The Birmingham age-herald., 1911-10-28
WILL INVESTIGATE BASIC RATE SYSTEM Hearings Held in Birming-
 ham December 1
WANT EXPLANATION
Unless Satisfactory Proof Is Offered System Will Be Condemned and
 Application for Relief of
 Southern Roads Refused
BY WALTER HARPER

Washington, October 27-(Speclal.) Business men and business organiza- tions of Alabama, Georgia and Ten nessee are being notified of hearings that are to be given at Birmingham, Atlanta and Chattanooga during the next two months on the proposed new basic rate system by the railroads.
 The hearings will be conducted by Henry Thurtell, chairman of what is known as the fourth section board of the interstate commerce commission.
 The dates set for hearings are as follows: Atlanta, November 27; Bir- December 1, and Chatta- nooga December 4. Chairman Yhurtell will be assisted in the hearings by E l.. Geddes, a member of the board.
 The "basic point system which pre- vafls throughout the southern states, is to become the foundation of one oi the most exhaustive investigations ever by the interstate commerce commission.
 Under this system the large commer- cial centers of the south, hubs Tor converging and competing railroads are granted lower rates than the in- termediate points. This is alleged to be in violation of the long and short haul clause of the interstate commerce act
 It was announced today that tne commission will open it's investigation next month with a series of hearings at Atlanta. Birmingham and Chatta- nooga.
 These three cities form triangle 'on7 meeting the trade centres of as many states in the very heart of the south All of the railroads concerned will be called upon to justify their basic point system of rates. As the investigation procesds it scope will be broadened so as to m clude the transportation situations creat- ed by the rates to otherHba points, In southern territory.
 Unless the railroads are able to prove to the commissions s satisfaction that thls method of rate making is a fair and legal one. the applications of the southern roads for relief from the enforcement of the long and short haul clause against them will not be granted.
 Under the amended interstate commerce act the railroads have the right Of asking for relief from the application of the long and short haul in situations to which they consider it inapplicable More than 5OoO such applications for relief from the fourth section have been filed by the ln- tcrstate carriers of the country. These cover more than 100000 long and short rate situations.
 Most of the southern carriers filed blan- ket applications for relief. Most of the northwestern roads, such as the Chica- gc Milwaukee and St. Paul, the Rock Isl and. Burlington and other systems, each put in several hundred applications for relief covering nearly all of the different lcng and short thauls situations in the territory they serve.
 It is claimed that the blanket applica- tions of the southern roads are of such a character that their nature and far reaching extent cannot be ascertained either by the shipper of the commission except through a thorough and compre- henisve investigation.
 Under the system Atlanta Is given a lower rate on shipment from Baltimore than is some other town with the Allan ta passing zone, situated on the same rail- road between Atlanta and Baltimore. The Southern railroad, for example, im- poses higher rate on shipments from Baltimore to Gainesville than from Bal timore to Atlanta, although Gainesville is nearer Baltimore and the shipment made on the same line in the same d. rection.
 The rate to Gainesville would be the rate to Atlanta plus the local rate from Atlanta back to Gainesville, or plus an arbitrary rate. In like manner the Louis vile and Nashville will be required to jus tify it's basing point rates to Chattanoo- ga, which are lower than the Intermediate rates in the Chattanooga passing point zone between that city and Cincinnati.
 All chambers of commerce and other trade bodies in Georgia, Tennessee and Alabama, likewise shippers in small towns who have been making protests to the commission against the practice are being notified of the hearings
 It is believed the main defense of the railroad will be that the rates to the bas- ing points are less than normal rates es- tahlished merely for passing point pur- poses, and that the intermediate rates to the smaller towns between the passing points are normal and just. It Is expected that the trade bodies of the larger cities of the south which enjoy the lower passing point rates will oppose any change calcu- lated to raise their rates, and it is inti- mated that they may even oppose the obliteration of the passing point system for which consignees and shippers in smaller towns are contending very vigorously.