RETURN OF THE RAILROADS TO PRIVATE OWNERSHIP. 2209

SIMS. He has already sold it?

BRADY. He has sold his timber, to start with, and the ownerof the timber in Mississippi, for instance, and there is a lot of that State, is in the hands of not more than six or eight comS. In other words, the lumber industry, outside of the chief rs, is a negligible proposition.

. SIMS. Well, my recollection is that the greatest amount of this : which you call "abuse" did exist west of the Mississippi, in nsas and portions of Texas, rather than in Mississippi.

JU •. BRADY. I think probably that is true, but my contention is Judge; that is, our railroads, these 62 railroads, are railroadsare common carriers. They are performing every service that railroad can perform-carrying passengers, carrying freight, eying mail, running passenger trains subject to all the orders he commission.

thend for further illustration of the justice of my contention, last one of these roads had a passenger coach to turn over. Six tons were injured. Now, this investment is taking that hazard. ommon-carrier hazard. It is not taking the hazard of an intrial road. It is taking the hazard of a common carrier, and it ntitled to the rights and privileges of a common carrier.

Ir. ROBINSON. Before Mr. Brady leaves the stand, he made one ement that I would like to call to his attention, because I think intended to confine it to practically these 62 railroads and not erally. He made the statement that there was usually only one erprise on a short line.

Mr. BRADY. I meant a tap line.

Mr. ROBINSON. I think he meant that particular class of roads to ich he is addressing himself, and I would like to have him correct e record to that extent, because I am quite sure he did not mean at.

Mr. BRADY. I meant tap lines.

The CHAIRMAN. We will now hear Mr. Manker.

'ATEMENT OF MR. W. W. MANKER, ASSISTANT TRAFFIC MANAGER, ARMOUR & CO., CHICAGO, ILL.

The CHAIRMAN. Mr. Manker, please give your name, address, and hom you represent.

Mr. MANKER. My name is W. W. Manker. I am the assistant affic manager of Armour & Co., located in Chicago, Ill.

My testimony will be largely confined to a reply to the statement ade before this committee by Mr. Lewis J. Haney, and in order o expedite and conserve time, if I may have your permission, Mr. Chairman, I will read a statement.

The CHAIRMAN. Very well; you may proceed.

Mr. MANKER. In the testimony of Mr. Haney, he refers several imes to the operation of so-called peddler cars by the packers, and the effect in loading nonperishable freight therein discriminates against the wholesale grocers, and his principal contentions may be summarized as follows:

1. That the peddler cars operated by the packers are accorded by the railroads a special expedited service, and that this service re

sults in a discrimination against and a disadvantage to the wholesale grocer because--

(a) The packers, by shipping in these peddler cars certain perishable or semiperishable commodities, which are also handled by the wholesale grocers, secure a refrigerator service upon such commodities, in addition to the special expedited service which is not rendered to the wholesale grocers in the distribution of their perishable and semiperishable commodities;

(b) The packers, by loading in peddler cars certain nonperishable commodities, which are also handled by the wholesale grocers, se cure expedited service on such commodities, while this same service is not rendered to the wholesale grocers in the distribution by them of the same or similar commodities.

Before proceeding to answer the contentions of Mr. Haney in detail, it would perhaps be helpful in understanding the situation to describe briefly the nature of a peddler car, and the method of operating it. The term "peddler car" is in reality a misnomer when applied to the car under discussion, in so far as it signifies that a miscellaneous quantity of goods is loaded in these cars without having been first sold in advance, and that the car is then sent out over a certain route with a man in charge who has the car set out of the train at various stations and peddles out or sells from the car door the goods to anyone who may desire to purchase them. This is the commonly understood meaning and method of operation of these peddler cars. It is absolutely incorrect, as these cars are not handled in this way.

The articles loaded in a peddler car have first been sold by salesmen operating in the various towns along the route over which the car will travel. They are usually small quantities. Each commodity is billed and invoiced to the particular customers in the various towns who have purchased them. They are loaded in the car in station order. No one accompanies the car in transit. It moves in the railroad's regular way freight trains, and when it arrives at any town for which it contains shipments the train crew unloads the articles from the car, and leaves them with the station agent, who makes delivery to the consignee for whom they are intended. The car is not taken out of the train. The goods are unloaded by the employees of the carriers the same as any other less than carload freight. The same process is repeated at the various stations along the line. The car is initially iced and re-iced in transit, at the expense of the shipper. The less than carload freight rates are paid upon all of the articles in the car. The term "route car" would be a much better description of this kind of a car than the term “peddler car." In as much, however, as the term "peddler car" has been used by Mr. Haney in his testimony, we will continue to refer to the car by that name in the discussion which will follow.

Peddler cars move under rules of the carriers, which are published in tariffs and filed with the Interstate Commerce Commission. The present or similar rules have been in effect for the past 25 or 30 years, and have been considered a number of times by the Interstate Commerce Commission, and in each case have been approved by the commission with respect to the method of distribution, minimum charges, etc. These rules vary somewhat in the different freight

territories. In official classification territory, which is that part of the United States east of the Indiana-Illinois State line and north of the Ohio and Potomac Rivers, the rules provide that the shipper must pay the carrier a certain minimum amount on each peddler car shipped in this territory. This charge is computed on the basis of 20,000 pounds at the fresh meat carload rate to the farthest destination to which the car contains shipments. Each commodity in the car pays its respective less than carload rate to the point shipped. If the aggregate of these less than carload charges does not equal the minimum charges computed in the way just described, the shipper must pay to the carrier the difference between the aggregate less than carload charges and the minimum charge.

In the western and northwestern portion of the United States the rules provide that the car must contain 10,000 pounds of certain specific articles to the first destination to which the car contains shipments. Any deficit in weight is charged for at the fourth-class rate from point of origin to the first destination. A minimum charge is also required computed upon the basis of 10,000 pounds at the fourthclass rate from point of origin to the farthest destination to which the car contains shipments. In computing the weight minimum and the minimum charge, the weight of and the revenue on only the following articles may be taken into consideration, namely: Fresh meats, butterine, dressed poultry, mincemeat, neat's-foot oil, lard oil, tallow oil, and packing-house products. While the shipper is permitted to load in the peddler cars in this territory any article he pleases, still if they are not contained in the above list, the weight of them and the revenue accruing on them at the less than carload rates can not be taken into consideration in making up the minimum weight and the minimum charge.

On some railroads in the Southwest, the rules which we have just described as applicable in the West and Northwest, apply. On other railroad in the Southwest no weight minimum is required, but there is a minimum charge computed on the basis of 10,000 pounds at the fresh meat less than carload rate to the farthest destination to which the car contains shipments. In the Southeast in certain cases a minimum charge is required computed on the basis of 12,000 pounds at the class B or packing-house product less than carload rate, whichever is the highest, to the final destination of the car. In other cases the minimum charge is computed on the basis of 10,000 pounds at the fresh meat less than carload rate from point of origin to the first destination to which the car contains shipments. These are the rules applicable generally in the territories above described. There may be some minor unimportant exceptions.

It often happens that these cars do not contain a sufficient quantity of goods, the aggregate revenue on which will equal the minimum charge, or the aggregate weight of which will equal the minimum weight where a weight minimum is required. In such cases the shippers must make up the deficiency in the way of a penalty. The penalties paid by the packers on these peddler cars aggregate many thousands of dollars per year, and, of course, correspondingly increase the freight charges on the commodities actually shipped in such cars. The rates paid by shippers on the articles shipped in

these cars are the less than carload rates, and are the same rates which the wholesale grocers pay when shipping the same com modities. In addition to this, the shippers using these cars assume the entire refrigeration expense, as well as the expense of loading cleaning, and preparing the car for shipment.

Referring, now, to Mr. Haney's contentions, the first of which is that peddler cars are accorded by the railroads a special expedited service. He was either badly misinformed, or purposely made misstatement. We will discuss these contentions in the following order named:

PEDDLER CARS RECEIVE A SPECIAL EXPEDITED SERVICE.

It is very easy to demonstrate that this is an absolute misstatement and not in accordance with the facts. Perhaps nothing more is nec essary to convince any one of the inaccuracy of this statement than to refer to the manner in which peddler cars are handled, which is described above. It would be a physical impossibility to give these cars special expedited service under the present method of handling. Let us illustrate the situation. Assume a peddler-car route on any railroad out of Chicago over which a car will travel serving towns located on the first two divisions of the railroad. This car must of necessity move on a local way freight train which stops at every station, because the car contains shipments for various stations along the route. In this train would be other cars containing less-than-carload shipments of merchandise or any other commodities for the same or different towns. It is a physical impossibility for the railroads to handle these way-freight trains on special expedited schedule, which would in any manner approximate the speed of passenger trains. They are, in fact, the slowest class of trains operated by the railroads. Any one familiar with railroad operations will verify this statement. The CHAIRMAN. That is treated as division way freight?

Mr. MANKER. Yes, sir. I expect to show a little later on, Mr. Chairman, if I have an opportunity, just exactly how the merchandise cars are handled.

Mr. STINESS. I should like to inquire if these peddler cars, so-called. are privately owned cars always or sometimes belong to the railroad companies?

Mr. MANKER. They are not always privately owned cars. There are a number of the packers who use railroad refrigerator cars in the peddler-car trade. I will refer to that a little later on.

If the car contains shipments for towns located only on the second division of a railroad beyond the point of origin the car would move in through service to the first division point and there be placed in the local way-freight train which stops at every station along the second division.

Mr. STINESS. I should like to ask if the wholesale grocers could put their merchandise in the peddler car, so-called, if there was room for it to be put in the same car and be handled the same by the station agent?

Mr. MANKER. I think it would be impracticable to do so, Mr. Congressman, because the merchandise would either have to be hauled to where the packer's car was loading in certain districts, or the

packer's car would have to be switched down town where the wholesale grocer would deliver his shipment.

Mr. STINESS. If there was only half a carload of the packer and half a carload of the wholesale grocer, instead of having one full car they would have to use two of these refrigerator cars to do that? Mr. MANKER. There would be two refrigerator cars provided the wholesale grocer was shipping freight requiring refrigeration, but the wholesale grocers use what is known as the carriers' less-than-carload refrigerator cars, which are operated out of all the larger cities each day of the week, except Sunday.

Mr. STINESS. If there was a shortage of cars it would not be economy to use two cars where one car could do it?

Mr. MANKER. It would be impossible to give the service that would be required on perishable freight if these cars had to be switched over the terminals and go out to the various points of loading. The wholesale grocers ship very little of what is known as perishable freight. Their shipments consist almost entirely of nonperishable freight. That is handled in what is known as trap or ferry cars, loaded at their industry plant and switched to the carrier's station and handled directly to the destination for which the car contains freight, or they handle the shipment to the local freight station by team or other means of transportation, and it is loaded by the carriers in what is known as their merchandise cars.

Mr. STINESS. If a packer has only half a car and the wholesale grocer wanter to get his goods quickly to the same point that the packer's car was going to, if they would not be received by the car he would have to wait for another car?

Mr. MANKER. No; because the carriers provide the service for handling shipments made by wholesale grocers in what is known as their merchandise cars, and while the wholesale grocers are able to get practically a six days' service the packers' peddler cars operate to certain destinations only once every week. The wholesale grocer would be able to get his shipments to destination by using the carrier's merchandise cars, which operate every day in the week except Sunday, and he would get his shipments to destination much quicker than by holding them for the packers' peddler cars, which only run, possibly, once a week.

Mr. STINESS. If I remember correctly the complaint of the wholesale grocers made before this committee, it was that they could not get as quick service as the packer's car, and while the packer's car went through and was taken care of they had to take any old time they could get to get their merchandise through.

Mr. MANKER. That is a misstatement, and I think I will be able to show you that.

The CHAIRMAN. That was some of the testimony in the packers' hearing?

Mr. MANKER. Yes, sir.

The CHAIRMAN. I think Mr. Bode of Chicago testified along that line?

Mr. MANKER. That is true. I think I will be able to show you that the service that the wholesale grocers are getting on their shipments today is far greater and a more frequent service than the service in handling peddler cars.