The times., 1899-01-14
THE Year With RAILWAYS
Report of the Interstate Com.
merce Commission.
LAWSCANNOT BE ENFORCED
Congress Urged to Amend the Reg
ulating Act - TnriGs DisrcGarded
and DETERMINATIONS Frequent
The Trans-MisSOuri Decision -
Financial StRtistics-Casuaitie

yesterday issued its twelfth annual fe-
port. dealing with its work during the
past year. The document contains numer-
Gus matters of great interest to those in
railway circles and the general public as
we'll.
The report calls the attention of Con-
gress to numerous matters in which the
interstate commerce act has proven de-
fective and inadequate. The commission
states that i'll its present condition the
law is weak and cannot he enforced. Fur
ther legislation is needed 10 make the
work of the commission completely salts
factory and effective.
Congress is urged to perfec. the law.
in accordance with suggestions made in
the previous reports of the commission.
The report then shows that the situ-
alton has become intoerable both
from the standpoint of the public and
the carrier. Tariffs are disregarded, dis
ordinations constantly occur, the price at
which transportation can be obtained is
fuctuating and uncertain. Railroad mana
gers are distrustful of each other. and
shippers all the while in doubt as to the
rates secured by their competitors. The
volume of traffic is so unusual as TO fire.
quently exceed the capacity Of equipment,
yet the contest for tonnage seems never re-
laNed. Enormous sums are spent in pur-
chasing business and secret rates accorded
far below the standard OF published
charges. The general public gets little
benefit from these reductions, for conces-
sions are mainly confined TO the heavier
shippers. All this augments the advan-
tages of large capital and tends to the in
jury and often 10 the ruin of smaller deal
ers. These are not only matters of grav-
est consequence TO the business welfare of
the country but they concern in no less
degree the higher interests of public NOR
ality.
To prove its assertions. the report cites
several cases investigated which showed
transactions contrary to the spirit OF the
law.
The report notes the urgent demand for
legislative relief made by the carriers for
lowing the decisions OF the Supreme Court
in the Trans Missouri and Joint Traffic
Association cases, and the commission
discusses the nature and functions of
railway traffic organizations and the origin
and growth OF such associations.
At the time the act to regulate commerce
took effect, practically all the competitive
railway traffic in the United States is
eleven of these associations. The pool
was the vitalizing force in these combtna
tions
The results obtained from an application
of the pooling principle to the act were not
satisfactory. Rates were not stable, the
grossest determinations existed, rate wars
were frequent, ana 1t was largely this con-
dition which railway combination had fail
ed to cure that induced the passage OF that
statute. The act prohibited pooling. but
the need for common understanding as to
competitive charges still existed and was
emphasized by the requirement in the
law for publication OF rates. The asso-
Citations were perpetuated in one form Or
another. and al the time of the Trans Mis-
souri, decision about nineteen were in OPP
Grafton.
In considering the legislation sought by
the railways. the commission insists that
it should be considered that the cardinal
purpose OF traffic associations is restraint
of competition between rival lines. and
that their object has been in every in
stance TO substitute the will OF the asso-
citation for that of the individual. The
railways, the commission argues, are
asking. not simply the right to form
such organizations as they formed in
the past, but to make contracts which are
illegal and unenforceable at common law,
Independent Of statutory prohibitions. The
want OF legal sanction was always the in
herent weakness of these associations.
The relief sought by the railways is. there
fore. much more than exemption from the
antitrust law or repeal of the anti-pOOl-
ing section of the act TO regulate COM
merce. and the real question now is wheth-
er the carriers shall be granted right OF
contract which they never possessed.
The income account OF railways in the
United States for the fiscal year ending
June so 1898 shows that the gross earn
ings of those systems, the returns OF which
we're received prior to December !, rep
resenting Is1, 333.62 miles OF line, or 81
per cent of the operated mileage in the
United States were Sizes 523.3So Tne
operating expenses We're SSll, ,2H.i' =
leaving net earnings Si21.2Sl. .322. Income
from sources other than operation
amounting to $39, sos 19i was received b.
these railways.
The total income Df tho operating rail
wavs covered by this report for the yeaI
ending June 80. 1898. was si66.ISO,ll6. The
total deductions from income. which term
| embraces taxes tsil .699.3is), interest on
funded debt, rents for leased lines, and
other charges against income, were for
| the same period sos, 1S9 202. The aggre-
| gate of dividends declared by the opar-
ating railways was S65 $50 .yl5. The deduc-
ton of these items from the total income
| stated shows a surplus of $42 60i, 999 from
| the operations of the year ending June
| so. 1898 The corresponding items for the
! previous year resulted in showing a def
| cit of 81, il2 39G from the operations OF the
| year.
| The present report being confined tC
| operating roads does not include the divi-
dends declared on the stock OF lines Operat-
| ed under lease, and on this account does
| not show the total amount of dividends
| declared during the year by all railwaJ
| companies. The dividends declared by tn,
operating roads embraced in this report
as stated above were S6.S39331 in excess
! of those declared for the previous veal
ending June 80. 1897.
The Commission granted numerous com
petitive carriers an extension OF two year!
| from January /. 1898. within which TO com
| plv with the requirements OF sections / an,
| of the safety appliance act, and required
| the companies whose equipment was in
| complete 10 make semi annual report
| showing the progress thereafter made. o.
| Nav 10 the carriers We're notified to fill
such report for the six months endinl
June /, 1928 Returns received from 2S
OF the 2g4 carriers which were granted al
extension Of time show l,l56.6l6 freigh
cars owned. AN increase of 20,6ll over tn
number reported on December ]. 1897. Dur
ing the six months .93S freight car
were equipped with automatic coup!ers an
"a iOO were fitted train brakes. making
total of 795. .253 or 60 per cent. having an
| tomato couplers, and 5ll ,666 or II pc
cent. equipped with train brakes up /
June J. 1898 On that date 29,l1 or q
per cent. of the total number of locomo
lives owned by these reporting carrier
we're equipped with driving wheel brakes
The returns for the six months endin
December l, 1898. are not yet filed, but
is believed that they will show reaSonabl
progress and indicate the probability q
l not tss