St. Paul daily globe., 1890-01-30
TESTED TIE MARKET.
THIS is a DEATH BLOW.
Two Big Lines Desert the Gentle
mems Association.

Two big LINES AIeSerC the GenSle-
mems Association.
CHICAGO, Jan. 29.-Chairman Walker
to-day made public the official notices
of the Union Pacific and Chicago &
Northwestern Railroad companies, with
drawing, from the Interstate Commerce
Railway association. President Charles
Francis Adams, of the Union Pacific,
in his letter to Chairman Walker says:
'Referring to the decision made by you
at the meeting of The Interstate Com
merce Railway association held in New
York on the 14th inst, to the effect that
the contract recently entered into be-
tween this company and the Chicago &
Northwestern railroad was in violation
under which the association was
organized: am instructed by the di-
rectors to Inform you that, in their
opinion, the decision places this COM
pany in most difficult position. As |
understand the purpOrt of your de-
cision, it is that the control of traffic is
matter of proprletorship of lines. In
other words, the existing distribution of
competitive traffic may be affected to
any extent by the construction of new
lines by members party to this associa-
ton or by the leasing of lines already
existing, but under the articles of aSSO-
citation it cannot be affected or
CONTROLLED BY CONTRACTS
between the lines, members of the as
sociatiOn. irrespective of the action of
the association. [ am directed to in
form you that if this decision is final it
would, in the opinion of the directors,
place this company in a position which
a proper regard for the interests OF
the stockholders would not Justify.
1t has ever been the intention and pol
icy of the Union Pacific to comply
strictly with all the rules and regula-
tions of the Interstate Commerce Rail-
way association, and the directors of
this company would be most reluctant
to take any steps calculated to impair
either the efficiency or the existence Of
that association. The Union Pacific is
unwilling to continue in any assOcia-
ti0n except in strict conformity with the
rules hereof. With a view, therefore.
to prevent the incurring of penalties on
its part, pending the consideration of
the matter by your committee, am di-
rected by the board of directors to give
you formal notice of the withdrawal of
this company therefrom, to take effect
at the expiration of thirty days from the
date thereof. 1t is unnecessary fOrRe
to add that this action IS taken by The
directors with extreme regret, and the
notice will be withdrawn should the
rules of the ASSOCIATION, as the result of
conferences which doubtless will here
after be held between yourself and the
representatives of the company. be so
modified as to permit the Union Pacific
to take such steps. not affecting rates,
as may be necessary
FOR ITS OWN PROVECuTION
in view of the manifest disturbing in
fluence which must be exercised on the
distribution of traffic through the con-
structIon of new lines, or the leasing of
old ones by other members of the as
sociation." The letter of President
Hughitt, of the Chicago 81 Northwest
ern, likewise gives notice of the with
drawal of that company, and says: ST
understand your decision as holding, in
effect. that no change can be made in
the status of the railway lines men,
bers of the association, in any manner
directly or indirectly affecting the dis
tribution of competitive traffic, unless
it be done by the construction of new
lines. or by acquiring in some manner
proprietary interest in existing lines. If
this construction of the agreement is
correct, then the Chicago & Northwest
ern and the Chicago, st. Paul, Mime
apolis & Omaha Railway companies bv
becoming members surrendered their
rights to make such contracts with
connecting lines, not affecting
rates, as in the Judgment of their di-
rectorS the best interests of the stock
holders require. 1t is proper for me to
say that the directors did not under
stand that by becoming a party to the
Interstate Commerce ASSOCIATION agree
ment they had so sacrificed their power
to make contracts. They therefore en-
tered into the agreements with the
Union Pacific Railway company, scru-
pulously observing, as they believed, all
the provisions of the Interstate Com
merce association agreement. 1t being.
however, your opinion that by so doing
they had violated that agreement, it
only remains for these companies, there
fore, to give formal notice of their with
dTaWal therefron, to take effect at the eX-
piration of thirty days from the date
hereof. have also to assure you that
these companies will, unless compelled
thereto by circumstances beyond their
control, abstain from any action calcu-
lated to demoraliZe rates, Improperly re-
duce established tariffs, or affect by il
legitimate OF irregular means fair dis
trIbutlOn of competitive traffic The
Fremont, ElkhOrn & Missouri Valley
and the Sioux City & Pacific railway
companies are also included In this no
tice of withdrawal" Chairman Walker
has called a special meeting of the In.
terstate Commerce Railway association
for Feb. II, to consider the action of the
Union Pacific and Northwestern, as
well as to consider and act upon the re-
port of the committee appointed at the
last regular meeting of the presidents
to revise present methods and organiza-
tions.
New Wrinkle in Grain Rates.