Savannah morning news. [volume] (Savannah) 1868-1887, 1883-09-18
FINK ON RAILROAD RATES
COMPETITION THE BASIS OF
COMBINATIONS.

Rates on Through Business Made IT,
for Between Local POints-No Exac
tiOns Perpetrated by POOls-Wate
Courses as a Check.
/ NEW YORK, Sept. 17.-Albert Fink
Commissioner of the Trnnk lines, was ;
witness before the Senate Committee OF
Education and Labor to-day. He sal,
that he was now al the head of bureau
composed of about forty railroad com
panies, who have organized
for the purpose of establishing
and maintaining a uniform tariff exten
sion of railroads in the United States aDC
the fierce competition between them made
organized action necessary to their ex
istence. The roads represented in the
| association, of which the witness was the
head, were the five trunk lines, the New
York Central, New York, Lake Erie and
Western, Pennsylvania Central, Balti.
more and Ohio, and the Grand
trunk line of Canada, with all their west.
running east and west. The territory in
which all these roads are located is in.
cluded between the Ohio and Mississippi
rivers and the great lakes. The princi-
pal object Of the association was to ar
range a uniform rate of tariffs for
transportation on the competitive
plan. 1t had nothing to do with local
business, but only where there was COM
petition at some great distributing point
for certain class Of business, it was
necessary for the protection of shippers
that the roads competing for this bust
ness should have an understanding by
which the rates would he known
Senator Blair inquired whether this
was not opposed to the idea of natural
competition.
Mr.. Fink replied that these associations
did not at all affect natural and legiti-
mate competition. They merely prevented
rulnous competition between rail
roads. 1t was very different
from that between private individuals.
In the latter case competition would
cease when 1t reached disastrous point
with railroads. On the contrary, ruinOus
rates OF transportation could be carried
on for a long time without the extent of
the injury becoming known until perhaps
the road was on the verge of
bankruptcy. This was frequently the
case IN railroad wars. This kind of strife
was not competition. The effect of the
establishment of a uniform rate was to
assess transportation charges equitably
on all branches of traffic. When the rates
were placed very low on through
business it was common to
put up rates on local business. 1t
was thus in the interest of
local business to adjust uniform and pay
ing rates for through business. In rail-
road wars also the shipper was in ignO-
rance OF what the rate would be from one
day, to another. This created an uncer-
tainty in trade. which affected all branches
OF business, and It's influence was
felt in the credit throughout the country,
and seen IN the fluctuations of prices.
Inc effect OF the association of roads in
joint committee was to bring about an
understanding in regard to rates and
publish them. This was in the interest of
shippers as much as for the railroads, and
heestablished rates as general rule were
satisfactory to all. The rate was deter
mined always by the competition between
water and railroad routes. The object
was to establish rate that was not so
nigh that business was lost, nor so low
that there was pecuniary loss. The Of
nee OF which the witness was the head
was nothing more or less than a great in
telligence office, whose object was
to furnish information which could
be used in promoting the general
prosperity of the country. 1t was not a
combination for any unlawful purpose. In
regard to the power of railroads to eXtOrt
unreasonable charges, Mr.. Fink said that
he thought that it was an impOssibilitv.
The competition of the water-cOurses
would always act to prevent
this, ana besides other conditions would
enter in TO prevent the maintenance of
an eXtortionate rate. He admitted that
Eastern and Western rates We're higher
in winter than i'll summer, but thought
this increase just, as the obstruction
caused by snow and ice in the West dur
ing the former season rendered the trans
pOrtatiOn of freight more costly. The
amount of fluctuations of rates at diff
ferenC seasons was never more than a few
cents on the hundred.
Mr., Fink thought that State railroad
commissioners were beneficial where if is
only sought to reform abuses, but he did
not believe In letting them exercise arb-
trary power in fixing rates or charges
and in controlling railroad property, as
was done in Georgia. He had no Obiec-
tiOn to their doing this, however, if they
made good the losses suffered by railroad
companies. Many men worked for years
without receiving any oOmDenSatiOn
whatever to establish railroad line. but
just as soon as the road began to make
money then there was cry that it was
monopoly and an effort was made to get
possession Of its property.
y statement had been made
by eX-Secretary Window, of Mime
had it in their power to put up rates at
any time to eXtOrt money from shippers,
and that raise of five cents a hundred
III the cost of transportation of grain
would give gain of S45, ,000.O 600 to the
railroads, This statement was copied eX-
tenslvely throughout the country. This
was based on wrong estimate, as the
raise of five cents referred to had only
brought in ~, 100000. Besides, there were
nlx lxUo
increase of rates, and fluctuations i'm grain
were between 80 and % cents per hundred,
1t never went beyond these
limits and the rate was now at the low
est limit. The witness did not think that
it was any evidence that a road was
charging too high rates that the road was
paying 20 per cent. dividends on its
stock. The only thing to be regarded
was the rates, II these We're reasonable
1t made no difference how much a road
made. 1T only showed that road hy its
good management or superior aocommo.
dations had secured large portion
of tie business. Every limitation of
profit, he thought. should be
accompanied by guarantee against
losses. There was very little danger.
however, that railroads would make ex-
Orbitant charges in this country. and
there were very few roads that made as
this country could not be replaced by
their present capitalization. II was true
that MANY roads MIGHT hava m"to-.oA
their stock, but it was equally trne that
many others, with large capital stock,
had gone into bankruptcy, aud the stock
cancelled. 1t was not true that some COM
were taxed to support railroads
at the expense of others. This could be
seen by examining the condition of each
road separately and of the community
which patrOniZed it. Mr.. Fink thought
legislation might be employed to assist
railroads in maintaining uniform rates. if
such an organization as he managed could
be incorpOI ated by the general govern
ment, but no direct legislation on anv
question affecting rates would avail, In
fact he thought that for some years il
would be best to let the railroads manage
their own business until the people came
to understand that the interests of the
public and railroads were Identical.
Any legislation at the present time
would be regarded with suspicion. The
Reagan transportation bill he regarded as
utterly impracticable. The freight rates
in this country were the cheapest in the
world, and the tendency was to still lower
them. The scheme advocated by MANY
that the government should purchase
the roads and run them itself
he pronounced to be the widest
folly, and one which no sane man would
for moment contemplate. The charac-
ter OF this government was utterly incon-
sistent with such thing, and if it had
been accomplished in other Countries, it
was under very different conditions.
In regard 10 trades unions, Mr.. Fink
thought that they were extreme
ly beneficial to workingmen when
restricted to their legitimate funcr |
tions. He did not believe that strikes |
as a rIIip Merp hpnnfciaI hut thnmrht tit