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Iowa. General Assembly. Senate. Committee on Railr.

Report of Committee on railroads of the Senate, nineteenth General assembly, Iowa, as per resolution of Senate no.4. online

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rame it. The shipper at a non-competitive point believes that he is greatly injured
if his rates are higher, and yet it is not true that if the business of the competitive
points furnishes any profit to the carrier, he can by that much less afford to carry
his freight at intermediate points. If he was compelled to carry all his business at
the rate of the competitive point, he would of necessity be compelled to abandon it
and confine himself to his local business. The local would necessarily be higher
by the amount of profit that might accrue from competitive points. It was a fa-
vorite theory of the Commissioners, and only abandoned after a careful study of its
effect, that the State should pass some law prohibiting the roads from charging
higher rates for a shorter than a longer distance. Coupled with this was the idea
that some such enactment might prevent the fluctuating and ruinous rates at com-
peting points, and place part of the burden of operating and maintaining the
roads on the through traffic. One of the oldest railway managers in the West, in
reviewing this subject, says:

" Nobody deplores foolish and reckless competition like that carried on from
Missouri River points in the Southwest, more than the thoughtful railway man-
ager, and if a law applicable to all the States could be enacted that would prohibit
such ruinously low rates, and punish severely the parties making them, I feel sure
that the railway managers would welcome it. But if the Iowa roads are prohibited
from making any higher charge than their proportion of a through rate from New
York to California — rates varying from time to time to meet the requirements of
commerce, and sometimes made without the knowledge or consent of the managers
of the Iowa lines — they must either do all their business at rates that will yield
insufficient revenue to pay interest and dividends, or maintain high rates on local
and allow through business to be mainly carried through States where no such
prohibition exists. A loss of the through business, so long as it yields any net
revenue, lessens the ability of the railway companies to reduce local transportation.
It is evident that any profit derived from competitive business must be a benefit to
local shippers, because it lessens local charges."

It may be a question whether the State has the power to fix this limit, and
whether it might not be considered a regulation of inter-State commerce. The
Supreme Court of the United States, in deciding the Pennsylvania case, says:

" If the power to fix tolls upon inter-State commerce is allowed, it would be in
the power of the Eastern States to exclude entirely the products of the West from
the sea-board by fixing a local rate that would prevent any through business being
carried."

Should the States of Iowa, Missouri, and Illinois order that the local and through
rates be the same, it might effectually prevent Kansas and Nebraska products
reaching an Eastern market. Again, the same court held that "The State may,
at its discretion, tax its own internal commerce, so that inter-State intercourse,
commerce, or trade be not embarrassed or restricted." Whether a tax on gross
receipts of a railroad is constitutional, has been affirmed by the Supreme Court of
the United States, Judges Miller, Field, and Hunt dissenting. Judge Miller, in
writing the dissenting opinion, uses this language:

" I lay down the broad proposition that by no device or evasion, by no form of
statutory words, can a State compel citizens of another State to pay to it a tax,
contribution, or toll, for the privilege of having their goods transported through
that State by the ordinary channels of commerce. The inter-State commerce of
to-day far exceeds in value that which is foreign, and it is of immense importance,
and it should not be shackled by restrictions imposed by any State."



X4 REPORT OF COMMITTEE ON RAILROADS. [E6.

In l)otli their former reports this Board has endeavored to give
proniiiience to the idea that people situated as we are, almost in the
center of the continent, and dependent mainly on all rail transjDorta-
tion to the sea-board for our bulky surplus products whose final
market was Liverpool or London, could not afford to give too inucli
prominence to short rates; that our interest is in the long haul, and
if this is reduced to the minimum we can afford to pay a reasonable
profit on our short hauls. Our fears have been that legislative in-
terference in the States east of us might in some way affect unfa-
vorably the through business.

Peter A. Dey,

M. C. Woodruff,
A. R. Anderson,
Railroad Comm issioiiers.

railroad committee of the senate.

Henry W. Rothert, Lee county (chairman).

E. J. Hartshorn, Palo Alto county.

E. D. Nichols, Guthrie county.

A. Hebard, Montgomery county.

J. K. Graves, Dubuque county.

J. 0. Schrader, Johnson county.

Delos Arnold, Marshall county.

A. N. Poyneer, Tama county.

H. A. Baker, Winneshiek county.

T. E. Clark, Page county.

J. L. Kamrar, Hamilton county.

J. W. Henderson, Limi county.

G. S. Robinson, Buena Yista county.



Chicago, Burijngton & Quincy Railhoad Co., )

T. J. Potter, General Manager, >•

Chicago, February 3, 1882. ^ )

E. G. Morgan, Esq., Secretary Board E. E. Corners, Des Moines, Iowa:

Dear Sir — Yours of the 1st inst. to C. E. Perkins, President, is referred to this
office for reply.

You ask, " Whether your company is in the habit of agreeing- with other roads
at Burlington, Fairfield. Ottumwa, Albia, Knoxville, Ues Moines, Indianola, Gris-
wold, Carson, Humeston, Shenandoah, Malvern, Clarinda, or Council Bluffs, that
one road shall take all the freight or the greater portion thereof, to or from any
one point or territory in the State, while the other companies with their railroad
lines there located refuse to take freight in order to carry out such agreement?"

I would say we are not in the habit of making any such agreement at the points
named, but give the parties the privilege of shipping upon any line they choose to
patronize. Yours truly,

T. J. PCT-ER.



1882.1 REPORT OF COMMITTEE ON RAILROADS. 15

Chicago, Milwaukee and St. Paul Railway, )

General Manager's Office, >•

Milwaukee, February 3, 1882. )

E. G. Morgan, Esq., Secretary Commissioners, Des Moines:

Dear Sir— I have received your favor of first inst., asking whether this com-
pany is in the habit of ag-reeing with other roads at various points in Iowa that
one road shall take all the business, and the other refuse to take it, in order to carry
out such agreement.

This company has no agreement with any other road of the nature described,
neither has it ever made any such agreement. On the contrary, it aims to carry its
full share of the business to and from all common or competing points in Iowa.
Yours truly,

S. S. Merrill, General Manager.



Milwaukee, Cedar Rapids & Northern )

Railway Company, >•

Cedar Rapids, Iowa, February 3, 1882. )

E. G. Morgan, Esq, Secretary Railroad Commissioners, Des Moines, Iowa:

Dear Sir — I am in receipt of yours of February first, in regard to inquiry of the
Railway Committee of the Senate, and in reply would say, that we have no arrange-
ment at either of the points named, in regard to either taking all the business or
most of it by our line, neither of allowing most of the business to go by any other
line, but we work actively for all the business we can get at agreed rates, which
would naturally go over our road.
Trusting this information is sufficient, and answers the inquiry fully, I am.
Yours truly,

C. J. IvES, General Superintendent.



Chicago & Northwestern Railway Company, ^
Office op Second Vice-Presdent and General Manager, >-

Chicago, January 6, 1882. )

E. G. Morgan, Esq., Secretary Railroad Commission :

Dear Sir — On my return to-day to the city, I am in receipt of yours of Febniary
1st, inquiring whether the Chicago & Northwestern Rail-vay Company '' is in the
habit of agreeing with other roads at Clinton, Cedar Rapids, Marshalltown,
Grand .Junction, Jefferson, Council Bluffs, and Sioux City, that one road shall
take all the freight, or the greatest portion thereof, to and from any one point or
territory in the State, while the other companies with their railroad lines there
located, refuse to take freight in order to carry out such agreement."

In answer to the foregoing inquiry, permit me to say the C. & N. W. R. R. Co.
has no agreement or understanding with other railroad companies whereby it will
refuse to take any or all freights offered for transportation, in order that any other
transportation company may carry such freights.
Very truly,

Marvin Hughitt.



15 REPORT OF COMMITTEE ON RAILROADS. [E6.

Chicago, Rock Island & Pacific Railway,
Office op the President,

Chicago, February, 1882.

E. G. Morgan, Esq., Sec'i/ B\l R. R. Commissioners of Iowa:

Dear Sir — In reply to the inquiry by the Railroad Committee of the Senate,
"whether your Company (Rock island) is in the habit of agreeing with other
roads at Davenport, West Liberty, Columbus Junction, Iowa City, Fairfield, Grin-
nell, Keokuk, Ottumwa, Knoxville. Des Moines, Indianola, Griswold, Carson, or
Council Bluffs, that one road shaU take all the freight or the greatest portion thereof
to or from any one point or territoiy in the State, while the other companies, with
their railroad lines there located, refuse to take freight in order to carry out such
agreement, I answer: this company are not in the habit of making such agree-
ments, and that no such agreement exists on the part of this company to the best
of my knowledge and belief. Respectfully yours,

Hugh Riddle, President.



Wabash, St. Louis & Pacific Railavay Company,
Office of Second Vice-President,

Saint Louis, February 6, 1882.

E. G. Morgan, Esq., Secretary Railroad Commissioners, Des Moines, Iowa:

Dear Sir— Your letter of February 1st to Col. Haw, Third Vice-President, has
been handed to me for reply, and I wish to say that we have no agreement or un-
derstanding with any neighboring road which debars us from doing our share of
the business.

It has been found necessary, in order to avoid undue competition, to agree fairly
upon rates to points reached by either road, and also to agree on a fair division of
the business. In other words: We have an arrangement with some of our neigh-
bors in Iowa, Avhereby the business of certain stations is pooled, and, whichever
road carries more than its percentage, pays over the difference to the road which is
in aiTcars in its earnings.

Each road has business located on its track; each road has grain houses, stock
j'ards, etc., at or near the junction points, and owned and operated by people who
are anxious to do business for any person who is engaged in the shipping business.

Your inquiry leads me to think that misrepresentations have been made to the
Senate Committee. I need only add that I can assure you there is no arrangement,
so far as I know, which renders it necessary for either of the roads to decline taking
business. Yours truly, Ira C. Gault, Second Vice-President.



Illinois Central Railroad Company, )
Chicago, February 10, 1882. )

E. G. Morgan, Esq., Secretary Railroad Commissioners, Des Moines, Iowa:

Dear Sir — 1 beg to acknowledge receipt of your favor of the 1st inst. received
during ray absence East.

This company has no agreement with any other roads at Dubuque, Delaware,
Independence, Waterloo, Cedar Falls, Charles City, Ackley, Webster City, Fort
Dodge, Lemars or Sioux City, that one road shall take all the freight or the great-
est portion thereof to or from any other point or territory in the State.

This company and the Chicago, Milwaukee & St. Paul Railroad Company did
endeavor to induce shipments of freight from that point by the shortest line to its
point of destination. This was done principally to meet the requirements of the
shippei-s in the matter of the supply of cars that could run through to destination
without change, thus ensuring prompt movement of business. We consider this
arrangement for shipment by the shortest route the best for the shippers as well as
the most desirable for the road. It is, however, entirely optional with the shipper
or consignee to select his own route.

Yours truly, W. K. Ackerman, President.



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Online LibraryIowa. General Assembly. Senate. Committee on RailrReport of Committee on railroads of the Senate, nineteenth General assembly, Iowa, as per resolution of Senate no.4. → online text (page 2 of 2)