The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-10-14
RAILROAD SECRETS.
New York Central and Erie Under
Investigation.
Further Testimony Before the
Legislative Committee.


morning IN the rooms OF the Chamber of Com
MERGE. at No. G3 William street. Mr.. Sterne
present, as usual to conduct the inquiry, and the
interests of the railroads were looked after by
Judge Shipman the part of the Erie and Mr..
Chauncey NJ. Depew for the New York Central. 1t
is understood that the Investigation of the Ell"
railroads and their management will be commenced
tomorrow.
james II. Rutter. general manager of the New
York Central and Hudson River Railroad. tho
first witness called Mr.. sterne questioned him in
relation to the American Transfer Company Or Pipe
line bringing oil from the oil districts to the line
Of tho railroad. Mr.. Rutter said that among its
officers j. A. Bostwick and Daniel O'Day; he had
heard that Bostwick was an officer of the Standard
Oil Company the oil not delivered direct to
tho Central Railroad that road did not reach the
oil regions; the New York Central never paid the
American Transfer Company cent for rebate on oil.
Mr.. Cusatt. Mr.. Sterne said. had testified to pay
ment of twenty cents barrel. fight occurred. wit
ness said between tho and the New York
roads. after which the Empire Oil Works ceased
to exist; the Standard Oil Company bought them
up; it believed that the American Transfer Com
pany were engaged in making OF their retneries
to compete with the railroads. that the result would
DO the gradual absorption OF the oil business by
them; the railroads did not believe that it was fair
for transportation companies to engage in manufac
turing. and hence the railroad and the closing
up OF the Empire Works; the Standard Oil Company
were not transporters. and the railroads did not
make war them. as it was not their custom to
make upon shippers. Witness reiterated his state
ment that the Central road did not pay anything to
the American Transfer Company; there pipe
charge he could not tell who paid it, whether it
was paid by the connecting road which brought the
oil from the terminus Of the pipe to the Central
tracks not witness could not say. but promised
ascertain.
Mr. Sterne again asked the question as to whether
money was paid by the Central. and Mr.. Rutter
said :-"When told you don't know you ought to
be satisfied"
.Oh, no; not necessarily" answered counsel.
well. you complimentary. to say the least"
angrily retorted the witness.
Then he continued There q very bad state
Of feeling between the Standard Oil Company and
Mr.. Vanderbilt; ut one time they shipping all
their oil by canal; in the fall OF 1872 they com.
menced shipping oil by tho New York Con trial. and In
1873 an arrangement was made to ship by the road
100000 barrels Of refined oil month; they did ship
100000"
THE RATE ON OIL.
O. by Mr.. Sterne-At what rate you carrying
oil this year? A. have got reasons why do not
tell that do not to tell since
the time when this so-caled tidewater pipe line
made or two occasions havo been forced to
give testimony that has injured our business worry
much.
Railroad would give S500.OO0 for the information
that Mr. Sterne trying to obtain, and that would
be very small sum.
Chairman Hepburn-I think 1t is the duty of this
committee to 60 right down to the bottom and
what privileges the railroads. are giving to this Stan
dard Oil Company.
Mr.. Rutter-we have . contract with the Standard
Oil Company by which we are bound to make no
less rates for others than VIC do for them.
Mr.. Sterne-What is your rate for the shipment Of
oil now7
''well, I refuse to answer
The Chairman-The committee direct the witness
to answer the question.
Mr.. nutter-f ask time to consult counsel.
Time was given MIN and he retired to the next
room with Mr.. Chauncey NJ. Depew, remaining .
long time in conversation there with him. The
interval was occupied by Judge Shipman in
presenting the various documents called for
BY Mr. sserne As he banded up batch of them
rage certificate next which sally provoked gen.
On the return of Mr. Rutter the committee, at his
request, took privately his answer to the rate on
carrying OIL subject to their discretion to make it
or this rate witness said the New York Central got
seventy seven per cent; he believed 1t to be the
whether it resulted in . loss or not but he was
unable to say whether there actually was profit
loss the business.
Octave Chanute engineer in chief of the Erie Rail-
road. was next examined as to the Improvement in
the value of the road by increased construction and
the decrease in its maintenance by reason of the
lessened cost OF labor and material Since 1873 no
testified the cost had been reduced about thirty per
cents iron cost fifty per cont less labor thirtythroe
por cent. engines seventy per cent. forty per
cent and bridges thirtyhve to forty per cent; the
impro vcment in the value of the road by new
tracks and increased construction and stock he esti
mated at from $500 900 to 900; the business
of the road. he added had boon increased by about
$1,0O0,000 yoar; when witness first became con-
nectcd with the Erie road 1t doing large bust
without adequate facilities; 1t had not then, he
said, increased its facilities with the increase OF its
traffic.
A recess Of an hour was here taken.
A RAILROADS. EXPENSES.
Mr. Chanute again took the witness stand after the
recess and testified that the value Of the traffic and
OF tho of transportation; the actual transport
formed from one-third to two-thirds Of the entire
expenses Of the rood; the proportion of handling
freight at the tcrinn depended greatly upon tho
| length of the haul; fuel the Eric road formed
about eight or ten per cent of its expenses; it
sometimes cheaper to haul freight long than short
distances because o; the bulk OF tho traffic. the DIFF
ference in the train load on the Now York Central
and the Erie was forty to twentyeight: supposing
the maximum grade tho Erie to be sixty feet and
that of the Central twenyour feet, the expense of
! that of the other.
| q. We're you ever connected with any railway of
| which you were required to make an estimate for
the officers OF the cost OF transportation . basis
for freight chargess A. never was.
The dead weight of u train, he contnued-that is,
oil cars ana engines, exclusive OF their contents
| two-thirds OF tho full weight; II all the cars
were loaded to their maximum capacity aud
weight and the dead weight would DO about
one and a half to one; exclusive of loco
motive ana tender IL would be about to one;
moro freightage was charged for goods Of light than
heavy weight to make up the difference; In point of
fact dead weight only mado small proportion OF
the operating of the ways and IL did not
cut much of figure in tho aggregate cost; mere dis
lance was not the only and conclusive basis In the
determination of charges; the difference Ina favor of
larger place arises partly account OF the bulk OF
traffc; there was no person employed TO calculate
the differences In cost OF transportation from differ
ont points.
q. Then those rates fixed arbitrarily without
any knowledge? A. 1t Is known In q general way
what tho average cost Is and IL Ii not that
more should be known.
"If 1t were not. continued tho witness, s.for the
MI ufil hipbo
fregts would have to DO charged on local traffic
to make up profitable business; ton cents hun
dred pounds probably covers moro than the direct
expenses of transportation from Chicago TO Now
york. but would not yield very large profit"
On cross.exaninaton by Mr. Blanchard witnoss
stated that when lie said the business of the Eric
had increased 81. O00 he had not taken into con