St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1888-11-17
Although Wrong in Theory,
Differentials Are Really a
Public Boon.
They Promote Stable Rates
and Afford Protection to
Railroad Investors.
After Dec. 1 the Reading Will
Exact It's Pound of
Flesh.

reporter to-day, ana III response 10 All
inquiry for news of the railroad rate
war, Chauncey NJ. Depew said: There
is no railroad war and no chance of
there being one. Formerly" he con-
tinued, ''Of the weSt-bound traffic the
New York Central had 30 per cent
against so per cent carried by the Penn
sylvania. Under the operation OF the
pool the New York Central had - per
cent and the Pennsylvania % per cent,
the reduction being due to the granting
of differen ials to lines which had lost
their business in maintaining the abso-
Lutte tariff agreed upon. About four
months ago we found that our business
was being taken from US, and
that our best shippers were trans
terring their business. This continued
and grew so rapidly that we determined
that we must either substantially retire
from the weSt-bound business or make
The open rate the same aS the real rate
was by other lines as nearlyaS we could
ascertain. SO, soon as we discovered
what we believed to be the real rate
under the rules of our association we
gave notice to Commissioner Fink to ill.,
form all other lines of our new tariff"
How does the interstate commerce
law affect the Central under existing
circumstances"
The New York Central ObeyS the
interstate law, but, being a purely state
road, presume we are not affected on
points this side of Buffalo, but on points
beyond we are, undoubtedly. Although
state corporation, we live up to the
spirit of the interstate commerce law"
"What does the Pennsylvania want?'
LAS understand the Pennsylvanians,
they want to
ABOLISH DIFFERENTIALS,
and to carry that out they have through
the West during the whole tall made
frequent reductions on eaSt-bound bust
ness to meet ditferentlals claimed by
weaker lines. These reductions have
been made every time without notice.
We supposed that they did the same on
westward traffic, but the eastward rate
was an open one. The ditferential rate
is all wrong in theory undoubtedly, but
after several disastrous wars to get rid
of the system, ninety-nine one-hun-
dredths of the railroad men Of the coun-
try believe there is no other way of pro-
noting stable rates Or of pro-
tecting railroad investors. A rail-
road tariff between two points
should be as well known and as stable
as the postage rate. If one shipper dur
ing a decentralization of rates can get a
better rate by rival line than his COM
petitor, 1t is just as bad and dangerous
discrimination as if it was practiced
by the same line. If there were no diff
ferentials two or three lines, including
the Central and Pennsylvania, would
carry eight-tenths Of the traffic. Under
these conditions, if the trade laws gov
al In1
they would speedily drive their weaker
competitors into bankruptcy and close
them up and out. But
A RAILROAD LIVES FOREVER.
1t is semi-public highway, and the
public would not permit 1t to stop OF
be stopped. As soon aS the line which
is at disadvantage i'll distance or IA
cilitieS discovers that its business is
gone, it proceeds to bid for business at
lower rates than the stronger lines. and
at rates which will give it traffic. The
stronger lines meet it and hold the
whole of the business. The weaker
line passes its dividends, defaults OIL
the interest Of its bonds, passes into the
hands of receiver. ceases even to earn
its operating expenses, and the receiver
which take precedence of the first mort
gage to raise money to pay
the simple expenses OF operation.
Z hen the bankrupt line controls
the situation, and ny doing bust
ness for nothing destroys the value of
the business of the strong roads and the
value of the property. Then the in
vestments in railway securities, which
are now practically the only securities
for investments in this country, call a
halt, compel REIMBURSEMENT, rates are
restored to fair and reasonable basis,
the weaker lines are granted in set
Element the differentials which make up
for their deficiencies, the railroads be-
come prosperous, the Spectator in rates
disappears and the business community
transact their business upon the Or
binary calculations governing their pro-
duct, without having them destroyed by
the actions of the common carrier.
Then the railroads discover that the
MONEY LOST TO THEMSELVES
and the uncalculable amounts lost in
the disturbance of business, to abolish
ditferentials, have been sacrificed for
nothing. | believe that in time the
theory to which the country is now COM
mitted, that the government through an
interstate commission shall prevent
railroad abuses and eXtortions, and dis
ordinations upon one line. will be eX-
tended W leSdllZe d poOl, Dy Wulcli
method alone precisely the same evils
can be stopped when practiced by com
peting lines against one another. sc
far as the public is cOncered all rates
from one part to another are one. and d
system which simply prevents one line
from discriminating in favor of ont
of its own customers against another
and on the destruction OF the pool pro
notes still more violent determinations
to one shipper as against others by
different lines, has:enormously eXagger
ated the evils which it was created tc
remedy. The whole of the existing
trouble is the impossibility of railroads
legally forming pool. A recognition
of proper system will settle the whole
difficulty in twenty-four hours. \
present, however. there is no railwa,
war, and there is no chance of there