The Saint Paul Globe

LEGISLATORS LISTEN TO RATE COMPLAINT

Joint Committee Begins Investigation of Alleged Discrimination

A delegation of Litchfield business men, representing the Commercial club of that village, presented a list of grievances regarding freight charges to the legislative joint railway investigating committee yesterday afternoon.

The complaints had been formulated into specifications, which were discussed and testimony was heard to support the allegations. The general complaint was that charges on commodities between the Twin Cities and Litchfield were proportionately higher than on the haul from Chicago to the Minnesota Transfer. It was admitted that charges on coal and lumber had been reduced in 1903 14 per cent, and it was not denied that in many instances the traffic complained of is interstate commerce and outside of the jurisdiction of the state railway commission.

At an executive session of the committee, held when the hearing for the day had been completed, it was decided to invite the representatives of the railroad companies to be present and participate in the discussions. It was agreed by the committee that cases involving only one road should be considered at each session of the committee, and that representatives of that railroad should be invited to appear and explain apparent discriminations.

Milwaukee Comes First

Complaints regarding the Milwaukee road will be taken up this afternoon, and it is expected that the Omaha will be before the committee Tuesday afternoon.

The state railway and warehouse commission is expected to appear before the committee at one of its sessions and to explain in detail matters which have come under its jurisdiction.

W. E. Young, of the commission, was present at the session yesterday, but did not take part in the inquiry. Thomas Yapp, the statistician of the commission was present and exhibited a map showing the rates on standard commodities at every station in the state. Mr. Yapp made clear the many seeming discriminations, showing that in nearly every instance the difference in the freight rate for the same distance at various points was due to the difference in the haul of two competing railroads at some competitive point.

The rate on coal from Duluth to Wadena, which is made by the Northern Pacific's short line, the statistician explained, is blanketed back on Great Northern points north and south from Wadena to meet the rate made to Wadena by the Northern Pacific.

Freight Classifications

The hearing yesterday developed a discussion of classifications of freight. One of the complaints of the Litchfield delegation was that building paper was improperly classified, and this brought out a statement from Mr. Yapp as to how these classifications are made. He said that the Western association classifications applicable to Minnesota are made subject to the affirmation of the schedules by the Minnesota commission, and he believed that the number of reductions was about equal to the increases.

George S. Loftus, a former St. Paul railway official and now representing certain shippers, testified that of 1,632 changes in classification in 1904, 1,410 had been increases. He inquired if the commission had been able to secure restoration of the old rates, when it objected to changes in classification.

Mr. Yapp said that the commission had been successful in forcing the association to conform to its ideas, and that often the commission objected to classifications on its own motion. Where complaints were made it always investigated the merit of the complaint.

He said that a reclassification amounted often to an increase of rates, and in reply to an inquiry from W. D. Washburn Jr., of the committee, said that reclassification was sometimes employed to disregard the laws of the state and to advance rates that might not otherwise be permitted. The railroad companies in the classification, Mr. Yapp said, are not required to show cause why their rates are changed. Rates are made each six months for the entire West by the classification bureau, and are influenced by conditions on each railroad in the association. All the Minnesota railways are in the association, Mr. Yapp testified.

Seven Specifications

The complaints made by Litchfield citizens charged seven specifications.

A. F. Foster and others swore to the complaint before Senator A. O. Eberhart, chairman of the joint committee.

The complaint recited that an investigation in May, 1903, by the state railway commission showed that rates on coal and lumber in Minnesota were 40 per cent higher than on similar commodities in Wisconsin, Iowa, Illinois and Michigan; that the railroads had agreed to a reduction of 14 per cent, which had been accepted as a compromise, but that the present rates are 30 per cent higher than corresponding rates in Iowa.

It was charged that rates from Litchfield to St. Paul on cattle are 10% and on hogs 13½ cents, and that the St. Paul-Chicago rate is considerably less; that a general discrimination of freight and passenger rates in the state exists; that a car of fence wire, shipped in 1901, from De Kalb, Ill., to the Minnesota Transfer, cost $48, and from the Transfer to Litchfield cost $61.46. Present tariffs would make the Litchfield rate $53.77. Complaint is made that in January, 1905, a carload of church fixtures cost from Chicago to Minnesota Transfer $19.84, and from the Transfer to Litchfield $22.23; that in January, 1905, a carload of lumber was shipped, freight prepaid, to Litchfield from Centralia, Wash., and that the manufacturer received $4.82 a thousand and the transportation companies $14.10 a thousand in freight; that building paper loaded in a car of sash and doors at Minneapolis for Litchfield was charged for at the rate of 23 cents, and that the rate of fire brick, 18 cents a hundred, from Minnesota Transfer to Litchfield, is exorbitant.

J. Esbjornson, a lumber and coal dealer of Litchfield, showed freight bills to substantiate statements in the specifications, and detailed the 1903 investigation that had resulted in the reduction on coal and lumber rates.

A. F. Foster testified that neighboring towns to Litchfield were being given more advantageous freight rates and that his town was losing trade from tributary territory. Col. Foster made a general argument to prove the theory of the sovereignty of the state in railroad supervision, and declared that passenger rates from North Dakota to St. Paul were lower than to Litchfield, seventy-five miles nearer the state line. He was unable to cite instances to prove his statement, but said, when questioned, that he relied on a statement of a neighbor. He referred frequently to the compilation of the Litchfield investigation of two years ago, but told Mr. Washburn, who questioned him, that he did not know the corresponding rates on other railroad lines on commodities on which complaints had been made.

Henry Klauser, a Litchfield business man, said that on the showing two years ago, Litchfield was entitled to a reduction on other commodities than coal and lumber.

Chairman Eberhart served notice on the committee that he had received complaints of inequalities from Aitkin, and that the Northern Pacific would be cited to appear and answer the complaints. The committee plans to hold sessions almost daily until the inquiry is completed.