Evening star., 1895-10-25
RAILROAD WARS
Rate Cutting a Difficult Problem for
Managers to Solve.
PROPOSED TRAFFIC AGREEMENT
Competition Among Smaller Roads
the Chief Cause of tho Trouble.
FAST LIGHT LINES


"Any one not acquainted with the inside
workings of railroad would naturally sup
pose that it's equipment and safe and rapid
operation were the chief problems that con-
front the head officials of our great trans
portaticn companies. Quite the reverse is
the state of things. The apparently insig-
nificant act Of cutting passenger or freight
rates causes more gray hairs than disas-
trous wreck or damage done by fire or
flood"
The above words were spoken by one OF
the ablest railway general managers Of the
west to reporter of The Star one night
recently. The general manager had been
over to New York attending the conference
of railroad presidents of the country brought
together to devise plans to discontinue the
disastrous cutting of freight rates, and had
stopped over in Washington on his way
back home. Continuing he said:
Il have been connected in high Off
cial capacity with different western roads
for many years and also attended
single greedy act Of a western or eastern
agent causes more trouble and worry than
seems possible to the outsider
Every year a new traffic agreement is
agreed upon that seems able to hold every
body together for years thereafter. Last
year it was the passenger rates: this year
the freight traffic was under consideration.
For time all goes well. Then, all at o1ce,
our men will hear murmurs from the east
or the eastern men from our country. Trou-
ble-brewing busybod;es are always at work.
Then up in the air like thoroughbred trot-
ting horse we all go in the mad scramble to
see who can deal the most vigorous blow
to the road we imagine started the demor-
ai.Zation of rates. Three months of this
sort of business and then the ads awake
to the fact that the country is rubbing its
hands gleefully, figuratively speaking, over
its enjoyment of the situation at our expense
Competition the Cause.
''The big roads are all right, although the
late Jay Gould remarked at one time that
a bond valued at $4,000 was worth more
than railroad presidents word, be he
worth s5,00OOOO. It's the smaller lines that
cause the trouble. The situation can be
1ikened to almost any wholesale business.
The big houses have their standard trade
and in endeavoring to get slice of it
competition sets in and prices are second
ary considerations
''At the meeting over in New York, on the
closing day, it took seven hours hard work
to frame an agreement that received the
unanimous approval of the Representatives
of all the roads concerned. This document
will be fully completed the last of this
month, when l will have to take another
trip east and help to make the work of the
past week success.
"A provision was inserted in the agree
ment that each member of our association
shall deposit with the treasurer $4,000
within twenty days after the agreement
gees into effect. and provision was made
for receiving into the association one or
more additional roads. This leaves the door
open for two or three rather backward
lines which operate in the territory cover
ed by the trunk lines. The money deposit
hurts. A railroad official don't mind as
rule. losing $l,O0o.00O for his road in disas-
trous rate cutting. but fine of 5000 makes
his flesh creep. The creepy feeling attacks
the stockholders when settling day comes
after rate war. The $4,000 guarantees
the fines.
1T was apparent to all railway managers
that there was urgent necessity of doing
something to stop the increasing demoraliz-
ing of freight rates. consequently, the
with zeal. and it has been pushed with
commendable celerity. President Depew
Of the New York Central. ably assisted by
Roberts of the Pennsylvania and ingalls, Of
the Big Four" aroused their associates to
action.
To Prevent Rate Cutting.
THE trainers of the plan determined to
devise an agreement more effective and
lasting than anything hitherto put into
or Grafton by the trunk lines. They worked
with care and took legal counsel on every
important point. The result of their labors
Is an elaborate agreement. which, If finally
adopted, will invest a controlling board Of
railway governors with as much power.
almost, is exercised by the governors
of the New York stock exchange
THE chief idea in the proposed agree
ment Is that the cutting of rates must be
stopped This step in the preliminary work
was taken without argument. All of us
agreed that unless fair standard of
freight rates could be maintained the
stockholders need not expect dividends. as
you know the proportion of freight hauled
over the road to passengers is about 20 to
30 per cent. The means suggested to put
stop to rate cutting troubles is some
thing in the nature of pool, although
there Is to be no money pool. 1t is pro-
posed to establish a board of nine govern
ors, representing the sixteen trunk lines.
This board Is to have absolute power in
making rates, enforcing the rules and i'm
posing penalties for aagrant violations.
There is also to be board of arbitrators,
and all complaints must be passed on by
that board before any of the disputing
lines can take action of a disturbing ma
ture.
From my observation, there appears to
be general disposition among the railroad
men to favor a clearing house. OF course,
If all of the trunk lines agree to combine
in common interest. some provision must
be made to insure to each road its proper
tionate share of the fruits of the traffic.
By having a periodical settlement Of bal
| ances through clearing house. it is
tnOuSnC tndt the T.SEtS OIL edcn ROAD Will De
well protected.
Why Rates Are Cut.
"It is a question whether this elaborate
and far-reaching agreement shall become
operative or not, but there is no denying
that the sentiment in favor of honestly
| maintaining rates is steadily spreading
| among railroad men. I remember an old
| saying that every railroad traffic manager
| cheated, not because he was dishonest, bul
| because he knew that his neighbor would
cheat and he could not afford to be left
From present Indications it will not be long
! before the average freight traffic manager
| will see things from another point of view
I recall some years back when we had fin
ished a meeting in New York and settled or
an agreement. The late Jay Gould was
| there, md, commenting on it, said: Tt is a
good enough agreement to watch each 9th
or with IF we all really want to maintain