will enable the carriers to do business in a businesslike way. I can cite many, many instances. In fact, I think the trunk lines could produce enough of instances of handicaps to the railroads that would take up, regardless of the time that has been allotted to the railroads, all of their time, if they desire to present specific cases where the carriers were handicapped in the operation of their business under the present fourth section.

Mr. PETTENGILL. Mr. Reece, do you have any questions?

Mr. REECE. No.

Mr. PETTENGILL. Mr. O'Brien?

Mr. O'BRIEN. No.

Mr. PETTENGILL. Thank you, Mr. Glynn.

STATEMENT OF J. C. McGOHAN, ASSISTANT GENERAL FREIGHT AGENT, BALTIMORE & OHIO RAILROAD, CINCINNATI, OHIO

Mr. PETTENGILL. All right, Mr. McGohan.

Mr. McGOHAN. My name is J. C. McGohan. I am assistant general freight agent of the Baltimore & Ohio Railroad, with headquarters at Cincinnati, Ohio.

I desire to subscribe to the statements of the witnesses who have preceded me, and particularly Mr. Morris' and Mr. Wilson's, whose testimony is especially applicable to the Baltimore & Ohio. It is, therefore, not necessary for me to comment at length and thus indulge in what would result in needless repetition.

The Baltimore & Ohio is fundamentally opposed to the present provisions of the fourth section of the Interstate Commerce Act, and strongly urges that the Pettengill bill, H. R. 3263, be enacted into law.

Under the existing long-and-short-haul provision our rate structure is in a state of inflexibility which might best be called a paralytic condition. To be specific, in view of the distressing competitive conditions that confront us daily in the ordinary course of business, it is impracticable-in fact, impossible-to foretell in advance for any fixed period of time whether conditions will be the same then as now.

But under the present law any application for relief from the longand-short-haul clause must necessarily be based and predicated entirely on the knowledge we have of the existing situation, although it often happens that by the time an order is handed down by the Commission, favorable or unfavorable, the conditions that prompted the filing of the application have changed so drastically that the relief, if granted, avails us nothing.

Stated differently, the order of the Commission is limited to the relief asked for in the application, which in turn must be confined to the facts then existing.

With such a state of affairs, it is not surprising that, although ever alert to the needs of particular situations, not only for the purpose of maintaining as nearly as practicable our present rapidly diminishing revenues, but also with the idea in mind of fostering and encouraging a free movement of goods for and on behalf of the industries served by us, that after careful analysis and the exercise of our best judgment as to what is required to approach this competitive service, we are confronted by a red light, the present requirements of the long- and short-haul provisions.

Among other things, this is true of the phrase referring to potential water competition, or as stated again, not actually in existence. In order to demonstrate to the committee that these are not academic statements, I should appreciate permission to introduce for the record a map of the Baltimore & Ohio System. It will show that the Baltimore & Ohio is typical of the railroads serving the East. In fact, this railroad serves 13 States and the District of Columbia, from New York and Rochester on the East to Chicago and Kansas City on the West.

The total population of all these States and the District of Columbia is 56,558,633 people.

It will be obvious from a glance at the map that the Baltimore & Ohio does not have, speaking relatively, the extensive mileage in some of these States that it has in others, and in this connection I desire to refer particularly to New York, Pennsylvania, and Virginia. Nevertheless, for the purpose of this showing, I have included the entire population of all of the States to which I referred earlier.

A substantial proportion of this population is in the larger cities and their suburbs, from and to which commodities of all kinds are transported in great volume. Virtually all of these large industrial centers are located on navigable waters; i. e., either on or near the ocean, on the Great Lakes, or on the great rivers of the interior. As a matter of fact, the 1930 census also shows that the more important of these cities and their suburbs on navigable water, counting only those served by the Baltimore & Ohio, have a population of 23,913,086 people, or, stated differently, 42.3 percent of the total population in the 13 States and the District of Columbia, to which I have previously referred.

It will thus be seen that of the total freight traffic available an enormous proportion of it is susceptible to movement via all water routes, not to mention the wholly incalculable amount available to relatively short truck hauls to and from the ports in the interior of this vast territory.

Under the present conditions we are powerless to retain or regain a fair share of the total business available to and from the competitive territory without unduly diminishing our revenues to and from the noncompetitive territory, as to which there is no complaint, either as to the reasonableness or otherwise lawful character of our charges.

We cannot afford to lose all of the competitive traffic, nor can we afford to needlessly sacrifice any of the noncompetitive traffic.

While this is merely one phase, as I stated in the beginning, the general situation has been dwelt on and dealt with fully and completely by Mr. Morris and Mr. Wilson, in view of which I will not comment further.

(The map above referred to was filed with the committee.) Mr. PETTENGILL. Any questions, Mr. Reece?

Mr. REECE. No, sir.

Mr. PETTENGILL. Mr. O'Brien?

Mr. O'BRIEN. No.

Mr. PETTENGILL. Thank you, Mr. McGohan.

Mr. McGOHAN. Thank you.

STATEMENT OF P. J. TIERNEY, GENERAL FREIGHT AGENT THE CHESAPEAKE & OHIO RAILWAY CO., RICHMOND, VA.

Mr. TIERNEY. My name is P. J. Tierney. I am general freight agent of the Chesapeake & Ohio Railway Co., with office and residence at Richmond, Va. I appear here on behalf of that company, and in support of changes in the present fourth section of the Interstate Commerce Act, as proposed in revised bill H. R. 3263.

I desire to support the statement of Mr. Morris, who has appeared for the carriers, including the Chesapeake & Ohio, in official territory, in which territory the lines of the Chesapeake & Ohio are located.

I might say that I have also read and am familiar with the testimony which will later be introduced by Mr. Wilson, who is also a general witness for the carriers in official territory.

With respect to the desirability of the proposed legislation, I will present for the committee's consideration a somewhat more detailed reference to specific instances, in which we believe it would be desirable and in the public interest that the carriers be relieved of the burdens imposed upon them by the requirements of the fourth section as at present provided. I shall confine myself to illustrations. which I believe to be typical and shall make them as brief as is possible, consistent with clarity. These illustrations will be numbered consecutively.

The geographical position of the Chesapeake & Ohio Railway is, in many important respects, similar to that of the Norfolk & Western Railway and the Virginian Railway, all three carriers serving partly or wholly the same general territory south and east of the Ohio River in the States of Kentucky, West Virginia, and Virginia. I am authorized to speak for these lines in respect to such conditions as are common to all three lines. I shall describe such situations more specifically in the illustrations which I shall give later.

Illustration no. 1: As is no doubt well known to the members of this committee, the United States railroads are divided into three major groups, official, western, and southern. The official lines are those which operate in that portion of the United States including, in a broad, general description, the New England States, New York, Pennsylvania, New Jersey, Delaware, Maryland, Virginia, West Virginia, Ohio, Indiana, and parts of Kentucky, Michigan, and Wisconsin, and a large portion of Illinois.

The western group of railroads are located west and northwest of Chicago and the Mississippi River, and the southern group in the territory south of official territory, as I have described it, and east of the Mississippi River to the Atlantic Ocean and the Gulf of Mexico.

A brief general description of the lines of the Chesapeake & Ohio, Norfolk & Western, and Virginian might, I think, serve to place before the committee more clearly some of the situations to which I shall refer. The Chesapeake & Ohio Railway extends from tidewater at Norfolk and Newport News, Va., to Chicago, Ill., through Cincinnati, Ohio, with branch lines to Washington, D. C., Louisville, Ky., and Toledo, Ohio, the latter line passing through Columbus, Ohio, with numerous branches in Virginia, West Virginia, and Kentucky.

The Norfolk & Western Railway also reaches tidewater at Norfolk, Va., and extends westwardly from that point through Virginia and West Virginia to Cincinnati, Ohio, crossing the Ohio River at Kenova, W. Va. From Portsmouth, Ohio, one of its divisions extends northwardly to Columbus, Ohio. It also has important branch lines extending from Lynchburg, Va., to Durham, N. C.; Roanoke, Va., to Winston-Salem, N. C.; and from Roanoke, Va., to Hagerstown, Md.; also lines extending southwardly from Bluefield, W. Va., to Norton, Va., and from Walton, Va., to Bristol, Tenn.-Va. It also has numerous shorter branches serving mainly the coal-field territory in Virginia and West Virginia.

The Virginian Railway extends from Norfolk, Va.,, through Virginia and West Virginia to Deepwater Bridge, West Virginia, a point on the Kanawha River where it connects with the New York Central Railroad, about 30 miles east of Charleston, W. Va.

It will be seen from this that the lines of these three railroads south of the Ohio River are in the extreme southern part of official territory. The trend of traffic between official and southern territories is north- and south-bound, while between the points in official territory it is east and west.

After leaving the Virginia cities of Richmond, Charlottesville, Lynchburg, and Roanoke, we find no important north and south railroads intersecting or crossing either the Chesapeake & Ohio, Norfolk & Western, or Virginian, until the western junction points, and termini of these lines, such as Huntington and Kenova, W. V.; St. Paul, Va.; Cincinnati and Columbus, Ohio; and Louisville and Lexington, Ky., are reached.

The Chesapeake & Ohio, Virginian, and Norfolk & Western, whose geographical position is that of east and west railroads, participate in what may be said to be north- and south-bound traffic between Cincinnati, Louisville, and Columbus, and points in the eastern part of southern territory in the Carolinas, south Georgia, and Florida. This traffic moves via their lines to the Virginia cities and is there interchanged with southern lines, such as the Atlantic Coast Line, Seaboard Air Line, Southern Railway, and Norfolk Southern Railway.

They also participate in traffic between the Virginia cities and points in the western part of southern territory in Mississippi, Alabama, and Louisiana, via routes through western junctions to which I have referred, which are generally longer than the direct or ratemaking lines.

Similarly, these three lines participate in traffic between points in Eastern States north of Virginia and points in Central States, moving through their junctions in Virginia and their western connections.

We believe that the routes, via which the Chesapeake & Ohio, Norfolk & Western, and Virginian participate in the handling of the traffic which I have briefly described, are not unreasonably long and that their participation in such traffic is in the public interest. Our participation in the southern traffic, as I have described it, serves two purposes which I believe to be useful in the public interest. It gives to a group of lines serving the Mississippi Valley, the Louisville & Nashivlle, Illinois Central, and so forth, a route via

which they may secure a share of the traffic moving between that section and Virginia cities, which might otherwise have to be confined to the direct lines; and it gives to a group of southern lines serving the Virginia cities, the Seaboard Air Line, Atlantic Coast Line, and Norfolk Southern, which do not reach the Ohio River cities, connections via which they may secure their long haul on a share of this traffic. In addition, it affords to shippers the benefits that flow from having a choice of competing routes.

No useful purpose would be served by the Chesapeake & Ohio,. Norfolk & Western, and Virginian Railways withdrawing from this traffic; in fact, the only result of such withdrawal would be to reduce the extent of fair competition.

Many rates, particularly class rates, between points in southern territory, including rates between the Ohio River cities of Cairo,. Evansville, Louisville, Cincinnati, and so forth, and also including Virginia cities and points in southern territory, are based upon distance. This is also the basis for such rates between points on the three lines for which I am speaking and points in southern territory. In each case the distance via the shortest route over which carload traffic can be moved without transfer of lading is used. This situation may possibly be made clearer by a few very brief illustrations:

The distance from Richmond, Va., to Montgomery, Ala., via the short-line route through southern territory is 720 miles, and the firstclass rate for that distance, as prescribed by the Commission, is $1.86.

Mr. PETTENGILL. Let me interrupt you there to introduce Mr. Eicher, of Iowa, of our committee, who has just come in. He is a member of our subcommittee, but has been busy with another subcommittee considering the public-utilities holding company bill..

Mr. TIERNEY. Covington, Va., is 205 miles west of Richmond, and is served only by the Chesapeake & Ohio Railway. The short-line distance from Covington to Montgomery, Ala., is 741 miles, and the first-class rate is $1.96. Traffic from Richmond to Montgomery is moved through Covington, Va.

From Cincinnati, Ohio, to Savannah, Ga., the short-line distance through Southern Freight Association territory is 712 miles, and the first-class rate is $1.90.

From Lexington, Ky., to Savannah, Ga., the short-line distance through Southern Freight Association territory is 630 miles, and the first-class rate is $1.78, while the distance from Huntington, W. Va., to Savannah is 644 miles, and the first-class rate is $1.81. traffic from Lexington being moved through Huntington to Savannah.

Under such a rate structure, largely Commission prescribed, each point of origin and destination is given the rate relationship to which its geographical location entitles it. Unless direct-line rates are to be observed as maximum from and to all intermediate points, it is necessary to secure from the Interstate Commerce Commission relief from the provisions of the fourth section, as it is now written, and if this relief is not granted these longer lines must forego participation in direct-line rates, or reduce rates to and from intermediate points to be no higher than rates from or to the more distant points..