| ERC Ives |
| Vol. 5 p. 3144 Mr. Brandeis. Something has been said here about the increase in class rates [rates on commercial products as opposed to commodities such as coal], and particularly the higher class rates, affecting only luxuries. What is the fact? Mr. Ives. I must admit that I received the impression that the traffic officers of the reailroads, or some of those who testified, had the impression that the majority of artiles moving in the classification were either luxuries or very high-priced necessities in which the freight was so small a moment that itcould be ignored. Such is not the case, as an examintion of the freight received at an medium-sized station on the roads of any of these carriers or an examination of the billings will show. It includes all the commonest necessities of life, boots and shoes--not only meaning shoes that are sold for $3.50, $4.00, and $5.00 a pair, but those that sell for $1.00 and $1.50 a pair. Als dry gOods--it does not mean simply ribbons and laces. We should be glad to see ribbons and laces bear their proper share of the burden of trnsportation. But it means the commonest kinds of cheap prints, cheap underclothing, overalls, all clothing, and all those articles of commerc that are among the barest necessities of life.6 |
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DAVID 0. IVES was called as a witness on behalf of the shippers
Mr. BRANDEIS. What cities and States are represented by these and, being first duly sworn, testified as follows: Direct examination: Mr. BRANDEIS. Mr. Ives, you are the chairman of the traffic com- mittee of the seaboard organizations? Mr. IVES. Yes, sir. seaboard organizations in the traffic committee? Mr. IVES. New England States, the seaboard part of New York, Pennsylvania, New Jersey Maryland, and Virginia. Air. FISHER. You are the manager of the transportation depart- ment of the Boston Chamber of Commerce? Mr. IvEs. I am. Mr. BRANDEIS. And have you been since 1909? Mr. IVES. Yes. Mr. BRANDEIS. What was your occupation immediately prior to that time? Mlr. IVES. I was chairman of the official classification committee for nine months. Mr. BRANDEIS. Before that time you were traffic manager of the Wabash? MIr. IVES. Yes. Mr. BRANDEIS. For how long? Mr. IVES. For three years. Mr. BRANDEIS. What was your occupation before that time? Mr. IVES. I had been in the railroad business in various capacities, almost entirely in the employ of the C., B. & Q. For a year or two I was in the Atchison, in the accounting, operating, and traffic depart- ments. Mr. BRANDEIS. How long a period did that cover? Mr. IVES. About 17 years. Mr. BRANDEIS. Then you had 20 years' railroad experience before becoming chairman of the official classification committee? Mr. IVEs. Abouit 22 years. Mr. BRANDEIS. Did you, while you were traffic manager of the Wabash, have occasion to consider the question of the increase of class rates ? Mr. IvES. Yes. Mr. BRANDEIS. Will you state what conclusion you then reached, and whether you afterwards changed that conclusion, and if so, why? Mr. IVEs. While I was traffic manager of the Wabash, in common with other western railway men and men in the railroad business west of Buffalo and Pittsburg, I was anxious to increase the class rates from seaboard territory to our territory in Illinois and the WVest, because I wanted to make the spread larger between the rates from New York, Boston, Philadelphia, and BaItimnore, and the rates from Buffalo, Detroit, Toledo, and our own shipping points as great as I could, in our own selfish interest. When I came to the classifica- tion committee I was called upon to look at the matter more judicially and more carefully. I changed my view entirely, and made up my mind that until the classification could be completely revised it would not be fair, just, or feasible to make any general advance in class rates throughout the territory. Mr. BRANDEIS. While you were in the official classification com- mittee and chairman of that committee you were in the employ of the railroads jointly? Mr. IVES. I was in the employ of all the railroads in that terri- tory between St. Louis and Chicago and the seaboard territory. Mr. BRANDEIS. You say you came to the conclusion that no general raise would be proper? Mr. IVES. Yes. Mr. BRANDEiS. Did you consider the question of individual in- creases? Mr. IVES. We were constantly considering them. Mr. BRANDEIS. In what way? Mr. IVES. We had our regular hearing days, and a good many intermediate ones on special occasions with special shippers. I came to the conclusion that no general advance should be made in class rates because I considered that the classification was entirely illogical and discriminative in its method and make up, which I always stated to the railroad men while I was there in their employ. I told them that it ought to be changed, before any general change in class rates could possibly be fairly made. For exarmiple, if it were decided to make a change in class rates, a few commodities were considered and it was found that those commodities could be advanced without ap- parently casting upon them the burden of more than their share; but automatically, and at the same time, hundreds of others would be raised, which could not be investigated, and which, upon investiga- tion, after the advances were made, proved to be unable to bear the burden put upon them by such blanket advances. Mr. BRANDEIS. In those changes which were made in official classi- fication territory, what was done with respect to consultation with the shippers and advising with the shippers and giving them an op- portunity to be heard before a change was made? Mr. IVES. The practice was to advise them by a printed ticket of any proposed change. These changes might be proposed by a ship- per or by a carrier or by an individual or group of individuals, or by a community. They were always listed, and periodically those lists were published and sent out throughout the territory. They were given as broad a distribution as was practicable. A small charge was made for them, so that only those who were anxious enough to get them to pay a small amount for them would get them. Mr. FISHER. How long a period was allowed, ordinarily, between the notification of the intention to consider a change in the classifica- tion and the time when it was actually acted upon? Mr. IVES. We published the classifications twice a year and we published the tickets, as I recall it now-and these gentlemen here can correct me if I am wrong-I think just two and a half months before the proposed date of the classification, and we had the meet- ing between those two dates. Mr. BRANDEIS. There was, at all events, an appreciable and ap- parently an ample period for the consideration of the effect of the change in the classification proposed? Mr. IVES. Yes; a maximum amount of time was given, consistent with not causing too great a delay in putting it into effect. Mr. BRANDEIs. 'Were there any other classes you considered in connection with the proposed increases? I refer specifically to the different raises in different classifications. Mr. IVES. There are, throughout the United States, three general classifications called " official, " " western," and " southern." These are not only each imperfect in itself, but. it differs from each of the others in such a way as to make it almost hopeless to make com- parisons. Mr. BRANDEIS. What is the reason why comparison should be made between them? Mr. IVES. Because shippers from New York, Philadelphia, Chi- cago, and St. Louis, in competing with one another in Illinois, use two different classifications. Mr. BRANDEIS. Does that apply only to eastern communities and seaboard communities, or would it apply equally to any other? Mr. IVEs. It would apply to any shipper in official classification territory doing business in Illinois or Wisconsin or along the Mis- sissippi River or in St. Louis or beyond affected by rates to the Mis- sissippi River. Mr. BRANDEIS. How great is the divergence or difference between these different classifications covering the same territory? Mr. IVES. It is so great that it was generally admitted by the rail- roads that it required sonlc unification, and over two years ago we appointed a so-called uniform classification committee. There was first a preliminary committee constituted to consider the feasibility of a uniform classification. I was a member of that committee, and we reported that we thought a permanent committee should be appointed to work upon this proposition and make rules and descriptions ex- actly uniform. That committee has been working for two years upon that proposition, and I have been advised and understand that it is undoubtedly true that they have no permission to work upon the proposition of unifying and numbering the classes, and until they have done that I consider that their work is merely expert and use- ful as expert work. If the various classifications had been taken hold of by them, there would be absolutely no use in making a uni- form classification unless they got permission to unify and number. Now, in the official classification there are 8 classes, 6 numbered and 2 intermediate classes, based on percentage with the class above them. In the western classification there are 5, numbered 1, 2, 3, 4, 5, and A, B, C, D. and E. In the southern classification there are 1, 2, 3, 4, 5, and 6 class, and then lettered classes based on an entirely different method of classification from that in the western and cffi- cial. Those I will not go into. Mr. BRANDEIS. What would be the practical effect in dealing with any particular article of commerce as to the effect of these varying classifications, say, in the Illinois territory? Mr. IVEs. In any particular commodity or in any particular article of commerce you could investigate that particular article of com- merce and find out exactly what the rate was from the seaboard ter- ritory into this common neutral fighting ground of Illinois. Mr. BRANDEIS. When you have found it out, would it be very differ- ent; would there be any great difference when you had deciphered it? Mr. IVES. In a large number of cases it might. I made a small, al hasty, comparison yesterday of some articles that I think are rather striking, giving the differences between the western classification and the official classification, on certain articles. Mr. BRANDEIS. WIill you give us an illustration of a situation show- ing what that would be? Mfr. IVES. I found that agricultural implements will take a differ- ent classification in the West in less-than-carload quantities from what they take in the East. Mr. BRANDEIS. Hlow different is the classification? Mr. IVES. It is one of percentage. One is second class and the other is third. In carloadc quantities one is in the second class and the other is in the fifth class. You can not make any comparison between them, because they have no comparative position, no posi- tion which you can compare in the classifications. Then I found that coffee, both green and roasted, in less-than-car- load quantities, sugar, canned fruits, and vegetables in less than car- ioad, are all very important and very largely shipped. On vehicles the methods of making the classification were so different that it is impossible to make an intelligent comparison except by an exception. I recall that while we were on this classification committee, our com- mittee-one of which I was a member-made a comparison between vehicles. After it was made, it practically was no comparison that could be used; the descriptions were so utterly different that when you put them beside one another, and then put the ratings of different letters and figures together, they could not be compared, and you had nothing but the two statements that could not be intelligently compared or from which any deductions could be made. The same condition applies as to furniture. We had a similar comparison made of furniture, and I found yesterday in looking over this that chairs, not otherwise specified, set up, second class, minimum of 10,000, was the way it appeared in official classification. I think even that is one of the reductions. That is my recollection, although I am not sure; I may be mistaken. In western classification it was fourth class, with a minimum of 12,000 pounds. There is also in the western classification a provision for certain kinds of furniture, which, while it may take a minute or two to read, I think I will read, because we had a great deal of trouble with it when I was chairman of the official classification committee; and I think it illustrates as well as anything could the absolute absurdity and impossibility of trying to make any comparison of class rates in themselves without picking out each individual item and making the comparison between that item from the official classi- fication territory into this neutral zone, and from the western classifi- cation. I will read it [reading]: Bank, store, saloon, and office furniture, consisting of arm rails, back bar mirrors, bottle cases, chairs, counters, counter fittings, desks, foot rails, metal brackets for arm and foot rails, refrigerators, tables, and work boards. * * * 3. Min. wt. 12,000 lbs.; subject to Rule 6-B. NOTL-Door, window, and bar screens, partitions, prescription cases, patent medicine cases, show cases, wall cases, wainscoting, office railing, and wooden mantels may be shipped with bank, store, saloon, or office furniture in mixed c. ., at 3d class, min. wt. 12,000 lbs. There is nothing of that kind in the official classification. I believe there is not in the southern, but I am not sure. However, we are com- paring western and official classification. There is no such provision as that in the official classification. On the contrary, a shipment of that kind can only be picked out by figuring the rate on the separate items. Some of them take as high a rating as three times first class. Show cases, set up, would be included in that and take third class. In official classification, if a man is competing with a man in neutral territory he has to pay three times the first-class rate. These mirrors are 5 feet long, about; I think saloon mirrors are that length, and they take double first class. A great many of these articles take first and second class. That illustrates not only the difficulty of comparison, but it illus- trates also the viciousness of the old way of making classifications, in which I bore my full share of the. fault-perhaps more than my share-because that was undoubtedly done to help one large shipper. That rating was made, in my opinion, to enable one very large con- cern to do business and drive everybody else out. That was worked through the classifications probably for that purpose. I am now giving my opinion, perhaps as an expert, rather than speaking from absolute knowledge; but I can not say positively that that was the animlus in each man's mind when that was done; but that was the result. That firm practically has a monopoly in that line of business throughout that territory, and it is now proposed to advance the rate on the man who is shipping-to put an extreme case-the show case set up at three times first class, or $2.25, from New York to Dan- ville, Ill., 20 per cent of 45 cents, making it $2.70. Whereas the third-class rate from Chicago down there, if it were raised-my recollection is it is about 20 cents a hundred-and if it were raised 20 per cent it would be raised 4 cents. As it happens, it is not going to be raised at all. Now I maintain therefore that with such glaring inconsistencies-_ and that is only one of hundreds that I could show-it is not fair or defensible to make a blanket increase in the class rates, nor is it in accordance with the law as I understand it, which specifically states that each rate to which objection is made must be proved to be, by the carriers, just and reasonable. Mr. BRANDEIS. Now, what percentage of change would be affected by these proposed rates if they were allowed to go into effect? Tak- ing into consideration now not only the fixed percentage as stated, 20 per cent and 20, 15, 10, and 8; but what the average is when you apjily it to these methods of transportation; for instance, lake and rail, ocean and rail, as the case may be. ADVANCES IN RATES BY CARRIERS. Vol. 5, p. 3140 Mr. IVES. Well, the lake and rail rate from Baltimore to Chicago, as I recollect, is 57j cents first class, and it is proposed to raise that 15 cents a hundred, which is practically 30 per cent. That is perhaps the maximum. That runs down to Philadelphia at 54 or 55. I have not the exact figures in my head. That would be 27 or 28 per cent. Our rate from Boston is 62 cents. That is advanced 15 cents, which is about 24 per cent. All those rail and lake and ocean and rail, differential, and all-rail rates are advanced in varying proportions 20 to 30 per cent. They are used very largely by our shippers-very much more largely in tonnage than is perhaps generally known. I do not know the per- centage, but it must be a very large percentage of the traffic moving from New England. From New York and from Philadelphia it moves by these differential routes. Mr. BRANDEIS. Then, it is an entire understatement to speak gen- erally of the raise in first, second, and third class rates as a 20 per cent raise. It is only a 20 per cent raise on the regular all-rail lines, and when you come to differential or come to ocean and rail and lake and rail you have a percentage that rises and varies from 20 to 30 per cent? Mr. IVES. Yes, sir. Mr. BRANDEIS. That the increase amounts to? Mr. IVES. Yes, sir. Mr. BRANDEIS. And as you understand it, that refers to a very large movement? Mr. IVES. Yes, sir. Mr. BRANDEIS. Now, something has been said about these horizon- tal increases distorting the existing trade relations. How does that work out? Mr. IVES. Well, 20 per cent of 75 cents is naturally more than 20 per cent of 30 cents. Mr. BRANDEIS. How do you apply it? Mr. IVES. The result is that on first class, in which the freight rate has something to do with the sale of the goods, an advance or 20 per cent, without taking in consideration all the terminal expenses which the railway traffic officials while declining to express any view as to the exact figures stated were a very material part of the expense, dis- torts the relation, to my mind, entirely unreasonably of rates that have been in effect for a number of years. The shipper in figuring does not figure on percentage. TIle iPhiladelphia man in competing with the St. Louis man in Springfield, Ill., does not compare the per- centage of his rate. He compares the actual difference in cents per hundredweight. Now, if a percentage is to be used and such a wrench Reed dislocation is to be given to these rates as this 20 per cent and 25 per cent and 30 per ceiit advance means, at least a liberal allowance should have been made for these terminal expenses which railway inen themselves, and justly, have said were a very large proportion of the rates. I should like to illustrate the advance in rates that would actually take place by referring to the rate on cotton piece goods. That was one of the articles which Mr. Tittemore had in his list, one of the articles in which an enormous amount of shipments take place of the necessities of life for the poorest people in this country, common prints and calicoes and even dry goods; also cheap knit goods, and 3141 ADVANCES IN RATES BY CARRIERS. so on. But take the cotton piece goods. The rate in 1900 was ad- vanced through the classification from 37 to 41 or 42 cents. It was raised again slightly two years ago when there was an insurance adjustment, until finally the rate, through the increase in the classi- fication and the increase in the rail-ancd-lake rate, becomes 46 cents instead of 37, which is 25 per cent increase. It is now proposed to add 20 per cent to that, which makes it about 56 and a total increase of practically 50 per cent, over 50 per cent, even after allowing for a slight difference due to the fact that the rate was an insured rate. That is true of a very large number of articles. The reclassifica- tion has been advanced on a very much greater number of articles than those on which it has been reduced, beginning with this advance in 1900. There is no question about tb-at, although I have not made a statement as Mr. Tittemore has and h1ve not the exact figures. I think the commission themselves know, because they gave a hearing on the subject, and the commodities are so important when you take commodities like sugar, coffee, canned goods of all kind, cottonseed goods, and so on, on which this advance is made. And I think it is quite apparent that it is a very important and far-reaching advance. Mr. BRANDEIS. FHas there been any special advance of the lake-and- rail rates in this case? Mr. IVES. Yes, sir; I just mentioned it. I applied it to the cotton piece goods. It was on all the classes. Mr. BRANDEIS. How much has that been? Mr. IVES. First, class has been raised from 54 to 62 cents. Third class, as I recall-no, it is only commodities that take third class, that were advanced from 37 to 46. They were advanced from third class to rule 45. Fourth class was advanced to 62 cents. Mr. BRANDEIS. Is there any special objection to the proposed hori- zontal increase Cay reason of the fact that it applies only to a portion of the traffic? Mr. IVES. It seems to me to be entirely unfair to attempt to get enough out of 15 per cent of the traffic in revenue to support over 100 per cent, especially when it is done not by an investigation and by picking out in accordance with the law commodities which can stand it and which may be proved to be by the railroads just and reasonable. A blanket advance is made which can not in the nature of things be investigated and about which nothing can be ascer- tained until the harm is done. Mr. BRANDEIS. You used the word " commodity; " I suppose you meant. article of commerce. Mr. IVES. Article of commerce in the classification. I am not speaking of the commodity rate. Mr. BGiNDEIS. Now, wvhat in your opinion is the method which must. be pursued or should properly be pursued if it were desirable or if it was believed to be desirable and necessary to raise additional revenue--what in your opinion is the method that should be pur- sued by the carriers before making the increase? Mr. IVES. I should select the special commodities. Mr. BRANDEIs. The articles of commerce, you mean? Mr. IviE. The special articles of commerce and change them to the classification. My own idea would be to make a revision of the classification and put some life into the uniform classification. Tell 3142 |
| them that their work must be done by a certain time. The nature of their work is such that if they are allowed to continue indefinitely without a prod from some one--although I believe them to be men of the highest character, concientiousness, and ability-they will never finish. It ithem that their work must be done by a certain time. The nature of their work is such that if they are allowed to continue indefinitely without a prod from some one--although I believe them to be men of the highest character, concientiousness, and ability-they will never finish. It is a job that will last for a lifetime if they are allowed to disagree. It is just the same as regards a jury. If a jury is turned loose and allowed to walk the streets, I suppose that in many cases they would never agree. 'l'his uniform classification, in my opinions will never complete its dilties until it is told that there must be a time when this work, in- cluding the uniform numbering of the classes, can be done. When that is done, there could be scientific handling of this matter. There are probably hundreds of commodities that are not bearing what they ought to bear and could be advanced regardless of whether the railroads need some revenue or not. That ought to bi done. But it. can not be done under present conditions. It is impossible. Therefore, to answer your question, from which perhaps I have digressed, I should simply pick out commodities and articles of commerce in and out of classification and try to get the necessary revenue if I believed it was necessary to get a certain fixed amount of revenue. Air. BRANDEIS. What should be the method of procedure on the )art of the railroads with respect to the shipping community before anes increase was made? Mr. IvES. If I am the judge, I should say they should take these matters up and confer with the shippers themselves or their repre- senitatives. Mr. BRANDEIS. 'What, if any, consultation and discussion was there between the railroads and the shippers' organizations before this tariff was settled, the one that is now proposed and under consid- eration? Mr. IVES. As far as I know, in our territory no effort was made to obtain the views of any of the shippers prior to the time when the rates and the adjustments were finally and positively agreed on by the railroads. After that, at our request, a conference was held by our committee with the railroads at which we were listened to with great patience and courtesy, with-well, I do not know that I can -add any other words-with great patience and courtesy. But noth- iiig came of it. We afterwards had another meeting with then, with the same result. Mr. BRANDEIS. Those meetings I assume were before there was any hearing before the Interstate Commerce Commission? Mr. IvEs. Oh, yes; they were in June and August, as I recall it. Air. BRANDEIS. And at those meetings the shippers were repre- sented by the traffic committee in part? Mir. IVES. Yes; and we had some of the actual shippers. AMr. BRANDEIS. Individual shippers? Mr. IVES. One or two. Mr. BRANDErs. And did they present their objections to that pro- posed increase in the tariffs? Mr. IvEs. They did very fully. There were arguments pro and con; but I maintained in what was intended to be a good-natured way, that the railroad men were holding themselves up as infallible when they stated that these changes which they had agreed upon ADVANCES IN RATES BY CARRIERS. themselves were such that they would not change them by the dot- ting of an " i " or the crossing of a " t." We did not ask them to cancel all reductions and make no advances. 'We assumed that they might need the money. We had an open mind on that question. But we said: " Do not make any advances on any of these articles without giving us a chance to argue the matter with you." We claim that it was impossible to argue, and they admitted it. They made the same claim, I might say. It was impossible to investigate the 4,000 articles in the classification when an advance was proposed on the class rates which automatically advanced or changed every single article in the classification. We maintain that should be done at first hand through the classifications. Mr. BRANDEIS. And the attitude of the railroads was- Mr. IVES (interposing). It was most agreeable and courteous, but that was all. Mr. BRANDEIS. An absolute refusal to consider any change? Mr. IVES. A courteous and positive refusal to consider any change; I use that word " courteous " because, the interviews were most friendly and there was no ill feeling or anything but good feeling ex- pressed, although a difference of opinion was reached. KEY TESTIMONY RE KEYNESIAN THEORY Vol 8 4818-20 originally in vol. 5, 3144 Mr. BRANDEIS. Something has been said here about the increases in the class rates, and particularly the higher class rates, affecting only luxuries. What is the fact? Mr. IVES. I must admit that I received the impression that the traffic officers of the railroads, or some of those who testified, had the impression that the majority of the articles moving in the classifica- tion were either luxuries pr very high-priced necessities in which the freight was of so small a moment that it could be ignored. Such is not the case, as an examination of the freight received at any me- dium-sized station on the roads of any of these carriers or an ex- amination of the billing will show. It includes all of the commonest necessities of life, boots and shoes--not only meaning shoes that are% sold for $3.50, $4, and $5 a pair, but those that sell for $1 and $1.50 a pair. Also dry goods--it does not mean simply ribbons and laces. We would be glad to see ribbons and laces bear their proper share of the burden of transportation. But it means the commonest kinds of cheap)prints, cheap underclothing, overalls, oil clothing, and a]l those articles of commerce that are among the barest necessities of life. It also includes such articles as the common metals which are shipped in bars and rods at less-than-carload rates under classifica- tion; not iron and steel. Well, I think they are also moving now under classification, but brass and copper, all those articles on which the margin is so small that an advance in the freight rate will often- times prohibit the sale and stop the commerce, especially when there is not a similar advance made anywhere else. The result of that can only be one thing. It eliminates the competition of the Eastern ship- per ultimately. It makes it at least more difficult for him to com- pete and it makes it thus easier for his competitor; and in the end the consumer is going to foot the bill. Mr. BRANDEIS. How does this increase affect, if at all, the cost of the food products? Mr. IvEs. It is proposed to raise the rate on butter, eggs, cheese, meats, and dressed poultry 20 per cent. The Chamber of Commerce 3144 ADVANCES IN RATES BY CARRIERS. reports in Boston show-I think it is something like a million pounds-I won't say exactly, but several hundred million potui'ls of these articles on which I estimate the increase in rates to be between $300,000 and $400,000, which can only come out of the consumer of those articles, in my opinion. Mr. BRANDEIS. And that translated into the individual family in Boston would be how much? Mr. IvEs. A family of five, I believe, is usually considered a normal family. Mr. BRANDEIS. Yes. Mr. IvSs. Three or four hundred thousand dollars with 600,000 population would be $2.50 a head on the basis of a family of five. Mr. BRANDEIS. Assuming the increase was no greater than the exact amount represented by the freight increase? Mr'. IVES. Yes; which is rarely the case. Mr. BRANDEIS. Have you made any investigation with a view to determining or any tests with a view to determining whether the estimate presented by the railroads as the aggregate that the freight increases would amount to in the official classification territory is $27,000,000? That is correct, is it? Mr. IvEm. I have had no facilities for making any exact calcula- tions, of course. Only the railroads can do that, but I have picked out a few items from some of the railroads which seem to me to indicate that the commission itself ought to investigate and verify these figures. In the first place they have beeh obtained by almost- I should say half-as many different methods as there are railroads making them. I found, for example, in the Lake Shore statement the figure $277,000 as the increase on all their commodity move- ment. That aroused by curiosity. In their annual report I looked tip the movement of the fresh meat, packing-house products, and live stock. Those three commodities alone I found amounted prac- tically to 1,000,000 tons moving on the Lake Shore. As I say, I have no way of making exact figures, but I assume that a very large proportion of this came from Chicago, where their share of the increase would be 40 or 50 cents per to'n. An increase of 28 cents per ton applied to these three commodities alone would produce the $277,000 without taking into account any of the other 40 or 50 com- inodities in the list, which it is proposed to advance. As I say, I only mention that as indicating the desirability and the propriety of making an investigation somewhere into these rates and seeing if the method of calculation and the actual calculations are correct. On the Boston & Maine I notice $10,167 as the figure for the in- crease on second class. I found 142,000,000 of butter and eggs, both of which take the second-class rate, were shipped into Boston alone. An estimate was made me by various of the receivers of these com- modities in Boston that the Boston & Maine received about half of it and that about 75 per cent came from the affected territory. Half of 142,000,000 is 71,000,000, and three-quarters of 72,000,000 is over 50,000,000. That increase would give the Boston & Maine at least 2j cents a hundred, which would figure about $12,000. In other words, as I figured it il. this rough and entirely estimated way, the increase on second class in the Boston & Maine on butter and 313x5 ADVANCES IN RATES BY CARRIERS. eggs over the Boston & Maine Road, to the one city of Boston alone, would be more than the total they show as the estimated increase from second class. Now, their method of estimating was to take the first and second (lays of September, 1909, and take the actual tonnage; multiply that by the advanced rates. Then multiply that by 13, and then multiply that again by the percentage that the business of September bore to the business of the whole year. The Boston & Maine Road took the whole month of September. I submit those two different methods would be pretty apt to give different results. Those are not the only instances. Mr. BRANDEIS. Are there any other instances, striking instances, that you have in mind? Mr. IVES. Another was the Delaware, Lackawanna & Western. I notice, for example, that their increase on one or two of the classes only figures 10 per cent. The increase on nearly all of the roads in the same territory runs from 20 to 21 and 22 per cent. Now, how the Delaware, Lackawanna & Western increase on class rates could be only 10 per cent, or 10 and a fraction per cent, I think is an inter- esting problem. There are several solutions that might occur to one. But it seems very strange that should be the case. The highest per- centage, as I recall, on any of the Delaware, Lackawanna & Western high classes was 16 and a fraction per cent. I do not think that they got arbitraries to any great extent that would account for that slight increase. Mr. BRANDEIS. Your conclusion from that is that these figures, from the slight tests you were able to make, are not reliable, and that, for instance, the commission ought to make an inquiry into these estimates by its own examiners, with a view to determining whether or not they are correct. Mr. ITVEs. I will say that if I was going to make an investment of my own money on the basis of those statements, I should insist upon some such further investigation before I would invest it in them, although I am firmly of the belief that they were entirely honestly made. But I do not believe that they should be accepted without verification, when such immense results are dependent on their cor- rectness. Mr. B1RANDIEIS. There was a statement made by Mr. Thayer, as I recall it, that the increases were not made within local territory; that is, within 250 miles of the seaboard, because those rates were considered already properly high and that the long-distance rates were out of line with the local rates. Do you know anything as to whether that was the motive, or the controlling nAotive; in regard to the exclusion of the local rates from the proposed increase? Mr. IvFy. I can not say that I know the motives of Mr. Thayer and those gentlemen, of course. I am quite sure that wats the motive of Mr. George F. Baer, of the Reading Road, who was the man who really controlled that situation. Mr. BRANDEIS. What was Mr. Baer's motive? Mr. IVES. As I understand it, in fact as I know, he said his rates were high enough and he would niot consider any advance in his local rates, and he did not advance one of them. That affected the situa- tion as far as his road went. 3 146 ADVANCES IN RATES BY CJ .RRTERS. Mr. BRANDEIS. As you understand it, hie refused to raise the local rates, and in consequence of Mr. Baer's refusal to increase the rates on his road-- Mr. Ives (interposing). To be honest, I always thought the Penn- svlvania Road had a good deal of sympathy with Mr. Baer's position. Commissioner LANE. Are not there some local rates on the New York Central this side of Buffalo that are not raised? Mr. LYON. Yes; they stated that they raised all theirs. The Bal- timore & Ohio and Pennsylvania did not raise their locals, but the New York Central did. Mr. BRANDEIS. These are the roads that serve the same territory as the Jersey Central and Philadelphia & Reading? Mr. CLYDE BROWN. That was a local situation. It may as well be made clear. The Pennsylvania, Baltimore & Ohio, and Reading, in the eastern territory, did not advance their local rates. I think the New Haven did not advance their local rates. I am not entirely certain about that. But all of the rates on all of our lines were ad- vanced and all the rates, local and through, on the lines west of the western termini of the trunk lines were advanced. Commissioner LANE. So that the argument made by Mr. Thayer in justifying this increase, on the ground that the local rates were out of line with the long-distance rates, is not applicable to you? Mr. C.-rDE BROWN. No. It was peculiar to the Pennsylvania Road east of Pittsburg, and perhaps some others. It was really, as I un- derstood Mr. Thayer, an incidental feature of that advance, so far as the Peniisylvania was concerned. Mr. BRANDEIS. Do you know how it applied to the Lehigh and the Lackawanna? Mr. CLYDE BROWN. I am informed they advanced the local rates. Mr. LYON. I might state I think I asked Mr. I)aly, of the New York Central, and he said his rates were on the same scale, as I re- member, as the Pennsylvania. I do not know what the tariffs will show. Mr. CLYDE BROw\'N. I am quite sure no such statement as that was made with reference to our local rates. Mr. LYON. Some question was asked, and I brought out that very point here as to whether the New York Central had not clone the same as the Pennsylvania. I did not think there was any explana- tion of it at the time. Mr. IVES. The local rates on the New Haven, Mr. Brown, have been raised to quite an extent in the method which, I think, is the correct one, by picking out a rate here and there and raising it where they could. They have also raised their passenger rate to a figure which they estimate themselves in their annual report is likely to bring them. in $800,000 a year. The Boston & Maine has attempted to make the same kind of advances in their passenger rates in New England. Mr. CLYDE BROWN. The Boston & Maiue did advance their local rates, their local freight rates. Mr. IVES. They hrae made an effort to get them up where they could, but they hLve not made any Very serious advances, and the rates from Boston out into the New York Central territory of course have been increased. I hnave heard no. objection from our shippers to these increases, because the increases were low. They were per- 3147 ADVANCES IN RATES BY CARRIERS. fectly willing to see them made where they did not threaten their business. Mr. BRANDEIS. Commissioner Prouty asked specifically a question as to whether there was a difference in regard to the advance in in- terstate rates and intrastate rates. Have you anything to say on that subject? Mr. IVES. You must refer to a different question from the one I thought you were going to ask me. Mr. BRANDEIs. What was the one you had in mind? Mr. IvEs. I will answer the one you asked me. The discussion we have just had shows very clearly that there was no distinction made between State and interstate rates. This policy of the Pennsylvania ito increase their rates from Philadelphia to points in Pennsylvania means of course that the rates of the Reading and other Pennsylvania roads within the State of Pennsylvania, and the Pennsylvania rates, were very largely not increased. But on the other hand, a. lot of interstate rates were not increased. So that as far as I know-the railroad men could probably testify to that more expertly and cor- rectly than I-they made no attempt to make a distinction between interstate and intrastate rates. They took them where they caine, where they could advance them, whether interstate or intrastate. But when you get out into Illinois there was practically no ad- vance made in the State of Illinois, because they are fixed by the com- mission and the statute there. It was impossible to make an increase in them. The question that I understood Mr. Prouty to ask in connection with that was-he said to Mr. Titternore, " You could not raise the rates, could you, in all territories; you could not make this horizon- tal rate unless you got every other railroad in the other territories throughout the country to raise them? " That is exactly what we are complaining about, principally, the very fact that the rates are not to be raised in this great consuming and producing territory with which we exchange so much traffic- Illinois and that territory. The rates to a great extent are not to be raised at all, and where they are raised it is to a very small pro- portion, so that the railroads have not been deterred from advancing rates because of the fact that other railroads have not advanced the rates from a competing center into this common territory. Mr. BRANDEIS. Mr. Titteinore was asked the question as to whether the number, as I understood it, of commodity rates had been in- creased since the practical abolition of rebates. Is that a subject upon which you can testify? Mr. IvFs. I do not think that anybody can say. I do not think Mr. Titteiiiore knows, and I think he said he did not.. I would say that I do not know. But I do know this I have attended a great many hearings or meetings at which the eiort has been very strenu- ously made to get back into the classification as many aiticles as possible. The whole tendency of railroads is to get back into classi- fication the articles that have been taken out, a very commendable effort when it does not raise the rates too much. Commissioner 1LANE. That is to say, if they have enough of scaled or class rates it is a good thing to abolish commodity rates as far as possible? 3148 ADVANCES IN RATES BY CARRIERS. Mr. IvES. I think so. Of course, there are certain commodities. I can not look far enough ahead in the future to think they would ever be taken out of the commodity lists, but I should certainly advo- cate reducing them very largely. Commissioner LANE. Give me an instance of a commodity which, in your imagination, would stand being put in the classification. Mr. IVES. Take lumber. Conditions are such that lumber does move in classification in some territory now. But in other territories the classification of lumber would be so high it would not move. It can move on class rates in some territories and it can not in other territories. Now, unless you could change your class rates to conform to that adjustment, you can readily see that you could not put lumber into the classification and cancel all the commodity rates without a wrench either up or down. Commissioner LANE. You can extend a number of your class rates down and you could make the classification which would include lumber, could you not? Mr. IVES. Yc. But take lumber moving under the central traffic territory, which is quite largely on the sixth-class rate. Suppose they were eighth, tenth, twelfth, and fifteenth classes. It does not make any difference. It would bear, presumably, the same relation to other rates in that territory that it would in New England, where to a great extent the class rate would prevent the movement of the lumber, and on a. good many of the longer hauls. Mr. BRANDEIS. Is there anything you care to say on the increases in classification rates since 1900? Mr. IvEs. I think nothing further than I have said. Mr. BRANDEIS. Now, have you anything to Jay on the question of possible economies in railroad operation, in addition to what has been said ? Mr. IVES. I think not. Mr. BRANDETS. Is there any other point on which you feel you can throw any light for the commission? Mr. Iv:s. I think not. Commissioner CLEMEN'rS. A good deal has been said about the abolition of rebates. Is it your observation that they have in fact been abolished, or are there some now? Mr. IVES. That rebates have been abolished? Commissioner CLEMENTS. Yes. Mr. IVES. I firmly believe so; yes, sir. I do not. know of a single case, and have no slIsl)icions of any cases where rebates are paid. Commissioner CLARK. 1)o you agree with statements that have been made as to the extent of the rebates when they did prevail? Mr. IvEs. As to 35 and 40 per cent, and so on? Commissioner CrARK~. Yes. Mr. IvEs. les. Commissioner COCKRELL. Did all the shippers get the benefit of them? Mr. IvEs. N!4o, sir-well, I am not omniscient; I could not tell that, whether they did or not. They did not all on the roads I was connected with. [Laughter.] I nam sorry to say, because I should have liked to give them all the same. LLaughter.] 3149 ADVANCES IN RATES BY CARRERS. Commissioner CoCKRELL. So that the percentage would not apply, then, to all tranlsportation? Mr. IVES. Certainly not. The CHAIRMAN. Are you able to make any competent estimate of the percentage to gross revenues to which rebates amount? In other words, did the railroads collect 75 per cent of what they would have received if full tariff rates had been charged in all cases, or 60 per cent or 80 per cent or 90 per cent ? AMr. IVES. I think that would differ very largely on different roads, and I should not say I could make any competent estimate there of all roads or of any one road. The CHAIRMAN. Could you make any estimate of the roads with which you were connected at the time? MIr. IvEs. On the C., B. & Q. for the last three years I was with it, as far as I was concerned, there was not a rebate paid on interstate business. Passes were given to influence business and business was influenced indirectly through concessions on State business to some extent. Prior to that time they were paid very largely, and the wary the C., B. & Q. was divided up into sections it would not be possible for me to make any rough estimate, anything more than a very rough estimate. commissioner LANE. We had some testimony in the western case by traffic managers that probably between 3& and 5 per cent of the total revenues went for rebates. .[ think one of the witnesses testified as low as 2 to the total amount. An estimate was given to me by the director of one of the large railroad systems that it amounted to about $60,000,000 a year, approximately. I figured on a 2 per cent basis with $2,000,000,000 revenue. That would be $40,000,000. Per- haps somewhere between $40,000,000 and $60,000,000 might be right. Mir. IvEs. Is that a question.? Commissioner LANE. Yes. Mf r. IVES. I really have not any idea, Mr. Lane. I mean it would be, a puire guess. Commissioner LANE. You do not mean to say, when you say that all rebating has stopped, that there is still no preference given out of the rate? Mr. IVES. I mean this: I have attended a great many meetings of railway men, of the higher traffic officials, and up to the last year or two, when I left the service, and if ever an impression was derived of the sincerity of men in any walk of life in the intention to do a certain thing it was the impression I received from the sincerity of the railway men in their intention to absolutely discontinue all Ipref- crences, either bv rebates or any other method. I do not mean to say that some did not exist. There were a great many that did exist, which were discussed, and they were anxious to get rid of. But,; I do not think the railway men as a rule, in any except the rarest excep- tions, are making any preferences which they can avoid. Mr. BRANDEIS. To-day? Mr. DIES. To-day. The CHAIRMAN. That is, the preferences which exist to-day are in the tariffs themselves? Mr. IEs. Oh1, absolutely. 3150 |
| ADVANCES IN RATES BY CARRIERS. pp. 3151-3155 The CHAIRtMAN. And that the instances in which there is any se- cret departure from tariff provisions are infrequent and unimportant relatively? I Mr. IvEs. W'hy, I should go further and say they must be acci- dental. I can not imagine any man so reckless or careless of the good opinion of his fellow-men as to do that to-day. I should like to call attention, now that you have mentioned rebates, to one very important effect that the rebate practice had which, in my opinion, was much more far-reaching than anything else; that is, it ex- tended itself into the future much more even than the discrimina.- tions resulting from the praADVANCES IN RATES BY CARRIERS. The CHAIRtMAN. And that the instances in which there is any se- cret departure from tariff provisions are infrequent and unimportant relatively? I Mr. IvEs. W'hy, I should go further and say they must be acci- dental. I can not imagine any man so reckless or careless of the good opinion of his fellow-men as to do that to-day. I should like to call attention, now that you have mentioned rebates, to one very important effect that the rebate practice had which, in my opinion, was much more far-reaching than anything else; that is, it ex- tended itself into the future much more even than the discrimina.- tions resulting from the practice while it was going on. That is the fact, that it had a tendency to prevent the correction of freight- rate adjustments as the necessity for them arose. Personally, myself, and I have no doubt that other railroad men here will recall many in- stances in the past when a proposition was made to make a general advance in rates which was opposed by certain districts. It was admittedly unfair to that district. It was taken care of by paying rebates to that ship per and giving him the old basis and letting the other fellows get the advance. In other words, an incorrect and unfair adjustment was perpetuated, and in scnre cases increased, because you could always relax it through these methods. Commissioner LANE. That is to say, you used the rate as a soi't of list price, with a percentage off ? Mr. IvEs. That is not what I meant. I did not mean in that case to refer to the general practice. That was very true in a great many of the staple commodities, I will admit. But that was not what I was trying to say at that minute. I was trying to say what I will illustrate by taking an impossible case: The rates to Kansas City and St. Joe are the same, and have always been. The rate to St. Joe is made higher than Kansas City, and everybody admitted it ought to be made the same as Kansas City, but all the railroad men felt it might mean a disastrous rate war. So that the thing was equalized for many years by paying rebates to about everybody in St. Joe down to the Kansas City rate. That is an absolutely imagi- nary case; it is not true, and I have mentioned it for that purpose, to ive yOu an illustration of what I mean. Commissioner LANE. There could not be a lighterage allowance or anything of that kind to bring about an adjustment, could there? Mr. IvEs. To-day, you mean? Commissioner LANE; Yes. Air. IVES. I do not think so, after the experience in New York and Philadelphia. Mr. BRANDEIS. Is it not a fact, then, that the abolition of rebates really intensified the injustice and actual inequalities of the existing cases, because it removed the ability to relieve a particular situation by virtue of a rebate? Mr. IvEs. Yes, to my mind. Mr. LYON. That was the question I wanted to ask you. You speak of the St. Joe situation as to what was done under the olden time- Mr. Ivis (interposing). I specifically said that was an impossible case. Mr. LYON. I understand, using it as an illustrative case only. You said that formerly they would equalize the situation to St. Joe 3151 ADVANCES IN RATES BY CARRIERS. by rebates in order that St. Joe might get the benefit of the lower rate. What is done now? Mr. IVEs. That is not just what I said. I said Supposing the rate to St. Joe is higher than to Kansas City, and it was admittd it ought to be the same, and it was also felt by the railroad men that the making of it the same might cause a disastrous rate war; that in order to overcome that situation and protect St. Joe they did it by paying rebates to about everybody in the. town for a while. Mr. LYON. But what is done now in such a case as that? You can not just correct it by giving a rebate to St. Joe now. What would be done now? Mr. IV'Es. I think a formal complaint should be made to the com- mission. Mr. LYON. That is, St. Joe would have to bring a formal com- plaint? Mr. IVES. Unless the railroads fixed it without. They often do. Mr. LYON. Is it a result of the old-time practice compared with the present time by which those adjustments were brought about, as you said, by the rebate system, and now when they agree upon the ad- vanced rates the carriers are in the position where they can not vio- late their agreements except by publishing it in the tariffs. That is true ? MAr. IVES. If I understand your question, you ask me simply a question that is a legal fact, do you not? Mr. Lyom. It is not more a legal fact than it was formerly. It was against the law in both cases. You say now they accompTish it by publishing in the tariff, if at all? Mr. IvEs. Yes; in my opinion. Mr. LYON. In regard to your statement about the rebates, have the rates been reduced openly--that is, through the published tariffs-to special industries more under the new order of things than under the old order, or have you any conclusion on that subject? Mr. IVES. I should say not. Mr. LYON. Then the specialized industries are not favored by an open published commodity rate? Mr. IVES. There has been a great deal of talk about the sugar rate, for instance. Personally, if that is done to favor the large indus- tries it must be done by higher officials than those I ever had ammy- thing to do with, because I believe that those officials with whom I conferred were honestly anxious to see the sugar rate restored and advanced to a proper share of the burden. That is one example. Mr. LYON. If those large industries are securing a lower published rate-that is, taken out of the classification and given a commodity rate--would that imply to your mind it was done with the same pur- pose in view as the old rebate system? Mr. IEms. It would not necessarily. I do not believe there is any intention to violate the law. Mr. LYON. Would such a case as that suggest itself to youi Mr. IVES. If there is, it is above and beyond the men I know. Mr. LYON. You made a. statement about the rates not being raised ,in this 250-mile territory on account of some statements made by Mr. Baer. What was your information on that? Mr. IVES. 1 think I stated in answer to a question of Mr. Brandeis that I thought Mr. Baer did not allow the rates to be advanced on 3152 ADVANCES IN RATES BY CARRIERS. the Reading road because he thought they were high enough. That was his position as I understood him to take it. Mr. LYON. From what source did you get your information? I would like to know something definite about it, if you do not object to disclosing it. Is it just a rumor? Mr. IvEs. No, it was not a rumor; but I do not know that it is proper for me to quote it. Mr. LYON. You do not need to state it. I wanted to know if it was definit.3 enough Mr. IVES (interposing). It was very positive. I had no idea there was any special significance attached to it when I said it. Mr. LYON. That is a question to be determined later. Mr. IVES. I mean I was not trying to make a sensation by saying it. I had no idea of making it. I thought it was commonly understood. Mr. LYON. We were of the impression here from the testimony of Mr. Thayer it was based on the relation of rates. Mr. IVES. I also stated I thought the Pennsylvania road was en- tirely sympathetic with the Reading road in that position, and that means it was on account of the relation of rates. Mr. LYON. That the rates were high enough? Mr. IVES. Yes, sir; high enough. That, however, is merely my opinion. Mr. LYON. You have given your opinion about rates, and I would like to ask this question: In case some of the carriers here before the commission should show reasonable returns, show their financial con- dition is not at least one of distress, is there any way of remedying this matter other than raising all of the through rates? Mr. IvEs. You mean is there any other way of getting revenue from freight and passenger business? Mr. LYON. Suppose one road needs $2,000,000 and they really need it for purposes of properly operating their road in the public interest, and there is another road competing between the same points that does not need it from a. financial standpoint so far as the record will show. Is there any way of meeting that situation other than raising the through rates? Mr. IVES. Unless they could at the same time advance their local rates if they were low. Mr. LYON. Is it feasible to advance local rates on one line in that situation ? Mr. IVES. Oh, no; they would have to do it at the same time. Mr. LYON. All-the roads in the State would have to advance? Mr. IVES. Assuming the conditions are the same, I should say so. You have a typical illustration of that in Illinois in the class rates. Mr. LYON. Would it be impracticable to have one line raise the rates on one article and another line the rates on another article locally? Mr. IVES. Not on the game commodity. Mr. LYON. On the same commodity. Mr. IvEs. I should say not. It depends on what the commodity is and if the commodity moves in large quantities, I should say not. Mr. LYON. What would be the effect of a higher rate on first class on one road than another between a local point? Mr. IVES. You means across country? 3158 ADVANCES IN RATES BY CAIRRIEBS. Mr. LYON. Between Mr. IvEs (interposing). Between Station A here and Station B here? Mr. LYON. Yes; stations local to the line. Mr. IVES. A slight difference often does exist across country and it depends largely on the topography of the country. My theory is that if each station is equally accessible to the intermediate country, the station with the lower rate will ultimately take away the busi- ness from the station opposite. Of course I have had a great deal of experience with that out in the far WVest where we lined our rates up. Our rates were very high and a slight difference there might mean 5 cents a hundred. We always tried to line our rates up to places 3sonvtimes 40 miles away-to make the same rates and grade them along just the same. That. was one of the reasons fir that "old row of bricks " expression. Mr. LYON. Is it lpractical to remedy this matter in any way except by raising these through rates, if revenue is needed by a particular line? Mr. IvES. It is entirely practical to raise local rates. Air. LYON. I thought you said that would be impracticable. Mr. IVES. For one road to do it and not the other. Mr. LYON. I say for one road to do it and not the other. Mr. IvES. I should say it was impracticable to do it to any extent. Mr. LYON. Where one road does not need the money-I mean its financial condition does not show the need of increased rates-is it impracticable for the other line, paralleling it, which does need the money, to raise the revenue through its local rates? Mri. IVES. I consider it so. Mr. LYON. You consider it impracticable? Mr. IVES. Yes. You are speaking of roads in open country? Mr. LYON. Yes. Mr. IvEs. I should consider it so. Mr. BRANDEIS. 'Where they are all strictly competitive? Mr. IVES. Yes. There might be a range of mountains between them. That would make the situation different. Commissioner CLARK. Do you agree with the statement that has been iiiade as to class rates that were not affected, that on that traffic they collected the tariff rates and adjusted the commodity rates on the old settlement basis, to a large extent? Mrl. IVES. That, I believe, was testified to by Mr. Thayer and re- ferred particularly to the conditions on his road. I can not say of my own knowledge that that was done to a very large extent. I know it was done on some articles. Commissioner LANE. When you made rates, to what extent were those rates made out of consideration for the weaker road? Mr. IVES. Well, they were very apt to be made not out of consid- eration for the weaker road, but because the weaker road forced them. The weaker road was very apt to be the road that made the lowest rate. Commissioner LANE. Then, the making of rates, so far as you knew it, was in the cutting of rates and not in the raising of them? Mr. IVES. Well, a rate could not be raised by one road, but a rate could be reduced by one road. 3154 ADVANCES IN RATES BY CARRIERS. Commissioner LANE. In your consultation and consideration of the questions-the question of increasing rates-to what extent did rail- road men feel that their sympathies should be allowed to control ill the making of the rates, and because their sympathies were w'ith the line that was not as well managed as the others raised the rate so as to give him a chance to get in out of the wet? Mr. IvES. As far as my recollection goes, I never heard that sub- ject discussed while I was in the railroad business. [ laughterr] Commissioner LANE. You represented a rather weak road, did you not, for a good while? Mr. IvES. The WVlabash? Why, rather; yes. Commissioner LANE. Did you ever find in making rates and con- sulting together with these traffic men that when you snaid, " We have got to have more revenues and we would like to raise some of these rates," that the railroad men representing other and stronger roads agreed with you onl that and raised the rates so that you could get more revenlle and become stronger? Mr. IVES. I do not think I ever made that proposition to anyone. I do not recall it. I recall making considerable effort myself to get certain rates advanced and in some cases it so happened that tl~e strongest roads opposed it. I do not think their object, however, wIS to keep the Wrabash poor. I do not think that occurred to them. I think they simply did not sympathize with the particular movement. I do not think there is any question but that in the past the stronger roads-in what might he called the cut-throat days-mnade low rates andI forced them down the throats of the weaker ones-in the more remote past. Commissioner LANE. But the question is whether the strong roads made high rates out of sympathy for the little fellow. Mlr. IVES. Out of sympathy? Commissioner LANE. Yes. Mr. IVES. I never heard of it. [Laughter.] We were not con- sidered a little fellow, or very weak, oni the Wl;abash. Wle, had a. long, straight line, and a fairly good road. Commissioner LANE. The last question did not have reference to you. All'. IVES. Oh, ves. ComnlissiOner TLANE. I have been trying to find out how the rail- roads were going to be assured of this advance(] revenue. There' is; no agreement or guaranty that can be given that a road between New York and Chicago which participates ill this increase will star with the increase long enough to make up this deficit. How is thlart? MTvr. IvXs. I should be willing to insure it if it is done, but I could nlot tell youi hTow it is done. f 1Laughter.] Commissioner LANE. You thillk it is something psychological I suppose? Mr. IVES. Yes; I think that is it; that is the best explanation. The CHAIRMAN. I suppose counsel for the carriers will desire to interrogate Mr. Ives, by way of cross-examination? Mr. BUTERFIELD. I Will not care to. Mr. CLYDE BROWN. Before you suspend, I would like to make a suggestion with respect to the date of the argument in this case. At the conclusion of testimony, at the hearing in October, it waS 70932-S. Doc. 725, 61-3, vol 5 13 3155 ADVANCES IN RATES BY CARRIERS.3156 |