Savannah morning news. [volume] (Savannah) 1868-1887, 1881-08-24
A Proposed Solution Of the Railroad
Problem.

A Proposed Solution of the Railroad
Problem.
A correspondent of the Baltimore Sun
proposes a plan for the organization of a
railroad clearing house, which, it is
claimed, in addition to the function Of
an ordinary clearing house, will have the
power of distributing traffic. adjusting
rates, settling misunderstanding, and in
fact of doing all that will be necessary
to harmonic the differences which at
present affiict railroad managers, mer-
chants and stockholders. The object OF
the writer is to guard against unnatural
fluctuations in rates and secure fair
return both for capital invested and for
the enterprise shown in investing it.
What is needed is, he thinks. the estab-
lishment of a clearing house as a.
permanent institution, to displace
entirely the present temporary
pooling arrangements. 1t would fix the
equities as between the great trunk lines
and remove the hindrances to business
originating in the personal jealousies of
railroad managers. Only the trunk lines
are to be necessarily included in the first
organization. The plan in some of its
details is as follows: There is to be
compact entered into for period of five
years by the trunk roads, binding them
selves to submit all business now com
petitive, or which may hereafter become
competitive, to the control of a clearing
house, and yield to it the continuance of
such checks and guards as will secure
the purposes of the compact This COM
pact is to be renewable at the will of a
majority of the parties concerned.
There is to be commission
to determine the quota of traffic
in and out of each centre of trade
which should fall to each party to the
compact. There is to be board of gov
ernors, invested with executive powers
only, who shall hold Office but one year,
being selected by representatives of the
trunk lines in convention assembled. As
the pools heretofore formed could not
enforce their agreements for want of
penalties, it is proposed that each trunk
line shall make with the clearing house
deposit of money or securities, to be for
feited by any member Withdrawing from
the compact or neglecting its require
ments, said deposit to be then divided
pro rata among those who remain faith
full to the arrangement. The authorities
thus created and fortified with the means
of inficting penalties will, in con-
junction with a representative of each
road, proceed to fix quotas of traf-
fic, establish classifcations, determine
rates, and when shippers prefer par
ticular road and give it excessive bust
ness, determine what the road preferred
shall have for its extra expense and
labor. One of the most important fea-
lures of the plan is that the division and
allotment of net earnings shall belong
exclusively to the clearing house, for,
through its exercise of the function of
clearing accounts, it will be in position
to enforce its decisions-a thing pools
have never been able to do. Each road
will manage its own business with its
customers, but will be required to send
duplicates of its bills of lading and du-
plcate way bills to the clearing house
In such data will be found the basis
for determining quotas of business,
etc., and for the clearing of &C
counts. The clearing house will also
certify to the correctness of claims for
Over-charges, rebates, etc., and indicate
monthly the amount due each road
allowances" to be made out of a gen.
eral fund to prevent suspicion of unfair
dealing by individual roads. The house
is also to have charge of mileage and car
service accounts, thus saving a vast
amount of trouble to the parties
to the arrangement Yard mas.
tiers and conductors will report to the
clearing house in order to establish liza
bilities for repair, equipment, etc. A
very desirable thing will be effected,
the writer holds, by the operations of
the central clearing house, namely
the introduction of a uniform method
of keeping railroad accounts Econo-
my will result, and 1t will be-
possible for each road to inspect the
books and understand its obligations to
other roads at a glance. Railroads are
shown to need such an agency for the
harmonizing of their differences as a
means Of protecting themselves from
bother of conflicting legislation, whether
from the individual States or from the
general government, and the writer
thinks, that a show on the part of the
railroads OF desire to settle their differ
ences would appease the growing popu-
lar clamor for their absorption by the
government The English system of
clearing house operations, though not so
thorough in its details as that now pro-
posed, has attained considerable success,
and put the plan proposed beyond the
stage Of mere theory.
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