Rock Island daily Argus. (Rock Island, Ill.) 1886-1893, 1889-06-07
THE ROCK ISLANDS LOSS.
To What President Cable Attributes
ft...The Railroad situation in Gem
eral.-.Other Track News.

To What President Cable Attributes
ft...The Railroad situation in Gen.
eral--.Other Track News.
The salient feature of the annual
financial report of the Rock Island road
is, of course, the deficit of 1914. 1884 fol
the year. The report showing that the
lines west of the Missouri river did moi
earn interest charges by nearly million
dollars, so that this heavy deficit can be
charged almost wholly toIthis account.
President Cable states in regard to the
extension west of the Missouri river thai
the question presented to the board oil
directors some years ago. was, How tc
increase the volume of business in order
to counteract the effect of the declining
tendency of rates? 1t was finally decided
to go west of the Missouri river for new
business.
Commenting on the railroad situation
in general. President Gable makes the
following observations:
For ten years there has been down
ward tendency in rates. The contest fol-
business steadily forced rates down, and
in order to encourage and build up cons
mercial and manufacturing centers spe-
cisl rates were given to shippers doing a
large volume of business. The result
was that in some instances less rate
was made for a long than for a short
haul. To prevent ruinous reduction 10
rates pools were formed. These agree
ments, popularity called pooling contracts.
were objected to by certain portions of
the shipping public, while the custom of
allowing special rates to certain CONNER.
cial centers. was obnoxious to another
portion. As these two methods of bust,
ness related mainly to interstate traffic,
congress was appealed to, with the result
that the law known as the interstate com
merce act was passed by that body. This
act forbids pooling, Determinations and
charging in any case more for short
haul than for longer haul, the former
being included in the latter The practi-
cal workings of this act was uneXpected>
ly hurtful to jobbing and manufacturing
centers which had heretofore thriven under
old conditions, since being deprived of a
better rate than retail dealers about them
they could no longer make as their profit
the better rate secured from the RAILWAYS
This produced. notably in the state of
Iowa, much dissatisfaction, especially
among the class thus afflicted. Jobbers
in that state. doing business with their
customers mainly through interstate
transportation, seeking relief. ostensibly
from Af ba N
from the effect of the interstate com.
MERGE law, went to the legislature. That
body enacted statute which, so far as it
could be made applicable, adopted the
interstate commerce act. II went. however,
much further. Ii cuts off all competition,
giving the business in all instances to
the shorter line, unless the longer line
will, If it desires to compete, charge the
competing rate on all other equal dis
tances of its line. 1t requires the rail-
way commissioners of that state, who by
cotempOraneOus law are made elective
by the people, instead of as heretofore.
appointlve by the governor, to make for
each railroad in the state a schedule OF
maximum rates for the transportation of
freight, which shall originate and end in
the state. This schedule, when made,
the law makes prima facie evidence of
reasonableness. To charge more consti.
tutes a prima facie case of extortion.
which, unless rebutted to the satisfaction
OF the courts and juries. subjects the car
rier to heavy fines and penalties.
During the past summer such a sched-
ule was published It was drawn with
the express design to afford so low rate
to Iowa jobbers and manufacturers that
they could buy in the larger markets. ship
on an Interstate rate and then make q
profit in selling to the retailer. A care
full and actual application of it to the
tonnage of the company in Iowa for the
previous year showed a reduction in
earnings of 90 per centum on the local
business of that state; and the same re-
duction applied to the entire tonnage, il
was believed, would have left nothing
for the payment of dividends and en-
dangered the interest obligations.
Believing law and schedule produce
ing such results to be illegal and uncon-
stitutional, some of the companies, in
Guiding ours, sought and obtained from
the federal and state courts temporary
writs of injunction staying the enforce
suits, the commissioners, proceeding, as
they claimed the right to do, notwith-
standing the injunction, under another
clause of the law. published another
schedule very slightly modifying the first
one. The change was so slight as to
make no material difference. This
Schedule the courts refused to enjoin,
though application therefor was made.
Thus the alternative was presented of ac-
cepting the schedule as the limit of the
rate that could be charged, or mourning the
chance of the heavy penalties conse>
quent on charging more, if the luries of
the state should determine such charge to
be unreasonablY high. The latter alters
native it was not deemed wise to accept.
To avoid it this company, under protest,
put that schedule into operation, and to-
day. by force of this legislation, we are
doing business under schedule of rates
which reduces the income from business
local to Iowa over 20 per centum, and
which, il applied to the whole tonnage,
would absorb all dividends. In other
states legislation of character generally
similar has been enacted. and it is natur-
al to expect that the people of Nebraska,
Kansas and Colorado will demand at
least as low rates as their neighbors IN
Iowa. Then, as the through rates cannot
well be greater than the sum of all the
locals, it may be anticipated that the in
terstate rate will be likewise reduced
1t is apparent from what has been said
that the national and state governments
are working at cross purposes. The for
mer seeks to abolish all competition and
preferences; the latter to restore by in
direction the special rates and prefer.
ences so long enjoyed by jobbers and
manufacturers.
The Ottumwa Press has the following
revival of the subject of the Ont. off of tho