STATEMENT SUBMITTED TO The Interstate Commerce Commission, . * BY C' A* •T' , * AT J /Cassatt, President New York, Philadelphia and Norfolk Railroad Company. REASONABLENESS OF RATES CHARGED ON FRUIT AND VEGETABLES. :-ffi—- . IN THE CASE OF The Delaware State Grange of the Patrons of Hus¬ bandry, of Delaware, a Corporation of the State of Delaware, vs. The New York, Philadelphia and Norfolk Railroad Company, the Delaware Railroad Company, the Phil¬ adelphia, Wilmington and Baltimore Railroad Com¬ pany, and the Pennsylvania Railroad Company, BEFORE The Interstate Commerce Commission. PHILADELPHIA : Allen, Lane & Scott, Printers, Nos. 229-31-33 South Fifth Street. 1892. 3 Tailor, 50 e&iw o Statement submitted by Mr. A. J. Cassatt , President New York , Philadelphia and Norfolk Railroad\ in relation to the order of the Interstate Commerce Commission for a reduction of twenty-five per cent . in rates on fruit and vegetables from points north of Cape Charles , Va. The New York, Philadelphia and Norfolk Railroad Com¬ pany, petitioning for a rehearing and suspension of the order made in this cause on the 13th of April, 1891, respectfully shows:— The decision of the Commission is to the effect that, leav¬ ing out of consideration the question as to whether the rates from the peninsula are relatively too high as compared with the rates from Norfolk, the rates from the peninsula are in themselves unreasonable. How is the question of the reasonableness or unreasonable¬ ness of these rates to be determined ? It seems to me that three considerations enter into this question :— First .—Are the rates unreasonable as compared with the rates generally charged throughout the United States upon ( 3 ) \ 4 this class of traffic, or as compared with the rates generally charged on other classes of traffic, having in view the differ¬ ence in the character of the service ? Second .—Are the rates unreasonable in their relation to the market value of the articles transported ? Third .—Are they unreasonable in that they afford to the carrier an undue and excessive profit ? With reference to the first consideration, namely: Are the rates unreasonable as compared with the rates generally charged throughout the United States on this class of traffic, or as compared with the rates generally charged on other classes of traffic, having in view the difference in the charac¬ ter of the service. In comparing the rates charged on similar articles, the rate charged per ioo pounds or per package is a proper and fair basis of comparison, but in comparing rates charged upon dissimilar articles, the car-load is the only fair unit of comparison, and, taken in connection with the car-load, the train-load. It costs little more to carry a car carrying 60,000 pounds than a car of the same dead weight carrying 20,000 pounds, at the same speed, and if the car with the lighter load is hauled at a high rate of speed, while the car with the heavy load is hauled at a low rate of speed, the cost per mile for hauling the light car is much greater than that for hauling the heavily-loaded car. I do not think that any one versed in railway management will dispute this fact. As an example: An ordinary freight locomotive of the New York, Philadelphia and Norfolk Railroad can readily haul 60 cars, carrying 30 tons each, over that road in either direction at a schedule speed of 10 miles an hour (which would mean a maximum running speed of say 14 or 15 miles an hour), while the same locomotives can haul only 25 cars loaded with truck at the speed at which these truck trains are run. (In this connection I may say that the officers of the Penn¬ sylvania Railroad Company, when the time-tables for this year’s truck service were being arranged, stipulated that the 5 New York, Philadelphia and Norfolk Railroad should not run more than 25 cars to a train, on the ground that the schedule could not be made with a greater number of cars, and that detentions and delays would occur.) The wear and tear on the rolling stock and track from a light train at a high speed is greater than from a heavy train at a slow speed. The necessity for giving these fast trains the right of way over other freight trains adds to their cost, so that from every point of view the adoption of the car and train load as the basis of comparison is against the light load moved at high speed. I mean that it costs more per car mile to move a lightly-loaded car at high speed than a heavily- loaded car at slow speed, and that the difference is still greater when the train-load is taken as the basis for compar¬ ison. In the accompanying statements, accordingly, the rates charged per package on fruit and truck have been reduced to the ioo-pound basis when comparing the rates charged by the New York, Philadelphia and Norfolk Railroad on fruit and truck with the rates charged on similar articles by other roads, but in comparing the rates charged by the New York, Phila¬ delphia and Norfolk Railroad on fruit and truck with rates charged on other principal articles of traffic on that road, the car-load has been taken as a basis, and the actual average weight of each class of articles carried has been ascertained and used. In comparing the rates charged by the New York, Philadelphia and Norfolk Railroad on fruit and truck with the rates charged by other roads upon staple articles of trans¬ portation, as there was no means of ascertaining what the average weights per car-load on foreign roads were, the full car-load has, in both cases, been taken as a basis. As the question of the length of the haul enters largely into that of the cost per ton per mile, I have endeavored, as nearly as possible, to compare the rates charged upon articles carried similar distances. With this explanation, I proceed to a comparison of the rates charged on the New York, Philadelphia and Norfolk 6 Railroad with rates charged by other roads, in the order named above:— Statement No. i. Comparison of the Rates Charged by the New York, Philadelphia and Norfolk Railroad, with Rates Charged by other Roads on Similar Articles. Strawberries. Rate per Rate per ton ioo pounds, per mile. Cents. Cents. New York, Philadelphia and Norfolk rate from Cape Charles to New York, 326 miles, per 6o-quart crate (weighing 100 pounds) . 75 4.60 Richmond and Danville Despatch rate, Charleston to New York, 825 miles, per 60-quart crate (weigh¬ ing 100 pounds). $3 52 8.53 Seaboard Air Line, Hamlet, S. C., to Washington, D. C., 314 miles, per 60-quart crate (weighing 100 pounds). 77 Yz 4-94 Pease , Lettuce , and other Vegetables. New York, Philadelphia and Norfolk rate from Cape Charles to New York, 326 miles. 50 3.07 Seaboard Air Line rate from Savannah to Richmond, 572 miles. 65 2.27 Seaboard Air Line rate from Raleigh to Washington, 217 miles .. 40 3-69 Kale and Spinach. New York, Philadelphia and Norfolk rate from Cape Charles to New York, 326 miles, per barrel (60 pounds), 20 cents per barrel. 33^ 2.05 Atlantic Coast Line rate from Savannah to New York, 940 miles, per barrel (60 pounds), 73 cents per barrel. 1 21^ 2.59 Atlantic Coast Line rate from Savannah to Wash¬ ington, 688 miles, per barrel (60 pounds), 66 cents per barrel. 1 10 3.20 Sweet and White Potatoes. New York, Philadelphia and Norfolk rate from Cape Charles to New York, 326 miles, per barrel (160 pounds), 40 cents per barrel. 25 1.53 Pennsylvania Railroad rate from Vineland, N. J., to New York, 133 miles. 12 1.80 Pennsylvania Railroad rate from Swedesboro to New York, 108 miles. 13 2.41 7 Bulk Potatoes. Rate per Rate per ton ioo pounds, per mile. Cents. Cents. New York, Philadelphia and Norfolk rate from Cape Charles to Canandaigua, 525 miles. 20 .76 New York, Philadelphia and Norfolk rate from Cape Charles to Jersey City, 316 miles. 20 1.28 Pennsylvania Railroad rate from Canandaigua to Philadelphia, 368 miles. 15 .82 New York, Philadelphia and Norfolk rate from Cape Charles to Buffalo, 622 miles. 20 .64 Pennsylvania Railroad rate from Buffalo to Philadel¬ phia, 465 miles. 16 .69 Cabbage. New York, Philadelphia and Norfolk rate from Cape Charles to New York, 326 miles, per barrel (100 pounds), 20 cents per barrel. 20 1.23 Richmond and Danville Despatch rate from Charles¬ ton to Philadelphia, 727 miles . 40% 1.11 Attention is also particularly invited to the following rates on fruit and vegetables, at present in effect on the Illinois Central Railroad, where the facilities offered and the distance as well as the conditions of the transportation of the traffic might be said to be similar to that of the New York, Phila¬ delphia and Norfolk Railroad. Rate per Rate per ton 100 pounds, per mile. Cents. Cents. From Cairo to Chicago, 365 miles. o 75 4.11 “ Odin “ “ 244 “ .. 60 4.92 “ Cairo “Dubuque 457 “ . 85 3.72 “ Sandoval to Dubuque, 338 miles. 70 4.11 “ Cairo to St. Paul, 707 miles. . . 3.18 “ Centralia to St. Paul, 594 miles. . . 3.79 It will be seen from the foregoing statement that the rates charged per ton per mile by the New York, Philadelphia and Norfolk Railroad upon fruit and truck, when compared with the rates charged by other roads, are, in almost every case* less than the rates charged by other roads, although the aver¬ age haul of the New York, Philadelphia and Norfolk Rail¬ road and its connecting lines is generally shorter. Statement No. 2. Comparison of the Rates Received by the NEW YORK, PHILADELPHIA AND NORFOLK RAILROAD On Fruit and Truck, with the Rates Charged Over the Same Road upon Lumber, Iron, Coal, Beer, &c. 8 O vovo cocNfomOOO'\H t^co o vo \D •—i VO h p) fOOO CO 10 o a O O O Q 0000 o O M-VO OOO ° o o O O VO 0000 0000 o o 00 00 N Tt- 10 O O CO^VOCO 3- Tf Tt- ►h t-i w Ci (N m C .g- - - - -.. V? vovO'Ovovo'ON nO\Ovn>Oh on o .—i Nr<«N«NNlON'O00N\O0't0\ cC fOfOrOrOfO lOVO cO ^ ^ 'T ^ (N rO ro * .l> tp . . 3 5 > < rt _ > 00000« -U 1— ri £ \7 ^ *- £ S S S s i s gig 82jJi.5'S'c =- 3.2 '-53 rO .. in . < . ■“ in w in w m in w os re • ^ Jid ^ 3 a> ’u’u'C’C'C’C i_ ^ - -CL 00 rtrtcCdcSrtrt^Co -- .c .e jo .c .c j= ,0 - £ tj rf > UUUUUUU^ 0*55 0.2 (H) D D D D 3)<2 o aaao.aaa*r£ bp V. o nSaJoJcccccCccOoE-io — U U U U U U U £ cl W Cm Jf « > o in cj O ._g CC c o CC U£ cC CC CL CL af af -*L 3 o o u u CC CC From the above it will be seen that the rate per car-load received by the New York, Philadelphia and Norfolk Railroad upon fruit and truck carried at a high rate of speed on trains limited to 25 cars is actually, in almost every case, lower than the rates received on the heavier and less valuable articles moved at slow speed. Comparison of Rates Charged on Fruit and Truck by the NEW YORK, PHILADELPHIA AND NORFOLK RAILROAD, 9 <; 5 8 m S 2 S * « W H . 03 G £ cj o 53 § £ £ nJ o^-s « > to 5 °'S £ T3 9 o D * s § ^ a id •S B 2 o x - T3 U .22 *" JP y jj w 3 y w. °* 4) y 33 s e , 3" CM o lUOiO't 03 CJ £5 - 03 •-« U a H • c/3 33 3 CO 3 H>H>H>H>H C ^ ^ ^ ^ ^ C^c O 3 C/2 C/2 +-> jS C/2 g G G G G C - -* a; 02 02 02 02 (O'* ~ 0 O O U U (J OV CO O O cO COVO CO 10 VO 10 q M VO M ■G- vd !>. (S c6 o’ vd vd 0 CO CO M 0 COW CO TD T 3 T 3 'V 'V T 3 G G G G G g^ . G G G G G G- - O O O O O O O. a a a a a O 0 0 0 0 0 0 O 0 0 0 0 0 0 O 0 0 o_ 0 ° ° o' 0 0 id o~ id id 10 SO cO ' 5 f - 10 G- G" 0) c; I 5 3 ^ g ^ > -cf G O s • £ £ $ ! ■§ a VO CW ^ ^ vrv <3 <0> I s <3 . $ £ 40 v & B.B.B g G ^ 'c3 c3 a! (3 d) J-c u v, g U ^ OOO C/2 IV* C/2 JD JL) 1 ,-! M Oo IO 10 V. CS co 8 ‘ . <2 CO JZ a , 02 ’V a *3 ^ J 1 1 5 E o G" O CO » >'£ a) V-. 02 02 r" o b /3 aJ _a U e « 02 Oh CU _ .2^. c£w Here, again, it appears that the rates received per car mile by the New York, Philadelphia and Norfolk Railroad on perishable freight are generally less than the rates received by the other roads named on heavier freights moved at low rates of speed, and at their convenience. 11 Comment does not seem to be necessary upon the foregoing statements, except that I may add that the rates actually re¬ ceived by the New York, Philadelphia and Norfolk Railroad on fruit and truck are less than above stated for the reason that in the case of strawberries the crates are returned free of charge to the shipper, and in the case of potatoes and other truck carried in barrels the New York, Philadelphia and Nor¬ folk Railroad, for the purpose of assisting shippers, has, since the opening of the road, been furnishing shippers at all stations with barrels at about the actual purchase price, without any allowance for transportation. See statement below :— Barrel Business From June isl, 1885 , io December 31st, 1890, Dr. Purchased by the company .... Expenses handling barrel business . Profit . Barrels. 1 , 317^70 Covers. 497,604 Money. $ 297,535 06 4 , 56 i 93 2,843 53 1 , 317,570 497,604 $ 304,940 52 Cr. Furnished shippers. On hand December 31st. Barrels. L 3 I 3,050 4,520 Covers. 495,826 1,778 Money. $ 303,865 36 1,075 16 1 , 317,570 497,604 $304,940 52 It would not appear, therefore, that the rates charged by the New York, Philadelphia and Norfolk Railroad on fruit and truck are unreasonable when compared with rates charged on like articles, and on other staple articles of traffic, by other roads. With reference to the second consideration : Are the rates unreasonable in their relation to the market value of the articles transported. In 1890 the average selling price of kale shipped from the Peninsula, in the New York market, was 60 cents per barrel. 12 The rate was 20 cents per barrel, or 33-J per cent, of the sell¬ ing price. The average price of spinach was $1.50 per barrel. The rate was 20 cents per barrel, or 13^ per cent, of the selling price. The average price of cabbage was $3.00 per barrel. The rate was 20 cents per barrel, or 6§ per cent, of the selling price. The average price of potatoes was $ 3.00 per barrel. The rate was 40 cents per barrel, or 13^ per cent, of the selling price. The average price of strawberries was $7.00 per crate of 60 quarts. The rate was 75 cents per crate, or io t 7 q- per cent, of the selling price. It would not appear that the charges made for carrying this truck at a high speed 300 miles to market bears an unreason¬ able proportion to the selling price, especially when compared with the rate of 8 per cent, which is charged by the com¬ mission merchants. In the case of bituminous coal, carried the same distance, the freight rate amounts to from 60 to 70 per cent, of the selling price of the coal. In the case of anthracite coal it amounts to about 50 per cent. The rate charged on corn to New York for a distance of 300 miles will be found to be about 15 per cent, of the sell¬ ing price, and on wheat about 8 per cent. It must be admitted, however, that this method of com¬ parison is a very unsatisfactory one, although such as it is it would not appear that the rates from the Peninsula bear an unreasonable proportion to the selling price of the articles transported. Third consideration : Are the rates unreasonable in that they afford to the carrier an undue and excessive profit. In answer to this it is only necessary to say that the entire benefit of the New York, Philadelphia and Norfolk Railroad, since its completion in 1884, has been derived by the people of the Peninsula. The balance-sheet of the company shows a debit to profit and loss of $335,120.59 on the first of January, 1891. It is true that this debit was accumulated during the first few years after the completion of the road, and that the last two years have shown somewhat better results. Nevertheless, the reports for the year 1890, while showing largely increased gross receipts on a largely increased toYmage, show that the net earnings barely covered the fixed interest charges upon the first mortgage bonds and on the obligations issued in pur¬ chasing floating equipment, cars, &c. When it is considered that the road is bonded at the very low rate of $16,500 per mile, and that the other interest-bearing obligations repre¬ sent considerably less than the cost of the floating equipment, it cannot, I think, be said that the profits of the line were excessive. Compare, on the other hand, the present condition of the Peninsula with its position before the opening of the New York, Philadelphia and Norfolk Railroad. The farmers were then excluded from growing any crops requiring rapid and certain movement to market; they were dependent upon sailing vessels to Norfolk and upon a single line of steamers to Baltimore. As a matter of fact the only export of any consequence from the Peninsula consisted of sweet potatoes, and on these they paid a much higher rate for the slow and uncertain service then afforded than the rate they now com¬ plain of for a daily, quick, and reliable service. The rate on potatoes was then 60 cents per barrel to Jersey City, with an additional charge of 10 cents for cartage to New York. Now potatoes are delivered on a pier in New York, provided free of charge as a market place for all kinds of truck, at a rate of 40 cents per barrel. The famers of the Peninsula were not even able to ship white potatoes to advantage. This crop is now their largest and most profitable one. Now they can grow any crop that promises them a fair profit, knowing that they can rely upon a daily and rapid transportation service to all markets of the East, and at rates which I believe have been shown to be not only reasonable and just, but exceptionally low. It is to be noted, too, that the farmers of the Peninsula are not entirely dependent upon the railroad, but that, on the contrary, in the transportation of all articles which,can be ad¬ vantageously shipped by water, they enjoy the benefits of an active competition existing between the railroad company and the large number of sailing vessels making freights to the same markets, as well as of a daily line of well-equipped steamers to Baltimore. The fact that since the opening of the railroad so large a part of the traffic has been diverted from the water to the rail, notwithstanding the heavy reduction in rates made by vessels in order to retain the trade, would seem to indicate that the vessel rates had been reduced to the lowest point consistent with any profit, and might also be taken as a con¬ firmation of the reasonableness of the rates charged by rail. Respecfully submitted, A. J. CASSATT, President New York , Philadelphia and Norfolk Railroad Company. T. H. BAYLEY BROWNE, General Solicitor New York , Philadelphia and Norfolk Railroad. MEMORANDUM ISSUED BY THE INTERSTATE COMMERCE COMMISSION IN REFERENCE TO FOREGOING STATEMENT. Washington, D. C., April 5th, 1892. By the Commission: In the report and opinion of the Commission, filed April 13th, 1891 (3 Inters. Com. Rep., 552), it was decided (among other things) that certain of the freight charges by the de¬ fendant companies upon market produce, ordinarily known as “ perishable freight ” were unreasonable in themselves, and a reduction in the tariff thereon was ordered of 25 per centum upon some articles, and of 20 per centum on some others. One of the claims of the complainant upon the hearing, was that the rates were in violation of the fourth section of the Act, by reason of lower rates from Norfolk, Virginia, to New York, than from intermediate points. The fact was conceded on the hearing, but it was insisted that the traffic was not carried on under similar circumstances and condi¬ tions, because the Norfolk business was in the presence of sharp and controlling water competition. It was thought best, under all the circumstances of the case, which was marked by many months of negotiation between the parties looking to a settlement of all the matters in the controversy, that an order should issue as to those rates which were ad¬ judged to be unreasonable in themselves, leaving the question of the effect of the lower Norfolk rates to New York for future determination upon further proofs. Thereupon the defendants filed a motion for a rehearing, and claimed, (1) that the former testimony did not warrant a finding that the rates upon articles, which were ordered to be reduced, were unreasonable in themselves, and it was claimed that the testimony to that effect was in view of and limited to the unsatisfactory service, which the defendants admitted had been rendered before that time, and which it was said had been so much improved as to be satisfactory; and (2) (15) i6 that the deduction made by the Commission that the rates were too high, because the earnings on the articles com¬ plained of in this case, between the starting point and New York, bore a disproportionate relation to the earnings of all other traffic, was fallacious. As to the first objection which is presented above, it is proper to state that while some of the witnesses did say that the rates would be satisfactory, if the service was brought up to what it ought to be, this is not true as to all the witnesses, some of whom testified that the rates were unreasonable and without qualification. Besides, the question of the reason¬ ableness of a rate does not depend always upon the opinion of witnesses, but is often determined, as the Commission has repeatedly said, by a comparison of the rates generallly for the transportation of the same commodities, the rates charged upon other commodities having some, but a more remote, bearing upon the question. Evidence of this character is al¬ ways within reach of the Commission, in its own records; and the question of reasonableness of rates is one which is constantly before us, and when this case was under consider¬ ation, another case was considered and passed upon, in which all the features of this special service involved here were pressed upon the attention of the Commission, and by the same parties in interest as are now pressing this motion. From a careful review of the whole case, which necessarily includes not only the oral and other testimony submitted, but also the evidence of records, which are always consulted, we are well satisfied that the result arrived at was just and fair to all the parties. Upon the second objection above stated, to the effect that the Commission made a fallacious deduction from the state¬ ment of the earnings of all other traffic, it may be said that the discussion of that subject was mainly by way of argu¬ ment and for the purpose of testing the reasonableness of the rates by comparison with other traffic, and for the same com¬ modities between other points, in which the defendants, or some of them participate. In support of this second objection the president of the New York, Philadelphia and Norfolk Railroad Company has filed a statement, entitled “ A comparison of the rates charged by the New York, Philadelphia and Norfolk Rail¬ road with rates charged by other roads on similar articles.” In this statement the rates are given in cents per ioo pounds, and per ton per mile, using for the purpose the sta¬ tion of Cape Charles only, which is the most remote of all the stations from New York, being 326 miles from that city, and 136 miles farther distant than the average of all the stations. As was distinctly pointed out in the former decision of this case, the tariffs in vogue are not made up on all articles on an increasing rate according to distance. For the most part they are grouped, and the group rates extend over a very extended territory, in one instance (potatoes), the group being more than 200 miles in length, and to which a single uniform rate is applied. Manifestly, in dealing with rates so markedly grouped as these are, that is not a fair statement which is based upon the rate per ton per mile, from that station of the group which is the farthest from the place of destination. Such a statement is worse than useless, for it is actively misleading. Compari¬ son of rates may properly be made, but a comparison of rates from a group of stations should be made from that sta¬ tion which is at the average distance of all stations from the place of destination. Upon the line of the defendants, that station which would fairly represent the average distance would be 190 miles from New York, and not 326 miles, as is Cape Charles. Assuming the mileage to be as above stated, and taking the article of berries, for illustration, the rate given per ton per mile, in the statement above alluded to and filed in sup¬ port of the motion, is but cents, figured on the mileage from Cape Charles. But the rate on berries from the station representing the average distance of all Peninsula points yields to the carriers an income of cents per ton per mile. No further comment is necessary except to say that the same fallacy exists as to the articles other than berries, i8 mentioned in the statement. A comparison of the very- lowest of a group rate proves nothing; the defendants would hardly be satisfied with a comparison of the highest of a group rate, if it was claimed to be controlling of the question, yet such a comparison would be quite as fair as one made with the lowest of the group. A comparison of the 'rate which fairly represents the average of all the group rates, is the only comparison that ought to influence the question, and it is that comparison which was made in the former decision. After making the reduction of 20 per centum on berries, as the Commission has ordered, the defendants will still receive, on an average, 5 ^°q- cents per ton per mile, which is 7 mills more than the amount which is put forth in the comparative statement as the true amount of income derived from the rates on that commodity before putting into effect the reduc¬ tion ordered by the Commission. All the forgoing computations have been made upon the assumption that the distance from New York to Cape Charles is 326 miles. It appears from the records of the Commission furnished by the defendant companies that the distaece is 310 miles only. If the correct mileage had been stated in the comparative schedule filed, the decreased mile¬ age would increase the rate per ton per mile above the amount given in said statement. Another feature of the comparative statement and illustra¬ tive of its misleading character, is to be found in that part which deals with a comparison of the rate on kale, spinach, and cabbage, with their market values. In this compari¬ son the rates on these articles are given at 20 cents per 100 pounds, that being the group rate for all the stations south of Delmar, the rates north of Delmar being twice as great, although the distance is very considerably less. This characteristic of the existing tariffs was pointed out in the decision, which only reduced the rates north of Delmar and did not interfere with the 20 cent rate south of that sta¬ tion. It is not easy to see why the decision should be chal¬ lenged by the citation of a rate with which it did not inter¬ fere. The motion for rehearing is overruled ’ *9 REPLY TO “ MEMORANDUM,” BY MR. CASSATT. Philadelphia, April 20th, 1892. To the Honorable Interstate Commerce Commission : In the “ Memorandum ” refusing to grant a rehearing in the case of the Delaware State Grange of the Patrons of Hus¬ bandry vs. the New York, Philadelphia and Norfolk Railroad Company et al ., your Honorable Commission has referred to a statement I filed at the time the application for a rehearing was made in a way that seems to me to require an answer. My statement is characterized by your Honorable Commis¬ sion as “ actively misleading,” because— First .—In comparing the rates charged per ton per mile by the New York, Philadelphia and Norfolk Railroad with rates charged by other roads on similar traffic I used the distance from Cape Charles to New York, whereas your Honorable Commission holds that I should have used the average dis¬ tance from all stations on the Peninsula, which your Plonor- able Commission states is 136 miles less than the Cape Charles distance, or 190 miles instead of 326 miles. As the New York, Philadelphia and Norfolk Railroad, extending from Cape Charles to Delmar, a distance of 95 miles, is an independent road, having no interest in the roads north of Delmar, nor they in it, I fail to see the justice of taking as a basis the average distance from all stations on the Peninsula. What has the New York, Philadelphia and Norfolk Railroad to do with the rates from stations on the roads north of its northern terminus, and how is it benefited by those roads receiving the same rates for a shorter distance than it receives for a longer haul. I might, it is true, have taken the average distance from stations on the New York, Philadelphia and Norfolk Rail¬ road to New York. This average is 278 miles, not 190 miles. But if I had used this distance it would have been proper to use the average distance to which the rates quoted on the other roads applied. Had I done this the comparison would have been even more favorable to the New York, Philadel¬ phia and Norfolk Railroad. 20 In the comparative statement referred to, while using the Cape Charles distance, I also, in most cases, used the longer distance of the other roads. I used the rate, for instance, on strawberries from Charleston to New York, distance of 825 miles, while the same rate applies to Washington, 573 miles, Baltimore, 616 miles, and Philadelphia, 727 miles. 1 quoted the rate on strawberries from Hamlet, S. C., to Washington, D. C., distance 314 miles. The same rate is in effect from Carey to Washington, distance 227 miles. I used the rate on bulk potatoes from Canandaigua to Philadelphia, 368 miles. The same rate is charged from Williamsport to Philadelphia, 221 miles. I need not give any further examples; the fact is that the rates and distances quoted were taken at random from the tariff sheets of the other roads, and I am now prepared to prove that, in almost every case, I could have used rates and distances more favorable to my showing. If the order for a reduction of 25 per cent, in the rates was based, as it appears to have been, upon an assumed average distance of 190 miles, which is 31 per cent, less than the actual distance from New York, Philadelphia and Norfolk Stations, the unfairness of applying the reduction to that road is apparent. Second .—The “ Memorandum ” charges that I gave the distance from Cape Charles to New York incorrectly in stat¬ ing it to be 326 miles, when it is actually only 310 miles. The “freight distance” so called is 326 miles, and it is so given in the freight distance table of the Pennsylvania Rail¬ road Company, a copy of which is on file in the office of your Commission. Freight rates are based on that distance, and so far as the New York, Philadelphia and Norfolk Railroad is affected, the distance is 326 miles. The difference of 16 miles is accounted for by the fact that the Pennsylvania Railroad demands and receives from all connecting lines an allowance of 10 miles, in addition to the actual distance, for its New York Division, and also an additional allowance of 6 miles for the haul through Philadelphia. Third .—The “ Memorandum ” finally cites as an instance of the “ misleading ” character of my statement the fact that 1 included kale, spinach, and cabbage in a comparison of the 21 rates charged on various articles with their market values, although the order reducing the rates did not apply to kale, spinach, and cabbage shipped from points south of Delmar. But why should I not use these articles for purposes of comparison ? The Commission must have considered the rates charged on them reasonable, since they did not in¬ clude them in the order for a reduction. Why was it not perfectly fair to show that the rates on kale, spinach, and cabbage, which the Commission considered reasonable, amounted to 33-J per cent., 13-j- per cent., and 6f per cent, of their respective selling prices, while the rates on potatoes and strawberries, held to be unreasonable, were 13-J per cent, and IO To P er cent * °f their selling prices at the same market? But in making these comparisons I admitted that this method of judging the reasonableness of rates was unsatisfac¬ tory, and I gave the figures for what they were worth. It seems to me that your Honorable Commission should have considered this before referring to that part of my statement to illustrate its alleged misleading character. My statement was not intended to be “ actively mislead¬ ing,” or misleading in any degree. It was, on the contrary, intended to give the Commission information that might assist it in arriving at a just conclusion. It was presented by me in person, and I was ready then, as I have been ready since, to answer all questions as to any matters therein con¬ tained that might appear to require explanation. I have never been called upon to do so. Your Honorable Commis¬ sion has preferred to pick out the three alleged inaccuracies above dealt with, to base upon them a general charge that the whole statement is “ actively misleading ” in its charac¬ ter, and with that to dismisss any further consideration of the subject by refusing a rehearing. Finally, I desire to say that I firmly believe the rates com¬ plained of are not only reasonable and just, but exceptionally low in view of all the circumstances, and that I am persuaded that compliance with your order would force the company I represent into bankruptcy. I have the honor to be, with great respect, Gentlemen, Your most obedient servant, A. J. CASSATT, President.