New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-03-27
now RATE WARS STAKT.
,,,,rroSs BEYOND THE CONTROL OF
RAILWAY MANAGERS.
~,,rS7s BY cHAuNcEY n prPnw AND
rn,oE F wALKER,-REcE1vERs AZ HLD-

IMAGE F. wALKER-REcE1vERs AZ nA0-
NrSrs IN COMPETITION
.sv NJ Dapew was asked by Tribune 70
- Yesterday why the railway presidents ana
por'e' should be so fearful Of a railroad rate
ranas a. ,ba decision OF tho Supreme Court In
wal OF the Transrrssouri Freight Association
ne .he rate war could only be brought about
~. presidents and managers themselves he
" .such a statement seems 10 De conclusive
Ear IN itself. and that view was aoiy
als" an editorial in The Tribune this morning;
pw era conditions In railway competition
bui a-a bevond the control Of railway presidents
wnH-.c,,ive officers unless they have some
Hssrvanding with each other. IL Ia safe 10 say
% ~ per cent OF the rate-cutting. Generalization
denomination done now. even with trafhc as
aas ,o,s IN existence Is the work OF receivers OF
rnaAs manufacturer or a merchant fails in
-.rs.s. hts assignee takes possession OF the
.-,, winds It UP. distributes the proceeds
-, me creditors, snd that competition ia over
. -s1V-sv company. on the other hand. stops pay
a., Av--An5s 10 its stockholders. defaults on the
10 M IT'S bonds. and is placed In the hands
- -a,ever The receiver runs Il absolutely inde-
.sar,lv OF It's owners or its creditors He pays
ton to either. He is anxious 10 make a
- shov.nc 40 as 10 become tho president or
oo-0l manager and have a permanent place II
. ~osh can oe reorganized upon any basis upon
n,cb n can pay The term REORGANIZATION simply
ealing down mo CHpllal anu llucptcuilco9
- =, estimated paying basis. For example, sup
~ 49, into which the people have put. say.
..on,oOe, 100000 in stock and $S0cn"V In bonds
m. stock has been paid in in cash. and then upon
49, ,ronerty thus created S9eo.HD has been DOR
80 on bonds The stock and the bonds become
-sss,v distributed. and the interest and DIVIDENDS
49,, .be living OF people of moderate means, OF
,aors and of minor children. The ouiloihs OF
- lives and the cheapening OF transportation
~ .ba diversion OF business become such tnat
. oaA ceases 10 pay its stockholders anything
y. .har defaults upon the interest Of its SSo""oW
- nonds and goes into tho hands OF receiver
THE DIFFERENTIATION PROCESS.
,a-vhne the receiver is running Il committee rep
,..ertinc the stockholders and bondholders eet 70
Gather ard see II they find safe hnaDclaI OASIS
~ which 10 reoryanize H. and the process is TO
s.sess The stock for the purpose OF paying OH the
Aostinr dent and compel the boncholders 10 take
.ho,i, one-nalf what they had before The Reor-
sanitation Committee believe that the road can
safev earn upon one-half Of its Indebtedness ana
that possiby in the development of the country the
x,ockholders may some time or other get some
thing. ,,
.,VoD IN. receiver being amenable 10 neither
stockholders nor creditors nor anybody but the
Court wants 10 show that under MS management
~ road can carry mora tonnage and earn more
money than when It's owners were running IT, ne
herins 10 paw commissions which means paying
pay larger mileage than anybody else 10 shippers
who own their own cars. and 70 make concessions
OF other kinds. He goes 10 the heavy Shippers OF
ne other line and offers this advantage TO go over
the road which Is being run by the United states
through him As one after another OF the strong
customers of a line are thus taken away, the freight
agents and the traffic manager beslege the president
with statements Of the loss and with starting sta
.is-cs showing that unless this diversion is stopped
his road will soon be in the hands OF A receiver
Tho president, finding that he can do nothlhg VII"
the Court 20 induce the Judge 70 restrain inc re-
oaive- and nothing with the receiver 20 check MS
~ -1a.bods fs compelled by the law Of sef-preser-
cation 10 saw TO mis- traffic and freight people; Keep
vorr customers The moment ne says tha' the
railroad war is opened. and the solvent road Is
handicapped by stockholders who have been accus-
-oroad 70 dividends and bondhoders VINO have been
accustomed 10 interest, and employees VINO nave
haao accustomed 10 having their wages PAID reeu-
Iar,v working against the line which the Court pre-
vents from paying anything.
Joint Traffic Association. One OF these ROADS nad
-acentv A. per cent OF its freight business taken
av,av from II by just the operation which have
described but its managers. representing us own
e-r-.n would not permit It 10 enter upon rail-
road war
WHAT HAPPENS.
IT. there can be no association. and II associa-
,,ors are trusts and conspiraces OF course no rail-
rav manager IS going 10 violate the law. Ihen
This occurs: The great shippers and the trusts go
20 each one OF these thirty-two roads ana repre-.
r+ that they can get their traffic carried al or 10
.e,+s a hundred less than the rate agreed upon
~. all lines and state the road upon which they
"a, get II done. The president Of the competing
line affected and upon which this big customer OF
,-,,s+ is instantly asks the representative OF the
o.he- line Il II u true and II Is denied. men
-bese great shippers transfer their whole business
zen done in their own cars, 10 the other line
.,-,,- az reason that they are getting THIS lower
-a-e The freight agent. who Is closest IN con'ac.
with this shipper. is furnished Win "aEoii'' az
vouchers upon pledge OF secrecy sho"l4s 'ie'
.nia low rate is being given, ana the presloeit oi
manager has the alternative Of not believing IT, los
d. ne business or explaining 10 his directors ahG
,,ockholders that he lost his business because 'he
simmer tried 10 buldoze him by gong 10 aiio'ile
l,s h1t that ne did not believe the othe1 Hlle pau
- -aha+a or gave the secret concession whlch
80 ~ +-a@c But when his directors or
80 s+ockhoiders meet the traf1c men they are
80 ,ba- they know that this secret concession
49, - and that this business might have been
held u the management OF their line hao peei' ~
10 date and prepared 70 protect It's CUSTOMER
with an association on the lines or inc JUN
81 A.o.ls+ior the machinery Is in existence for
.ha investigation OF these charges and sa'lslAo''
o.or,at,-7an- OF the facts, that II u is CON-
susra-z OF one OF two or more Dig Shippers ~ -
duce railroad than fact Is developer ~
the association the members can ascei' ~
good faith IS being maintained or Il not the eh,en'
20 which and by whom Il 10 being violated WIN
Oh, the association this IS simply Impossible ana
-arwav manager has no source Of Information wneh
re IS losing his business as 20 tne cause OF H. "41oi
than The reports brought 70 him by his uaHic peo-
pie whose business is get business for the ROAD
snc me statements made by shippers that they are
getting better rates by competitive lines. frequently
supported by waybills and rebate vouchers "noso
authenticity there are means OF sscertaiiilnB.
Jus. 70 -h ,r-en- that railroads been able 10
West INST
~DTEre. .t