New-York tribune., 1905-04-26
PANAMA RAILROAD RATES.
TAFT SETTLES QUESTION.
No Discrimination -4fter Present
Contract Erpires.
IFRoM rHE rRIBUNE BUREAU.

Washington. April 35.-The policy which will
govern the administration OF the Panama Rail
WAY. in Ear il affects transcontirental
railway rates, was clearly enunciated to-day by
secretary Taft in letter 20 J. J. Hooker. Of Gin
cinnatL The Secretary assures Mr.. Hooker.
who is chairman OF the executive committee OF
the Receivers and shippers Association Of Gin
cinnati. that the government VIII act without
regard 10 transoontinental railway rates; that
the monopoly now enjoyed by the Panama
steamship Company IN the transportation of
freight and passengers between Panama and
an Francisco VIII be terminated July l. when
81 oompany's present contract expires. and
that thereafter nothing VIII interfere with open
competition in transportation between those
,oirts He declares that The government will
maintain the present line OF three steamships
between colon and New-York. in order to pre-
vent any possible combination which might
seriously enhance the cost of transporting ma
,erial for the canal between those points
Nr Hooker addressed the Secretary on this
subject because Of an interview which he had
seen credited 10 Chairman Shonts. and which
represented NJ Shonts saying that the gov
eminent would DO nothing TO demoralize trans
continental rates. While this still appears 10 be
the opinion Of Chairman Shonts such opinion
Is based on the limited capacity OF the Panama
route and its slowness. and not on any plans OF
the commission with regard TO fixing rates on
the Panama Railway.
The secretary's letter is as follows:
Washington. D. c, April -. 1905
Ny Dear Mr.. Hooker: I am in receipt of your
letter OF April y. and have read it with inter-
est The policy Of the government in managing
the Panama Railroad is 10 charge such rates as
viii pay for the carriage Of the goods across
The isthmus. a reasonable return on the invest
viii permit no discrimination against or in favor
OF any of the connecting steamship lines. Il
may be that this policy VIII affect the transcon-
rinental rates Is 10 those classes of freight that
can stand the isth1nus trip, favOrably for the
shipper. However. Mr.. Wallace, our chief engi-
neer, and railway manager Of experience
thinks that the proposed changes will not have
much influence on transcontinental rates. be-
cause he thinks that but small proportion of
that which goes 10 make up transcontinental
freight can be carried by the lsthmus The long
trip and the fact that the merchandise carried is
10 be cons ierable period IN the tropics exclude
the possibility OF carrying many kinds.
The Panama Railroad Company owns three
Eteamships, which ply between New-YOrk and
Colon We shall make the -ate upon these ships
low as possible, consistent with paying rea-
sonabie compensation for the carriage and the
investment. We shall run them merely for the
purpose Of preventing a combination 10 raise the
rates for the delivery OF material for the con-
structon OF the canal from the United States
The government is not running. and does not
expect 10 run. a line between Eew-York and
San Francisco. or between San Francisco and
Eew-YOrk; hence, the relation Of its policy 10
transcontinental rates is only indirect. The
policy OF the Panama Railroad Company hereto
fore. IN view Of its ownership Of the three ships
and the docks at Colon, and its resulting abil-
Sly 10 exclude from the New-York and Colon
business any other steamship line, has been TO
monopOlize the trade between New-York and
Panama on the one side. while its arrangement
for exclusive through billing between New
York and San Francisco with the Pacific Nail
Steamship Company produced a monopoly for
the Pacific Mail trade the other side between
Panama ana san Francisco on the north, and
monopoly for the Chlian and Pacific Steamship
companies from Panama 10 the South. So far
as the action OF the Panama Railroad Company
can break up these monopolies. It is being taken
The governments acquisition OF the railway
line was not primarily for the purpose OF affect
ing railway or ocean rates. transcontinental or
otherwise. II was for the purpose Of acquiring
instrument with which to construct the
canal. an instrument absolutely Indispensable to
The accomplishment OF our purpose within a
reasonable time. The incident that must
hold the railroad under franchise requiring US
20 do a commercial business IS what imposes
upon us the obligation TO do what can TO
make just rates and prevent discrimination and
this we shall do II this ameliorates conditions
We shall be very glad. II il does not II will not
be IN our power 10 do more
The effect Of changes in rates and trade con-
ditions IS so elusive that II is hardly safe to
make a prediction as 20 the result one should
study the local conditions which prevail at Pan
and at the many ports between San Fran
cisco. in Mexico and Central America, and
should estimate the exact operation Of our
coastWise laws. which prevents the intervention
q foreign shipping in the trade by way Of the
isthmus between san Francisco and New York,
before expressing opinion as TO the effect Of
the governments operation OF the Panama rail-
road upou the trade between our east and west
coasts An attempt has been made heretofore TO
establish an American line competing with the
Pacihc Mail between San Francisco and Pan
anna. With the assistance Of the Panama Rail-
road Company. 1t proved TO be a disastrous
failure and was therefore followed by re-
neWal Il The discriminating contract which is TO
terminate in July next. 1t is possible that the
time is now ripe for the establishment OF Amer
lean competition with the Pacific Mail between
San Francisco and Panama
Certainly the government in operating the
Panama railroad viii do nothing 10 hinder IL
Nevertheless. Il is possible that the position OF
advantage that the Pacific Mail has with re-
Epect TO Mexican and Central American trade
and its ownership OF dock at Colon may enaDle
Il to establish lines on both sides which VIII 90
al the through business and fix the rates win
out enjoying any discrimination IN is FAVOR Dy
the Panama railroad. II SO. the government
could not prevent this except by running a line
from Panama 20 San Francisco for the purpose
which II cannot do. -,
Mr Sh0nts could hardly have been correcuy
reported IN The interview you send me, because
lie fully agrees with the policy Of the govern
ment as / have outlined il above
Should you have any criticisms TO make upon upon
st. my dear Mr Hooker I should be glad L"
hear from you Very sincerely yours
WILLIAM H. TAFT.
gr James J. Hooker. chairman executive com
rnittee the Receivers and Shippers as AS-
sociatiOn Company. Of Cincinnati Aii1Oi'
Trr,er F,ufldfng. Cincinnati, Ohio.