Transcript of Record — Baltimore & Ohio R. Co. v. United States

Supreme Court brief1936

Ask Donna

What actually matters in this document.

Text

ANS COPY

Vol. Il

TRANSCRIPT OF RECORD

Supreme Court of the United States

OCTOBER TERM, 1935.

No. 312

THE BALTIMORE AND OHIO RATLROAD COMPANY,

THI PENNSYLVANIA RAILROAD COMPANY,

THE RICHMOND, FREDERLCKSBURG AND PO

TOMAC RAILROAD COMPANY, ET AL. APPEL-

LAXTS,

US.

THE UNITED STATES OF AMERICA, INTERSTATE

COMMERCK COMMISSION, ATUEANTIC. COAST

LINE RAILROAD COMPANY. ET AT.

a —_—_-_—_- — —--- --

APPEAT FROM THE DISTRICT COURT OF THE UNITED STATES FOR

THE EASTERN DISTRICT OF VIRGINEA,

FILED JULY 31, 1935.

” s

: wha: ‘Sep auh

ip RM

anti

cy stp be le,

Be. os §

aS oie

~“

Supreme Court of the United States

: OCTOBER TERM, 1935

No. 312

THE BALTIMORE AND OHIO RAILROAD COMPANY,

THE PENNSYLVANIA RAILROAD COMPANY,

THE RICHMOND, FREDERICKSBURG AND PO-

TOMAC RAILROAD COMPANY, ET AL., APPEL-

LANTS, ;

vs.

THE UNITED STATES OF AMERICA, INTERSTATE

~ COMMERCE’ COMMISSION, ATLANTIC COAST °

LINE RAILROAD COMPANY, ET AL,

r .

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR

THE EASTERN DISTRICT OF VIRGINIA, — ee

’ VOL. IL.

INDEX. ;

Original Print

Narrative statement of evidence before I: C. c., Docket

Nos. 24069-24160:

Destieer al GC. W. WE scccccccccccscsaccescs 1282 806

WE Tie caeeacadcdscedscucs<uss 1289 810

OG. BD. FRG cccccacccscccsccsccsse 1291 811 ~

DB, Dy Te cccvccocesccctecseccsesse . 1305 820

A, Wa Gents BE ccccaccccéccccccess 1312 824

H. M. Kendal) (recalled) ......... 1318 827

A, Th. FORE ccccscccccccecssisdes 1319 828

J. Te, Hegpweed .ccccccccccccccs w--+ 1342 842

Jupp & DerwerLer (INC.), Parnrers, WasHrneton, D. C., SepremBer 12, 1935

—6755-C

a ne

“

ii INDEX

Original

Testimony of E. A. Hodkinson (recalled) ........ 1344

Hubert M. Bassett | ieenune rere rr «- 1362

Anthony Bonn ..............+.005- 1388

% James L. Heywood (recalled) ...... 1401

P H. A. Bassett (recalled) ........... 1418

RB. J. Doss (recalled) .....:....0000. 1419

E. M. Dewey ....<........ eer rere Te » 1487

H. M. Kendall (recalled) ....4...... 1494

W. L. Dixson (recalled) .......... .- 1501

By Ee COED sesccconsesccane enue 1503

G. Th. WHBGERS cc cccccssccccs wesees 1510

et Ws SE bak d RNa ne edessnecuitanxe 1520

° Bb Gs MEE meade Oeedebasercésndnic 1531

Ch ee SEE Gakdhcdcaskuscene »--> 1538

Mie te Ss Uh. cc cdccenc cébeecssedua 1560

i EE da thcandh heen hseueee 1570

Me Bee WD cadidsodccdecasscacace 1593

; SE re ee a 1610

George W. Lamb (recalled) ........ 1618

Wee, Bo GED cccccccscccccen 1675

N. S. Menaugh (recalled) .........:. 1696

? Arthur F. McSweeney (recalled) .... 1704

B. J. Doss (recalled) ............ 2. 1707

J. L. Heywood (recalled) ........ e 1750

Anthony} Bonn (reealled) .......... 1781

George W. Lamb (recalled) ......... 1791

J. H. Ketner (recalled) ............ 1789

H. M. Bassett‘ (recalled) ........... 1801

L. H. Kentfield (recalled) .......... 1807

J. L. Heywood (recalled) <........ 1810

Anthony Bonn (recalled) .......... 1839

E. A. Hodkinson (recalféd) ..... ...' 1851

Anthony Bonn (recalled) ......... 1879

J.-L. Heywood (recalled) .......... 1889

Maurice S. McClellan .............. 1921

Sb Be SE sandddnadedeséond ‘sectee” 2B

G. W. Lamb (recalled) ./.......... 1940

Narrative statement of evidence at final hearing before

EY SD Uahbntewadsabancuesesenssseneace 1972

Caption ik uw aa (omitted in printing)... 1972-A

EY Scncedheenudbabebececnonsssénadcdsaantes 1973

Testimony of George W. Lamb ................... 1980

AG SED cui nnnunentecksenies 1991

2 SRA ent perp 2070

es RE 2085

E. A. Hodkinson (recalled) ....... 2100

H. .E. Coverston (recalled) ....... 2110

E. A. Hodkinson (recalled) ....... 2112

ee Ge BN - ee dncessscence Sr

E. A. Hodkinson (recalled) ........ . 2156

Wa ds Uh has cacesennacdanes 2187

we Ty TED cc ncscsscencssescie 2197

Print |

843

_ 854

ce.

INDEX .

P Original

Testimony of A. F. McSweeney .................. 2234

; Thomas J. Ward .....:....... oe |

2 Be GT: 648bbn bab awadaas whekwae 2250

i te BE ebékanakesses Riaceeasase 2254

Anthony Bonn — TT PCT TEES CP re Crore 2281

a ne Ddpandarwankene saneeuse 2289 .

GE Sadandadbccaccad eiscie 2294

F. H. Clark (recalled) iebecdeatasec 2296

: E. A. ‘Hodkinson (recalled) ..... -.. 2296

GE “bbs coescsauncucdadiseasscdccndancéesdccn 2300

Testimony of W. B. Porter ............. rere rr ye 2311

OA a ee ose Saas

9 George W. Lamb (tecalled ) jhaesies 2315

ie We Es ddbscdcncneadecenes * 2375

B. G TM wacencs. Mesvicnccsasas 2405

Me Mie SE. ondunéneshenacdeccedane y «(2444

i DAE shccndiuedhednacdadinans 2485

E. M. Albert (recalled) ............ 2524

F. H. Clark (recalled) ..... seaaban 2526

E. A. Hodkinson (recalled) ........ . 2533

Offer in evidence—Minute entry stewing vote of

Commission on denial of ‘second’ petition for re-

EEE senkdabaneasbatdepheecdidebantaceicads 2547

Proceedings before Interstate Commerce Commission,

Docket Nos. 24069 and 24160 .......... grcttt tees 2548-A

Stipulation re use of statistics of carriers on file .

I oe ek ek eee ca da ies eee cas: 2548 B

Letter from Examiner to By L. Beach paces F. W.

Gwathmey, December DM banedthedsbabsncca 2550

Exhibit 35844—Statement showing divisions of. joint

rates on Florida citrus fruit to official territory,

EE Sa aWasaaeAdhbunsnades bce ahiks sokcks. 2551

’ Exhibit 3581%4-A—Statement showing divisions of

joint rates on Florida citrus fruit to official terri-

tory, 1933 (ten months ended with October) .... 2564

Second petition for rehearing, etc., .. oteesevescces 2568

Appendix “A”—Affidavit of Edwin A. Hodkinson; 2612

Exhibits 1 to 9, ine. —Statistical statements 2626

Reply of Southern Carriers to seeond petition for

rehearing, etc. (copy) | .-.- (omitted in printing)... ‘2658

Order of July 3, 1933, setting ME 5.08 54o esa aca 2675

Order reopening proceedings, etc. ................ 2677

Order on further consideration, January 8, 1934 ... 2678

Order postponing effective dates .................. 2680

- Orders denying second petition for rehearing, étc... 2682

2684

Orders amending order of January oS ae

. 4 -_

lil

1364

1370

-1374

1376

1391

1396

1399

1400

1403

1409

1410

1411

1446 —

1463

1486

1511

1534

1535

1540

1548

1549

1550

1552

1575

1578

1610

1622

1623

- 1625

1626

1628

1429

1630

801

(e) Wheeling & Lake Erie Railroad:

. Cars for interchange between the Wheeling & Lake Erie

and Nickel Plate railways are handled by puller crews, the

arrangement being of the same duration and same alter-

nating. plan as the Pennsylvania. Cars for Nickel Plate

Railway are accepted as interchanged when delivered in

their 55th Street Yard, cars for the Wheeling & Lake Erie

Railroad are accepted as interchanged when delivered in

their coal dock yard. The distance from Food Terminal to

coal dock yard is approximately three miles, and ‘in this

inter-terminal operation between the two lines the main

line of the Erie is traversed for a distance of approximately

1.5 miles. The costs for use of the Erie Railroad in this

operation are the same as described in the Pennsylvania

interchange arrangement. The amount of perishable, in-

cluding-citrus fruit, will not average more than 10 cars per

month, but the greater portion of such movements are spe-

(fol. 1274] cial, but the arrangement for such special serv-

‘jee as may be necessary is the same as described in the

Pennsylvania interchange operation. . !

Cleveland Food Terminal is divided inté three track

areas, as follows: (a) Team track placement yard, 17 tracks,

capacity 25 cars each; (b) Holding Yard, 12 tracks, total

capacity 320 cars; (c) Auction house terminal, 3 tracks, ca-

pacity 14 cars each.

In addition to the above trackage, there are four tracks

serving cold: storage, warehouses, produce merchants and

industries:

Aiction sales.are held on Mondays, Wednesdays and Fri-

days, and cars must be in their proper position not later

than 5 A. M. on sale dates, to admit of their being unloaded

not later than 7 A. M., to permif the pulling of all cars from

these tracks, so that trucks may use the unloading plat-

‘form as tailboard space for loading. As a general rule,

there is very little switching at the auction house on Satur-

days, but Sunday, Tuesday and Thursday of each week

there is a considerable amount of switching to line up the

ears listed for sales. These cars are placed in the team

’ track placement yard and are switched from these tracks,

by number and initial, for plagement at auction terminal

in accordance with instructions received. There is a con-

o1—312

Pingere

VOL. I

802

stant re-handling of cars between the teani track place-

[fol. 1275] ment yard and auction terminal, and the spotting ~

at auction terminal is an intricate operation because of the

necessity for placing the car at a particular, designated lo-

cation. It is intricate because of the fact that cars are being

iced by truck, refrigeration inspection being made by in-

spectors, seal and other records being taken by clerks and

inspection of commodities being made by Federal inspec-

tors, brokers, employees and others, and it is necessary to

know. that such persons are clear of the cars and track be-

fore a switching operation can begin.

In addition to the many re-handlings between the auction

terminal and team track placement yard, there is a great

deal of switching necessary to take care of reconsignments

and diversions for movement to auction terminal, various

connections, and for training for line movement. A factor ~

of material interference in the switching eperation in the

‘team track placement yard is brought abaqut by reason of

the fact that a great number of cars within this yard are

in process ef unloading or partly unloading as a result of

sales from the car direct, or are being re-iced from truck.

It is not unusual for cars to remain in this yard from four

to ten days, requiring many re-handlings before the lading

is entirely discharged, and the cars which have to be han-

dled from which a part of the lading has been discharged

require extvemely careful movement, in order tc preclude

[fol. 1276] the possibility of damage to that portion of the

lading remaining in car.

The holding yard is used exclusively for cars which are

at the moment destined to auction terminal to minimize

switching, and during certain months of the year, usually

May, September, and October, the overflow has to be placed

in auction storage yards, and when this is necessary the

switching operation is over an ascending two percent grade,

requiring extremely careful handling and heavy power.

An effort is maae to deliver all cars of perishable within

a two-hour period from time car is delivered to Nickel Plate.

The handling of all perishable, including citrus fruit, takes

priority over all other yard operations, and other cars are

handled thereafter, in order of their importance. -In the

handling of merchandise and other freight, because of later

delivery orders, they can be held for accumulation of larger

— BL oe ee

803

cuts, but cars containing perishable cannot be held. Their

delievery must be effected as quickly as possible.

Cincinnati is one of the principal distributing points for

Florida citrus fruits in C. F. A. territory, but I am not in a

position to state the exact manner in which this distribution

is arranged. It is, however, my understanding that mar-

ket conditions govern as controlled by supply and demand

[fol.1277] in the reeonsignments or diversions from

Cincinnati. My experience is that fruit is not ordinarily

reconsigned or diverted to Cleveland market from Cincin-

nati until the second afternoon prior to unloading time at

Cleveland, which makes most of this freight arrive—Cleve-

land late in the morning of the auction sales day, which

- _ necessitates special service to handle to auction terminal,

with a minimum of time. The Produce Terminal at Cleve-

land is a new terminal finally completed late in 1929. It

offers all the advantages of any of the modern fruit termi-

nals as described here. It has three free areas and auction

warehouses, with team track placement yards and storage

yards. The investment represents a great deal of money

to pick out a suitable area which would be convenient to the’

people demanding service. It was necessary to fill in I

would say, approximately an acre and a half to a depth of

90 feet. The other part of the area Was used by buildings

which had to come down, of course. Streets had to be taken

off the map and new streets put in. Some of the driveways

are 100 feet in width, others are 60. We have 60-foot drive-

ways between our tracks in our team track yard, which are

tracks in banks of two so that one of the tracks is served

by one side of the driveway and the other by the other.

The auction house, I cannot give you the distance of that,

holding 14 cars on each track, I would say is approximately

400 or probably 600 feet long. An auction house is

(fol. 1278] a peculiar operation to péople who are not fam-

iliar with it, of course. It involves a very special spotting

of cars. Our tracks are sunk in concrete so that after the

freight is unloaded the cars are pulled out and the trucks

use the same space for tailboard space.

The highest auction we have ever had in Cleveland has

‘ been 70. cars, whieh indicates somewhat the capacity of the

display room in the auction terminal.

The: operation of that from the placing of the cars and

the cataloguing of the fruit and the unloading and the dis-

SN a ete te oe utaye' SRSA 0

POSES AARC OI UR NRE Oe : a Js

TS I Bs ba Garett ose yy tere

eS 8 POS TAR rs

SE SERIE EO Ne OCR BRM gota “6 Sh HS rather D029 see

ey 3 s ve

oie aia

SIE Fle LE OTR) LR

804

playing and the auctioning and then the reloading up again,

taking out of the empties and replacing of cars, would, I

think, approximate our modern machine production in a

modern plant, so intricate are ail the different moves and

how they have to dovetail.

We in the Operating Department are anxious to keep up

our end. In addition to that we have a jar ge space used

for a produce terminal distinguished from carload ship-

ment, but having special reference to produce toming"in by

truck from an area of probably 50 miles, so the net result

is that a man can come there, a buyer, and select everything

he needs in the way of citrus fruits, vegetables and even

the local produce that is grown there. It is still being ex-

tended to this extent, that large receivers of perishable

’ freight are putting in private tracks in order to facilitate

[fol. 1279] the movement. We have an incinerator to take

eare of the rubbish and refuse that comes out of the ears.

‘That is necessary: because that food being: handled must

be handled in a cleanly manner and the premises must be

kept clean.- We have a snow plow arrangement and we put

on a tractor there to keep the roadways clear i in the winter-

time.

The streets opeancrste driveways are flushed with water

a couple times a\month, especially this time of the year, in

order to rij the premises in a clean and sanitary condi-

. tion.

I have previously stated in reference to interchange op-

eration that there is a considerable amount of special crew

service devoted exclusively to the handling of perishable,

including citrus fruit, and I know that at times it is neces-

- sary to operate a special train service with not more than

12 or 15 cars from the Baltimore & Ohio connections at

Lima to Cleveland, an approximate distance of 150 miles,

in order to make the necessary time delivery of citrus fruit

for food terminal auction. Perishable, including citrus

fruit, set off by Nickle Plate trains in the 55th Street Yard

is in nearly every:instance handled special from set off

point to food terminal, a distance of about one mile.

Clerical service: There is a considerable amount of cleri-

eal work involved in the handling of perishable, including

citrus fruit, within the food terminal, requiring data as to -

(fol. 1280] refrigeration, compiling waybill data for the

benefit of traffic department, consignees and consignors,

ek. eam diy to ACPA RG ARSENE SAME oe

a ;

checking cars from which sales are conducted direct, re-

porting arrivals by telephone and telegraph, and making

switching lists for the handling'of cars in the entire area.

Inspection: There is, of course, a class A inspéction ren-

dered on all cars containing perishable, including citrus z

fruit, and in addition a refrigeration inspection, which re- =

qures more time because of the inspection from the top of £

car to car bunker, commodity, and taking inside tempera- :

tures. It should be borne in mind that it is necessary to

make inspection of all-cars containing commodities in the

food terminal once each 24 hours, and in thexwinter time, .

when the greater portion of perishable is received under

‘ ventilation protection, the proper position of ventilators and

plugs is of vital importance in the protection of the commo-

dities, requiring time and labor not necessary with other

freight.

Cross-examination.

By Mr. Gwathmey

I am representing the Nickel Plate Railroad, the New

York, Chicago & St. Louis. This produce termirtal is lo-

cated on that road. It is leased by the Nickel Plate and

owned by the Northern Ohio Food Terminal. I have no

[fol. 1281] figures but I would say considerably more’ than

1 percent of the produce handled in that terminal is: repre- :

sented by Florida citrus fruit. I would say not more than

10‘percent. There is a considerable amount of California

citrus fruit—not more during the season, but the California

fruit runs for a longer duration and there is more during

a period of one year.

I do not know that I am qualified to say over what routes

north of Cincinnati the Florida citrus fruit moves into

Cleveland. It is sometimes the Pennsylvania or the Balti-

more & Ohio or the Chesapeake & Ohio. The greater por-

tion of it is over routes other than the Nickel Plate. Our

company switches for the competing lines. The Food Ter-

minal ‘is open to all competing lines into Cleveland. The

charge for that switching is $12.50 per car. That is greater

than the ordinary switching charges in the Cleveland Dis-

trict which is, I believe, $3.15. The reason for the extra

charge is because perishable freight has to be handled, prac-

tically all of it, specially and because of additional clerical!

806

expense involved in ‘the handling of it. I do not think

the desire of our company to secure the movement via any

particular route has anything to do with our charge of $12.50

' for switching for other lines.

By Mr. Hobbs:

The engine crews on the Nickel Plate get what we call

[fol..1282] a road rate, just a few pennies more per hour

than the ordinary yard rate. We regard it as a road serv-

ice but it is terminal service. We use yardcrews. We have

to pay that rate. They operate over a foreign line.

By Mr. Gwathmey: :

I do not think our company makes any charge to cover

‘the unloading and stacking, and so forth, on Florida cit-

rus fruit but I am not qualified to answer that. The auc-

tion market is held in our terminal. I am not sure whether

we make any charge for the use of those terminals for that

purpose. :

C. W. Dizritt, having been first duly sworn, testified as

ame:

Examined by Mr. Fitzpatrick:

I am C. W. Dilfill; Detroit, Michigan; Operating Vice-

President of the D. T. & I. Railroad. I was Locomotive

Fireman 3 years, Engine Inspector 1 year, Locomotive En-

gineer 9 years, Freight Conductor 3 years, Yard Master 2

years, Train Master,3 years, Superintendent of Terminals ..

2 years, Operating Vice-President 3 years. The last ten

years of that time I have been engaged on ~ D. T. & 1.

Railroad.

[fol. 1283] Ihave a map of the Detroit, Toledo & Ironton

Railroad which [I would like to offer in this proceeding.

Mr. Fitzpatrick: We offer that as Exhibit No. 192.

(The map referred to was received in evidence, marked

Exhibit No. 192, Witness Dilfill.)

Witness: This exhibit shows the route taken from one

end of the road to the other, and the points are designated

where we receive and deliver perishables. The circle is

807

at the points ohaws we receive and the diamond is where

we deliver.

I have prepared certain data for presentation in this pro-

ceeding. Perishables moving over the southern lines

through Cincinnati, destined D. T. & I. delivery, are de-

livered to the D. T. & I. by the Pennsylvania Railroad at

Springfield and South Charleston, Ohio. That moving

through Springfield is handled on what i is known as DC-8,

and the schedule on this train is such that tonnage is re-

stricted, due to the importance of arriving at Detroit to

make the market and other railway connections for points

beyond Detroit. In the past year and a half the time has

been shortened approximately two and one-half hours, due

to earlier closing hours at Detroit, and this train must run

whether it has one car of perishables or 40.

That moving through South Charleston is handled on

what is known as DJ-2. Account of South Charleston lying

[fol. 1284] beyond the point where train is made up, it is

necessary to back light engine Springfield to South Charles-

ton, a distance of 10 miles, to pick up perishables set off by

the Pennsylvania Railroad. This engine runs from South

Charleston to Springfield with what perishables.there may’

be, whether it is one or more, picks up a light tonnage train

at Springfield and must arrive at Detroit in ‘time for in-’

speetion at the Produce Terminal.

That moving via-Toledo must be protected and it is fre-

quently necessary running. light engine from Detroit, 61

miles, or backing an engine up from Petersburg Junction

with the main line, 22 miles, to handle. . |

That received from.the C. & O. and N. & W., Greges

and Glen Jean, respectively, results in reducing tonnage to

one cut over Summit Hill, as it takes one and one-half hours

to double, resulting in following train to triple hill. Sum-

mit Hill is approximately 9 miles long, the maximum grade

being 2 per cent.. The tonnage is 900 tons for our class of

engine, 53,000 tractive effort, and these trains, if there is

no perishable moving, takes a double cut over the hill. If

there is perishable that shows up at one of these junc-

_ tions they must go with the single cut, resulting in a train

following have to triple the hill. That train then proceeds

with 900 tons from there on to Springfield. As stated be-

fore, all of these trains run with restricted tonnage and

[fol. 1285] it is necessary to substitute other service to

are

KS,

shea

ae,

- Pe a’!

wEe

Ws HR

‘

ie:

808

handle the overflow which these two trains could handle

if it were not for the importance of moving the perishables

to destination in the quickest, safest possible time to make

the market or connections. The percentage of the full ton-

nage will vary from 70 per cent to 50 per cent.

The D. T. & I. between South Charleston and Detroit

crosses 32 interlocking plants and draw bridges, where we

are frequently delayed account of other lines reaching plant

first. This time must all be made up, another reason for

restrictéd tonnage. Numerous cities and towns along the

line have restricted speed. As these places are frequent®

and of more dense population, it requires extreme observ-

ance to comply. with laws, city ordinances, etc., another

source of delay making schedule.

During the winter months when the temperature is freez-

ing and below, especially when freezing begins in the fall

and ends in the spring, closer and more frequent inspec-

tions must be made to manipulate ventilation. -

Account of these trains handling perishable commodities,

they are given preference over other trains, including pas-

senger trains, which frequently must take the siding and

results i in an additional delay to them.

Another feature in operating in the winter time is the

additional cost in cleaning snow, ice, sleet, ete., from tracks, .

[fol. 1286] interlocking plants, telephone and telegraph

wires, etc., to keep the line and communication clear at all

times.

In addition to these transportation costs, another out-

standing expense that the northern lines have, aside from

the actual claim payments, is the cost of inspection and re-

coopering damaged packages. We pay an inspection bu-

reau at Detroit twelve cents per package for recoopering.

This is in addition to the $1.00 per car inspection service,

and as I understand it, this entire expense of recoopering,

. inspection, ete., is borne by the delivering line.

As stated before, we have in this part of the country

most unusuat and unexpected changes.in temperature which

require constant supervision and frequent inspection of

ventilating and heating: devices, which tend to make the

claim risks of northern lines extremely high, and quite na-

turally this responsibility rests with the northern lines and

any failure on their part means that the claim costs must

be paid by them and the southern lines assume no part

809

thereof. Any delay on these trains, no matter how slight

they may be, caused by the D. T. & L., which results in the

‘ ‘missing of the market or connectidns, often results in‘claims

for market decline, which, of course, makes this company

liable for the full amount if there is no delay with other

carriers. oa

In the winter time our connecting lines demand earlier |

[fol. 1287] deliveries due to the ice conditions in the De- :

troit region, which interfere with the movement of the —

ferries handling carload shipments. This results in further

reduction of tonnage in order that we may reduce our run-

ning time further in order that our connecting lines may

make their schedules. Mentioning the Detroit region, the

Detroit River, which the Wabash handles, our connections

to Canadian points have frequent interruptions on aecount

of ice conditions in the river. In the spring when the

. frost goes put’of the ground, track upheavals are frequent,

resulting in running at reduced speed, another condition

which reduces the possibilities of making the market on

time. Another annual event, usually in the spring, is the

collapse of communicating lines, due to heavy sleet, which

results in unavoidable delays.

Above are a few of the operating conditions which tend

to increase the cost of handling perishables, despite the

fact that‘the markets are the ruling factor and set the pace

by extending or shortening their market hours at will, for

their convenience. -

In addition to these expenses, we also have an added ex-

pense of switching at Detroit in connection with cleaning

of cars, which must, when returned, be placed on cleaning

tracks for cleaning. There is also the cost of added police

protection in the larger cities because of density of pop-

[fol. 1288] ulation and the nature of the commodities han-

~ died.

Generally speaking, as I observe the ear situation, vén-

tilated cars were originally designed to handle fruits and

vegetables in territories where these commodities would

not be subject to freezing, but since these cars have been

inereased in use, extending more into the northern terri-

tories in the summer months on account of the increased

demand for perishables in the north, it is only natural that

such equipment is utilized more today than five to ten

years ago. —_ .

i AN aa A ae a ali

MA RAISE he ei "S

$10

The increase of refrigerator cars originating on south-

ern lines may be due to an increase of. perishable coming ~

out of the south wbere the extreme hot weather very ma-.

terially affects the condition of such ee commodi-

ties.

I have prepared a statement showing tonnage from south-

eastern territory. That statement is taken from the citrus

fruits and perishables moving from the southeastern ter-

ritory only.

Mr. Fitzpatrick: We offer that as Exhibit No. 193.

(The statement referred to was received in evidence,

marked Exhibit No. 193, Witness Dilfill.)

[fol. 1289] Cross-examination. _

By Mr. Gwathmey:

I cannot tell you now where those 25 cars of oranges that —

were moved in September, 1930, on Exhibit 193, came from.

It was taken from our records. I could not tell you whether

they came from Florida.

F. P. LittTLe, havi ing been first duly — testified as

follows:

Examined by Mr. Fitzpatrick:

_I live at Detroit, Michigan, and am Superintendent of

Detroit Terminals of the Pere Marquette Railroad. I have

been thirty-five years with‘the Pere Marquette Railroad,

ranging from télegraph operator to my_present position.

I have prepared certain data for presentation in this pro-

ceeding. The Pere Marquette Railway handles several

hundred cars of Florida citrus fruits annually, mostly for

the Detroit market where final deliveries or reconsignments

are: made through the Detroit Union Produce Terminal

Company, which is a common facility provided especially

for the handling of citrus fruit and other perishable com-

modities, having a capacity of about 900 cars, costing up-

ward of $6,000,000 owned in equal shares by the Pere Mar-

[fol. 1290] quette, the Pennsylvania and the Wabash Rail--

roads, as indicated on the maps filed as exhibit by Witness

211

This traffic comes to the Pere Marquette through the

Toledo Gateway, largely from the Chesapeake & Ohio, the.

Baltimore & Ohio and the Big Four, where interchange with ~

connecting lines is done by transfer runs operated between

the various yards on regular schedules so arranged as to

connect with the regular scheduled road trains. The hand-

ling of citrus and other perishables involved fréquent

operation of extra transfer runs and of maintaining a more

frequent and rapid transfer road service than would other-

wise be required.

Special handling in the way of switching operations at

Detroit is also required in order to expedite the handling

of such commodities, the marketing of which is so organized

that cars must be placed for eee and delivery at a

very early morning hour.

' At this produce terminal special attention is given to

_the matter of inspecting of the cars for ventilation and °

refrigeration. Preparations are made for re-icing when that

is necessary and an inspection service of loaded cars is per-

formed by the Moorehead Inspection Service.

~ Special service in the way of advance information on the

movement of such cars is provided so that receivers may

anticipate arrivals and arrange for reconsignments, and so

[fol. 1291] forth.

‘Under existing conditions two scheduled daily trains be-

tween Toledo and Detroit would normally be required to

handle the average volume of traffic, but another train is q

especially provided for the handling of citrus fruit, and - J

so forth, daily except Sunday, operating frequently with :

as low as 50 per cent of its normal tonnage rating. ;

I have a statement showing the business handled by the

' Pere Marquette for the period ending May 31, 1931. .

Mr. Fitzpatrick: We offer that as Exhibit No. 194.

4 A

tte

‘

“ee

Lo oe

LEERY AIR OSCR IRSe LAB RST ERY LES Sr GES

(The statement referred to was received in evidence,

marked Exhibit No. 194,.Witness Little.)

C. A. FisHer, having been first duly sworn, testified as

follows:

Examined by Mr. Wolfe:

I am employed by the Reading Railroad as Inspector of

Transportation of the Reading lines. I have been with that

€. "

». > an

Vee hag

812

company 42 years as Clerk, Telegraph Operator, Dispatcher

15 years, Chief Dispatcher for 15 years and my present

position for 5 years. I am now Inspector of ee

tation. '

Mr. Wolfe: At this point I would like to have identified

[fol. 1292] two maps. First, the large white map which is

the Reading Lines and, secondly, the map showing the ter-

minal situation in Philadelphia, which is a blue print.

' (The maps referred to were received in evidence, marked

Exhibits Nos. 195 and 196, Witness Fisher.)

_ Witness : About two-thirds of the perishable products and

citrus fruit which the Reading handles is received from

the’ Baltimore & Ohio and other lines and delivered to other

lines at junction points. On the map, Exhibit No. 195, the

first red line to the left from Philadelphia to. Newberry

Junction at the extreme top indicates a distance of 197 miles

from West Falls to Newberry: Junction. At that point the

Reading connects with the New York Central and the Erie

Railroads. The second red line which connects with that

line at Milton shows the connection with the Delaware,

Lackawanna & Western Railroad at Rupert. At Allentown

, we connect with the Lehigh Valley and the Central Rail-

road of New Jersey; at Bethlehem we make deliv ery to the

- Lehigh Valley Railroad and the Central Railroad Company

of New Jersey: On the red line extending toward New

York we deliver to the New York Branch and to Trenton

and to the Central Railread Company of New Jersey at

-Bound Brook for delivery to New York Harbor.

In making deliveries to-the South Jersey territory we

move ears to Port Richmond, which is Philadelphia, and

[fol. 1293] float them to Camden, at which point they are

moved over the Atlantic City Railroad. to Atlantic City and

intermediate points.

I have a statement prepared showing the total amount

of perishable product business, including citrus fruit, which

- is separated for the period from June, 1930, to May, 1931.

That shows at what points it was received ind to what des-

tinations deliveries were made, the number of cars and the

‘total. They are all received from the Baltimore & Ohio

-at Park Junction and front the Pennsyivania at Belmont.

During the period from June 1, 1930, to June 1, 1931, the

Reading .Company received 1,319 cars of citrus fruit from

wns :

813

the Baltimore & Ohio and 133 cars from the Pennsylvania,

making a total of 1,452. -In addition to that we received

from the Baltimore & Ohio 2,246 cars of perishables.

(The statement referred to was received in evidence,

’ marked Exhibit No. 197, Witness Fisher.)

That exhibit shows that 677 cars were delivered at New-

berry Junction to the Erie Railroad and the New York

Central. Citrus fruit shipments are received by the Read-

ing Company from the Baltimore & Ohio Railroad on their ~

train No. 84 due at Park Junction at 4 P. M., which arrives

at Belmont about 4:15 P. M. Shipments are also received

at this point from the Pennsylvania Railroad. The trains

are delivered into the receiving ‘yard for inspection, after

[fol. 1294] which the yard engine breaks up the trains and .

classifies the cars into eléven different groups: —

ANTES NOUGAT

1. Local division points.

_ 2. For points via New York Central Railroad via New- -

berry Junction.

3. For points via Erie Railroad via Newberry . unction.

4. For points via Delaware, Lackawanna & Western

Railroad via Rupert. ‘

5. For points via Central Railroad of ow Jersey via

Bethlehem, Pennsylvania.

6. For points via Lehigh Valley Railroad via Bethle-

hem. .

For:points via Lehigh Valley Railroad via Perkiomen

Railroad and Allentown. bp .

8. For points via Central Railroad of New Jersey, Perk-

iomen Railroad and Allentown.

9.. For points via New York Branch and Trenton. :

_ 10. For points: on Atlantic City Railroad via Port Rich-

mond.

11. For terminal delivery in Philadelphia.

‘

Pe ta oat. a ied

Sihehho ats ide, atte

oa ied

6 BEPC LEGO, A

We do not make any deliveries to the Perishable Prod-

ucts Terminal in Philadelphia. It is all isolated delivery.

From June 1, 1930, to June.1, 1931, there were received

ee ae Re . . — ~~ -

ee ee a ee ae ea LSS oS SARIN (EGU bit ie Ad LAN aly Si Ce aE

a”

814

through this gateway 1452 cars of citrus fruit and 927 cars

[fol. 1295] of other, perishables. Approximately 777 cars

of citrus fruit and 456 cars of other perishables moved via

—the long haul route, namely, Newberry Junction, a distance

of 197.1 miles from West Falls, Philadelphia. This route

is a particularly difficult ‘one from an operating standpoint.

‘There are four tunnels involved, from 800 feet to 8-10 of a

mile in length, a gradually ascending river grade from

Philadelphia to Port Clinton, a distance of 77 miles. The

gerade then inereases to 1 percent from Port Clinton to

Tamaqua, a distance of 20 miles, at which point engines

end crews are changed. The average freight tonnage per

train handled is 2600 tons. From Tamaqua to Buck Mount,

a distance of 8.6 miles, the grade is 1.31 percent, and two

additional heavy assisting engines are required on every

train. In other words, every train that proceeds has to

have in addition to the pulling engine two assisting engines.

A further very heavy grade of 2.54 percent is met from

Gordon to Locust Siynmit, a distance of 5.7 miles, which

requires two additional heavy Mallet type engines and in-

case the Mallet type engine is not available it requires two

of what are known as 1-9 engines to assist these trains up

the grade, and the return movement is light.

Via the same route and handling from Philadelphia to

Tamaqua, at which point the engines and crews are changed

there is a second route to New ber ry Junction via the Cata-

[fol. 1296] wissa Railroad. A train consisting of 2600 tons

requires two additional heavy assisting engines from Tama-

qua to Lofty, a distance of 12.1 miles over a grade of 1.54

percent. Thirty percent of the citrus and perishable traf-

fig moves via this route. Due to the connection made with

the Delaware, Lackawanna & Western Railroad at Rupert,

a distance of 157 miles from Philadelphia, this route is used

between- Tamaqua and Newberry Junction for approximate-

ly ‘100 miles, and includes 67 miles of single track operation.

-The burrent of traffic on this division is southward, which

interferes very much with the northbound movement of

business. If you will just look at the map of the system,

we handle ouy southbound business from Newberry Junc-.

tion south to Tamaqua over what is known as:the Catawissa

Railroad for the southbound movement and the northbound

movement goes via the Shamokin ‘Division. The Catawissa

Railroad is shown as that short branch connecting with the

extreme red line on the left on my map.

ere Rigen prt eanee ass . 4

ee sae b Bont | 2 bikes CBRE IOMIORS ELM a eich, Blea TE SDs 4a ih Bar Oe Ca ———

815

The northbound movement moves via the Shamokin Divi-

sion, which connects with the Catawissa Branch again at

Milton. I might add there that this is a very expensive

movement from the fact that when we do have the fast

‘freight moving if we do not have sufficient trains for these

heavy types of mountain engines to push up the grade they

are paid their 8 hour day and they probably only make one

(fol. 1297] or two pushes up the erade.

After cars are grouped ‘at Belmont, cars for via Ruport,

D. L. & W. and for Newberry Junction via New York Cen-

tral and Erie Railroad, are moved by drag engines from

Belmont to West Falls, 3.9 miles, at which point the cars

are grouped in regular symbol trains with the assistance

of switching engine. |

On the next route that we sain most of the business

there were 289 cars of citrus fruit and 411 cars of perish-

able fruit, total of 698 cars.

Cars for Allentown and beyond, a distance of 67.7 miles,

are grouped at Belmont for the regular symbol train to

pick up at that point, except in case the Baltimore & Ohio

connection should be late and in that event the cars are.

moved from Belmont to West Falls via drag engine where

they ar¢ grouped in a three symbol train with the assistance

of the yard engine. These trains require an assisting en-

gine for a distance of 14 miles over an average grade of .76

percent.

On arrival at Allentown, the cars for via Central Rail-

road of: New Jersey are taken aeross the river and delivered

to East Penn Yard. The cars for via Lehigh Valley Rail-

road are dropped at East Penn Junction and later moved

by switch engine into the Lehigh Valley Railroad yard, a .

distance of about one-half mile from East Penn Junction.

[fol. 1298] Cars for Reading Company local point de-

livery, which amount to 80 cars of citrus fruit and 478 cars

of perishables. By local point Reading delivery, I mean

any point on the system outside of Philadelphia. Cars for

Reading Company local point delivery require drag serv-

ice from Belmont to West Falls, at which point, with the -.

assistance of a switch engine, the cars are grouped in a

regular symbol train for movement to destination, where

local switching placement is effected, including some in-

stances, short branch movements.

Cars for Bethlehem, 56.6 miles from Erie Avenue,. Phila-

eee’ lead

: De Ra ee . . = .

PLACES SMR thaig RS rab Rs is AL oN die hin WN hay iene ~ i : 4

b ome Nba w ae ae Lae ase —

. j 2s

; 816. 5 ee

delphia, and for Bethlehem for delivery to the Lehigh Val-

ley Railroad and Central Railroad of New -Jersey are

moved from Belmont to Fairhill Junction and into Erie

Avenue yard, at which point they are grouped into symbol

,trains. As this branch has a grade of slightly less than 1 :

pereent, the M-1 or I-9 engine can only handle 1400 tons,

which results very frequently in double heading the train.

We have what is known as first PB-1; second PB-1 and

third PB-38 out of Philadelphia, double- headed fast freight

' trains.

Between 7 and 8 o’clock in the evening and about on an

average of 3 days a week we receive from 25 to 40 carloads

of bananas in which event one of these trains, mostly the

first PB-1, is doubled headed handling the banana ship-

- ments,

Cars for Trenton, New Jersey and the New York Branch

[fol. 1299] are moved in. drag service from Belmont to

Fairhill Junction, and then to Erie Avenue yard, at which.

point they are clas’ ’ -to symbol trains or handled by

district or traveling .ifters to destination.

Cars for the Atlantic City Railroad move from Belmont

by drag service to Port Richmond, Pennsylvania and are

handled by the yard engine for placement. on the floats and

are delivered to the Atlantic City Railroad at Bulson Street,

Camden, where they are switched and moved to destination

in freight service. Those cars have to cross the river. ©

Often times- they have considerable trouble on account of

the ice conditions and tide conditions.

‘The blue map shows the different colors covering the dif-

ferent routes and destinations in Philadelphia. Belmont

is shown on the map as the beginning of the red line. When’

we receive a car for Newberry Junction we receive it at

Belmont and move it out to West Falls at the end of the red

line just to the north, at which point we build it into our

through train. If you will follow the yellow line from Port

Richmond coming up through Fairhill Junction, where we

cross the New York Branch: into Nicetown, where it goes -

into the city, up to West Falls, at which point we break up

the train and with the assistance of switch engines we

_build the cars into our fast freight symbol trains and the

‘ groups in which they belong. It then proceeds along the

[fol. 1300] heavy brown line toward Newberry Junction.

We do all of our switching and cutting in and out at. West

Falls.

a SA Ai Eee id CRRA IOI oN RET A DEI se bis LL CACEY ESahAOMNL S Raa eae

If a shipment is to be cut out for Bethlehem we take it

over to Fairhill Junction. We take it from Belmont to

West Falls, then the black line through Nicetown over to

Fairhill Junction and then up over the grade into Erie

Avenue. That is the end of the black line.

When we receive shipments for delivery to the Lehigh

Valley Railroad and the Central Railroad of New Jersey

at Allentown, we receive the shipments at Belmont, move

them over to West Falls by drag service and then follow

that line that is shown by the brown hatched line beyond

‘Norristown, clean up to the right-hand corner, about 6

miles bey ond Norristown to the Perkiomen Junction where

we move over the Central Railroad of New Jersey.

Shipments received at Philadelphia for delivery on the

New York Branch are moved from Belmont to Norristown,

follc wing the black line to Fairhill Junction, out of Indiana

Avenue and then made up into single trains moving out on

the brown line or the other line where we make delivery to

the Lehigh Valley Railroad or the Central Railroad of New

Jersey. In going to New York, instead of going out on

the dotted brown line yougo out on the line on the New York

Branch to West Trenton, 49 miles, and then into Trenton,

6 miles.

[fol. 1301] Drag service takes cars moving to points in

South Jersey from Belmont over through Nicetown, Fair-

hill and, following the yellow line down to Port Richmond

where the floats are, and there the cars are placed on the

oats, floated across to Camden where they are pulled into

freight train movement to Atlantic City or intermediate

points.

I have stated that this passing freight traffic which is

destined to other railroads constitutes two-thirds of the

traffic that is handled by the Reading in citrus fruit -

produets. The other one-third.of the traffic is isolated busi-

ness from different points around Philadelphia to points on

the system such as Reading, Harrisburg, Pottsville and

Allentown.

‘The’ switching movements at Philadelphia are very diffi-

cult, depending on where the delivery is being made.

Cars for local Philadelphia points delivery are handled

- by terminal and district switching and are moved from i

Belmont to Fairhill Junction, from which point it requires

52—312

ied Fithian OTN. ASR LT PR A Bi ie tien Th ain seh ts ‘ — + wes > cand

818

a 6-wheel locomotive to handle the cars to Montgomery

Avenue. From this point they must be handled by a lighter

locomotive, which is known as a 4-wheel shifter, to destina-

tion. This movement is made into a very congested and

densely populated territory, necessitating sending a flag-

man in advance for a distance of 11% miles to protect fifteen

grade crossings. They have a watchman at the crossings,

[fol. 1302] but there is a city ordinance there, on account

of the trucks and different vehicles using the street. Part

ef this track is on the street and we are often held up any-

where from 15 minutes to an hour or an hour and a half by

trucks up against some building, loading or unloading, so

we can not get away, and in many cases we have to get the

assistance of an officer to get away. There are many in-

terruptions there. We have to work our way through the

best we can. It is particularly important to call your atten-

_ tion to the fact that the density of traffic between Belmont

- and Fairhill Junction, a distance of 7.23 miles, is very

great, including in addition to Reading Company traffic, .

11 high speed through B. & O. first class trains operating

in each direction between Washington and Jersey City; also .

10 B. & O. fast freight symbol trains through this territory.

In connection with the ten B. & O. fast freight symbol

trains, I might add that this includes the advance section

of B. & O. train No. 68 that Mr. Ward of the B. & O. re- |

ferred to this morning, which they are operating from Park

Junction, through, in 25 minutes. We continue this to

Bound Brook, New Jersey, at which point it is delivered to

the Central Railroad of New Jersey, and our running time

is 2 hours ineluding one water stop, a distance of 60 miles,

and that is getting the regular schedule of our track one

(fol. 1303] way. This is possible for the reason that we are’

handling only between ten and fourteen hundred tons on

the train due to being a high type citrus fruit and very

perishable commodities: Ordinarily, the tonnage for the

train is 3,200. P

' In eases where citrus fruit shipments reach Reading Com-

pany on Sunday for points on the Philadelphia and Néw

York Divisions, a day on which symbol train service is not

operated, it is frequently necessary to handle such cars

in connection with our regular passenger service, which re-

quires special movement of the cars to get them into these .

trains.

—— . . ii, id MR ae in DiS SS RT aA ARE he RAS OE .

a ' ~~ : - 3 ae

x °

819

We are lucky in handling a good bit of the citrus fruit-as

an entire dwision. It is mostly trackage handling, and we

have got to move it as soon as we get it; we have got to make

good time for it, because the connecting lines are after us—

they have got a market time delivery to make and we have to

move it promptly; therefore, on holidays or other days ©

when we get a straight car, we are obliged to call out a crew

and get service all the way probably from Philadelphia to

Newberry Junction, a distance over which we would not

operate just at thattime. However, we will try to get

full tonnage if possible in filling the train out. In saying

that. we would not operate at that time, I mean we try to

operate a straight train from the terminal over the moun-

tainous part of the railroad, at a time when we can use

[tol. 1304] the easiest power in operating over that moun-

tain, and in that way we may get thrown off of:our schedule.

I have a statement showing switching distances in the

City of Philadelphia of various symbol trains, the pusher

engines required and some additional data.

Mr. Wolfe: Mr: Examiner, I submit this.

(Thereupon, the document, referred to was received in

evidence, marked Exhibit No. 198, Witness Fisher.)

Witness: The speed given there includes terminal delays.

We build into these trains anywhere from two to six points

along the line, and that time is included in the average speed

from the time from Philadelphia to Newberry Junction or

‘Allentown. It does not show the speed limit as being very

fast, but our trains do operate 40 to 50 miles an hour at

some points. We are operating over a very hard grade and

that takes time, to cut into the trains and take them out.

We have numerous other items of expense which enter

into the handling of citrus fruit shipments, such as special

inspection, telegraphing instruction as to handling, emer-

gency icing, and so-forth.. We don’t ice these cars very

often, but in. the case of an emergency, we must ice the

cars, and of course, from November to April 1st, we have

slipping conditions and snow which makes it somewhat

[fol. 1305] expensive operating on the grades, and naturally

the tonnage must be cut to make the time delivery to our

connections on all shipments, and sometimes we have to

double-head the train.

‘

o nyt ee Mie ene > pS 5 s

a ee ee oe

‘

820

J. O. Betz, having been first duly sworn, — as

follows:

Examined by Mr. Eshelman:

I am Superintendent of Transportation of the Chicago

& Eastern Illinois Railroad. I entered the service of the

C. & KE. I. in 1905 as General Yard Master, was made Train

Master in 1906, Superintendent in 1910 and have been Di-

vision Superintendent on the several divisions until 1 1927,

when I was placed in my present position.- Prior to going

with the C. & E. I, I had experience as Train Dispatcher,

Chief Train Dispatcher, Train Master, and so forth.

I am familiar with the manner: in which the C. & EF. I.

handles southern perishables, including citrus. The

greater proportion of citrus and other perishable fruit from

Florida and other points comes to us at Evansville, Indiana,

at the Ohio River gateway. We receive some from river

crossings at Thebes, Illinois, from the Frisco, the Cotton

Belt and the Missouri Pacific at that gateway. We also

receive some from the Mobile & Ohio at Tamims, Illinois.

| [fol. 1306] Our connection at ‘Evansville 1 is with the Louis-

ville & Nashville.

We have a small map on a condensed profile blue print

which shows the several gateways in connecting points.

Mr. Eshelman: We ask that that be received as the next

~ exhibit.

(Thereupon the document referred to was received in

- evidence, marked Exhibit No. 199, Witness Bell.)

Witness: “We have another exhibit which gives the trac-

tive effort, the grades, ton ratings, northward and south-

ward, and also shows the ruling. grade, maximum grade,

maximum curvature with location, weight of rail and ‘ype -

of ballast and this includes the types of engines that we

have in service.

Mr. Eshelman: We ask that that be received as Exhibit

No. 200.

(Thereupon the document referred to was received in

evidence, marked Exhibit No. 200, Witness Bell.)

- Witness: In that list of engines is shown the Mikado type

of locomotives, Nos. 1900 to 1959, which is the type of en-

—aEEEEEE—— ieee i he

821

gine we use in road movement of citrus fruit and other .

perishable business coming from connections. The tonnage

rating for that particular type is shown in this exhibit by ;

districts. %

The direction of the loaded movement on the C. & E. I. f

(fol. 1307] is northward to a substantial extent. There is é

considerable preponderance northward. That business is

a combination of light-weight traffic and coal, with the re-

sult that our southward movement is largely of empty coal

cars and empty cars that have hauled the northward busi-

ness of such citrus fruit which would be refrigerator, at the

present time, and ventilated box cars. The northward

movement of perishables loaded would be in the direction of

the loaded movement and the balance, or the empty move-

ment of the refrigerators would be in the direction of the

empty movement. We do not: consider that to be well

balanced traffic. Fully 90 percent of refrigerators that

move nortuward under load are returned empty and my off-

hand opinion is that it will exceed that percentage. :

From Evansville departure yard to arrival in Chicago,

Thirty-third Street City Yard, we have 36 grade crossings,

not including the several crossings north of Englewood in

the City of Chicago terminal proper. All but seven of

those crossings are protected by interlocking devices. The

expense of maintaining the interlocking service is borne

jointly; in some cases on a fifty-fifty basis; in others on a

unit basis. Generally speaking, the using lines would con- -

tribute to the maintenance. |

In Chicago we have our.own team track at 26th Street

and Canal Street and we deliver to the Chicago Produce

[fol. 1308} Terminal citrus, vegetables, and some perishable

commodities. To reach the Chicago Produce Terminal we

use the rails of the Chicago Junction Railway from our

city yard to the Chicago Produce Terminal yard, making

delivery with our own power and crew. The trackage ex-

pense is $1 per car in each direction. The Chicago Produce

Terminal charge is covered by tariff which is $12 for place-

ment on our inspection track and $15 for placement on our |

team track or at the auction house. Citrus fruit is usually

handled at the auction house.

We do not have a full train load of perishables from

the south to go to the Chicago Produce Terminal every day.

We operate our schedule through from Evansville to Chi-

= —

Mire AOA Et Fa a nena

822

cago whether we have one car or 40 and make delivery to

the Chicago Produce Terminal of 1 car or more. - Delivery

must be made at the Chicago Produce Terminal by 4 A. M.

That is the dead line for morning market.

‘After leaving our 33rd Street Yard in going to the Chi-

cago Produce Terminal we have to cross several railroads

at grades and ‘use the rails of other roads and the Chicago

Junction Railway in the early hours is the Union Stock

. Yards route and it is frequently quite heavily congested

‘so that we have delays that cannot be foreseen and which

will not oceur every day but which will on some days be

quite serious.

_ About 1920 or 1921 the traffic came to us from the Evans-

[fol. 1309] ville Gateway around 8:30 or 9 P. M. and we

established what we called a citrus special to leave Evans-

ville at 11:30 P. M. We arrange our schedule to arrive at

our outer train yard, at Haney, Chicago, at 6 P. M., as we

could not, of course, reach the next morning market by leav-

ing Evansville at 11:30 P. M. This accomplished delivery

to the Chicago Produce Terminal around 11 o’clock P. M.

which, at that time, was the requirement for auction house

placement. Later, conditions changed, and we established a

train that we programmed to leave Evansville at 6 A. M.,

to handle deliveries that could not reach us before midnight.

That train was placed on the program to arrive at Haney,

our outer yard, as at 10 P. M., which gave us one hour to

reach the 11 o’clock P. M. delivery requirement, and we

still had until the 4 A. M. dead line for early morning place-

ment.

Last year the program was set so that the citrus and

other similar products would reach Evansville on the Louis-

ville & Nashville at 10:45 A. M. and would be delivered to

us by 12 o’clock noon. I think we set back our Dixie Red

Ball Emergency run to leave Evansville. at 1 o’clock P. M.,

instead of 11:40 A. M., and we’shortened our running time.

We formerly reached our 33rd Street Yards at 3:40 A. M.,

but on the new schedule we arrived at 2 A. M., which gives

us 2 hours to accomplish delivery at the Chicago Produce

[fol. 1310] Terminal by 4 A. M. On the first arrangement

the elapsed time from 11:30 P. M. to arrival at our other

yard at 6 P. M., and delivery to the Chicago Produce Termi-

nal by arowrd 11 P. M. we had approximately 24 hours for

that run. On the later program, leaving Evansville at 6

_——_— ; , pectin ina an mA

" .

823

A. M. to arrive at 10 P. M. and delivery by 11, we had the

difference in that departure up to 11 P. M. and we had 20

hours from 6 A. M. to 4 A. M., to accomplish the early morn-

ing delivery.

Now, we have 13 hours running time to our city yard, or

15 hours, from 1 P. M. to 4 A. M., to accomplish delivery

into the produce terminal yard. The present schedule, from.

the time it leaves Evansville, in which delivery in the Chi-

eago Produce Terminal Yard is made, is only 10 hours which

includes 2-hours for that present run. The'deliveries come

to us now by noon-at Evansville and we endeavor to get

* out our program by 1 o’clock. We do not always accom-

plish that. - So, our terminal time, from the program time

of delivery into the C. & E. I. yard, to our departure, has

been shortened about one hour against our former practice.

While I cannot speak for any other line, I understand that

it is also the practice with the final line or the final division

on any line that it shall have the slower and more flexible

schedule to have an opportunity to make up time or delays

that may have been encountered from the initial or inter- |

mediate lines. That is true in the case of passenger serv- .

(fol. 1311] ice and it is true on our own line. :

My previous statement will illustrate when we could

leave Evansville at 6 A. M. and accomplish arrival in Chi-

cago and delivery to the Chicago Produce Terminal, Yard iy

at 4 A. M. the next morning it gave us 20 hours. Today b.

we leave at 1 P. M. and accomplish.the same delivery or a

difference of 7 hours in elapsed time from the time of '.

actually leaving to the actual delivery in the Chicago Pro- 7

duce Terminal. } - ne

Readjustments or revisions of schedules are usually | ~

made by conference with operating officials. I attended

the conference at Chicago at which this last revision was

accomplished. The present arrangement is one which was

agreed on by the various lines interested. I could not say .

specifically whether that agreement was in view of the vari-

ous requirements of .the several lines, but I know they built

the: schedule up to arrive at Evansville at a certain hour.

and to arrive in Chicago at a certain hour and it was up to

me to get to Chicagé at the dead line and I met the compe-

tition to do that. The program was set up to accomplish

fourth morning arrival in Chicago and to accomplish de-.

livery for the fourth morning delivery at Chicago we must

at an a ar cS A a

RO MPS

- .

AOD ER TRA

in oY

ER IRE Ss ars Fiat eekoe oe Ba ee

: = 2

TiS Seki aie UR RGR Ae a ee this RE. Fe:

Yo! CA eR Gotha ae. OFT NT

Pa Re Hs

SPAT SEL OR

a BF ER ee

PO,

PN - p —e } 4

824

arrive there at a stipulated hour. I put all the facts before

. the conference as to our situation and other lines did the

same. The final result was that they would bring the traffic

{fol. 1312] to us at a certain hour. We said we would do

that if they would give it to us at a certain time. My im-

pression of the conference was that these schedules were~

arrived at by the combined adjustment of the operating

men who participated in them and that the result was satis-

factory to all..

Our schedule leaving Evansville at 1 ip ‘wie the

present program, reduces the loading to approximately 70

or 75 percent of the engine rating, depending on the time

of leaving. If he is late we reduce his loading accordingly.

A. W. Geary, Sr., mane been first duly sworn, testified

as follows:

Examined by Mr. Eshelman:

At the present time I am head Claim Clerk of the Penn-

sylvania Railroad. I was employed by the Pennsylvania

Railroad in September, 1891. I have been with them con-

tinuously since. I have been practically in the produce end

of it since I was employed. I am thorougbly familiar with

the manner in which the southern perishables, including

_ citrus fruits, are handled in the Philadelphia terminal.

In 1908 we were located on the west side of the Schuyl-

kill River between 29th and 30th Streets and from Market

[fol. 1313]. to Chestnut. There was a capacity at that

point of about 80 team track cars. There were three small

depots and the total capacity of the three was about 225

ears. There has been a substantial change in the facilities.

In July of 1927 there was built a terminal known as the

Pennsylvania Produce Terminal. That is located on Oregon

Avenue east of Delaware Avenue. It consists of 29 tracks

and three depots. Two of the depots are 800 feet long and

110 feet wide. The capacity for depot cars is about 300;

that is, we can unload about 300 cars at one time or place ~

them so they can be unloaded on the three depots. The-

~ building is about 500 feet long and that is due to the fact

that a cold storage which was built took off about 300 feet.

The capacity of that cold storage plant is about 200 cars.

Platform A has two auction rooms on the second floor

™~

= gos

and one is a little larger than the other and will seat about

250 and the other about 150. There are all conveniences

for carrying on a perishable business, including a restau-

rant on both floors, Platform A is used exclusively by the

auction company. This terminal is also described to some —

extent in the testimony of Witness Menaugh and in the

* booklet which he introduced as to the New York Terminal.

Cleaning is a big ‘proposition. The cleaning costs us

between $3,000 and. $3,500 a month. That means cleaning

of the cars, depot and yards and, as I said, there are 29

(fol. 1314] tracks, each of them holding about 35 cars.

The station is about one-quarter of a mile long.

In 1908 we did not do any careful cleaning. We had to |

clean the yards, of course, but the traffic did not amount

to anything like it is today and therefore it was not nearly

ag big a job.: At that time we never heard of such a thing

as passing reports given to the Philadelphia produce trade.

I have not been agent at the Philadelphia Produce Termi-

nal. I was second to the agent, in charge of the perishables

department.

; In 1908 reconsignments averaged about 3 a day; that is,

in 300 working days it would amount to about 900 cars.

At the present time we reconsign 900 cars and divert 800

or a total of 1700." That means two additional clerks.’ In

1908 there was really no inspection provided. If we got

a protest, a delivery clerk in the yard made the examina-

tion and that is all the inspections that were made. At the

present time we have what is known as.a Morehead Inspec-

tion Bureau and until two months ago they inspected the F

protested cars, but at the present time they are inspecting

every car that comes in.

In 1908 the carriers kept no vent records.. In fact, up

until a few years ago, say 5 years ago, it was not necessary.

Then due to complaints from consignees, particularly on

(fol. 1315] the weather or the water where they claim the

vents were defective in some way so that they were an inch

closed or two inchgs not open or something like that, we had

to keep a record and that made additional labor. ; :

In addition to the arrival notice we are required to make

‘up what is known-as a placement sheet. These sheets are

made up for each and every receiver individually. They

show the car number and initial, the commodity and track

location. We did not do that in 1908. -We now make a

CTR DENGINE BaRER MME IM

_orameree

SERA Rat,O RP RE gree crayon

826

commodity report. That is a sheet showing each and every

commodity on hand, the number of cars and whether the

commodities are new or old. For instance, if the seasons

overlap and we have old potatoes or cabbage, and things of

that kind. We are also required to record, and notify, cer-

tificates of beneficial ownership which never was heard of

until a few years ago. They are a notice to us that the

beneficial consignee is someone. other than the receiver.

That is in the event of freight bills not being correctly ren-

dered and if we want to change them they will not be re-

sponsible for the additional amount.

In.1908 we did not admit the delay unless it was 5 or 6

hours. The markets were not like they are today. They

_ did not vary. The market today is lable to jump from

_ $2.50 to” $5.00 and we very seldom got a-claim. In 1908

we had a policeman who worked in a certain district, within

(fol. 1316] possibly a mile. He used to walk to and fro

in the district and that is all the policing we thought was

required. He was a part time watchman. Af the present

time ‘the policing of our terminal costs over $20, 000 last

year. :

I heard the testimony of Witness Ward this morning

about the Philadelphia Produce Terminal location of the

Baltimore & Ohio. Prior to 1908 the Baltimore & Ohio

terminal for citrus fruit was Pier 12 and the Pennsylvania

Railroad was at Pier 13. Therésvas only one auction com-

pany in Philadelphia at the time and it was located on Phila-

delphia Street between Rose and Vine and I imagine’ that

was the reason for the citrus fruit going up into ‘that sec-

tion. That was also the part of the city where the trade

had their places of business and where it was convenient

for them to transact business. It covered from 500 south

to 800 north Vine Street, so it was practically in the center.

Pier 12 was established before my ‘time arid the Pennsyl-

vania Railroad was there Jocated next door. How long

they were there I do not know. I do not.know whether

the Pennsylvania Railroad built into Baltimore before the

Baltimore & Ohio Railroad built into Philadelphia.

Cross-examination.

' By Mr. Gwathmey:

In cleaning a car of citrus fruit that comes into Phila-

[fol. 1317] delphia we have to sweep the car out. We have

: . 5: ee: 4 Se Le aes t 3

a cea pir eI ETO SAS DED ea aa DEED tk Bh ns seal A oag Neistas neue 1

. ars

; (:

827

to take ali the wood out: of it and clean it thoroughly before

itis returned. Citrus fruit is possibly a cleaner commodity

than some of the others but they are stripped in layers and

those boxes are all thrown in the car and we have to take

them out and burn them. During the Mediterranean fly

epidemic we were compelled to clean every car and even

had to use whisk brooms. Those costs of service are not

charged back against the southern lines. They are all

absorbed. Wedo not charge to the southern lines any part

of the cost of recoopering cars. :

There has been a considerable increase in the number

of reconsignments since 1908 and there has also be-.a con-

siderable increase in the number of shipments. I don’t

think the increase in the number of consignments equals

the percentage of the actual number of cars reconsigned.

‘In other words, we had about 900 in a year and now we E-

are getting about 1,700 in a inonth. We make a charge for a

every one of those reconsignments. ; ,

When there is délay the liability for such delay depends

entirely upon where it occurs.

(fol. 1318] H.M. Kennan, having been previously sworn,

was recalled and further testified on direct examination

as follows:

Examined by Mr. Gwathmey:

I offer as an exhibit a statement showing the ownership

of our ventilated box cars by years, as of June 30, 1908,

up to June 30, 1916, then starting at the fiscal year 1917

to 1930. 4 or

Mr. Gwathmey: We offer that as exhibit No. 201.

(The document referred .to was received in evidence,

markéd Exhibit No. 201, Witness Kendall).

Witness: I would like to add in this connection that there

will be noticed a drop of approximately 2000 cars from

1927 to 1928 seasons. That is due to the fact that we have

taken them out of our accounting, in one account, but not

in another. That is our ventilated box cars or wooden

cars. As a matter of fact, we only have approximately

600 of those cars in service.. They are not used in any

- . '

. «

RSS racy

Baers? 3 % x ; .* = NBEO ah

ee . -

PRON Ly et IIE CE

aa aoe eC a!

PROT ONT ee

828

of our freight trains and only to some extent in local trains,

‘ only for cotton, and thing of that sort.

The next statement is a statement showing freight train

car ownership as of April 1, 1931.

Mr. Gwathmey: We ask that. this be received as Exhibit

No. 202.

‘(The document was received in’ evidence marked Ex-

(fol. 1319] hibit No. 202, Witness Kendall).

Witness: The first item shows the ventilated box cars at

the present time. There may be a few cars that have been’

destroved by fire but it won’t amount to over 30 cars.

By Mr. Eshelman :

When I said ‘‘wooden construction’? I meant wooden

under-frame cars. Our vents are mainly steel under-frame

cars.

By Examiner Hosmer:

I would like to refer to sheet 317, the first line, which

shows a distance in the record from Richmond to Jersey

City of approximately 33 miles. That should read ‘‘333

miles.’’ j

-A. H. Farriexp, having been first duly sworn, testified

as follows:

Examined by Mr. Boynton:

I am Operating Commerce Assistant of the New Haven

Railroad, reporting to the Vice-President and General

“Manager, with. headquarters at New Haven, Connecticut.

My experience covers 18 years in the Operating Depart-

ment, including work in the yard, at different stations,

[fol. 1820] Chief Clerk to Superintendent, Chief Trans-

portation Clerk to the General Superintendent, Division

Accountant, Statistician under the General Manager and

other jobs.

I am familiar with the handling of citrus fruit traffic over

the New Haven Railroad. I have prepared a series of ex-

hibits which I wish to introduce in connection with the tes-

timony which J will give. They are true and correct to the

best of my knowledge and belief.

——e —_ ae? en 2 Se tetnie athe ame MESO

——— eee ar ee

829

Mr. Boynton: May it be understood, Mr. Examiner, that

throughout his testimony where reference is made to the

New Haven or New Haven Railr oad, the New York, New

Haven & Hartford Railroad is the carrier indicated? f

Examiner Hosmer: Yes, sir. E

Witness: I have prepared a statement showing the sea-

sonal movement of citrus fruit over the New Haven Rail- ©

which I offer as an exhibit.

_ (The document referred to was received in evidence,

marked Exhibit No. 203, Vjtness Fairfield) ..-—

This exhibit, No. 203,.is a statement showing the number

of carloads of fruits and vegetables received from connect-

ing carriers by the New Haven Railroad during the twelve

months ending March 31, 1931. During this period we re-

ceived 7229 carloads of citrus fruit, which was 10.2 percent

of the total receipts of.fruits and vegetables. The lightest

[fol. 1321] month’s receipts of citrus fruit was September.

with 121 cars and the highest was March with 942 or over

» seven times that of the low month. The heaviest receipts

are during the five months November to March and the

light receipts April to October. Attention is called to this

fluctuation because in later statements I have used the

month of February as representative of the heavy months

and the month of May as representative of the light months.

I have prepared a map of the New Haven, showing the

_ gateways through which the citrus traffic is received. I

offer that as Exhibit No. 204.

(The document referred to was received in evidence,

_marked Exhibit No. 204, Witness Fairfield).

This exhibit, No. 204, is a map of the New Haven Rail-

‘road. The citrus fruit originating on the southern railroads

is received. by us through our Harlem River Gateway

marked ‘‘ A’ on the exhibit, in the extreme left-hand corner.

I wish to call attention at this time’to the network of criss-

cross and intersecting lines that make up the New Haven

Railroad.

' I have a statement of the citrus fruit traffic received

through the Harlem River Gateway, as compared with

other gateways and I offer it, as Exhibit No. 205.

| (Thereupon, the document referred to was received in

evidence, marked Exhibit No. 205, Witness Fairfield).

ie... Pears . .

ee . , . = _ Don ——

an Te ee ee ee ee SOS ene

830

This exhibit, No. 205, is a statement of carloads of

{fol. 1322] citrus fruit and other fruits and vegetables re-

ceived by the New Haven from connecting carriers during

the months of May 1930 and February 1931. The first

grouping shows total receipts of fruits and vegetables on

the New Haven via all gateways. The second group shows

the fruits and vegetables received via the Harlem River

gateway. The third group shows the percentage of Harlem

‘River gateway receipts—79.4 percent of the citrus fruit

was received via this gateway. The fourth zroup shows that

79.7 percent of. the citrus fruit received via the Harlem

-River gateway originated on four southern roads as listed.

Percentages are shown separately for other fruits and vege-

tables and also for each of the two representative months.

There is a material fluctuation in our receipts of+citrus

fruit from day to day and from hour to hour. The Febru-

ary 1931 daily average receipts of citrus was 21 cars; the

low day on the 17th with no cars and the high day, Sunday,

February 15th, with 58 cars. In May 1930 we received

citrus fruit on 17 days of the 31. The highest day’s receipts

were 17 cars. Receipts of the fruits and vegetables are scat-

tered through all of the 24 hours of the day.

I offer as an exhibit one sheet of 8 photographic views of

New York yards, floating equipment-and the Hell Gate rail

route.

(Thereupon, the document referred to was received in

[fol. 1323] evidence, marked Exhibit No. 206, Witness Fair-

field).

My next exhibit is No. 207.

(Thereupon, the document referred to was received in

evidence, marked Exhibit No. 207, Witness Fairfield).

This exhibit, No. 207, is a map of New York and vicinity

showing connections to the New York, New Haven & Hart-: ©

ford Railroad. There is no all-rail connection between the

New Haven and our Jersey connections. The interchange

of traffic is made with the Pennsylvania over the. foute

marked (1) via floats and tugs from the Pennsylvania

Greenville bridges to the Long Island float bridges at Bay

Ridge, 3.5 miles across the upper bay, thence via rail over

the Long Island tracks and the New. York Connecting Rail-

road to the Oak Point yard of the New Haven’ s ———

. P “ POP ae ee

a Sih Td Ga Ret RO ia ah BN OTE a SCAU FOES ete

831

River Terminal, a rail haul distance of 20 miles. New

Haven crews and locomotives move these cars between Bay

Ridge and Oak Point, operating over the Long Island under

trackage agreement. The interchange routes with the Le-

high Valley and Central New Jersey are marked 2-A and

2-B on the map to the right of Greenville, cars being floated -

from the C. N. J. and Lehigh Valley float bridges across

the harbor at the lower end of Manhattan and then follow

the route marked 2 up the East River to the New Haven

float bridges at Oak Point Yard, a distance -of 11.5 miles.

Prior to the construction of the Hell Gate Bridge route in

(fol. 1324] 1918, the Pennsylvania Railroad traffic was

floated from Greenville bridges up through the East River

to our Oak Point bridges, a distance of 14.5 miles. The

Hell Gate bridge was constructed jointly by the New Haven

and the Pennsylvania at a cost of approximately $30,000,-

000.

The interchange made via water is a much more compli-

cated and expensive operation than an interchange effected

by land. On a land interchange one road will bring its train

into.a yard and set it out on interchange tracks constructed

for that purpose and the other carrier will move these cars”

cff the interchange tracks on to its railroad.

In the case of the New Haven interchange on the west-

-ward movement, the trains are brought into Oak Point yard

and cars classified for the different routes. Lehigh Valley’s

and Central New Jersey’s are loaded on to floats at Oak

Point and the Péynsylvania Railroad’s are moved to Bay

Ridge and loaded on to floats. The eastward movement is

handled similarly in the opposite direction. The New Haven

performs the floating service and operates a fleet of 16

tugs and 70 car floats in its interchange and pier float oper-

=» ations. .The interchange tugs are of 1,000 to 1,200 horse

power and the steel floats, having capacity of 20 to 22 cars

each, are approximately 300 feet long. These floats are

‘moored into electric float bridges, bridge aprons and plat-

forms adjusted to meet the varying tide conditions, and the

[fol. 1325] cars are then switched over the float bridges in

several cuts. There are three tracks on each float, the out-

side tracks holding on an average seven cars each and the

center track six cars. The loading of floats is difficult and

Slow because. there is the hazard of knocking the float off

the keys, because of the number of cuts of cars to be made, ©

Be SiTye cs 7% - me a

ee REPL HME I EMT IAPR EEE OR SLOTS TT I EN a i

c a ee — = polyen* m 5 b

tari ssiestis is Hansie sricrasorstnrcsen.ss0 sextet eatnnDicus a De shi ibee EA SODA ets

832

and further because of the exactness with which each cut

g of cars must be pushed flush against the bumping posts on

the float ‘without heavy impact. Our float yard switching

crews are well drilled but because of the complexities of the

operation accidents occur more frequently in this type of

switching than on land.

The unloading and loading of floats averages about one

~ and‘one-half hours per float. Floats are moved ‘in pairs,

lashed to the tug in the center. The time consumed on the

water between Oak Point and the Jersey float bridges varies

from one to two hours, depending upon tide conditions. The

time between Greenville and Bay Ridge averages about 40

minutes. Our tugs and floats are manned by a captain, en-

gineer, oiler, firemen, first deckhand, second deckhand and

two floatmen, the wages per hour being 40 percent more

than that of a five man switching crew. “The floating oper-

ations necessitate an entirely separate organization. li ad-

dition to the tug and float crews named, we have float

bridgemen, bridgemasters, chock and chainmen, float and

-tug repairmen and mechanics, marine clerks, supervisors,

[fol. 13826] ete. Fogs, storms, ice and heavy winds at times

have a serious effect on our-interchange operations.

_ In one round trip of floating service we have a maririe

-erew of seven men one and one-half hours on the water in

each direction and tied up idle at each terminal one and

one-half hours, while the yard switching crew unloads and

loads the floats, or a total of approximately six hours in the

eycle, and, in addition, a five-man yard crew loading and

unloading floats for one hour at each float yard terminal or

a total of six hours‘ of a seven man crew and two hours of

a five man crew, and these crews and equipment have moved

40 cars.each way, a distance of 12 miles. If the movement

_ were citrus, there would be 40 loads one way and 4( empty

- the other.

In contrasting a rail interchange and a float interchange

it is also necessary to consider the complexities of the land

switching in Oak Point Yard itself. Oak Point is hemmed

in by the water and the industrial and residential district

of the Bronx. It is a combined floating and rail interchange

yard. The tracks for classifying and making up of trains

in front of the float bridges have a capacity of but 20 cars

-" each, which necessitate rehandling of cars and-doubling of

| cars over on two or more tracks in making up outward

833

trains and in breaking up inbound trains.- The desirable

[fol. 1327] modern interchange yard is built with separate

receiving tracks of 100 or more car capacity .each, separate

hump yards for eastward and westward classifications, ade-

quate classification tracks and separate forwarding yards

with tracks of 100 or more capacity. There is no room to

make such a yard at Oak Point and in order to meet the

present day demands for expedited service we are required

to spend more switching effort in producing transportation

in this yard than roads that do not have this geographical

handicap. -

The operation of this yard is also affected by-the com-

muter service in and out of Grand Central Terminal. The

freight movement eastward from Oak Point joins the pas-

senger route from Grand Central at New Rochelle, ten miles

east of Oak Point. We carried 16,900,000 passengers in and

out of Grand Central Terminal in the year 1930._There are

196 regular passenger trains moving daily through the in-

terlocking towers at New Rochelle and over the same tracks

handling the freight service. New Rochelle isa crossing at :

grade.. This total movement of 196 passenger trains and an -§

average of 48 freight trains daily means that. there is a |

movement of either a passenger train or a freight train

over this route every six minutes in the day. This count -

of movements is understated in that work trains, light en-

gines, special trains and sections of passenger trains are

not included. ; |

During the heavy inbound commuting hours, 7 to 9 A. M.,

(fol. 1328] the passenger trains, excluding light engines and

. deadhead moves, pass at the rate of one every 3.4 minutes

and from 5 to 7 P. M. eatbound passenger trains are spaced

at average intervals of one every 3.2 minutes.

The Harlem River route, particularly from New Ro-

chelle, New York, to New Haven, Connecticut, sixty miles,

requires the use of one of the heaviest traveled passenger

lines in the United States. The movement of passenger

trains is so intensive during the morning and evening hours

that freight trains are held back in the términals until the

peak periods are over. Oak Peint yard must hold up such .

cars as have been classified and made ready for eastbound

movement until these two peak passenger periods are over.

As previously referred to, the movement of this traffic

o3—312

east from Bay Ridge is made by New Haven crews and

locomotives over the electrified zone of the Long Island and

the New York Connecting Railroad, a distance “of 20 miles,

to our Oak Point Yard. At this point cars are set out for

Harlem River proper and for points local to the New York

Division. Other traffic that comes to us at Oak Point from

the Lehigh Valley and Central of New Jersey is consoli-

dated into the various trains. Due to the terminal and di-

verging route characteristics of the New Haven, a large

number of classifications are necessary because of the traf-

fic branching off at the various intersection points. Leaving

{fol. 1329] Oak Point the first diversion from the main line-

is at South Norwalk, Connecticut, for the Berkshire route,

next at Bridgeport, Connecticut, for the. Waterbury and

Winsted route, next at New Haven, which is the main hub,

the traffic splits to five general routes, next to New London,

Connecticut, for the Worcester route and the Central Ver-

mont Railroad, and then at Providence, Rhode Island, which

is the hub of the east end of the road, the traffic separates

to seven different routes. Each of these lines branching off

the main line have other junction points and lines extend.

ing in various directions, as is shown on my map exhibit.

That traffe which moves over the Shore Line Division is

over our ivur track electrified zone from Oak Point to New

Haven, 70 miles, and from New Haven to Boston over dou-

ble track steam operated route, a distance of 155 miles.

We have never had a solid train of fruits and perishables’

on the New Haven and it moves in various trains td various

- destinations throughout the 24 hours of the day. This is due

to the three factors, ‘first, because this traffic comes to us

' during all hours of the day; second, the float service and.

train service must. be coordinated-to keep the float bridge

yards ope, and, third, because our transportation condi-

tions do not permit us to switch out‘and hold so-called slow

freight for heavy slow moving freight trains.

In February, 1931, out of Harlem River, 107 trains

[fol. 1330] which handled the bulk of the perishables aver-

aged 12 cars of fruit and vegetables per train, of which 5.5

cars per train were citrus. In.May, 1930, 116 trains handled

15 ears of fruit and vegetables per train and .5 cars per

-train of citrus, these trains also moving, various classes of

other freight. Boston received 152 trains handling perish-

ables during February, 1931, with 7.2 fruit and vegetable

ey.

835

cars per train, of which 2.4 cars per train were citrus fruit.

During May, 1930, 226 trains arrived with an average of

nine cars of citrus fruits and vegetables per train and there

were but 75 cars of citrus fruit split in the 226 trains. Tes-

timony has been introduced as to the special and expedited

services rendered by the Southern lines in handling this

traffic and our services on the New Haven is very similar

in many. respects.

Our mechanical forces specialize in the inspection and

treatment of journals in this traffic to insure continuous and

‘- prompt movement to destinations or break-up yard. We

give special attention to repairing cars shopped for defects.

On a train containing perishables leaving the. gateway or

.leaving the various break-up yards we put eight to ten car

inspectors on the train so that a thorough inspection is

made in the quickest time possible, the force on a perishable

train being doubled, and this slows up other trains. If a

car is set out the inspection force is called and if there is no

[fol. 1331] regular train service available a crew is ealled —

_to move car to destination.

We also specialize on the switching of the traffic at the

gateway, at intermediate points, and at the final destination.

Perishable cars are the first classified at all points and at

many ‘points on the road the road crews instead of regular

switching crews place the cars early in the morning. Place- |

ment of other traffic is made by yard crews when they re-

port at 7 A. M. but the’fruit and vegetable dealers demand

and get placement before this time.

The Southern railroads speak of the cleaning of cars.

The cleaning of cars is an important item at our various

cities. At Harlem River we contract with a concern to re-

move refuse outside of the city. At Boston we have a spe-

cial truck and force of cleaners to dispose of the refuse.

At New Haven, Providence and other points’ the rubbish is

cleaned up by work trains or switchers and moved outside

the city and dumped.

Similarly to the Southern lines, we hav e our troubles with

diversion orders. During February, 1931, we diverted 361°

ears of fruit and vegetables from the larger points on the

road; 233 of these or 64% were citrus fruits. Where the

sale of fruits and vegetables has been held up due to a sur-

plus in the market and diversion orders given we are held

strictly to making an expedited move in getting the cars to

- ’

BR org. 5 ~ . t

met } : ™ . : ’ : eee,

3s -e : = ‘ Ha ales

836

[fols 1332] the central yard and forwarding to the changed

destination.

As a terminal railroad we do the accounting and book-

y .keeping work for the originating and intermediate carriers

on all OS&D work, all claims, collections, etc. We are the

clearing house for claims on traffic due to loss or damage

or te failure to 11ake the market and the expense incurred

by our various departments cannot be passed back to other

carriers. In.addition, we have special forces of perishable

inspectors to watch and check the condition, of the fruits

and vegetables on arrival and before disposal.

With regard to testimony presented as to reductions made

_ in tonnage of perishable trains to maintain fast schedules

and effect prompt deliveries, an analysis of February, 1931,

shows that our fast freight trains over the Shore Line route

handled but 75.2 percent of the tonnage handled by the slow

freight trains over this same territory.

That is an actual figure. That is not a hypothetical rat-

ing. It is actual tonnage handled.

A further analysis of the trains handling the largest part

of the perishable traffic shows-an average time on the road |

from terminal to terminal of 18.1 miles per hour. However,

deducting the intermediate terminal time setting out and

picking up cars, the running time is 21.0 miles per hour.

This schedule is comparable to that of the Southern lines.

_ and, in addition, we have slow orders for 10 drawbridges,

[fol. 1333] slow speed over the Hell Gate route and through .

- congested areas and a heavy passenger train interference.

Our heavy density passenger service on our Shore Line

route has a very definite influence on our freight train

schedules. .We operate 38 through passenger trains be-

. tween New York atid Boston, 26 of which run over the Shore

o Line route. We have made a special study covering a 52

i mile section of this route from New.Haven, Conn., to Mid-

way, Conn. The scheduled running time of our through

passenger trains is one hour 13 minutes. Practically all

freight trains are therefore required to enter a siding at

some point in this 52 mile stretch of track to clear the faster

through passenger trains and ‘frequently the freight trains

take siding at two different points for different following

passenger trains. The delay to freight,trains clearing for

passenger trains in the month of October amounted to 182

freight train honrs.

oe SA AS ae

. : ei etal SD Raia hb leet le tS

837

With regard to our final placement, a description of three

of the larger cities, I believe, will give a general idea of the

operating difficulties experienced in handling the fruit and

vegetable traffic. Testimony has been presented as to the

change in operating conditions brought about by present

day requirements for the expedited movement of the fruit

and perishable traffic. This is particularly true on the New

Haven.

[fol..1334] I offer as exhibit No. 208 one sheet shoving air

photo of our Boston freight terminal, with oval insert of .

our classification vard No. 4.

(Thereupon, the photo referred to was received in evi-

dence, marked Exhibit No. 208, Witness Fairfield.)

Prior to April, 1927, it was our practice at Boston. Mass.,

to place this traffic on various tracks in our No. 5 public

delivery yard. At that time the Boston terminal market

was constructed with two large brick houses 660 feet long

and 50 feet wide, each with a capacity of 75 carloads and a

_ bulk yard with a capacity of 200 carloads. -Since that ‘time

a third housé has been added-and three covered platforms...

All. of this involved ‘an investment of approximately $1,-

200,000 covering the buildings and land under them, but not

including the tracks or the land under the tracks required

to serve these terminals and the adjacent yards. In this

construction it was necessary to relinquish tracks in the

yard having a total capacity of 290 cars and this was done

in a yard that was cramped even before the change. This

added to our ¢ifficulty in switching perishable traffic and

slows up the handling of other traffic. Boston terminal

proper is made up of ‘12 separate yards, not. including the

outlying yards. The present Boston terminal is the growth

and extensions of what were the terminals of the Old Colony

Railroad and the New England Railroad. .Additions and

[fol. 1335] extensions Kave been made as business increased

-bat the location of the yard limited by the waterfront, by

city streets and by built-up distriets has prevented the con-

struction of a receiving yard, a classification yard and for-

warding yard, such as would provide for a more,economical

operation. The longest track in the yard holds only 38

ears. There is a bottle neck of the yard passing under one

of Boston City heavy traffic streets, as can be seen in the

photo. The yard tracks fan out from the east end of the

— aw _— aes -* tad

. .

EON INLET RTI SEPP CR ORM RME PALL IT LTT NLR

atthe eet :

pa ASAT Mi ET i ia IT NR ci IS BA ASN i Si SS inl i

838

yard, contract again under-the overhead Summer Street,

and from the latter point extend in all directions to, the

waterfront. The physical characteristics of the yard and

the lack of space to provide hump yard facilities: results in

numerous rehandlings of the same cars in flat switching

passing from one yard to another.

Measured by cars handled per switch engine hour, Boston

has the least productive results of any yard on the - system

and this is, due to the layout of the yard as described and

the handling of the perishable traffic requires a greater

amount of effort than that of any other traffic received in

the yard. The cause of this is that the bulk of the perish-

able commodities is arriving at this terminal in-the differ-

ent trains prior to and after midnight with a definite limi-

tation that they must be placed at the various parts of the

market terminal pricr to opening at 5 A. M. Cars that are. -

not placed are subject fo refusal by consignees and subse-

[fol. 1336] quent filing of claim for loss of market. Tele-

‘phone advices are forwarded from the gateway to Boston

of car numbers, initials, consignee and contents and the

“ same information i is also given from New Haven on trains

destined to Boston and other eastern points and the con-

signeeg have all information available as to various com-

modities en route and the New Haven assumes the expense

for doing this work. Orders are then placed with our local

people for the placement of cars they want placed and those

to be held out. On arrival of trains at Boston, yard crews

classify the ears according to the points ordered. For ex-

ample—10 house, 11 house, 12 house, 7 yard delivery, 7 yard

hold, platform delivery, State Yard hold, 5 yard hold, ete.

This work is performed during limited hours i in a yard that

has very definite restrictions “and if this fruit and perish-

able traffic could be handled in the ‘same-manner as slow

freight traffic we could save five vere switching crews at

this point alone, per day.

In addition to the cars delivered by the New Haven Rail-

road at Boston, cars of citrus are interchanged with the

Boston & Maine Railroad and Union Freight Railroad

_ through the city streets of Boston.

The Union Freight Railroad is operated as a separate

railroad and is a switching railread that has its tracks on.

city streets in the heart of Boston. The tracks run under

[fol. 1337] the elevated structure of the Boston Elevated

'. after 11 P. M. In’ making this interchange movement a

839 |

Railroad on Atlantic Avenue and Commercial Street. The

tracks are between the pillars of the Boston Elevated and

are flanked on both sides by street car tracks.

The interchange movement over the Union Freight Rail-

road and to the Boston & Maine is restricted by the City of :

Boston to the night hours, the first mevement usually being &

‘

flagman is required to walk twenty feet ahead of the switcher.

The distance flagged in this way is a little over two miles

on the Avenue. In going to and from the Boston & Maine 4

Railroad the movement is over two drawbridges.

At Providence, R. I., a new market* terminal was con-:

_ structed April 15, 1929. The building is 965 feet long, two

‘stories high and.60'feet wide with a total floor area of 224,-

eres,

000 square feet. A paved driveway 50 feet wide separates F

the warehouse siding from our yard No. 17 in the heart of &-

Providence. A total of four tracks including the warehouse é

siding serve the property, each track having a capacity of E -

35 cars. Receivers of fruit and vegetable carload ship- 3

ments insist on a 3 A. M. placing of cars in order: that. con-

signees may make delivery in time,for the morning market.

This traffic is also placed in the public delivery yard and

_at various points in the Providence terminal, including Ar-

lington (6 miles from Providence) on the Willimantic

[fol. 1338] Branch and Olneyville on the Pascoag Branch

(4% miles west.of our break-up yard). The movement of

this traffic is to our Northup Avenue hump yard (4 miles

‘east of Providence) where cars are classified and moved

back to yard 17 or a total of eight miles.in switching serv-

ice, over and above the rail haul to Providence. Providence,

as measured in cars switched per engine hour, is next, low-

est in Boston, due to the congested switching area, aud here

too we have given’ up space and switching facilities valuable

for other traffic in order to provide the facilities that are

demanded today for the handling of this class of traffic.

Because of the large number: of diversions‘on fruits and

vegetables at Providence, it was necessary last year to start

an additional train out of this point at night in order to

make the market at Boston for next morning delivery. This

was done after a trial of stopping the through trains in —

order to pick: up these diverted ‘cars, because the delay in-

curred in stopping to set off.and pick up the perishable from

Harlem River and other gateways, in several eages brought

USM AM rc AR aA EAT eRe BBY IN RNR LRTI NE gy sla weap TEN AN aye Shoot Tey eapencp Nt

“e Z :

vik

840

them into Boston too late for the market. While this extra

train handles other than perishable cars, it was put in pri-

marily because of the fruit and vegetable traffic. At New

Haven the principal delivery yard for fruits and vegetabies

is located at Silver Street with the remaining cars being

delivered in the bulk tracks at Brewery Street, both loca-

E [fol. 1339] tions being in the congested part of the city.

& Cedar Hill, being the break-up yard, cars from the Har-

; lem River gateway are hauled past these locations, a dis-

tance of 244 miles beyond New Haven where they are

4 switched out of the road.trains and hauled back to the city

% _ proper by a transfer switcher. Cars for Brewery Street

are then placed by city yard switcher and the cars for Silver

Street are taken.by another switcher and hauled down the

main line through the passenger station, a distance of one

mile, to the.connection with the old Derby Railroad, thence

over, this line a distance of 144 miles back to Silver Street.

When placed these cars are within 1000 feet of the city

. break-up yard, yet it is necessary to haul them 214 miles

for placement, in addition to the 214 miles back haul ‘from

Cedar Hill. not

I have prepared data as to the effect of weather condi-

tions on the operations in New York Harbor. My exhibits

show that a large part of this traffic moves in cold weather

‘months and I have referred to the slowing up-of our opera-

tions in New York Harbor and vicinity due to inclement

weather. I offer Exhibit No. 209.

(Thd paper referred to was received in evidence, marked

Exhibit No. 209, Witness: Fairfield.)

Exhibit 209 is a statement showing weather conditions

affecting floating operations January 1 to April 19, 1929.

This is the result of a special analysis made two years ago

[fol. 1340] but I consider it is representative of conditions

that we meet yearly. ‘The first block of figures: shows the

number of hours of inclement weather conditions that ad-

versely affected our operations. The last line shows the

number of hours that there was a complete stoppage of

floating operations.

Where that first line shows ‘‘cloudy, hazy or foggy,”’

cloudy is not where we have a few clouds, but where it is

verging on the haze, or will change to haze or fog. —

_ When the water route is stopped entirely and the pros-

reo Cea ER CRN? sete etter eT BRIN ia PHONG SSR AERTS

pect of clearing in time for perishable movement is not good,.. .

the Pennsylvania Railroad run the perishable cars through

the passenger tubes under the Hudson River and the East

River through the New York passenger terminal of the

Pennsylvania Railroad. This movement through the con-

gested passenger terminal and tubes is an indication of

measures taken to assure the prompt handling of perish-

able freight. In no instance do ears of merchandise or other

freight move over this route. That, of course, is not a reg-

ular thing. ,

In considering the effort of the railroads to produce this

highly specialized and expedited movement of citrus fruit

' it is interesting to show one item of expense thrown on to

the terminal railroads by the consignees. In Boston during

the month of February, 1931, consignees released only 20

percent of the citrus fruit on the same day car was placed,

(fol. 1341] 29 percent on-the second day and 42 percent was

held three days or more. In May, 1930, 37 percent of the

citrus was released on the first day,'27 percent on the second.

day and 36 percent was held three days or more. This con-

dition means that the railroad bears additional expense in

switching the cars, in the first place to place on hold tracks

and then place for delivery and also to switch cars for icing.

It also means ‘that we have to furnish additional space to

hold the cars until required. It is not infrequent to have

cars of citrus fruit held three days or longer and then re-

ceive orders to place at a certain designated location or too

divert it to some other point.

Cross-examination.

By Mr. Gwathmey:

Exhibit 205 shows the receipts of citrus fruit via the

_ Harlem River gateway from the four Florida lines and in

a separate item the receipts show from all other lines. That

last includes the California citrus fruit.

The New Haven Railroad has taken no-steps to discour-

age the holding of car. .t destination that I know of.. The

reason a car is sometimes held out for three days at Boston

is the market conditions. It is my understanding that con-

signees are not ready to accept and unload the car on ac-

count of the market conditions and they will just let it stand

[fol. 1342] there. I don’t believe I am prepared to answer

e e . «

z : EET IPE Be MNS Te TE Ne EOE Bia iti h oh Sek

bk See ae ee ee ee ab edanewy 4 a —————

ae .

842,

whether that is the proper function of a railroad. I am

just stating what the conditions are and how our operations ©

are adversely affected but whether we should control that.

or not, I do not know. I think it is a part of the picture in-

showing the work we are doing in connection with the citrus

fruit traffic and that is what my statement was for and if

that should not be given consideration I think the Commis:

sion will know that.

There are certain exceptions to the charges for diversions

-and reconsignments made by our company. I understand

that if it is diverted from one consignee to another before

arriving at destination there is no charge but I have not

included those items in-my testimony. Those that ! have

referred to are, of course, covered by the tariffs. |

J. L. Heywoop, having been first duly sworn, testified as

follows:

_ Examined by’Mr. Eshelman:

I am a special agent in the Accounting Dileinwianat of

the Pennsylvania Railroad. I have caused to be compiled

certain data as to the expenditures of the Pennsylvania

Railroad for the account of perishable terminal facilities

during the years 1912 to 1930, inclusive. The exhibit that

[fol. 1343] I have prepared is true and correct to the best

of my knowledge and belief.

Mr. Eshelman: We ask that that be received as the next

exhibit.

(Thereupon, the paper ited to was received in evi-

‘ dence, marked Exhibit No. 210, Witness Heywood).

Witness: I have also made an investigation to determine

the amounts of money which the Pennsylvania Railroad

regional system paid out during the years 1926 to 1930, in-

clusive, for removing snow, ice and sand from the tracks.

Those amounts are as follows: 1926, $1,914,348 ; 1927, $916,-

243; 1928, $602,189 ; 1929, $977,859; 1930, $586, 038. 7

Cross-examination.

By Mr. Gwathmey:

Exhibit No. 210 covers anything connected with perish- :

ables and I would say that if it was connected with that plat-

| 843

form cost of tracks. would be included in it. In putting in

a new facility for perishable freight, I would say it was

included. That would be my understanding.

[fol. 1344] E. A. Hopkinson, having been previously

sworn, was recalled and furtlier testified on direct examina-

tion as follows:

Examined by Mr. Calhoun:

I am commerce statistician for the ‘Trunk Line Associa-

tion. I am appearing for all the Official Classification lines.

There has been prepared under my supervision a set of

exhibits for introduction here dealing with the accounting

features of this case. Those exhibits reflect the tacts, to

the best of my knowledge and belief.

My first exhibit, no 211, shows the rail mileage, sathieen

district and southern region, reapectively, by “three- -year

periods.

(The paper referred to was received in.evidence, marked

Exhibit No. 211, Witness Hodkinson).

Starting with the year 1911, up to and including the

year 1929, the mileage is shown separately as ‘‘Single or

first track’? ‘second traek’’, “‘Third track’’, “fourth and

industrial track?’, ‘yards and sidings’’, and, ‘‘total mile-

age operated all tracks.”’

The last line in the first section of the exhibit shows the

mereased mileage as to each class of track, 1929 over 1911.

The increase in total mileage is 23,025 miles for the eastern

district. and 14,235 miles for the southern region.

[fol. 1345 ] At the foot of this exhibit is shown the per-

centage increase over 1911 for each class of track, The-

percentage increase. as to single or first track, 1929 over

1911, is 7.1 percent for the eastern district and 10.7 per

cent tor the southern region.

For the second track, the increase is 28.5 percent for the

eastern district and 180. 9 percent for the southern region.

For the third track, the increase is 26.9 ‘percent for the

eastern. district, as compared with 253.8 ic for the

‘southern region. "

For ‘the fourth and industrial track, the increase is 94:9

b * ss = . ‘

— BFE ICO HLS OEY OES RILEY, ROTC ASC UTS PRP LEE ERP LY RA RLY EL LD ILE TEE NR

Ba PN we F ¥ “he z . < on c ae

° . 7 : .

AOR LS ieee Lee ies eden OS

SAAN,

844

percent for the eastern district, as compared with 267.4

percent for the southern region. .

For yards and siding, the increase is 32. 4 percent for the

eastern district, as compared with 65.8 percent for the

southern region. .

The percentage increase for the total mileage operated

all tracks is 19.4 percent for the eastern ‘district, as com-

pared with 29 percent for the southern region:

My next Exhibit is No. 212.

(Thereupon, the exhibit referred was received in evi-

dence, marked Exhibit No. 212, Witness Hodkinson).

In this exhibit, No. 212, I have shown the population by

states, by ten-year periods from 1870 to 1930. In this ex-

[fol. 1346] hibit separation is made as to states within

Southern Classification territory and states within Official

Classification territory. ,

While it is true that a small part of Kentucky is located

within Official Classification territory, the greater part of

Kentucky falls within Southern’ Classification territory, and

for that reason I have placed Kentucky in the Southern

‘Classification. group. It is also.a fact that some portion

_ of the State of Virginia is located in Southern Classifica-

tion territory, but since most of the state is situated within

Official Classification territory I have included Virginia with

the Official Classification ‘states.

The population figures shown on this. exhibit agree w ith

Witness Lamb’s Exhibit’ No. 81, in so far asthe states

shown on his exhibit are concerned.

My next exhibit is No. 213.

(Thereupon, the document referred to was received in

~ evidence, marked Exhibit No, 213, Witness Hodkinson).

This exhibit No. 213, ened the population per mile of

railroad in the Southern Classification states and Official

Classification states, respectively, by 10 year periods, start-

_ing with the year 1890 up to and including 1930. The fig-

ures shown on this exhibit also agree with the miles of

railroad and population figures shown on Witness Lamb’s

Exhibit No. 81, in so far as the states shown on his —

[fol. 1347] are concerned.

In this exhibit, as in the prectéing exhibit, .I have in-

cluded Kentucky with the Southern . ‘Classification states

BERR ERT ee AN ELLIS A BGS ESERIES SN TEN

‘

845

and Virginia with the Official Classification states. It is,

of course, perfectly obvious that the small increase in popu-

lation per mile for the southern states is due to the tre-

mendous increase in railroad mileage in the southern states

during the period covered by the exhibit. In this con- °

nection, F desire to call‘ particular attention to the per-

centage of increase as shown at the bottom left-hand corner

of Mr. Lamb’s Exhibit No. 81, from which it will be noted

that the railroad mileage in the South Atlantic group was

increased 68 percent in 1930 over 1890, whereas the popu-

lation during this period only increased 76 percent. On the |

other hand the railroad mileage in the Eastern group was

only increased 16.1 percent with a population increase’ of

101 percent. Naturally, under these conditions the popula-

tion per mile of road remained practically stationary in the

South Atlantie group. . ‘2

Mr. Lamb’s Exhibit No. 82 is copied from a statement

issued by the statistical bureau of the Interstate Commerce

Commission. I do not understahd it to be an official docu-

ment of the Commission, it simply reports the results of a’

study made by Dr. Lorenz. The carriers within the Official

Classification territory are unable to compile statistics for

[fol. 1348] traffic density, operating costs, revenues or any-

thing else, by states. The figures shown for Trunk Line

territory for an example, include points in the States of

New York and Pennsylvania, which are within Central

Freight Association-territory. The New York figures would

also include some points within New England ‘territory.

Further than this, the study in question was made in 1927,

which may, or may not be a representative year, and it is

also highly probable that conditions have changed materi-

ally since-the study was made.

My next exhibit is No. 214.

_ (Thereupon, the document referred to was received in

evidence, marked Exhibit No. 214, Witness Hodkinson).

This exhibit, No. 214, shows a comparison of traffic den-

sity, comparing the Eastern district (including Pocahontas)

with the Southern region, for the years 1911, 14, 15, 16,

26, 27, 28 and 29. I have started with the year 1911 for the

reason that, this was the first year in which the statistics

of the Commission were prepared for the respective re-

gions, Our idea was to go back as far as we could con-

™ ‘

EE ss in ABEND in Ut a a ES

+ >,

veniently do so, for all of these exhibits and, generally

speaking, 1911 was the first year that we could cover. In

other statements, it maybe we could only go back to 1914.

That was because those were the first years for which we

could obtain the figures. It is a fact that in some instances,

even by doing the clerical work and expending the money, ~

we could not have goné farther back than we have gone

{ fol. 1349] in these exhibite,

Prior to 1911 the statistics were prepared by groups and

it would require considerable work to prepare comparable |

figures prior to that year. The percentage increases, 1929

over 1911, are shown in the three last columns of each

block as to miles of track, revenue ton miles and tons one

mile per mile of road. For the Eastern district there is a

percentage increase of 6.56 percent miles of road, as com-

pared with 1169 percent for the Southern region; the rev-

enue ton miles increased 61.69 percent for the Eastern dis-

trict as compared with 102,09 percent for the Southern re-

gion. The tons one mile per mile of road increased 51.73

percent for the Eastern district as compared with 80.93

percent for the Southern region. The comparisons which

I have just made are 1929 over 1911.

My next exhibit deals also with traffic density. This

exhibit will be No. 215g ,

(Thereupon, the do@iment referred to was received in

evidence, marked Exhibit No. 215, Witness Hodkinson).

This Exhibit No. 215, is similar to the preceding exhibit«

It also deals with traffic density, showing the revenue ton

miles (thousands), revenue tons originated (thousands)

and revenue tons carried (thousands) for the Eastern dis-

trict, including the Pocahontas region, compared with the

Southern region. The percentage increase is shown over

[fol. 1350] 1911 for each year appearing on the statement.

With but very few exceptions the Southern region enjoyed

a greater percentage increase in every. year than did the

Eastern district, as to all three factors considered, namely,

revenue ton mile, revenue tons originated and revenue tons

’ earried. The only exceptions are as to revenue tons orig-

inated in 1914 and 1917, where the Southern regions per-

centage of increase was‘less than that of: the carriers in

- the Eastern district, and as to the revenue_tons carried, the.

‘years 1914 and 1917, where again the thern region’s .

ESI KORE Bie SY te Hse’ 5 meee

increase was less than that accruing to the Eastern district.

In all other years the carriers in the Southern region had

a materially greater percentage increase than did the Kast-

ern carriers.

Comparing 1920 with 1911 shows, as to revenue ton miles.

there was an increase of 38.15 percent for the Eastern dis-

trict as compared with 72.21 percent in the Southern re-

gion; revenue tons originated, an increase of 12.40 per-

cent in the Kastern district, as against 24:20 percent in the

‘Southern region; revenue tons carried, an increase of 8.48

percent for the Eastern district as compared with 37.52

in the Southern region.

Particular attention is also directed to the large per-

centage increase in revenue ton miles in the Southern re-

gion for the years 1920, 1923, 1926 and 1929. |

_ [fol. 1351] Witnesses for the Southern carriers have laid

~ considerable stress upon the importance of citrus fruit traf-

fic to them. I have made a study for the purpose of devel-

oping the facts, and that is shown in my next exhibit No.

216. i 1

(Thereupon, the document referred to was received in

' evidence marked Exhibit No. 216, Witness Hodkinson).

This exhibit, No. 216, shows the tonnage originated by 4

the five principal Class I citrus fruit originating carriers q

in the Southern region and have compared the citrus fruit

originated with the total carload traffic originated by these

fivé roads. | : |

. The percentage the citrus fruit traffic constituted of all .

carload traffic originated ranged from .9 percent in 1926

to 2 percent in 1929, with varying percentages higher than

‘9 percent and less than 2 percent for the other years. This

exhibit shows that the five roads dealt with originate prac-

tically all of the citrus fruit traffic originating in the South-

ern region. This is shown in the third block in the exhibit,

. where I have shown the total citrus fruit traffic originated

in the Southern region and the percentage of that total

which these five roads originate. Mog

It will be noted that: during the period covered, these

‘Toads originated in excess of 90 percent of the total citrus

fruit traffic-originated in the Southern region, the percent-

[fol. 1352] ages ranging from 96.3 percent in 1922 to 99.5

~ in 1930. ss |

847 -

In the last block on this exhibit I have shown the per-

centages which the total citrus fruit traffic originated in

the Southern region was of the total carload traffic in that

territory.. Thespercentage was either .3 percent or .4 per-

- cent during the years 1920 to 1928, .6 percent in 1929 and

5 percent in 1930. I have a companion exhibit which will

be No. 217.

_ (Thereupon, the document referred to was received in

“ avidence, marked Exhibit No. 217, Witness Hodkinson).

| There is not any difference in the method employed in

»reparing the information shown thereon and the informa-

tion shown on Exhibit No. 216. They’ were both prepared

from the same source, but in the one case we took the ton-

nage originated and compared the citrus fruit traffic orig-

inated with the total, and on the next exhibit, No: 217, the

comparison is made of citrus fruit traffic carried with all

carload traffic carried. Exhibit No. 216 covers only citrus

‘fruit raised in the South, originated there by these roads

_and covered by the roads. -Exhibit No. 217 contains not

only the cigrus fruit grown in the South, but also that grown

elsewhere and carried by the Southern lines.

Taking the five principal Class I originating carriers,

again it will be noted that citrus fruit traffic constitute from

{fol. 1353] 0.8 percent of the total carload traffic carried

in 1926 to 1.6 percent in 1929. The percentage of the total

citrus fruit carried in the Southern region of all carload

traffic carried in the Southern region was less than 1 per-

cent, ranging from 0.4‘to 0.7 percent as is shown in last

_ block om exhibit.

In Mr. Lamb’s Exhibit No. 85 it will be noted that in

-- the year 1928 citrus fruit revenue constituted only 4.14 per-

cent of the total revenue of the five Southern roads dealt

with by him, in 1929 it was 6.25 percent and in 1930 it was

5.63 percent of their total revenue. On pages 424 and 425

of the record Mr. Lamb stated that the products of mines"

and products of forests constituted approximately the same

percentage of the total tonnage carried by the five Southern

‘railroads on the one hand, and the Eastern roads on the

other, whereas the higher grade traffic which was less than

earload freight and manufactures and miscellaneous com-

modities, constituted an appreciably higher percentage of

the Eastern lines’ total traffic carried than of the Southern

al 849

‘roads. The figures shown on this exhibit, of course, speak

‘for themselves. It will be noted, however, that in every

year the total products of mines and forests, according to

the figures shown on line 5 of Mr. Lamb’s exhibit, show that

the Eastern lines handled a greater percentage of these

low grade commodities compared with their total tonnage

(fol. 1354] than did the Southern lines. It also shows that

the Southern lines’ less than carload traffic carried also

constituted’ a greater proportion of their otal tonnage .

carried than was the case in so far as the Eastern roads

were concerned.

I have an exhibit consisting of two pages, which will be

exhibit No. 218, comparing for the years covered by that

exhibit, including 1911 to 1930, the distribution of tonnage

by groups of commodities, Eastern district, including Poca. _

hontas.

’

(Thereupon, the document referred to was received in

evidence, marked. Exhibit No. 218, Witness Hodkinson).

This exhibit, No. 218, compares the Kastern district with.

the Southern region, for the years 1911, 1914, 1915 and

1920 to 1930, both inclusive, both as to tons originated and

tons carried, showing what percentage of the grand total

each commodity was for each of the years covered. That

exhibit speaks for-itself. |

My next exhibit is No. 219.

(Thereupon, the document referred to was. received in

_ evidence, marked Exhibit No. 219, Witness Hodkinson.)

. This exhibit, No. 219, compares’ the tonnage of the heavy

joading low’ grade commodities originated in the Eastern

district with the tonnage of these same commodities origi-

nated in the Southern region. We used 11 items for years

1921 to 1927 and 14 items for. years 1928 and 1929 having

(fol. 1355] an average load of 40 tons and up. In the

years 1928 and 1929 we used a fifteenth item, brick, common,

which does not average a load of-40 tons. to the car.

These-commodities during the period covered constituted

‘in excess of 60 percent of the total carload tonnage origi-

_ .Mated in the Eastern district, and over 54 percent of the

total carload tonnage originated in the Southern region.

It will be noted that the Eastern district originates a greater

54—312 ae

Ss LOAN iit SLM SoC Liana se Seicseskiia <<a.

850

percentage of this low grade traffic than does the Southern °

region. The average for the years 1921, 1923 and 1925 and

1927 for the Eastern district was 68.17 percent of the total -

a tonnage originated, as against 57.37 percent of the total

\F \ tonnage originated in the Southern region. Those figures

are found on sheet 2 of the statement. For the years 1928

and 1929 this low grade tonnage constituted 63.82 percent

of the total tonnage originated in the Eastern district, as

compared with 37.95 percent of the total tonnage originated

in the Southern district. These averages are found on

the second sheet of the exhibit, and the explanation of the.

item numbers shown in-the fourth and ninth columns on

the second page of the exhibit will be found on the first

page of the exhibit. .

Item 16, for example, is the average tonnage of all the ,

items 1 to 15. Item 17 is the average of the grand total

all carload traffic.

(fol. 13856] The next exhibit, No. 220, is a graph.

(Thereupon, the document ,referred to*was received in

evidence, marked Exhibit No. 220, Witness Hodkinson.)

Ton mile revenue is influenced by the average haul and by

the character of the tonnage carried. Roads handlin

preponderance of heaving loading low grade commodities

naturally earn low ton mile revenue. The preponderance

of low grade tonnage handled by the Eastérn carriers of

course has its effect on their ton mile revenue, but the vari-_

- ous general rate changes received by the carriers in the

Eastern district, namely, the increases of 5%, 15%, 25%

and 40%, with a decrease of 10%, as compared with the

two general increases of 25% and a general reduction of

310% for the carriers in the Southern region have also had

a material bearing on ton mile revenue earned by the

carriers in the respective regions. While 20 years ago

there was a wide disparity between the ton mile revenue

of the carriers in the HKastern district and those in the

Southern region in favor of the latter, this spread had

rapidly diminished since 1917. This is graphically illys-

trated in my exhibit No. 220. In 1911 the ton mile revenue

for the Eastern district was 6.18 mills, in the same year

for the Southern region it was 8.24 mills. The ton mile

revenue for the Southern region being 133 percent of that

in the Eastern district. In the year 1928 the ton mile reve-

Tae Ds Pe Oy Men pee Reva et TL er sits a

851

nue for the Kastern district was 10.21 mills as against 10.78

(fol. 1357] mills for the Southern region. In 1929 it was

10.14 mills for the Eastern district, as against 10.88 mills

for the Southern region. In 1930 it was 9.98 mills for the

_ Kastern district as against 10.82 mills for the Southern ~

region. Then in 1930 the ton mile revenue for the Southern

region was only 108.5 percent of the ton mile revenue for the

Eastern district. In 1922 and 1923 the ton mile revenue

for the Southern region was even lower than 108.5 percent

of the ton mile revenue of the carriers in the ‘Eastern

district.

My next exhibit is No. 221.

(Thereupon, the document referred to was received in

evidence, marked -Exhibit No. 221, Witness Hodkinson.)

‘This exhibit, No. 221, is comparable to Witness Lamb’s

Exhibit No. 86; except that it covers all Class I carriers in

the Eastern district and Southern region instead of only

selected carriers. That exhibit shows freight and passen-

ger service dSperating statistics of Class I steam roads in

the Kastern district. This exhibit consists of two pages,

the first page being devoted to the astern region, and

the second page to the Southern region. .

My next exhibit is No. 222.

(Thereupon, the document referred to was received in

’ evidence, marked Exhibit No. 222, Witness Hodkinson. )

This exhibit, No. 222, covers the various criteria of effi-

[fol. 1358] ciency as reflected in the statements filed by the

carriers with the Interstate Commerce Commission, This

statement was prepared in exactly the same manner as Dr.

’ Parmelee prepares his statements, covering those 13 items

for all Class I railroads in the country. It has been offered

in a number of cases and has been accepted by the Inter-

state Commerce Commission, and I believe the exhibit

speaks for itself. .

My next exhibit is No. 223.

(Thereupon, the document referred to was received in

evidence, marked Exhibit No. 223, Witness Hodkinson. )

This exhibit, No. 223, is similar to Mr. Lamb’s exhibit

No. 88, except that it covers all Class I carriers in Eastern

district and Southern region respectively. The exhibit is

OT Bo Re ee BOR On Be Fe SOM 4 Ba i, BS Re ee gd

852

in two pages, the first page being devoted to the Eastern

district and the second page to the Southern region.

Rate of return figures for each region as a whole are

indicated, whereas in exhibit 88 Witness Lamb made com-

parison of rates of return on individual roads in the two

territories and on five Southern roads, as distinguished

from seven Eastern and nine Eastern roads.

It is not permissible to draw any conclusions from rate -

of return data for individual lines, or for groups of indi-

vidual lines in any territory. The only rate of return fig-

ures that have.any standing before the Interstate Commerce

[fol. 1359] Commission or the courts, are rate of return .

figures covering all railroads in each rate of return group.

fixed by the Commission, be it the Eastern district or the

Southern region each as a whole.

My next exhibit is No. 224.

(Thereupon, the document referred to was received in

evidence, marked Exhibit No. 224, Witness Hodkinson.)

This exhibit, No. 224, is a comparison of property invest-

ment and condensed operating income account, Eastern dis-

trict (including Pocahontas) and Southern region. The

property investment figures shown thereon are carriers’

book figures and they check with the figures shown in Mr.

Lamb’s Exhibit No. 87, pages 3 and 7. The average rate

of return on total investment for the period-t921 to 1930,

inclusive, is 4.52 percent for the Eastern district and 4.19

percent for the Southern region. I have also averaged the

amount required to realize 5%4 percent on total investment

and the shortage, the last figure being obtained by taking

the net railway operating revenue income from the column

headed ‘‘5%4 percent of. total investment.’’ It will be noted

that the shortage for the period covered was $1,330,347,096

for the Eastern district, and $469,389,859 for the Southern

region, average of $133,034,710 for the Eastern district and

$46,836,986 for the Southern region during each of the ten

vears covered by the exhibit. This exhibit, No. 224, shows

(fol. 1360] that the” average rate of return received by the

Eastern district carriers and by the Southern region carri-

ers has been substantially the same.

In his exhibit No. 90, Mr. Lamb undertook to show the

cost per revenue ton, based on yard accounts, yard accounts

excluding floating ton miles, other than yard accounts, these

saa

va Ne

853

* ° -

accounts excluding floating ton miles; all expenses; and all

expenses excluding floating ton miles. |

In commenting upon this exhibit he said, page 446 of

the record, that the cost- for the yard expenses listed on

this statement are greater on the four Southern roads than

on the Eastern roads referred to in his exhibit, per ton

mile.

While admitting that these figures were not fully repre-

sentative of terminal costs, he went on to say that the cost-

for the yard expenses listed on this statement are greater

on the four Southern roads than on the Eastern roads

referred to on this exhibit, per ton per mile.

While not admitting that the yard accounts, so-called,

measure terminal expense, or that accounts other than

yard measure entirely road haul costs, if such a compari-

son is to be made, it should be made preferably on a gross

ton mile basis instead of the net ton mile basis, and further,

the entire territory should be compared instead of certain

selected roads.

In my Exhibit 225 I have shown for the year 1929 the

_{fol. 1362] total yard accounts, for the Eastern district and

the Southern region, total of all accounts other than yard

and grand total expenses, freight proportions. I have

further shown gross ton miles, including locomotive and

tender for each region, as well as freight car miles. On the

gross ton mile basis it will be noted that the expenses in

the Eastern region exceed-those in the Southern region,

when measured by the yard accounts, other than yard ac-

counts, or all expenses, and this same situation obtains as’

to cost per loaded freight car mile.

The reason- why in my opinion it is improper to use reve-

nue tor miles in making a comparison of this nature as

Mr. Lamb does, are: 5

1. He omits entirely non-revenue ton miles. Non-reve-

nue ton miles are made in hauling company supply fuel

and materials used in construction and maintenance,

2. The revenue ton miles do not take into consideration

either the tons of locomotive, tender, rolling stock and

caboose, either loaded or empty, both of which, together

with the lading, must be taken into consideration, especially

in dealing with yard maintenance and operation.

Be . a“ as ae

854

3. Gross ton miles are the basis of the OS forms reported

by the carriers to the Inferstate Commerce Commission

pursuant to its accounting regulations.

It is more equitable to make such a comparison on the

[fol. 1362] basis of gross ton miles beeause gross ton miles

take into account all of the service performed by the carrier

as reflected by the revenue ton miles, as well as the other

items to which I have referred, which items are not included

in revenue ton miles. : :

A. comparison made on the Sahai of loaded freight car

miles is fairer than a comparison made on the basis of

revenue ton miles for the following reasons: 1. It more

nearly approaches the gross ton mile unit since it includes

_ the weight of the container, the freight car. It is not as’

good, however, as the gross ton mile basis because it does

not include the weight of the locomotive and tender, the

caboose and the empty return movement of the container.

Husert M. Bassett, having been first duly sworn, testified

‘ as follows:

Examined by Mr. Calhoun:

I am Hubert M. Bassett, assistant to ths Comptroller,

New York Central Lines, 466 Lexington Avenue, New York

City. I am testifying in behalf of all the Official Territory

lines in this proceeding.

I have prepared some evidence in the form of exhibits.

I entered: the railroad service upwards of 27 years ago in

’ [fol. 1363] the engineering department, held various posi-

tions-in the engineering department, and finally that of

designing engineer. I theri was transferred to the operating

department where I was engineer of roadway and struc-

tures for the entire New York Central. Later I became

general engineer for the New York Central. I am a gradu-

ate engineer.

In the operating department I was special assistant to the

Vice-President in Charge of Operations over the entire

New York Central lines, the Vice-President in Charge of

Operations and Maintenance of the New York Central Lines

at. that time, senior Vice-president, I think his title was.

Subsequently I transferred to the Official and Executive

sey

——

: 855

Departments, where I spent four or five years. In the

last eight years I have been on the Staff of the Vice Presi-

. dent in Charge of Accounting. He was known as the Comp-

‘troller for a period up to four or five months ago. As such

I have jurisdiction over the entire New York Central

Lines insofar as the accounting or stafistical or traffic mat- .

ters or rate cases are concerned. I have testified in a num-

ber of these rate cases. — :

Witness Lamb introduced an exhibit, No. 91, which pur-

ported to be a comparison of traffic density and operating.

costs on. five Southerr roads with those on seven Eastern

roads and nine Eastern roads. I have elaborated on that

exhibit in the respect of showing the five Southern roads,

(fol. 1364] seven Eastern roads and nine Eastern roads just

as Mr. Lamb did except that I have added to the invest-

ment in materials and supplies the cash, and in addition, I ~

have shown two columns only representing the Eastern

district, including the Pocahontas,.by roads, and the last

column in éach year of the roads in the Southern region.

The comparison is on the basis of 1928 1929 and 1930. . e

Mr. Calhoun: That exhibit is offered as Exhibit No. .~

226. >

(Fhereupon, the paper referred to was received in evi-

dence, marked Exhibit No. 226, Witness Bassett.)

Witness: This exhibit consists of two sheets. The first

sheet is in practical accord with Mr. Lamb’s exhibit No. 91

except that I have added the Eastern district carriers’ fig-

ures as a whole to the Southern region carriers’. figures

as a whole, and I have included with the investment in

materials and supplies the cash. The first sheet has been

prepared on Mr. Lamb’s relationship of passenger to

freight, passenger miles to ton miles, of three to one and

While I do not subscribe to that at‘ all, I am putting it in

to-show the situation. My calculation shows what the com-

parison of traffic density and operating costs would be on

the roads in the Eastern district as a whole and in the’

South as a whole, assuming that a three for one ratio is cor-

rect. I will give testimony later indicating that I do not

(fol. 1365] consider that the three to one ratio is a proper

method for use in making computations ef this nature. ,

In sheet two instead of using the ratio of three to one in

the block, I have used the actual ratio or revenue per pas-

Ce a a Se =

856

senger mile to revenue per ton miles in the various groups

set forth, and for each year, and in the lower block I have

used the ratio of expenses per passenger mile and expenses

per revenue ton.mile for each of the groups. ‘.

The most important deduction to be drawn from either

sheets 1 or 2 of Exhibit No. 226 is perhaps most clearly

brought out if you will look at line 18. If one proceeded on

Mr. Lamb’s selected road group, you will find that the .

seven .Eastern roads exceeded the five selected Southern

roads in this unit by about 39 percent. In other words, the

* five Southern roads are 61 percent of the seven Eastern

roads and 63 percent of the nine Eastern roads. When I

compare the Eastern district roads as a whole with the

Southern region roads as a whole I find in this case that

the Southern region was 86 percent of the Eastern district

in the year 1928. Likewise in 1929 I found the Southern

region to be 81 percent of the Eastern district, whereas Mr.

‘Lamb’s figures were respectively 59 and 61.

In 1930, J find that the: Southern region was 81 percent

of the Eastern district, whereas Mr. Lamb’s exhibit would

show the seven Eastern roads 61 percent of the five selected

[ fol. 1366] Southern roads, or 62 percent of the seven Hast- es

ern roads as he seleeted them. That simply means, in a

few words, that as you take the groups and compare the

groups on traffic units per $1,000 of investment, they come

very close together, much closer together than if you pick

out selected roads, and I think that is reasonable to expect.

However, close as I brought them together, on page 1,

if-we go over to page 2, to deal with, for instance, the real

passenger ratio, I find that in 1928 the Southern region

was 87 percent of the Eastern district; in 1929, the South-

ern region was 82 percent of the Eastern district; and

in 1930, the Southern region was 85 percent of the Eastern

district, still closer together, and if one cares to use—which

I don’t subscribe to—the ratio of the passenger mile ex-

pense to the ton mile expense, I find that in 1928 the South-

ern region was 89 percent of the Eastern district; in 1929

the Southern region was 83 per cent of the Eastern dis-

trict, and in 1930 the Southern region was 94 percent of

the Eastern district performance; in other words, getting

very close to parity. The last figures which I gave are

based on the actual ratio in the Kast as a whole, and in the

South as a whole.

Wie: i _ ere 2 Pee “weenie 4 = ess tise 5

857

I stated, when I started to discuss exhibit No. 226, that

I do not subscribe to Witness Lamb’s so-called three to

‘one ‘ratio. Among the ever increasing number of statistics

[fol. 1367] of railroad operation, the traffic unit, continues

to show its head. Occasionally, writers in finance journals

have used it. and in earlier days the Interstate. Commerce

Commission made use of same, though in a very guarded

manner. It might be considered ideal, if it had any value, |

because it is assumed that by means of it railway opera-

tions as a whole can be analyzed without the troublesome

problem of separating the passenger and freight statistics.

The traffic unit, is a combination of ton mile and passen-

ger miles with the passenger mile re-stated in terms of ton

ailes on the basis of an equation factor; passenger miles

being multiplied by a factor, which varies from 1 to 10,

and the result added to the freight ton miles. x

Perhaps the traffic unit was brought into being solely

because of. the difficulty constantly experienced in present-

ing any unit costs based‘on tatal revenue and total expense

—passenger and freight. Evidently there has been some

‘thought that by the use of an equated traffic unit the distor- .

tion brought about by the passenger business could be elimi-

nated. While the unit has not been used extensively, it has

been used to compare unit operating costs on the same rail-

road for different periods and sometimes for different rail-

‘roads for the same period.

Spasmodically.-it has been used to compare generai op-

erating results, freight and passenger combined, on a unit

[fol. 1368] basis, but more often it has been used to compare

the trend of traffic as a whole, with the growth of facilities,

capitalization and investment, and I propose to check the

use of such a unit and point out the inconsistencies and .

fallacies which appear. ‘ .

My conclusions are based on the use of this statistic

.. drawn from the records of four railroads; the first railroad

is a line with very heavy and relatively satisfactory passen-

ger business; the second railroad is a line which has very

little passenger’ business, but a heavy freight movement;

the third railroad has a sizable, but unprofitable passenger

business and a good tonnage of freight whereas the fourth

railroad is an interterritorial carriers with a well balanced

passenger and freight business.

All of the statistics used are based on the actual opera-

tion of the different.roads under the various conditions that

exist and the results therefore can be taker as indicative

of results on like series of railroads.

“ oe . Basis of Revenues

“ The first difficulty arising in connection with the use of

: the traffic unit is that of a basis of equating passenger miles

4 to freight ton miles. These have nothing in common and

13 can be put on a common base only by the use of an arbitrary

3 alleged to measure the relative effect of each service on

operating revenues and expenses, and since the reve-

[fol. 1369] nues per passenger mile or per ton mile are

‘more accessible than are the respective expenses, most usefs

have based their equation on the relationship of the ton

mile and passenger mile revenues, but if this relationship is

analyzed it will be found that it is not a fixed or standard.

ized ratio but one which varies in great end Table I,

- and I would ask that this be made Exhibit No. 227

(Thereupon, the document referred. to was received in

eviderice, marked Exhibit No. 227, Witness Bassett.)

Table I shows the percentage of the revenue per passen-

ger mile to the revenhe per ton mile for the four railroads

in the years 1926 to 1930, respectively.

This table present curious results, even so far as com-

parisons are confined to the same railroad, there seems

to be no.consistency generally. On roads A and D the rela-

tionship holds fairly close, particularly on road A, dur-

ing the five year period.. One of these roads handled a

very heavy passenger business, while-the other handled a

more generally distributed passenger and freight business.

On railroad B there is almost a constantly diminishing

spread between passenger mile and ton mile earnings,

whereas on, railroad C the..ratio between the respective.

earnings shows more nearly a constant increase over the

five years. Except on railroad A therefore, one cannot

use the same basis of equation from year to year and be

{fol. 1370] certain that the results will be consistent. As

between railroads there is greater inconsistency. Or rail-

road A the passenger miles would have to be multipled by

about 0.2 in any year, 1926 to 1930. The ratios on rail-

road B range from 4.6 to 5.3; railroad C would have ratios

varying from 3.1 to 3.2 and railroad D would have ratios

859

’ from 2.8 to 3.0 depending upon the year which was being

considered.

These inconsistencies are extremely troublesome as be-

tween railroads, the factor, about one quarter, which is

proper for railroad A would be’ absurdly low for either of

the other three railroads and particularly low if applied

to railroad B. In no year, could the same factor be applied

on all railroads, nor if we discounted railroad A, would —

there be any year on which the same factor could prop-

erly. be applied on all the other railroads, and this situation

produces the inconsistencies of having different bases of

equation on different railroads, with the furthér absurdity

of having different bases of equation for the same railroad

if more than one year’s figures are involved. Witness Lamb

used in his ratio all of the railroads covered by his ex-

hibits Nos. 89, 90, 91 and 92.

Relationship of Revenues and Expenses

Not.only are there inconsistencies as between the, rela-

tionship of ton mile and passenger mile revenue, but an

equation factor set up on the basis of relationship of ton

[fol. 1371] mile and passenger mile revenues very fre-

quently does not express the difference between the ton mile

and passenger mile expenses. Those that have used the

traffic unit have done so primarily to obtain unit costs and .

in the unit revenues because the unit expenses are not so

easily. available. Obviously, however, if the question is to-

be made on the difference between ton mile and passenger

mile revenues, this relationship will be entirely different

from that of the ton mile and passenger mile expenses and

any unit costs based upon the equation factor derived f rom

unit revenues must not be used to check expenses. _

I have therefore prepared for the-same railroads and for

the same periods, comparing in a manner similar to Table

I, the ratio of the expenses per passenger mile to the ex-

penses per ton mile. (See Table II in Exhibit No. 227.).

The figures shown on Exhibit No. 227 are actul figures made .

by reports of four actual railroads to the Interstate Com-

merce Commission. Curious and remarkable inconsisten-

cies appear. Railroad A remains nearly constant, and its

relationship between passenger and freight expenses ap-

proximate the similar relationship between passenger and

860

freight revenues per passenger and ton mile and also on

railroad A either relationship remains fairly constant over

[| fol. 1372] each of the five years.

Railroad D is scarcely comparable as to the relative ex-

| pense ratios and the relative revenue ratios as on railroad

D the variation is noticeable, ranging as it does from 316

percent to 400 percent. The highest revenue ratio, over

period of five years, being lower than the lowest expense

ratio for the same period of five years.

On railroads B and C we leave the realm of any compari-

son between the respective expense and revenue ratios.

Railroad B, as to revenue ratio would not exceed 51% to 1,

but the expense ratio ranges all the way from 14.9 to 33. 0

in the different years, there being absolutely no relation-

ship. Still less is there any consistency apparent in.a rail-

road, which over a period of five years ‘shows such spreads. -

Railroad C does not have quite so wide a variance, but

there is a comparison between the expense relationship

and the revenue relationship here either, as its unit expense

relationship varies from 6.3 to 8.1 in a five year period.

The lowest unit expense ratio being almost twice the high-

est unit revenue ratio.

As was shown in revenue ratio data, except on railroad

A, We cannot use, even on an individual carrier, the same

ratio from year to year and it is certainly improper to use

the same ratio on several railroads for even the same year, »

as the absurdity is clear of attempting to apply the

{fol. 1373] same ratio to a road, like railroad A, where the

unit expense passenger ratio is approximately 26 percent

of the unit expense on freight to railroad B, where the pas-

senger unit expense is as’ great as almost 3300 percent of

that road’s corresponding freight unit expense.

I feel that no further elucidation of such a performance

is necessary.

My next Exhibit is No. 227.

(The document referred to was received in evidence,

marked Exhibit No. 227, Witness Bassett).

I have shown in this exhibit No. 227, Table III, for the

year 1930 only, the percentages of revenue per passenger

mile tu the revenues per ton mile compared with the per-

centages of expense per passenger mile to the expense per

ton mile for the four railroads, and it might be noted that

_—_ GAP La PER ICSE BOE <A aetna aed th Bil Celie LOTS SBE

861

__ traffie units made on the basis of an equation factor based

on the percentages of passenger mile revenue to ton mile

‘+ yeyenue would be nearly correct only as applied against the

expenses on railroad A. But by no stretch of imagination

could they be considered of any value whatsover, if applied

on railroad B and the probabilities are that they are little, |

‘if any value, if applied on railroads C and D. In other

words, in the case of railroad A, one could multiply the

passenger miles by one quarter and be reasonably correct,

but in the case of railroad B, one would need to multiply

(fol. 1374] the passenger expenses by 33.0 if they were

~ used, or 4.6 if the revenue ratios were used. The absurdity

in the comparison. on the other two roads is just as evident.

It at oncais clear that- any attempt to correctly equate

passenger miles and ton miles presents insurmountable

difficulties, as there is no definite basis for equating the two.

While on some railroads the relationship between the ton

mile revenue and the passenger revenue is reasonably the . €

same, as that between the ton mile expense and passenger

mile expense, on the other roads there is absolutely no re-

lationship and that there is further a wide difference in the

relationship of ton mile and passenger mile revenue as be-

tween different roads and on the same road in different

years, and that before we could éven attempt to make use

of the traffic unit we must have the knowledge both as to

-relative ton mile and passenger mile earnings, but also

relative ton mile and passenger mile expenses.

So far I have dealt with the proposal to use the traffic

unit to,measure operating expenses as a whole, but at-

tempts have been made to obtain unit costs of various

classes of operating expenses, by using the traffic unit by

applying the ratio to all accounts which necessarily carries

with it the application of the ratio to group expenses, such

as station, yard, road, miscellaneous, general and traffic

expenses, ete. All railroad officers and _ regulatory

(fol. 1375] commissions know that the effect of passenger

service on different classes of operating expenses vary

widely, arid the Interstate Commerce Commission Classifi- *

eation of Accounts contemplates this situation when it is-

sues instructions as to how the accounts should be reported.

As illustrative, Account 314, maintenance of freight cars,

is 100 percent freight expenses, and we have Account 317,

maintenance of passenger cars, 100 percent passenger ex-

SELINA N IORI ND TO :

weet ages

e 8 ants

FPL AS Ta SIE RET PRS

IHG

UI Se VAN EPR Sen pee tC Meme:

ranean ty

és ot, sine " * > . wee

Vaan BES Sd Mabe AN OE a te a NS MO Staessen * . baie é ere waa ae

‘ :

862

pense. These two accounts measure the extremes, but be-

tween the extreme ranges the entire list of accounts, -which

when analyzed presents, on any railroad over a period of

‘years, a wide variancé’as to the actual percentages charged

to the respective services, passenger and freight. The ac-

tual percentages would unquestionably vary in all degrees,

from 0 percent passenger to 100 percent passenger, yet one

who uses the traffic unit. secured gn equation factors gives

the same weight to the respective passenger and freight

services, throughout all accounts.

From the above it would appear that the traffie unit based

upon equation factor derived from the spread between ton

mile and passenger mile earnings, would be entirely im-

proper to apply against expenses as a whole, or against

various subdivisions of the expenses, yet in Mr. Lamb’s ex-

hibits he has taken one equation factor for all roads and

applied it against all revenues and all expenses and sub-

[fol. 1376] divisions thereof, and, he has applied it against

all accounts.

a Inconsistencies which Develop

In order to visualize some inconsisteneies which develop

through the use of the traffic unit, I have made compari-

sons in (the various groups of expenses between the actual

ton mile‘cost and the equated ton mile cost on these four

railroads. (See Table IV). The first column shows the ton

mile cost based upon a division of the actual freight ex-

penses, per ton miles. That is the actual. The second column

shows the quotient derived by dividing the total of the

expenses by the traffic units, in which the equation factor

of 3 to 1 has been used. That is Mr. Lamb’s method. The

third column shows the quotient derived by dividing the

total expenses by the traffic units where the equation is dif-

ferent for each-railroad and is based upon the relationship

of ton mile and passenger mile revenue for the given road

in the year 1980. : |

A review of Table IV indicates (1), that if it was the pur-

pose to obtain from the total operating expenses and the

traffic units, unit eosts which will approximate the freight

expenses per ton mile, the traffic unit based upon the rela-

tionship of three to one is in almost no case correct. Table

IV also shows that a traffic unit based upon an equation

[fol. 1377] factor for each railroad will produce results

863

corresponding more closely with the actual ton mile expen-

ses, but even in this case, the variations between the actual

expenses per ton mile ‘and expenses per traffic unit based

upon the second basis produces widely different results in

many instances. Because of such variances this table in-

dicates that the traffic unit as a measure of obtaining unit

costs which will approximate freight unit costs actual can-

an individual railroad, much less over an extended period

of railroad groups.

Comparison Four Roads

Although unit costs based upon traffic units do not pro-

duce results approximating the actual costs per ton mile,

it has been claimed that the relationship of cests on differ-

ent roads based on the traffic unit will be the same as the

relationship of the costs of the same groups of expenses

based on actual freight expenses and ton miles.

The Tables V, VI, and VII compare the percentage rela-

tionships of unit costs on four roads, using the unit costs

shown in Tabte IV. Table V compares railroad A and rail-

road B, showing for each group of expenses, (a) the per-

centage of the ton mile costs on railroad A to those on

railroad B, (b) the percentage of the traffic unit costs on

railroad A to railroad B, the traffic units being based on a

factor of one passenger mile to three ton miles, and (¢) the

[fol. 1378] percentage of the traffic unit costs based on dif-

ferent equation factors on each road as previously ex-

lained. ‘

:The first column shows the true relationship as between

the two railroads, and as per table V the relationship as

shown by the traffic unit, however equated, is widely dif-

ferent from the actual relationship shown by the relative

ton mile costs. This comment applies to all groups of ex-

penses.

Table VI shows the relationship of the unit costs on the

same three bases for railroads A and C. This table presents

scarcely better results than does Table V. There is no gen-

eral or standard relationship. The percentages based on

the second traffic.unit are more nearly the actual shown in

the first column but there I am forced to the conclusion that

even this data is valueless if I desire the true picture,

Re a deat

DERG PRR TE TITS MRI

i Ph a ge

‘

864

whereas the column based upon the 3 to 1 ratio presents

for every group absolutely false data.

Table VII shows the same results for railroads A and D,

with data far wide of the facts. .In this table the relation-

ship shown by the first traffic unit is in all eases the re-

verse of the facts. It shows railroad A with lower costs

than railroad D while actually its costs are much higher.

Moreover, while the percentages based on the second traf-

fic unit are not as absurd, they are wrong. Moreover, in the

[fol. 1379] case of yard expenses, this column also shows a

condition the reverse of the real situation.

Traffic Unit Unreliable

Even a casual review of the tables makes it appear evi-

dent that the traffic unit, is a most unreliable statistic.

Sometimes unit costs based upon it are close to the actual

ton mile costs, but they more frequently are very different.

Moreover, while the relationship of costs based upon the

traffic unit are sometimes almost the same as the varia-

tion shown by ton mile costs, at other times the traffic unit

costs show a relationship exactly opposite to the true ones,

and lastly, the tables indicate that traffic units based upon a

factor of 3 to 1 cannot be relied upon to show either cor-

rect unit costs or correct relationship between unit costs.

There have been proposals based upon using the traffic

unit to show total revenues and expenses on a unit basis

on different roads, and the relationship of unit revenues

and expenses (based upon the traffic unit) has sometimes

been used to show what the ton mile revenues and expenses

of freight traffic would be, if these were available. How-

ever, as this‘latter point has not yet arisen in this case I

shall not give the fallacies and inconsistencies which the

use of a traffic unit produces in the attempt to develop such

units. Conclusions, which in my opinion, are reached from

the foregoing outline are as follows:

[fol. 1380] (1) That in equating passenger miles and ton

‘miles, one must not use the arbitrary basis of one passenger

mile equalizing three ton miles, unless it is found that this

represents the actual difference on the given road for the

given year, between relative ton mile and passenger mile

revenues and expenses. bel .

a Wi a GANAS ASD SES ae eR Ail LEER TS

. 865

(2) That a traffic unit based upon any equation factor

cannot be used without assuming that the result obtained

may be untrue or as Dr. Lorenz of the Interstate Commerce

Commission personnel said in 1923 in the Railway Age,

the same trend would be shown whether you use an equat-

ing factor of 0, 1, 2,3 or 4. In my opinion this could have

been shown and a factor of 10 or 100 might just as well

be used and still not produce, except by coincidence, true

results.

(3) That the unit costs based upon the traffic unit cannot:

be accepted as even indicative of the freight unit costs for

the same expenses, except under very unusual conditions.

(4) The unit costs based upon the traffic unit must not

be accepted as indicative of the relative freight costs be-

tween railroads.

SAREE ANT LOE SH PRET A EOIN RL RNS ‘

’ ; er Sc

i Bs

(5)-That the unit costs of total revenues and total ex-

penses based upon the traffic unit must not be accepted as

indicative of the units of freight revenue and expenses

[fol. 1381] unless information is available as to the rela-

tive profitableness of freight and passenger services.

Questions may arise as to when the traffic unit can be

used if available, with any degree of satisfaction.

In my opinion it should never be used, but there is a pos-

sibility that it might be used, if car efully considered, when %

‘

CI 7 RA DT RNG! ER ES RE BN TE BLU ING AY

one desired, for a given railroad, over a given period

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.