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March 4, 1887, and it is the sense of this committee that, while the act of paying commissions is not a violation of the law, but the payment of a commission may result in a violation, therefore we unanimously recommend that the payment of commissions for the sale of passenger tickets to any agent, firm, broker, scalper or other person be absolutely abolished by the New England roads after March 31, 1887.
Baggage—The subject of baggage (section 6, joint committee) referred to this committee for consideration is as follows:
* It has been the custom of railway companies to transport a certain amount of personal baggage, in baggage cars provided for this purpose on paasenger trains, for which no separate charge has heretofore been made. The custom has varied somewhat in different sections of the country and for different classes of people. To the end that a uniform rate may be adopted, we recommend that the rule for free transportation of personal baggage be as follows, and that no greater excess be allowed to go free, or at different rates than are named in this general rule: (a) There may be checked free on each full first or second class ticket 150 pounds of baggage; on each half first or second class ticket, 75 pounds; on each full emigrant ticket, 100 pounds. (b) Baggage of first and second class passengers weighing in excess of the free allowance thus authorized shall be subject to a charge of not less than 12 per cent. of the lowest unlimited first-class fare; provided, however, that no less charge than 25 cents be made in any case. (c) No single piece of baggage weighing more than 250 pounds shall be checked as baggage by any of these lines except for ship immigrants. We recommend that this concession shall apply only to the personal baggage of travelers, as covered and included in decisions at common law, to-wit, the personal effects of the traveler, which may include his wearing apparel, worn jewelry, a book for reading on his journey, a watch, or other personal effects which are not merchandise, and which may vary according to the condition in life of the passenger and the length of his journey, and that no commercial luggage, musical instruments, organs, pianos, donkeys, horses or theatrical scenery be transported as free baggage. We recommend that all excess baggage, order books and permits be at once withdrawn from sale.
“ Your committee recommend the adoption of the above with the following exception: That commercial travelers' baggage be checked under the same conditions as to weight as that of other passengers, with the exception that railroad companies shall not be held responsible in the event of loss and damage except for personal effects as enumerated above. We would respectfully suggest that for the sake of uniformity in the transaction of business of New England roads that the above recommendation relating to interstate business be applied to local state traffic.”
It was voted to adopt the report of the committee in relation to commissions and baggage, and also that for the sake of uniformity the above recommendation relative to interstate business be applied to local state traffic.
REPORT OF GENERAL FREIGHT AGENTS' COMMITTEE. The committee of general freight agents to whom was referred the third, fourth and sixth questions of the report presented the following report:
"3. Shall a charge be made for detention of cars where the duty of unloading devolves upon the consignces ?
“It is the sense of the committee that a reasonable and just charge should be made for the detention of cars where the duty of unloading devolves upon the consignees.
“4. Shall freight charges be collected at once on delivery of goods in all cases ?
“It is the sense of the committee that this is a question which should not be decided by the traffic department of the railroads, but should be settled by the president and board of directors of the different roads.
“Shall freight be stopped off short of its billed destination, or changed in transit from one destination to the other? And in connection with this, shall grain in transit be stopped off for milling and a mill product sent forward on the same way bill?
“ Three members of the committee vote that freight may be stopped off short of its billed destination or changed in transit from one destination to another, subject to a reasonable charge for the service, and two members of the committee vote that freight may be stopped off short of its billed destination, or changed in transit from one destination to another, where the through rate and the divisions of the through rate are identical. The committee's answer to the second section of question 6 is that it is the sense of the committee that grain in transit should not be stopped for milling and a mill product be sent forward on the same waybill; but the committee thinks that special rates may be made for carrying the mill products from the mill to points on the line of the road which brought the grain to the mill.”
It was voted to adopt the recommendation of the committee in regard to the third and fourth questions of the report, and it was voted, after some discussion of the sixth question of the report, that "freight in carloads which a railroad company receives from connecting roads may be stopped off short of its billed destination, or diverted to another destination on the line of that road upon which the original destination is located; always provided that the through rate and the divisions thereof to the new destination are identical with those on the original way-bill, and provided also that notice of the desired change in destination be given by the owner to the agent before the car has reached the road upon which the change in destination is to be made.”
The committee to whom was referred the question of a uniform classification of local freight rates reported that the variations in New England are confined to special articles, such as lumber, brick, dry goods, carriages, etc., and that if time was given, and a full meeting with New England roads be had, the matter could be satisfactorily adjusted. The committee was also of the opinion that the adoption of rates fixed by the trunk lines for local business would, if applied in New England, result in a serious loss of revenue.
Upon this report it was voted that it is desirable for the New England roads to adopt a uniform classification for their local and interchangeable freight business, and that the subject of a uniform classification for local and interchangeable business of New England roads be referred to a committee consisting of one representative for each road here represented, with power to act. A committee was appointed in accordance with the vote.
APPLICATION FOR RELIEF FROM SECTION FOUR.
ARGUMENT OF MR. MILTON H. SMITH, ON BEHALF OF THE SOUTHERN RAILWAY AND STEAMSHIP ASSOCIATION, SUBMITTED TO THE INTER-STATE COMMERCE COMMISSION AT WASH
INGTON, APRIL 2, 1887.
Mr. Chairman and Gentlemen of the Commission:
We appear before you as a committee representing the Southern Railway and Steamship Åssociation.
The Southern Railway and Steamship Association is one of a number of similar organizations existing throughout the country, that owe their origin to the rapid development of the transportation systems and methods that has taken place in this country during the past twenty years.
For nearly thirty years from the beginning of the construction of railroads in the United States, little or no attempt was made at federation. Nearly all the railroads constructed during that period were local; and even where two or more companies constructed railroads that connected, and together formed a continuous line, they continued to be operated as local railroads, each company issuing bills of lading to points on its own line at local rates only, both freight and passengers being transferred at termini.
For many years forwarding and commission merchants continued to transact business in the same manner as when the transportation of the country was by water-that is, a shipment from an interior point in Ohio, say Springfield, destined to a point south, say Bowling Green, Ky., was shipped locally to Cincinnati, consigned to a forwarding and commission merchant, who received the same, paid the freight, transferred the shipment through the city, and delivered it to the Mail line boats plying between Cincinnati and Louisville, shipped it to another forwarding and commission merchant at Louisville, who in turn receipted for the property, paid charges accruing thereon up to that point, attended to the transfer to the depot of the Louisville and Nashville Railroad Company, and shipped the property to destination, collecting from the railroad company as advances the accrued charges, including a liberal compensation for receiving and forwarding, with a fair margin of profit in the item of drayage.
These conditions resulted in the formation of fast-freight line organizations by enterprising persons who saw the necessity for through arrangements, whereby shippers could forward property to distant points over the lines of a number of carriers under a contract for a through rate and continuous carriage. These fast-freight lines entered into agreements with the different carriers, whereby, in consideration of assuming the responsibilities of through contracts, through carriage, and furnishing through cars, they secured reduced rates of transportation on car-load quantities, occupying the position of middle men between the various carriers and the shippers. As this system developed, and the rates of transportation declined, the profits of the fast-freight lines were found to be excessive; and as it became apparent that the carriers could by combination furnish facilities nearly or quite equal to those of the fast freight lines, complaint arose that such organizations were an unnecessary tax upon the revenue of the carriers. No such organization has ever existed in the territory served by the carriers—members of the Southern Railway and Steamship Association.
In time it became apparent that the carriers could eliminate some of the charges imposed upon traffic under the methods just described by agreeing to become parties to through arrangements, and, by one carrier receiving the property from the shipper and consigning it directly to a connecting carrier to be carried to destination, or to be delivered to another connecting carrier, could perform the service theretofore performed by the forwarding and commission merchant or by the fastfreight lines. This could be done with little or no increased expense to the carrier, since the same facilities that were necessary for the carrier to do business with the forwarding and commission merchants could be used in receiving property from and delivering it to connecting carriers. Even after these methods were to some extent adopted, carriers in many instances, while guaranteeing through rates which were the sums of the locals, only receipted for property to the ends of their railroads, and still continued to transfer property from car to car, or by drays at termini, each company receiving its local rates.
This, for a time, created a class of middlemen, which may be correctly described as "freight brokers." They were generally enterprising men, who familiarized themselves with the rates of the various carriers; and by manipulating them were able to contract with shippers at lower rates than the shippers, without the special knowledge of rates, could secure for themselves. By reshipping at less rates they secured a margin that would remunerate them for their time and enterprise. As an illustration, a person such as we have described, located at Cincinnati, would contract with manufacturers in the interior of Ohio, guaranteeing a through rate from the manufactory to destination; have the property consigned to him at Cincinnati, pay charges, reship at rates he had secured, and collect from the carrier the difference between rates thus secured and the contract rate made between himself and the manufacturer. As the methods of the carrier rapidly improved, this class of middle-men soon became extinct.
As two or more carriers entered into arrangements for continuous carriage over their various railroads, the joint business rendered frequent communication and personal conferences necessary. This developed traffic agents, who devoted much or most of their time to what became known as through traffic,” in contradistinction to “ local traffic,” or traffic between stations on the line of a single carrier. As the system gradually extended, and the number of carriers, parties to through arrangements increased, the necessity of some organization for