The Washington times., 1915-03-20
Joker in Railroad Act
Boosts Freight Rates
BY Changing Forms and Terms of Bills of Lading in
Use, Lines May Get Increase of 10 Per Cent.
Congress Expected to Fix the Blame.
By JUDSON c. WELLIvER.

BY JUDSON
When Congress comes back to towr
next fall or winter there is very likely
to be set on foot an Investigation ia
determine just where lies the respon.
| sibility for a Joker getting into tns
railroad legislation, which seems 10
have opened the way to a possible In
crease of railroad rates OF 10 per cent
on freight business.
There Is circumstantial story that
in some fashion the House Committee
on Interstate Commerce made a re-
port that read one way, to accompany
a bill that read another way: and that
the House passed the bill in the last
hours Of the session. thinking 1t meant
one thing, while, In fact, 1t meant an
| other.
That other thing. it has since been
discovered. was the privilege OF In
| creasing rates, If the railroads cared to
take advantage OF 1t, under the guise
OF changing the forms and terms OF the
bill of lading in use by most OF the
| lines in the country.
It is a curiously involved story. For
many years-going back. in fact, long
Il
riers was attempted-the railroads have
| made rates dependent on the shipper re-
leasing them from liability, In part, II
| the goods were destroyed or injured
For instance. live stock rates have been
based on the shipper signing a contract
agreeing that II the stock we're killed he
| would accept $50 per head in settlement
II the shipper were not willing to sign
this special contract, he must pay a
higher rate. as a sort Of premium for
| larger insurance. This higher rate was
| in some cases so much higher as to be
practically prohibitive. so that the busi-
! ness commonly moved under. the limited
liability rates.
Shipper Declares Value.
A variation Of this limited liability
rate Is the declared value rate. In this
case the shipper Of q commodity is al
| lowed to declare It's value: then the
carrier fixes a rate proportional 70 the
risk he must assume II he destroys the
property or loses It. Ores containing
precious metals affor dan excellent illus
| tratlon Of this class Of rates The rail-
given ore contains 50 or $4,000 of gold to
| the ton.
The shipper declares that It contains
| s. and gets the lowest rate, because. II
damages at only 50 per ton; or. he may
declare that 1t contains s.. 900 per ton.
| and pay a much higher rate. which en-
| titles hi INTO larger damages II his ore
tration. A gallon Of whisky may be
worth anywhere from a few cents to
several dollars. The shipper may de-
clare the value, pay accordingly. and
be insured in proportion.
The actual working effect OF this sys-
tenn has been to cause shippers gen.
orally to place very low valuations on
their goods. carry the risk themselves.
and take the lowest damages II they
lost. Experience proved this the cheap
est plan. the danger Of loss being small:
The courts sustained the limitation Of
liability. and the system was firmly es-
tablished.
preme Courts decision Of the Croninger
case. little known .popuiariy. but IA,
nous in railroad circles. A diamond
was shipped by express, and lost: The
shipper had declared 1t worth 20. out
amount. The Supreme Court held that
no matter what its real value. he was
bound by the declared valuation, be-
cause the declaration Of low Halua-
ton gave him the privilege OF a low
rate.
Received Low Rates.
In the good old days" Of rebates. ia
vored shippers were wont to ship goods
under very low declared valuations. get
ting correspondingly low rates; then
they would put in damage claims based
on much higher valuations. and dam
ages would be allowed which amounted
to rebates. This system has been IN
bad odor latterly with the regulating
authorities, because. since rebatins was
forbidden, 1t has been found that dam-
age claims have been made the vehicle
through which to get the substance OF
rebates.
by the agitation for a uniform bill OF
lading. The railroads. severa years
ago. tried to agree on such bill. and
at length did so: which the Interstate
Commerce Commission, after care1u.
examination and some sussestions or
changes. recommended be adopted by
the roads.
It was adopted. After the adoption Of
this uniform bill. now effective every
the roads published rate schedules
which provided that the rates named
are reduced rates" conditioned on
the shipper limiting his claims for dam
ages: and providing that u this nnttea sin
higher.
That is to say. II the shipper was not
willing to limit liability by accepting
auired to pay 10 per cent higher rates:
This practice was tacitly approved-at
least, was never disapproved-and has
since been in effect.
Would Amend Act.
During the recent session Senator
Cummins introduced a bill tc amend the
irterstte commerce act, so as to deprive
the railroads of the right to limit their
liability in case Of losses. The primary
reason In favor of this was that the
old limitation OF $50 per head on live
stock had become obsolete. The price
of cattle had advanced to much that a
steer was likely to be worth two or
three times the $50 and there was con-
stant complaint So 1t was proposed to
do away with the limitation.
There was some objection, by repre-
sentatives of the Interstate CommerC,
Committee, before the Senate commit
tee, on the ground that this removal OF
the right to limit liability might give
the railroads the right to advance their
rates 10 per cent. To this objection the
reply was that the matter could be ad-
justed so that there should be no such
sweeping change in the situation.
The Senate finally passed the measure
with some sort of understanding that 1t
would be changed in the house, and that
then in conference, the dangerous fea-