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 BOOK 
 
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 CLASS VOLUME 
 
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 FEW HOURS' TALK 
 
 WITH 
 
 A Railroad Man. 
 
 BY 
 
 THOMAS H. BOWNE. 
 
 PHILADELPHIA, PA. 
 THE BOWNE PUBLISHING COMPANY 
 
 1894.
 
 COPYRIGHTED BY 
 
 THE BOWNE PUBLISHING COMPANY. 
 
 1894.
 
 3Sb 
 
 INTRODUCTION. 
 
 The object with which this work is presented to the 
 pubhc is to demonstrate the practical railroad questions 
 of the day which have become matters of public concern. 
 The man who would really study the subject would of 
 necessity be required to seek his material and informa- 
 tion amongst hundreds of different arguments and re- 
 ports, many of which are exceedingly able, and, I dare 
 say, few of them easy of access, and still fewer at all com- 
 plete in themselves. 
 
 The author's aim is to treat each topic in simple man- 
 ner, having in mind the needs of new men who may en- 
 gage in the service, and that an average man or layman 
 can readily understand the internal affairs of a company. 
 Let every man, therefore, avail himself of this oppor- 
 tunity, remembering the words of the poet, 
 
 " The best that we can do for one another is to ex- 
 change our thoughts freely, and that after all is but little." 
 
 The Author. 
 
 7iOS6
 
 CONTENTS. 
 
 EARLY AMERICAN RAILROAD HISTORY. 
 
 CORPORATION OF A COMPANY. 
 
 CONSTRUCTION. 
 
 Location OF the Road; Actual Construction of the Road; 
 FoKMiNG the Road Bed (Grading); Ballasting; Cross- 
 Sleepers and Rails. 
 
 RAILWAY MANAGEMENT. 
 
 Definition of Duties; Handling of Trains; Schedule Mak- 
 ing; RiccoRDiNG the Movement of Cars; Skeleton of a Rail- 
 road Organization. 
 
 FREIGHT RATE CONSTRUCTION. 
 
 PASSENGER RATE CONSTRUCTION. 
 
 FIXING AND CLASSIFYING FREIGHT RATES. 
 
 CONSTRUCTION OF FREIGHT CLASSIFICATION. 
 
 CONSTRUCTION OF SCHEDULES OR FREIGHT TARIFFS AND 
 
 PERCENTAGE TABLE. 
 RECEIVING, FORWARDING AND DELIVERING PROPERTY. 
 REVENUE AND EXPENSES. 
 ANALYSIS OF ACCOUNTS. 
 
 RAILWAY ASSOCIATIONS. 
 
 Hon. Aldace F. Walker, Formerly Chairman of Board 
 Commissioners, Western Traffic Association.
 
 EARLY AMERICAN RAILWAY HISTORY. 
 
 The hi.5tory of railroads in the United States is very- 
 interesting, exhibiting as it does the growth and develop- 
 ment of a system superior in all respects to that of any 
 other country. 
 
 The American railroad system is the most wonderful 
 product of human invention, adaptation and enterprise of 
 this the most progressive of the centuries. It correlates 
 the arts and possibilities, and to its peculiar exigencies of 
 physical characteristics has revolutionized the commercial 
 methods and the social habits of the world. This has 
 been accomplished within memory of persons now living ; 
 the railroad mileage has increased from 23 miles, 1830, 
 to over 170,000 m 1893. 
 
 It would be a difficult and arduous undertaking to pre- 
 sent and trace each stage of proceedings which led to the 
 establishment of railways in the United States. The sub- 
 ject alone with its magnitude would certainly be a volume 
 within itself; yet, however, there are some important pro- 
 ceedings connected with the subject which I shall present 
 to the reader in a brief tone that will be of some interest 
 to him. When the Stephensons, of England, made a trial 
 trip of their locomotive before the people of that country 
 they thought it a wonderful piece of ingenuity, and it 
 was beyond a doubt such. It received considerable appre- 
 ciation ; but when we center our thoughts upon one who 
 was even as much of a genius as he was, we cannot give 
 the credit in its entirety to him, but come to our own 
 country and bestow the graces of a good loyal American 
 
 7
 
 8 
 
 citizen upon one worthy of it, " Oliver Evans." At 
 some periods, few things were attempted which were not 
 imitations of something that had previously been done 
 in Great Britain. This rule has a notable exception, the 
 first of which was the invention of a high pressure engine 
 which under favorable circumstances could presumably 
 have been developed into a successful primitive locomo- 
 tive by Oliver Evans, an able and successful inventor, at 
 an earlier date than any equally important forerunner of 
 the locomotive had been devised elsewhere. 
 
 There were no railways in America at the period when 
 Evans first conceived his idea of a steam roadwagon, re- 
 markable as it was at that time. He has the honor of be- 
 ing the first citizen of the 'United States to devise a ma- 
 chine capable of moving itself and additional weight by 
 steam power over an ordinary street or road. In a letter 
 published in Nile's Register, dated November 13th, 181 2, 
 he describes at length the steps he had commenced soon 
 after 1772 to construct steam wagons and to organize 
 methods for applying them to useful service, and which 
 he considered his most remarkable discovery. At one 
 time a book fell into his hands which described the old 
 atmospheric steam ; he was astonished to observe that 
 they had so far erred as to apply steam only to create a 
 vacuum and to use the mere pressure of the atmosphere 
 instead of applying the elastic power of the steam for 
 original motion, the power which he supposed irresistible. 
 Having been forcibly impressed that his aspects were cor- 
 rect, he renewed his studies with that persister>t zeal 
 which he possessed and soon declared that he could make 
 steam wagons. In 1776 he petitioned the legislature of 
 Pennsylvania for exclusive right to use his improvement 
 in flour mills and steam wagons in that commonwealth.
 
 \ 
 
 A committee was commissioned to hear his pleadings ; 
 they came to the conclusion that he was insane by his 
 representations concerning steam wagons. Not feeling 
 at all discouraged at this he made a similar application to 
 the legislature of Maryland which resulted favorably, 
 mainly on the ground that the grant could injure no one 
 and the encouragement proposed might lead to some- 
 thing useful; but, for the want of pecuniary resources, he 
 was compelled to abandon his pursuits. 
 
 In 1 800 or 1 80 1 he constructed a small stationary en 
 gine which was used for grinding plaster ; this fully de 
 monstrated the correctness of his theory, and in 1804 he 
 further demonstrated his theory by building a machine 
 for cleaning docks which was propelled by steam through 
 the streets of Philadelphia, from the Delaware to the 
 Schuylkill rivers. 
 
 Another important proceeding is presented to us 
 by that venerable and judicious gentleman, Col. J. 
 Stevens, of Hoboken, N. J. He was the first citizen of 
 the United States who combined advocacy Vv'ith pcrsis- 
 tance and faithfulness that led to any final practical results. 
 He commenced advocation and construction of a railway 
 about 1 8 10, and in the year 181 1 he applied to the legis- 
 lature of the state of New Jersey for the first American^ 
 railway charter, which was granted in the year of 1815. | 
 
 In the year of 1812, when the question of construct- 
 ing a canal from Lake Erie and to connect with the 
 Hudson river was being agitated. Colonel Stevens urged 
 the New York commissioners of inland navigation to 
 construct a railway instead of a canal. His suggestions 
 however were rejected, but this movement did not prove 
 fruitless but helped the public to direct their attention to 
 practical use of improved highways. Failing in his at-
 
 10 
 
 tempts to secure a favorable consideration from the New 
 York commissioners, and like all other ambitious geniuses, 
 he published his suggestions in pamphlet form in 1S12 
 and made an earnest appeal to the Federal Government 
 for the purpose of having an experimental railway con- 
 structed to test the feasibility of his plans. His efforts on 
 this occasion were also unavailable, and he then directed 
 his attention to secure a railway charter from the State 
 ' Government of New Jersey authorizing a road from 
 : Trenton, N. J., to NcwBrunswick. At all events he was 
 successful in obtaining a charter in 1 8 1 5, but being unable 
 to speedily obtain financial resources to construct the 
 proposed road he abandoned the idea and directed his 
 attention to the construction of an experimental railway 
 of his own in Hoboken in 1820. In the year of 181 8 or 
 18 19 Colonel Stevens addressed a memorial to the legis- 
 lature of Pennsylvania, recommending the construction 
 of a railway from Philadelphia to Pittsburgh, and in the 
 year of 1S23 he secured, in conjunction with other cor- 
 porators who were citizens of Pennsylvania, the passage 
 of an act by the Penns)dvania legislature authorizing the 
 construction of a line from Philadelphia to Columbia, 
 and the act was approved on March 31st, 1832. 
 j Oliver Evans, Col. J. Stevens, and Robert Fulton who, 
 j above all others, best represented the inventive and prac- 
 tical talent of the United States applicable to transporta- 
 tion during the early decade of the nineteenth century, 
 adopted advanced views, and their dissemination was a 
 slow progress but an actual demonstration of the superi- 
 ority and utility over the crude railroad or tramways on 
 which horse power was used. This was a powerful 
 agency in educating the public mind and securing the 
 assistance of capitalists. One of the outgrowths of this
 
 II 
 
 state of affairs was the organization in Philadelphia, in 
 December, 1824, of the Pennsylvania Society for the pro- 
 motion of Internal Affairs in the Commonwealth. At the 
 outset it contained 48 members, each subscribing $100.00 
 for the immediate promotion of the cause for which or- 
 ganized and an additional amount of $10.00 a year. In 
 1825, William Strickland, Esq., was sent to England in 
 search of information bearing on the advancement of 
 railways. He furnished valuable information and for- 
 warded reports from time to time dating from June 16th, 
 1825. Up to 1825 actual work had been simply confined 
 to a few crude railroads, but from 1825 to 1830 there 
 was considerable anxiety and enterprise displayed. 
 
 After the publication of Mr. Strickland's reports, the 
 public was certainly desirous of having cheaper transporta- 
 tion, and with this object in view quite a number were con- 
 structed. The longest and most important one was the! 
 Mauch Chunk R. R. which was completed in the autunm 
 of 1827; a line used for the purpose of carrying coal. 
 Others were constructed for similiar purposes but are 
 hardly important enough to be noted as an exception. 
 
 Three events of considerable importance were the pas- 
 sage of an act by the Penna. legislature in 1828, which 
 provided for the construction of a railway by the State of 
 Penns)lvania, to extend from Philadelphia to York, Pa., 
 touching at Lancaster and Columbia, Pa., which was pur- 
 chased afterwards by the Penna. R. R. Co. The in- 
 corporation of the Baltimore and Ohio R. R. Co., to ex- 
 tend from Baltimore, Md., to some eligible point on the 
 Ohio river, by the legislature of Maryland and other 
 states, in the years 1827 and 1828, and the Charleston 
 and Hamburg Railway in South Carolina in 1827. 
 
 The latter part of the third decade of the nineteenth 
 
 C
 
 12 
 
 century was an eventful period. It formed an era during 
 which sufficient changes in the prevailing sentiment were 
 effected to make the year of 1S30 a vigorous starting 
 point in railway improvement; beyond a doubt it was 
 certainly a remarkable year in the advancement of rail- 
 ways in the United States. 
 
 The State of Maryland can be given the honor for tak- 
 ing the lead in the construction of a full-fledged railroad, 
 which is the present Baltimore and Ohio R. R., the 
 pioneer of them all; this road was chartered in 1827 and 
 begun in 1828, and on the fourth of July of that year 
 Charles Carrol, last surviving signer of the Declaration 
 of Independence, laid the first rail, which was on the first 
 section of the line and extending in length 1 5 miles, 
 and opened for operation in 1830. 
 
 Railroads in the early periods were like modern street 
 railroads in their construction ; that is to say, instead of 
 having transverse sleepers, they were laid upon heavy 
 wooden beams or sills, placed lengthwise; these beams 
 were the real supporting power; the rails were simply a 
 flat strip of iron to protect the underlying wood from 
 wear. Roads with such a track were too frail and would 
 not support the locomotives that were being shipped from 
 Eneland, the first of these were for the use of the Dela- 
 ware and Hudson Canal Co. in 1828. This created ad- 
 vanced ideas to commence manufacturing locomotives in 
 this country, the West Point Foundry Works being the 
 leader in the matter. 
 
 The most rapid growth centered around Philadelphia. 
 To the northwest was a system of coal roads, principally 
 owned by private parties, and were connecting links to 
 the various mining properties. In 1S33 the Philadelphia 
 and Reading R. R. was chartered and opened in 1838.
 
 13 
 
 In 1846 the Pennsylvania R. R. was chartered and the I 
 west end of the Camden and Amboy route was opened \ 
 as early as 1832-34. The Philadelphia, Wilmington and 
 Baltimore R. R., which forms a part of the world's 
 greatest system, the " Penna. R. R.," was chartered in 
 1 83 1-2 and was opened in Baltimore in 1838. 
 
 The Baltimore and Ohio R. R. advanced but slowly 
 after 1835, the greatest activity being shown further 
 south. By the year of 1840 there seems to have been a 
 continuous line of rail opened from Fredericksburg via 
 Richmond to Wilmington, N. C. 
 
 The Charleston and Hamburg R. R., chartered in the 
 year 1827, and when opened in the year of 183 3, was 137 
 miles in length and considered the longest line of rail- 
 road under one management in the world. 
 
 The earliest New York railroads were built near Al- 
 bany. 
 
 The Mohawk and Hudson (Albany and Schenectady) 
 opened in 1833. 
 
 The Rensselaer and Saratoga in 1835. 
 
 New York Central route was opened to Utica in 1836, 
 and to Buffalo in 1842, though the consolidation of the 
 different sections did not take place till eleven years 
 later. In the meantime the Plarlem River R. R. had 
 been opened and many other roads were well under con- 
 struction, especially the Erie; its main line was not 
 opened through its whole length till 185 1. 
 
 In Massachusetts there were three railroads opened from 
 Boston toward Providence, Worcester, and Lowell respect- 
 ively almost simultaneously in 1835. The whole line of 
 the Boston and Albany was completed in 1842, the 
 only road that has the distinction of being the only 
 through route not merely supported by local traffic.
 
 14 
 
 In Ohio part of the Cincinnati, Sandusky and Cleve- 
 land R. R. had been built about 1837, and it was not 
 until 1848 that through rail connections by any route 
 whatever was secured from Cincinnati to the Lakes. 
 
 The years of 1840-1850 formed a period of rapid rail- 
 road construction in New England, more rapid than in any 
 other section of the country during that decade, but alter 
 the year of 1850, railroad construction in New England 
 diminished and was diverted to Middle and South Atlan- 
 tic States. In 185 1, the Cleveland, Cincinnati and Colum- 
 bus R. R. was opened and the Cleveland and Pittsburg in 
 1852, as well as the Michigan Central and Michigan 
 Southern Lines. In 1853, the connecting link between 
 Cleveland and Toledo was opened, furnishing through 
 rail communication to Chicago, and in 1855 the Chicago 
 and Galena was opened, and followed up by the Chicago 
 and Alton, Chicago, Burlington and Quincy, and Illinois 
 Central. The Ohio and Mississippi R. R. from Cincin- 
 nati to St. Louis. The first line to reach the Missouri 
 was the Hannibal and St. Joseph in 1858. 
 
 The railroads of the United States have certainly 
 grown from the year of 1830, when the first full-fledged 
 railroad was opened for traffic in this country, up to the 
 present time. Until the year of 1 850, each railroad in the 
 United States was, as a rule, operating independently of 
 all other companies. The idea of connecting the tracks 
 of diflerent companies having a termini in the same town 
 was repelled by railroad managers as something in the 
 nature of an entangling alliance fraught with comphca- 
 tions and administrative difficulties which had better be 
 avoided. The transportation business of to-day could 
 not be handled with any degree of dispatch had it not 
 been for the consolidation of the various companies.
 
 IS 
 
 The social, commercial, postal and military necessities 
 of the age were certainly elements of importance towards 
 brushing aside all obstacles to the formation of that great 
 American railroad system which is to-day unto the 
 traveler and shipper as one instrumentality of transporta- 
 tion, embracing over 170,000 miles of track, and employ- 
 ing, June 30th, 1892, 821,415 men. If the total popula- 
 tion be assigned to the number of men employed on rail- 
 ways, it appears that there was one employee to each 
 seventy- nine inhabitants. 
 
 With these figures before us we can see what the rail- 
 way industry is. Considering this vast organization of 
 human devising it would hardly be practical to conceive 
 that it could exist with the absence of an intelligent direc- 
 tory. 
 
 The American railroad system was not a thing which 
 could run alone. Its existence involved conventional 
 agreements touching on every point of detail and co- 
 operative arrangements for the maintenance of such rela- 
 tionship. 
 
 Associations of various sorts were organized to bring 
 them all together as a unity. Certain of these organiza- 
 tions are based upon the idea of managing the traffic of 
 great geographical areas, while others take cognizance of 
 crreat traffic currents. There are also associations which 
 have for their object the management of through cars, i. e., 
 car service associations. There are besides these claim 
 associations and local associations, etc., etc. These as- 
 sociations form the mind or legislative thought of the 
 American railroad system. Their functions embrace the 
 classification of freight, making joint rates, traffic facilities, 
 the apportionment of traffic, receipts from traffic and a
 
 i6 
 
 vast volume of details requisite in'\ the legislative manage- 
 ment of so great a transportation system. 
 
 With these facts the author will leave this subject and 
 repair to the question of the requirements necessary in 
 organization.
 
 CORPORATION OF A RAILWAY. 
 
 We have now come to consider the requirements and 
 powers necessary for the complete equipment of a com- 
 pany or corporation for the transaction of its business. 
 
 The author's aim is to present in this chapter — first, 
 Information " to those engaged or interested in the hne 
 of steam railway business," in the organization of new 
 corporation, the consolidation of existing companies, and 
 the charter; second, to define the legal and commercial 
 terms which are used in the business, so that the internal 
 affairs of a company may be readily understood by the 
 average man or stock-holder, and, thirdly, to name some 
 of the special requirements that are imposed by state and 
 municipal authorities in the granting of charters and 
 franchises. 
 
 It is not the intention to invade all the provinces of 
 the legal profession, and give a code that could be used 
 without legal assistance, but to illustrate and describe 
 some of the elementary and essential features of certain 
 legal forms so that a common ground can be formed 
 upon which the layman may be able intelligently to dis- 
 cuss the business of the company. To give a copy of all 
 the different forms in use and compile the various state 
 enactments this chapter would expand to a volume of an 
 ordinary law-book, 
 
 A charter may exiit in fact or only in name. In some 
 states the filing of the articles of agreement with the 
 clerk of the county and the secretary of the State is a 
 presumptive evidence of the incorporation, while in 
 
 17
 
 i8 
 
 other states the governor issues a patent or charter after 
 the articles of association have been filed with the secre- 
 tary. Some states have enacted a general corporation 
 law under which all corporate bodies are organized, while 
 in others a special act is passed in each case. In most 
 cases the parties desiring to form a corporation or com- 
 pany take the initiative on their own account and after- 
 wards file their articles of agreement. 
 
 A corporate charter is a contract between three parties 
 viz.: the state, the corporation, the stockholders. First, 
 it is a contract between the state and corporation, " an 
 artificial person ; "second, it is a contract between the cor- 
 poration and the stock-holders ; and, thirdly, it is a con- 
 tract between the stock-holders and the state. As be- 
 tween the state and stock-holders, the contract is pro- 
 tected by that provision of the United States Constitution 
 which prohibits a state from passing any law which will 
 impair the obligation of a contract. 
 
 A charter may be perpetual or may be limited, and if 
 limited may contain provisions for an extension. In 
 some cases it may be extended by filing application as 
 in the first instance, but, in some states the legislature re- 
 serves the right to alter, amend, or repeal the charter at 
 any session. The reservation, however, is generally for 
 the protection of the state's interest and not by any means 
 for the benefit of the corporation or individual. A state 
 tax for the privilege of organization is usually imposed 
 upon corporations having capital stock divided into 
 shares, which tax is due and payable before the certifi- 
 cate of incorporation or articles are filed. 
 
 A like tax is also required in some cases upon an in- 
 crease of capital stock. In addition to taxes a fee is 
 demanded for filing the certificate in the office of the
 
 19 
 
 secretary of the state and a fee of cents per folio for 
 
 recording in both tlie county and state records. For an 
 example, and to present a comprehensible idea what the 
 articles of corporation should consist of, will give the 
 form of certificate of corporation under the railroad law 
 of the State of Pennsylvania, approved April 4th, A. D. 
 1 886, to wit : 
 
 Articles of Association of 
 
 We, the undersigned, nine of whom are citizens of the 
 State of Pennsylvania, do hereby form a company for the 
 purpose of constructing, maintaining and operating a rail- 
 road for public use in the conveyance of persons and 
 property under the provisions of an act of the General 
 Assembly of the Commonwealth of Pennsylvania, entitled 
 " An act to authorize the formation and recrulation of 
 railroad corporation," approved April 4th, A. D, 1886, 
 and the acts supplementary thereto ; and for that pur- 
 pose do make and sign these articles of Association, 
 
 First. — That the name of the said company is 
 
 Second. — That the said company is to exist for the 
 term of 
 
 Third. — That the places from and to which the said 
 railroad is to be constructed, or maintained and operated, 
 are as follows, namely : 
 
 Fourth. — That the length of said railroad will be as 
 
 near as may be miles, and the name of each county 
 
 in the state through or into which it is made, or in- 
 tended to be made, is as follows, viz :
 
 20 
 
 Fifth. — That the capital stock of said company is to 
 
 be dollars, being at least ten thousand dollars for 
 
 every mile of road constructed, or proposed to be con- 
 structed, and shall consist of shares, of a par value 
 
 of dollars each share. 
 
 Sixth. — That affairs of the company shall be con- 
 trolled by a president and a board of directors, 
 
 and the following are the names and places of residence 
 of those who shall manage its affairs for the year, or 
 until others are chosen in their places, a majority of 
 whom are citizens of Pennsylvania. 
 
 Name. Residence. 
 
 PKESIIjEXT. 
 
 DIEECTOES. 
 
 / 
 In Witness Whereof the subscribers to these 
 
 Articles of Association have hereto subscribed their 
 
 names, places of residence and the number of shares of 
 
 stock which each agrees to take. 
 
 Name. Residence. No. of Shares.
 
 21 
 
 AFFIDAVIT. 
 State of Penna., County of ss : 
 
 Before me, the subscriber, a in and for said 
 
 county and state, in which county the principal of- 
 fice of the company is designed to be located, duly 
 authorized to take the aknowledgm.ent of deeds person- 
 ally came -being three of the directors named in 
 
 the foren-oin^ Articles of Association, and in due form of 
 law acknowledged as their act and deed for the purposes 
 therein set forth. 
 
 In testimony whereof, I have hereunto set my hand 
 and seal this day of A. D. 189— 
 
 State of Penna., County of ss : 
 
 Personally, before me, a in and for the county 
 
 and state aforesaid, came being three of the 
 
 directors of the and named as such in the fore- 
 going Articles of Association, who being duly sworn, 
 
 according to law do depose and say that dollars 
 
 for every mile of road proposed to be made has 
 been in good faith subscribed thereto, and that ten 
 per centum paid thereon in good faith and in cash to 
 the directors named in said Articles of Associa-
 
 22 
 
 tion and that it is intended in good faith to con- 
 struct the road mentioned in said Articles of Associa- 
 tion. 
 
 Sworn to or affirmed and subscribed before me this 
 day of A. D. 189— 
 
 After these Articles of Association have been drawn, 
 [ and at least jii ne thousand dollars of stock for eveiy mile 
 I of railroad proposed to be made is subscribed thereto, 
 and ten per centum paid thereon, in. good faith in cash 
 to the directors named in said Articles of Association 
 and that an affidavit is endorsed thereon or annexed 
 thereto " as the foregoing affidavits " made by at least 
 three of the directors named in said articles and file the 
 same with the articles of association to the secretary of 
 state whereupon the said articles shall become and be a 
 charter for the company. 
 
 It very often occurs that necessity requires the chang- 
 ing of the proposed route and in such instances proper 
 certificate must be drawn setting forth the required 
 changes. Again it may be necessary, in the opinion of 
 the directors, in order to fulfill their wishes and equip the 
 road in a complete sense, to increase the amount of capital ; 
 this can be done by filing with the secretary of the state 
 a certificate setting forth the amount of such increase, 
 whereupon a new issue is granted provided the original 
 amount of stock and increase shall not exceed the sum 
 "fixed by law."
 
 STOCKS AND BONDS. 
 
 The term stocks, as used in this country, covers a wide 
 area of significations, embracing almost every species of 
 obligations, from the best secured pledges of national 
 and state indebtedness to the personal promise to pay of 
 individuals Stocks may be properly divided into two 
 classes, namely • Interest Stocks and Dividend Stocks. 
 Interest Stocks or mortgage bonds are those calling for 
 a certain fixed percentage on the amount loaned or the 
 amount which they represent and are secured by mort- 
 gage on the property and franchises of the corporation. 
 The value of bonds does not depend upon the percen- 
 tage of dividends, but upon the character of the securi- 
 ties upon which they rest and the market value of 
 money. Bonds are disposed of through trust compa- 
 nies, viz. : The officers of the company executes a mort- 
 gage on the property and franchise of the corporation to 
 a reputable trust company, which in turn guarantees the 
 payment of the bonds. 
 
 The bonds are printed for a certain amount and have 
 coupons attached, stating the amount of interest payable 
 annually or semi-annually. These coupons are cut off 
 in order, as the interest installments are paid, and are 
 equal in number to the interest period before the bond 
 becomes due. In disposing of the shares of a company 
 the directors of such company are usually constrained by 
 law from selling them belov/ the par value, but the bonds 
 may be given away or be sold. The annual or semi- 
 annual income to bond-holders is a fixed and certain 
 
 23
 
 24 
 
 amount of " interest " without regard to the success of the 
 business, while the income to stock-holders is uncertain, 
 depending upon the paying or passing a dividend. Div- 
 dend Stocks are of two classes, namely : Common and 
 Preferred. Common Stock is the original or considered 
 capital stock. Preferred Stock is created by a special 
 legislative enactment and may differ in any state. Holders 
 of preferred stock are entitled usually to a certain fixed 
 amount or per cent, of the net earnings before or in 
 preference to that of common stock. In some states the 
 preferred stock-holder is not liable for any debts of the 
 company, the debts falling absolutely upon the common or 
 original holders. 
 
 Watered Stock. In some states companies are re- 
 quired by law to pay to the state all profits over and 
 above a certain per centage on amount of capital in- 
 vested. Wherever this be the case, and in order to 
 evade this obligation, they increase their capital stock 
 to a sum large enough to reduce their percentage 
 of profit to the rate limited by their charters. This 
 is called watering stock. For example : The Penn- 
 sylvania Railroad Company has a paid up capital of 
 ^1,000,000; the state requires railway companies to 
 pay to it all excess of profit over six per cent, per 
 annum ; it is to be seen that this company v/ith its present 
 capital will earn during the coming year at least twelve 
 per cent, net profit, that is, 560,000 for itself, and 
 ;^6o,ooo which should, according to its charter, be 
 paid to the state. Now, in order to defraud the state of 
 these ;^6o,ooo the company increases its capital stock to 
 ;^2,ooo,ooo, thus making the percentage of profits six per 
 cent, on ;$2,ooo,ooo, instead of twelve per cent, on 51,000, 
 000, and thereby retaining $120,000, and giving the state 
 nothing.
 
 CONSTRUCTION OF THE ROAD. 
 
 While I do not intend in this chapter to invade all the 
 principles and mathematical problems connected with this 
 branch of railway construction, yet in order to make the 
 question clear the author will give a general outline of it 
 
 The first object for consideration in examining a pro- 
 ject for a railroad, is the nature and extent of the traffic 
 to be provided for. If this is large and of character to 
 demand high speed, the work must be adapted to bear 
 the contemplated service ; bridges and rails must be 
 stronger than for lighter traffic and lower speed. If a 
 light traffic, and especially where a lower rate of speed is 
 anticipated, much may be saved in the expense of con- 
 struction, and also in the expense of operating the road 
 by adapting the work to the service to be performed. 
 
 Location of the Road. 
 
 The location, or layout, of a road consists in determin- 
 ing and marking out on the ground those points through 
 which the road should pass. In the location of the pro- 
 posed line, the engineer's first duty is to make a survey 
 by eye without the aid of instruments, which is called 
 " Reconnaissance." This is a rapid preliminary survey 
 of the region through which the road is to pass, and is 
 generally made by the eye alone without instruments. 
 It is intended to be only an approximation to accuracy, 
 and serve to determine through what points the route 
 should be instrumentally surveyed. The road-maker 
 
 25
 
 26 
 
 must examine the country map in hand, visit and identify 
 tlic points selected on the map and see whether his closest 
 decision has been correct. He must go over the ground 
 backwards and forwards in opposite directions, for it will 
 appear quite different, and convey very dissimilar impres- 
 sions, according to the points from which it is viewed. 
 Thus, a hill which one is descending may seem to have 
 a very easy slope, while it may appear veiy steep to one 
 ascending it. After the general position of the line has 
 been agreed upon, the engineer in charge takes up the 
 different maps, and lays down a new line which may 
 coincide with that surveyed or perhaps be quite different. 
 The parties are then sent back into the field and stake out 
 the new line called the approximate location upon which 
 the curves are all run in. In a difficult country it maybe 
 run over a third or fourth time, while in an easy country 
 the prehminary may be all is wanted. After the railway 
 line has been finally located, the next duty of the 
 engineer is to prepare the work for letting, or the actual 
 "construction" of the road. A "specification" is first 
 to be prepared, containing an exact and minute descrip- 
 tion of the manner of executing the work in all its 
 details. 
 
 Copies of it, with maps, profiles and drawings of the 
 proposed road, etc., are to be submitted to the inspection 
 of the persons desiring to undertake it, \\ho are to be 
 invited by advertisement to hand it sealed tenders of the 
 prices per cubic yard (or other unit of m.easurement) at 
 • which they will agree to perform the work. 
 
 The proposals are opened on the appointed day, and 
 the lowest are accepted, other things being equal. The 
 " contract," which is to be then signed by the parties, 
 should contain copious and stringent conditions as to the
 
 2; 
 
 time and manner of performing the work; stipulating 
 when it is to be commenced, how rapidly to progress" in 
 what order of parts, and when to be completed, which of 
 the incidental expenses are to be borne by the contractor, 
 and for which he is to be remunerated. The specification 
 is considered to form part of the contract, and a "bond" 
 is appended, by which the contractor and his securities 
 are"holden and firmly bound" in a penal sum, "this 
 bond to be null and void if the said parties shall faith- 
 fully execute and fulfill the accompanying contract. 
 
 Each contract should include such a length of road, 
 called "a section" (usually a half a mile or a mile long, 
 or even a greater distance). There should be separate 
 contracts for the mechanical structures required. The 
 works which will need most time for their execution 
 should be commenced first ; but no contract should be 
 let till the land which it includes is secured, or exorbi- 
 tant demands will be made. 
 
 The forming of the road-bed is our next thought for 
 consideration. The grading of a line embraces all work 
 required to bring the surface of the ground to the grade 
 line, and is mostly earthwork, and for a limited extent 
 of the line it is rock work, " which is the founda- 
 tion and support of the whole superstructure." This 
 work prepares the bed for the superstructure, and when 
 the earth is not composed of sufficiently hard gravel it is 
 excavated to a proper depth, so as to give space for the 
 ballast. An important feature connected with this line of 
 work is the drainage, and a thorough attention to this is 
 essential to a good railway. 
 
 In soils through which the water percolates freely, as 
 course gravel and sand, the drainage may be so well pro- 
 vided for, as to require little attention, but most soils are
 
 28 
 
 too retentive for this and drains are to be so made as to 
 take tlie water off quickly to some natural or artificial 
 channels which will carry it beyond the reach of influ- 
 ence of the road-bed, because water standing at or near 
 the road-bed will soften the foundation and allow the 
 ballast to settle and thus derange the superstructure. 
 The road-bed or foundation of the ballast should be so 
 constructed as to give support, and be to the require- 
 ments of the traffic to be hauled. 
 
 It is also necessary to provide for the passage of water, 
 by natural streams or artificial channels, which flows 
 across the railway. In order to accomplish this, bridges 
 and culverts are constructed. The term culvert is used 
 for work on small streams and bridcres for larcre ones, 
 and the building of the same depends entirely upon the 
 condition of the body of water and its tributaries. The 
 "ballasting" of the track, and in this connection there 
 are two characteristics to be considered, namely : First — 
 A material that by its open porous character will allow 
 falling water to pass quickly and prevent heaving by frost. 
 Second — By its hardness and firmness in all states of 
 weather to sustain the action of trains, so as to prevent 
 as much as possible tlie derangement of the track. If these 
 conditions are secured all requirements will essentially 
 be provided for so far as the ballast depends. The best 
 material for ballast is clean gravel and sand. Broken stone 
 is very good and makes the most durable ballast, but has 
 the least tendency to make dust, and is not at all times 
 favorable toward 'the durability of the rail or rolling 
 equipment, and in selecting broken stone for ballast a 
 rather hard, silicious kind is better than a more solid and 
 unyielding quality, as it favors the elasticity desirable in a 
 rail track.
 
 29 
 
 The " cross-slcepers, " upon which the rails are placed, 
 are usually of chestnut, oak, pitch-pine, or red cedar. 
 They are hewn on both sides, allowing about six inches 
 of material for the thickness, and more if possible. The 
 longer they are the better, as the extra length on each 
 side of the track lessens the danger of settling. The 
 rails which are also a very important factor to be con- 
 sidered, should be to the requirements of the traffic to be 
 hauled. If the traffic is light much can be saved by placing 
 a light rail down, but if the traffic is of a heavy character 
 a heavy rail will be more profitable and durable. The 
 rails may be directly fastened to their supports, and also 
 have their ends held by " chairs," spiked to the blocks 
 or cross-sleepers. The chairs are generally cast-iron, 
 and weigh from twenty to thirty pounds. They are cast 
 in one piece, consisting of a bottom plate, and two side 
 pieces, between which the rails pass, its under surface 
 being about an inch above the block. The opening of 
 the chair must be as wide as the lower part of the rail, 
 in order that it maybe removed and replaced without dis- 
 turbing the chair. A key of wood or iron is used to fill up 
 the openings which are made in between the joints, and 
 to hold the rail firmly in the chair, but without offering 
 any resistance to its longitudinal motion in expansion and 
 contraction. The force with which iron expands is from 
 si.x to nine tons per square inch of section, which corre- 
 sponds to ten pounds to the yard, so that a rail of sev- 
 enty pounds expands with a force of about fifty tons.
 
 RAILWAY MANAGEMENT. 
 
 It would be impossible to give a complete account of 
 the organization, distribution of duties, systems of work- 
 ing and checks in the various departments, and to de- 
 scribe technically the variations of practice in the differ- 
 ent sections, and on different roads, for the reason of the 
 difference in opinions of the officers in charge. Consid- 
 ering this fact, let us only look at the essential feature of 
 a good management. No matter how small or large the 
 company may be, there are certain and important duties 
 requisite to a good management, and they may be classi- 
 fied as follows : 
 
 1. The physical care of the property, 
 
 2. The handling of trains and moving of freight and 
 passengers. 
 
 3. Accounting and the collection of revenue. 
 
 4. Making of rates and soliciting business. 
 
 5. The custody and disbursement of revenue. 
 
 The president is of course the executive head of the 
 company, but in important matters he acts only with the 
 consent and approval of the board of directors or an 
 executive committee, clothed with authority of the board 
 which may be called the legislative branch of the man- 
 agement. The president's duty is of a dissimilar char- 
 acter, the variations in the scope of the labors actually 
 performed by the railway presidents of the United States 
 have beed accompanied with and perhaps partly caused 
 by noticeable differences in their individual characters, 
 acquirements and antecedents. In a general manner the 
 
 30
 
 31 
 
 tendency in recent years has been strongly inclined 
 toward a requirement that they should possess an exten- 
 sive railway experience. In many instances it was ac- 
 quired in various branches of railway affairs, the prelimi- 
 nary labors being either in legal profession, engineering, 
 construction, or operating department. The selections of 
 presidents to-day have been made chiefly on account of 
 the favorable influence they could presumably exercise 
 either in commercial, banking or investing circles, with 
 very little regard to their actual knowledge of the compli- 
 cated details of the railway movements. Others have 
 virtually elected themselves by their control of stock or 
 influence with stock-holders ; and again others have been 
 selected as president solely on account of skill displayed 
 in the management of one or more branches of practical 
 railway affairs and possession of recognized executive 
 ability. The office is one of great importance, and the 
 stock-holders of different companies have acted in some 
 instances on the theory that they neither desired nor ex- 
 pected the president to be the active head of all depart- 
 ments, looking to him chiefly as a financial leader; while 
 in many other cases presidents have been chosen in the 
 expectation that they would exercise intelligent supervi- 
 sion over all classes of operation. Whatever the antece- 
 dent training or acquirements of a railway president may 
 be, he can usually, if he chooses, exercise a positive in- 
 fluence over all the affairs of his own company and 
 materially affect sundry other companies with which it 
 connects or competes, so that his characteristics may be a 
 matter of considerable consequence. There is perhaps 
 no single class of men who have left a deeper impression 
 upon the transportation systems of the United States than 
 railway presidents.
 
 32 
 
 Every company has a board of directors or a board of 
 managers. The latter title is adopted in few instances, 
 and, perhaps, represents more correctly than the former, 
 the functions theoretically exercised, as they include 
 action on every important new proceeding, — the declara- 
 tion of dividends, the issue of new securities, either the 
 appointment of important officials, including the presi- 
 dent, or the ratification of important appointments made 
 by the president or high officials, the construction of 
 new lines or other work of consequence. Their nominal 
 position is somewhat analogous to that of a legislative 
 body of a political government, as they are always elected 
 by the share-holders and are supposed to act as their im- 
 mediate representatives. The extent to which boards of 
 directors or managers do manage railway operations or 
 control the policy and movements of great lines varies 
 materially, and the actual state of affairs differs widely in 
 different companies. The executive power and super- 
 vision of the president may be delegated to one or more 
 vice-presidents, excepting everything that relates to finan- 
 cial matters, but, as their functions are merely subdi- 
 visions of those of the president, they have no part in a 
 general scheme of authority. 
 
 The first four of the subdivisions of duties indicated 
 above are usually confined to a general manager who 
 may also be a vice-president, and the last is in charge of 
 a treasurer - reporting directly to the president. The 
 power and supervision of the general manager may be 
 delegated to the following, namely : 
 
 1. A superintendent of roadway, having charge of the 
 track and keeping the right of way in good condition. 
 
 2. A superintendent of transportation, who has charge 
 of the handling of trains, the keeping a record of the lo-
 
 33 
 
 cation and whereabouts and movements of all cars, and 
 the preparation of the train schedule. 
 
 3. A superintendent of machinery, who has charge of 
 the construction and maintenance of all rolling stock, and 
 is assisted by a master car builder, who looks after the re- 
 pairs to all cars, and the inspection thereof along the line 
 of the road. 
 
 4. A traffic manager, or a general freight and pas- 
 senger agent, who has charge of the making of rates, ad- 
 vertising and soliciting for business, and the adjusting 
 of claims arising from overcharge or loss and damage to 
 property. 
 
 5. A comptroller, who has charge of all the book-keep- 
 ing by which the revenue and disbursements of the com- 
 pany are accounted for. 
 
 6. A paymaster receives money from the treasurer 
 and disburses it under the direction of the comptroller 
 for all expenses of operation. 
 
 Besides these already mentioned there are the legal 
 and purchase departments. The legal department is in 
 charge of a lawyer or in other words a solicitor. He 
 looks after all claims for loss or injury to persons and 
 property, the preparation of contracts and agreements, 
 which should always pass under the scrutiny of a counsel. 
 The verification of all forms of bonds, mortgages, deben- 
 tures and stock certificates should also be made by the 
 counsel. 
 
 The purchasing department is in charge of a purchas- 
 ing agent. His position is a very important one; he buys 
 and sells all the material and supplies and stationery for 
 the company; he is assisted by what are commonly 
 called "store-keepers," who are stationed at various 
 points and disburse the supplies when a requisition is 
 made for the same.
 
 34 
 
 Having given an idea of the management and the prin- 
 cipal features of each department, let us turn our attention 
 to the diagram on page 35, showing the skeleton of a 
 railroad organization and line of responsibility. 
 
 Handling of trains, which is one of the many features 
 of the operating department, comes under the direction 
 of a superintendent, and is called conducting transpor- 
 tation, in charge of a superintendent. The duties of a 
 superintendent are by no means limited or easy; he has 
 perhaps as great a variety of occupations, and as many 
 different questions of importance depending upon him as 
 any business or professional man in the country. 
 
 Fully one-half of his time is devoted out of doors, 
 looking after the physical condition of the road. He must 
 be familiar with every foot of his track and in cases of 
 emergency must know what course to pursue for imme- 
 diate remedy. All train hands, train masters, train 
 despatchers, telegraph operators, and station forces 
 come under his immediate supervision, and must furnish 
 all regular and irregular service, when the traflic de- 
 partment requires it. The time-table or schedule is 
 .the general law governing the arriving and leaving time 
 of all regular trains at all stations. They are issued from 
 time to time, as the case may require, and from the 
 moment the new one takes effect, any and all preceding 
 tables are superseded by the one issued, as well as all in- 
 structions "special" relating thereto. The regular 
 meeting or passing points for trains on the road, are in- 
 dicated on the time table in full-faced type, as well as the 
 arriving and leaving time of a train, when both are meet- 
 ing or passing trains, or when one or more other trains 
 are to meet or pass it between those times. In preparing
 
 35 
 
 I Comptroller { ^^^'-'ors of Receipts and Disbursement 
 
 r'urchaMug Agent 
 
 Storekeeper. 
 
 a 
 w 
 o 
 
 'A 
 
 C 
 
 E-i U) 
 
 Supt 
 
 « 
 
 < 
 
 
 Supt. of 
 
 Machinery 
 
 r 
 
 r r^eceiving Clerk 
 
 Shil)piDg Clerk 
 
 J-oading Clerk 
 
 Discharging CJerk 
 I Collectors 
 I Laborers 
 
 I V , f P!"'', ^^"ii'neers 
 
 Yard Master J Switchman 
 I j Conductors 
 
 irain Dcspatchers 
 
 Operators of the Telegraph 
 I ^ > Conductors and Brakemen 
 
 A ^"' /Sr"'^''^'"^^"^«^^'Sn and focal" 
 
 Accountant 1 ^^'Jeage " '^ i-ucai 
 
 (. Lost Car. and Tracing Clerks 
 
 ^^remanMch.Shop|S:S^:^^^^:;r 
 Ulechanies and Laborers 
 Foreman Car Shops / Grea^erT' "°^ "^"^"'"^ 
 ( Car Inspectors 
 
 Station 
 Agent 
 
 Train Master 
 
 H 
 
 Supt. of j 
 
 Road 
 
 Roadway j Master 
 
 I Sujit. of f I^'iclge Foreman 
 
 I Bridges j Watchman 
 
 I Ma.son and Carpenter Gane 
 I Section Foreman. ^ 
 
 Qiinf „r I Ganor nnri T^ 1 T.T .. 
 
 Supt. of 
 Road. 
 
 CO 
 
 Gang and Track Walkers 
 Wood and Water Tenders 
 Floating Gang Constructing 
 'n Iransit. 
 
 Traflic 
 Manager 
 
 General 
 Freight Agent . 
 
 General 
 
 Division Freijh, Agems 
 
 Tariff Clerks 
 
 Freight f I^egister Clerk 
 
 Claim J ,^"^«tigating Clerk 
 Agent Voucher Clerl 
 
 ivision pJl^J'^^ ^Sem 
 
 Claim 
 
 _ „. ?'^-on Fass^enTeT^Uf "' 
 
 Passenger Agt. ^ Rati cS^'"'"^'^ ^S"' 
 I -Aijportionment Clerk 
 I Advertising Agent
 
 36 
 
 a time-table, our first step in that direction would be to 
 obtain from the engineer in charge a chart showing the 
 miles of the road, and the distance between stations, 
 with a scale, then secure a sheet of paper that would be 
 sufficiently large to contain the diagram. After the 
 stations are divided off by proportional horizontal 
 lines, as per the scale, divide the sheet into twenty- 
 four equal spaces of one inch width, which repre- 
 sents the twenty-four hours of the day ; these spaces are 
 again divided into twelve equal spaces representing the 
 minutes of the hour, by vertical lines. The course, of 
 every train can now be plotted thereon, and the time that 
 each train will arrive at any station can be ascertained by 
 drawing or extending a line obliquely across the sheet, 
 the intersecting point being the time due at that point, as 
 for example: — 
 
 A Passenger Train, No. i, leaves station A at midnight and arriving 
 at R at 6.40 A. M. 
 
 An Express Train, No. 2, leaves station R at midnight and arriving 
 at A at 5.35 A. M, 
 
 No. 7, which is a freight, leaves station A at I A. M., runs to G by 
 3.10 A. M. remains there until 3.35 A. M. to allow No. 5 to pass and 
 arrives at R 10.50 A. M. 
 
 No. 5, Local Passenger, leaves station A at 1.30 A. M.; runs to 
 station K by 4.42 A. M. and raturns to A by 9 A. M, being called No. 4 
 on the return. 
 
 No. 3, Freight, leaves station A at 4 A. M., arriving at R. at 
 11.50 A. M. 
 
 No. 9, Local Passenger, leaves station A 6.50 A. M., arriving at J 
 10.20 A. M. 
 
 No. 6, Local Passenger, leaves station R 5 A. M., runs to K by 
 8 A. M., remains there until 8.30 and arrives at station A 12 noon. 
 
 The diagram shows at a glance how, when and where every train is at 
 any moment and at what points they should meet and pass.
 
 37
 
 3S 
 
 Even numbers are generally assigned to trains of one 
 direction and uneven numbers given to those of the 
 opposite direction. Trains are classified according to 
 their superiority and right to the track, namely : First- 
 class trains (passenger trains) have the superiority over 
 any succeeding classes. Second-class trains (mixed 
 trains) have the superiority over any succeeding classes. 
 Third-class trains (freight trains) have the superior right 
 over any succeeding classes, and so on. Extra trains 
 are those not represented on the time table, and are run 
 without notice and have no superiority over any class but 
 of an inferior character. If all trains could be run ac- 
 cording to the time as shown on the time-table, very little 
 trouble would present itself, but, when irregular service 
 is put on the road (extra trains) the trouble begins, and 
 of necessity requires the use of the telegraph. Telegraphic 
 orders are usually written on a prescribed form for that 
 purpose, and when issued every one contains the same 
 wording so that each person receiving them will have a 
 duplicate of what is given to the other. 
 
 These orders simply contain one special movement, or 
 at least should not contain any more than the one to 
 which it has reference. 
 
 When they are addressed for a train, a copy must be 
 given to engineman, conductor, and the pilot, should there 
 be one. Train orders are of various forms and significa- 
 tions, and too numerous to invade this chapter. 
 
 The signal, which takes an important part in the move- 
 ment of trains, is the only means of communication. 
 They have many significations, too many however to 
 mention in this article, but in order to make the subject 
 plausible, will mention some few of them, namely: 
 
 Red signifies danger, and is a signal to stop.
 
 39 
 
 Green signifies caution, and is a signal to go slowly. 
 
 White signifies safety, and is a signal to go on. 
 
 Green and white is a signal to be used to stop trains at 
 flag stations for passengers or freight. 
 
 Blue is a signal to be used by car inspectors. 
 
 An explosive cap or torpedo, placed on the top of the 
 rail, is a signal to be used in addition to the regular 
 signals. 
 
 The explosion of one torpedo is a signal to stop, two 
 torpedoes is a signal to reduce speed immediately, and 
 look out for a danger signal, and when a fuse is burning 
 on the track all trains must stop, and not proceed until it 
 is burnt out. 
 
 A lamp swung across the track is signal to stop. 
 
 A lamp swung vertically in a circle across the track 
 when the train is standing, is the signal to move back. 
 
 A lamp raised and lowered vertically, is a signal to 
 move ahead. 
 
 A lamp swung vertically in a circle at arms length 
 across the track when the train is running, is the signal 
 that the train has parted. 
 
 Train rules governing the movement of trains are 
 very simple and would be all that is requisite, if all trains 
 could always be kept exactly on time. But as this 
 cannot at all times be done, certain provisions are made 
 to overcome all the complication which may arise there- 
 from. 
 
 The first and most important rule is, that no train 
 must ever, under any circumstances, run ahead of its 
 schedule time, that is, the time appearing on the time-table. 
 
 The second is, that any train making a stop not on its 
 schedule, must immediately send out flagmen with red 
 flags, lights, and torpedoes, to protect it, sometimes at a dis-
 
 40 
 
 tance of six hundred yards or twelve telegraph poles, and 
 again at a distance of twelve hundred yards or twenty- 
 four telegraph poles. This is a very important one, and 
 it is a difficult matter for the officials to impress the 
 importance of it upon the minds of the train hands. 
 
 It is essential to make some requirements, when a train 
 is prevented from arriving on time at its meeting or pass- 
 ing, by which the opposing train may proceed, or business 
 will be suspended. As space will not permit a full de- 
 scription of these principles, only the general principles 
 of these rules will be given, namely : — 
 
 First. — All trains of inferior class must keep out of the 
 way of a train of a superior class ; that is, all freight 
 trains or extras must wait indefinitely, and must keep 
 out of the way of all passenger trains. 
 
 Second. — When one train only is behind time, the op- 
 posing train of the same class will wait for it a special 
 time usually ten minutes, and five minutes for possible 
 variation of watches, then go ahead keeping fifteen 
 minutes behind its schedule. 
 
 Third. — But should such a train, running on delayed 
 time, loose more time, or in any other wayj should both 
 trains get behind time, then the one which is bound in a 
 certain direction, for instance north, has the right to the 
 track, and the other must lie by indefinitely. 
 
 Still there is another safe-guard in the handling of 
 trains where they become very numerous, and this is 
 multiplying telegraph stations at short intervals, and 
 giving them conspicuous signals of semaphone arms and 
 lanterns, until the whole road is divided into a number of 
 so called blocks of a few miles each. No train is per- 
 mitted to enter any block until the preceding train has 
 passed through or out.
 
 41 
 
 In the approaches to some of our great depots, where 
 trains and tracks are muUiplicd and confused with cross- 
 overs and switching s^ervice, signal towers are built and 
 all the switches are set, and all movements are controlled 
 from them. 
 
 They are sometimes operated by electricity, and 
 others by compressed air. 
 
 Having given some facts pertaining to the handling of 
 trains, the preparation of the time-table, signals, etc., let 
 us repair to motive power department, which is under 
 the direction of a superintendent of motive power. This 
 department is divided into two branches, in charge of a 
 master mechanic and a master car builder. 
 
 The Master Mechanic has direct charge over all en- 
 gines and the repairs thereto ; enginemen and firemen also 
 come under his supervision. He keeps a record of all 
 material and supplies furnished and consumed, the 
 number of miles run and cars hauled by each engine, 
 which is placed on a performance sheet. At the end of 
 every month he is required to make up a report or 
 balance sheet, which gives a complete account of all 
 material received and disbursed, with a detailed account 
 of the charc^ings to the accounts receiving the benefit. 
 
 The Master Car Builder has charge of all repair 
 shops where cars are repaired and erected. Under him 
 are inspectors who are located at various points, and at 
 junctions, for the purpose of inspecting cars. When 
 these inspectors locate a defect in any portion of the car, 
 they attach what is called a defect card, and if unsafe to 
 run is not accepted ; but where the defect does not render 
 the car unsafe to run, or unsafe to train-men, is generally 
 accepted. In such circumstances, every company to 
 which the car is offered may require that a defect card be
 
 42 
 
 securely attached to the car, and when any company, 
 finding a car with a defect card attached, may make the 
 repairs noted by the card, provided such repairs are 
 necessary for the safe running of the car, at the same 
 time rendering a bill for the same to the company attach- 
 ing the card, stating upon the bill the date and place 
 when the repairs were made, the card to accompany the 
 bill as a voucher for the work done. A defect card 
 which is generally used is as follows : 
 
 M. C. B. DEFECT CARD. 
 (Name of Road.) 
 
 Car No Date 
 
 Initial Hne. 
 
 Will be received at any point on this company's line, with 
 the following defects : 
 
 Inspector at 
 
 The Car Accountant and his duties are of as much im- 
 portance as any other officer of the operating department. 
 He furnishes valuable information regarding the move- 
 ment of all cars, either on home or on foreign roads, and 
 his office may be properly divided into main branches, 
 namely: Mileage and Record. The computation of 
 mileage is made in most cases directly from the reports 
 of each train, which are made out by the train conductor.
 
 43 
 
 These reports give the initial and number of each car 
 in a train, whether loaded or empty, and the station 
 whence taken and where left. To facilitate the compu- 
 tation of mileage of each car, the stations on the road 
 are consecutively numbered, beginning at nought, and 
 each succeeding station being represented by a number 
 equivalent to the number of miles it is distant from the 
 initial station, excepting, at divisional and terminal 
 stations, which are generally given a letter in order to re- 
 duce the work of recording. 
 
 The conductor in making his report shows the stations 
 between which each car moves, by their number or letter, 
 so all that is necessary for the mileage clerk to do is to 
 take the difference between station numbers, in each case, 
 an^ he has the miles the car travelled. The mileage of 
 every car on these reports is condensed and recorded 
 into a ledger, and at the end of every month they are 
 footed, showing the total mileage of all cars owned by 
 the home company, and those owned by a foreign road. 
 
 At the close of every month each road renders the 
 other a report showing the amount of mileage due them 
 for that month of cars which were on the road within 
 that month. 
 
 The Record Branch is of equal importance, where 
 a broad and complete record is kept of the daily 
 movement of every car upon the road either local or 
 foreign. The records are divided between local and 
 foreip-n. Local records are books used for home cars, 
 and are of a large size, ruled in such a manner as to 
 allow space for the daily movement or location of each 
 car for one month. Foreign records are similarly ruled, 
 but a slight change being necessary to allow the number 
 and initials of the foreign cars, which could not be very
 
 44 
 
 well provided for in advance. When conductors' reports 
 are received they are distributed amongst the record 
 clerks, who record the movement of certain initials, or 
 scries of numbers, under the date shown by the report ; 
 the report being handed from one to another until every 
 car has been entered and the reports checked. Reports 
 
 \/\Jai)ne 7\n7i CayuoaT^fibCTenH Crsmjitiny 1 
 
 cur 
 
 'trondrf 
 
 ± 
 
 ^ 
 
 ^ 
 
 ^ 
 
 A 
 
 t, 
 
 7 
 
 if 
 
 __C_ 
 
 fo 
 
 ff 
 
 f« 
 
 7.?y 
 
 0A7li) 
 
 ts jihs 
 
 
 
 
 
 
 
 
 
 
 
 
 
 y 
 
 a,7 % 
 
 ^v 
 
 Z.J 
 
 2 I'll 
 
 
 3. 
 
 ,y^ 
 
 '7^ 
 
 '7^ 
 
 
 ?^ 
 
 
 ,X 
 
 [y 
 
 
 
 
 
 
 
 
 
 
 
 
 i.o ^ 
 
 / 
 
 
 
 tn^vo 
 
 .vo f>h^ 
 
 
 
 
 
 
 
 
 
 
 
 / 
 
 
 U-iS 
 
 '7-^ 
 
 'V 
 
 3yi 7 
 
 ■='7 
 
 
 ^BJ 
 
 Soj 
 
 'U 
 
 '-V* 
 
 9^ 
 
 J 
 
 V 
 
 
 
 
 
 
 
 
 
 
 
 fi~^ 
 
 / 
 
 
 
 
 
 
 
 
 
 
 
 
 
 / 
 
 
 
 
 
 
 
 
 
 
 y 
 
 V 
 
 
 
 
 
 
 
 
 
 
 
 X 
 
 
 
 
 
 
 
 
 
 
 
 ^,^ 
 
 
 
 
 
 
 
 
 ^ 
 
 X 
 
 
 
 
 
 
 
 
 / 
 
 
 
 
 
 
 
 
 
 / 
 
 
 
 
 
 
 y 
 
 V 
 
 
 
 
 
 
 
 / 
 
 
 
 
 
 
 
 " X 
 
 
 
 
 
 
 f 
 
 
 
 
 
 
 -^ 
 
 
 
 
 > 
 
 L- 
 
 t^ 
 
 
 
 L/ 
 
 
 are also received from junction stations daily, showing 
 all cars received from or delivered to connecting roads, 
 whether loaded or empty, and the destination of each. 
 Station agents also forward reports showing cars received 
 and forwarded from their station from mid-night to mid- 
 night, remaining on hand loaded or empty, and if loaded, 
 contents and consignee, and also cars in process of load-
 
 45 
 
 ing or unloading. Reports are also received from shops 
 and yards, showing cars undergoing repairs or waiting 
 for the same. It is plainly to be seen that the car ac- 
 countant endeavors to get a complete record showing 
 every car that may be either in use or standing at any 
 point on the line. The diagram on page 44 illustrates a 
 foreign record page, and the process of recording. 
 
 EXPLANATION OF DIAGRAM. 
 
 Each connecting line at each junction station is assigned a number. 
 When a car is received from a connection, the record is shown by entering 
 the road number in the upper space of the block under the proper date, 
 followed by the character X if loaded or empty, together with the time. 
 As for example, car 24710, is shown as being transferred from station 
 217, 11.30 and to have been received 11.25 from Pennsylvania Railroad, 
 at Cayuga, (15). An entry in the lower space of the block indicates a 
 delivery to connecting line Wayne & Amboy Railroad ( 20 ) at 8 o'clock 
 A. M. The middle space of the block is used for the car movement, the 
 first number or letter showing the station from which the car moved. The 
 character X when a prefi-x to a station number, indicates that the car is being 
 
 loaded at that station. The character when used as a prefix, shows 
 
 that the car is being unloaded ; and as an affix, it indicates a movement 
 empty, or on hand empty, and when used under a station number, it indi- 
 cates a change date record, that is, leaving a station on one date, and 
 arriving at another on the following date. Station numbers or letters with- 
 out other characters, show that the car is loaded. 
 
 Sign B is used when the car is left at a station for repairs while in 
 transit. 
 
 Sign T, lading transferred to another car, a transfer record being kept 
 showing to what car transferred. 
 
 Sign R, on hand at station, or yard for repairs. Shops are assigned 
 numbers with an O prefixed. The upper and lower spaces being used to 
 show delivery to or received from the shop, similar to the interchanging 
 record with connection. 
 
 For convenience the 24 hour system is used in recording time, and is 
 shown in quarter hours, thus iqI, 12I, iS^, and 21^, or 12.25,18.30, 
 or 21.45. The transfer column shows the station at which the cars were 
 reported on the last day of the previous month, and the date, also from 
 what road received, with date,
 
 46 
 
 Wc have now come to the Road-way Department, 
 which is in charge of a civil engineer, whose duty is to 
 look after the betterments of the road bed and right of 
 way. All new construction comes under his personal 
 supervision, and he will have to pass his judgment upon 
 the purchasing of additional property, and the prepara- 
 tion for letting of contracts for new construction. Under 
 him comes supervisors, whose duty is to keep the road- 
 bed in the best possible condition, sustaining the physical 
 condition of the track for the safe handling of trains. 
 All section men and laborers come under their direct 
 charge ; it is also their duty to keep a correct and accu- 
 rate account of the time of each man, and the material 
 received and disbursed, making a report at the end of 
 every month in a detailed manner.
 
 FREIGHT RATE CONSTRUCTION. 
 
 Before taking up the various special topics, to which 
 this article is devoted, it is deemed suitable to submit 
 some of the general observations bearing upon the scope 
 and the peculiar office of common carrier, and the in- 
 creasing dependence of every occupation upon their 
 facilities. Commerce reaches its destination by the most 
 advantageous route. Trade seeks the easiest path from 
 the producer to the consumer. The right of every person 
 to just and equal treatment in all that pertains to public 
 transportation is practically unquestioned. To secure 
 the actual enjoyment of this right, to insure fairness and 
 impartiality in the conduct and charges of public carriers, 
 is the paramount purpose of all regulative enactments of 
 the law governing interstate commerce. It is hoped 
 that in a short time every shipper can and will enjoy a 
 greater amount of privileges, and that the carrier will be 
 equally remunerated. 
 
 The rates of railways are governed absolutely by the 
 same law which controls the ruling price of other neces- 
 saries of life. 
 
 The question may be asked, what is a reasonable rate ? 
 This is a difficult question to solve, simply due to the 
 reason that what may be a reasonable rate in one section 
 of the country, may not be in another. The question 
 alone is purely a local one, and cannot be generalized or 
 made to fit any particular formula, because it is a practical 
 and not, as some writers infer, a theoretical question. The 
 rate making power of a railroad company is an adaptive 
 
 47
 
 48 
 
 one. It must take into consideration the producer, middle- 
 man and the consumer, as well as the carrier. All rates 
 must conform to the market competitive influences of 
 other carriers, and it is only in isolated countries and in 
 petty cases that the rate maker exercises any discretion 
 whatever. The commercial and industrial forces arc so 
 interwoven throughout the whole country, and compete 
 so actively with each other, that they effect the rates of 
 local carriers quite as powerfully as do local interests and 
 rivals. 
 
 There are occasions where competition is so sharp, 
 where the freights of some large shippers or combination 
 of shippers is so needful to a particular road, that when 
 reduced rates are demanded as the alternative of loosing 
 the tonnage, the carrier can scarcely refuse, and will devi- 
 ate from the pubHshed rates, sometimes below the rates 
 of its rival company. The question of rate making 
 cannot be estimated on a theoretical proposition as some 
 have inferred, but is the result of practical observations 
 and compromises. With these observations presented to 
 us, we can conceive what position the rate maker is 
 placed in. 
 
 The first freight schedule of rates upon a new road in 
 a noncompetitive district or territory, is based on sound 
 principles, and if a manager could adhere and absolutely 
 follow it, very little difficulty would be experienced, but 
 every manager avails himself of every advantage that will 
 bring business, often sacrificing a profit to do so. There 
 are two divisions of expense necessary to be consid- 
 ered in the determination of rates, namely : 
 
 First. — The cost of terminal and station work. 
 
 Second. — The cost of handling. 
 
 Every shipment requires station work at both forward-
 
 49 
 
 ing and receiving stations, and requires an expense for 
 transporting it. The station expenses for a short haul 
 are the same as for a long haul, but the transportation 
 expenses is in proportion to distance. The expense at a 
 station may be correctly estimated at one and one-half 
 cents per one hundred pounds, or sixty cents per ton 
 that is the expense at both the forwarding and receiving 
 stations, and one half cent per ton per mile can be con- 
 sidered a profitable rate for handling. The rate for one 
 hundred miles on this basis would be $1.20 per ton for 
 station expenses and one hundred miles at one-half cent 
 per mile, or fifty cents, making a total, or the rate for the 
 one hundred miles, ;^i.70. Now, if a manager were called 
 upon to make a tariff or rates for a new road in a non- 
 competitive district, whether he copied an old tarriff or 
 followed one which has been in effect at some former time 
 on a road similarly situated, as no doubt he would, without 
 first adhering to the underlying principles, or if he were 
 compelled to rely on his own resources, the rates which 
 he would produce would be substantially on this mathe- 
 matical calculation. 
 
 Rate making in a competitive district is not so easy. 
 The manager in charge will follow the quotations of his 
 rivals and even make or offer a more advantageous basis 
 in order to secure the business. Unreasonably low rates 
 never happen, as a rule, except in the case of traffic to 
 competitive points. It is unrestricted competition that 
 brings rates below what is just and reasonable, and reve- 
 nue lost by the adoption of unreasonably low rates to 
 competitive points can only be compensated for by rates 
 to noivcompetitive points. The opportunity of the ship- 
 per combined with the carrier's asserted necessity is a 
 constant temptation to bargain for preferential rates, and
 
 50 
 
 agreements between rival lines to maintain schedule 
 charges are usually short lived, for they rest mainly on a 
 pledge of good faith, and do not long survive when 
 interest inclines either party to break them. Joint rates 
 are made up by the agreement between the general 
 freight agents of the roads desiring the rate. They arc 
 formed by a combination of each road's local rate up to 
 the nearest junction point with each road. It frequently 
 occurs that in forming a joint or through rate one or 
 more roads may take an arbitrary position and demand 
 as its or their proportion of the rate agreed upon, its or 
 their local rate and, when this be the circumstance the 
 remaining portion of the rate agreed upon is divided 
 amongst the other roads. Then again another road 
 which is a terminal company may demand in addition to 
 its proportion of the agreed rate a terminal allowance, 
 and in this case the amount must be deducted from the 
 rate which has been agreed upon and, the balance divided 
 amongst the remaining roads, as for example: — A, B, C, 
 & D, are desirous of forming a rate from a point on A, to 
 a certain point on D, which are competitive points, their 
 rival road has been receiving all the cream from a certain 
 hne of merchandise finding a desirable market at the certain 
 point located on D, while the competing roads have only 
 been receiving the skim-milk ; so they meet or, perhaps, 
 make a lower rate in order to get the business, as their 
 route is by far the longest. The rate agreed upon is 19 
 cents per hundred pounds, and the basis for dividing 
 the rate is on a mileage one. A to receive forty 
 miles, B to receive thirty-five miles, C to receive sixty- 
 two miles and D to receive seventy-five miles. In order 
 to ascertain what each will receive of the rate we would 
 find the percentage of each to the total miles travelled, as 
 for example ;
 
 51 
 
 A's mileage is 40 or 40-212 of 19 cents or ;^.6 cts, 
 B's " " 35 " 35-212 " " " " 3.1 " 
 C's " " 62 ".62-212 " " " "5.6 " 
 B's " " 75 " 75-212 " " " " 6.7 " 
 
 Total 212 19.0 cts. 
 
 If any of the above roads were to receive an arbitrary 
 amount in addition to their regular proportion of the rate 
 agreed upon, for instance, A is to receive a terminal of 
 I J/C cents per hundred pounds for facilities offered as the 
 delivering road, plus its prorata proportion of the rate, D 
 is to receive a junction allowance of }4 cent per hundred 
 pounds offering a connection with C, plus its prorata 
 proportion of the rate, the amount that each would re- 
 ceive and the process of figuration is as follows. We 
 first deduct the arbitrary amounts, namely, terminal i j4 
 cents, and junction allowance j4 cent, or, 2 cents in all, 
 leaving but 17 cents to be prorated. We would then 
 divide this amount amongst the roads as per the foregoing 
 example, and the result would be as follows: 
 
 A's mileage is 40 or 40 212 of 17 cts. or 3.3 plus 11-2:4.8 cts. 
 
 B's " " 35 " 35-212 "''"<< 2.8 " 
 
 C's '* " 62 " 62-212 " " " <' 4.9 " 
 
 D's " "75 " 75-212 " '' " " 6.0 plus 14 : 6.5 " 
 
 Total 19.0 cts. 
 
 East and West bound rates, in conjunction with the 
 Trunk lines, is another name given to rates. These rates 
 cover all traffic from the eastern seaboard territory to 
 western points and are subjected to the rules and regula- 
 tions of the associations known as the Trunk Line and 
 Central Traffic Associations, the former embraces the
 
 52 
 
 important roads leading from the eastern seaboard 
 to Buffalo, Erie, Salamanca, Pittsburgh, Parkersburg 
 and Wheeling, which points are known as the western 
 termini of the Trunk lines, and are also the eastern ter- 
 mini of roads in the Central Traffic Association. Under 
 agreements of several years standing it has been the cus- 
 tom of these roads, forming by connections through lines 
 from the seaboard to the west, to determine through 
 rates from New York to Chicago, and to adopt such rates 
 as the standard or basis for the construction of tariffs 
 from other eastern cities and points adjacent thereto, 
 which are directly or indirectly in competition for west- 
 ern business. 
 
 The principal seaboard cities are New York, Boston, 
 Philadelphia and Baltimore, and adjacent to each of these 
 are important industries commanding for the points at 
 which they are located equal transportation rates and 
 facilities with the larger cities. For twenty years or more 
 the rates from Boston to western competitive points 
 have been the same as from New York. From Philadel- 
 phia and Baltimore the rates are " agreed differentials " 
 less than New York, the Baltimore rates being also 
 lower than Philadelphia rates. 
 
 The westward traffic from the seaboard is carried prin- 
 cipally under classified tariffs. The number of classes 
 and the rates for each as now in effect are shown in the 
 following table :
 
 53 
 
 West Bound Rates, Seaboard Cities to Chicago. 
 
 Classes in cents per loo pounds. 
 
 I 2 3 4 5 (? 
 
 From New York to Chicago . . 
 
 From Boston to Chicago 
 
 From Philadelphia to Chicago . . 
 Philadelphia, lower than New York 
 From Baltimore to Chicago . . . 
 Baltimore lower than New York . 
 Baltimore lower than Philadelphia 
 
 75 65 50 35 30 25 
 
 75 65 50 35 30 25 
 
 69 59 48 33 28 23 
 
 662222 
 
 67 57 47 32 27 22 
 
 883333 
 
 2 2 I I I I 
 
 These rates have sprung up out of the conferences of 
 many years, and the circumstances under which they were 
 established varied in the different years and precludes the 
 adoption of any form of analysis which could be applied 
 to the determination of these rates. 
 
 Under existing arrangements the roads leading from 
 the east publish rates and issue through bills of lading 
 to all western points located on the railroads within the 
 territory west of Buffalo and Pittsburg, east of the Mis- 
 sissippi and north of the Ohio rivers. The agreed rates 
 and distances from New York to Chicago are taken as 
 the standard, or one hundred per cent. Through rates 
 to the principal western cities, towns and junction points, 
 in the territory above described, are computed at a per- 
 centage of the New York-Chicago rates, based generally 
 on the relative mileage of such points to the Chicago 
 mileage. For example, rates New York to Detroit, 
 Michigan, are computed at seventy-eight per cent, of the 
 rate New York to Chicago, it being seventy-eight per 
 cent, of the total distance. In the same manner rates 
 New York to Indianapolis, Indiana, are ninety-three per 
 cent, of the New York-Chicago rates. Thus the New
 
 54 
 
 York-Chicago rates, being at all times applied as the 
 basis, would, when changed, create relative changes in 
 the rates to the other western points. In a similar 
 manner the relation as to rates is maintained from the 
 other eastern cities. When rates from New York to 
 western points are changed, like changes are made from 
 Boston, Philadelphia and Baltimore, and points receiving 
 the same rates, the "differentials" as between the eastern 
 cities being at all times maintained. The relative dis- 
 tance between points between which freight is to be 
 carried is substantially the basis of computation. There 
 are sometimes many routes of different lengths between 
 the given points, and rates may sometimes be based 
 upon the longest route or the shortest, and sometimes 
 on the average length of the several routes. After a 
 rate has been established for a competing point, Indian- 
 apolis, Ind., it being ninety-three per cent, of New York- 
 Chicago distance, then the rate from a point beyond 
 Indianapolis, Ind., if it be not a competing point, but a 
 local point beyond on any one of the various roads 
 which run to Indianapolis, is added to the through rate. 
 The local rate for a short distance can generally only be 
 charged to the first competing point. Again, if a rate is 
 wanted for a point west of Chicago, but east of the 
 Mississippi River, the distance west thereof is added to 
 the New York-Chicago distance, and if it is, say 200 
 miles beyond, the rate to that point would be twenty per 
 cent, higher than the rate to New York-Chicago, or one 
 hundred and twenty per cent, of the rates current. 
 
 Differential Rates: — This term is made use of in a 
 somewhat restricted sense, being applied, not to the 
 differences in rates generally or between the several
 
 55 
 
 classes of freight as they are arranged in the tariffs of 
 freight charges, but to the differences in rates which are 
 made by railroad companies as between the several 
 Atlantic seaport cities. They have not been determined 
 on any principle but are simply the result of a com- 
 promise between the various companies. 
 
 An important element in the arrangement of rate 
 schedules is the distinction made in the class of railroads 
 or routes, by which certain routes are under agreement 
 allowed to charge a lower rate than others to the same 
 points of destination. 
 
 From each of the eastern cities there are two classes 
 of roads, commonly termed the " standard lines " and 
 the "differential hnes." The standard Hnes are those 
 which are conceded to possess advantages over their 
 competitors by reason of shorter all-rail distance and 
 superior facilities arising from old and well-established 
 connections and freight organizations. The differential 
 lines are those which, on account of the longer routes 
 and inadequate facilities, or owing to their through 
 routes being partly by water, or from other dis- 
 advantages, cannot command, at even rates with the 
 more direct lines, an amount of tonnage which under 
 customary methods for determining such matters would 
 be considered a fair proportion. 
 
 With a view to equalizing these conditions, and 
 securing the permanency of the tariffs, as well as to 
 bring about a fair distribution of the traffic, the " differ- 
 ential lines " are accorded somewhat lower rates than 
 the "standard lines." Differential rates may thus be 
 considered simply premiums offered for business. 
 
 At this time there are ten different lines leading from 
 New York competing for western business. Three are
 
 56 
 
 " standard* lines " and seven are " differential lines." 
 The standard lines are N. Y. C. & H. R. R. Co., Penn- 
 sylvania R. R. Co. and the B. & O. R. R. Co. The 
 differential lines are N. Y., L. E. & W. R. R. Co., L. V. 
 R. R. Co., W. S. R. R. Co., D. L. &. W. R. R. Co., 
 N. Y. O. W. R. R. Co., C. & C. Ry. Route and the 
 Central Vermont R. R. Route. The rates governing all 
 traffic moving via any of the standard routes from New, 
 York to Chicago for the six classes are 
 
 123456 
 
 75 65 50 35 30 25 
 
 per one hundred pounds, and the rates for traffic moving 
 via the " differential lines " are for the first four 
 
 I 
 
 2 
 
 3 
 
 4 
 
 5 
 
 6 
 
 70 
 
 6i 
 
 47 
 
 33 
 
 29 
 
 ^ 24 
 
 per one hundred pounds, and for the latter three propor- 
 tionately alike. With these facts the reader can con- 
 ceive the meaning of "differential rates;" merely 
 advantages offered to lines of longer routes and 
 inadequate facilities.
 
 PASSENGER RATE CONSTRUCTION. 
 
 The construction of passenger rates is slightly differ- 
 ent from freight rate making. In the first place the rate 
 maker is not confronted with the fact of classification, 
 and is not compelled to follow any specific principles in 
 the figuration of a rate, merely the basis of so much per 
 mile per passenger. Local passenger rates are very simple 
 in their construction ; they are usually based on three cents 
 per mile for one way, and for a round trip two-thirds of 
 the double one way rate. Of course there may be some 
 exceptions to this problem, on the ground that every 
 company may follow its own specific principles; how- 
 ever, should a manager be called upon to construct a 
 schedule of passenger rates for a territory where there is 
 no competition he would, if there were no other schedule 
 to follow, simply adhere to this mathematical principle, 
 and in doing so the revenue accruing therefrom would 
 meet all expenses created through the passenger service. 
 
 Through passenger rates are made by the agreement 
 between the general passenger agents of the roads 
 desirous of the rate. They are not made up by a com- 
 bination of each road's local rate, but simply on so much 
 per mile. Of course this rule will in almost every 
 particular be generalized to make fit any case, but 
 exceptions, however, spring up widely different from 
 these. Looking at the question from a general stand- 
 point, they are computed in this way: The several 
 passenger agents hold a conference and agree on a rate 
 from the points in question ; it may be an arbitrary rate 
 
 . 57
 
 58 
 
 or so much per mile. If it be the former, then the roads 
 sharing in the rate would receive, as their proportion of 
 the rate, so much per mile of the total distance; for 
 example: A, B, C and D are desirous of securing some 
 business from a point on A to a point on D, and in 
 order to do this they must make it low enough, and at 
 the same time observe the fact of an adequate return. 
 The total distance is one thousand miles and the rate 
 agreed upon is ^16.50 or i 65-100 cents per mile. A is 
 to receive forty miles, or 66 cents of the rate per 
 passenger; B is to receive one hundred and ten miles, 
 or ;^ 1. 82 of the rate per passenger; C is to receive four 
 hundred miles, or ;^6.6o of the rate per passenger; and 
 D is to receive four hundred and fifty miles, or ;^7.42 of 
 the rate per passenger. If the same rate were to be 
 divided on so much per mile, regardless of the distance, 
 that is to say, each road to receive as its proportion of 
 the rate, namely : A is to receive its regular local rate 
 up to the junction, being the same rate which it formerly 
 received prior to the consolidation, and should D demand 
 as its proportion of the rate 2 cents per mile, and B and 
 C to receive as their proportion of the remainder on so 
 much per mile of the aggregate mileage of B and C, the 
 rate would divide as follows : 
 
 A's proportion 40 miles at 3 cents per mile or ;$ 1.20 
 D's " 450 " " 2 " " " " 9.00 
 
 The remainder or ;^6.30 would divide 
 
 B's proportion no miles at i y^^^^cts.per mile or $i.;^6 
 s 400 ijoo 4-9" 
 
 These are only some of the many examples of
 
 59 
 
 passenger rate construction, but it is the author's hope 
 that they will lend a thought towards the comprehension 
 of the subject. 
 
 At this juncture it is thought that a few remarks 
 devoted to the explanation of some of the terms used in 
 conjunction with the passenger business would be bene- 
 ficial to the reader, believing that in case of travel they 
 would be available. 
 What is the definition of Stop-off? 
 
 By a stop-off is understood a departure from the con- 
 tinuous train short of the final destination of the ticket; 
 a failure to take, at a junction or transfer point, the first 
 connecting train therefrom, or the stopping off at an 
 intermediate station by reason of having commenced the 
 journey on a train which does not stop at or connect for 
 the desired destination. 
 What is a Mileage Book Ticket ? 
 
 These are books containing one thousand miles and 
 are usually sold at a rate of two cents per mile, and are 
 only good to the persons in whose favor they are drawn, 
 Wliat is a Computation Ticket ? 
 
 These are tickets of different denominations, ran^ine 
 from fifteen trips to even as high as one hundred trips; 
 they are usually based on so much of the total cost of 
 trips specified, say three-quarters or two-thirds of the 
 total cost, except where they are simply an arbitrary 
 amount. 
 What are some of the tickets and how distingidsJied? 
 
 Local one way. 
 
 Local half one way. 
 
 Local round trip ; no round half fare tickets are sold. 
 
 Coupon tickets are issued in conjunction with foreign 
 roads. They are of a limited and unlimited character.
 
 6o 
 
 Attached to these tickets are coupons specifying a 
 certain distance or the points from and to which they are 
 good; these are detached by the train conductor and 
 forwarded to the auditor of the road, and are his 
 authority when rendering bills against the road selling 
 the ticket. 
 
 Limited tickets are only good within a certain period 
 of time, but. 
 
 Unlimited tickets are good until used and are sold at 
 a higher rate. 
 
 The reader may at some time be called upon to ship 
 a corpse; unfortunate as it be; however, let us not con- 
 sider it in its worst stage but from a point of necessity. 
 The person shipping a corpse must accompany it, 
 together with a certificate of a reputable physician or of 
 the board of health, stating the cause of the death. In 
 every case a full first-class fare must be paid.
 
 FIXING THE RATES. 
 
 The fixing of rates, that is to say, what will be the 
 proper rate to charge on articles transported, is the topic 
 for consideration. 
 
 This question is of a wide conception and its develop- 
 ment of to-day is the outgrowth of irregularities and 
 divided attention. The fixing of rates as practiced to-day 
 is erroneous and not in any sense founded on good and 
 sound principles, but is simply the action of com- 
 promises. This hit or miss method of rate making has 
 been allowed to drift along year after year without any 
 serious attempts to institute a radical reform, and 
 naturally provokes the inquiry, why, if the matter is of 
 such importance as seems to be universally conceded, it 
 has not already received an adequate consideration. The 
 reason is not far to seek. Railroad officials are busy 
 men, more occupied, perhaps, than any other class. The 
 matters crowding upon a traffic manager every day are 
 far beyond his time or strength, and he will dispose of 
 them in the quickest possible time; that means things 
 keep moving in the same old rut. No good reason can 
 be given for the marked differences appearing in the 
 many rate sheets throughout the country other than 
 that the judgment of men differ upon these matters as 
 widely as upon other questions. 
 
 Schedule making, when taken up in a systematic 
 manner, becomes a question of independent thought and 
 judgment. The important question to each officer of 
 every company is how to fix his rates so as to produce 
 
 6i
 
 62 
 
 the largest aggregate income necessary to meet all fixed 
 charges and operating expenses, and at the same time 
 observe the required uniformity and have due regard to 
 matters of public policy. 
 
 When a manager starts out to construct a schedule of 
 rates for a new road his first step would be to classify 
 the commodities to be transported ; that is to say, in the 
 several classes which he decides upon. The purpose of 
 the classification is to simplify the difficulties of rate- 
 making by grouping together the different articles which 
 it is thought should rightfully make the same contribu- 
 tions towards the payment of fixed charges and opera- 
 ting expenses. The second step, although not formerly 
 practiced, would be to determine the relative rates upon 
 the different classes; that is to say, what ratio the rates 
 of one class should bear to rates of other classes. This 
 measure is an absolute necessity to preserve uniformity. 
 The third step would be, what the actual rate should be. 
 
 Having these thoughts presented to us let us consider 
 them briefly. The first thought — which refers to the 
 classification of articles necessary to simplify rate- 
 making — is an essential feature. It would not be 
 practicable to charge a uniform rate on all articles, as it 
 would prohibit the movement of many. For instance, 
 the wheat or flour of the western prairies would never 
 reach the several seaboard cities, were they subjected to 
 the same conditions and the same rate as on other 
 manufactured articles, so it has been found expedient to 
 classify the articles. 
 
 The second step is to determine the relative per- 
 centage of one class to the other classes. If a manager 
 starts out with only three classes they certainly should 
 bear or have a relationship, if a systematic principle is to
 
 63 
 
 be followed. In the past the relationship of one class to 
 the other has been wrought simply by compromises, 
 and, while the proceedings are somewhat detailed, let us 
 only consider the principle that we would think to be an 
 equitable one. 
 
 Many plans for the proper way of dcterming the 
 relationship of the various classes of rates have been 
 presented; some are able while others are incomplete in 
 themselves. The percentage system is one that would, 
 it is hoped, meet every requirement. This system would 
 afford means whereby the varying and multiform grades 
 of differences in the relative transportation conditions of 
 the many articles of the same general class may be 
 expressed, while the distribution of all articles into 
 classes on generic lines will permit each section of the 
 country to adjust its carrying charges so as to develop 
 its own peculiar interests. The plan is to take each 
 article in its transportable form and follow it through 
 the varying conditions affecting its transportation value 
 to the highest conditions in its class, or until it is taken 
 out of its original assignment and put into the composite 
 class because of its union with other products. Instead 
 of the variable and irregular rates as are in practice 
 to-day, the use of a single basic rate to apply on all 
 articles in the same class will always be maintained. 
 That is to say, suppose the basic rate on a certain 
 product betw^een two points to be one dollar per 
 hundred pounds. Each article included under that 
 specific product wall then be charged such a proportion 
 of one dollar as is indicated by the percentage given to 
 it; that is, if it be a twenty-five per cent, article the rate 
 would be twenty-five cents per one hundred pounds, and 
 so on. The basic rates on these general classes could
 
 64 
 
 be varied to suit circumstances, but every article in a 
 class would bear the same relation to every other article 
 in the same class, regardless of what be the general rate 
 on that class. The establishment of a fixed percentage 
 relation for each article in its own class will, if intelli- 
 gently done, insure that every article shall pay its proper 
 proportion of the total charges on that class; while the 
 variation in rate required by the diverse interests of the 
 carrier will determine, w^ithin the limit of reasonableness, 
 what shall be the basic rate on each class. As already 
 presented, a reasonable rate in one section of the country 
 may not be in another. With this fact in mind it would 
 hardly be practicable to make a division. There is no one 
 who is better acquainted with the fact of how much a 
 certain shipment cost to transport and what were the 
 assumed risks in carrying it than the traffic manager. 
 
 In a previous chapter the system of rate making is 
 illustrated. The two divisions of expense that are 
 necessary to be considered are, first, terminal expenses, 
 which includes every expense at that point. Second, 
 the hauling. The station expenses for a short haul are 
 just the same as for a long haul, but the hauling cost is 
 charged according to the distance; therefore, in deter- 
 mining the general rates for the various classes, these 
 points should be considered. 
 
 The use of this system w^ould permit any shade of 
 difference in the rate of charges that may be desired, so 
 that supposing wheat to be a thirty per cent, article, bran 
 might be made one or two per cent, lower, and so on. 
 
 The use of this system would certainly simplify tariff 
 making and at the same time make the use of tariffs by 
 the public very much more practicable than is now the 
 case.
 
 65 
 
 In 1852 the Pennsylvania Railroad received as an 
 average freight rate 5 and 42-100 cents per ton per mile. 
 In 1892 the average rate was but .647 cents per ton per 
 mile. In 1S60 the Filchburg Railroad received as an 
 average freight 4 lo-ioo cents per ton per mile, and in 
 1892 the average rate was .925 cents per ton per mile. 
 These figures give plainly the differences in rates as 
 between the Middle and llic New England States, there- 
 fore no set system of the price per ton per mile could 
 with intelligence be given.
 
 CONSTRUCTION OF FREIGHT CLASSIFI- 
 CATION. 
 
 To trace the development of the present method of 
 making freight classifications would be an interesting 
 study. What every student wants to know is not so 
 much how the present conditions were brought about 
 but how and what are the principles of necessity 
 requisite in the making up of a freight classification. 
 The step from a railroad classification of 1856, which 
 contained thirty-three specifications, in addition to the 
 clause "Analogous articles will be charged at corre- 
 sponding rates," to the present classification, comprising 
 six thousand articles, is a long one, and it would be 
 impracticable to give even a minute account of its origin. 
 
 Ordinarily a classification is understood to mean one 
 thing and a rate sheet another; whereas, as a matter of 
 fact, they are only parts of the same thing. If we were 
 to take the rates away from the classification, what 
 would its use be to us? and if we were to take the 
 classification away from the rate sheet the charging and 
 fixing a rate in an intelligent manner would be one of 
 the impossibilities. 
 
 Prior to the date of the Interstate Commerce Act 
 there were numerous classifications throughout the 
 country, but to-day there are only three, "official," 
 "western" and "southern." 
 
 There are two general classes of schedules under 
 which the freight traffic of the United States is carried ; 
 namely, Class Tariffs and Commodity Tariffs. Class 
 66
 
 6; 
 
 tariffs are arranged to show the rates of the respective 
 classes contained in the freight classification. 
 
 In the commodity tariff are found the great majority 
 of articles carried by the railways, classified in accord- 
 ance with the various elements that properly enter into 
 the determination of freight charges. Under these are 
 also found the commodities above mentioned, and 
 although exceptionally treated in certain sections as to 
 rates, they are all amenable to some rule of the classifi- 
 cation. The rate-making foundation for all commodities 
 is seen to lay largely in the freight classification. The 
 commodity tariffs have reference to schedules applicable 
 to such articles as grain, lumber, coal, live stock, dressed 
 beef, fertilizers, oil, etc., transported between sections of 
 the country where these articles have attained a com- 
 mercial and shipping importance which has made 
 necessary specific rules for their transportation differing 
 from those covering classified traffic, as well as a some- 
 what lower scale of rates than is applied to the former. 
 
 The development of the railroad business of the 
 country and the volume of business interchanged, has 
 been the means of enlargement and extension of freight 
 classifications. These publications, which are arranged 
 in an enlarged and convenient manner, wherein may be 
 found all commodities of commerce, described in every 
 probable form of shipment, with a rate reference for 
 each description, together with the rules and regulations 
 under which each will be received for carriage, are now 
 current guides to the shipping public and have an 
 enormous circulation. 
 
 Concerning the basis of constructing classifications, 
 it may be said to have been early discovered that the 
 charges for transportation of different articles of freight
 
 6S 
 
 could not be apportioned among such articles with 
 regard alone to the cost of carriage. 
 
 This basis of determining the charges, it was found, 
 would confine to narrow limits the movement of different 
 articles whose bulk or weight was large in comparison 
 to their value, while heavier articles with less bulk would 
 be made to pay disproportionately low rates. Under the 
 system of apportioning the charges strictly to the cost 
 some kinds of commerce which have been very useful to 
 the country, and have a tendency to bring different sec- 
 tions into more intimate business and social relations, 
 could never have amounted to any considerable magni- 
 tude, and in some cases could not have existed at all, for 
 the simple reason that the value at the place of delivery 
 would not equal the purchase price with the transpor- 
 tation added. The traffic would thus be precluded, 
 because the charge for carriage would be greater than 
 it could bear. On the other hand, the rates for the 
 carriage of articles which, with small bulk or weight, 
 concentrated great value, would, on that system of 
 making them, be absurdly low when compared to the 
 value of the articles, and perhaps not less so when the 
 comparison was made with the value of the service in 
 transporting them. 
 
 Accordingly it was found not to be unjust to distribute 
 the entire cost of service among all articles carried, on a 
 basis that gave greater consideration to the relative value 
 of the service than to the cost. Such a method would 
 be most beneficial to the country; it would enlarge 
 commerce and extend communication, and would be 
 better for the railroads because of the increased traffic 
 which would be brought to them. 
 
 The value of the article, carried under this system,
 
 69 
 
 would be the most important element in determining 
 what freight charge it should bear. Other considera- 
 tions, however, equally important, must not be over- 
 looked when the freight classification is to be made. 
 The classifications as now constructed have for their 
 foundation the following elements: 
 
 The competitive element, or the rates made necessary 
 by competition. 
 
 The volume of the business; that is, the tonnage 
 movement. 
 
 The direction in which the freight moves ; that is, 
 whether it moves in the direction in which most of the 
 freight is transported or in the reverse direction in which 
 empty cars are running. 
 
 The value of the article. 
 
 The bulk and weight. 
 
 The degree of risk attending transportation. 
 
 The facilities required for particular or special ship- 
 ments. 
 
 The conditions attending transportation, such as fur- 
 nishing special equipment, as in the case of private 
 dressed beef, cars specially adapted for freight of a 
 perishable nature, or cars of large size for freight of 
 extraordinary bulk. 
 
 Another condition which has also received considera- 
 tion is the analogy which the new articles to be classified 
 bear to other articles found in the classification. The 
 conditions under which railroad companies can afford to 
 transport traffic have a large influence in determining the 
 classification. 
 
 These are the general rules under which classifications
 
 70 
 
 are constructed, and while to a great extent controlling, 
 the classifications are, notwithstanding, in great measure 
 a series of compromises, the participants in which are 
 not alone the railroads, but also the shippers and repre- 
 sentatives of business interests throughout the country, 
 the latter being afforded ample opportunity to join with 
 the railroads in the discussion as to the proper classifica- 
 tion of articles of shipment affecting their interests. 
 
 While the pressure for reduction is very strong from 
 certain localities, concessions are not now so readily 
 granted, as the territory covered by the freight classifica- 
 tions is so large that great care in the assignment of 
 articles to particular classes must be taken in order to avoid 
 working an injury to any particular section. The com- 
 mercial and transportation interests are regarded as 
 identical, and the welfare of the whole territory and all 
 interests affected must be considered. It is however, 
 occasionally observed that particular localities are to 
 some extent preferentially served by the action of the 
 carriers w^ho resist proposed changes in the classification, 
 for the reason that, in their opinion, they will operate to 
 the prejudice of certain patrons. Thus exceptions to the 
 classification are created by a road continuing to carry 
 some articles at one class, when in the opinion of a 
 majority of the roads using the classification, the articles 
 could well stand a higher rating. At this time fewer 
 articles are rated independently of the classification than 
 ever before in the history of railroads. 
 
 At this time there are practically but three freight 
 classifications in use throughout the United States; 
 namely, the Official classification, the Southern Railway 
 and Steamship Association classification, and the Western 
 classification. The application of these are as follows :
 
 71 
 
 First : — The official classification is used almost exclu- 
 sively throughout the territory cast of Lake Michigan, 
 Chicago, and the Mississippi River, and north of the 
 Ohio and Potomac Rivers to the Atlantic sea-board. 
 
 Second : — The Southern Railway and Steamship Asso- 
 ciation classification is applied generally to roads south 
 of the Ohio and east of the Mississippi River to the sea- 
 board. 
 
 Third : — The Western classification governs the terri- 
 tory north and west of Chicago, west of a line drawn from 
 Chicago to St. Louis, and west of the Mississippi River, 
 St. Louis to New Orleans. 
 
 In each of the three divisions of territory described 
 exceptions to these particular classifications are made to 
 some extent by state commissions, and by individual 
 roads for state or local traffic. Traffic carried between 
 different points in the sections above described is usually 
 taken at either one or the other of these leading classifi- 
 cations. For example, the classified traffic from the 
 Atlantic sea-board to the Pacific coast is carried under 
 the Western classification ; traffic from Chicago to 
 Atlanta, Ga., is carried under the Southern Railway and 
 Steamship Association classification. 
 
 The territory throughout which the official classifi- 
 cation is shown to govern is the largest both in point of 
 tonnage and communities served. At the date of the 
 passage of the act to regulate commerce, one hundred 
 and thirty one (131) railroad companies within the terri- 
 tory defined above as governed by the official classifica- 
 tion, each had a separate classification, in addition to 
 those classifications which had grown up mainly to foster 
 local conditions, and were thought to be beneficial to the
 
 72 
 
 particular roads and shippers, there were five associa- 
 tions of raihoad companies each having a classification. 
 These classifications were as follows : 
 
 First : — The local ckssification of each railroad com- 
 pany. 
 
 Second: — The through west-bound classification, gener- 
 ally known as the " Trunk Line classification," applying 
 to through traffic originating at sea-board cities and 
 points east of the western termini of the trunk lines, and 
 destined to Buffalo, Erie, Pittsburg, Parkersburg, etc., 
 and to a number of competitive points, trade centers or 
 railroad junction beyond. 
 
 Third: — The east-bound classification, which alone 
 applied to east-bound traffic originating in the territory 
 east of Chicago and the Mississippi river, west of the 
 western termini of the trunk lines and points east 
 thereof ^ 
 
 Fourth: — Traffic between competitive interior points 
 in the Middle States ; namely. New York, Pennsylvania, 
 New Jersey, Delaware, Maryland, Virginia and West 
 Virginia, and between the several trunk lines and 
 connecting roads, was governed by the joint merchandise 
 classification, which also applied to the local traffic on 
 certain roads. 
 
 Fifth : — The Middle and Western States classification 
 applied to the traffic between competitive interior points 
 west of the western termini of the trunk lines east of the 
 Mississippi River and north of the Ohio River. 
 
 When it became certain that the interstate commerce 
 act would become a law, early in 1887, tJhe railroad 
 companies decided at a meeting held for that purpose
 
 73 
 
 that it would be necessary to create, and, if possible, 
 adhere to a uniform classification. At this meeting there 
 was appointed a special committee, composed of represen- 
 tatives of ten or twelve different roads, whose duty it was 
 to go over the various classifications then in force and 
 unite them into one classification, and the result of the 
 work of this committee was the formation of Official 
 Classification No. i. 
 
 Under the former arrangement the through or larger 
 portion of the classified traffic was carried in two classifi- 
 cations; the west-bound classification was applied to 
 traffic moving westward while an entirely separate 
 classification was applied to traffic moving eastward. 
 
 These two classifications, as well as the rates of the 
 respective classes, were entirely dissimilar; the latter 
 made provision for twelve or thirteen classes, which 
 embraced the heavier or bulk freight carried mainly in 
 car load quantities from the western center to the sea- 
 board; while the former provided almost exclusively for 
 package freight, usually transported in small or less than 
 carload shipments, the rules and regulations applicable 
 to each classification being in a few instances similar. 
 
 The conditions and the requirements upon which the 
 present classification is based are of an entirely different 
 character, as the new issue governs all traffic, through 
 and local, between all stations of the roads within the 
 territory described. 
 
 It may be interesting to learn the methods under 
 which an article may receive its place in the classifica- 
 tion. This will be here briefly explained for the official 
 classification, which is applied exclusively by carriers 
 covering more tonnage than any of the other classifica- 
 tions in use.
 
 74 
 
 The official classification committee is composed of 
 twelve general and assistant general freight agents, 
 representing twelve of the principal lines in the territory 
 using that classification. While the twelve men referred 
 to are the official representatives of only twelve rail- 
 roads, the official classification governs and is used by 
 one hundred and fifty different railroads the total mileage 
 of which is 65,000. Over 50 per cent, of the total ton- 
 nage of all roads in the United States is carried under 
 the official classification. 
 
 This class committee was created for the purpose of 
 defining the classes under which freight shall be trans- 
 ported by the various lines within the territory above 
 described. 
 
 What is known as the " through " business of the Trunk 
 Lines Association and the Central Traffic Association is 
 arranged for by a joint committee composed of members 
 of the two associations named, and this joint committee 
 appoints the classification committee, which latter com- 
 mittee has a permanent chairman. All applications bear- 
 ing upon changes or additions in the classifications may 
 be submitted in writing at any time, either by the rail- 
 roads or shippers, to the chairman of the classification 
 committee, together with the various reasons in support 
 of the application for such changes. 
 
 The chairman acknowledges the receipt of every such 
 application, following which an investigation is made as 
 to the value, bulk, and various other features relating to 
 the article for which a change is sought and which are 
 usually considered when making a classification. 
 
 Upon the conclusion of the investigation the chairman 
 renders a report to the classification committee for its 
 consideration and action, with a recommendation for or
 
 75 
 
 against the granting of the appHcation. The chairman 
 may make temporary rulings regarding the classification 
 of any article, but the final classification of all articles 
 is only obtained by vote of the roads in joint committee. 
 
 Official classification No. i was issued April i, 1887, 
 and may be said to have been largely experimental, as it 
 was hardly to be expected that the commerce of so large 
 an area could at once be made to conform to the new 
 conditions resulting from the consolidation of the widely 
 different classifications formerly in use. 
 
 Official classification No. 2 was issued on July 15, iSS/* 
 The revisions in the classifications have necessitated fre- 
 quent issues of this publication, the last being No. 13, of 
 January, 1894. Since 1887 there have been thirteen 
 issued, and in view of this fact one can conceive what 
 differences occurred and what changes were necessitated. 
 
 With these facts presented it is hoped that the student 
 or reader may have a conception of the construction of 
 freight classification.
 
 CONSTRUCTION OF FREIGHT SCHEDULES 
 
 OR TARIFFS. 
 
 All freight tariffs should ser\^e to describe the rate 
 they contain. Considering the vast number of railroads 
 in the countrj'- and their methods of constructing tariffs, it 
 would hardly be practicable to give even a minute account 
 of their way of construction. 
 
 There are many tariffs in effect which, to a greater or 
 less degree, are defective and imperfect in their construc- 
 tion, and do not present the rates or the rules and regula- 
 tions governing the same with clearness. The printing 
 of tariffs is one of the main features in the construction; 
 they should be printed in large, plain t>'pe, and in such a 
 manner that they can be readily understood and read. 
 Many roads throughout the country use the various 
 duplicating processes, such as the hectograph, mimeo- 
 graph, t>'pewriter type, etc. 
 
 Much can be said against these methods ; they will 
 fade in the light and in a httle time cannot be deciphered, 
 and from their vague construction do not give sufficient 
 information for a clear understanding of their application. 
 Every schedule should plainly state the places between 
 which the rates apply. Tariffs are generally issued by 
 the road on which the traffic originates. 
 
 It frequently occurs that a road will issue a tariff from 
 points on another road to points on its own line, and such 
 a tariff will make no reference to the initial connectincr 
 road other than giving the name of the point from which 
 the traffic originates. 
 
 ;6
 
 77 
 
 The title of the tariff" will in no way indicate that it is 
 a joint tariff, and in many cases nothing whatever appears 
 showing that connecting roads have authorized the tariff". 
 This should be done in every particular case. When a 
 tariff" is issued between points on different roads showing 
 rates on various classes on basis other than combination 
 of local rates, such a tariff is a joint tariff, and its title 
 should read "joint through tariff on general merchandise." 
 If it only covers one commodity the name of that commo- 
 dity should be prominently shown, and should it become 
 necessary to issue tariffs in different directions they 
 should read, "joint west-bound freight tariff," or "joint 
 east-bound freight tariff," as the case may be. If the 
 tariff is only to cover one commodity, the name of the 
 commodity should be prominently shown in the title of 
 the tariff; for example, "joint east-bound freight tariff on 
 lumber." 
 
 When using the word "joint " it should only be applied 
 to titles of tariffs which are joint tariffs in fact, and 
 omitted from any other tariffs. In constructing freight 
 tariffs to apply between points on the same road, they might 
 be called " freight tariff on general merchandise between 
 local stations," " freight tariff on general merchandise," 
 or " freight tariff on coal." 
 
 The front or title page of a tariff should make a clear 
 distinction as to whether it be an individual tariff", that is, 
 to only cover business betw^een local points, or whether 
 it is a joint tariff. The front or title page of tariffs should 
 contain only: 
 
 First: — Number of tariff! 
 
 Second : — Reference in detail, by title or number, to 
 all tariffs which are superseded, indicating in what
 
 78 
 
 manner the new tariff changes the rates in the previous 
 tariffs referred to. 
 
 Third: — Title of tariff; traffic covered. 
 
 Fourth : — Name of road, if an individual tariff, or 
 names of all roads uniting in making the rate if a joint 
 tariff In the latter 'case suitable wording should be 
 used to indicate the assent of all roads to the rates con- 
 tained in such tariff, as set forth in the ninth requirement 
 below. 
 
 Fifth : — Date of issue. 
 
 Sixth : — Date effective. 
 
 Seventh : — Note indicating the route and names of 
 connections. 
 
 Eighth : — Name and address of the official issuing the 
 tariff 
 
 Ninth : — Appropriate certification of the rates by the 
 officers authorizing their publication. For example, 
 " the following officers of the above-named roads concur 
 in the rates herein given;" following this the names of 
 the proper officials. 
 
 The form as presented shows the title page of a joint 
 ■freight tariff which contains all the information requisite 
 to the foregoing regulations.
 
 79 
 
 Inter-State. — To be Posted in Two Places at Each 
 
 Freight Station. 
 
 THE POTAMAC AND ROANOKE RAILROAD 
 
 COMPANY. 
 
 Baltimore & Ohio R. R. Company, 
 Wilmington and Northern R. R. Company, 
 Philada. and Erie R. R. Company, 
 New York, Lake Erie & Western R. R. Co. 
 
 ORDER No. 221. 
 
 Joint Class Rate Tariff. 
 
 Applying in both directions between stations on the 
 Potomac & Roanoke K. R., Baltimore & Ohio R. R. 
 and stations on the New York, Lake Erie & Western 
 R. R. Company via Philadelphia & Erie R. R. Co., in 
 effect December ist, 1890. 
 
 The rates named in this tariff do not apply on coal, coke or fruit. 
 
 Under this tariff, when freight is to be loaded by consignor or unloaded 
 by consignee, one dollar (|i.oo) per car per day or fraction thereof, for 
 delay beyond forty-eight hours in loading or unloading, will be added to 
 the rates named herein and constitute a part of the total charges to be 
 collected by the carrier on the porperty ; except, however, when in con- 
 flict with Car Service Association (or local regulations at shipping point or 
 destination), in which case such car service association or local regulations 
 shall prevail. 
 
 The following officers of the above-named roads 
 concur in the rates herein given. 
 
 Charles J. Brown. Walter Johnson, Walter Dietrich, 
 G. F. A., P. & R. R. R., G. F. A., B. & O. R. R., G. F. A., W. & N. R.R., 
 Philada., Pa. Pittsburg, Pa. Chester, Pa. 
 
 Thomas II. Bowne. Jr., John Eckert, 
 
 G. F. S.. P. & E. R. R. Co., G. F. A., N. Y. L. E. & W. R. R., 
 
 Harribburg, Pa. New York, N. Y. 
 
 Philadelphia, Pa., June 20th, 1891.
 
 8o 
 
 In the arrangement of the points, classes and com- 
 modities should be systematic, and the language chosen 
 for the purpose of expressing as to whether the rates 
 may be used in one or more directions should be definite. 
 There is a considerable amount of irregularity in the 
 publishing of tariffs; simply because many roads where 
 the duties of the officers are divided so that one agent 
 will only be interested in through traffic, with authority 
 to make rates, while the local traffic is in charge of 
 others. The conditions surrounding the traffic covered 
 by the through rates would not necessarily be known to 
 the officers in charge of local traffic. Changes made in 
 the through rates may therefore not come to their knowl- 
 edge. In view of this fact it often happens that reduc- 
 tions are made to terminal points without corresponding 
 changes to the intermediate points. 
 
 The authority for the publication of joint tariffs should 
 always be shown, and what carriers and officials are 
 responsible for their correctness and compliance with the 
 act to regulate commerce, and they should indicate the 
 routes over which rates are applicable. It frequently 
 occurs that the route by which the traffic is to be carried 
 is omitted, thereby making its application doubtful owing 
 to the absence of this valuable information as to the 
 routing of the traffic. 
 
 A large portion of the roads issue what are termed 
 distance tariffs and distance tables, applicable to local 
 traffic. These tariffs show rates upon the various classes 
 and commodities for different mileage groups, generally 
 of five or ten miles. The distance table shows the names 
 of the various stations and the distance from each to all 
 other stations. In some cases, however, they are com- 
 bined, and in such events they are very often so con-
 
 8i 
 
 structed that it is not clear how one should proceed to 
 obtain a particular rate. Ordinarily, to obtain a rate 
 between any two stations under these tariffs, reference 
 must be first made to the distance table for the mileatre. 
 and, second, to the distance tariffs for the corresponding 
 mileage. If a rate is sought for a classified article the 
 classification must be consulted. 
 
 These three papers, namely, the distance tariff, distance 
 table and the classification, are all necessary to ascertain 
 the rate. 
 
 In constructing tables of this character care should be 
 given to the fact of clearness, system in the compilation, 
 and should not in any sense be complicated, for example : 
 
 TO BE POSTED. 
 
 The Potomac and Roanoke R. R. Co. and Branches. 
 
 Philadelphia and Baltimore, Baltimore and Potomac, 
 Harrisburg and Lancaster and Reading and CarHsle. 
 
 GENERAL FREIGHT DEPARTMENT. 
 
 Freight Distance Table. 
 
 Order No. A 12 of 1880. 
 Station. 
 
 In Effect February 2ist, 1880. 
 
 Distances as given herein are constructed for the pur- 
 pose of arriving at freight rates only, and must not be
 
 82 
 
 used for any purpose other than in connection with 
 freight tariffs. Stations and sidings for which no dis- 
 tances have been provided will take the distance apply- 
 ing to the next station beyond. 
 
 Charles J. Bowne, G. F. A. 
 Samuel Dietrich, G. F. A. 
 
 Thiladelphia, February 1st, iSSo. 
 
 In the adoption of tariffs of other roads, associations, 
 etc., the road receiving such tariffs for the purpose of 
 announcing to the public rates from their own stations, 
 should regard such tariffs the same as tariffs of their 
 own issue, and should be provided with a supplemental 
 title page, numbered and dated, showing plainly the 
 names of the stations from, to, or between which the 
 rates in the adopted tariff will apply ; and the title page 
 should be otherwise arranged after the form of their 
 own tariffs. The manner of abrogating and changing 
 tariffs varies in many cases. Some are complete in their 
 purpose while others are indefinite. There is a variety 
 of expressions used for this purpose, some of which are 
 as follows : 
 
 Abrogating all previous tariffs. 
 
 Abrogating all conflicting rates. 
 
 Former rates conflicting are hereby withdrawn. 
 
 This is not considered a very satisfactory form or in 
 any sense complete, and in many instances is misleading. 
 A more definite form and one that will meet all the 
 requirements, is as follows : If we were to cancel order 
 No. 221 and instead issue another, our clause would 
 read:
 
 83 
 
 "Order No. 222 superseding Order No. 221 of 
 December ist, 1890, and supplements." In this case 
 order No. 222 would take its place, and should any 
 one have occasion to refer to this tariff the information 
 is at hand. 
 
 Numbering tariffs is a very important feature to 
 remember; while there are a variety of systems through- 
 out the country, some are complete and others not 
 worthy of mention. To have a correct system is 
 important. A number should serve as a part of the 
 title of the tariff and should be plainly stated for the 
 purpose of identifying each tariff, and further, for the 
 purpose of abrogating or amending other tariffs. The 
 numbering should be systematic, and references to the 
 numbers should be plain and complete to be of service 
 to all making use of the tariff. Where roads issue a 
 series of tariffs they are characterized by letters, as for 
 example: "Order A-221 of December 15th, 1890, and 
 so on." 
 
 Tariffs are of various sizes. Many are larger than 
 they need be, while others are frequently on sheets so 
 small that much of the information necessary to under- 
 stand their application is omitted. The size that is fast 
 becoming a standard, and is found large enough to 
 embrace all the detail necessary to properly present 
 the rates, is on sheets eleven inches long by eight inches 
 wide. 
 
 When constructing a tariff the unity of quantity 
 should always be given, so as one can determine the 
 quantity for which the rates are named, such as "per 
 one hundred pounds," per barrel, per ton, per car. If 
 the student will follow the foregoing suggestions he will 
 have very little trouble to meet all the requirements 
 requisite in tariff construction.
 
 PERCENTAGE TABLES. 
 
 The percentage tables are used in apportioning revenue 
 accruing from the transportation of freight and the con- 
 veyance of passengers. 
 
 They may be characterized as "joint percentages," 
 that is to say, percentages applicable in dividing business 
 between two or more companies, and "local percentages," 
 for the purpose of dividing the revenue of the home com- 
 pany. Percentage tables are of different construction; some 
 are made up on an actual mileage basis and others on a 
 constructive principle, commonly termed blocks, of so 
 many miles each. In the establishment of these tables it is 
 in some particulars identical to rate construction. One road 
 will want a certain mileage to a certain given point, which 
 may be several miles greater than the actual distance, 
 and the other roads to receive but actual miles. Another 
 principle of construction is the grouping system ; that is 
 to say, so many points within a certain limit of miles will 
 take the same percentage as is given to that limit; as for 
 example : — There are four stations within a distance of 
 20 miles, A, B, C and D. If we were to take the actual 
 miles and ascertain the percentage, station D would be 
 the largest, but the difference to the intermediate points 
 being so small it is deemed practicable, for the sake of 
 simplifying and lessening the work of prorating revenue, 
 to give the same percentage to the intermediate points as 
 the ultimate point. Local percentages are computed on 
 an actual mileage principle. 
 
 To ascertain the percentage relationship between two 
 
 84
 
 85 
 
 points on separate roads, our first step would be to find 
 what distance these points are fiom the nearest junction 
 point with that road. Say the distance from a junction 
 point to A is forty-five miles and B is distant from the 
 same point forty-nine miles, the percentage relationship 
 would be : 
 
 A's mileage is 45 miles or 45 — 94-47, 9 per cent. 
 
 B's " " 49 " 49—94-52, I 
 
 The solution is, what percentage forty-five miles is of 
 the total distance or ninety-four miles. If forty-five miles 
 is some percentage of ninety-four miles, then ninety-four 
 miles, multiplied by some percentage, will equal forty-five 
 miles. If ninety-four miles, multiplied by some percent- 
 age, equals forty-five miles, the percentage equals forty- 
 five miles divided by ninety-four miles, the total distance, 
 or forty-seven 9-10 per cent. The rule is, divide the 
 relative distances by the aggregate and the result will be 
 the percentage. 
 
 If the reader would follow the above rule, no matter 
 how many roads were sharing in the revenue, the relative 
 percentage would be obtained on that principle. 
 
 It very often occurs that an arbitrary amount is to be 
 deducted before the total revenue is apportioned between 
 the several roads, and when this is the case this amount is 
 first deducted and the remainder divided on agreed per- 
 centages ; as for example : 
 
 Three roads, A, B, and C, and the amount to be divided 
 between them is ;^24.oo. A's proportion is thirty per 
 cent., plus arbitrary one cent per one hundred pounds. 
 B's proportion is forty per cent., and C's proportion is 
 thirty per cent., plus three cents per two thousand 
 pounds. The amount that each would receive is as 
 follows :
 
 86 
 
 The shipment reads 24,000 pounds at 10 cents per 
 100 pounds or $24.00. 
 
 A's proportion 30 per cent., of $21.24 plus arbitrary. 
 
 $2.40 or a total of $8.77 
 B's " 40 " " $21.24 58.50 
 
 C's " 30 " " $21.24 plus arbitrary'. 
 
 $0.36 or a total of $6.73 
 
 Total $24.00 
 
 All percentage tables are practically based on the fore- 
 going principles and, with this brief explanation it is 
 hoped that the reader has been given sufficient informa- 
 tion to enable him to understand a table in an intelligent 
 manner.
 
 RECEIVING, FORWARDING AND DELIVER- 
 ING PROPERTY. 
 
 We have now come to consider the requirements 
 which are necessary in the moving of property. This 
 question of transportation is one of the weightiest topics 
 in * connection with conducting transportation. The 
 essential principles are numerous, and if it were possible 
 to invade all of them in this chapter, it would expand to 
 an ordinary book of itself; however, let us only con- 
 sider those which are absolutely necessary. 
 
 If the reader had a box of dry goods which he de- 
 sired to ship he would be compelled to furnish a shipping 
 order, signed by himself, giving full particulars of the 
 consignment; that is to say, a correct list of the articles, 
 with marks, and the name of the consignee and destina- 
 tion of the shipment in full, including the State or Terri- 
 tory and the county therein. This document is for the 
 guidance of the parties shipping the property, as no 
 verbal shipping directions are accepted. In turn for this, 
 the company's agent gives a shipping receipt if it is a 
 straight consignment, which should be an exact copy of 
 the forwarding authority. This shipping receipt is not 
 negotiable, but simply an acknowledgement for the pro- 
 perty as described in the body of the receipt. Should 
 the reader desire to ship this box of dry goods " to 
 order," or to his order, notify the consignee ; that is to 
 say, deliver the freight only upon the presentation and 
 surrender of the original bill of lading properly endorsed 
 by him. It is necessar)'- to secure a bill of lading, which 
 is a binding contract, as per conditions within the body of 
 
 8/
 
 88 
 
 bill of lading, between him and the receiving carrier, and 
 is of the same respective value as bankers' drafts or bills 
 of exchange. 
 
 This bill of lading can only be obtained upon the 
 surrender of the original shipping receipt, properly en- 
 dorsed by the company's authorized agent. The box is 
 then weighed, and the weight thereof, together v/ith the 
 number of car into which it has been placed, is noted on 
 the shipping order, when it is ready to be manifested or 
 way-billed, as no shipment is allowed to go forward 
 without a way-bill. 
 
 This way-bill is a memorandum of the consignment, 
 together with a full and complete shipping directions. 
 It is made directly from the shipping order or forwarding 
 authority, which should give all particulars of the con- 
 signment, the number and initial of car into which the 
 property or box has been loaded, the record of the check- 
 ing into such car, and the point to which the car is 
 carded. As for example : 
 
 One box of dry goods from Cayuga, Pa., to New 
 York, consigned to Mr. John Brown. The way-bill would 
 read thus :
 
 89 
 
 JOINT FREIGHT MDSE. WAY-BILL. 
 
 Car No. 23, Initial P. & R. 
 
 Way-Bill No. 123. 
 
 From Cayuga, Pa., to New York 
 
 Via Wayne and Zealand Junction. 
 
 Consignee and 
 Destination. 
 
 Articles. 
 
 Weight. 
 
 Rate. 
 
 Freight. 
 
 Advances. 
 
 Prepaid. 
 
 Mr. John Brown 
 New York 
 
 one box 
 
 dry 
 
 goods 
 
 300 lbs. 
 
 100 
 
 $2.25 
 
 
 
 75c. 
 
 
 The revenue would divide 
 
 ROADS 
 
 A. . 
 
 B. . 
 
 C. . 
 
 Apportionment 
 
 PER CENT. 
 . . . 20fo . . 
 
 . . . 40^ . . 
 . . . 40% . . 
 
 Total, 
 
 AMT. 
 
 $0 45 
 
 $0 90 
 
 ^o 90 
 
 $2 25 
 
 The reader will observe that there are three columns 
 provided for in this way-bill ; namely, Freight, Advances, 
 Prepaid. 
 
 In the column "freight " are extended the total charges 
 between points from and to which way-bill is made. 
 
 In the column " advances " are extended the amounts 
 paid out by the forwarding station as back charges ; that 
 is to say, when a shipment is received from a connecting 
 road at a junction point the agent of the receiving road 
 pays all the charges against the shipment up to that 
 junction, and they are termed advance charges, which is 
 a credit to the forwarding agent, as he advanced the 
 money. 
 
 In the column "prepaid" are extended the amounts
 
 90 
 
 collected by forwarding station to apply on the ship- 
 ment. When a shipment is prepaid a memorandum is 
 noted on the way-bill, explaining fully the point to 
 which the prepayment is to cover, as, for instance: 
 "prepaid to New York," or "prepaid to Boston, Mass.," 
 and is a debit to forwarding station and a credit to the 
 receiving agent or road. 
 
 The amount in "freight" and " advances" columns are 
 a charge to the receiving agent or road ; that is to say, 
 all charges, whether freight or advance charges, appear- 
 ing on the way-bill received is chargeable to the agent 
 receiving it. The way-bill is now made and there must 
 be some provision made for the proper handling of the 
 car into which the box was placed so that the property 
 will reach its correct destination. This is provided for 
 by issuing memorandum manifests or card way-bills, 
 which contain the same instructions as the regular way- 
 bill, viz. : forwarding point and date, number and initial 
 of car, contents, name of consignee, and ultimate desti- 
 nation. The car is carded with regular ticket which 
 gives the forwarding point and destination, date, route, 
 contents, car number and the initial. 
 
 The car is then sealed and together with the card way- 
 bill is handed over to the train conductor, who makes an 
 examination that no discrepancies exist, and the car is 
 carried to its destination. 
 
 When the car reaches its destination the train con- 
 ductor unloads the freight and delivers it to the agent at 
 that point with the manifest. The agent receiving the 
 property takes a record of the shipment and records it 
 in a ledger or freight receipt book, and at the same time 
 making out a bill against the consignee which is called 
 an expense bill.
 
 91 
 
 Upon the arrival of property notice is sent to the con- 
 signee, or the parties to be notified. The following rules 
 are generally observed in the delivering of property: 
 
 When consigned to a certain party, the freight is 
 delivered to that party only, or upon his written order. 
 
 When consigned to one party " in care of" a second 
 party, the freight is delivered to the second party only, 
 or upon his written order. 
 
 When consigned to one party, "notify a second 
 party," the second party is notified, but delivery of the 
 freight is only made upon the presentation and surrender 
 of the original shipping receipt or bill of lading, properly 
 indorsed by the first party. 
 
 When consigned simply " to order," or " to order of 
 shipper," the freight is only delivered upon the presenta- 
 tion and surrender of the original shipping receipt or bill 
 of lading, properly indorsed by the party to whom it was 
 issued. 
 
 When consigned "to order" of a certain party, the 
 freight is only deliv^ered upon the presentation and 
 surrender of the original shipping receipt or bill of 
 lading, properly indorsed by the party to whose order 
 the property is consigned. 
 
 When consigned simply " to order," or " to order of 
 shipper, notify a certain party," the said party is notified, 
 and the freight is delivered only upon the presentation 
 and surrender of the original shipping receipt or bill of 
 lading, properly indorsed by the party to whom it was 
 issued. 
 
 When consigned "to order of one party, notify a 
 second party," the second party is notified, but the pro- 
 perty is not delivered until the original shipping receipt
 
 or bill of lading, properly indorsed by the first party, is 
 presented and surrendered. 
 
 No freight or any portion of a consignment can be 
 removed from a station until all of the charges are paid, 
 and when delivering property a delivering receipt is 
 taken, which indicates the station at which delivery is 
 made, the date and exact time of delivery, full reference 
 to billing, the name and address of consignees, articles, 
 marks, weight, charges, etc., as shown b}' the corres- 
 ponding expense bill, and the condition of the property 
 when delivered. 
 
 We now come to the accounting for the shipment. 
 As previously referred to, every agent is charged with 
 the amount on all way-bills received by him for collec- 
 tion, and all amounts collected to prepay on shipments 
 forwarded, and all cash remitted to the treasurer, and all 
 money paid out for advance charges, if he be a junction 
 agent, are credits to him. The tables on pages 91 and 92 
 will show an exhibition of a "Station and Cash Account :"
 
 93 
 
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 AVQ-Ol S1N3KAV,J IJ 
 
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 95 
 
 From the foregoing illustration the reader can see 
 how and under what principle the accounts at a station 
 are kept. This exhibit is made out daily. Some roads 
 follow this rule, while there are others which only 
 require a weekly exhibit, and others a monthly report. 
 
 This report, together with a report of all way-bills 
 received and tickets sold, and a report of all way-bills 
 issued, are forwarded daily to the auditor, for recording. 
 
 The way-bills appearing on the report of way-bills 
 issued are recorded in a ledger or freight record, as 
 some roads term it, consecutively in station order ; that 
 is to say, from the initial point to termini. The daily 
 exhibit is also recorded in a ledger, or, as some 
 have termed it, a station agent record, and the way-bills 
 and total of each on the report of way-bills received are 
 checked against the way-bills and totals of way-bills 
 forwarded. If they both agree the agent is charged 
 with that amount. At the close of every month these 
 records are summarized and if the totals in the freisfht 
 record agree with the total amount to be collected on 
 way-bills received his accounts balance so far as that 
 portion of his account is concerned, and he is charged 
 with that amount. The sales of tickets are accounted 
 for in a somewhat similar manner ; the agent, at the 
 close of every month, renders a monthly statement 
 which shows a complete record of all tickets sold from 
 his station, giving the beginning and closing numbers, 
 to what station sold, the total number, rate and 
 amount. Before this report is checked, however, all 
 the tickets sold from a station are assorted according to 
 the stations to which they are sold and arranged in 
 consecutive order, the lowest number on top. 
 
 The report is then checked, and if the total number of
 
 96 
 
 tickets shown on the report agree with the number on 
 hand the report is correct and the agent is charged with 
 that amount. This process is followed month after 
 month.
 
 REVENUE AND EXPENSES. 
 
 The whole structure of the system of collecting freight 
 revenue, holding accountable all agents who assess it and 
 collect it, dividing it in the agreed proportion between 
 the railroads over which it passes, and the tabulating of 
 the immense mass of statistics, which are kept to show 
 separately the quantities of freight received from and 
 delivered to connecting lines, and every possible class 
 and variety, by route, and to and from point of departure 
 and destination, is founded upon a paper called the way- 
 bill, neither the magnitude nor the minute elaboration of 
 the system involved in a way-bill could be adequately 
 described within limits. 
 
 The theory of a way-bill is that no shipment must 
 move without one, which gives a full description, showing 
 the points of departure and destination, whether it has 
 been prepaid or to be collected at destination, etc., and 
 not only must a way-bill accompany a shipment, but a 
 duplicate of it must be sent to the office of the auditor. 
 
 Before making an entry of the way-bill received its 
 extended figures are first checked by a rate clerk, who is 
 kept constantly supplied by the traffic department with 
 all current rates, classifications, and percentage tables 
 by W'hich through freight is divided. It has been 
 the general practice to record all way-bills immediately 
 and directly from the reports received from the agents 
 making them, and afterwards, if an error was found, a 
 correction was issued raising or reducing the charges as 
 
 97
 
 98 
 
 the case may be. All way-bills are recorded consecutively 
 and in station order. After the business of the month is 
 dosed, the records into which all the way-bills are 
 recorded are summarized, the totals, which represent a 
 debit against the receiving agent, are taken off on an 
 abstract; that is to say, the total of all the way-bills 
 received at one particular station and from all stations. 
 The grand total is checked against the agent's account of 
 way-bills received and they should agree. The theory is 
 that all way-bills received must equal the amount of all 
 way-bills forwarded. The records are then turned over 
 to the statistician who separates the various classes of 
 freight and the weight thereof, from what point and to 
 what point, what connecting line received from and 
 delivered to. When the total weight in pounds has been 
 found, it is reduced to tons and tons one mile; that is to 
 say, how many miles a ton was carried, and is arrived at 
 by multiplying the tons by the difference of miles between 
 stations. 
 
 All the tickets that are sold are taken up by the train 
 conductor who forwards them to the auditor. These 
 tickets are assorted according to the station selling them, 
 and at the close of the month's business the agent will 
 forward to the auditor a report showing in detail the num- 
 ber of tickets sold, price, and to what point. 
 
 These reports are checked to verify the extension and 
 price, and the number sold is checked with the number 
 received from the train conductor, which should agree. 
 In ascertaining the total number of passengers carried, 
 and the total number of passengers carried one mile, 
 reference is made to the agent's report, which gives the 
 total tickets sold, representing the total passengers car- 
 ried; and the multiplying of this total by the difference
 
 99 
 
 of miles between stations will give the passengers carried 
 one mile. 
 
 All disbursements are taken account of by and are 
 under the charge of an auditor of disbursements. All bills 
 for the purchase of the material and other supplies for the 
 road are received by him and verified as to their correct- 
 ness, as well as any other bill which demands an outlay 
 of money or is simply a department bill. These bills are 
 recorded in a record called a bills payable book, or 
 voucher record, and given a number. When they are 
 found to be correct a voucher is drawn for the amount 
 of such bill, which, after the endorsement of the author- 
 ized officers, becomes a bank draft and is negotiable. 
 
 Every bill must have a charge to off-set the amount 
 disbursed. The accounts, which are numerous, cannot 
 be given an adequate description, owing to limited space ; 
 but let us consider a few of them. 
 
 There are eight general accounts in disbursement 
 account chargings ; namely, general expenses, traffic or 
 commercial departm.ent expenses, maintenance of way, 
 maintenance of engines, maintenance of cars, conducting 
 transportation, construction and equipment and open 
 account. These general accounts are subdivided into 
 several detailed accounts or sub-accounts, and when a 
 bill is paid the amount is charged to one of these sub- 
 accounts. When material is purchased in large quanti- 
 ties it is not charged directly to the account for which it 
 was purchased, and included in the expenses of the month 
 in which it was purchased, but is charged to an open or 
 running account until a draft is made, when the amount 
 is charged to expenses of the month in which it was con- 
 sumed. This principle applied to material purchased is 
 not the only one, but any open account is used for the 
 same purpose.
 
 lOO 
 
 The chargings to the accounts already referred to can 
 be applied to operating the freight business, passenger 
 business and general business; the latter cannot be applied 
 directly to either freight or passenger, but must be appor- 
 tioned between freight and passenger. The expenses 
 coming under general division are salaries of superin- 
 tendents, taxes, etc., and other expenses which cannot be 
 applied directly to either one. This is done on a mileage 
 basis. The total miles run by passenger trains, and the 
 total miles run by freight trains, and whatever the per- 
 centage relationship is of the total miles run that will be 
 the percentage basis for figuration.
 
 101 
 
 Income 
 
 ANALYSIS OF ACCOUNTS. 
 History, Capital Stock and Funded Debt. 
 
 Supt. and Engineers Expenses 
 
 Right of Way 
 
 Road-bed and Track 
 
 Rolling Stock 
 
 Repair Shops 
 
 Telegraph Lines 
 
 Offices 
 
 Additions and Betterments 
 
 Passenger and Freight 
 Express and Mail 
 Car Service 
 
 Cost of Road and Equipment 
 
 Earnings 
 
 1 
 
 Other Sources 
 
 { 
 
 Operating Expenses 
 
 .1 
 
 Fixed Charges 
 
 Balance Sheet Assets 
 
 Balance Sheet Liabilities 
 
 Interest and Rents 
 Surplus of previous year 
 
 General Expenses 
 TrafBc Department Expenses 
 Maintenance of Way 
 Maintenance of Engines and Cars 
 Conducting Transportation 
 
 Interest 
 
 Rentals 
 
 Taxes 
 
 Franchise Charges 
 
 Cost of Road 
 
 Cost of Equipment 
 
 Real Estate and Buildings 
 
 Stocks and Bonds 
 
 Franchise 
 
 Other Permanent Investments 
 
 Cash on 1 1 and 
 
 Bills Receivable 
 
 Open Accounts 
 
 Material and Supplies 
 
 Sinking Fund 
 
 Sundries 
 
 Profit and Loss (Surplus) 
 
 Capital Stock (Prefened and Common) 
 
 Funded Debt 
 
 Interest Due and Accrued 
 
 Dividends Unpaid 
 
 Audited Vouchers (Ready for Payment) 
 
 Pay-Uolls (Unpaid) 
 
 Open Accounts 
 
 Bills Payable 
 
 Sundries 
 
 Profit ar.d Loss (Deficit) 
 
 Deficit of Previous Year
 
 RAILWAY ASSOCIATIONS. 
 
 By Mr. Aldace F. Walker. 
 
 An important difference between the railway service 
 of the United States and that of other countries is found 
 in the fact that traffic by rail is here conducted by a 
 great number of distinct corporations. These inde- 
 pendent organizations are found in all the states and 
 territories of the Union, maintaining lines of roads inter- 
 laced and interwoven through almost innumerable junc- 
 tion and crossing points, and actively competing with 
 each other for the freight and passenger business of 
 every section of the country. There are now in the 
 United States over 150,000 miles of railroad owned by 
 nearly fifteen hundred companies ; this aggregate mile- 
 age is now operated by about six hundred and twenty- 
 five separate corporations. The process of combination 
 and amalgamation is a marked feature of the railway 
 situation, but as yet it has proceeded only to the extent 
 above indicated. At the present time there is practically 
 no part of the country in which active competition does 
 not exist between organically independent carriers. 
 Even of so-called local points, situated upon the line of 
 a single road, there are very few where traffic is not in 
 some respects subject to competitive conditions, or where 
 the transportation charges can be arbitrarily established 
 by the carrier. Nor is railway competition confined to 
 the various routes which may exist to and from the 
 nearest market; but all markets are thrown open 
 throughout the land ; rates in a given direction arc often 
 jegulated by those which exist in a precisely opposite 
 
 103
 
 I04 
 
 direction ; the price of each commodity added to the trans- 
 portation charge determines the direction of the shipment 
 or the source of supply. Moreover, the various water 
 routes with which our country is favored have an almost 
 incalculable influence upon the railway rates, the expense 
 being very small when compared with the expense of 
 constructing, maintaining and operating railway routes. 
 
 The contrast thus presented with the railway system 
 of France, for example, where six great railway com- 
 panies have a vast sub-division of the national domain 
 assigned to each exclusively, is too marked to require 
 comment. And in other European countries the com- 
 petitive conditions which are found in the United States 
 have been to a great extent eliminated through state 
 ownership, by protective legislation, or by amalgamation 
 of titles. 
 
 In our peculiar form of dual government, each state 
 authorizes the construction of railroads within its 
 boundaiy without control or supervision by the nation. 
 Practically, no restrictions have been placed upon local 
 railway building ; and consolidations of ownership or of 
 operative control are easily accomplished by the consent 
 of state legislatures, coupled with concurrent action 
 between adjoining states. 
 
 Answering the demands of the public for the freest 
 possible interchange of products and commodities, an 
 almost universal system of through traffic has come into 
 existence; affording facilities which, while altogether 
 unprecedented, no longer excite surprise. Each com- 
 pany might have contented itself with receiving 
 passengers or freight, and delivering them at the end 
 of its hne to its connections ; but this is by no means 
 the case. On the contrary, the various companies have
 
 105 
 
 tiecome accustomed to act together in establishing 
 through rates of fare and through freiglit tariffs between 
 most distant points, without regard to the hostile rela- 
 tions which necessarily exist among them in respect to 
 competitive traffic. Tickets can be universally purchased 
 for remote destinations ; freight is everywhere consigned 
 to every other point. Customs have arisen in the pro- 
 visions for through business and in the adjustment of 
 traffic balances which have the force of law. The shipper 
 does not pause to inquire concerning the route over 
 which his goods are to be forwarded; he is informed 
 of the established through rate, and he relics without 
 anxiety upon the arrangements which the companies 
 have established among themselves, concerning which 
 he has little knowledge and less care. 
 
 The work of railway auditors and accountants has 
 become enormous, involving the exact apportionment 
 not only of each company's share in all receipts from 
 through traffic, but also of losses and of liabilities for 
 damages, as well as the distribution of car service 
 charges and through line expenses. One of the great 
 wants of the present time is a railway clearing house, or 
 a series of clearing houses embracing territorial groups 
 of roads, for the purpose of auditing their innumerable 
 transactions upon a common basis, checking all charges 
 with the estabhshed tariffs, and adjusting settlements 
 between the various lines each with each other. It may 
 be said in passing that such a railway clearing house 
 was early organized in England, and was placed upon a 
 legal foundation by act of parliament in the year 1850. 
 Nearly every company in the United Kingdom now 
 participates in its benefits. Its affairs are controlled by 
 a committee, on which each line is represented ; and its
 
 io6 
 
 awards are made by law final and conclusive before the 
 courts. 
 
 When the act to regulate commerce became effective 
 on April i, 1887, our railway system presented substan- 
 tially the features outlined above, although many prac- 
 tical advances in conducting the details of universal 
 intercommunication have since been adopted. It soon 
 became manifest that every carrier, to some extent at 
 least, was engaged in interstate commerce; and one 
 consequence of this attempt at the national regulation 
 of railways has been the perception by close observers 
 that such regulation, to be successful, must be exclusive; 
 in other words, that Federal control and state control 
 conflict at innumerable points, so that their co-existence 
 before many years will be found practically impossible. 
 
 The theory under which the Interstate Commerce law 
 was framed, contemplated the maintenance of the inde- 
 pendent existence of railway corporations as then con- 
 stituted, subject to such organic changes as their owners 
 might from time to time accomplish by contract among 
 themselves in subordination to the laws of the several 
 states under which they held their various charters, and 
 all working together under a uniform national control. 
 Although this was the first important occasion in which 
 the Congress had undertaken to exercise the power 
 intrusted to it by the constitution, to regulate commerce 
 among the several states, nevertheless the act was in 
 most respects well considered and did not contemplate 
 the creation of any obstacles or embarrassments in the 
 way of the free interchange of traffic. On the contrary, 
 the maintenance of through routes and of through 
 tariffs was provided for, and it was expressly made 
 unlawful for any common carrier in any manner to
 
 I07 
 
 prevent the continuous carriage of freights from the 
 place of shipment to the place of destination. It became 
 immediately obvious that many duties were incumbent 
 upon carriers, some imposed and others recognized by 
 the new law, which could be satisfactorily performed 
 only through joint action among the roads. 
 
 There were in existence at that time many tariff 
 organizations, commonly known as pools, which, in 
 addition to the apportionment between competing lines 
 of earnings derived from competitive traffic, performed 
 many other important functions in making necessary 
 arrangements of all kinds under which traffic might be 
 systematically conducted. These organizations had 
 been found indispensible for the proper and efficient 
 transaction of railroad business ; and when the pooling 
 of freights was abandoned these existing organizations 
 each became the nucleus of a reorganized association, 
 exercising a certain supervision and control over tariffs 
 and traffic arrangements. The form of their orf^aniza- 
 tion, and their purposes are not clearly understood by 
 the public ; in fact, their very existence has given rise 
 in some sections to jealousy ; they haft^e been attacked 
 from time to time before the Interstate Commerce 
 Commission ; state legislatures have attempted their 
 suppression; and in Texas a judicial decision of the 
 highest tribunal has held one of them to be organized 
 in a form incompatible with the provisions of the consti- 
 tution of the state. 
 
 At the present time the leading railway associa- 
 tions are the following: The Trunk Line Association, 
 embracing the great railroads which operate between 
 the Atlantic seaboard and the cities of Buffalo, Pittsburg 
 and Wheeling ; the Central Traffic Association, which
 
 io8 
 
 includes most of the roads in the territory west of the 
 Trunk Lines as far as Chicago and St. Louis; the 
 Interstate Commerce Railway Association, with its 
 affiliated organizations called the Western Freight Asso- 
 ciation, the Western States Passenger Association and 
 the Trans-Missouri Freight and Passenger Association, 
 covering the region between Chicago and St. Louis on 
 the one hand and the Rocky Mountains on the other ; 
 the Southern Railway and Steamship Association and 
 the Southern Passenger Association, having their field 
 in the southern states east of the Mississippi river; the 
 Southern Interstate Association, working in the south- 
 west beyond the Mississippi ; and the Trans-Continental 
 Association, embracing traffic to and from the Pacific 
 coast. In addition to the foregoing there are a number 
 of other associations, some of which have to do with the 
 freight or passenger traffic of smaller sections of the 
 country ; some with selected articles of traffic ; some are 
 hmited to particular subjects like classification and the 
 exchange of cars. 
 
 Their organization is very simple. The officer in 
 charge is usually designated as commissioner, or chair- 
 man; and he is generally assisted by a secretary, an 
 accountant or auditor, and a small staff of clerks who 
 perform such services as are necessary in the prepara- 
 tion and publication of tariffs and the collection and dis- 
 tribution of statistics. They are purely voluntary, and 
 are formed by agreement between the various lines 
 which compose them, the details of which are expressed 
 in articles of association subscribed by representatives 
 of the several roads. These agreements are filed with 
 the Interstate Commerce Commission, pursuant to the 
 requirement of the act to regulate commerce, which
 
 109 
 
 provides for the filing of copies of all contracts, agree- 
 ments or arrangements between common carriers in 
 relation to traffic affected by the provisions of said act. 
 Stated meetings arc held from time to time, usually 
 monthly, wliich are attended by a representative of each 
 line, and which are usually presided over by the chair- 
 man or commissioner. Unanimous agreement is com- 
 monly required in order to effect a change in established 
 rates, rules or regulations respecting traffic, subject, 
 however, to a right or independent action which is 
 reserved in case of failure to agree. In the event of 
 disac^reement between the lines arbitration is sometimes 
 provided for. The duties of the chairman frequently 
 embrace the investigation of cases where it is claimed 
 that tariffs have not been maintained, or that the 
 established rules and regulations which govern the 
 handling of traffic have been departed from ; the 
 requirements of the association in such cases being in 
 conformity with the provisions of the act to regulate 
 commerce, which forbids the charging of a greater or 
 less compensation for the transportation of passengers 
 or property than is specified in the schedule of rates, 
 fares and charges at the time in force, and which 
 requires ten days' public notice of any advance in rates, 
 together with three days' public notice of reduction. 
 
 The basis upon which these associations rest is simply 
 good faith among the members. They are not corpora- 
 tions, and they exercise no corporate powers ; yet they 
 deal at times with questions of the utmost importance, 
 and their influence is distinctly visible in every branch of 
 the railway service. The subjects which they treat are 
 not restricted to the territory which they respectively 
 embrace, but the various associations are able, by nego-
 
 no 
 
 tiation with each other, to accomplish results in the man- 
 agement of long distance traffic that would otherwise be 
 altogether impossible. 
 
 In order to correctly apprehend the relation which they 
 bear to the governmental regulation of carriers, it is neces- 
 sary first to understand precisely what is undertaken by 
 the federal law under which all interstate commerce is 
 now carried on. When this is properly appreciated it will 
 be perceived that the work of the associations is directly 
 in line with the administration of the law; in fact, that they 
 owe their existence at the present time to the effort and 
 desire of the carriers to transact their business in con- 
 formity with the statute ; and that as a practical matter 
 the act to regulate commerce would not be workable 
 without the intervention of railway associations. 
 
 The object proposed by Congress, in enacting the 
 Interstate Commerce law, may be perceived by ascertain- 
 ing the then existing evils which that legislation proposed 
 to remedy. The introduction of the bill was preceded 
 by a long investigation, which resulted in the formulation 
 of an able report discussing broadly the general subject 
 of the internal commerce of the country, its importance 
 and the methods employed in carrj'ing it on ; and which 
 embraced a concise and summary statement of conclu- 
 sions entitled " The Causes of Complaint Against the 
 Railroad System." The points covered by this indict- 
 ment were eighteen in number, and there is scarcely one 
 of them which is not comprehended within the significant 
 word " discrimination." It was charged that local rates 
 were unreasonably high as compared with through rates; 
 that both were unreasonably high at non-competing 
 points; that unjustifiable discriminations were constantly 
 made between individuals ; also between articles of freight
 
 II I 
 
 and branches of business of a like character ; also between 
 localities ; also by the use of secret special rates, rebates, 
 drawbacks and concessions ; also by secret cutting rates 
 and fluctuations, demoralizing to legitimate business; also 
 by the granting of free passes ; by undue advantages 
 afforded to business enterprises in which railway officials 
 were interested ; and otherwise as was set forth with 
 particularity and detail. 
 
 Examined in the light of this report it is easy to per- 
 ceive that the fundamental purpose of the Interstate 
 Commerce law is the prevention of discrimination in 
 every form. The first five sections of the statute declare 
 the principles that are to regulate the internal commerce 
 of the country, and the subsequent sections provide 
 machinery for the enforcement of the rules thus first laid 
 down. These rules are three in number : First, all rail- 
 road charges shall be reasonable and just; second, no 
 unjust discrimination between persons by means of special 
 rates, rebates, drawbacks, or other devices shall be per- 
 mitted ; third, no undue or unreasonable preference or 
 advantage shall be given to any person, locality or 
 description of traffic, in the establishment of tariffs. 
 
 These provisions comprise the foundation principles of 
 the Interstate Commerce law ; the famous fourth section 
 being merely a declaration that the charge of a greater 
 sum for a shorter than for a longer distance, shall consti- 
 tute a preference or discrimination in favor of the* more 
 distant point, unless conditions and circumstances exist 
 which make the service dissimilar ; and the fifth, or anti- 
 pooling section, was undoubtedly the result of a belief on 
 the part of its authors that the pooling system, by stifling 
 competition, tended to make rates unreasonably high. 
 
 The leading feature of the administrative portion of
 
 112 
 
 the law is found in the sixth section, which requires the 
 establishment and publication by the carriers of tariffs 
 showing rates, fares and charges for all interstate carriage 
 of passengers and property, together with the classifica- 
 tion of freight in force, and any rules or regulations 
 which affect the rates. These tariffs are required to be 
 filed with the Commission, and when established must be 
 absolutely adhered to. The charge of a greater or less 
 sum than the established rate is made a midemeanor. 
 This requirement that tariffs for all traffic shall be fixed 
 in advance, madepublicandrigidly observed, is obviously 
 designed to prevent discrimination. The task imposed 
 upon the carriers by the passage of the law was an enor- 
 mous one. It involved nothing less than the establish- 
 ment of a full and complete system of schedules of rates, 
 fares and charges, not only between the stations upon 
 each road, but between all points in the United States 
 under which through traffic might be handled by joint 
 tariffs, which should be without preference, as between 
 localities, and as between classes of traffic ; which should 
 be just and reasonable in every respect, and which should 
 be made the measure by which all transportation charges 
 should be governed, disregarding previous customs and 
 usages, and suddenly bringing the entire interstate traffic 
 of the country within the operation of a procrustean rule. 
 Sixty days were allowed for this task before the law 
 became operative. The work is by no means finished 
 yet. The various details necessary to be covered in the 
 establishment of tariffs, classifications, rates, rules and 
 regulations controlling transportation of persons and 
 property are almost innumerable. Tariffs and traffic 
 regulations must necessarily be alike upon the lines of 
 carriers engaged in joint operations, or holding competi-
 
 113 
 
 tive relations with each other. Harmonious action be- 
 tween carriers was an absolute necessity in order to enable 
 them to take the first step in obedience to the adminis- 
 trative sections of the Interstate Commerce law. This 
 cause compelled the continuance, for the purpose above 
 described, of such associations as had previously been in 
 existence, and the development of a system for the con- 
 duct of traffic, in which the existing associations play an 
 important part. The Interstate Commerce Commission, 
 in its first annual report, recognized this feature of the 
 situation in carefully chosen words, as follows : 
 
 Voluntary Association of Railroad Managers. 
 
 " Nearly every railroad in its origin has been independ- 
 ent of all others, and in the early history of such roads 
 they were commonly provided for as local conveniences, 
 with no provision of the great highways of trade and 
 communication which they have since become. It was 
 in many cases thought to be important that a road should 
 be kept as distinct in its business from all others as pos- 
 sible, and at their termini in some instances they are not 
 allowed to have the same freight or passenger stations 
 with other roads, lest the local draymen and hackmen 
 should be deprived of a profitable employment. 
 
 When the 'great possibilities of railroad service came 
 to be better understood these primitive notions of local 
 benefits gave way before a more enlightened public senti- 
 ment, and the fact was recognized that the public interest 
 would be best subserved by making the connection 
 between the roads as close as possible, in order that the 
 commeroe between different sections and localities might 
 go on steadily and uninterruptedly. The railroad com-
 
 114 
 
 panics perceived also that their interest lay in the same 
 direction. * * * 
 
 To make railroads of the greatest possible service to 
 the country, contract relations would be essential, because 
 there would need to be joint tariffs, joint running arrange- 
 ments, an interchange of cars and a giving of credit to a 
 large extent, some of which were obviously beyond the 
 reach of compulsory legislation, and even if they were 
 not, could be best settled and all the incidents and quali- 
 fications fixed by the voluntary action of the parties in 
 control of the roads respectively. 
 
 Agreement upon these and kindred matters became, 
 therefore, a settled policy ; short, independent lines of 
 road seemed to lose there identity and to become parts of 
 great trunk lines, and associations were formed which 
 embraced all the managers of roads in a state or section 
 of the country. To these associations were remitted 
 many questions of common interest, including such as are 
 above referred to. Classification was also confided to 
 such associations, it being evident that differences in 
 classification were serious obstacles to a harmonious and 
 satisfactory interchange of traffic. But what perhaps 
 more than anything else influenced the formation of such 
 associations and the conferring upon them of large autho- 
 rity, was the liability, which was constantly imminent, 
 that destructive wars of rates would spring up between 
 competing roads to the serious injury of the parties and 
 the general disturbance of business. 
 
 Accordingly, one of the chief functions of such asso- 
 ciations has been the fixing of rates and the devising of 
 means whereby their several members can be compelled 
 or induced to observe the rates when fixed. And in 
 devising these means the chief difficulty was encountered.
 
 115 
 
 Agreements upon rates were voluntary arrangements 
 which could be departed from at pleasure, and if they had 
 behind them no sanction, they were not likely to stand in 
 the way of a war of rates when the provocation to one 
 seemed sufficient. Accordingly, the scheme of pooling 
 freights or the earnings from traffic was devised and put 
 in force through the agency of these associations, as a 
 means whereby steadiness in rates might be maintained. 
 The scheme was one which was made use of in other 
 countries and had been found of service to the roads. 
 
 The pooling system was looked upon with distrust by 
 the public, mainly because it seemed to be a scheme 
 whereby competition between the roads could be obviated 
 and rates for railroad service put up or kept up to unrea- 
 sonable figures. But if railroad managers supposed that 
 by this scheme they were to stop competition among 
 themselves, the result has not answered their expectations. 
 
 Competition has still gone on; each road striving to 
 obtain as large a share of the business as possible, and 
 no agreement among them could altogether prevent a 
 yielding to the pressure of shippers for lower rates. * * * 
 
 The pooling of freights and of railroad earnings so far 
 as the commission has knowledge or information on the 
 subject, came to an end when the act took effect. But 
 as pooling was only one of several purposes had in view 
 in forming railroad associations, the leading associations 
 have not been dissolved, but have been continued in exis- 
 tence for other objects. Among these objects are the 
 making of regulations for uninterrupted and harmonious 
 railroad communication and exchange of traffic within 
 the territory embraced by their workings. Some regula- 
 tions in addition to those made by the law, are almost, if 
 not altogether, indispensable. Thus, while the seventh
 
 ii6 
 
 section of the act forbids the carriers preventing ship- 
 ments from being continuous by the device of changing 
 time schedules, carriage in different cars, etc., it has not 
 undertaken to provide for the making of such time 
 schedules as would facilitate the continuous shipment, 
 or to prescribe rules for the loading and movement of 
 cars for that purpose. However desirable this might 
 have been, if it were practicable to make rules which, 
 while general in their nature, should be sufficiently 
 definite of enforcement as laws, it was doubtless per- 
 ceived by Congress that these and many other matters 
 of detail, though they might be of high importance, 
 could not be wisely and effectively dealt with by general 
 legislation, but that such legislation must chiefly be 
 restricted to provisions for regulation and to prevent 
 abuse. 
 
 " Moreover, these matters of detail, to a considerable 
 extent, involve the element of contract, and also of 
 credit, when one company becomes the agent for 
 another in the sale of tickets and the collection of 
 freight moneys; and they then require the assenting 
 minds of parties, and the number of parties whose minds 
 are to be brought into accord being commonly very 
 considerable, an association of officers or agents is made 
 the means of bringing about the desired unity of action, 
 and is also made a common arbiter, to prevent frequent 
 and serious disturbances. 
 
 "Classification also, as has been said, is not by the act 
 taken out of the hands of the carriers, though a certain 
 power of supervision is vested in the commission ; and 
 classification is not only best made by joint action, but 
 if it were not so made and the methods of the roads 
 thereby brought into harmony, it would probably
 
 117 
 
 become indispensable, however undesirable it might 
 otherwise be, for the law to undertake to provide for it. 
 Moreover, when classification is made and put into effect 
 it becomes necessary to make provisions tor inspecting or 
 some sort of supervision of its application, in order to 
 firevent its being employed as a device for giving prefer- 
 ences as between shippers. A fraudulent classification, 
 through connivance of the agent in making out decep- 
 tive shipping bills, has often been resorted to for this 
 purpose ; and as the fraud affects the competing carriers 
 as well as the shippers who are discriminated against by 
 means of the cheat, the carriers and the public alike are 
 interested in such a supervision of the work of all the 
 roads as will be likely to detect the fraud. Self interest 
 on the part of the carriers will impel to this supervision, 
 and it is most generally done through some common 
 agency. If it shall be fairly done as between the carriers 
 themselves, it will tend to the protection of the public; 
 and the benefits will be on the same line with those the 
 act undertakes to establish or provide for." 
 
 Joint Traffic. 
 
 It will be observed that the traffic which lies within 
 the scope of association control may be considered under 
 tw^o distinct relations, as joint traffic and as competitive 
 traffic. Joint traffic is defined in the act to regulate 
 commerce as " where passengers and freight pass over 
 continuous lines or routes operated by more than one 
 common carrier, and the several common carriers opera- 
 ting such lines or routes establish joint tariffs of rates or 
 fares or charges for such continuous lines or routes." 
 The general nature of the work of the associations in
 
 ii8 
 
 respect to joint traffic has been already indicated. 
 Through their agency arrangements of all kinds are 
 consummated under which joint service is made 
 possible, and constant improvements in its extent and 
 facilities are brought about. The principal subjects of 
 negotiation and concerted action are the following: 
 rates, classification of freight, apportionment of earnings 
 and inspection. Other points relating to through traffic, 
 such as time table arrangements, exchange of cars and 
 settlement of traffic balances are usually adjusted by 
 individual connecting lines. 
 
 Lines where traffic originates are expected to establish 
 and publish through rates to points of ultimate destina- 
 tion, but such rates must necessarily be made by agree- 
 ment between the various lines composing such through 
 routes, and the necessary agreements would be too infinite 
 in number to be practically possible without the assistance 
 of associations. The present extremely complicated 
 system is the result of long years of negotiation and 
 contest. The effect of rates which exist in one section 
 of the country upon those made between very distant 
 points, can be appreciated only by careful study. 
 Certain principles in the relation of rates to each other 
 and in the use of established differences, sometimes 
 called differentials, have been worked out, usually by 
 some arbitration or agreement, founded upon just 
 reasons and presenting a m.edium betv/een the claims 
 of competing points. These adjustments are found in 
 every section of the country and are made upon the 
 broadest principles. While one community and another, 
 upon a narrow view of its geographical situation, has 
 from time to time made complaint of an alleged unfair 
 adjustment of its rates, instances have been very few in
 
 119 
 
 which the Hnes have been unable to demonstrate that 
 the tariffs, in fact, were just and reasonable, upon the 
 requirements of the whole situation involved. Through 
 rates are almost invariably somewhat less than the sum 
 of the local rates, and are necessarily established by 
 concerted action in view of the relation of rates at one 
 point to those at others. The mileage rate of the 
 shortest line is taken as the maximum. No line, how- 
 ever circuitous, can expect to participate in the traffic 
 if its rates are higher ; and cases are found where the 
 effort is made to attract travel to longer routes by the 
 employment of a lower rate than is charged by direct 
 routes between the same points. 
 
 Much has been said in relation to the importance of a 
 uniform classification of freight throughout the land. A 
 common classification even in a single state requires con- 
 certed action. Every article of merchandise must be 
 taken up and considered with relation to the various 
 considerations embraced in the establishment of its just 
 and reasonable classification ; in addition to this the 
 development of the traffic of every line must be kept in 
 mind, and the classification of each commoditv must be 
 sufficiently low to permit of its free movement. Prior 
 to the passage of the act to regulate commerce thirty- 
 seven different classifications were in use in the territory 
 of the Central Traffic Association. The great bulk of 
 interstate traffic throughout the United States is now 
 handled under four classifications. The progress which 
 has been made in this direction would have been 
 impossible but for the fact of the existence of railway 
 associations, in which the subject has been efficiently 
 handled. At the present time a conference of represen- 
 tatives of all the associations is in existence, meeting
 
 120 
 
 from time to time and engaged in the work of still 
 further simpHfying and harmonizing the present differ- 
 ences, with a view, if possible, to ultimately establish a 
 single uniform classification of freight. 
 
 The subject of the apportionment of receipts from 
 joint traffic between the various lines which unite to 
 form through routes is one of the utmost importance to 
 the carriers, but in which the general public has little 
 interest. Shippers are concerned solely with the ques- 
 tion of the rate which they are required to pay as an 
 aggregate through rate from the initial point to the point 
 of destination. The division thereof between the various 
 roads which unite in performing the service is of no 
 consequence to the public, although of great con- 
 sequence to the carriers. These divisions have been 
 and are a constant subject of negotiation and modifica- 
 tion. In determining the share of a through rate which 
 any given link will receive, a great variety of elements 
 are taken into account. A common basis where the 
 lines participating in the division are relatively equal is 
 that of mileage, under which the through rate is prorated 
 according to the length of the various roads. This basis, 
 however, is by no means universal. Weak lines, or roads 
 where the traffic is light and expenses are high are accus- 
 tomed to claim and are usually conceded an additional 
 allowance in the division of the earnings upon through 
 traffic. Sometimes this concession takes the form of an 
 arbitrary allowance for an expensive bridge, or for a 
 mountainous haul ; sometimes an arbitrary mileage is 
 assigned, one and a half, twice or even thrice the actual 
 mileage of the line in question; sometimes an arbitrary 
 division of the total through rate is awarded, under 
 which a short branch line, or feeder, may receive one
 
 121 
 
 third or e\xn one half of the total income ; sometimes 
 the adjustment is made upon the relative local rates 
 charged in different sections of the country, so that 
 roads where traffic is thin and low rates are impossible, 
 divide with other lines having a heavy tonnage and low 
 freight charges upon the basis of the sums received by 
 each respectively for their local traffic. These matters 
 are necessarily the subject of frequent negotiation, and 
 are often adjusted between large sections of the country 
 east and west, or north and south, by concerted action 
 through the associations which represent the lines in the 
 various sections involved in the question. It often occurs 
 that lines are willing, for the sake of increasing their 
 own traffic, to concede to their connections a larger share 
 in the earnings of joint business than would naturally 
 accrue to them. Lines having more than one outlet are 
 sometimes able to sell their traffic to the highest bidder. 
 Some standard is usually adjusted for a considerable 
 extent of territory, designed to effect an equitable distri- 
 bution of the results of joint traffic between the lines of 
 which various through routes are composed. Were it not 
 for the existence of associations where understandings 
 already reached are maintained, and necessary changes 
 are effected from time to time, confusion would at once 
 arise and chaos would speedily follow. 
 
 The advantages to shippers and passengers arising 
 from the through billing of freight, and through tickets 
 under the coupon system, need not be enlarged upon. 
 
 The importance of the inspection of freight is found in 
 the fact that, without it, advantages would be continually 
 obtained by shippers as against each other. It becomes 
 necessary, therefore, to establish bureaus not controlled 
 by individual roads, which would be under the constant
 
 122 
 
 
 ^^::-C-:.^:rfi 
 
 
 
 
 
 tl- 
 
 - _ _ ^ 
 
 itf 
 
 
 be i^ _ 
 
 
 
 -'• ::£, 
 
 
 - " -e, the r 
 
 --^^ preferences in order to dbt^ 
 
 ^- Jer assooations of carriers where 
 
 rules of shipment be mavnsaUy 
 
 ^. "J^ ijJ^Kxtioo scmce 
 
 ■ -'^"c^Tis poinlslbr 
 
 r";' _ applied, aod flot Ae' 
 
 ^ is TCiy stm^cnt in 
 
 ^ reoTilajions ^l,^ 
 
 V "pose of 
 
 ^lons 
 
 '°™'**Jui3i'E -maiTsc. 
 
 - - - 1 c» Mmo e as r-kMMwJu -^ _ *» ^^ 
 
 ascJianadb of
 
 123 
 
 hardly be claimed to be for the h^ ;nt„ ^ r ^ 
 
 at large; and the san,e thin, l^"t^^°^"'^P-"*= 
 
 betueen competing railroadCL ^ °^-"P^<« 
 
 ^tT'^z^f^::^": ^^ r ^-"^ ■- p- 
 
 hons several wealthy coraoraaon. u-i^,L ^^" 
 
 that they must foreC-er ^p^r^nd lf„Z'""~"' 
 cumstances shall concerted action iTI-Int^ "" T 
 presently result in the evtirr^ ? allowed, would 
 Tk- 1, \ '"*°"''f<=°eormoreorfh«n 
 
 Th,s has been so often practicallv demon -f^tJ^ 
 where competition between riJi °"^°"f^ted m cases 
 weaker to thTwall and^^te^ h LT"^ ^- ■"'"" *^ 
 crother rormof combinX^iT.,S^°J'>;;^ 
 
 ^r :rr'^'>- -•--■ ^* ^ts^STenr^ 
 
 Again. ade<;uate rai-K^v =— -. r-^„,w ,v 
 nance of the road and its « -tl^^l "^'^" 
 
 and efficient form. to<.eth^wift X ""^ P^'^ 
 
 e™p.o3-es of the i^^smT^T'^'^Zu"' 
 ser^-,ce cannot be rendered unless the rat« =^1,'^ 
 to its support, and adequate also to^L^^ ^^^ 
 in the field of the necLa^ ^p ^ .^ ' "'""'""^ 
 ^.to ha™oni.ethe.V col-S'^,.,:^--^^ 
 
 l:^:::7r^T'^ a war of tat. enlut^ 
 eierj rate «-ar the pubbc as well as the carr-r^ n,,,-! 
 
 ^an!; L^h^nr-oT.r'^^-^'- 
 
 -y exist, and d^ eS. wWe^.^r"^;, ~""^«' 
 The veo- feet that difielt r^ut^r^roS^ 
 sents the essential element of competitir -nJ^,?^ 
 and aA-antages of compebn. rouS ™ .K u°^^ 
 
 selection by shippers ^d ^ ""''J"* '*'■ 
 
 > snippers and passengers while rates may
 
 124 
 
 be alike on all. It cannot be denied that the public 
 generally is more interested in safe and efficient railway 
 ser\'ice than in extremely low railway rates. Rates may 
 easily be so low as to render such serxnce impossible. 
 The public is best ser\'ed b)' rates which are reasonable, 
 uniform and firmly maintained. This is precisely what 
 the act to reflate commerce demands. English tribu- 
 nals have affirmed healthy competition to be that in 
 which x-arious transportation routes are kept open which 
 are " practically independent of one another, fairly alter- 
 native, and reasonably calculated to keep one another in 
 check-" 
 
 Looking at the question of competitive rates as affected 
 by the requirements of the act to regulate commerce, it 
 will easily be seen that some degree of concurrent action 
 between the competitors is indispensable. Although in 
 denouncing discrimination the act in terms applies to 
 individual carriers, a moment's reflection will show that 
 discrimination in rates between competing carriers is 
 equally prejudicial to the public interest. Suppose, for 
 example, that there were only two lines of road between 
 New York Cit)- and Chicago, and that the charges upon 
 one were twenty per cent lower than upon the other. 
 So far as volume of traffic is concerned, the immediate 
 result would be to turn all business to which a choice 
 of the two routes was open, upon the road gi\'ing the 
 lowest rate, but so far as the manufacturing public is 
 concerned, everj' establishment situated upon the line 
 of the other road would at once be placed at a disadvan- 
 tage impossible to overcome. Nor is this confined to 
 rates alone. If, for example, one trunk hne from the 
 eastern seaboard to the west, transports sugar at its net 
 weight, deducting the weight of the barrels, while the
 
 regulations in force upon the other Hues demand that 
 the gross weight shall be employed in applying the 
 same tariff rate, the refineries upon the latter roads are 
 placed at a disadvantage sufficient to exclude them from 
 the territory reached by the other line; or if one line 
 returns without expense tank cars furnished by shippers 
 of oil, while another line exacts a charge for the return 
 of such cars, the refineries located upon the latter line 
 are discriminated against to an extent which would soon 
 close their works. Hundreds of instances like the fore- 
 going might be readily enumerated, in which the failure 
 to apply similar rules and regulations, as well as similar 
 tariffs, by competing lines of road would result almost 
 immediately in the destruction of important industries. 
 It is absolutely essential that discrimination be pre- 
 vented by the formulation of rules, regulations and 
 tariffs between competing lines, which shall work out 
 exact justice to the patrons of all. This is one of the 
 results accomplished through the agency of railroad 
 associations. It may be said that by preserving absolute 
 independence of action the desire to secure competitive 
 traffic would compel the line which wished to maintain 
 a higher rate to reduce its charge to the basis fixed by 
 its rival; but this would not necessarily follow, and if it 
 did not follow the result would be a series of reductions, 
 causing great disturbance to business, and ultimately 
 resulting in the elimination of one or the other of the 
 competitive agencies. 
 
 Again, enlarging the field of vision, and taking the 
 case of carriers from different competing points to the 
 same markets, or from different markets to the same 
 field of distribution, discrimination necessarily produces 
 a similar result to that above described. One point or
 
 126 
 
 the other is excluded, and the public is wronged. Ths 
 only remedy possible is the establishment of a cor- 
 responding or a relatively equivalent rate to or from the 
 different points in question which will prevent unjust 
 discrimination, preference or advantage, and serve the 
 whole public equably. 
 
 And once more, consider a complicated network of 
 roads which operates through a wide sweep of territory 
 in which the products are all competitive and all 
 markets are common ; the law leaves them to fix their 
 rates each for itself; without co-operation the trans- 
 portation charges would immediately become grossly 
 discriminative, and in the end almost certainly would 
 become inadequate to sustain the service, while inflicting 
 great wrong upon innumerable communities. 
 
 Association among competitive carriers for the adjust- 
 ment of their rates and their traffic regulations, is required 
 by sound public policy. It makes possible the handling 
 of traffic which is competitive as between individuals and 
 between localities, without preference and without discri- 
 mination. It is required upon similar considerations to 
 those under v.hich towns, cities, states and the nation itself 
 are organized for concerted action in matters of common 
 interest, and for the prevention of anarchy. It estab- 
 lishes rates co-ordinated with the value of the service, 
 which are necessarily adjusted to the expenses of the 
 shortest routes. It assists to preserve all existing lines 
 in competitive existence. It affords an organized support 
 to the enforcement of the regulative statutes. Associa- 
 tion is the servant of the law. Without it there can be 
 no adjustment of tariffs made which will conform to the 
 administrative provisions of the act. The law implies 
 associate action as a necessary pre-requisite to obedience.
 
 12/ 
 
 One of the objects of association among competitive 
 carriers, therefore, is the estabHshmcnt of a forum, or 
 meeting place, where rates, rules or regulations govern- 
 ing the transportation cf all commodities can be arranged 
 by concurrent action, and where all the elements attend- 
 ing the fixing of rates by one or more of the lines may 
 be given full force in reaching the resultant. In this 
 correlation of forces, the most direct and economical 
 route dominates the rest. If the ruling rate thus fixed 
 is not a reasonable one, the act to regulate commerce 
 provides control. 
 
 An inspection of the actual work taken up by the 
 associations at their meetings will show that the raising 
 of rates is not, by any means, their important function. 
 Undoubtedly one of their leading principles is the main- 
 tenance of rates upon a durable and permanent basis. 
 Proposed changes in tariffs are discussed in association 
 meetings, and are acted upon with care. Considerations 
 based upon the exigencies of business and the stimula- 
 tion of traffic are those most frequently urged, while 
 the necessity for the maintenance of revenue counter- 
 balances, to some extent, the pressure that is constantly 
 brought to bear for reductions here, there and every- 
 where. The scale of rates throughout the United States, 
 as is well known, has been constantly shrinking through 
 a long term of years. At times a general scheme of 
 advancing rates may be devised and agreed upon, for 
 the purpose of putting an end to a rate war or of taking 
 advantage of an outside condition like that wl.ich arises 
 upon the annual closing of lake navigation ; but such 
 advances as are accomplished are usually trivial, arising 
 from the lining up of rates previously reduced to meet 
 some special emergency, or from the removal of some
 
 128 
 
 factor of disturbance. The general tendency is always 
 in the direction of lower rates. In respect to this matter 
 the association system is conservative. It tends to 
 check unnecessary reductions, but it is inadequate to 
 stem the tide in its universal ebb. It is estimated that 
 the rate changes considered at associiition meetings con- 
 stitute almost one-half of the business presented; and 
 that about ninety per cent, of such proposed rate 
 changes are propositions for reduction, which are so 
 accomplished as to prevent the preferences and discrimi- 
 nations that would ensue if each line were to make 
 reductions for itself 
 
 At the present time the usual rate question is in 
 respect to relative rates. It is claimed that the rate at 
 some point is too high when compared with the rate at 
 some other point, or that the rate on a given commodity 
 is too high ill comparison with the rate upon some 
 analogous article, or upon the same article from other 
 sources of supply. A complaint that rates are excessive 
 in themselves, or as compared with the value of the 
 service, is very seldom seriously made. 
 
 CO-OPERATIVE MANAGEMENT. 
 
 Certain distinctions that exist between the business of 
 transportation and other branches of industry, in respect 
 to the practical effect of associated management, cannot 
 properly be overlooked. There is no governmental regu- 
 lation of the price of lead, or sugar or oil. Manufactur- 
 ing and mining combinations, presumably intended to 
 restrict production and increase profits, are regarded 
 with suspicion by reason of the fact that no control 
 exists upon the prices to be charged. The regulation
 
 129 
 
 of the tariffs of common carriers, on the contrary, has 
 become an established feature of our legislation and 
 jurisprudence. The danger apprehended in the one case 
 is altogether absent in the other. 
 
 Another marked difference between railroads and 
 other business enterprises lies in the fact that if the 
 latter find their work unprofitable, it is open to them at 
 any time to close their doors. The loss irwolved is, of 
 course, serious ; and a struggle for continued existence 
 is often maintained until bankruptcy ensues; but the 
 result of a lockout or a failure is confined to the owners 
 and the operatives of the particular plant involved ; the 
 public are supplied from other sources. In the case of 
 a railroad under similar circumstances the operations of 
 the road can seldom stop. The road must stay in 
 existence, and the courts assume its operation when 
 bankruptcy has destroyed the value of the original 
 investment. New capital is brought in through receivers' 
 certificates, and the wheels continue to turn. If the dis- 
 continuance of a line is determined upon, the public as 
 well as the owners and operatives suffer. Some com- 
 petitor or some larger system has usually found it for 
 its interest to assume the operation of bankrupt roads; 
 but several instances of abandonment have actually 
 occurred, and others are in sight; cases even exist 
 where state officials are seeking by legal process to 
 compel the maintenance of worthless branches, for the 
 benefit of the local communities through which they 
 run. 
 
 Again, the tendency to lower rates in railroad service 
 under the stress of unregulated competition has a 
 violence of which citizens engaged in other branches 
 of business are wholly ignorant. It resembles the rush
 
 130 
 
 of the cataract. The education of the freight agent has 
 been in the direction of maintaining tonnage at almost 
 aiiy cost. The net results are shown in the accounts of 
 the operating department, which is separately organized. 
 One effect of the law has been to extend the scope of 
 all reductions by making general what was formerly 
 restricted, localized and often secret. Where, in the 
 days before the law, a single rate was cut, the freight 
 agent must now reduce a tariff; and while he points 
 with pride to the increasing tonnage of the line, the loss 
 of net revenue may be excused as a result of the opera- 
 tion of the statute. 
 
 It has become a common eriticism upon the present 
 form of congressional regulation of railway traffic, that 
 while it prevents discrimination and protects the public, 
 it altogether fails to protect the carriers. It presents no 
 method of restraint upon impecunious, extravagant, 
 speculative or unreasonably aggressive railway manage- 
 ment; it leaves the doors of competition open to the 
 most circuitous routes ; it puts the strong lines at the 
 mercy of the weak, and makes it possible for a road that 
 should never have been built to fix rates which all other 
 competing roads must perforce accept. 
 
 And this, in truth, is an obvious defect. The Congress 
 has assumed the task of making provision against rates 
 which are unreasonably high, and rates which are not 
 relatively equal, without providing for the prevention of 
 rates unreasonably low, or for the protection of invest- 
 ments which now form an immense proportion of the 
 country's wealth, represented by securities which are 
 not found alone in the vaults of capitalists, but which 
 in many cases, constitute the only source of income for 
 the comparatively poor and the otherwise hopelessly
 
 131 
 
 dependent. The scheme of governmental regulation 
 will not be rounded and complete until this omission 
 is supplied. 
 
 State ownership, or direct national control of the rail- 
 way system of the country, is at times suggested as a 
 remedy; but this may beat once dismissed as chimerical. 
 No greater injury could befall our republican institu- 
 tions than the establishment of a branch of the public 
 service which would throw open to the field of politics 
 the railway service of the land. 
 
 Legislative regulation in the direction of the preven- 
 tion of rates unnecessarily low is not impossible, 
 although it has not been seriously considered. If it 
 were simply to take the form of a provision that rates 
 once established should not be reduced, except at 
 stated periods or after prolonged announcement, it 
 would materially improve the existing situation in some 
 respects. Such restrictions, however, might at times 
 operate unjustly, and occasionally would divert traffic 
 for a time into unreasonable channels. So lone as 
 carriers are independent, and some of them irresponsible, 
 occasions wall arise where prompt action may be 
 necessary. 
 
 The theory of the law up to the present time has been 
 that railway owners, having the rate making power in 
 their own hands, are competent to protect their revenues. 
 If the premises were correct the conclusion would follow; 
 but the theory is applied to a situation where independent 
 action by six hundred different carriers is preserved ; and 
 it is not true, as a practical matter, that any one of them 
 can control its own rates. On the contrary, the rates of 
 every line are, to a greater or less degree, at the mercy 
 of its rivals. There is but one way in which the prosper-
 
 132 
 
 ity, or even the prolonged existence, of independent 
 railway corporations can be maintained under exist- 
 ing legislation ; namely, through co-operation among 
 railways themselves in preserving their tariffs from 
 destruction. 
 
 This co-operation may take two forms ; associate action, 
 subject to the regulation of the law, or consolidation of 
 titles and control. 
 
 Railway consolidations, or " trusts," as they are often 
 unthinkingly termed, are among the popular bugbears of 
 the day. Some of the distinctions which differentiate 
 them from the "trusts " that have been formed in other 
 directions, have been alluded to above; and it is safe to 
 say that no consolidations or combinations among rail- 
 roads are imminent at the present time which are likely 
 to operate otherwise than favorably to public interests. 
 But the public mind is aroused upon the general subject, 
 and, while usually just, it is not ready to distinguish. It 
 is undeniable that the present time is not a favorable one 
 for the unification of competing roads in common owner- 
 ship, or even in joint control. The American system has 
 been estabhshed upon a contrary basis, involving the 
 maintenance of competitive conditions. As a last resort, 
 and in default of any other solution of the question, 
 actual immense consolidations may eventually arise. At 
 the present time their necessity has not been demon- 
 strated to the public eye, and their formation would 
 arouse antagonism in many quarters. As has been well 
 said, however, unless railway managers can associate, 
 railway owners must combine. 
 
 When revolutions of this character occur, the move- 
 ment is usually sudden and unexpected. The association 
 experiment, which is now in progress of trial, is unmis-
 
 133 
 
 takably in the nature of a breakwater against the so- 
 called railway "trust." If this fact can be clearly recog- 
 nized, and the usefulness of railway associations sus- 
 tained, while their power is strengthened, the existing 
 system, for a time, at least, can be preserved. In order 
 to secure this result it is necessary that the public should 
 understand the nature of their work and their value, and 
 that their results should receive some governmental 
 sanction. Central bureaus, with power to establish and 
 adjust reasonable rates through large sections of territory 
 where traffic is competitive, are indispensably required. 
 This is going far beyond the work of the present asso- 
 ciations, but the matter can be arranged by the roads 
 among themselves, through the employment of a reason- 
 able amount of good sense and as much good faith as 
 usually pertains to ordinary business transactions, pro- 
 vided that their tariffs continued to be recognized as prima 
 facie )\xsX.^ though subject to proper revision and control, 
 and their arbitrations are supported by authority for the 
 enforcement of awards. In controversies between man 
 and man an award of arbitrators may be made the basis 
 of a suit at law, and a judgment is rendered in order to 
 compel the payment of money so found due. A money 
 judgment, however, is not appropriate to awards between 
 competing carriers. They relate to the establishment of 
 rates, the adjustment of divisions, and the preparation of 
 rules and regulations for the conduct of traffic. They 
 deal with the future, not the past, and mandatory process 
 is required for their execution. It is believed that an 
 amendment to the sixteenth section of the act to regulate 
 commerce might very properly provide that the courts 
 of the United States sitting in equity should entertain 
 jurisdiction of awards rendered in arbitrations between
 
 134 
 
 carriers, or between associations of carriers, respecting 
 interstate commerce, and should hav^e power to enforce 
 them by any appropriate process, subject to the rules 
 which govern the consideration of awards for the pay- 
 ment of money in courts of law 
 
 This idea is not novel; in 1885 the Railway Commis- 
 sioners of the state of Kansas used the following 
 significant language: 
 
 " Since the \aolcnt fluctuations of rates, consequent on 
 rate wars between rival lines, result, usually, in discrimi- 
 native benefits to a few at the ultimate expense of the 
 public, means should be taken to at least moderate this 
 disturbing element to the business interests of the 
 country. As a means to this end, we venture to suggest 
 that contracts or agreements between rival companies to 
 carry on interstate traffic upon given rates, providing 
 those rates are reasonable and just, should be invested 
 with a legal status and be enforcable with appropriate 
 sanctions." 
 
 In the same year a somewhat similar thought was 
 thus stated by Hon. T. M. Cooley : 
 
 " The question then presents itself whether the final 
 solution for the ' railroad problem ' is not Hkely to be 
 found in treating the railroad interest as constituting in a 
 certain sense a section by itself of the poUtical commu- 
 nity, and then combining in its management the state, 
 representing the popular will and general interests, with 
 some definite, recognized authority on the part of those 
 immediately concerned; much as state and local 
 authority are now combined for the government of 
 municipalities."
 
 135 
 
 The wisdom of these pregnant utterances has been 
 demonstrated by the result of the experiment which has 
 been conducted for nearly three years upon narrower 
 lines. The statesman who can effect the required co- 
 ordination of governmental regulation with associated 
 railway management, will prolong for many years the 
 American system of universally competitive railway 
 service. Without some such provision the statute is 
 incomplete. The only other natural solution of existing 
 difficulties appears to be through actual consolidations of 
 ownership, by which all traffic in great sections of the 
 country can be brought under the control of a single 
 mind.
 
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