The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-03-27
DEPEW AVERTS A WAR
How the Trunk-Line Association
Agreement Was Saved.
Orator Chauncey Makes Plea to Rail-
way Presidents and Induces Them
to Avoid Cutting Rates.

600 is to be imposed for every violation OF
the contract. will be watched in railroad
and investment circles with intense inter
est because of the critical condition of
railroad rates. The agreement is to go
into effect on April /, and lawyers of emf
nence are carefully drawing 1t up so as TO
render it enforceable at law and at the
same time make 1t perfectly in consonance
with the interstate-commerce law. How
near the association approached the point
Of disruption was not known generally until
yesterday, when the speech of Chauncey NJ.
Depew, president of the New York Central.
at the meeting held on March Is was dis
tributed among the trunk-lne presidents.
The Pennsylvania railroad it is understood
moved, through its representatives, for a
complete abandonment of all agreements to
maintain rates This drastic proposition
grew out of the disgust Of the Pennsylvania
at the discovery that the Chicago & Grand
Trunk railroad had made contract with
the steamship line controlled by the Grand
Trunk of Canada by which ii hoped to Sc
cure larger share of the passenger bust
ness through Illicit payment of commits
sions to steamship agents. The matter In
dispute was a small one. as regards reve-
as virtually involving the whole principle
OF good faith in the trunk Line agreements.
offered by the Pennsylv ania railroad in an
eloquent speech which pointed out the dan
gers and losses that would follow
adoption of resolutions for a continuance
of the railroad agreement and efforts to
make 1t more binding than ever before.
MIR. DEPEW'S SPEECH.
The address of Mr.. Depew at the meet
ing was obtained in spite of his refusal
to make it public. and it is herewith pre-
| sented:
Eve will approach the last ditch fast
| enough if the resolutions just offered and so
| strongly pressed shall pass. When we get
w U % run haR Dg 1ne fS9tne
| duties here elsewhere. Receivers will
manage manage these properties, and the stock
must find some other sources of income.
| The situation which confronts us is very
| were signed by the executive officers OF all
| the companies which were members of the
ciation. These Agreements nave been 1,'s So
| cretly violated The five so-called weaker
| lines were given such differentials, or lower
rates, as were supposed to be sufficient to
| enable them to secure and retain their share
| of the traffic. If these differentials were not
| sufficient greater ones were to be allowed.
| In consideration of these concessions these
| lines agreed not to pay commissions. 1t
now appears that in competition among
| themselves one of them has made secret
| contract with steamship line, which is TO
run during the. whole of this year, to allow
| the total passenger fare from Chicago to
| New York. This line says it cannot break
in breaking the one entered into with us
| TO meet this contract ALL or nearly all, the
| dinerentlal lines are paying commissions on
| To meet this breach of faith these resolu-
| lions are offered by the strongest interests
| in our associations The first directs the
immediate withdrawal of all differentials,
| and the placing of strong and weak lines
| on the same basis. The second calls for
n al oNtc or afr.tnf IN,
ing !s,r rates Gos,tor toten hv Tho mowers
| these resolutions is logical enough. One
party has broken faith, therefore break the
| contracts. But we cannot manages these
vast ana confiicting interests by the rules
| of logic, or the principles governing ordinary
| agreements. We all have two obligations
one to our stockholders, the other to the
| public. We formed these organizations
| many years ago to stop the generalization
| which threatened. the bankruptcy of all the
railroads in the United States and Canada
| and an assault upon Americn credit and
| business more serious than any the country
had ever known. / maintain that these or
| ganizations have eXerted a good influence;
| that they did check the decentralization and
| disastrous results which would have fol-
| lowed if the associations had not been
formed. They benefit legitimate business
| and protect it from gamblers.
| PECULIARITIES OF THE BUSINESS
(, cit is one of the pecllarities Of our bust
ness, and seems TO apply to no other, that
when we have more traffic than we can
carry charge full rates, and get returns
which enable us to meet our charges and
dividends-those Of us who pay dividends
easily, and have large surplus for the bet
| terment of our roads, without taking the
usual process of charging it to capital ac-
count. But when there is a dearth of bust
| ness, and 20 to % per cent. Of the freight
| cars and locomotives are, as
to ent Tafes and then DO tbe
that is left at or below cost. instead of TAX
| ing every possible means to secure full re-
| business at standard rates. If that sort of
| management characterized any dry-goods
| house, any mill, or any factory, or any fur
| mace, it would be bankrupted and shut up.
The popularity of the railroad is that it
| runS-aS far as its physical properties are
concerned-just the same when IN its owners
| ceive fair returns. Now, the present situa-
ton is exaggerated from the fact that each
| of us Is suffering. We are suffering from
| loss of traffic, and the agony is enormously
| intensified by our being put upon the rack
| of cut rates. We all know the present con-
| ditionS will not last year. We know that
| If rates were maintained our reductions in
| expenses would enable us to retain our net
"The passenger business that we have
been considering this morning, and which
| is affected by the Irregularities, is, perhaps,
| Is per cent. of the second-claSS passenger
business from Chicago east. That Is all
thre tbs ct OF aPs conco
to the weaker lines shall be abandoned at
once will be that by next Monday we will
be carrying passengers between New York
and Chicago at $40, and a week from Mon
day for IS, and a week from that will
be giving them a chrome and paying their
sleeping car fares il they will take our
respective lines. 1t might not get Down
quite so bad as the last, but in two weeks
IL would get where any railroad that ran
| more trains than were necessary to take
| care of it's local business, TO accommodate
the through, would be running them at
Dc sitive loss. You could not expect such
conditions in passenger business to exist
| tv enty-fOur hours without the demoraltZe-
ton reaching the freight traffic. and by the
middle of April we would be in the midst
of a railway war equal in its severity &c
| anything which ever occurred in the coun-
try. By Easter the slight props now sus-
tanning confidence and credit would be
broken. and all hope of revival of general
business blasted.
WAR WOULD MEAN RUIN.
1.-The only question would be how long
1t would last, and how many roads would
have to go to the wall before it ended
The method proposed is one way, and the
poorest way, 10 settle the question. 1t 1:
TO have an exhaustive railroad war until
everybody is used up and willing to come tC
any terms. Nations do this sometimes in
Europe, and, after killing a million or mort
men on both sides, and adding TO theil
national debt several thousands of million:
of dollars, they make peace by coming bach
have so increased their debts that thei
taxes are increased almost beyond whsr,
il is possible for their people to earn
living. We may as we'll take IL for granted