The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-03-27
PLEADS FOR CARE IN
STATE RATErMAkING.
President A. B. Stickney of the Great Western Appears
Before the Minnesota Commission Attacks
Iowa and Illinois Tariffs.

tors is established the reasonableness of all the
rates is established, because all the rates are
mathematical sequences Of these three factors.
-.., Schedules Compared.
Let us begin the investigation of reasonable
charges for the two terminal expenses by mar
shaling the charges which have been established
in the various schedules which have been ex-
amined excepting the Illinois arbitrarily reduced
schedule): -#..L s..-.3s.
.~trr- ~-2s Per Cwt
The proposed schedule of the Mime
sofa commission seems to regard a
sonable charge for the two terminal ex-
penses frst-class freight to be. 11.6c
The Iowa commissioners schedule. ........ 132c
The Illinois commissioners schedule In
l9UD ...................,., 11.2c
The freight agents mileage rates south
rn or st.; paul. ::. 9oc
or ST. Paul ........................ 42c
This wide range nearly equa1ized the
five miles Of haul by the difference In the
constant quantity added, in the different sched-
ules for the straightaway haul. At the end
of five miles of haul their rates are 1875, A. 10,
IL and 10 cents respectively The proposed
Minnesota rate, being 1875 cents, Is almost
the exact average Q2.25 cents) Of the pre-
existing four rates. which is another evidence of
the conscientious painstaking with which the
Minnesota schedule has been prepared. The COM
missloners, necessarily having no facts upon
which to base the terminal expense, did all
they could 90 by consulting preexisting sched-
uies and striking an average. =, :
Terminal Expenses. ,'.-~
1t is not easy to demonstrate the exact COM
pensation, based cost, which railway COM
panies entitled to collect for terminal ex-
| penses Of the respective classes.
There is public impression that the margin
of profits in railway transportation is SO large
that in making schedule of rates it is not
pounds, more less. But the fact is that
one mill per ton per mile is equal to $7242 per
year for small road like the Great Western
and to $4,359, 664 per year for the Northern
Pacific. 1t is, therefore, important to check the
amount Of these initial rates with as much care
as possible.
Such expenses are all by the car but the COM
pensation is by the hundredweight. The cost
of switching the track room occupied, etc. are
as much per car for loaded with 1000
pounds as for car loaded with S0,0 600 pounds.
| No railway keeps separate accounts of its
terminal expenses, and many of the terminal
expenses are so interviewer with the expense
of hauling that they only be ascertained
by making proportional division. =
Dealing with first consideration, ter
minal expenses, Mr.. Stickney drew the
conclusion that in building up first
class rate it should start with the ter
minal, charge of l6.5 cents. He tool
for illustration the terminal expenses
of the Great Western during October
| 1905, which was the month, he said
| uLdG tHC N1GoU w CStciu cIlJOycC HI
heaviest freight business. The averag.
cost car in Minneapolis and st. Pau
that month"; he said, was found to b,
1886. Inasmuch as October was busy
month and more cars were handled
the average was less than for the entir,
year, the latter being $5.07. However
he based his arguments on the average
1 for October. - .>*
Taking the four classes. he showed
that the average cost hupdredweigh
for one terminal expense was GO cents
Distributing this average. between tn
four classes he presented the followin,
ratio a hundredweight: First class
,, 16:5; second, 1875; third, II; fourth
1925 cents. -, - 44..,.A e>A e.
Value of property, he admitted, woul
/ serve to make the, terminal costs i
Minneapolis and St Paul higher than i
e other cities, but volume of business hal
c died at these terminals is enough higl
er to offset this.
d The Three Conclusions.
s :. Taking the second and third factor
Z Mr.. Stickney presented the methods c
s handling all freights in detail, citin
g specific cases, and compared eXistin
9 and proposed rates, arriving at the TO
:. = lowing conclusions regarding all thre
. factors:
4 First-That the reasonable terminal char,
= for the trst7class rate is 1917 cents per cwt
~ SecOnd-That the reasonable constant qua
=, tity to be added for the straightaway ha
- on the way-freight train (the distance bell
Is to le P pir for sht pf es
- miles; and that the reasonable constant qua
= tity to be added for the straightaway haul
. thru trains beyond the 100 miles way-freig
,t train haul. is 11.375 cents per hundredweig
y per 100 miles. 49,. .-s =
lc Third-That the reasonable percentage
D. tween the rates of the different classes is t
:. relation fixed in the commissioners propos
II schedule; frst-class being 100. second ella
u SO 1-3 third class sc %, fourth class So fit
IL class 40, class %, class B S5, class C (:
=; :; class D %. class 20. ~
ct Results He Sees.
e. I now propose to show by an entirely Ser
at rate and independent. line of Chicago Gre
Western statistics that the rates proposed
n the schedule which 1 have prepared reasc
Mt able and just rates.
az The Chicago Great Western railway is
be main line. The greater part of its traffic
interstate traffic, in the territory of the keent
Of competition, and, therefore. lowest rates
VS. tween Chicago and the Pacific coast.
se We have taken the waybill of every NJ
nesota state shipment bearing the classif
rates on the Chicago Great Western road d.
ing the month Of June. and find that If
~. rates proposed by the Minnesota commissi
~ had been applied to these shipments the re,
w. nue. on these shipments would have been
~ creased 22.1 per cent and if the Iowa ra
~, had been applied to such shipments the rever
40 derived from such shipments would have be
j. reduced 2S.S per cent. 1t would appear fir
u! this that, practically, the Iowa commissions
~ class rates about 81 per cent lower tn
Isl the proposed rates of the Minnesota commissi
i ue These percentages seem large, but the tra1
~. is so small that when applied to the classif
III state business alone the aggregate reduction
au comparatively small. In Minnesota the agg
VI gate reduction for June only $3S7.2S, eQ
to about $4,000 per annum. ~,
,e- I have statistics Of the unclassifed br
IL ness of Iowa, but the aggregate reveI
yer from the classified freight in Minnesota '
about S21 900 in 1905 if estimate the c
10 responding business of Iowa at four times
ect unclassifed business in Minnesota it wo
Is amount to $S4 900, and as the Iowa rates
an % per cent less than the Minnesota fret
he agents schedule in southern Minnesota it
zee lows that the company's revenues for the Y
would have been increased about S34, 900
= applying the Minnesota rates which prevail
-, in 1905 to its Iowa classified traffic.
IN IN Hence. these % and 20 per cents, If appl
oii- to the Chicago Great Westerns classified ST
"a business only, would not ma terially affect
eA - statistics which l present E..
But If the present commodity and interest
tho rates in line with the classified rates,
,au | claim and expect to prove that they
Coo and if the rates of the commissioners. propo
80 schedule are reasonable rates, then, logica
~ the commodity and interstate rates must
W, reduced the same percentage to bring tt
hr,, within line. That is to say II the class r.
~ w are reduced % per cent the commodity
-. interstate rates must be reduced % per G.
en' and If reduction Of 20 per cent should
=, made upon the entire freight earnings Of
~ ~ Chicago Great Western road, the effect WI