REPORT.

To the Honorable the Senate and House of Representatives:

The Railroad Commission has the honor to submit the following Report, being the fifth in the series of Railroad Commission Reports, and the first under the existing law.

The Statute adopted at the last session of your honorable bodies increased the number of Commissioners to three, and very materially changed and extended the duties of the Commission.

Among the Commissioners honored by the appointment of the Governor was one who, to the great loss of the Commission and the whole State, is no longer among us. Governor Jeter had adorned higher stations, but he could have filled none more acceptably than that from which he passed to his rest. His illness and death retarded the work of the Commission and delayed the preparation of their freight and passenger schedules, so that these were with difficulty got ready to meet the Autumn business of the railroads.

THE GENERAL RAILROAD ACT, AND THE COMMISSIONERS' STANDARD SCHEDULE OF JUST AND REASONABLE PASSENGER AND FREIGHT RATES, CLASSIFICATIONS, RULES AND REGULATIONS.

Under the General Railroad Act, the Railroad Commissioners are required to make just and reasonable rates for passengers and freight, and to make rules and regulations to prevent discrimination by the railroads on principles fixed by Statute. Before commencing this work, we visited the Georgia Commissioners, to whom we are indebted for marked attention and for suggestions of much value. It soon became apparent that, before attempting to make freight rates, it was essential that the underlying principles of transportation and the rates then in force on the different roads should be closely studied. The rates in force and such of the rates used since 1877 as could be obtained were gathered and tabulated, so as to show at a glance the comparative rates charged by the roads and the allowances made by each for distance. To accomplish this, it was necessary to make a table for each distance of ten miles, reflecting the rates in force on each road, and a similar set of tables for rates of the past five years. The preparation of these tables, the work of comparing the rates of the different roads with each other, and with such rates as could be had from other States, the study necessary

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to discern them fully, to penetrate their bearing as to the financial condition and peculiarities of business of the various roads, required time and attentive consideration. It was found that there was formity in the system of the different roads; indeed, the greatest irregularity existed, each road having its own method, and, to add to the complication, no uniform classification, and the public were, in consequence, unable to comprehend rates they were daily dealing with. We were impressed with the importance of adopting some system which the public, and not the railroads alone, could grasp, and to this end the Reports of the different Railroad Commissions were studied. The thoroughness of the system adopted by the Georgia Commission, together with the advisability of two States so closely allied in business having a uniform method, prompted us to conform to this system as nearly as the law under which we had to work would permit. It should be noted, however, that the laws creating the two Commissions differ in important particulars. Much that is fixed by Statute for this Commission is left to the discretion of the Georgia Commission. The Georgia Commission has cognizance only of rates for freight within the State, and are left to decide the principles upon which those rates are to be made, and to determine what is discrimination; while this Commission is required to fix rates for freight coming from without and going beyond the limits of the State as well as for freight within the State, and on principles fixed by a law that also defines the various forms of discrimination and prescribes what the railroad corporations shall and shall not do. Every effort has been made by the Commission to get all possible data on which to frame just and reasonable rates. It has been found, however, since the Standard Tariff has been put into effect, that many special rates which were not published, and consequently not before the Commission, had been made and worked by most of the roads in the State.

In fixing rates the Commission established a maximum based upon the length of the haul, the capacity of the roads, the amount of business of each and their financial condition, except where these considerations were overruled by the requirements of the law. The maximum rates may be reduced by any railroads, subject always to statutory restrictions requiring such reductions to be uniform and non-discriminative in their effect.

On the 28th June, after over five months of study and work, we first issued a "Standard Schedule of Just and Reasonable Passenger and Freight Rates and Classifications, also Rules and Regulations," which were submitted to the different railroad authorities, accompanied by the following circular:

[Circular No. 1.]

OFFICE OF RAILROAD COMMISSIONERS,

COLUMBIA, S. C., June 28th, 1883.

In accordance with the requirements of the General Railroad Act, this Commission has prepared for the railroads of this State Rules and Regulations and a Standard Schedule of Rates and Classification, which will be found enclosed with this. This Standard Schedule will be varied in proper cases to suit peculiarities in the location, condition and business of any road that may appear to the Commission entitled to a special adjustment. It is the present purpose of the Commission to effect special adjustments by allowing the railroads entitled thereto a definite percentage of variation from the rates of the Standard Schedule. In order to obtain all possible information as to the cases in which special adjustments should be made, and as to the percentage of variation to be allowed in each case, this Commission invites and requests such facts and observations as you may be able to furnish with a view to the objects stated. All communications in reply to this circular must be placed with the Secretary before the 10th of July in order to be considered.

M. T. BARTLETT, Secretary.

M. L. BONHAM, Chairman,
L. J. WALKER,

Commissioners.

On the 5th July a Committee appointed by the companies interested appeared before the Commission and asked for three weeks or thirty days' extension of time in which to examine and report upon the matters then submitted, which, appearing proper and reasonable, was granted. During this interval representatives of the several railroads in turn appeared before the Board and submitted arguments which will be found appended hereto. The Commission, having duly weighed the points made in these arguments, fixed upon the present Schedule of Standard Freight and Passenger Tariffs, which, with the Rules and Regulations that appear in connection therewith, and Circulars 2, 3, 4 and 5, were published August 23d, to take effect on 15th September. As required by law, copies of all these were at the same time sent to every railroad doing business in this State. The Standard Freight Tariff was limited in its immediate application to local rates, and the principles it embodied were to be subsequently applied to joint rates, these principles being prescribed to the Commission by Statute. Circular 2 was adopted because it appeared that certain roads required higher rates than others, and it was thought better to make the concession to such roads in that way than to have several tariffs in existence.

The principle of rates varying as to distance only, without reference to direction of movement or to the point of shipment or destination, is regarded by the Commission as the fundamental rule established by the Statute, and this is the principle that they have endeavored to apply and maintain in all they have done; and they believe this has been accomplished by means of the Standard Freight and Passenger Tariff, and by the rules and regulations made in connection therewith.

In applying these impartially to all the roads, as the Commission felt bound to do, results have been obtained as follows:

1st. The rates for short distances have been generally reduced below what they were before.

2d. The rates for long distances are about the same as before.

3d. In the case of the Charlotte, Columbia and Augusta Railroad, short distance rates have been increased and long distance rates reduced. On this road the former rates had conformed to the construction of its charter by the Courts, fixing the maximum rates to be charged at half cent per hundred pounds per mile. Now, while this gave a fair rate for long hauls, the rates for short hauls were very low, and, consequently, in applying the "Standard Freight Tariff" to the Charlotte, Columbia and Augusta Road, the rates for short distances have been advanced and for long distances reduced.

The fact that the same Tariff which reduces rates for short distances on nearly every road in the State and increased so decidedly such rates on this particular road shows that either the rates on the other roads were unreasonably high for short hauls or that the rates on this road were far too low. In the opinion of the Board, certain stations on the Charlotte, Columbia and Augusta Road enjoyed discrimination, which the present Statute especially forbids. To show this more clearly, the following table has been made, exhibiting the old rates on this road as compared with the old rates on some of the other roads for similar service, up to fifty miles: