Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-07-25
The Southern Freight Rate Troubles
Will Cost Heavily.
OBSERVATION-DISCLOSURES ARISEN ALREADY
B. and o. Interest Charges to Be
Paid Promptly.
J. p. MORGAN'S EXTENSIONS

the Southern rate war, said a prominent
Baltimore banker last evening to a Star
reporter, "there are some railroads in this
country whose managers will have hard
work to keep them out of the hands of
the receiver. 1t IS all very well to talk
about the Southern being stronger financial
ly than the Seaboard but continuance OF
the present struggle much longer will in
evitabIy result in depreciation of the Sc
curities of both. and also very probably of
some other roads which are likely to be
brought into the fight According to the
Financial Chronicle. a recognized authority
on banking and railroad matters, the south
ern stocks which are listed at the New York
exchange have already suffered terrible
losses during the present year. For ex
ample, the preferred stock of the Southern,
of which there is $50 0O0. 900. has deprecated
to the extent of A.S75.00o. and the common
stock of the same company of which there
is S125.NO,OOO. has shrunk in value to the
amount of 81 49, 900 Them again. the Louis
vile and Nashville, whose capital stock
amounts to $49. I66. 800, has suffered de-
cline of 20 per cent. amounting to nearly
s10,O00OOO. This list might be heightened.
1t Is bad enough to know that the two COM
panies named have suffered a shrinkage
from the highest quotations of their stock
during the present year to that of the low
est Of more than S2o.00O0O0.
The railroads Of the south are also al
ready threatened by influential persons in
many states with legislation which shall
have for its aim the prevention of rate
wars and their consequent baleful effect
business of all kinds. The people who are
interested in the Plant system of Florida
Alabama, Georgia and South Carolina can
not be convinced that they ought to be
compelled to lose portion OF their revenue
for the reason that the Southern and Sea-
board choose to have a fight because the
former establishes a steamer line between
Baltimore and Norfolk nor do other roads
relish the idea of decreased earnings be-
cause. through the influence of the South
eTn. the seaboard cannot run a through
sleeper between Atlanta and New York A
war or rates now, on the of the move
ment of the fall traffic from the east to the
south. to be followed in a very short time
by the transportation of the great cotton
crop. would cause the loss of millions to
the railway companies II the fight be long
continued. A general reduction would cost
| all the lines heavily. and would demoralize
almost countless business interests on
which the roads rely to a great extent for
traffic Fluctuations in freight rates from
the great trade centerS would let In thou
sand articles and shut the home products
out of the local markets. which they have
built up on stability Of fixed freight
charges 1t is an open secret that there
are lines in the Southern States Freight
Association whose managers feel that they
are In no way responsible for the fight be-
tween the Southern and the Seaboard and
they are opposed to the adoption of any
course that will affect the receipts of their
security holders"
The Wholesaler Benefited
A prominent official of the Southern. in
talking of the fight. said it was worthy of
consideration that in this cutting of rates
the people of the south will get no benefit.
The merchants of the south purchase their
supplies from their northern and eastern
correspondents at "A certain price delivered
there Al Ter Of iph+
rates II Is the wholesaler who gets the adj
vantases that are to be derived from the
lower rate, and not the consumer
1T is stated, said railway official that
it is a part of the agreement between the
members of the Southern States Freight
Association that when one eastern city
gets a cut in rates the other eastern poin+s
shall be granted g relative cut. Complaints
on this score are already brewing. business
that has been done during the last day or
two had to he done on the Baltimore basis
otherwis" the merchants of Baltimore would
get all the orders. Sellers in other cities had
to 70 uce their prices to cover the excess
in freight which New York has to pay over
Baltimore. That excess is now forty-two
cents per hundred. The result of this if
kept up long. Will be to shut out all heavy
traffic from eastern points and leave the
field clear to the Baltimore people, and it is
hardly probable that the competitors of
the Baltimore merchants would stand this
very long"
The friends of the Seaboard continue to
ridicule the idea that the Southern may be
abie TO get "A controlling interest in the
former. and thus kill the Seaboard off as a
competitor but this is precisely what Presi-
dent Honman of the Seaboard said when
he declared war on the Southern was what
the Southern was after. and the truth is as
stated by a wel-informed railroad man
tnat there are members of the Southern
Association who believe that the Southern's
pollcy IS 10 continue absorbing until prac-
ticaly every line in the south east of the
Illinois Central is under its control"
Steamer Line Changes.
The Clyde line of steamships a close ally
Of the Seaboard Air Line. yesterday made
a sweeping reduction to meet the rate or
dered by the Southern. The Saaboard's ally
at Baltimore. che old Bay Line, yesterday
Withdrew its passenger service to Rich
mond. which it opened few days ago
The reason given for this action was that
no steamer suitable for carrying passan-
gers could be obtained The CASTOR. which
mas been on the route, will carry freight to
Richmond. but will only make weekly
trips.
The Southern railway officials at Chat
tanooga have been put to much inconyen
:ehce by the opera tons Of an injunctiol
issued by the chancellor prohibiting them
IRON using three lots pending the settle
ment or suit, relative TO them. 1t is stated
tnat the lots in question were purchas eI
ny the cincinnati Southern from Col. S. b.
NOE some years ago, but according to the
.t''ei lhey never PAID Tor them. AT the
Tune the lots were sold the price agreed
upon was $12.0O. but they are now valued
at %D.oD or more to the Southern by rea-
son OF the fact that they are part of the
switch yard.
me railway commissioners of North Car
oliha nave Increased the valuation of the
southern railway in that state to s. :Hs03 Os,O
an ADDITION of $l,362o 900 The Southern has
iooo miles OF track in dhe state The Sea-
BOARD has 616 miles. valued DIT S5,231 900, an
increase of $lI2.uU. q.
Norfolk md Western.
1t Is reported that the Norfolk and Wos.
ern railroad Corafianyy which has for some
time past been in the 6ands of j. p. Morgan
d Co. for Reorganization. ard for the sale
OF which by foreclosure judgments were
recently entered by Jrfge Golf of the Unit !
ed States courts at sNdrfolk ard Lynchburg
mas purchased controlling interest in the
Marietta and North Georgia railroad, ard |
that, after the Noffolk' and Western is re- |
Southern system At ssesert the n. and w
IS stopped at Brsfol, Tenn. The distance
from Bristol to knox vflle the northern end
Of the Marietta and North Georgia, Is 13l
miles. With that Ink connected, ana :. line
twenty miles long from Marietta to At
lanta. the Norfolk ard Western could get