, the Grand Trunk Railway, the New York Central Railroad, the Erie Rail- way, the Pennsylvania Railroad, and the Baltimore and Ohio Railroad. In considering the competition between the east and west trunk lines it is necessary to observe, first, the distinction between local or non- competitive traffic and through or competitive traffic. The expression ' ' through traffic ' ' is here applied to traffic between the Western States and the Atlantic seaboard. Statistics showing the relative proportion of local and through traffic can only be obtained in regard to the Erie Canal and the Pennsylvania Railroad. The New York Central and the Erie Railroads present only statistics in regard to their total ton- nage movement, and the Baltimore and Ohio Railroad Company merely presents facts as to through tonnage and the quantities of grain and flour and of coal and live stock transported. The local traffic on almost all railroads greatly exceeds in importance the, "through traffic" which we are here especially considering. Dur- ing the year 1875 the through tonnage of the Pennsylvania Railroad amounted to 1,354,203 tons and the local tonnage amounted to 7,761,165 tons, the through tonnage being only 15 per cent, of the total tonnage. The number of through and local tons carried one mile were — Through tons carried one mile 484,043,840 Local tons carried one mile 995,370,626. Total 1,479,414,466 . APPENDIX. 437 It appears from this that the ton-mileage of through freight was 33 per cent, of the total ton-mileage. The through tonnage of the Erie Canal during the year 1875 appears to have been about 50 per cent, of the total tonnage carried. From the very scanty data of this sort which can be procured as to local and through freight tonnage it is estimated that the through traffic passing over all the main lines con- necting the West with the East is about 33 per cent, of the total traffic over the several lines. The proportion of "local" and "through" traffic differs very much on the various lines. Attention is especially called to the fact that the local traffic is hut little affected hy the competition between rival trunk lines or hy the competition hetween rival seaboard cities, whereas the through traffic is greatly exposed to such competition. VARIOUS DEGREES OF COMPETITION IN THE COMMERCE BETWEEN THE WEST AND THE SEABOARD. The through traffic between the West and the seaboard is competi- tive in various degrees, both with respect to the interests of the rival trunk lines and to the interests of the rival commercial cities on the Atlantic seaboard. There are many points to and from which the fa- cilities of transport afforded by one route for certain freights are so much superior to the facilities afforded by every other practicable route that in practice the more favorably situated line enjoys a monopoly of the traffic ; and there are also many points to and from which there are several lines of transport, all affording such facilities for certain traffic, as to engage with each other in a constant and effective competition. The field of competition in the great struggle for the traffic between the western states and the seaboard begins in the State of Ohio and grows stronger and more complicated as we advance toward the West. At Cincinnati, Louisville, Indianapolis, Saint Louis, Chicago, Peoria, and all other important centers of trade, the shipper has not only the option of transport to each one of the Atlantic seaports, but he has also the choice of two or more routes to the same port, all offering equal rates in time of agreement, but during the frequently recurring and long enduring railroad wars the agents of each line bidding against all the others and struggling for all traffic which is in any practical sense competitive. The various degrees of competition range from the re- mote and incidental competition, the existence of which may sometimes be regarded as problematical, to that direct struggle between rivals for the same traffic. This may be illustrated with respect to traffic over the east and west trunk lines as follows : First, The direct shipment of merchandise from interior points at , 438 ATLANTIC PORT DIFFERENTIALS the West to Europe and the direct shipment of merchandise from Eu- rope to interior points at the West constitute traffic which is in the highest sense competitive, since the rail-lines from such interior points connect directly with ocean-steamer lines to Europe at Boston, New York, Philadelphia, and Baltimore. During the last two or three years very little difference has existed between the prevailing rates from interior points in this country to points in Europe. Second. The shipment of commodities from points in the AYest to At- lantic sea-ports for local consumption, for distribution coastwise or to interior points in the United States, or for exportation to foreign coun- tries, constitutes a traffic which is competitive, but not to as great an extent as direct shipments from interior points at the AA^est to points in Europe. In the case of shipments to the seaport markets, other con- siderations are involved besides the mere question of transportation. These considerations are the advantages afforded by the several mar- kets, the relative magnitude of the home and foreign demand, and the facilities for storage and for interior, coastwise, or foreign shipments at each port. Third. But there is a third and the largest class of traffic which is even less affected by the competition of rival lines and of rival sea- ports, viz, direct shipments from the AVest for consumption at interior points in the Atlantic States. Such shipments are in many cases con- tiued to one of the trunk lines and therefore form a part of its local traffic. In other cases two or even three of the lines may compete for the traffic, but it is excluded from the direct competition of all the trunk lines by certain geographical limitations. But even where the traffic appears to be confined to one or two lines, the rates of transportation are to some extent controlled through the competition of product with product in the various markets of the country, and thus each one of the transportation-lines exerts a competi- tive influence over the rates on other roads. It is important to notice in this connection the fact that the home consumption in the Atlantic States very largely exceeds the foreign de- mand. Of the entire surplus products of the West, embracing vege- table food, animals and their products, spirituous and malt liquors, and the innumerable commodities transported in greater or less quantities, very much the l&rger part is shipped to seaports or to interior points on the several trunk lines for local consumption. It was found by careful computation that in the year 1872 about 40 per cent, of all the grain shipped into the Atlantic States was exported and about 60 per cent. Avas consumed in the United States. During the year 1876 also, 4PPENDIX, 439 the demand for such products in the states of the Atlantic seaboard largely exceeded the foreign demand. In view of the facts thus presented it is evidently necessary in con- sidering the subject of transportation between the West and the sea- board to distinguish carefully between these three degrees of competi- tion with respect to through traffic, viz : First. Direct shipments from interior points at the West to Europe. Second. Shipments from the West to Atlantic sea-ports; and Third. Direct shipments from the West to interior points in the states on the Atlantic seaboard. The importance of these distinctions has recently been realized in the course of the difficulties which have been encountered by the managers of the trunk lines connecting the AVest and the seaboard in their at- tempts to adjust through rates between the centers of trade at the West and Boston, New York, Philadelphia, and Baltimore. About the 1st of February, 1877, the representatives of the various trunk lines met at New York to form a basis of agreement. There was no difficulty in agreeing as to the rates by the various lines for all traffic consigned from the West directly to ports in Europe, but in regard to rates on commodities shipped to the seaports above mentioned the trunk lines were unable to agree, since such commodities may be consumed at those ports, and therefore constitute a local traffic, or be exported to foreign countries or to seaports in the United States, and thus become competi- tive traffic. The final adjustment of differences in this case is believed to have been effected through the spirit of compromise. The real diffi- culty in the case was to distinguish between "local" and "competi- tive ' ' traffic. This subject involves many perplexing questions in practice, for ex- ample, the drawing of a line of distinction between competitive and non-competitive business ; the determination of the geographical extent of the influence of trunk lines by means of their various branches and connections ; questions as to the relative advantages which the rival lines enjoy on account of distance, grades, and other elements of the cost of transportation ; the facilities for coastwise and foreign distri- bution, &c. Experience seems to prove that there must be either a tacit or a formal agreement as to rates on all competitive traffic, the rates by tacit agreement constituting substantially the market value of transporta- tion, whereas the formal agreement is an arbitrary or artificial mode of adjustment. 440 ATLANTIC PORT DIFFERENTIALS CERTAIN IMPORTANT CONDITIONS UNDER WHICH THE TRUNK LINES ENGAGE IN TRAFFIC BETWEEN THE WEST AND THE SEABOARD. The several trunk lines engage in traffic between the West and the Atlantic seaboard under certain very important conditions which may be stated as follows: The more northerty lines to the seaboard enjoy peculiar advantages on account of their geographical position. Grain raised in the States of Iowa, Minnesota, and Wisconsin, which has the option of transport to the seaboard by the lakes and the New York or Canadian canals, as well as by the more northerly roads, can, under ordinary circumstances, be shipped to Europe via Montreal, Boston, or New York at less cost than by the way of Philadelphia or Baltimore. On the other hand, grain raised in the southern part of Illinois or In- diana and exported to Europe can, on account of shorter rail distance and direct connecting ocean-lines, be transported over the Pennsjd- vania Eailroad and over the Baltimore and Ohio Railroad, via Balti- more and Philadelphia, cheaper than by the way of the more northerly roads. These conditions are, however, quite variable in practice. In case the Baltimore and the Philadelphia markets are glutted or no available tonnage can be secured at these ports for foreign shipment, commodities raised on the line of the Baltimore and Ohio or the Penn- s.ylvania Railroad will inevitably take a longer and more expensive route if such movement should be justified by more favorable condi- tions of trade or of transport at other seaports. This is but a general view of the question. It runs into almost end- less detail and presents many striking exceptions. There are through- out the western states many small interior points situated upon a road forming a direct communication with one of the trunk lines to the sea- board only. Assume a point thus situated on one of the connecting lines of the New York Central Railroad, from which direct transporta- tion can be secured without change of cars to the city of New York, but involving a change of cars if sent to the seaboard over any other trunk line. The mere question of direct shipment or of avoiding the cost of transfer to any other line may cause the commodity to go to New York regardless of distance, or perhaps of greater advantages offered at cer- tain times by rival lines or rival markets. Conditions of a similar na- ture also operate in favor of the other seaports. A second condition under which the trunk lines between the West and the seaboard engage in ''through traffic" is that the amount of grain and other western products transported to each Atlantic sea- port for exportation to foreign countries depends largely upon the available supply of tonnage for such shipments at the several ports. It is found that the grain-trade of a port cannot be increased very APPENDIX. 441 much out of proportion to its total commerce ; or, in other words, that the grain-trade is essentially a part of a great whole, and not an in- dependent branch of commerce. Grain which, on account of the geo- graphical situation of the point of production, would, all tilings else being equal, go to Philadelphia, may, on account of the scarcity of ton- nage at that port, be diverted to New York. The latter city, by virtue of its enormous shipping interests, thus determines the direction of a very large amount of the general trade between the West and foreign countries. The trunk lines terminating at Montreal, at Boston, at Philadelphia, and at Baltimore have been able to secure the control of a part of the foreign trade by means of improved facilities for the transfer of freights from cars to seagoing vessels, and through the new and im- proved mode of shipping commodities on direct consignment from points at the West to Europe. For the purpose of effecting this object certain of the trunk lines have entered into combinations or agreements of some sort with steam- er-lines making regular trips between the respective seaports and the principal commercial ports of Europe, and they have also aided di- rectly or indirectly in the establishment of such ocean steamer-lines. In addition to the steamer-lines, however, a very large amount of sail- ing tonnage, not engaged in any particular traffic, is always required in order to meet unexpected demands in any particular direction. Espe- cially is this true with respect to the transportation of grain, the move- ments of which are exceedingly fluctuating, not only from week to week, but also from year to year. This requirement is met in the largest degree at New York, where shipping of all kinds, both sailing- vessels and steamers, is generally free from any sort of combination of interest with the transportation-lines to the interior. **[In the Appendix to this report] may be found a statement, pre- pared by Mr. Charles Randolph, which indicates the relative through charges which prevailed during the year 1876 for the transportation of wheat from Chicago to Liverpool via Baltimore, Philadelphia, New York, and Montreal, respectively. The total through charges by the various routes at the time Mr. Ran- dolph presented his statement were as follows : Cents per bnshol. Via Baltimore IVIq Via Philadelphia ^2' 5^ Via New York ^*-^7 Via Montreal '^^ ' "^ The closeness of the competition may be seen from the fact that the difference between the charges via the three Atlantic seaports of the 442 ATLANTIC PORT DIFFERENTIALS United States was only eight-tenths of a cent, and that the charges via ]\Iontreal were but one and a half cents higher than those via New York. A third condition under which the trunk lines engage in traffic be- tween the West and the seaboard is that the amount of icestern traffic over each one of the trunk roads is to a great extent limited hy the de- mands at interior points on its line and at its terminus or termini on the Atlantic seaboard. Flour and other products of the state of Michigan, purchased for the purpose of supplying the local demands at points in the states of West Virginia, Maryland, or Pennsylvania, on or near the main line or branch lines of the Baltimore and Ohio Railroad, must necessarily be transported to such points over that road, although in moving to these points it may cross all the other great trunk lines. Such traffic is con- sidered ' ' local " or " non-competitive. ' ' The local demands of the city of Baltimore may be met by the Baltimore and Ohio or by the Penn- sylvania Railroad, since both of these roads have connecting lines from the state of Michigan to Baltimore. But the more northerly roads are not competitors for this traffic. Grain raised in the southern part of Illinois and shipped to interior local markets in the states of Pennsyl- vania, New Jersey, New York, or the New England States will almost invariably be transported over the line forming a direct connection be- tween the point of production and the point of consumption, as traffic of this character is in the least degree competitive. Grain and western products shipped to New York and to Boston for local consumption will generally be transported over direct lines terminating at one or the other of these points. In the cases just adduced the geographical situation of the point of production and of the point of consumption mainly determines the route, since it is confined to one or two lines. Other lines would com- pete, if at all, under very great disadvantages with respect to time, dis- tance, and transfer of freight from one vehicle to another. THE COMPETITIVE INFLUENCE OF THE TRUNK LINES AND OF THE ATLANTIC SEAPORTS DIFFER WITH RESPECT TO DIFFERENT COMMODITIES. The competitive influence of the various trunk lines and of the sev- eral Atlantic seaports differ very widely, with respect to different com- modities. Certain commodities furnish a large amount of competitive traffic, whereas other commodities, perhaps produced in the same lo- cality, are in a very much less degree competitive. Cotton being a commodity of high value, in proportion to its weight and bulk, and be- ing transported great distances, is in the highest degree competitive APPENDIX. 443 with respect to almost all the great trunk lines of the country and with respect to many rival markets. Hay, potatoes, and vegetables, being heavy commodities of low value and produced in almost every state and county, are in the lowest degree competitive. They constitute a part of the local traffic of railroads and of the local trade of the sev- eral Atlantic seaports, since each port has to a great extent its separate sources of supply. The contests which have been going on during the last four years with respect to the movements of grain from the West to the seaboard render it a matter of much interest to note the characteristics of the different cereals with respect to the competitive forces of transport and of trade. Wheat, wheat Hour, and corn, being largely exported, are to that extent in a high degree competitive as to the interests of the several ports. Oats, barley, and rye, on the other hand, are exported in very limited quantities, and are, therefore, both with respect to the interests the several trunk lines and of the several seaboard cities, re- garded as "local" or "non-competitive" commodities. During the year 1876 there was received at the ports of Portland, Boston, New York, Philadelphia, and Baltimore 161,312,646 bushels of wheat, wheat- flour, and corn, and 30,811,570 bushels of rye, oats, and barley ; and there were exported 103,354,171 bushels of wheat, wheat-flour, and corn, and 2,678,788 bushels of rye, oats, and barley, or, in other words, of the wheat, wheat-flour, and corn received, 64 per cent, teas exported, and of the rye, oats, and barley received only 9 per cent, was exported. Grain shipped to each of the Atlantic seaports for local consumption naturall}' forms a part of the traffic of the roads which afford the fa- cilities of direct shipment. THE INTERESTS OF THE TRUNK LINES AND OP THE SEABOARD CITIES ARE NOT ALWAYS IDENTICAL. In order to appreciate the conditions which determine the course of trade between the West and the seaboard, it is important to note the fact that the interests of the trunk lines and of the seaports which re- spectively constitute their eastern termini are not in all respects identi- cal, although not necessarily antagonistic. The interests of the trunk roads are sometimes apparently at vari- ance ifith the interests of their eastern termini. — The interests of the New York Central Railroad with respect to its "through traffic" are closely identified with the commercial interests of New York City, and yet the managers of that road find it to their interest to develop traffic between the West and the New England States, since this traffic passes over 297 miles of their road from Buffalo to Albany. The interests of 444 ATLANTIC PORT DIFFERENTIALS the road are most intimately related to the commercial interests of the city of New York ; yet its managers would not attempt to force New England freights to New York, thence to be distributed to the New England States, as was the practice when the Erie Canal was the only avenue of commerce between the West and the seaboard. Any attempt of this kind would simply be to abandon the New England business to some existing road or to some new road which would inevitably be con- structed in order to supply the demands of the New England States for direct trade. The New England traffic of the New York Central Rail- road, (which is said to constitute about 60 per cent, of its through traffic,) by increasing the volume of its total traffic, greatly reduces the cost of transportation and thus affords to New York City the advan- tages of cheap transportation. In like manner the interests of the Baltimore and Ohio Railroad are closely allied to the commercial interests of the city of Baltimore ; yet the management of that road find it to their interest to carry western products consigned to Philadelphia to New York and to Boston. This they are able to do by means of their eastern connections, viz, the Philadelphia, Wilmington and Baltimore Railroad to Philadelphia, and the Pennsylvania Railroad line from Philadelphia to New York ; also, the interior water-line formed by the Chesapeake Bay, the Chesa- peake and Delaware Canal, the Delaware River, and the Delaware and Raritan Canal to New York, and the outside lines by the ocean to Phila- delphia, New York, and Boston. The Baltimore and Ohio Railroad Company has its soliciting-agents at Philadelphia, at New York, and at Boston for the purpose of secur- ing a share of the west-bound freight to points reached by its western lines and their connections. In so far as possible, the managers of this road undoubtedly direct traffic in the interest of Baltimore, but their power to do so is not absolute. In competing for traffic to and from other Atlantic seaports, they must afford to that traffic all necessary facilities. The additional traffic secured to and from other cities than Balti- more, by increasing the business of the road tends to reduce the cost of transportation and thus incidentall^y to advance the commercial inter- ests of that city. It may be stated generally that the managers of all the trunk lines, while recognizing the importance of affording the greatest possible facilities to their respective terminal cities, are coming to realize the fact that the interests of the transporter may best be subserved by in- terfering as little as possible with the natural course of commerce. The merchants also realize the fact that their interests may best be sub- APPENDIX. 445 served by conducting their business without any special reference to the interests of the transporter. Commerce can only be prosperous so long as it is free. It can never be bound to the car-wheel of any rail- road company. Its course, its limits, and all the forces which control its movements are of a different character from those which surround the managers of transportation-lines. The economies, and the con- siderations Avhich govern men in trade, not only differ from, but are oftentimes opposed to, those M'hich shape the judgment and form the policy of the managers of railroads. No commercial city can become so wedded to any one or more transportation-lines that it can afford to neglect commerce which would naturally come to it from other lines than the one upon which its prosperity mainly depends, nor, on the other hand, can a railroad company refuse to allow traffic to pass over its line, or over a part of its line, even if such traffic should afterward be diverted to another market than the one with which its interests are most closely identified. In manj' important features, the interests of transportation and of trade are correlative, yet there are certain incompatibilities of interest which forbid that they should be very closely joined together. ]\Iany years ago the city of Baltimore held a very much larger proportion of the stock of the Baltimore and Ohio Railroad than at the present time, •and the city directors, in connection with the state directors, controlled the policy of the road. But the road did not prosper. Subsequently a change took place in its management, and the road has ever since been conducted upon the strictly business principle of making its interests paramount to all other considerations in the conduct of its affairs. Traffic of all kinds has been secured, without regard to source or des- tination, and the road has become in the largest sense a commercial highway. The adoption of this line of policy not only rescued the road from stagnation and apprehended disaster, but it has been the means of greatly advancing the interests of Baltimore and of establishing her commercial independence. Experience proves that attempts by com- mon carriers to control commercial movements are against public policy, and that such attempts create popular discontent and ultimately lead to disaster. In practice many curious and perplexing questions arise as to the relative rates which shall prevail between the West and the several rival Atlantic seaports. A single illustration will suffice upon this point. When a war of rates is begun at New York, it becomes neces- sary for the Baltimore and Ohio Railroad to reduce its rates to and from New York in order to be able to secure a share of western traffic to and from that point. If, at the same time, upon its much more im- 446 ATLANTIC PORT DIFFERENTIALS portant traffic between the West and the city of Baltimore rates are maintained, it is evident that a discrimination would arise as against the interests of the cit}^ of Baltimore and in favor of New York, and this discrimination might go to the extent of carrying freights to. and from New York through the city of Baltimore for less than the rates to Baltimore. It then becomes a nice ciuestion of expediency with the railroad company as to whether they should reduce their rates on their main traffic to the city of Baltimore, in order to meet the rates on their comparatively small traffic to the city of New York — rates which have been reduced upon compulsion, and as the result of a struggle between other roads. A very important question also arises with respect to the interests of the city of Baltimore, as to whether its most important avenue of com- merce with the West should be allowed to discriminate against it in the interest of a rival seaport. It may be added that, even if the Bal- timore and Ohio Railroad were to pursue the polic}^ of attempting to conform its through rates at all times to the rates to and from other seaports, such changes might create other discriminations, and it might therefore prove to be expedient, even in the light of the interests of the city of Baltimore, for the Baltimore and Ohio Railroad to maintain its normal freight-charges rather than encourage those capricious fluctua- tions which are detrimental to the interests of commerce. Questions of this character belong to the details of railway management. The determination of each case depends upon the circumstances surround- ing it, and upon the views with respect to the relations of the railroads to the public which may from time to time prevail, TJie interests of the seaboard cities are sometimes apparently at vari- ance tvith the interests of the trunk lines. — There are circumstances in- volved in the adjustment of competitive rates between the West and the seaboard which relate especially to the interests of the markets and to the various industrial enterprises of rival seaports. Traffic which is apparently local with respect to the trunk lines may be in a marked degree competitive with respect to the interests of these cities. This may be illustrated as follows : A firm in New York City engaged in the manufacture and sale of linseed-oil receives large quantities of lin- seed from the West. Shipments to them necessarily come direct from the points of production, and the trunk lines to other cities are not re- garded as competitors for this traffic. In the current phrase of man- agers of railroad traffic, such shipments are considered to be "local to New York." There is also a firm in Baltimore engaged in the same business and also receiving linseed from the West, the rail-rates on this coinmrxlity being 13 per cent, less than the rates to New York. The APPENDIX, 447 transportation of linseed to this firm by the Baltimore and Ohio Rail- road is also considered to be local to that road, since it is shipped for the purpose of meeting a local demand at the city of Baltimore. Never- theless, this traffic is competitive with respect to the interests of the two cities. Two-thirds of the weight of the product of linseed when crushed is oil-cake, a prominent article of export. Oil-cake is a com- modity of low value in proportion to its weight, (being worth only about $42 per ton,) and therefore the difference of 13 per cent, in rail- rates to Baltimore causes a discrimination in favor of the manufacturer at that city, so far as relates to the exportation of oil-cake to Europe, for, as we have already seen, the transportation of the products of the West to Europe is in the highest degree "competitive traffic," since the facilities of rail and steamship lines exist at each of the great At- lantic seaports. Linseed-oil is also shipped both by the Baltimore and the New York I\Ianufacturers to all parts of the United States, and it is also exported to foreign countries. The linseed-oil trade is there- fore in a high degree competitive with respects to the manufacturing and commercial interests of the two cities. Many other illustrations might be given of traffic apparently local with respect to the interests of the trunk lines, but competitive with respect to the interests of the Atlantic seaports. It ma}^ be stated, generally, that the transportation of all classes of raw" material from the West to be manufactured or advanced in the process of manufacture at two or more of the Atlantic seaports, while it may be considered to be local or non-competitive with respect to the roads, is competitive with respect to the interests of the cities. The competitive elements of transportation and of trade present themselves under various phases and give rise to a great variety of practical questions in attempts to adjust traffic between roads or the course of trade as between rival cities. The control exercised by the great trunk railroad companies over their competitive traffic is from year to year growing weaker, and the local or non-competitive traffic is continually being invaded by the in- creasing influence of the various elements of competition. There is a constant demand for the construction of branch roads cutting across existing trunk roads, and forming new competing lines. These branch roads in some cases eventually form parts of great trimk lines between different sections of the country. Results of a similar character have followed the construction of branch lines by the departments and com- munes of France. So long as the lateral lines are confined to local traffic, they usually pursue a policy of neutrality in so far as it may be practicable for them to do so, but in reality every new railroad is a 448 ATLANTIC PORT DIFFERENTIALS competitor of all other roads through the development of new sources of supply to the various markets of the country. PACTS INDICATING THE PRESENT COURSE OP TRADE BETWEEN THE WEST AND BOSTON, NEW YORK, PHILADELPHIA, AND BALTIMORE. Let us now turn to the consideration of some of the facts which serve to illustrate the present course of trade between the West and the At- lantic seaboard. It must be stated at the outset that there is a lack of statistical and other exact information requisite for a thorough development of this subject. It is necessary, therefore, to resort to certain lines of char- acteristic data. Valuable information of this kind is afforded by the statistics of the movements of the cereal products of the West. These statistics have been carefully compiled by various trade organizations. The transportation of grain and flour from the West to the seaboard probably constitutes a little more than one-half the entire east-bound through traffic from the western states to the seaboard. Comparative statements based upon the movements of grain afford, therefore, an ex- cellent illustration of the general movements of trade. The receipts of grain of all kinds (including flour) at Boston, New York, Philadel- phia, and Baltimore during the calendar years 1873, 1874, 1875, and 1876 were as follows: Grain ( including flour) received. Year. Boston. New York. Philadel- phia. Baltimore. Total. 1873 1874 1875 Bushels. 17,805,906 18,000,002 18,351,815 22,753,698 Bushels. 92,137,971 107,273,156 93,443,488 95,949,242 Bushels. 24,949,157 24,625,591 28,195,330 35,546,845 Bushels. 19,099,517 24,936.208 22,823,879 37,564,-530 Bu.ihels. 153,992,551 174,834,957 162,814,512 1876 191,814,315 Total 76,911,421 388,803,857 113,316,923 104,424,134 683,456,335 Comparing the receipts at each one of these ports during the year 1873 with the receipts during 1876, there appears to have been a gain in the total receipts of grain at each port, as follows : Year. Boston. New York. Pl^iladel- Baltimore, phia. 1 ' 1 1876 Bu.ihels. 22,753.698 17,805,906 Bushels. 95,949,242 92,137,971 Bu.ihels. 35,-546,845 24,949,157 10,597,688 Bu.ihels. 37.-564,530 19,099,517 1873 Increase 4,947,792 3,811,271 18,465,013 Per cent, of increase . . . 28 per cent. 4 per cent. 43 per cent. 97 per cent. APPENDIX, 449 The increased receipts at Boston were nearly 30 per cent, greater than at New York. The increased receipts at Philadelphia were nearly three times those at New York, and the increased receipts at Baltimore were nearly five times the increase at New York. The percentage of increase of the receipts of the receipts at each port during the year 1876 over the receipts at the same ports during 1873, exhibits the growth of the grain trade at each port in a more striking manner. The increase at Boston was 28 per cent., at New York 4 per cent., at Phila- delphia 43 per cent., and at Baltimore 97 per cent. The exports of grain at the several ports mentioned were as follows: Grain (including flour) exported. Year ending De- cember 31 — Boston. New York. Philadel- phia. Baltimore. Total. 1873 1874 1875 1876 Bu^shels. 2,145,a64 3,186,318 3,987,959 6,043,298 Bushels. 54,020,056 66,263,946 50,-599,710 55,253,686 Bushels. 4,807,620 6,671,334 8,846,658 22,016,515 Bushels. 9,049,-545 12,555.090 11,407,499 24,761,307 Bushels. 70,022,585 88,676,688 74,841,826 108,074,866 Total 15,362,939 226,137,398 42,342,127 57,773,441 341,615,905 Comparing the data embraced in the statement of exports with the statement of receipts, it will be seen very clearly that the diversion of grain from New York to other points is due largely to the export-trade, and not in any very considerable degree to increased local consumption or distribution to points in the United States. This is shown by the following statement : Increased receipts and exports of grain, (1876 over 1873.) Boston. New York. Philadel- phia. Baltimore. Increase . . Increased exports Bushels. 4,947,792 3.897,934 Bushels. 3,811,271 1,233,630 Bushels. 10,-597,688 17,208,895 Bushels. 18,465.013 15,711,762 ]\Iaking due allowance for the fluctuations in the movements of com- merce, it is evident that the competition of the seaports mentioned in the grain-trade relates mainly to the exportation of grain to foreign countries. Grain being the chief commodity now relied upon for export cargoes of vessels, it is evident that any great and permanent increase in the grain-trade of any port must naturally lead to an increase of imports at that port, and thus to a general diversion of commerce. * * * [In the Appendix to this report] may be found a table showing the receipts, exports, and local consumption of flour and grain of all kinds at Bos- 29 450 ATLANTIC PORT DIFFERENTIALS ton, New York, Philadelphia, and Baltimore during the years 1873, 1874, 1875, and 1876, compiled from statistics prepared by Theo. F. Lees, general agent of the New York Cheap-Transportation Associa- tion, By a careful inspection of this table it will be seen that the di- version of grain which has been described is almost entirely due to the diversion of corn alone. There has been no very marked change in the relative receipts and exports of wheat and wheat-flour at these ports since the year 1873, as appears from the following tables : Statement showing the receipts of wheat and wheat -flour (flour reduced to hushels) at Boston, New York, Philadel.pliia, and Baltimore during the years from 1873 to I87fi, inclusive, and the percentage of such receipts at each port. Boston New York. Philadelphia. Baltimore. Calrndar Tear. Bushels. Bushels. i. Bushels. a . CM Bushels. fe 03 PM 1873 1874 9,857,107 10,814,452 9,224,969 9,689,692 12 11 11 13 52,194,366 62,099,422 .54,357,147 46,324,831 65 63 61 61 9,346,000 12,479,880 13,501,750 9,550,035 12 13 15 12 9,373,677 14,262,819 11,368,885 10,693,264 11 14 1875 13 1876 14 Statement showing the exports of wheat and ivheat-flour (flour reduced to bushels) at Boston, New York, Philadelphia, and Baltimore during the years from 1873 to 1876, inclusive, and the percentage of such exports at each port. Boston New York. Philadelphia. Baltimore. Calendar Year. Bushels. p it PLH td Percent- age. Bushels. a . PM Bushels. a . 1873 1,642,933 2, 500, 9.^6 2,140,341 1,456,870 4 5 4 3 36 061 744 1 R-'^ 2,^4,015 2,222,848 4,105,794 3,926,074 6 4 8 9 2,955,927 6,384,009 4,329,879 3,832,221 7 1S74 45,701,447 36,076,679 34,720,245 80 79 79 11 1875 9 1876 9 It also appears from the folloM^ng' statements that there has been little relative change in the receipts of oats and barley at the four prin- cipal Atlantic seaports. Statement showing the receipts of oats and barley at Boston, Neiv York, FhUadel- phia, and Baltimore during the uears from 1873 to 1876, inclusive, and the i^er- centage of such receipts o,t each port. Boston. New York. Philadelphia. Baltimore. Calendar Year. Bushels. So; S3* Ph Bushels. d . 0) « bo Ph Bushels. S3 oj bo Bushels. fees Ph 1873 3,996,213 3,455,884 3,363,940 3,420,8.39 16 15 13 13 12,833,500 12,952,980 14,595,094 17,008,904 51 54 57 62 7,042,457 5,941,900 6,473,100 5,838,850 28 26 26 22 1,255,072 5 1,149,188 5 977 514 4 1874 1875 1876 810 282 ^ APPENDIX. 451 Statement shmrwq the exports of oats and barley at Boston, New York, Philadel- phia, and Baltimore durinq the years from 1873 to 1876, inclusive, and tlie per- centage of such receipts at each port. It appears from the foregoing statements there has been no marked change in the course of the traffic in wheat, oats, and barley, owing to the fact that the receipts of those grains at the seaports are very largely for local consumption or for shipment to points along the Atlantic seaboard in the United States, and therefore that the transportation of those commodities is competitive in a comparatively low degree. It appears, however, from the following statements, that the corn traffic is subject to very different conditions in so far as relates to com- petition between the several trunk lines and between the four princi- pal Atlantic seaports. Statement showinp the receipts of corn at Boston. New Yorl', Fhihidclpliia, and Baltimore during the years from 1873 to 1876, inclusive, and the percentage of such receipts at each port. Boston. New York. Philadelphia. Baltimore. Calendar Tear. Bushels. •ti a . V S) a, Bushels. 1 g Bushels. 4^ a . Bushels. +3 a . Oh 1873 5,558,363 3,308,041 5,346,340 9,005,375 12 8 12 11 24,680,831 29,661,443 22,183,077 26,645,599 52 61 50 34 8,238,400 5,954,700 7,960,000 19,420,825 17 10 17 25 8,830,449 9,355,567 9,567,141 24,684,230 19 1874 21 1875 21 1876 30 Statement showing the exports of corn at Boston, New Yorlc, Philadelphia, and Baltimore during the years from 1873 to 1876, inclusive, and the percentage of such exports at each port. Boston. New York. Philadelphia. Baltimore. Calendar Tear. Bushels. d . feoj to Percent- age. to Percent- age. Percent- age. 1873 162,727 380,254 1,551,576 4,160,817 1 2 6 7 16,168,152 18,647.114 12,980,670 16,470,935 65 68 49 28 2,202,368 2,203,588 4, 601,. 586 16,754,718 9 8 18 29 6,093,618 5,959,767 6,980,442 20,751,343 or 1874 22 1875 o- 1876 36 452 ATLANTIC PORT DIFFERENTIALS The foregoing statements in regard to corn indicate that there has been a very marked change in its movements to the seaboard, and that this change is due almost exclusively to the exportation of it to Europe, Each one of the trunk lines having nearly equal advantages for the foreign trade afforded by steamer-lines and sailing-vessels to ports' in Europe, the cost of transportation by these several routes from western points to the grain markets of Europe is very nearly equal. There- fore, as already explained, the corn traffic is competitive in a very high degree, both with respect to the interests of the trunk lines and of the four principal Atlantic seaports. The following statement shows the increased receipts of grain during 1876 over those of 1873, in comparison with the increased receipts of corn during 1876 over those of 1873: r— Increased receipts of 1876 over those of 1873. Port. Boston. New York. Philadel- ! .p, ,.. , . Baltimore, phia. Bushels. Increased receipts of grain . . . 4,947,790 Increased receipts of corn .... 3,447,012 Bushels. 3,811,271 1,964,768 Bushels. 10,,597,6S8 11,182,425 Bii!-hels. 18,465,013 15,853,781 This statement very clearly shows that the diversion of the grain- trade from New York and the increase in the grain receipts at Boston, Philadelphia, and Baltimore is due almost entirely to the diversion of the corn-trade alone. "While the exportation of wheat, flour, rye, oats, and barley has ex- hibited little change with respect to the interests of the various trunk lines and of the Atlantic seaports, the expoi'tation of corn has changed as follows : The exporation from Boston has increased from 1 to 7 per cent. ; at New York it has decreased from 65 to 28 per cent. ; at Phila- delphia it has increased from 9 to 29 per cent. ; and at Baltimore it has increased from 25 to 36 per cent, of the total receipts at the four ports. This remarkable diversion in the corn-trade appears to be mainly at- tributable to the following causes : First. Corn being a commodity of low value in proportion to weight, its movements have been greatly influenced by the small difference in rates which have prevailed in favor of the Pennsylvania and the Balti- more and Ohio Railroads, in consequence of the excellent facilities for the transfer of grain from railroad-cars to steamships at the ports of Philadelphia and Baltimore, in connection with the arrangements Avhich have been perfected at those ports for the direct shipments of grain from interior points to Europe. APPENDIX 453 Second. The cargoes from the United States to Europe being uow much in excess of the import-cargoes, vessel-owners are free to seek ex- port-cargoes wherever they can be obtained, and the advantage as to the available supply of ocean-tonnage does not operate so strongly in favor of New York as formerly. Other conunodities for which the Pennsylvania Railroad and the Baltimore and Ohio Railroads afford direct transportation in connec- tion Avith ocean-lines to Europe have also to a considerable extent fol- lowed the direction of the corn-trade. It is, however, declared by those who are familiar with the grain-trade that the diversion of corn from New York to other ports during the year 1876 was very largely due to an exceptional circumstance affecting the crop of the year 1875. It is said that the corn crop of the northern corn-producing district was in- jured by dampness, and did not come to maturity, so that it reached the market in a bad condition and unfit for exportation, whereas the crop of the southern portion of the corn-producing area came to ma- turity in good condition, and was alone available for meeting a large and unexpected foreign demand. The foregoing facts have been adduced with the view of showing as clearly as possible, by available characteristic data, that there are very many conditions affecting the competitive traffic between the west and the seaboard, that these conditions are variable, and that they are so intimatedly blended that it is impossible to prescribe geographical or commercial limits to the traffic of any line or to the trade of any sea- board city. It is impossible within the prescribed limits of this report to consider more fully the comparative advantages held by the various seaports for supremacy or for the control of any particular branch of commerce. The facts stated fall far short of a complete development of this great and important subject, for it embraces all the elements of the pros- perity of commercial cities, including their capital, the force of asso- ciated enterprises, the energy, tact, and persistency of their merchants, the manner in which their interests are affected by the tariff upon im- ported goods, and by the rapidly-increasing power of American manu- facturers, the geographical position of water and rail lines, and the available supply of coal, iron, lumber, and all other commodities which go to meet the wants or to contribute to the commerce of a great city. Facts which indicate the relative magnitude of the commerce of the four principal Atlcmtic seaports. There are no available data affording an accurate comparative view of the total internal and foreign commerce of the various seaports 454 ATLANTIC PORT DIFFERENTIALS based upon either the quantity or the value of commodities. The fol- lowing statement in regard to bank clearing-house transactions at Bos- ton New York, Philadelphia, and Baltimore affords an approximate indication of the relative magnitude of the commerce of the four cities. To what extent the clearances at New York embrace transactions not properly representative of the commerce of that port cannot be ascer- tained. Clearing -house returns for the month o f January, :I877. Cities. S c3 d ^ ^ .a New York . Boston Philadelphia Baltimore . . Total 59 51 27 20 157 $72,052,000 8,436,000 6,826,000 1,853,000 89,167,000 81 9 100 The relative value of the foreign commerce of the four principal At- lantic seaports is presented in the following table, showing the value of imports and exports at each one of these ports during the year ending June 30, 1876 : Cities. II OJ o C3 > Total value of foreign commerce. *J o a ft o New York $311,712,910 37,416,623 22,471,516 22,340,629 393,941,678 $294,705,902 36,041,892 40,254,075 31,216,807 $606,418,812 73,458,515 62,725,591 53,557,436 76.2 Boston 9.3 Philadelphia 7.8 Baltimore 6.7 Total 402,218,676 796,160,354 100.0 The clearing-house transactions at New York appear to constitute 81 per cent, of the total clearing-house transactions at Boston, New York, Philadelphia, and Baltimore, and the foreign commerce of New York appears to be 76 per cent, of the total foreign commerce of the same cities. These statistics, in connection with the facts already presented in re- gard to the grain-trade, prove that the movements of any particular commodity, even one of prime necessity, do not afford an indication of the general course of trade or of the relative magnitude of the com- APPENDIX 455 merce of the great seaports. Although a hirger quantity of corn is passing through Baltimore than through New York, the total couinieree of Baltimore, in so far as indicated by clearing-house transactions, is but 21/^ per cent, of the commerce of New York, and, in so far as in- dicated by exports, the connnerce of Baltimore is less than 9 per cent, of the value of the foreign connnerce of New York. There is a certain territory directly tributary to the trade of Baltimore, and each one of the Atlantic seaports has a separate local trade, and enjoys peculiar advantages for trade with the West, with the South, and with foreign countries. The city of New York can rely for the maintenance of its commercial supremacy upon its enormous capital; the geographical advantages of its position as a distributing point; its direct connec- tions with all parts of the United States by rail and water lines ; the exclusive advantages of that important line of transportation formed by the lakes, the Erie Canal, and the Hudson River ; the persistency of its established commercial relations with almost every country on the globe ; the energ>^ and intelligence of its merchants, and the facts that it is the chief monetary center of the western continent. The foregoing statistics in regard to the movements of grain simply serve to illustrate certain important trade currents and to throw light upon the question of transportation, but they evidently fall very far short of conveying adequate information upon Avhich can be based any prediction as to the future prosperity or decadence of commercial cities. GENERAL RAILROAD MANAGEMENT IN REGARD TO THROUGH TRAFFIC. The facts already presented, which point to the impracticability of drawing any exact lines of demarkation between the local and the com- petitive traffic of the several trunk lines and between the local and the competitive trade of the several seaboard cities, also serve to throw light upon the competitive struggles between the railroads connecting the "West with the seaboard, and to explain the difficulties which the managers of these lines have encountered in their efforts to protect themselves against themselves — efforts which have generally termi- nated in the often-recurring and protracted railroad wars. The effort to adjust competitive rates between the West and the seaboard began about twenty years ago, when the Erie and the Ncav York Central Rail- roads had extended their lines to Lake Erie, and the Pennsylvania and the Baltimore and Ohio Railroads had reached the Ohio River. Then the adjustment of through rates was simply a question of detail in the discharge of the executive duties of general freight agents ; but it has now become a great question of administration, affecting the entire internal and foreign commerce of the United States. The increased 456 ATLANTIC PORT DIFFERENTIALS magnitude of the interests affected lias rendered it necessary to adopt new methods in the management of competitive traffic, and has called for the employment of men endowed with the intellectual grasp and vigor requisite for comprehending and administering the affairs of a great railroad organization. Men capable of adjusting the freight- tariffs of a railroad so long as its traffic was practically a monopoly, and the only question as to rates was "how much each commodity would bear," have been superseded by a class of men of broader views, competent to understand and to grapple with the difficulties incident to the management of the transportation and commercial interests of the present day. The internal commerce of the country is year by year becoming more complex as the interests of transportation and of trade increase in mag- nitude and importance. No one forsaw the results already reached by the railroad system. Certain customs with respect to traffic and travel on railroads, have been established and have become authoritative under decisions of the State and Federal courts. Other customs touch- ing the relations of the railroads to each other and to the public will undoubtedly in time acquire the force of law. Thus we may expect that by the slow, but sure process of adjustment the rights of the rail- roads and of the public, with respect to all the new issues of transporta- tion, will in time become tirmly established and that competition will remain the stimulus and the vital force of commercial enterprise. TERMINAL FACILITIES. There is another subject touching the interests of the great trunk lines and of the several seaport cities, which is worthy of special no- tice, and that is the question of terminal facilities. The direct convey- ance of merchandise without breaking bulk, from the point of ship- ment to the point of destination, and the most approved facilities for the transfer of freights from one vehicle of commerce to another, where such transfers must necessarily be made, constitute very important commercial requirements of the present day. To effect the former ob- ject, ''through freight-lines" have been formed and expensive bridges have been constructed across navigable streams. Railroad companies have also provided union depots in many of the large cities for the economical transfer of both freights and passengers. Elevators and warehouses have been constructed at ports on the coast, on the lakes, and on the western rivers, in order that freights might be cheaply and expeditiously transferred from one vehicle to another, and that ad- vantage might thus be taken of the different markets. Very much, however, remains to be done in this direction. It is stated that in cer- APPENDIX 457 tain cities the cost of transferring freights from one railroad to another through warehouses exceeds the charges for transporting the same freights six or seven hundred miles. It is also stated that in one of the large seaboard cities the cost of handling and carting freight, ex- clusive of the losses from damage and theft, so frequent under the present disjoined system, is, on the average, about $2 per ton, or 25 per cent, of the cost of hauling grain from Chicago to New York. One of the most important economies of the present day with respect to trade between the West and the seaboard is the transportation and storage of grain in bulk. This important economy has not only ren- dered it necessary to supply suitable ears and elevators at terminal points, but also to establish a system of grading under which the rail- road companies are enabled to avoid the inconvenience and expense of keeping separate each particular shipment, and to deal with grain in great masses. Experience has proved the necessity of extending railroad tracks into the business portion of commercial cities for the purpose of effecting the receipt and delivery of goods of all kinds with the least possible expense of handling and cartage. This is a require- ment which has only been properly appreciated during the last five or six years. Formerly a railroad depot within the limits of a city was regarded as in some sense a nuisance, to be tolerated only at the very outskirts. The necessity of providing the amplest means for the flow of com- merce has led to the establishment of excellent terminal facilities at Boston, Philadelphia, and Baltimore. The city of New York has not yet fully come up to the new order of conuneyeial requirements in this regard, and the fact has already operated prejudicially to the interests of that citj^ There are several reasons for this tardiness at the chief commercial center of the western continent. Extensive and very costly facilities were provided many j'cars ago, especially adapted to the requirements of commerce on the Erie Canal and the Hudson River in connection with ocean commerce, the harbor of New York being the great distributing depot of that commerce. But in addition to these facilities the success of commercial enterprises now requires a line of adaptations embracing the ship, the railroad car, and the modern ware- house, with its appropriate spaces and mechanical improvements. The commercial habits of the great city of New York were formed during the period in which she attained her commercial ascendency, and while the Erie Canal remained almost the sole avenue of commerce between the West and the seaboard. It appears to be necessary in advancing to the new order of things to overcome the force of a conservatism forti- fied by the habits of half a century and involving millions of capital. 458 ATLANTIC PORT DIFFERENTIALS A difference of views as to the plans which should be adopted has led to delay at New York, but it may be confidently predicted that the merchants and capitalists of that city will not in the end fail to make the best possible use of all the means which nature and art have placed within their power. A plan has been proposed by the New York Cheap Transportation Association and endorsed by several of the commercial bodies of that city. This plan embraces railroad tracks around the entire city, with warehouses upon or adjacent to the wharves, such warehouses being- provided with ample facilities for the loading and unloading of all classes of freights. Terminal facilities of this character have been adopted at Portland, Me., at Boston, at Philadelphia, and at Baltimore. The plan proposed or some other practical one will undoubtedly be adopted at New York. Venice was reclaimed from the sea, and her canals, wharfage and warehouse facilities were adapted to the peculiar exigencies of her commerce. Vast docks have been constructed at Lon- don and Liverpool at enormous expense, in order to meet the demands of commerce, and to provide against the difficulties incident to the rise and fall of the tides, and those cities have in their turn become the cen- ters of European conmierce. New York City cannot long delay pro- viding a system of terminal facilities adapted to the requirements of the present day and commensurate with the magnitude of her enormous commerce, CONCLUDING REMARKS IN REGARD TO COMPETITION IN THE COMMERCE BE- TV^TEEN THE WEST AND THE SEABOARD. The practical difficulties which have arisen as the result of competi- tion between railroads and between rival markets embrace the more salient features of what is cormnonly known as "the railroad problem of the day. ' ' During the last three years there has been much specu- lation as to the tendency of our railroad system, and as to the remedies which should be provided against existing or anticipated evils. For many years it was apprehended that the railroads might become abso- lute monopolies, and that competition in the carrying trade might be utterly broken down, but within the last two years it has been urged that competition has failed to secure the ends of justice and stability, and therefore that it is no longer to be relied upon. It is asserted that competition is an irresponsible force, that its essence is instability, and that so long as it continues, systematic justice cannot be done. This conclusion appears to be based upon the assumption that, in the com- merce between the West and the seaboard, the struggle is confined to four or five great railway organizations. It has, how^ever, been herein- APPENDIX 459 before shown that the struggle embraces the competition of many lines and of many commercial forces, which overshadow the power exercised by the managers of the great trunk lines. This is clearly understood, and in practice fully recognized by men engaged in extensive mer- cantile operations, and by the managers of great railroad interests. The evils incident to competition are sharply defined and incisive, but the benefits which it affords are substantial and pervading. The bene- ficent law of supply and demand where it operates most freely may not secure systematic justice, and yet the whole world concedes that, so far as it is operative, it secures substantial justice. This is all that can be expected in the present condition of human affairs. Competi- tion may not make all things even, but it affords a nearer approach to equitable dealing among men than any substitute which has 3'et been proposed for the natural laws of trade. The very instability of com- petition is the surest safeguard of the public interest. When compe- tition ceases to be irresponsible, monopoly will step in, unless it be substituted by the autocratic rule of a combination sufficiently power- ful to control all the transportation-lines of the country. Any arbi- trary rule in whatever manner formulated, or by whatever agency ex- ercised, would prove to be an impotent substitute for the great bene- ficient law of competition in the irresponsibility and instability of which is embraced that conservatism which inheres in the untrammeled operations of natural forces. So intimately are the interests of transportation and of trade con- nected that it is impossible to eliminate competition beween the rail- roads without doing violence to conunercial interests, and thereby working greater evils than those sought to be removed. It is well known that within the restraints imposed by the various forces of com- petition, a comparatively narrow range of discretionary power is left to the railroad companies in regard to their "through traffic." The rates which have at times prevailed especially for the transportation of grain on the east and west trunk lines during the last two years are said to have involved an actual loss to the companies. Earnest efforts have been made by the managers of the great trunk lines to advance freight charges, but the competition has been so strong that they have been unable to effect that object. The public have thus secured the benefits of cheap transportation. But the practical results of competition between railroads and be- tween trade forces are before us, and we may learn the effects of these forces upon the adjustment of freight-tariffs. The following table presents the average charges per ton per mile during the last eight years on several important trunk lines of the United States largely en- gaged in transportation between the West and the seaboard. 460 ATLANTIC PORT DIFFERENTIALS Statement showmff the pradual reduction in freight-cJmrges per ton per mile on several transportation-lines enpaped in commerce between the Western States and the Atlantic seaboard, from 1868 to 1876, inclusive. Railroads. Tears. 1868 1S69 1870 1871 1872 1873 1874 1875 1876 Cents 2.59 1.90 1.92 .88 2.43 Cents 2.20 Cents 1.86 Cents 1.65 1.34 1.47 1.02 2.02 1.85 1.39 1.56 2.19 2.87 Cents 1.69 1.42 1.52 1.02 1.96 1.46 1.37 1.57 2.18 2.51 Cents 1.57 1.42 1.45 .88 1.82 1.36 1.33 1.30 1.92 2.35 Cents 1.47 1.26 1.31 .73 1..53 .94 I.IS 1.16 1.90 2.10 Cents 1.27 1.06 1.21 .66 1.11 .87 1.01 l.OS 1.91 1.95 Cents 1.05 1.72 i 1..55 .89 Erie 1.60 .92 2.19 1.37 .83 2.09 1.07 .68 Lalie Shore and Michigan Southern 2.43 2.09 3.01 3.13 2.34 1.S8 1.50 1 61 .82 Chicago, Burlington and Quiney 2.77 1 2.31 3.09 Average 2.26 .97 1.91 1.74 1.67 1.54 1.36 1.21 N. B.— In this table the calendar year nearest the several fiscal years is taken. It appears that the average rates on the New York Central Railroad fell from 2.59 cents per ton per mile in 1868 to 1.05 cents per ton per mile in 1876, a fall of 59 per cent. ; the rates on the Pennsylvania Rail- road fell from 1.90 cents in 1868 to .89 of a cent in 1876, a fall of 53 per cent. ; the rates on the Erie Railway fell from 1.92 cents in 1868 to 1.07 cents in 1876, a fall of 44 per cent. ; and that the rates on the New York State canals fell from .88 of a cent in 1868 to .68 of a cent in 1876, a fall of 23 per cent. It appears that the annual average of the rates stated in the forego- ing table fell from 2.26 cents per ton per mile in 1868 to 1.21 cents per ton per mile in 1875, a fall of nearly 50 per cent, in eight j-ears. This decrease has not resulted from voluntary concessions by the great trunk lines over which passes a very large proportion of the internal commerce of the country, but from causes beyond their control, and against which they have striven earnestlj' but in vain. Another most significant fact is the fall of all-rail grain-rates from Chicago to New York from 45 cents per 100 pounds in 1869, to 16 cents per 100 pounds during a part of the j^ear 1876, the rates during the latter year being little more than one-third of those which prevailed but seven years before. These facts carry with them their own argument. The reductions in freight-charges are the result of competition, and they have been of incalculable advantage to the commercial and the agricultural interests of the country. Attention is called to the fact that the foregoing table illustrates the average reduction of rates on both 'Hhrough" and "local" traffic, the local traffic of all the roads being the chief source of revenue. The re- APPENDIX 461 duction of local rates has resulted mainly from competition between the various markets of the country, a result in conformity with the general reduction of prices during the last four years. Local rates are still remunerative, and it is believed that "competi- tive rates" may, within the limits of clearly-defined mutual interests, be so adjusted through cooperation as not to entail losses upon the com- panies. No scheme of adjustment, however, can override the forces of competition, and all attempts of the kind must result in disaster. It has been supposed that in the contests between the trunk lines the strongest company or combination of companies invariably remains master of the field. It has, however, come to be almost an aphorism among railroad managers that the weakest line determines the rates. It has been seen at Boston that in the struggles between the Grand Trunk Railroad on the one side, and the New York Central, the Erie, and the Pennsylvania Railroads on the other, the Grand Trunk Road, the weakest of them all, has remained master of the field. The causes of this apparently paradoxical result have already been explained. It has also been supposed that the combination between the railroads of the country is yearly becoming closer and more powerful. The facts which have been hereinbefore adduced seem to indicate, however, that the extension of the railway system has tended to create new ele- ments of competition, and to render the adjustment of through rates more difficult. Every trunk line has many interests outside of, and which cannot possibly be embraced within the terms of any combina- tion with other trunk lines, and it has been found that sooner or later these collateral interests lead to the infraction of any conditions which the ingenuity of railroad managers has yet been able to devise. The difficulty appears to be that, heretofore, competing companies in at- tempting to protect themselves against themselves, have failed to ar- rive at a clear understanding of the nature and limits of their mutual interests. As the promoters of the great railroad organizations connecting the West with the seaboard have pushed their lines westward, they have seen their control over ''through rates" gradually becoming weaker and weaker, and the idea has been suggested in the interests of the rail- road companies, by able men, that the roads ought to invoke some external aid in order to maintain remunerative rates, or at least to avoid the necessity of at times, carrying through freight at an absolute loss. Evidently, it would be detrimental to the public interests if the railroads of the country were to become crippled by their own excesses, but in view of the beneficial results which have been realized from the regulating influence which competition has exerted over rates in the i62 ATLANTIC PORT DIFFERENTIALS great commerce between the West and the East, and between all im- portant centers of trade which enjoy the advantages of two or more rival lines, the people will watch with favor the gradual extension of the railway system by which means the limits of the local or non-com- petitive traffic are being contracted and the limits of the competitive traffic enlarged. It appears probable that as the facilities of transportation are more widely extended many injurious discriminations will disappear, and that the legitimate limits of the traffic of rival companies will become more clearly defined. It is also to be hoped that the various companies will, upon enlightened views of self-interest, formulate and acquiesce in such regulations with respect to their common interests as to prevent the occurrence of those sudden changes of rates which cause erratic diversions of traffic from one line to another; results which tend to destroy confidence not only in railroad securities, but in the value of the entire property of commercial cities. Such changes of rates tend to depress and not to advance commerce. Inter- and Inyra-Territorial Bases of Rates in Official Classi- fication AND New England Territories Including the Atlantic Port Differentials. Following its Report on Supplemental Hearing (32 I. C. C. 325) in the Five Per Cent. Case (I. C. C. Docket No. 5280, Revenues of Rail Carriers in Official Classification Territory and I. & S. 333, Rate Increases in Official Classification Territory) the Interstate Commerce Commission entered an Order, January 4, 1915, in which there was required, with certain stated modifications, the maintenance of the existing relationships between groups in Official Classification and New England Territories, including the Atlantic Port Differentials. These differentials and other relationships were fully set forth in the Commission 's Order : — ''The Commission having under consideration its report and order herein of July 29, 1914, and its supplemental report herein of Dec. 16, 1914; And it appearing, That, with respect to interterritorial rates, points of origin on the one hand and points of destination on the other in trunk line. New England and Central Freight Association territories, Illinois, the Virginias and eastern Canada are arranged in geographi- cal groups designated by rate groups or percentage numbers generally indicating their relation to the New York-Chicago rates, or to the Chicago-Montreal rates as to certain Canadian points, which represent 100 per cent. ; that as to rates between points within trunk line and Central Freight Association territories and the Virginias, and as be- tween trunk line. New England and Central Freight Association ter- ritories, and between these territories and Illinois, the Virginias, and parts of eastern Canada, certain rate relations have been established by grouping points of origin and points of destination and applying a common rate to or from such points; that the construction of rates to or from specific points is based upon a per- centage of rates to or from other points; that certain rates are con- structed by the observance of specific or arbitrary rates or differences to or from adjacent or competitive points, and that rates via differ- ential routes are constructed by the application of stated differentials under the rates of standard rail routes ; And it appearing. That these described groupings and relations should, in the interests of carriers and of competition between shippers and receivers, be maintained : 463 464 ATLANTIC PORT DIFFERENTIALS It is ordered, That in establishing the increased rates approved in said reports, respondents may preserve these existing groupings and relationships as specified herein, even though by so doing some rates are increased slightly more than five per cent. It is further ordered, That in establishing the increased rates ap- proved in the said reports the rates from Chicago to New York and Montreal, and from New York to Chicago, may be increased five per cent., and those increased rates may be scaled to or from percentage points or groups upon the established percentage groupings and per- centages; that the rates via ocean-and-rail and established all-rail differential lines may be made the same differentials under the stand- ard all-rail rates as now exist, and that the established groupings of points of origin or of points of destination under common rates may be preserved, even though so doing results in increasing some rates slightly more than five per cent. A')2d it is further ordered, That the percentage relationship of rates, the differential and arbitrary adjustment of rates hereby authorized and not above designated shall be as follows, in cents per 100 pounds, except where otherwise noted: I. — CLASS RATES FROM TRUNK LINE AND NEW ENGLAND TERRITORIES TO CENTRAL FREIGHT ASSOCIATION PERCENTAGE POINTS, Classes 1 2 3 4 5 6 From Philadelphia, Pa 6 6 2 2 2 2 From Baltimore, Md 8 8 3 3 3 3 lower than from New York. From Albany, XJtica and Fair Haven, N. Y. — To 75 per cent, points and higher. New York rates less 20 per cent, of the New York to Chicago rates. To 60 per cent., 67 per cent., and 71 per cent, points, Philadelphia to 60 per cent, points rates as minima. To 70 per cent, points, Philadelphia to 70 per cent, points rates as minima. To 72 per cent., 73 per cent., and 74 per cent, points. New York rates less 20 per cent, of the New York to Chicago rates, observing 71 per cent, rates as minima. From Tiochester, Syracuse — Geneva, Elmira, and Moiint Morris, N. Y. — To 72 per cent, points and higher, 70 per cent, of the New York rates. To 60 per cent., 67 per cent., and 71 per cent, points, arbitrary rates. To 70 per cent, points, same rates as to 81 per cent, points. From Boston, Mass. — To 60 per cent, points, New York rates plus Classes 1 2 3 4 5 6 Arbitraries 5 4 3 3 2i/^2 APPENDIX 465 To 67 per cent, and 70 per cent, points, same as to 71 per cent, points. To 71 per cent, points and higher, New York rates. From New Berlin, -Y. Y. — To 60 per cent, to 77 per cent, points. New York rates with 78 per cent. (New Berlin) rates as maxima. To 78 per cent, points and higher, New York rates less Classes 1 2 3 4 5 6 Arbitraries 6 5 4 3 2 2 From Ogdenshiirg, N. ¥. — To 60 per cent, to 77 per cent, points, same as from Boston, but not to exceed rates from Ogdensburg to 78 per cent, points. Classes 1 2 3 4 5 6 To 78 per cent, points 8 6 4 3 3 2 To 79 per cent, points 8 6 5 4 4 2 To 80 per cent, points 9 7 5 4 4 2 To 81 per cent, points 10 8 6 4 4 2 To 82 per cent, points and higher 10 8 6 4 4 3 lower than from Ncav York. From Scranton, Pa. — To all percentage points, except 70 per cent, points, 80 per cent, of rates from New York to same destinations, with Philadelphia to 60 per cent, points rates as minima. To 70 per cent, points Williamsport rate plus Classes 1 2 3 4 5 6 Arbitraries 2 2 1 1 1 1 From Williamsport, Pa., and Cumberland, Md. — To all percentage points except 70 per cent, points, 77 per cent, of rates from New York to same destinations ; Baltimore to 60 per cent, points rates minima from Williamsport. To 70 per cent, points, same as from Syracuse to 70 per cent, points. From Washington, D. C. (via southern routes), and Lexington, Va. — To percentage points, Baltimore rates subject to Virginia cities- Pittsburgh rates (Columbus to Baltimore basis) as minima. From Virginia cities — Classes 1 2 3 4 5 6 To percentage points, Baltimore rates less 8 6 4 3 2 2 subject to varying minima at points taking less than 95 per cent. II, CLASS RATES FROM TRUNK LINE TERRITORY TO CANADIAN PERCENTAGE POINTS. From Boston, Mass. — To 76-C to 100-C points, New York rates. 30 466 ATLANTIC PORT DIFFERENTIALS From Albany, N. Y. — To 76-C to 100-C points, New York rates less 20 per cent, of New- York to Chicago rates. From Ogdenshurg, N. Y. — To 76-D and 78-D points, Detroit rates as maxima. To 76-C points, same as to 78-C points. Classes 1 2 3 4 5 6 To 78-C points 6 5 3 2 2 2 less than New York rates. To 80-C points 8 6 4 3 3 2 less than New York rates, but not less than to 78-C points. To 82-C to 100-C points 8 6 4 3 3 2 less than New York rates. From Syracuse, iV. Y. — To 76-C to 100-C points, 70 per cent, of New York rates. From Philadelphia and Scranton, Pa. — To 76-D and 78-D points, Detroit rates as maxima. To 76-C to 100-C points, New York rates. From Baltimore, Md., and Williamsport, Pa. — To 76-D and 78-D points, Detroit rate as maxima. To 76-C to 100-C points. New York rates. From New York rate territory — To Montreal rate territory, 73 per cent, of New York to Chicago rates. To Carleton Place rate territory, 76 per cent, of New York to Chi- cago rates. To Quebec rate territory. 78 per cent, of New York to Chicago rates. From Philadelphia and Baltimore rate territories — To ^Montreal rate territorj^ same as from New York rate territory. To Carleton Place rate territory, same as from New York rate ter- ritory. To Quebec rate territory, same as from New York rate territory. From Albany rate territory — To Montreal rate territory, same as from Albany to 73 per cent, points in Central Freight Association territory. To Carleton Place rate territory, same as from Albany to 76 per cent, points in Central Freight Association territory. To Quebec rate territory, same as from Albany to 78 per cent, points in Central Freight Association territory. Rate to Canadian territory east of Kingston, Sharbot Lake, North Bay, and Depot Harbor, Ontario, other than as described in the fore- going, arbitraries above base-point rates. APPENDIX 467 III. — COMMODITY RATES FROM TRUNK LINE AND NEW ENGLAND TERRI- TORIES TO CENTRAL FREIGHT ASSOCIATION PERCENTAGE POINTS. From Boston, Mass. — To Trunk line western termini and 60 per cent, points : When com- modity rates from New York to the western termini of the trunk lines and points taking 60 per cent, of New York to Chicago rates are the same as standard class rates, rates upon like articles from Boston, Mass., and New England points taking Boston rates to such western termini and 60 per cent, points may be made by adding to the com- modity rates from New York the same differences which exist between such class rates from New York and the corresponding class rates from Boston to same destinations. When commodity rates from New York to western termini of the trunk lines and points taking 60 per cent, of New York to Chicago rates are not the same as standard class rates, rates upon like articles from Boston and New England points taking Boston rates to such western termini and 60 per cent, points may be made by adding to the commodity rates from Nev/ York the differences which exist between the class rates next higher than the commodity rates from New York and the corresponding class rates from Boston to same destinations. To 67 per cent, to 71 per cent, points : When commodity rates are established from New York to Chicago, either locally or as a basis for other western points, rates upon like articles from Boston and New England points taking Boston rates to points taking higher than 60 per cent., but not greater than 71 per cent, of New York to Chicago rates, may be made the same as rates applying from New York to 71 per cent, points. To 72 per cent, points and higher: To points taking higher than 71 per cent, of New York to Chicago rates, the rates from Boston and points in New England taking Boston rates may be made the same as from New York, but to points taking higher than 60 per cent, not less than to 60 per cent, points, as provided in the foregoing. From Albany, N. Y. — To 60 per cent, points and higher: When a rate per 100 pounds or per ton is established upon any commodity from New York to Chica'ro as a basing rate and corresponding rates apply from interior points, the rate from Albany, N. Y., to Chicago and other points taking TOO per cent, of New York to Chicago rates may be 80 per cent, of the New York to Chicago rate. Rates to points taking other than 100 per cent, of New York to Chicago rates may be scaled on the established percentage of the rate from Albany to Chicago. 468 ATLANTIC PORT DIFFERENTIALS From New Berlin, N. Y. — To 60 per cent, to 77 per cent, points, same as from New York, with rates from New Berlin to 78 per cent, points as maxima. To 78 per cent, points and higher, New York rates less Classes* 1 2 3 4 5 6 Differentials 6 5 4 3 2 2 From Ogdenshurg, N. Y. — To 60 per cent, points, same as from Boston to 60 per cent, points. To 67 per cent, to 77 per cent, points, same as from Boston, bnt not to exceed rates from Ogdensbnro; to 78 per cent, points. To 78 per cent, points and higher, New York rates less Classes* 1 2 3 4 5 6 Differentials 10 8 6 4 4 3 From. Rochester-Syracuse, N. Y. — To 60 per cent, points and higher: When a rate per 100 pounds or per ton is established upon any commodity from New York to Chicago as a basing rate and corresponding rates apply from interior points, the rates from Rochester-Syracuse, N. Y,, to Chicago and other points taking 100 per cent, of New York to Chicago rates may be 70 per cent, of the New York to Chicago rate. Rates to points taking other than 100 per cent, of New York to Chicago rates may be scaled on the established percentage basis of the rate from Rochester-Syra- cuse to Chicago. From Philadelphia, Pa. — To 60 per cent, points and higher. New York rates less Classes 1 2 3 4 5 6 or lower Differentials 6 6 2 2 2 2 From Baltimore, J\Id. — To 60 per cent, points and higher. New York rates less Classes 1 2 3 4 5 6 or lower Differentials 8 8 3 3 3 3 From Scranton, Pa. — To 60 per cent, points, same as from Philadelphia to 60 per cent, points. To 67 per cent, points and higher, to Chicago and other 100 per cent, points, 80 per cent, of New York to Chicago rate ; to points t^kino; other than 100 per cent, of New York to Chicago, rates scaled on es- tablished percentage basis of rate from Scranton to Chicago. (Phila- delphia to 60 per cent, rates as minima.) *In connection with westbound commodity rates upon a lower basis than sixth class, varying differentials are applied, dependent u]inn the standard rate basis New York to Chicago governing in such instances. APPENDIX 469 From WilUamsport, Pa. — To 60 per cent, points, same as from Baltimore to 60 per cent, points. To 67 per cent, points and hig-her, to C'liicag'o and other 100 p-r cent, points, 77 per cent, of New York to Chicago rate : to points tak- ing other than 100 per cent, of New York to Chicago, rates scaled on established percentage basis of rate from Williamsport to Chicago. (Baltimore to 60 per cent, rates as minima.) From Cumberland, Md. — To 60 per cent, points and higher, to Chicago and other TOO per cent, points, 77 per cent, of New York to Chicago rate ; to points tak- ing other than 100 per cent, of New York to Chicago rates scaled on established percentage basis of rate from Cumberland to Chicago (via Pennsylvania Railroad, Baltimore to 60 per cent, rates as minima). From Belington and Richivood, W. Va. — To 60 per cent, points and higher, Cumberland wmmodity rates, subject to various minima and exceptions. From Lexington, Va. — To 60 per cent, points and higher, Baltimore commodity rates, sub- ject to Virginia cities — Pittsburgh rates as minima, with various ex- ceptions. From Virginia cities — To 60 per cent, points and higher, Baltimore commodity rates, sub- ject to various minima and exceptions. IV. — CLASS AND COMMODITY RATES BETWEEN POINTS IN TRUNK LINE TERRITORY. Between New York, Philadelphia and Baltimore rate points and — 60 per cent, of New York-Chicago rates. Between Philadelphia rate points and Pittsburgh and Erie rate points — Classes 1 2 3 4 5 6 Arbitraries of 6 6 2 2 2 2 lower than rates between New York and Pittsburgh or Erie. Between Baltimore rate points and Pittsburgh and Erie rate points — Classes 1 2 3 4 5 6 Arbitraries of 8 8 3 3 3 3 lower than rates between New York and Pittsburgh or Erie. Between New York, Philadelphia and Baltimore rate points and Buffalo rate points — Philadelphia-Erie rates. From Albany and Utica rate points — To Pittsburgh and Erie rate points — class rates, Philadelphia to Pittsburgh or Erie rates ; connnodity rates, 80 per cent, of New York to Pittsburgh or Erie rates. 470 ATLANTIC PORT DIFFERENTIALS From Pittsburgh rate points — To Albany rate points, Pittsburgh to New York rates. From Erie rate points — To Albany rate points, 92 per cent, of Erie to New York rates. From Pittsburgh rate points — To Utica rate points, 92 per cent, of Pittsburgh to New York rates. From Erie rate points — To Utica rate points, 80 per cent, of Erie to New York rates. From Syracuse and Rochester rate points — To Pittsburgh and Erie rate points — class rates, Syracuse to Cleve- land rates; commodity rates, 70 per cent, of New York to Pittsburgh or Erie rates. From Pittsburgh rate points — To Syracuse rate points, 84 per cent, of Pittsburgh to New York rates. To Rochester rate points, 72 per cent, of Pittsburgh to New York rates. From Erie rate points — To Syracuse rate points, 75 per cent, of Erie to New York rates. To Rochester rate points, 62 per cent, of Erie to New York rates. Between Boston rate points and Pittsburgh-Erie rate points — Classes 1 2 3 4 5 6 Arbitraries of 5 4 3 3 2^2 higher than New York-Pittsburgh or Erie rates. Between Boston rate points and Buffalo rate points — Classes 1 2 3 4 5 6 Arbitraries of 5 5 2^ 2i^ 2i^ 2 higher than New York-Buffalo rates. Between Pittsburgh and Virgiviia cities — Columbus to Baltimore basis. Between Rouses' Point rate points and points in trunk line territory — same as between Sherbrooke rate points in New England and trunk line territory points. Between Buffalo, Dunhirh and interior New York state points and — " Classes 1 2 3 4 5 6 Alexandria, Va., and Washington, D. C 10 8 6 6 5 5 Quantico, Va 13 10 8 6 5 5 Virginia cities 20 17 13 9 8 6 over Baltimore rates. APPENDIX 471 V. CLASS AND COMMODITY RATES FROM TRUNK LINE TERRITORY TO POINTS IN NEW ENGLAND, INCLUDING EASTERN CANADIAN POINTS ON THE BOSTON it MAINE AND MAINE CENTRAL RAILROADS. From Fittshurgh and Eric rate points — To New York and Pelliaiii rate points, 60 per cent, of Chicago to New York rates. To Hartford, Boston, Portland and Brunswick rate territories Classes 1 2 :? 4 5 6 Arbitraries of 5 4 .3 3 2y, 2 higher than Pittsburgh or Erie to New York rates. To Sherbrooke or Woodsville rate points in the United States, Cleve- land to Boston rates. To Sherbrooke rate points in Canada, Toledo to Boston rates. From Buffalo rate territory — To New York and Pel ham rate points, Buffalo to New York rates. To Hartford, Boston, Portland and Brunswick rate points — Classes 1 2 3 4 5 6 Arbitraries 5 5 2i^ 2^ 2t/^ 2 higher than Buffalo to New York rates. To Woodsville and Sherbrooke rate points. Pittsburgh or Erie to . Boston rates. VI. — FROM POINTS IN CENTRAL FREIGHT ASSOCIATION TERRITORY, ILLINOIS AND MISSISSIPPI RIVER POINTS CLASS RATES. To Boston, Mass. Classes 1 2 3 4 5 6 Cents 7 6 5 4 3 2 over New York. To Rockland, Me., Boston rates, with Cleveland to Boston rates as minima. To Stanstead, Quebec, Boston rates, with Toledo to Boston rates as minima. To Baltimore, Md. Classes 1 2 3 4 5 6 Cents 3 3 3 3 3 3 under New York. To Philaxielphia, Pa. Classes 1 2 3 4 5 6 Cents 2 2 2 2 2 2 under New York. 472 ATLANTIC PORT DIFFERENTIALS From and to the following points rates will be the stated percentages of New York rates, except as shown : From 661^ From 72 From 79 pe - cent, to per cent, to per cent, to From 71 per cent. 78 per cent. 100 per cent. points joints, points. points, over both both both 100 per ir elusive. inclusive. inclusive. cent. Per cent. Per cent. Per cent. Per cent. Albany, N. Y 96 9(i 96 96 Mount Morris, N. Y. *63 *6S 74 76 Rochester, N. Y ■ • Cumberland, Md.f . •1 74 76 80 84 Syracuse, N. Y • -J Utica, N. Y 83 87 90 91 To Emporium, Pa., same as to Rochester, N. Y. *From 66>2 per cent, to 78 per cent, points, both inclusive, to Mount ]\Iorris and Rochester, N. Y., and points taking ]\Iount ]\Iorris or Rochester rates Classes 1 2 3 4 5 6 Cents 3 3 2 2 1 1 over Buffalo. f Johnstown, Pa., rates as minima. VII. — LIVE STOCK AND DRESSED MEAT RATES. To Boston, Mass., same as to New' York. To Baltimore, ]\Id., 3 cents less than to New York. To Philadelphia, Pa., 2 cents less than to New York. To Albany, Cumberland, Mount Morris, Rochester, S.yracuse, Utica and points taking same rates, percentages for class rates will apply, except : From Q&lA per cent, to 78 per cent, points, both inclusive, in car- loads, to j\Iount IMorris and Rochester, and points taking same rates, calves, cattle, hogs and sheep, 1 cent; horses, 3 cents, and dressed meats, 2 cents over Buffalo. From Indiana, Illinois and Kentucky points taking higher than 100 per cent, of Chicago to New York rates to Baltimore, Md. ; Boston, Mass., New^ York, N. Y., and Philadelphia, Pa., on cattle, horses, mules and sheep, also dressed beef, dressed hogs and dressed sheep, carloads : From points over 100 per cent, to and including 108 per cent. From points over 108 per cent, to and including 110 per cent. From points over 110 per cent, to and including 112 per cent. From points over 112 per cent, to and including 117 per cent. Over Chicago. 2 3 4 On cattle, horses, mules and sheep, also on dressed beef, dressed hogs and dressed sheep, carloads, to interior eastern points, established percentages of the New York rates. APPENDIX 473 On live stock, carloads, to Virginia points: (a) From 60 per cent, to and including 76 per cent, points, 76 per cent, of Chicago-New York rates, less Baltimore differential of 3 cents, (b) From 77 per cent, to 87 per cent, points, inclusive, 87 per cent, of Chicago-New York rates, less Baltimore differential of 3 cents. From 88 per cent, points and higher, established percentage of Chi- cago to New York rates, less 3 cents, except that on horses and mules New York rates apply. From Illinois, Indiana and Kentucky points taking higher than 100 per cent. : On calves, cattle, lambs, and sheep, carloads : Over the Chicago- Virginia points rates. Cents. From points over 100 per cent, to and ineliuling lOS per cent. 2 From points over 108 per cent, to and including 110 per cent. 3 From points over 110 per cent, to and including 112 per cent. 4 From points over 112 per cent, to and including 117 per cent. 5 On horses and mules, carloads, from points taking higlier than 100 per cent., New York rates as minima. VIII. — COMMODITY RATES. To Boston, Mass., class differentials over New York rates when the rate of New York is same as the standard class rate. If commodity rate to New York is not same as standard class rate, commodity rate to Boston will be the differential for the next higher class than that indicated by the New York rate. To Rockland, Me., and Stanstead, Quebec, same rules as provided above for class rates. To Baltimore, Md., 3 cents, and to Philadelphia, Pa., 2 cents lower than to New York. To Albany, Cumberland, Mount Morris, Rochester, Syracuse, Utica and interior points taking same rates, class rate percentages of the New York rates. From 66>2 per cent, to 78 per cent, points, both inclusive, to Roch- ester and Mount Morris, N. Y., and points taking Rochester rates, Buffalo rates plus arbitrary for class that is most nearly approximated by the New York commodity rate, but not to exceed rates from or to points beyond. Minimum rates to Rochester, Syracuse and same rate points may be : (a) Basis less than 20 cents, Chicago to New York, from 66>4 per cent, points or higher Baltimore rates. (See Note 1.) (b) Basis of 20 cents or higher Chicago to New York, from points 474 ATLANTIC PORT DIFFERENTIALS taking 66>4 per cent, or higher, Baltimore rates on basis 19>4 cents Chicago to New York. (See Note 1.) Note 1. — These rules will not apply on blocks, asphalt paving, fur- nace, or tank ; brick, building, fire, furnace, hollow, paving, pressed, salt-glazed, sand lime, or tank; clay, all kinds, including fire; con- duits, brick or clay ; curbing, vitrified ; fireproofing, clay ; flue lining ; guards, cattle, clay; heads, stopper, clay; kaolin; shale, slabs, tile; sleeves, clay ; tuyeres, clay. IX. — COTTON, COTTON LINTERS AND BEGINS. To Boston, Mass., 5 cents higher than to New York. To Baltimore, Md., 3 cents less than to New York. To Philadelphia, Pa., 2 cents less than to New York. To Albany, Rochester, Syracuse and Utica, 5 cents less than to New York. X. — GRAIN AND GRAIN PRODUCTS. DOMESTIC. To Baltimore, Md., 3 cents under New York. To Boston, Mass., 2 cents over New York. To Newport News and Norfolk, Va., same as to Baltimore, except as otherwise provided herein for rates to Virginia cities. To Philadelphia, Pa., 2 cents under New York. To Rockland, Me., and Stanstead, Quebec, same rules as apply to class rate traffic. The following percentages of the rate to New York will apph' from and to the points named : To To To Cumber- Eoches- To To Alb'any, land, ter, Syracuse, Utica, From— N. Y. Md. N. Y.* N. Y.* N. Y. Pet. Pet. Pet. Pet. GrouTl ■.■.■.■.■;.■.■.■.■.■.} '' ** ^4 80 90 Group 2 96 * ' 74 80 90 Groups 96 ** 74 80 90 Group 4 96 *"" 74 80 90 Group 4-A 96 ** 76 84 91 Group 5 96 ** 74 80 90 Group 6 96 ** 74 80 90 Group 7 96 ** 74 80 90 Group 8 96 ** 74 80 90 Group 9 96 *^ 68 76 87 Group 9-A 96 ** 74 80 90 Group 9-B 96 ** 74 80 90 Group 10 96 ** 68 76 87 Group 11 96 ** 68 76 87 Group 12 96 ** 63 74 83 Group 13 96 ** 74 80 90 Group 14 96 ** 74 80 90 Group 15 96 ** 74 80 91 *Baltimore rates as minima to Rochester and Syracuse. **Deduct one-half cent from the Baltimore rates, observing Johns- town rates as minima. APPENDIX 475 GRAIN FOR EXPORT. To Baltimore, V/^ cents under New York. To Boston, same as New York. To Philadelphia, 1 cent under New York. GRAIN PRODUCTS (EXCEPT FLOUR ) FOR EXPORT. To Baltimore, 3 cents under New York. To Boston, same as New York. To Philadelphia, 2 cents under New York. FLOUR FOR EXPORT. To Baltimore, same as export ' ' grain product ' ' rate. To Boston, same as New York. To New York, 2 cents over Baltimore. To Philadelphia. 1 cent over Baltimore. XI. — CLASS, COMMODITY, DRESSED MEATS AND LIVE STOCK. From points named below in the following groups : Group Group Group Group 1 2 4 5 Percentage of Chicago to New To — York rates (see Note 2). New York, N. Y 60 60 60 60 Percentage of New York rates. Albany, N. Y So 92 92 100 Cumberland, M(i.*f Emporium, Pa. (see Note 1) 60 62 62 72 Syracuse, N. Y 75 75 78 84 Utica, N. Y 80 80 85 92 Mt. Morris, N. Y. (see Note 1) 55 62 62 72 Rochester, N. Y. (see Note 1) 55 62 62 72 Hagerstown, Md.J. .Baltimore, Md., rates with Norfolk, Va., rates as minima. Rockland, Me Cleveland, Ohio, to Boston, Mass., rates as minima. Standstead, Que Toledo, OhiOj to Boston, Mass., rates as minima. *Eates from &Qy2 per cent, points as maxima. t Grain, grain products, and bj^-products of grain, ^^ cent less than Baltimore ; Johnstown rates as minima. JVia Norfolk & Western Ry. only. From groups 1, 2, 4 and 5 to Boston, Mass., class and commodity rates will be — Classes 1 2 3 4 5 6 Cents 5 4 3 3 2i^2 higher than to New York. On dressed meats and live stock, carloads, from all groups to Boston, same as to NeAv York, From points named in groups 1, 2, 4 and 5 to Philadelphia, class and commodity rates will be — Classes 1 2 3 4 5 6 Cents 6 6 2 2 2 2 476 ATLANTIC PORT DIFFERENTIALS less than to New York. On dressed meats and live stock, carloads, from all groups to Philadelphia, 2 cents less than to New York. From points named in group 1 to Baltimore, class' and commodity rates will be — Classes 1 2 3 4 5 6 Cents 6 6 2 2 2 2 less than to New York ; from groups 2, 4, and 5 to Baltimore, will be — Classes 1 2 3 4 5 6 Cents 8 8 3 3 3 3 less than to New York. On dressed meats and live stock, carloads, from all groups to Baltimore, 3 cents less than to New York. Station. Group No. Station. Group No. Brockton, N. Y 1 .Taniestown, N. Y 1 Butler, Pa 5 Mayville, N. Y 1 Corrv, Pa 2 Meadville, Pa 4 Dayton, N. Y 1 Oil City, Pa 4 Dunkirk, N. Y 1 Titusville, Pa 4 Erie, Pa 2 Union City, Pa 2 Falconer Junction, N. Y 1 Warren, Pa 2 Franklin, Pa 4 Westfield, N. Y 1 Irvineton, N. Y 2 Note 1. — Rochester, Emporium, Mount ]\Iorris and points taking same rates: Classes 1 2 3 4 .5 6 Cents 4 3 2 2 1 1 over BuflPalo, but not higher than from or to points beyond. Note 2. — Except on iron and steel articles, grain and grain prod- ucts, rates from Mahoning and Shenango Valleys as maxima from 60 per cent, points. TO VIRGINIA CITIES. Baltimore rates will be minima to Virginia cities proper, except (a) from points taking less than 77 per cent, of Chicago to New York rates, and (b) from points taking higher than 77 per cent, of Chicago to New York rates, located in territory on and east of Norfolk & Western Railway, Columbus to Portsmouth, Ohio, and south of Pittsburgh, Cin- cinnati, Chicago & St. Louis Railway, Columbus to Steubenville, Ohio, inclusive, to Virginia cities proper, Columbus, Ohio, to Baltimore proper rates as minima. TO VIRGINIAN RAILWAY STATIONS. To first station south of Deepwater, W. Va., to and including Lester, W. Va. : From points on and west of Cleveland-Marietta-Belpre line described in Note 1, Norfolk rates, plus Classes 1 2 3 4 5 6 Cents 6 5 4 3 2 2 APPENDIX 477 From points east of Cleveland-Marietta-Belpre line described in Note 1, same as from Baltimore. To points south and east of Lester, W. Va., to but not including Salem, Va. : From points on and west of the Cleveland-IMarietta-Bel- pre line described in Note 1, Norfolk rates plus Classes 1 2 3 4 5 6 Cents 12 10 8 7 6 5 From points east of Cleveland-Marietta-Belpre line described in Note 1, same as from Baltimore. To Salem, Va. : From points on and west of Cleveland-Marietta- Belpre line described in Note 1, Norfolk rates. From points east o£ Cleveland-INIarietta-Belpre line described in Note 1, Baltimore to Salem, Va., rates. To Roanoke, Va. : From Central Freight Association and Illinois points, Norfolk rates. To points east of Roanoke, Va., to and including Altnvista, Va. : From points on and west of Cleveland-]Marietta-Belpre line described in Note 1, Norfolk rates. From points east of Cleveland-]\Iarietta- Belpre line described in Note 1, rate basis as per Note 2. To points east of Altavista, Va., through, but not including Suffolk, Va., to, but not including Norfolk, Va. : From points on and west of Cleveland-Marietta-Belpre line described in Note 1, Norfolk rates plus Classes 1 2 3 4 5 6 Cents 12 10 8 7 6 5 From points east of Cleveland-Marietta-Belpre line described in Note 1, rate basis as per Note 2. To Alberta, Brookneal, Jarratt and jNIeherrin, Va., on shipments destined beyond: From points on and west of Cleveland-Marietta- Belpre line described in Note 1, Norfolk rates. To Norfolk, Sewells Point and Suffolk, Va. : From Central Freight Association and Illinois points, Norfolk rates. Note 1. — Description of Cleveland-Marietta-Belpre line: Begin- ning at and including Cleveland, Ohio ; thence via and including points on the lines of the Pennsylvania Company to and including Hudson, Ohio; thence via and including points on the Cleveland, Akron & Columbus Railway, to and including Akron, Ohio; thence via and including points on the Baltimore & Ohio Railroad, to and in- cluding Canton, Ohio; thence via and including points on the Balti- more and Ohio Railroad to and including Valley Junction, Ohio; thence via and including points on the lines of the Pennsylvania Com- pany, to and including Canal Dover, Ohio: thence via and including points on the Baltimore & Ohio Railroad, to Uhrichs- ville, Ohio; thence via and including points on the Pittsburgh, 478 ATLANTIC PORT DIFFERENTIALS Cincinnati, Chicago & St. Louis Railway, to and including New Com- erstown, Ohio; thence via and including points on the lines of the Pennsylvania Company, to and including Marietta, Ohio ; thence via and including points on the Baltimore & Ohio Southwestern Railroad, to and including Belpre, Ohio. Note 2. — Add following arbitraries, governed by Southern Classi- fication, to Norfolk, Va., rates: Classes ...12 3 45 6ABCDEFH Cents ....20 16 13 11 9 8 7 8 7 7 9 14 11 Arbitraries for commodities announced in Virginian Railway Freight Tariff I. C. C. No. 760 may be used in arriving at through joint rates from points east of Cleveland-Marietta-Belpre line described in Note 1. TO BELINGTON, ELKINS, ETC. Class and commodity rates to Belington and Elkins, W. Va., and points taken same rates, same as to Cumberland, Md., subject to exist- ing rule as to minimum rates. This basis applies from points west of Ohio River and Ohio-Pennsylvania state line taking rates higher than from Pittsburgh, Allegheny, Pittsburgh, North Side, Bellaire, Wheel- ing or Parkersburg proper, also from points east of Ohio-Pennsylvania state line located on and west of Bessemer & Lake Erie Railroad, sub- ject to minimum basis of 17^2 cents, Chicago to New York. XII. — IRON AND STEEL ARTICLES, BILLETS, PIG IRON AND ARTICLES TAKING SAME RATES. FROM CLEVELAND GROUP. Iron and steel articles classified fourth, „.,, fifth, and sixth class. Billets, pig iron, etc., per ton. Albany, N. Y 2 cents higher than Pittsburgh 30 cents higher than Pittsburgh. Baltimore, Md 3 cents higher than Pittsburgh RO cents higher than Pittsburgh. Binghamton, N. Y. . Same as Pittsburgh Same as Pittsburgh. Boston, Mass 3 cents higher than Pittsburgh fio cents higher than Pittsburgh. Burlington, Vt 3 cents higher than Pittsburgh fin cents higher than Pittsburgh. Corning, N. Y. , Same as Pittsburgh Same as Pittsburgh. Elmira, N. Y Same as Pittsburgh Same as Pittsburgh. Geneva, N. Y Same as Pittsburgh Same as Pittsburgh. Hornellsville, N. Y. . Same as Pittsburgh Same as Pittsburgh. Ithaca, N. Y Same as Pittsburgh Same as Pittsburgh. Lexington, Va Same as Pittsburgh 2n cents higher than Pittsburgh. Lynchburg, Va Same as Pittsburgh 20 cents higher than Pittsburgh. Mount Morris, N. Y. Same as Pittsburgh Same as Pittsburgh. Newport News, Va. . Same as to Lexington, Va Same as to Lexington, Va. New York, N. Y. . . 3 cents higher than Pittsburgh 60 cents higher than Pittsburgh. Norfolk, Va Same as to Lexington, Va Same as to Lexington, Va. Old Point Comfort, Va Same as to Lexington, Va Same as to Lexington, Va. Owego, N. Y Same as Pittsburgh Same as Pittsburgh. Philadelphia, Pa. . . 3 cents higher than Pittsburgh 60 cents higher than Pittsburgh. Portsmouth. Va Same as to Lexington, Va Same as to Lexington, Va. Punxsutawney, Pa. . Same as to Rochester, N. Y. . . Same as to Rochester, N. Y. Richmond, Va Same as to Lexington, Va Same as to Lexington, Va. Richfield Springs, N. Y 2 cents higher than Pittsburgh 30 cents higher than Pittsburgh. Rochester, N. Y. ... Same as Pittsburgh Same as Pittsburgh. Rockland^, Me Same as to Boston Same as to Boston. Stanstead, Quebec .. Same as from Toledo to Boston Same as from Toledo to Boston. Syracuse, N. Y Same as Pittsburgh Same as Pittsburgh. Utica, N. Y Same as Pittsburgh Same as Pittsburgh. Waverly, N. Y Same as Pittsburgh Same as Pittsburgh. Wayland, N. Y Same as Pittsburgh Same as Pittsburgh. APPENDIX 47!J FROM YOUNGSTOWN GROUP. Albany, N. Y 1 cent higher than Pittsburgh 20 cents higher than Pittsburgh Baltimore, Md 2 cents higher than Pittsburgh -iCi cents higher than Pittsburgh Binghamton, N. Y. . Same as Pittsburgh Same as Pittsburgh. Boston, Mass 2 cents higher than Pittsburgh 4n cents higher than Pittsburgh Burlington, Vt 2 cents higher than Pittsburgh 40 cents higher than Pittsburgh Corning, N. Y Same as Pittsburgh Same as Pittsburgh. Elmira, N. Y Same as Pittsburgh Same as Pittsburgh. Geneva, N. Y Same as Pittsburgh Same as Pittsburgh. Hornellsville, N. Y. . i^ cent less than Pittsburgh ..10 cents less than Pittsburgh. Ithaca, N. Y Same as Pittsburgh Same as Pittsburgh. Lexington, Va Same as Pittsburgh 20 cents higher than Pittsburgh Lynchburg, Va Same as Pittsburgh 20 cents higher than Pittsburgh. Mount Morris, N. Y. I/2 cent less than Pittsburgh . 10 cents less than Pittsburgh. Newport News, Va. . Same as to Lexington, Va Same as to Lexington, Va. New York. N. Y. . . 2 cents higher than Pittsburgh 40 cents higher than Pittsburgh. Norfolk, Va Same as to Lexington, Va Same as to Lexington, Va Old Point Comfort, Va Same as to Lexington, Va Same as to Lexington, Va. Owego, N. Y Same as Pittsburgh Same as Pittsburgh. Philadelphia, Pa. ..2 cents higher than Pittsburgh 40 cents higher than Pittsburgh. Portsmouth. Va Same as to Lexington, Va Same as to Lexington, Va. Punxsutawney, Pa. . Same as to Rochester, N. Y. . . Same as to Rochester, X. Y. Richmond, Va Same as to Lexington, Va Same as to Lexington, Va Richfield Springs, N. Y 1 cent higher than Pittsburgh . 20 cents higher than Pittsburgh Rochester, N. Y. ... ^4 cent less than Pittsburgh ... 10 cents less than Pittsburgh Rockland, Me Same as from Cleveland to Bos- ton •,• Same as from Cleveland to Boston. Stanstead, Quebec .. Same as from Toledo to Boston Same as from Toledo to Boston. Syracuse, N. Y fame as from Pittsburgh Same as from Pittsburgh. Utica, N. Y 4th and .5th class same as Pitts- burgh : 6th class, i^ cent less 10 cents less than Pittsburgh, than Pittsburgh 10 cents less than Pittsburgh. Waverly, N. Y Same as Pittsburgh Same as Pittsburgh. Wayland, N. Y V2 cent less than Pittsburgh ... 10 cents less than Pittsburgh. FROM MARIETTA AND ZANESVILLE GROUPS. Albany, N. Y 3 cents higher than Pittsburgh 60 cents higher than Pittsburgh. Baltimore, Md 'iy, cents higher than Pitts- burgh 70 cents higher than Pittsburgh. Boston, Mass 3I/2 cents higher than Pitts- burgh 70 cents higher than Pittsburgh. New York, N. Y. ... 3i,4 cents higher than Pitts- burgh 70 cents higher than Pittsburgh. Philadelphia, Pa. ... 31/2 cents higher than Pitts- burgh 70 cents higher than Pittsburgh. Rochester, N. Y 2 cents higher than Pittsburgh* 40 cents higher than Pittsburgh. Syracuse, N. Y 1 cent higher than Pittsburgh. 20 cents higher than Pittsburgh. Utica. N. Y 1 cent higher than Pittsburgh. 20 cents higher than Pittsburgh. Virginia cities Columbus, Ohio, to Baltimore rates 20 cents higher than Pittsburgh. ♦Fourth class, 3 cents higher than Pittsburgh. Will also apply on less-than-carload shipments of articles specified in special iron and steel list. From Marietta and Zanesville groups, the rates subject to the basis of 74 per cent, of rates current from Chicago to New York City apply as maxima. On iron and steel articles classified fourth, fifth and sixth class, re- spectively, billets, pig iron and articles groups therewith : From Wheeling, Va., group to eastern base points named above, same as from Pittsburgh. From Conneaut Lake, Pa.; Dunkirk, N. Y. ; Erie, Exposition Park, Franklin, Lj-nces Junction. ^Meadville. Oil City, Watsons Run, West Union and West Vernon, Pa., Pitt.sburgh rates, except that rates from Youngstown, Ohio, will be maxima. 480 ATLANTIC PORT DIFFERENTIALS On iron and steel billets, pig iron and articles taking the same rates to Virginia cities from Ashland, Ky., and Tronton, Ohio, same as from Pittsburgh ; from Columbus, Ohio, 20 cents per ton over Pittsburgh. ON BILLETS, PIG IBON AND ARTICLES TAKING SAME RATE. From To — Rate bases. Akron, O Alliance, O Ashtabula, O Barberton, O Cambridge, O Canal Dover, Canton, O Cleveland, Coshocton, O Dunkirk, N. Y Elvria, O Erie, Pa Girard, Pa Hudson, Kent, O Lorain, O Mahoning and Shenango Valleys Massillon, O Medina, O Mineral Point, Minerva, O New Conierstown, O New Philadelphia, O. . . . Oneida, O Orrville, O Painesville, O Ravenna, O Zoar, O Bridgeport, Brilliant, O Irondale, O Martins Ferry, Mingo .Junction, O Smith Ferry, O Steubenville, O Wellsville, " Harrisburg, Pa. . . . Milton, Pa -Northumberland, Pa. Steelton, Pa Sunbury, Pa Williamsport, Pa.. . . j-Bal timers. Harrisburg, Pa I Milton, Pa I Northumberland, Pa. I Steelton, Pa Sunbury, Pa Williamsport, Pa. . . .1 Baltimore, less 10 , I cents per ton (gross . j or net, as case may . (be), Wheeling, W. . I Va., to Syracuse, N. .J Y., rates as maxima. J TO CUMBERLAND, MD. On iron and steel billets, pig iron, tin ashes and articles taking same rates, from points west of a line drawn from Sandusky, Ohio, through Kimball, Monroeville, Chicago Junction, Plymouth, Shelby, IMansfield, i\Iount Vernon, Newark and New Lexington, Ohio, through Coming and Athens, Ohio, to the Ohio River at Pomeroy, Ohio, to Cumberland, Md., 60 cents per ton, net or gross, higher than to Pittsburgh, Pa. IRON AND STEEL BILLETS, PIG IRON, ETC. Except from Cleveland, the ]\Iahoning and Shenango Valleys and other points basing on Pittsburgh, Pa., rates on pig iron, iron and APPENDIX 481 steel billets, and articles taking same rates may be computed as fol- lows: When a basing rate per gross ton is established from Chicago, 111., to New York, obtain rates from Chicago by ascertaining the rate in cents per 100 pounds from Chicago to New York, using weight of 2,000 pounds per ton and retaining the actual fractions, after which apply regular percentage basis. Xni. — TO CANADIAN POINTS. To Canadian points mentioned below and points taking the same rates : From points east of Cincinnati taking Pittsburgh rates via Detroit to stations east of Toronto, through rates from Cincinnati will be minima. From points taking less than 78 per cent, of Chicago to New York rates, 78 per cent, point rates w^ill be minima. From points taking percentages of Chicago to New York class rates, the following percentages of Montreal standard rates, subject to ]\Ion- treal rates as maxima to stations in direct line : Classes and commoclities. To— Agincourt, Ont 1 Myrtle, Ont |- Oshawa, Ont j Cobourg, Ont Lindsay, Ont 1 Peterboro, Ont Central Ontario Jet., Ont | Trenton, Ont |- Sharbot Lake, Ont Napanee, Ont Kingston, Ont To— Agincourt, Ont Myrtle, Ont Oshawa, Ont Cobourg, Ont Lindsay, Ont Peterboro, Ont Central Ontario Jet., Ont. Trenton, Ont Sharbot Lake, Ont Napanee, Ont Kingston, Ont Under 78 pet. Pet. 80 90 78 per 79 to 100 Over 100 pet. pet. pet. Pet. Pet. Pet. 68 76 87 74 80 90 84 91 Live stoek and dressed meats, carloads. 78 79 to 100 Over 100 pet. pet. pet. Pet. Pet. Pet. 68 87 96 74 90 96 76 91 96 31 482 ATLANTIC PORT DIFFERENTIALS ■opj tH — — ^ to* za X 0) o b k. 0) > c O .5 3 p. TS O 3 >< ^2: IP . > M " t>^ O c3 .2 «{ cs H CU o m n ? «J>-| < • ^'^ "i .5 t*— - ^^ *i ™ cd a -^ ( -S'g 0.2 5 c- T33-? "^ £ ^i -2i °" ja ni»- m a =^ ^ aS«S£Sll^ o — >- fi &. a. >aE o"2 i^5 O »- t. o X a o 37° ^ 3j.ii pa o ■" rtX; c X"3 ., a> C a xS^ ?: Ki.^ o.cs = c o o-- 1"! M - o g 01 ;o ^1 -^ O c ■ -,^^ o . . ^ O w *J '•'"^ s d X c c oj a; ^ ■o ^JcZ 3 O •sis E o « >o eS ■" c:; ■a o C 3- M Q^ ^c-' u c^=o rti cs *- a" a; o c £ >. csS 532 5-0 t t.00 . 3 a) J - = « a: (3 '- : cc nil -.8 -^ st-'C o^ • coio ■£«&: - o~ O a » c . o~2.c c: 2< CO o o CS - - e P" ■" -^ OC ^ ;:?>-;£ 2; -g a : o cS C M o s) 1 M i' 5 •'-' c^ N 5 :j w O »j-^ ~ Cft-CUCC^ - APPENDIX 483 h CM c-S "^ ^D C! "^ CC CQ '!^ CC Tf "^ ? f^ O e3 «OOOrt^O rtWI^ ci«=S c3«=S Bi==;2; eS V .-iC ^C i^C ^c ; S 'r t- § 's- c^ S OS t. To—' rH r-( »^ C3 o c „-■- o ^ ■HTi "Ht; <^^ti «^t; S u =« "H u « t. CS ^ " t3 = oi .XI o '- o c ui-a o c c ca a; CO m — t. ^ aj ao d M 3 484 ATLANTIC PORT DIFFERENTIALS PIG IRON, CARLOADS. O .Th bJD > .S'3 J3 O To— Agincourt, Ontario 1 Myrtle, Ontario V 74 Oshawa, Ontario J Cobourg, Ontario 80 Lindsay, Ontario "1 Peterboro, Ontario Central Ontario Junction, Ont.. | Trenton, Ontario J- 90 Sharbot Lake, Ontario Napanee, Ontario Kingston, Ontario J Broekville, Ontario ^ Prescott, Ontario i Smiths Falls, Ontario f Carleton Junction, Ontario . . . . | Ottawa, Ontario J Montreal, Ontario "1 St. Johns, Quebec !- Sherbrooke, Quebec j cS ■ C3 g c « 2 s > HP Q Percentages of the Montreal Rates. 68 80 74 80 90 76 84 91 Montreal Rates. Boston Rates. 76 84 91 76 84 91 XIV. — FROM MEMPHIS, TENN. Established arbitraries over rates from St. Louis, Mo. XV. — DIFFERENTIALS VIA BREAK BULK ACROSS LAKE MICHIGAN. From west bank Lake Michigan ports via routes operating across Lake IMichigan, break bulk rates may be the established differentials under the rates via all-rail routes. XVI. — LEXINGTON BASIS FOR RATES. Rates from Lexington, Ky., group, and proportior al rates from Cin- cinnati, which are proportions of through joint rates from Lexington, Ky., may be continued on existing bases. XVII. — LUMBER, ETC., FROM CINCINNATI, ETC. On lumber and articles grouped therewith, rates from Cincinnati and points in Ohio, AVest Virginia and Kentucky taking the same rates on lumber, may be proportions accruing north of Cincinnati of through joint rates from Lexington, Ky. APPENDIX 485 Xyjll. — LUMBER, SASH. DOORS. BLINDS. ETC.. FROM MICHIGAN. Ou lumber and artie-les taking same rates, carloads, from points in the lower peninsula of Michigan : To New York City, 2 cents under sixth-class rates. On sash, doors, blinds, etc.. carload, to New York City, 3 cents under fifth-class rates. To interior base points in New York and Pennsylvania and to Vir- ginia points, bases as provided herein for class rates. XIX. — COMMODITY RATES SAME AS CLASS RATES. Specific commodity rates which are now the same as the class rates from and to the same points may be increased the same amounts as such class rates are increased. XX. COMMODITY RATES NOT SUBJECT TO BASING RATE, CHICAGO TO NEW YORK. Commodity rates not made subject to a basing rate from Chicago to New York may be increased 5 per cent, from each point of origin from which published to New York, and the rates to other eastern basing points niSLX be based thereon. XXI. — BRICK. CLAY. ETC. On brick, clay and articles grouped therewith in present taritfs to points in Central Freight Association territory and Illinois and ou the Mississippi Kiver, rates from western Pennsylvania, West Virginia, central, southern and eastern Ohio, and the Ashland, Ky., group may be the established differentials under Pittsburgh. XXII. — COMPUTING RATES PER TON, Rates per ton may be increased on basis per 100 pounds, using 2,000 pounds as the ton. ' ' TABLE OF CASES EEPORTED. Atlantic City Eailroad Co., et ah, Board of Trade of the City of Chicago, V. (20 I. C. C. 504) 191], 357 Baltimore & Ohio Railroad Company, et al, New York Produce Exc-hango, v. (7 I. C. C. 612), 1898, 157 Board of Trade of Chicago v. Atlantic City Railroad Co., et al. (20 I. C. C. 504), 1911 357 Boston & Albany R. Co., Kenible v. (8 I. C. C. 110) 1889, 231 Boston Chamber of Commerce v. Lake Shore & Michigan Southern Ry., ct al, (1 I. C. C. 436), 1888, Ill Boston Chamber of Commerce v. New York Central & Hudson River R. R. Co., et al. (1 L C. C. 436) 1888, Ill Chamber of Commerce of the State of New York, et al., v. New York Central & Hudson River Railroad Company, ct al. (24 I. C. C. 55) 1912, 377 Chamber of Commerce of the State of New York, et al., v. New York Central & Hudson River Railroad Company (24 I. C. C. 674) 1912, 409 Chamber of Commerce of the State of New York v. New York Central & Ilml- son River Railroad Company (27 I. C. C. 238) 1913 419 Grand Trunk Railway Co., et al. Saginaw Board of Trade v. (17 ]. C. C. 128) 1909, 343 In the Matter of Differential Freight Rates to and from North Atlantic Ports (11 I. C. C. 13) 190.5, 283 In the Matter of Export Trade of Boston (1 I. C. C. 24), 1887, 105 In the Matter of Import Rates (24 I. C. C. 78), 1912, 403 In the Matter of Import Rates (24 I. C. C. 678"), I9I2, 415 In the Matter of Import Rates (27 I. C. C. 245), 1913, 429 Kemble v. Boston & Albany R. Co., et al, (8 I. C. C. 110), 1889, 231 Kemble v. Lake Shore & Michigan Southern Ry. Co., et al. (5 I. C. C. 166), 1892, 137 Lake Shore & Michigan Railroad Company, et al., Boston Chamber of Com- merce v. (II. C. C. 436), 1888, Ill Lake Shore & Michigan Southern Railway Company, et al, Toledo Produce Exchange v. (5 I. C. C. 166) 1892, 137 New York Central & Hudson River Railroad Company, et al., Boston Chamber of Commerce v. (1 I. C. C. 436) 1888, Ill New York Produce Exchange v. Baltimore & Ohio R. R. Co., et al., 7 I. C. C. 612 (1898), 157 487 488 ATLANTIC PORT DIFFERENTIALS New York Produce Exchange v. New York Central & Hudson River Railroad Company, et al. (20 I. C. C. 504) 1911, 357 New York Central & Hudson River R. R. Co.^ et al., New York Produce Ex- change V. (20 I. C. C. 504) 1911, 357 New York Central & Hudson River R. R. Co.^ et al, Chamber of Commerce of the State of New York v. (24 I. C. C. 55) 1912, 377 New York Central & Hudson River R. R. Company, Chamber of Commerce of the State of New York v. (24 I. C. C. 674) 1912, 409 New York Central & Hudson River R. R. Company, Chamber of Commerce of the State of New York v. (27 I. C. C. 238) 1913, 419 Saginaw Board of Trade v. Grand Trunk Railway Company, et al. (17 I. C. C. 128) 1909, 343 Toledo Produce Exchange v. Lake Shore & Michigan Southern Ry. Co., et al. (5 I. C. C. 166) 1892, 137 TABLE OF CASES CITED. Armour Packing Co., v. U. S. (.209 U. S. 56) 399 Banner Milling Case (19 I. C. C. 12S). 361 Banner Milling Case (14 I. C. C. 39S) 365, 366 Bigbee & "Warrior Rivers Packet Co. v. M. i O. R. R. (60 Fed. 545) 364 Board of Trade of Farmington, Etc.. v. The Chicago, Milwaukee i St. Paul R. R. Co. (1 I. C. C. 215), 126 Boston Chamber of Commerce v. L. S. i M. S. Ry. Co.. et al. (1 I. C. C. 436), 150, 153, 235 Chamber of Commerce of the State of Xew York v. X. Y. C. «Sr H. R. R. Co. (24 I. C. C. 674), 417. 41S. 431 Commercial Club of Omaha v. Chicago, Rock Island & P. R. Co. (6 I. C. C. 647), 215 Cosmopolitan Shipping Co. v. Hamburg- American P. Co. (13 I. C. C. 266),.. 399 Detroit Board of Trade v. Grand Trunk Ry. of Canada (2 I. C. C. 315), 350 Enterprise Mfg. Co. v. Georgia R. R. Co. (12 I. C. C. 451), 355 Federal Sugar Refining Co. v. B. &: O. R. R. Co. (17 I. C. C. 40), 391 Frt. Bureau of Cincinnati C. C. v. Cincinnati, X. 0. & T. P. R. Co. (7 I. C. C. 180), 215 Green Bay Bus. Men's Assn. v. L. S. & M. S. Ry. Co., ei aJ. (15 I. C. C. 59). 350 Indianapolis Freight Bureau v. C. C. C. & St. L. Ry. Co. (23 I. Cx C. 195),. . 401 In re Investigation of Advances in Rates (20 I. C. C. 243) 3S6 Investigation & Suspension Docket Xo. 26 (22 I. C. C. 604), 400 Interstate Commerce Commission v. Alabama Midland R. Co. (16S U. S. 144). 20S, 227 Interstate Commerce Commission v. B. & O. R. R. Co. (145 U. S. 263), 207 Interstate Commerce Commist^ion v. Texas & P. R. Co. (162 U. S. 197) 208 Import Rate Case, see Interstate Commerce Commission v. Texas & Pacific R. Co. In the Matter of Differential Freight Rates (11 I. C. C. 13), 375. 3S9 In the Matter of Export Trade of Boston (1 I. C. C. 24) 235, 327 In the Matter of Import Rates (24 I. C. C. 78), 3S1, 383, 402, 412, 413, 414, 424,425 In the Matter of Import Rates (24 I. C. C. 78 and 678), 424, 425 Jennison Case (18 I. C. C. 113), 365 Kemble v. Boston & Albany R. Co., et al. (8 I. C. C. 110), 327, 338 Kemble v. L. S. & M. S. R. Co. (5 I. C. C. 166) 235, 289 Xew York Board of Trade & Transportation v. Pennsylvania R. R. Co., et -ory ("oniiiiii^sioii to diH'eniu-eK in lates ;is iietwccri Atlantic jiorts, Tli reconiniended abolisiieil and percentage basis (Boston 110% of New York) ordered, !.")•_' prescribed (1912), 4(i'J relation of Interstate Commerce Commission to, in 1898 controversy,. .2(1(5, 2U7 general investigation by Interstate Conmierce Commission in li)i)4, . . . 286 causes of 1905 controversy, 286 alleged to divert traffic from New York, 297 to Boston 1882, 289 ; 1892, 140 at Philadelphia and Baltimore, 1905, 290 amount of, Eastbound, all-rail, domestic, 245 Eastbouud, all-rail, export, 246 Westbound, all-i-ail, domestic, 247 Westbound, all-rail, import, 249 Rail and lake, westbound, 249 Ex-Lake, from Lake Erie ])orts to Atlantic ports, 249 stated in currency, 324 to and from North Atlantic Ports, Memo., of Auditor, Interstate Com- merce Commission, 243' see Fink: Adjustment of transijortation rates to fealioard, 5, et scq. Differential Rate Agreement, provisions of, xv text, J 1 , ct seq. j^urpose of, 10, 293 provision for modification by notice, 3, 10 intended permanent, 3, 10 modification to be by nuitual agreen.ent, 3, 10 parties to, 3 agreements inconsistent with, annulled, 3 adopted, 1877, 10 provision for modification, 10 broken without attempting alteration by nutual agreement, 1880, 10 notice of withdrawal from, by New York Central, 1880, 10 recognizes fixed differences in inland rates based on prevailing ocean rates, 26 based on relative ocean rates, 394 reference to terminal charges at time of, 107 not considered lawful by the Interstate Commerce Commission, 401 not recognized by Interstate (Commerce Commission as lawful, 425 did not include Newport News and Norfolk, 383 Differentia!, Territory, described, < 101, 291, 380 Differentials ai)ply to traffic moving through, 324 Buffalo not in, 322 22% of imports through Boston for, 389 rates to and from in zones (percentage system), 385 Difficulties and Complications encountered in determining i-rojier and equitable adjustment of relative rates, 11 Direct Shipments for export, highly competitive, 438, 439 502 ATLANTIC PORT DIFFEREXTIALS Direct Shipments— ;Coniimied. no difficulty in fixing differential rates on, 439 Disadvantages op Water Haul at Baltimore and Philadelphia, 1()9, 327 Distribution op Trabfic, constancy of, due to certain laws and conditions, not accidental causes, ]-t in 1878-1880 satisfactory, 14 equitable, cannot be pre-determined, 11 due to railroad competition, 17 governed by certain laws and conditions, 15 conditions that control : 1. Eelative carrying capacity of transportation lires and their ter- minal facilities, 15 2. Storage capacity of private warehouses, 3 8 3. Established commercial relations of each city in this and foreign countries, 19 4. Location of the competing railroads, 19 5. Practice of competing railroads in attaching to, and retaining, shippers, 21 DisCRiMiNATJON, unjust, against ccmmunities must not be created by relative rates, 11 Differential Controversy produced rate wars, 324 in 1898 between New York, Philadelphia and Baltimore, IGl Distance, principle of, rejected by New York 80 principle of, for determining differential rates, 78 carriers allowed latitude in respect to disregarding, 215 said to be habitually disregarded, 214 frequently disregarded by carriers, 215 by water to foreign destinations, 297 not a circumstance without value in determining railroad tariffs, 80 an element in determining amount of rate, on assumption it corresponds with cost of service, 215 of least weight where competition most influential, 80 does not supply controlling principle, 80 principle of, does not stand test of competition, 80 relative, as measure of rates, 23 alone, cannot determine ex-lake differentials, 396 supposed to express cost of service, 292 to points of origin urged by Philadelphia and Baltimore, 214 percentages of, other ports from western i)oints to New York, 79 Buffalo to ports, 322, 395 short line, in 1882 from various western points to Atlantic ports, 79 short line Chicago to ports, 1905, 291 Chicago to New York and Boston, 152 from Chicago to ports, 1898, 165 to Boston from Chicago, 145 Division oi' Through Eate not to be considered, 153, 364 mileage for purpose of, 116 export rate is in essence, 240, 242, 328 unimportant in connection with through rate as unit, 126 difference is due to deduction of lighterage and wharfage before pro- rating, ; 121 INDEX 503 Davisiox OF TiiKoiHiu Katk — ('(tiiiiinud. agreed iipiui .■uul based on distance, 117 Chicago to Xew Vrnk and l!(.ston, J892, 147 Division of Traffic, ))uriio«e of differentials, '2'2:^, 385 differentials established with view of influencing, 326 iu 1879, results of, 21 at source proi)osed, 22, 23 Dockage expenses and port diarges less at Boston than New York, 174 Domestic Bate greater than ex]iort not unjust discrimination, 241 on grain more than export to jxirts, 399 Drayage charge at New York 422 East Boston, earnings on carhiad sliipnients to Boston and, 120 lighterage charges at, 147 Eastbound dead freight, points of origin of, 166 East and Westbound Traffic, greater movement eastbound, 86 differ iu character, 129 Economies in transportation by shipping grain in bulk, 4.t7 Elevator Charges, at Buffalo, 204; absorption of, by carrier, 360; included in ex-lake grain rate, 372 higher at Boston than Baltimore and Philadelphia, 322 Elevator Storage, capacity at ports, 1898, 200; ownersliip of, 201 Embargos, see Blockades. Expenditures, by United States for liarbor improvements at different ports, 217, 39.5 Equal Through Bates insisted on by New York merchants, . . . .' 37 there must be, 23 difficulties of, in trattic under domestic bills of lading, 26 based on lowest ocean rates, an insurmountable proposition, 25 objectionable to carriers, 25 protests against by Chambers of Commerce, 25 attempted iu 1876, 24 during Minimum Freight Agreement, 330 Equal Freight Bates to all the ports proposed by New York mer- chants, 18 (note) as between Boston and New York not supi)orted by several important elements, 126 must be, if equalizaticm of cost to be had, 176 to all seaboard ports, claimed just by New York Central, 1880, 11 Equalization of Conditions, no duty of railroads, 389 of cost of transjioration, purpose of. Differential Bate Agreement, ... 2 of advantages of transportation, a proper question, 331 of cost of exports means at least equal inland rates, 176 of inequalities, no business of common carriers 125 change in, as ground for withdrawing from Differential Kate Agree- ment by New York Central, 1880, 10 Equalization of Bates. Interstate Commerce Commission has no jurisdic- tion over, 399 through various ports, 328 purpose of, to permit carriers and ports to compete for traffic, 328 such adjustment deserves serious consideration, 328 504 ATLANTIC PORT DIFFERENTIALS Erie Canal, transportation rates of, affects ditferences in ocean rates, ... Sfi slower method of transportation, 33 cost of transportation by to New York by, 31 advantages of, to New York, 201 volume of tonnage to New York by, 31 cheaper rates by, due to inferior service, 39 cheap transportation to New York by, 31 effect of cheaper transportation by, on average cost to New York, 31 competition with railroads, 97 transportation of grain to New York, ]\v, 225, 226 falling off of tonnage of, associated with decline in tonnage to New York, 333 tonnage of, 1886, 124 early competition of railways with, 383, 4'35 relative importance of tonnage on and railways, 1876, 435 diversion of commerce from, to railroads, . . 436 tlirough and loeal traffic of, 437 projects of Boston to meet competition of, 129 important bearing of, on Differential Rates, 332 formerly important factor in grain rate situation, 369 Erie Canax, and Hudson Eiver fixed rate on grain from Chicago to sea- board, ., 362 Erie Railroad, cost of moving freight on, 1880-1881, 84 Ex-lake Differentials, described and stated, 162 reasons for, 336 on grain, history of, 320, 384 cannot be determined by distance alone, 396 Ex-lake Grain, percentages of, received at ports 1892-1903 (6 mos.), 322 Ex-lake Rates, meaning of term, , 360 highly competitive, 321 demoralized in 1904, 286 non-maintenance of in 1904, 286 low in 1904, 2.^6 recommended (1905), 3 41 on grain of 4 cents recommended but not prescribed, 374 on grain, includes lighterage, 372, 373 on grain, includes cost of elevation at Buffalo, 372 amounts of 1889-1911, 3o8 domestic, 360, et seq. for export, 367 stated in bushels; local rates in per hundred pounds, 365 attacked in 3 911 in Board of Trade, etc. v. A. C. E. Co., and N. Y. Prod. Ex. V. N. Y. C. & H. R. Co., 359 short line distances Buffalo to ports, 395 of prime importance in movement of grain at eastern lake ports, 383 also see ' ' Rates, ex-lake. ' ' Exports, variation in, by ports obeys no law, 222 relative amount of cargo and berth business unknown, 174 of Canadian breadstuffs, in bond, volume of, 393 an important factor in regulating freight charges, 98 increase in, naturally leads to increase in imports, 449 INDEX 505 Export and Domestjc Grain Rates, difference in 1911, 3 cents, 374 Exports and Imports, changes in volume of, at New York, 217 PLvpoRT and Import Bates, view of Interstate Commerce rounnission re- specting, changed by Supreme Court in Texas & Pacific R. Co. v. Interstate Commerce Comiiiii-hion (162 U. S. 197), 238 Export and Import Traffic, controversy in 190-4 early narrowed to ques- tions of, 286, 293 Export Grain, method of doing, 176, 297 moves largely via Great Lakes, 367 in 1872 contributed 40% of tctal shipped into Atlantic states, 438 in bushels and per cents, by ports, 1878, 1903, 333 percentage of, by different ports, 1882, 1895, 1896, 219 Export Rates, in their essence inland division of a through rate,. . . .240, 242, 328 legality of, 242 less than domestic, not unjust discrimination, 241 less than domestic, decision respecting in N. Y. Prod. Ex. v. N. Y. C. & H. R. (3 I. C. C. 138) , 237 lower than domestic on grain to ports, stated, 399 through Boston since 1870 same as New York, 234 at Boston, less than domestic, 118 on grain and provisions to Boston may properly be less than on domestic, 107 at Boston may be less than domestic under Differential Agreement, and such arrangement since approved by the Interstate Commerce Commission, 327 Export Traffic, distribution of, to ports, purpose of differentials, 208 competitive and hence rates ought be adjusted so rival routes can compete for it, 327 Facilities at New York, 296, 297 Findings of Advisory Commission summarized by Interstate Commerce Commission, 133 Fink, Report of, reference to, xvi, 288 Report on Adjustment of Transportation Rates to Seaboard, 5, et scq. General Conclusions on adjustment of rates to seaboard, 39 representative of carriers before Advisory Commission, 71 report of, characterized as ' ' most luminous discussion of the entire subject and must be a classic to every one, " 288 quoted from, that ' ' ocean competition acts at least in a great measure as an equalizer of the through rates, " 396 Fixed Differences in rates to ports provided by Differential Rate Agree- ment, 2 based on prevailing ocean rates, 26 Fixed Principles to determine proper adjustment of rates sought, 12 Flour, movement of by lake and rail on through bill of lading, 320 parity of rates on, and grain, 366 percentages of export, by ports, 392, 393 no intent to change differentials on in 1912, 411 and provisions exported by berth rate, 221 grain and provisions, classification of 1888, 116 50G ATLANTIC PORT DIFFERENTIALS Foreign Commerce, foiifeiitratiou of at New York favorable as furnishing compensating freights, 86 Freight Rates, inland cannot distinglli^•h l)et\vcen cr.rgo and Ijcrtli lots, . . 211 equal to all the i)orts proposed by New York nierc-hants, 18 (note) Freight Charges, reductions in, due to competition, t(jU Full Cargo, no apprecialile difference in ccst or o'.ean rate on, at three ports, 170 Geographjcal Location, an advantage of certain railways in, 440 Crades and curvatures on New York Central and Penns-ylvania, 292; of Boston roads, 422 Grain most important brancli of through tratiie, 435 method of exporting, 168, 176, £97 inspection of, at New York, a possible disadvantage, 205 method of fixing through rates for cotton inapplicable for, 330 brought to the seaboard other than by rail, 30, 369 traffic in, most affected by differentials, 221 tonnage of, changes in not connected with differentials, 100 differentials on, reduced in February, 1899, 290, 326 through rates to Liverpool via various ports, 1876, 441 diversion of, from New York, 1876, due to corn alone, 452 shipment of, in bulk, brought about economies, . . . 457 . cost of delivering at each port to vessel from terminus the same, 2 cost of delivering into hold of vessel at New York and Baltimore, .... 3.i9 traffic in, influenced by storage capacity of private warehouses, 18 amount of, shipped to particular port depends largely on available sup- ply of tonnage thereat, 440 movement of, by lake, and rail, not on through Ijill of lading, 320 ex-lake rates on, of prime importance in movement of, at eastern lake ports, 383 competition for traffic in, by railroads began 1891, 383 large quantities grown tributary to Philadelphia and Baltimore 389 amount of, received and exported alt various ports, 1876, 443 exports of, by ports and percentages, 1S78, 1903, 333 amount received at five Atlantic ports, 1886, percentages of and per- centages exported, ] ;:3 received at New York and Boston, 1886, 129 exports of, quantity exported by New York and Montreal 1902-1910 and percentage, 370 exports of, percentage of totals by ports, 1902-1910, 370 percentages of exports of, by ports, 392 Gra:n and Flour, receipts at five Atlantic ports, 1886, 122 Grain Rates, are competitive, 362 amount of from west to east, 360 Erie Canal important factor in, 339 difference between export and domestic in 1911, 3 cents, 374 Grmn Trade is part of the whole, not an independent branch of commerce, 441 Great Lakes export grain moves largely via, 367 Harbor Improvements, expenditures by Federal Government in, 395 Hepburn Committee, excerpts from testimony before, x INDEX 507 History op Differentials to 1S9S, 1()2 ; to 1904, 287, ct scq. History of Ex-Lake Dil^FERENTiAr.s, 320, 384 History of Minimum Freicht Agreement, 294, et seq.; 397 Inland Rates, average to ports, 1880, 31 Import Rates, decision res]ectiiig in N. Y. B. of T., etc., v. P. K. K. (4 I. C C. 447), 237 Imports, great bulk of, land at New York, 169 percentage of, through four ports, 1909-1911, 392 percentage of, by ports, to differential territory, 392 percentage of, destined to Trunk Line Tcrnuni and beyond, 393 Import and Export Rates, legality of, 242 view of Interstate Commerce Commission respecting, changed by Su- preme Court in Texas & Pacific R. Co. v. Interstate Commerce Commission (162 U. S. 197), 238 iMPi RT Rates, all-rail and lake-and-rail from ports, 1908-1912 406 from Boston, lower than from New" York alleged to be discriminatory against latter, 422 reductions in at Boston, 1909, 406 submission concerning,. 1910, 406 differentials recommended, 1912, 407 Inspection of Grain at New York, a possible disadvantage, 205 Insurance, marine, as an element in determining adjustment of rates, ... 43 cost of, from Baltimore and Philadelphia more than Boston, 323 Interstate Commerce Commission, no jurisdiction to fix differentials,... 337 has no jurisdiction to equalize rates, 399 characterization by, of Fink's Report as "Most luminous discussion of the entire subject and must be a classic to everyone. " 288 resume of Advisory Conunission 's Report by, 289 does not recognize as lawful Differential Rate Agreement, 401, 425 relation of, to Differential Rates, 1898, 206, 207 function of in 1898 controversy, 324 relation of to 1905 controversy, 324 general investigation by in 1904, 286 consented in 1912 to act as arbitrators, 245; but could not make an adjustment contrary to that made in discharge of duties under the law, ibid. decisions of, see Table of Cases Reported, p. 487. Iron and Steel, differentials on, reduced, 290, 326 no intent to change differentials on in 1912, . . . .■ 411 Joint Traffic Association, rates maintained by, 210 legality or propriety of, not considered in 1898 proceeding, 230 Lake and Canal Rates lower than all-rail, 119 Legality of export and domestic rates of different amounts to Boston in 1898 not considered, 161 Lighterage, deduction of, before pro-rating caused difference in divisions,. 121 cannot be considered separate from through rate, 154 at New York as element of cost, 292 cost of urged as justification of grain diffe'-ential, 168 508 ATLANTIC PORT DIFFERENTIALS JjIGUTERAGE — CO)ltiHUecL and teriiiiiial services at New York referred to, 167 c'liarges to New York and East Boston, 147 charges at New York irrelevant to question cf reasonablenei-s of rates to Boston, 128 charges, none at Boston, 1888, 118 and wharfage charges part of through rate, 120 and wharfage charges at Bobton, 1888, ] 19 loss in performing by Baltimore & Ohio at New York, 386 included in ex-lake grain rates, 372, 37 3 Load-line, advantages in respect to, at southerly ports, 169 Local Traffic, exceedingly diverse in character between roads, 85 but little affected by competition of rival trunk lines or of cities, 437 difficulties in distinguishing between and "competitive," 439 chief source of revenue, 460 Local and Through Traffic, distinction between, must be kept in mind when considering competition between carriers to ports, 436 Location of Philadelphia and Baltimore pcrsi&tent.y urged, 326, 381 Long Haul, railroads desire, 390 railroads have right to ^jroteet, 401 Maintenance of Diiferentials doubtful, 199 ; better alter organization of Joint Traffic Association, Itg Maintenance of Rates, differential adjustment not alwa.>s adhered to, . . . 391 Maintenance of ex-lake rates, 368 Merchants and communities, interest of, in relation uf rates, . . . '.9 Merchants of New York and Boston compete in New England, 121 Mileages, for purpose of certain divisions, 116 constructive, sometimes used as basis for couiputing percentage in Per- centage System, 151 to Boston, 1888, 115 ^Mileage, see "Distance." 2*IiNiMUM Freight Agreement, history of, £94, ei seq.; 397, et seq.; effect of, 296 equal through rates via all ports during, 330 Montreal, export and import traffic increasing in recent years, 383 all-water grain moves to, 369 claim of New York of grain going to, -369 advantages of, compared with New York, 371 grain exports of, compared with New York, 370 New Orleans, harbor facilities at, 218 Newport News and Norfolk, not included in differentia] agreement, 383 growth of, in exports, 218 and Norfolk, established policy of carriers to make Baltimore rates to and from, 424 New York before Advisory Commission rejected distance principle and favored cost of service, 80 vast importance of, 90 great bulk of imports land at, 169 advantages of, 30, 133, 171, 200, 387 INDEX 509 Neav York — Continued. advantages of, cannot be fixed ])reti?ely in (nnrency, H9 steamer advantages at, 170 advantages of, eonipared with IMontreal, 371 advantages of Erie Canal to, 201 might be ruined by strict application of cost principle to trtuisporta- tion rates 90 claim of, concerning cost of moving freight, 80 views on differentials expressed to Advisory Commission, 74 cheap transportation of grain to, by Erie Canal, ;^1 effect of cheaper transportation to, by Erie Canal, on average cost, ... 31 less import rates at Boston ssid to be harmful to, 427 high class tonnage moves through, 39fi option market at, claimed as advantage, but denied, 39;") traffic alleged to be diverted from, by differentials, 297 Pennsylvania Eailroad might for competitive reasons haul to, at Balli- • more rates, but it conld not with justice be compelled so to do 327 reduction of differentials to, takes a.way Baltimore 's advantages 328 decline in tonnage to, associated with falling off of canal traffic, 333 its contentions in respect to differentials, 1898 164 argued in 1898 cost of service conld not justify differentials 16G claim of, in 1898 of increasing burden of differentials, 177 contentions of in 1898 210 cannot determine wliat differentials would offset advantages of, 213 changes in exports and imports through, 217 competitive factors at. very strong, 14S rates to, fixed by sharp competition, 149 reasons for tardiness in providing termiisal facilitirs at, 4:")7 lighterage charges at 14 7 lighterage at, as element of cof-t, 292 dockage and port charges greater at than Boston, 174, port charges at, higher than at Baltimore and Philadelphia 169 lighterage and terminal services at 167 facilities at, 296, 297 cost of transfer of traffic at, greater than at Boston 38S cost of delivering grain into hold of ve?sel at 399 terminal costs at, said to be greater than at Boston, 42.") improvements in terminal facilities at 17 drayage charges at, 422 diversion of grain from, 1873-1876, due to export trade not local con- sumption, 449 diversion of grain from 1876, due to cnm alone 452 transportation of grain to, by Erie Canal 22n, 226 losing grain trade, 225 grain exports of, compared with Montreal, 370 claim of, that grain is going to Montreal 369 railroads to, have policy of making rail rates sufficiently above canal rates to secure reasonable remuneration, 38 import rates same from Boston as, 417 import rates from Boston less than from New York, alleged to be dis- criminatory against latter, 422 510 ATLANTIC PORT DIFFERENTIALS New York — Continued. rates to, in 1888 from various western cities, 122 and Boston, grain received at, 1886, 129 earnings on ear load shipments to, 120 car earnings on certain traffic to, 117, 148 foreign conimerce of the port of, 1886, 1^3 equality of rates to Boston rot supported by several important elements, 126 and Boston merchants compete in New England, 121 lower ocean rates to, than to ' ' outports. " 397 reasonable to expect lower ocean rates than at Baltimore and Phila- delphia, 25 ocean rates at, less than at Baltimore, 36 has during closed navigation less ocean rates than Boston, 423 mileage to, 1888, 116 rates of, made to Boston as a concession, 13U Nkvv' York Central Eajlroad, grades and curvatures on, 292 cost of moving freight on, 1880-1881, '. . 84 New Y'ork Eailroads, offer of, to carry thereto at Baltimore rates, 385 No Preference Clause ox Constitution, inapplicable to freight rates, 385 Non-competitive Points furnish considerable traffic, 20 Ocean Carriage does not differ materially at Baltimore and Philadelphia,. . 212 exact relative cost of, from ports impossible, 2Jli Ocean Competition "Acts at least in great measure as an equalizer of through rates, ' ' Fink, 396 Ocean Eates, reductions in, as ground for withdrawal from Differential Bate Agreement by New York Central, 1880, 10 fluctuations .in, 41, 170 not stable, 394 result of free competition, ,, 330 • average of, misleading, 41 changes in, 24, 213 lower in winter than in summer, 36 increase with decline in canal and lake rates, 33 adjust themselves to inland rates, 33 quotations of, apply to only small part of business, 28 cannot be predicted, 24, 27, 41 average from ports, 1877-1880, 27 reasonable to expect higher at Baltimore and Philadelphia than at New York, 25 less at New York than at Baltimore, 36 in 1881 greater from Baltimore than from New York, 99 from Boston and New York not materially different, 107 from New York during season of closed navigation less than from Boston, 423 testimon}' that they are lower to "out-porls" than to New York, 397 have important bearing on inland rates, 98 fluctuations in, said to accommodate steamship companies 388 relative, basis of Differential Agreement, 394 for full cargos same from four ports, 297. 394 not carried in tariffs, in sense that they could be maintained, 394 INDEX 51 1 Ocean Rates — Continued. impossibility of detennining acem-ately, -93 variation in, alleged to be canseil by inland differentials, 294 difference in between ports, always exceeded by differentials, 329 variation in between ports, 1897-1905, 294 relative from the four ports 171 quotations not reliable, 173 no difference as between ports on cargo lots, but is on berth lots 211 difference in, berth lots, between the ports, 173 berth rate less stable than cargo rates, 212 flour and provisions exported at berth rates, 221 Ocean Shipment, method of making cargo and berth shipment of grain,. .168, 170 Ocean T'ariffs, none in sense that rates could be maintained, 394 Ocean Tonnage, available supply of, at ports, affects shipment of grain thereto, 440 Option Market, claimed as a New York advantage, but denied, 395 Origin, points of, as sources of traffic, 19 "Out-ports," North Atlantic port's other than New York, 171 lower ocean rates at; than to New York, 397 Passenger and Emjgrant business a facor in distribution of traffic, 19 Pennsylvania Railroad, extension of, 16 claim of, that rates be adjusted in accordance with length of comjieting routes 40 not a road of a particular city, 76 cost of moving freight on; 1880-1881 84 burden of defence in 1912 controversy by, 381 grades and curvatures on, 292 might for competitive reasons haul to New York at Baltimore rates, but could not with justice be compelled to do, 327 Percentage Differences in rates to ports, abolished by Differential Rate agreement, 2 Percentages of Traffic at seaboard, 26 carried by Trunk Lines, 16 Percentage Basis of Rates recommended for Boston, 152; substantially adopted, . .• 236 Percentage of Exports at New York, change in 206 Percentage Map, connection between and port differentials, ix Percentage System, referred to, 151, 161, 32-J constructive mileage sometimes used in, 151 applicable to and from Differential Territory, 385 connected with Differentials, 345 (note) described, 346, et seq.; illustrated, ' 348, 353 revisions of, to Saginaw, 351 ; Detroit and Toledo, 354 Per Ton Per Mile, averages various carriers, 1868-1876, 460 Philadelphia, differences in rates under New York 3 difference in rates to, 1875, .9 difference in rates to, under Differential Rate Agreement, _ 10 views on differential rates expressed to Advisory Commission 74 contentions in respect to differentials, 1898, 164 claim of, concerning cost of moving freight thereto, 84 512 ATLANTIC PORT DIFFERENTIALS Philadelphia — Continued. location of, persistently urged, 326, 381 large quantities of grain grown in territory tributary to, 389 differentials at, 1905, 290 elevation charges less than at Boston, 322 insurance at, as an element, 323 disadvantage of water to, Ifif*, 327 reasonable to expect higher ocean rates than New York, 25 ocean rates at, do not materially differ from Baltimore, 212 Ph]ladelphl\ and Baltijicre, competitive conditions at. created by Penn- sylvania and Baltimore & Ohio, 400 less rates to, than to New York and available ocean tonnage at causeil diversion of corn trade, 453 urge distance to western points, 214 port charges at, less than at New York, 16.) heavy class of traffic hauled through, 396 Policy, questions of, all ports should be kept open, 325 Port Differentials, see ' ' Differentials. ' ' Port Preference Clause of Constitution inapplicable to freight rates, .... 385 Poet CHAfeGES, less at Boston than New York, 174 higher at New York than Philadelphia or Baltimore, 1C9 Ports, early differences in rates between, xiv interests of, and carriers not identical, xviii interest of Trunk Lines at variance with interests of, 446 prosperity of, involved in adjustment of rates, 73 service of carriers to all, where possible, 390 assumed burden of conducting 1904 proceedings, 286 should each be kept open, 325 Ports op Call, installation of, by certain steamship lines, 3!' 9 Practice of Carriers in making assurances of rates during rate wars, ... 21 Preference in Bates may be excused by carrier competition, 208 Principles of correct adjustment of rates, 24 Principle of Differentials legitimate, 228 Proportional x?ates to Boston, if based on distance alone, 127 Pro-rate Principle, see Distances, relative. Quotations on ocean rates for small part of total traffic should not measure all traffic, 29 Railroads, public agencies, 89 powers are gttasi-govemmental 89 chief public duty to make reasonable rates, 94 no business of, to equalize inequalities, 12.5 no duty of, to equalize conditions, 389 latitude allowed to, in recognizing competitive conditions 227 difficult "questions between them on hypothesis that New York roi'ds can compete with canal rates 38 advantage in offering to patrons outlet to all ports, 77 obligations of to the several Atlantic ports, 74 a single class interested in adjustment of rates, 73 problem of 1876 arises out of difficulties of competition, 458 INDEX 513 Eailroads — Continued. problems of change rapidly 102 routes of, to various ports, 389 list of, sending Atlantic ports, 1876, 436 list of, serving Boston, 1888, 115 right of, to ])rotet't long haul 401 effect on revenue of, if rates to New York reduced, 206 interests of, in determining rates nuist be considered, 209 non-participation of, in 1898 controversy, 210 agents of, bid against each other for traffic during rate \vars, 437 location of competing, a factor in distribution of traffic, 19 geographical location of, an advantage, 440 control of, over through rates gradually becoming weaker, in 1876, . . . 461 early competition of, with Erie Canal, 435 relative importance of tonnage on, and Erie Canal, 1876, 435 carrying capacity of, to seaboard limited by demands in west and at Atlantic terminals, 442 carrying capacity of, influenced by storage capacity, 18 competition of, may excuse giving preference, 2(18 competition of water carriers with, 97 wars of, expensive, H wars affect companies and investors, 11 wars cause difference between just compensation and what carriers actually receive, 11 wars result from no agreement in respect to rates, 11 purpose of relative rates by, to give each fair share of traffic but not unjustly discriminate between communitfes, 11 Bail Proportion of Through Eates not far different from those based on pro rata principle, 23 Bate Agreement, Differential, adopted, 1877, 10 Bates, basis of, in Trunk Line, Central Freight Association and New Eng- land territories, 463 early differences in to ports, xiv low rail to Atlantic ports, beginning of, ix relation of, between Atlantic ports important, ix difficulty of determining relation of, as between ports, xviii adjustment of, to seaboard, report on, by Fink, 5, et seq. relative, principles to determine proper adjustment of sought, 12 proportion of, for rail transportation to be not less than local, 3 differences under New York to Philadelphia, 3 differences under, to Baltimore, 3 to Boston, to be not less than to New York, 2 differences in, 1869, 9 differences in, 1875, to Philadelphia and Baltimore, 9 changes in, to seaboard preceding 1876, recited, 9, ct seq. differences in, to Philadelphia and Baltimore under Differential Bate Agreement, 10 fixed differences in, abandoned 1876, 9 relative (percentage) differences in, adopted, 1876, 9 proper and equitable adjustment of, fraught with difficulties and com- plications, 11 33 514 ATLANTIC PORT DIFFERENTIALS Rates — Continued. concessions in, to Xew York and other cities, 1880, 14 agreement in respect to, necessary, 11 reductions in ocean, as ground for withdrawal from Differential Rate Agreement, 1880, by New York Central, 10 equality of, to all the ports claimed as just by Now York Central, 1880, 11 change in equalization of, as ground for withdrawing from Differential Rate Agreement, 1880, by New York Central, 10 actually charged, difficult to obtain, 14 no attempt to maintain in 1878-1879, 14 non-maintenance of, claimed by New York Central, 1880, 14 adjustment of a question of national importance, 12 result of adjustment prior to 1880, described, 12, et seq. adjustment of, has no practical bearing when railroad capacity is fully taJted, 15 arbitrary adjustment of cannot be maintaiu'^d for any length of time, 17 adjustment of, difficulty arises because carriers handle both domestic and through traffic, 24 adjustment of, marine insurance as an element in considering, 43 proper adjustment of, a question of national concern, 74 proper adjustment that which does not interfere with natural distribu- tion - 18 adjustment of, general principles involved, 23 adjustment of, complex and intricate, 43 lowest through, establishes rates for all regardless of distance, 40 adjustment of, on basis length of competing routes, claim of Baltimore & Ohio and Pennsylvania, 40 adjustment of, must be such as to meet combined influence of rril and water transportation at New York, 39 fixed differences in, based on preA'ailing ocean rates recognized in Dif- ferential Rate Agreement, 26 of Trunk Lines must be determined ■with regard to competition in export trade, 23 rail proportion of, not far different than under pro rata principle, 23 inland, must be made more in view export than domestic trade 26 based on relative distances, 23 via competing routes must be same for same service, 23 do not determine amount of ti-affic from non-competing points 20 reduction of New York, to Philadelphia and Baltimore basis woiShl invite business to latter cities, 78 accustomed higher, to Boston and New York than to Philadelphia and Baltimore, 73 should not be determined arbitrarily, 102 must be relatively reasonable, 155 by lake and canal lower than by rail, 119 "arbitrary" of no alarming significance, 131; but see dissenting opin- ion in Boston C. C. v. L. S. & M. S., 134 large volume of traffic can be profitably conducted at relatively small,. . 127 cost of service not sole or most important factor, 127 in reasonableness of, cost of lighterage at New York, not relevant 126 concessions in to New York, 35 INDEX 515 Rates — Continued. throuiih must be cousiclered as a unit, the divisions being unimportant,. . 126 on grain by lake and canal, 188/ -•-•■* low, volume of traffic as infiueuce in sectoring, 38G carriers have right to make such rates as see fit to Boston, but must not unduly burden other traffic, 400 grain from Chicago, fixed by Erie Canal and Hudson River, 362 parity of, on flour and gi-ain, 366 on grain, flour and provisions, 1898, tc ports, K"! better maintenance of, after organization of Joint Traffic Association,. . IW) reductions in, effect on revenue of carriers, 206 in determining, interest of carriers must be cou,sidered, 209 difference between export and domestic grain, 1911, 3 cents, 374 maintenance of, '^- ' "^ maintained through Joint Traffic Association, 210 rail, changes in, -^"^ differential, perhaps not maintained to 1896, 220 l)asis for computing, short line mileages, 1->1 on grain to various points, !•'- combinations on Buffalo on grain less than on Detroit and Toledo, 1892, 153 must be agreement in respect to, for competitive traffic, 439 determined not by the strongest but by the weakest lines. 4G1 sudden changes in, should not be allowed 462 non-observance of, because of competition, 42 equal inland, must exist, if equalization of cost to be had, 1'6 maintained in 1880, ^4 equal through, objectionable to carriers, 25 average through, year 1880, 3.. equal through, difficulties of under domestic bills of lading, 26 equal through, under through bills of lading attempted, 1876, 24 equal through, protests by Chambers of Commerce against, 25 average through, period of canal navigation, 1880, 32 ocean, adjust themselves to inland rates, 33 reductions in, as ground for withdrawal from Differential Rate Agree- ment in 1880, by New York Central, 10 average ocean, during closed season, 1880, 32 ocean, quotations of, apply only on small part of business, 28 average 1877-1880, 27 reasonable to expect higher at Baltimore and Philadelphia than ^ New York, 25 cannot be pre-determined 24, 27 no appreciable difference in cost of full cargo sliii>ments between the ports, I'O fluctuations in very great, 1"0 quotations of, not reliable, 1 ' 3 difference in berth lots between the ports, 173 relative from ports, 1 ' l no difference as between ports on cargo lots but is on berth lots, . . 211 do not differ materially at Baltimore and Philadelidiia, 212 berth less stable than cargo, •^'2 see "Ocean Rates." 516 ATLANTIC PORT DIFFERENTIALS Rates from Boston westbound, New York rate in 1882, 117 Rates to New York and Boston, 1888, from Chicago, 116; 1892, 147, 151 from various western cities, 1888, 122 divisions of, 1892, . . 147 Rates to Boston, complained of in 1888, 114 on export grain and provisions may properly be less tlian on domestic, . 107, 109 over New York are arbitrary, 117 Qxport less than domestic, 118 equal to New York as a concession, 130 Rates, amount of, statement shoTjring changes in rates on grain, ex-lake domestic, from Buffalo, N. Y., to Boston, Mass., from 1896-1904, via New York Central and Hudson River Railroad, 250 Statement showing changes in rates on grain, ex-lake, for export, from Buffalo, N. Y., to Boston, Mass., from 1897-1904, via New York Central and Hudson River Railroad, 251 Statement showing changes in rates on grain, ex-lake, domestic, from Buffalo, N. Y., to New York, N. Y., from 1894 to November 29, 1900, via New York Central and Hudson River Railroad 252 Statement showing changes in rates on grain, ex-lake, domestic, from Buffalo, N. Y., to Philadelphia, Pa., from 1894-1904, via New York Central and Hudson River Railroad, 253 Statement showing changes in rates on grain, ex-lake, for export, from Buffalo, N. Y., to Philadelphia, Pa., via New York Central and Hudson River Railroad, 254 Statement showing changes in rates on grain, ex-lake, domestic, from Buffalo, N. Y., to Baltim'ore, Md., from 1894 to November 11, 1895, via New York Central and Hudson River Railroad, 255 Statement showing changes in rates on grain, domestic, from Buffalo, N. Y., to Boston, Mass., from 1896-1904, via Delaware, Lacka- wanna and Western Railroad, 235 Statement showing changes in rates on grain, for export, from Buffalo, to Boston, Mass., from 1896-1904, via Delaware, Lackawanna and Western Railroad, 256 Statement showing changes in rates on grain, ex-lake, domestic, from Buffalo, N. Y., to New York, N. Y., from 1896-1904, via Delaware, Lackawanna and Western Railroad, 2.36 Statement showing changes in rates on grain, ex-lake, for export, from Buffalo, N. Y., to New York, N. Y., from 1896-1904, via Delaware, Lackawanna and Western Railroad, 257 Statement showing changes in rates on grain, ex-lake, domestic, from Buffalo, N. Y., to Philadelphia, Pa., from March 9, 1896-1904, via Delaware, Lackawanna and Western Railroad, 258 Statement showing changes in rates on grain, ex-lake, for export, from Buffalo, N. Y., to Philadelphia, Pa., from 1891-1904, via Delaware, Lackawanna and Western Railroad, 258 Statement showing changes in rates on grain, ex-lake, from Buffalo, N. Y., to Boston, Mass., via Erie Railroad, 259 Statement showing changes in rates on grain, ex-lake, from Buffalo, N. Y., to New York, N. Y., via Erie Railroad, 260 Statement showing changes in rates on grain, ex-lake, from Buffalo, N. Y., to Philadelphia, Pa., via Erie Railroad, 261 INDEX 517 Rates, amount of — Continued. Statement showing changes in rates on grain, ex-lake, from Buffalo, N. Y., to Boston, Mass., via Erie and Western Transportation Company (Pennsylvania Railroad Comjjany), 263 Statement showing changes in rates on grain, ex-lake, domestic, from Buffalo, N. Y., to New York, N. Y., from 1889, via Erie and Western Transportation Co., 264 Statement showing rates on grain, ex-lake, domestic and export, from Buffalo, N. Y., to Philadelphia, Pa., from 1899-1904, via Western New York and Pennsylvania Railroad, 26;5 Statement showing rates on grain, ex-lake, domestic and export, from Buffalo, N. Y., to Philadelphia, Pa., from 1S99-1904, via Western New York and Pennsylvania Railroad, 265 Statement showing changes in rates on ex-lake grain, for domestic use and export, from Erie, Pa., to Boston, Mass., via Erie and Western Transportation Company (Pennsylvania Railroad Company), 267 Statement showing changes in rates on grain, ex-lake, domestic, from Erie, Pa., to Philadelphia, Pa., via, Erie and Western Transporta- tion Company, 269 Statement showing changes in rates on grain, ex-lake, domestic, from Erie, Pa., to Baltimore, Md., via Erie and Western Transportation Company, 271 Statement showing changes in rates on grain, ex-lake, domestic and export, from Fairport, Ohio, to New York, N. Y., via Pittsburgh and Western Railroad, 273 Statement showing changes in rates on grain, ex-lake, domestic, from Fairport, Ohio, to Philadelphia, Pa., via Pittsburgli and Western Railway and Baltimore and Ohio Railroad, *. . . . 273 Statement showing changes in rates on grain, ex-lake, domestic, from Fairport, Ohio, to Baltimore, Md., via Erie and Western Trans- portation Company, Pittsburgh and Western Railway, and Balti- more and Ohio Railroad, 274 Statement showing rates on grain, ex-lake, for domestic use, from Buffalo, N. Y., to Boston, Mass , 'and New York, N. Y. ; also dif- ference in rates, 276 Statement showing rates on grain, ex-lake, for export, from Buffalo, N. Y., to Boston and Philadelphia; also difference in rates, 277 Statement showing rates on grain, ex-lake, for domestic use, from Buffalo, N. Y., to New York and Philadelphia; also dift'erence in rates, 278 Statement showing rates on grain, ex-lake, for export, from Buffalo, N. Y., to New York, N. Y., and Philadelphia, Pa.; also difference in rates, 279 Statement showing rates on grain, ex-lake, for export, from Erie, Pa., to Philadelphia and New York ; also difference in rates 280 Statement showing rates on grain, ex-lake, for domestic use, from Erie, Pa., to Philadelphia and Baltimore; also difference in rates, 281 Rates, Eastbound, all-rail, class, 382; eastbound lake and rail, 382; ex- lake, grain, 382 Westbound, all-rail, class, 383 Westbound, lake and rail, 383 518 ATLANTIC PORT DIFFERENTIALS Rates, ex-lake, differentials, history of 320 demoralization of, in 1904, 286 maintenance of, '^-^' ^ob highly competitive, ^''^ in 1898, ^^2 RATE War, ill 1879, 14; in 1882, 133; 1909, -±06 ineffectual to get rid of differentials, 99 differentials as a means of averting, 386 produced by differential controversy, 324 illustration of spread of, when begun, 445 agents of different lines bid against each other for traffic, during, .... 437 weakest not strongest lines have advantage in, 461 unprofitable, ^^ practice of carriers in making rate assurances to shippers, 21 during, traffic obtained under competition, 14 distribution of traffic, not influenced by, 16 due to efforts of carriers to protect themselves against each other, 460 eff'ect of, is general reduction in revenue, •• • • 16 of 1876 produced increased receipts at Baltimore, 17 Rate per ten mile, to Boston, 1888, 124, 146 Reasonable Compensation to carriers and what they actually get, differ- ence between, due to railroad wars, 11 Rebate paid on Boston traffic to equalize rate v/ith New York, 107, 109. 118 Refund, method of giving New York rate at Boston, 235 see ' ' Rebate. ' ' Relation of Rates to Atlantic ports, 1888, 119 see "Differential Rates." Relatively Reasonable, rates must be, 155 Res Judicata, none in respect to propriety of export rates less than domestic in certain proceedings, 236 Re-shipping Rate on grain at Chicago, 368 Returns per ton mile for various carriers, 1868-1876, 460 Return Loads, greater at New York than at other ports, 87 bespeak lower rates, 86 should receive consideration, 86 Revenue, from local traffic, is chief source of carriers' income, 460 reduction in, is effect of rate wars, 16 Routes of Transportation through Chicago to New I'ork, 1887, 123 to various ports, 389 of grain from west to east, 360 Shippers, attaching and retaining, as causes of distribution of tonnage, ... 21 Short-line Distance should be used as basis computation, 151 Statistics: Percentage of total grain receipts 1878-1880, at ports, 12 Percentage of westbound traffic from ports, 1878-1881, 13 Percentage of total tonnage carried by four Trunk Lines, 1878-1880, to ports, 13 Grain receipts at five ports, 1865-1880, 16 Statement A. Showing the total number of bushels of grain (including flour) received at and exported from the four Atlantic ports, during the years, 1878, 1879, 1880, 44 INDEX 519 Statistics — Continued. Statemeut B. Showiug the relative aniouiit of west aud eastbound and export tonnage (under tlirough bills of lading), of all classes, of the four x\tlantic cities, during the certain periods, 45 Statement C. Statement showing: 1. The receipts of dead freight (in classes) and cattle and hogs, by the four trunk roads, at New York City, Boston, Philadelphia aud Baltimore (eastbound). 2. The ''exports" (in classes) under through bills of lading, via A'ew York City, Boston, Philadelphia and Baltimore (east- bound). 3. The 7th class traffic receijits by the four Trunk Eoads, and exports according to Produce Exchange report (eastbound). 4. The imports destined to trunk line termini and west thereof, arriv- ing at New York, Boston, Philadelphia and Baltimore (west- bound ), 47 Statement U. Total receipts and exports of flour and grain at the five Atlantic cities, New York, Philadelphia, Baltimore, Boston and Montreal, during certain ye:irs, also percentages of each city of total receipts, 49 Statement E. Tonnage and per cent, of total tonnage from each point of its origin from the west, and termini of the four trunk roads, (N. Y. Central, N. Y., L. E. & Western, Pennsylvania, Baltimore & Ohio), to points east of the trunk line termini, during the year ending December 31, 1880, 50 Statement F. Showing the distribution and per cent, of total tonnage to each destination of traffic originating at the four Atlantic cities and eleven interior New England competing points, carried to the West by the four trunk roads (the N. Y. Central, N. Y., L. E. & Western, Pennsylvania, and Baltimore & Ohio). Also including traffic carried by Central Vermont and Grauk Trunk from Boston and New England competing points, 52 Statemeut G. Showing average quotations of ocean rates from the sea- board cities to Liverpool by steamers and back, for orders by sail- ing vessels, during the years 1877 to 1880, inclusive. Compiled from New York Produce Exchange reports, average quotation reduced to cents per 100 lbs., Statement H. 1. Quotations of rates on grain via lake and canal, and lake and rail from Chicago to New York during the year 1880, as per report of Board of Trade of Chicago. 2. Average ocean rates at New York and Baltimore, for each of the eleven months ending November 30, 1881. 3. Estimate of average ocean rates on grain exported by steam and sail from New York and Baltimore from January 1 to November 30, 1881, 50 Statement J. Destination of ex^iort corn and wheat from New York aud Baltimore during crop year ending August 31, 1880, and from Philadelphia during calendar year ending December 31, 1880, 58 Statement K. Estimate of average ocean rates on grain exported by steam and sail from New York, Philadelphia and Baltimore, during 520 ATLANTIC PORT DIFFERENTIALS Statistics — Continued. the year and during the periods of open and closed navigation of the year 1880, ^0 Statement L. Estimate of average rate per 100 lbs. for transporting grain to and through New York, Philadelphia and Baltimore, by all routes during tho year 1880, also during open navigation of same year, • 62 tonnage received at and forwarded from North Atlantic ports, 1880, ... 87 percentages of receipts at four ports, 1878, 1879, 1880, 1881, 1882 (6 mos.), ^"^ mileages to New York and Boston, 1888, Ho, 116 rates from New York and Boston to Chicago, 1888, 116 grain and flour received at five Atlantic ports, 1886, 122 grain and flour receipts at New York, 1886-1887, 122 grain received at five Atlantic ports, 1886, percentages of, and per- centages exported, 123 lake and canal rates on grain, 1887, 123 steamers sailing from New York, 1888, 123 foreign commerce of the port of New York, 1886, 123 tonnage of Erie Canal, 1886, 124 grain received at New York and Boston, 1 886, 129 rates, Chicago to New York and Boston, by classes, 1892, 147 receipts of grain and flour at New York, 1886-1887, 148 rates, Chicago to Boston, 1882, 151 rates, Chicago to New York and Boston, 1892, 151 grain rates to various points, 152 rates on grain, flour and provisions, 1878, to ]iorts, 161 average ocean freights, quoted on wheat from the ports to Liverpool, for the non-canal season, 1882-1896, 172 annual average ocean freights quoted on wheat from the ports of Liver- pool, 1882-1896, 173 table showing the relative amount of berth rate and cargo exp)orts for the years 1895 and 1896 in wheat and in corn, 174 full cargos, by ports, 1893-1896, 175 table "showing total receipts and total exports of flour, wheat and corn in bushels at New York, Boston, Philadelphia, Baltimore, Norfolk and Newport News, for the years 1873 to 189G inclusive, 178 table showing relative proportions of the total receipts of flour and all kinds of grain, including oats, rye, and barley, in bushels, including receipts of wheat, corn, oats, rye and barley, at the four named Atlantic ports for years 1878 to 1896 inclusive, 179 table showing relative proportions of total receipts of flour and all kinds of grain, including oats, rye, and barley, in bushels, including re- ceipts of wheat, corn, oats, rye and barley, at the six Atlantic ports for years 1878 to 1896 inclusive, 180 statement showing in tons the dead freight forwarded by defendants to points named, with reference to flour, grain, and mill stuff, provi- sions and lard, for years 1888 to 1896 inclusive, 181 statement showing number and tonnage of vessels in the foreign trade which entered and cleared from the six Atlantic ports during each year from 1882 to 1896 inclusive, 182 INDEX 521 Statistics — Continued. table showing total export of wheat, corn and oats from ports on tlie Atlantic coast, in bushels, with percentages from each port for the years 1878 to 1896 inclusive, 1^3 table showing exports of wheat, corn and oats from ports on the Atlantic coast, in bushels, with percentages from each port for the years 1878 to 1896, inclusive, 189 table showing recapitulation of the average percentages for the six named Atlantic ports for years 1878 to 1896 inclusive, 190 table showing exports of wheat, corn and oats from Boston, New York, Philadelphia and Baltimore from 1878 to 1S96, inclusive, with per- centages of total shipments from the four ports, 191 table showing value of all exports from Boston, New York, Philadelphia, Baltimore, Norfolk and Newport News for years 1878 to 1896, in- clusive, I'''' table showing total exports of provisions, including beef, canned, failed and fresh; bacon, hams, pork, lard, mutton and tallo\v, 1892 to 1896, inclusive, at the six Atlantic ports, 195 table showing exports of flour in barrels from Boston, New York, Philadelphia and Baltimore, 1886 to 1896, inclusive, 196 table showing total value of imports of all kinds at Boston, New York, Philadelphia, Baltimore and Norfolk, 1878 to 1896, inclusive, to- gether with percentages for each port, 197 table showing total value of all imports and exports through the Atlantic and Gulf ports for the years 1895, 1896 and 1897, together with percentages, •, 198 claim of New York in 1898 concerning its loss in exports, 198 table showing rates per bushel by lake from (Chicago to Buffalo and by canal from Buffalo to New York on wheat and corn, 1878 to 1896, inclusive, 202 table showing total rate per bushel by water from Chicago to New York on wheat and corn, 1878 to 1896, inclusive, 202 table showing average rail rate per bushel from Chicago to New York on wheat and corn, 1878 to 1896, inclusive, 203 table showing average rail rate per hundred pounds from Chicago to New York on wheat and corn, 1878 to 1896, inclusive, 203 percentages of exports of grain by ports, 1882, 1895, 1896, 219 comparisons of single years are of no value, 222, 332 comparisons of averages more satisfactory than of single years, 222 may be marshalled to point to radically different conclusions, 223 in 1905 warranted no definite finding concerning movement of exjiort traffic, 298 percentages of ex-lake grain received at ports, 1892-1903 (6 mos.), • • • 322 percentage of exports of grain by ports, 1878-1903, 333 ex-lake and local rates Buffalo and Chicago to New York, 1899-1911, . . . 368 grain exports, New York and Montreal, volume and percentage, 1902- 1910, 370 grain exports by ports, percentage of, 1902-1910, 370 percentage of exports of grain by ports, 1902-1910, 370 bearing upon historical facts only, 391 percentage of import traffic through four ports, 1909-1911, 392 522 ATLANTIC PORT DIFFERENTIALS Statistics — Continued. import traffic, percentage of by ports to diffcroutial territory, 392 exports of grain, by ports, percentages, 392 flour, export, percentages by ports, 392, 393 exports of Canadian breadstufifs, in bond, 393 percentage of westbouiul import freight destined to, ainl west of, trunk line termini, 393 difficulty in basing conclusions on, 393 grain received and exported at various ports, 1876, 443 grain, including flour, received at Atlantic ports 1873-1876, 448 exports of grain from different Atlantic ports, 1873-1876, 449 statement showing the receipts of oats and barley at Boston, New York Philadelphia and Baltimore, 1873 to 1876, inclusive, and the per- centage of such receipts at each port, 450 statement showing exports of wheat and wheat flour (flour reduced to bushels) at Boston, New York, Philadelphia and Baltimore, 1873 to 1876, inclusive, and the percentage of such exports at each port, . . 450 statement showing receipts of wheat and wheat flour (flour reduced to bushels) at Boston, New York, Philadelphia and Baltimore, 1873 to 1876, inclusive, and the percentage of such receipts at each port, 450 statement showing the exports of corn at Boston, New York, Philadel- phia and Baltimore, 1873 to 1876, inclusive, and the percentage of such exports at each port, 451 statement showing the receipts of corn at Boston, New York, Philadel- phia and Baltimore, 1873 to 1876, inclusive, ami the percentage of such receipts at each port, 451 statement showing the exports of oats and barley at Boston, New York, Philadelphia and Baltimore, 1873 to 1876, inclusive, and the per- centage of such receipts at each port, 451 Clearing House returns for ports, January, 1877, 454 value of foreign commerce of ports, 1876, 454 Steamships sailing from New York, 1888, 123 advantages of, at New York, 170 fluctuations in ocean rates said to accommodate, 388 installation of ports-of-call by, 389 Storage Capacity affects carrying capacity, 18 increased, at Baltimore, 18 at ports, 1905, 296 Terminals : storage capacities at ports, 296 capacity at ports for graiu, 200 ; ownership of elevators, 201 improved .facilities at certain ports have helped secure foreign trade,. . 441 Terminal Charges, reference to, at time of Differential Agreement, 167 lightemge and, at New York, referred to, 167 lighterage urged as justification for differentials on grain, 168 Terminal Costs, and service at ports, 216 if purpose of differentials is equalize cost, cost of placing grain on ships must be same, 210 at New York said to be greater than at Boston, 425 drayage charge at New York, 422 INDEX 523 Terminal Facilities, at New York, iinprovenients in, 17 improvement in at New York, resulted in increased reeei[it.s of grain, ... J 7 question of, as bearing on interests of trunk lines and seaboard cities, 456 at Boston, Philadelphia and New York excellent, 457 reasons for tardiness in providing adequate, at New York, 457 Terminal Service, lighterage at New York as an element of cost, 292 loss in lighterage at New York, 386 Through Billed Foreign Freight, rebate on at Boston, 118 Through Bills of Lading, by Ipke and rail, movement of flour on, 320 Through Charges on grain to Liverpool via various ports, 187G, 441 Through Kates, method of fixing for cotton, 329; inapplicable for grain,. . 330 divisions of, not a matter of public concern, 364 must be considered as a unit, 154 lighterage and wharfage charges, a part of, 120 railroad control of, gradually becoming weaker, 1876, 461 Through Traffic, grain is most important part of, 435 exposed to competition of rival trunk lines and cities, 437 general railroad management in regard to, 460 Through and IjOCAL Traktic of Erie Canal, 437 by rail, relative proportions of, 436 Tonnage, of Erie Canal, 1886, 124 to New York, decline in, associated with falling off of canal traffic, . . . 333 Trade, course of, in 1876, between west and different Atlantic ports, 448 Transit Privilege, grain moves under, 368 Traffic, what constitutes equitable distribution of, as between communities cannot be fixed, 10 equitable distribution of cannot be pre-determined, 11 distribution of, 1878-1880, satisfactory, 14 constancy in distribution not due to accidental causes but to certain laws and conditions, 14 distribution of, governed by certain laws and con'ditions, 15 jiercentages carried by trunk lines, 16 distribution of, due to railroad competition, 17 division of, at Detroit proposed, 19 division of, in 1879, and results of agreement, 21 proposed division at source, 22, 23 percentages of, at seaboard, 26 to seaboard, amount of, limited by demands in west and at Atlantic ter- minals, 442 difficulties in distinguishing between "local" and "competitive,'' ... 439 in grain, most affected by differentials, 221 change in percentage of exports at New York, 206 movement of, differentials made with view of influencing, 326 movement of, effect of differentials on, can only be approximately determined, 298 export, highly competitive, 298 alleged to be diverted from New York by differentials, . .• 297 all does not originate at Chicago, 165, 291 to ports affected by contiguous territory, 398 heavy class of, handled through Baltimore and Philadelphia, 396 high class of, handled through New York, 396 524 ATLANTIC PORT DIFFERENTIALS Traffic — Con tin ued. volume of, as influencing low rates, 386 division of, alleged to be purpose of differentials, 385 grain, railroads began to compete with Erie Canal for, in 1891, 383 export and import increasing at Montreal in recent years, 383 if of large volume, can be profitably conducted at lower rates than rela- tively small traffic, 127 east and westbound, differ in character, 129 Transportatjon, not a private business, 94 through rates of, to New York, 1887, 123 Trunk Lines and ports, interests of, not identical, xviii interests of, and seaboard cities not always identical, 443 interest of seaboard cities sometimes at variance with, 446 conditions under which they engage in traffic between the West and seaboard, 440 control of, over competitive traffic growing weaker in 1876, 447 carrying capacity taxed during portion of year to full extent, 15 are great arteries of commerce, 22 links in the through routes, 23 rates of, must be determined w-itu regard to competition, 23 not exclusively identified with any one city, 42 percentages carried by, to various seaports, 42 appointment by, of Advisory Commission, 67 Unjust Discrimination between points may be by carrier, even though it does not reach both points, 424 United States, expenditures in harbor improvements at different ports by,. . 217 Varjation in volume of exports between ports obeys no law, 222 A^ESSELS, number and tonnage of, entered and .cleared at ports, 1903, 296 Vested Right, claim of Boston in export rates as low as New York, 108 Volume op Traffic as influence in securing low rates, 386 increase in, shared in proportionately by the ports, 1878-1881, 13 small fluctuations in, 1878-1880, as between the ports 13 Wars, railroad, result from failure to have agreement in respect to rates, . . 11 railroad, affect the carriers and as well the investors, 12 railroad, affect commercial transactions and bring about unjust dis- criminations, 121 rates, do not influence distribution of traffic in, 16 rate, unprofitable, 16 rate, effect of, is general reduction in revenue 16 by railroads, expensive, 11 rate, 1870, 9 rate, in 1879, 14 rate, in 1882, 133 Westbound Differentials not considered in 1905, 337 see "Differentials." Western Cities, rates from, to New York and Boston, 1888, 122 Wharfage, deduction of, before pro-rating causes difference in divisions, . . 121 charges for at Boston paid by shippers 118 Wheat, not usually exported in full eargos, 174 THE LIBRARY UNIVERSITY OF CALIFOjiWA LQfi AI^GELES ERRATA. Pages 260, 261, 262: for "charges" in lines 1, read ^'changes." THE UNIVERSITY LIBRARY This book is DUE on the last date stamped below URL MAR 2 8 INTERLIBRARY MAR 1 4 1972 Three wMk» from dat* of nnipi — Non-RenewaWe 972. CS 11 URL 72 Form L,-3 25m -10. '1-1(2191) UC SOUTHERN REGIONAL LIBRARY FACILITY AA 001014 727 SUPPLIED BY THE SEVEN BOOKHUNTERS STATIONO.BOX22.NEWyORKI|.N.r.