The Virginia enterprise. [volume] (Virginia, St. Louis County, Minn.) 1893-19??, 1911-06-23
INTERESTED IN ORE RATE
Duluth Man Has Already Started Proceed
ings for Reduction to so Gents.


ings for Reduction to SO Cents.
The introduction of the question
of freight rates between the Mesa ba
iron range and upper lake ports at
the hearing before the Stanley com.
mittee which is investigating the
United States Steel corporation, has
attracted considerable attention in
Duluth.
1t is claimed by many people in
terested that the 8O-cent per ton rate
from the mines to the docks at Du-
luth is excessive, being practically
cent per ton per mile. Leon L.
Lum started proceedings some time
ago before the state commission to
secure reduction of ore rates to so
cents tons The case has not been
heard.
The United States Steel corpora
ton owns and operates two rail
roads which are wholly within the
state of Minnesota, the Duluth, Mis-
be & Northern and the Duluth &
Iron Range.
The Eastern Minnesota of the
Great Northern system is the other
line operating between the mines
and the dock, and, of Course, it's rate
is also 80 cents per ton. The stocks
OF these two roads of the corpora
ton pay the largest dividends of
any railroads in the country.
Being wholly within the state of
Minnesota, which by the way, col.
lects tax on gross earnings and is
therefore, not specially interested
in securing lower freight rates for
producers and consumers beyond
the state limits, there is little prob
ability that the initiative i a attem pt-
ing to force revision will be made
by Minnesota.
THE GREAT NORTHERN.
But the Eastern Minnesota, hav-
ing it's terminus at Superior, Wis.,,
comes under the Jurisdiction of the
interstate commerce commission,
and that body has the authority to
initiate an investigation of freight
rates. Independents insist that
reduction of 40 cents per ton should
be made, and it is quite likely that
the matter may be formerly pres
ented to the com mission in the near
future.
| The regular contracts made be-
tween the three railroads operating
in the Mesaba range and the ore
shippers, by which the latter make
contract to ship ore for special
period, all provide that the charges
shall be adjusted to the going rate.
Consequently if the commission
should order reduction in rates
on the Eastern Minnesota, the re-
duction would, therefore, automatic
ally apply to the steel corporations
roads.
HILL SAW DANGER.
James J. Hill evidently appreciat-
ed the danger of some such con-
tingency when he leased the Great
Northern ore lands to the steel cor.
poration. The usual traffic contract
was not entered into, but, instead,
he made the lease on terms provid-
ing that the ore should be deliver
ed at Lake Superior at $165 per ton
the first year, with 3.4 cents per
ton additional each year. The IS
cents over the freight rate was the
royalty, which IS the item to be in.
creased year by year. Even should
the 80-cent rate be reduced, the Hill
line would still be getting it's equiv
alent, by reason of the shrewd con-
tract made by Mr.. Hill. In such an
event, the steel corporation would
be compelled to pay more freight
on part OF its ore than the indie
pendents. Moreover, should a re-
duction be ordered by the commits
sion, the Hill lease might be affect
ed, as the steel corporation has the
right to terminate the contract in
1915, provided notice is given in
1913; otherwise, the lease is practic-
ally perpetual.
AS the steel manufacturers still
regard the railroads as their best
customers, from year to year, they
have always manifested hesitancy
about attacking freight rates. Con-
sequently the rates on steel pro-
ducts and on ore are higher than
might be expected if there was the
same determination shown againet
advances as was manifested by
shippers last year, who won their
fight before the interstate commerce
commission.
1t is not only in the Northwest
that rates on ore are high. The
tariff between lower lake ports and