The times. [volume] (Richmond, Va.) 1890-1903, 1902-01-25
COMPETITION DOES
NOT LOWER RATES
James ]. Hill Before Interstate
Commission.
PURCHASE OF BURLINGTON
Matter of Necessity and Not Movement IL
Line With Trust Ides-dives Expla>
nation OF Formation OF Northern
Securities Company.
PURCHASE OF BURLINGTON
6Rr As.ocia,ed Press.,

nv Associated Prcss.o
CHICAGO. Jan. a.-James ]. HILL presi-
aent of the Northern Securities Company
and president of the Great Northern Rail-
SHv testified for :hrcc and onc-duartcr
hours before the Interstate commerce
Commission here to-day.
In answer 10 questions tending 10 snow
the effect of the community OF interests
plJu on rates the veteran Tailroader de-
clarca that competition docs not lower
isltos but on the contrary. he believed
that II advanced them. lie declared that
IN the Northwest, where for twenty years
tic Northern Pacific and the Great North
crn have been ut peace, where ono road
has agreed with the other on rates and
maintained the agreements, rates were
lower than III any other part OF the
country.
In regard 10 the purchase Of the Bur-
;iugton by The Northern Pacific and the
Great Northern. Mr. Jill declared that
Tho purchase was a matter Of necessity,
and was not due TO "a movement III Inc
with the trust idea
SIMPLE EXPLANATION.
lie testified TO the formation of the
Northern Securities Company, and IN
doing so gave a reason far more simple
than has generally been coniecturcd.
There arc some old men, sonlc very
cid men. interested in the mana cement
OF the Great Northern, . said nc. Two Of
them are over eighty and several over
seventy years. They wanted 10 form il
close corporation into which they could
coutine their interests with the assurance
that the road would be managed along
the lines which have made it a success.
i was TO have taken over one-third of
The stock of the road. The plan seemed
a good one: then it was proposed 10 let
all the stockholders in-not alone the
few owners of the one-third-but all Of
,,l-,, J.. .-.,I
thcn it broadened into the idea of taking
IL tho Northern Pacific also. The roads
had worked in harmony for twenty years,
and tho change in the holder of the Sc
curities would make no difference IT
can make no difference, and will make
40 difference
FULL EXPLANATION
in explaining his reasons for the pur-
chase of the Burlington, Mr.. Hill went
back to the time when he found it neces-
ssary to offer Il low rate TO the timber
mon of Oregon and Washington, in order
to get loads for cars which had originally
gone West laden with merchandise. He
said:
I'm order TO put ourselves in q safe
position, VIC had to buy the Burlington
road; II gave us tho market for our West
crn stuff that we had to bring back and
il afforded us a. connection in the East
with all tho producers. and it completed
The conditions that were necessary.
Mr.. Day attempted TO show by long
line of questions that The real reason Tor
taking over the Burlington was to form
a sort OF trust. whereby Northwestern
rates would he absolutely in the hands
of Mr. Hi and his friends. To this Mr.
Jill reiterated his previous statement COLI
corning the purchase of the Burlington
Mr. Day then asked the witness if after
the agreement to organize the Northern
as,pl1. ita
had exercised amy control over or given
any instructions to the managing officers
OF tho Northern Pacific regarding ITS
operation
Mr.. Hi replied that he had issued no
instructions of any kind TO the officials
OF the Northern Pacific
GRoWS EMPHATIC.
The witness then entered into a lengthy
dissertation on the effects of competi-
ton as he had observed it. Commissioner
Clements repeatedly questioned his as
sgrttou that competition does not lower
rates or tend to lower them, but each
time the veteran waved his Eyeglasses
omphaticaIly and reiterated his state
mont.
The railroad is a sort OF mcrcurlal IN
fication of the state of the country trib-
,It;;ry 10 it, lie declared M he country
Is poor the railroad viii be poor. a low
1at, is not the result of competition, it
merely shows how low rate he railroad
can afford to give. DO you suppose that
man in absolute control of railroad,
having no competition, could raise latcs
TO an unjust degree and prosper? The
minute lc did he would hamper the COM
Incrcc en- which his road lived, ANA when
llc did that YOU would hear of road
passing their dividend. 1t is principle
that a road must give the lowest rate it
can. / always do
REBATE SYSTEM
MIR. Hin averred in answer to further
Interrogation in regard to The effects of
connection that commercial war between
roads really resulted in higher tariffs.
THEY cut each other TO the heart, said
~ ana then patch up an agreement,
whereby everything is higher than before.
The rebate system is Il part OF competitive
warfare and you know the rates the gen
rrgil shipper get thereby He pays the
freight which the large shipper hau
lodged Roads arc bound to hustle or
business and they Viii do much to secure
The patronage Of a large shipper
Mr. IIiH was then asked if amy agree
ment had been made. express or other
wise respecting the division OF traffic or
earnings. which involves the Northern
Pacific he Great Northern, or the Bur
,ii7etcu. lie replied:
40 understanding. directly or indi-
rcctly''
'or with The Union Pacifc?" lie was
asked
None whatever " he replied.
Darius Miller traffic manager of the
Puflinrton ard ] G. StuhhS traffic man
accr or Tho Southern Pacific and Union
Pacific testified as TO rates on their lines.
------ -