The expense to these three roads would not stop there. Competition is not only between railroads but between cities, and any innovation in passenger service over one route leads inevitably to demands for the provision of corresponding service over other routes. The roads operating between Chicago and St. Louis have other trains, some of which operate over greater distances, in the daylight hours and through longer seasons of hot weather, on which, be cause of the necessity of exercising the utmost economy, it has not been found possible to use air-conditioned equipment. The operation of such equipment on the night trains between Chicago and St. Louis would make it extremely difficult, if not impossible, to put off the expense of providing similar service on other trains where its provision would seem to be the more justified by such conditions. Generally speaking, the increased use of air-conditioned equipment is a very desirable thing. In this case, however, it is believed that the Commissioner will be compelled to find that the announced plan of the Alton should be held in abeyance under the present conditions and that the four roads which are engaged in the operation of passenger service between Chicago and St. Louis should refrain from the operation of air-conditioned equipment on night trains until such time as further consideration in the light of changed conditions would make it appear desirable. Very truly yours, President, Illinois Central Railroad Co., Chicago, Illinois. C. T. O'NEAL, President, C. & E. I. Ry. Co., Chicago, Illinois. Receiver, Wabash Railway Company, St. Louis, Missouri. Vice President, The Alton Railroad Co., Chicago, Illinois. GENTLEMEN: Enclosed herewith is copy of my report and conclusion with respect to air-conditioned equipment on night trains between Chicago and St. Louis. In the event you are not in accord with the conclusions reached in this report, will you submit notice in writing to that effect, to the undersigned, within five days from the date hereof, pursuant to the provisions of Section 7, Agreement for Commissioner Plan, Western District? Very truly yours, H. G. TAYLOR, Commissioner. cc-To Signatory Roads to Agreement for Commissioner Plan, Western District. EXHIBIT No. 289 CHICAGO, ILL., March 21, 1934. AIR-CONDITIONED EQUIPMENT ON NIGHT TRAINS BETWEEN CHICAGO AND ST. LOUIS During the course of negotiations between railroads in Western Territory, leading up to the adoption of a program for air conditioning certain passenger equipment to be operated in 1934, the Alton Railroad Company announced its intention of occasionally operating air-conditioned Pullman cars on midnight trains between Chicago and St. Louis. Objection to this plan was immediately 84949-44-pt. 12——5 raised by the Illinois Central, C. & E. I., and Wabash. Failing to reach an agreement in the matter, the controversy was submitted in the usual manner under the terms of the Commissioner Agreement. STATEMENT The Baltimore & Ohio Railroad Company, of which the Alton is a subsidiary, operates air-conditioned trains between St. Louis and Washington and Chicago and Washington. At times there is a surplus of this equipment at Chicago or St. Louis. Transfer of the equipment is made between those points over the Alton, and usually on its night trains. At the present time all four railroads operating between Chicago and St. Louis operate air-conditioned cars on their daylight trains, but no air-conditioned equipment is handled on the night trains. ALTON'S POSITION It is the contention of the Alton that the transfer of air-conditioned cars between the western terminals of the Baltimore and Ohio R. R. is a normal and economical transportation operation. The extra cars are handled in regular service and, in order to avoid extra terminal and other expense, the cars thus handled are substituted for regular equipment in the night trains. It is claimed that the terminal costs at St. Louis and Chicago average $18.00 per car, and that this and other expense is avoided by the method referred to. During the summer, Pullman cars on the Alton midnight trains are precooled. It is argued that it would be unnecessary and unreasonable to precool cars already equipped with air conditioning machinery and cut this machinery out of service during the trip between the terminals. The Alton contends it cannot advertise the operation of these cars because their use will be irregular and occasional, and lack of information in advance of their movement would preclude the solicitation of business on their account. The Alton is further of the opinion that occasional air-conditioned service operated under these conditions need not create demand for such service between other cities, pointing out that the air-conditioned service that has existed between Chicago and St. Louis for some time has not made it necessary to provide such service between other cities served by the same railroads. It feels it would be subjected to severe criticism if it attempts to operate air-conditioned cars over its line without giving passengers the use of the facilities. POSITION OF PROTESTANTS The Illinois Central, Wabash, and C. &. E. I. join in a presentation of their objections to the service proposed by the Alton. It is their position that even the occasional operation of air-conditioned cars would afford the Alton a distinct advantage in soliciting party movements and in the handling of such movements the superior service enjoyed by the passengers would tend to influence other business of an individual nature. They contend that the use of this equipment could not be limited to the transfer of the surplus cars, but that travelers once enjoying this use would be inclined to demand it on a permanent basis, and the Alton would find it difficult, if not impossible, to deny such demand. It is pointed out that the business between Chicago and St. Louis is highly competitive and that any innovation provided by one railroad must be adopted by others if they desire to maintain their relative position in the field. They are quite insistent that if these cars are handled in the manner outlined, they will find it necessary to install air-conditioned equipment on their night trains. It is claimed this would involve an outright investment of at least $170,000 and an annual operating cost of $40,000. Point is also made of the fact that competition in passenger business is not only between Railroads but between cities, and that if air-conditioned service is inaugurated on night trains between Chicago and St. Louis, other large cities served by the same lines will demand the same service. The three protestants concede that the increased use of air-conditioned equipment is a very desirable thing. Under the present financial conditions, however, they ask that the announced plan of the Alton be held in abeyance so that all four roads be spared the expense of extending the use of air-conditioned equipment to night trains between Chicago and St. Louis, at least until such time as changed conditions would justify. CONCLUSIONS This case affords a striking illustration of the interdependence of railroads. It reveals how the introduction of what would otherwise be a very reasonable and practical method of operation, may so involve the interests of competitors as to make the adoption of the plan unwise. The transfer of the B. & O. surplus passenger cars from Chicago to St. Louis and vice versa over the line of the Alton is a convenient and economical arrangement and cannot be criticized. If the B. & O. and Alton were the only roads affected, there could be no possible objection. It happens, however, that three other railroads maintain passenger service between Chicago and St. Louis. Under the present plan, no air-conditioned equipment is provided on any of the midnight trains, precooling of the sleeping cars having been considered all that is justified under business conditions. There is force to the Alton's contention that its present proposal contemplates only the occasional use of air-conditioned cars on its midnight trains. Where competition is as acute as prevails between these two large terminals, however, it would be difficult to restrain passenger solicitors from urging even this occasional service as a preferential advantage, possessed by the Alton. The actual physical service is less important than the cliams that could and probably would be made for it, nor is it unlikely that if air conditioned cars were operated, patrons would be inclined to demand it as a regular service. The Western Railroads, after very serious consideration and somewhat prolonged negotiations, have entered upon an agreement as to the extent air-conditioned equipment will be installed on passenger trains during the year 1934. In order to reach this agreement. It has been necessary for some of the lines to withdraw programs originally planned. In other words, the agreement involved compromises the surrender of advantages by some of the companies. The desire to avoid a large outlay for air conditioned equipment prompted the effort to reach this agreement. It is quite important, therefore, that nothing be done to dis turb it. The Alton can continue to transfer the air conditioned Pullmans of the B. & O. without putting the air-conditioning machinery into operation. It will thus be put to no additional expense and at the same time can realize whatever economies are involved in such transfer. In view of the fears of the three protestants that the operation of air conditioned cars by the Alton, even occasionally, might and in all probability would intensify the present competitive situation and make necessary the installation of similar service by protestants, I believe the Alton should refrain from carrying out its plan, except to the modified extent suggested. It is my opinion that the Alton's plan, if carried out, would be disturbing and might lead to an expenditure of a considerable sum of money and an increase in operating expense, which does not now appear to be justified. Respectfully submitted. H. G. TAYLOR, Commissioner. EXHIBIT No. 290 THE ALTON RAILROAD COMPANY, Mr. H. G. TAYLOR, Commissioner of Western Railroads, 474 Union Station, Chicago, Illinois. DEAR SIR: I have received your letter of March 21st, file C 19–1, enclosing a copy of your report and conclusions with respect to the occasional operation of airconditioned sleeping cars in Alton night trains between Chicago and St. Louis. As I still believe The Alton should be at liberty to carry out its announced plan, I am submitting a written protest within the five-day period in compliance with section 7 of the Western Railroads' Commissioner Plan Agreement. I have already answered all of the protestants' objections; therefore, it seems unnecessary to restate The Alton's position, and I will confine my remarks to the conclusions you have reached after studying the contention of all interested parties. You state: "This case affords a striking illustration of the interdependence of railroads. It reveals how the introduction of what would otherwise be a very reasonable and practical method of operation, may so involve the interests of competitors as to make the adoption of the plan unwise." The traveling public in this part of the country is by now fairly well educated on the subject of air-conditioned equipment, and I am fearful that if The Alton should cut out the air-conditioning machinery in any of its cars operating between Chicago and St. Louis, the occupants would know that The Alton was depriving them of a comfort provided at considerable expense, and it would be too much to expect that they would not learn that it was done as the result of a protest lodged with the Commissioner, which would create public sentiment against The Alton, the railroads in general, and the Commissioner Plan. You state: "There is force to The Alton's contention that its present proposal contemplates only the occasional use of air-conditioned cars on its midnight trains. Where competition is as acute as prevails between these two large terminals, it would be difficult to restrain passenger solicitors from urging even this occasional service as a preferential advantage possessed by The Alton. The actual physical service is less important than the claims that could and probably would be made for it as a regular service." I have assurred you that the occasional operation of air-conditioned sleeping cars between Chicago and St. Louis by The Alton could not be advertised and could not be used to advantage by solicitors, which assurance is backed up by the fact that our solicitors could not know in advance when these cars will be available for use, and on that account could not offer air-conditioned equipment as an additional inducement to use the line. You well know that Alton solicitors would not attempt to secure party movements in advance assuring air-conditioned equipment without knowing definitely that such equipment could be furnished. You state: "The Alton can continue to transfer the air-conditioned Pullmans of The Baltimore & Ohio without putting the air-conditioning machinery in operation-it will thus be put to no additional expense and at the same time can realize whatever economies are involved in such transfer." I call your attention to the fact that we would, in accordance with our past practice, find it necessary to precool these cars at extra expense if they were handled in our midnight trains without the air-conditioning machinery in operation, and to this extent your statement is not correct. I note you believe The Alton should refrain from carrying out its plan, except to the modified extent suggested, and it is your opinion The Alton's plan, if carried out, would be disturbing and might lead to an expenditure of a considerable sum of money and an increase in operating expenses which does not appear to be justified, but you do not make a positive ruling. While I do not question the sincerity of the three protestants in their statement that the operation of an occasional air-conditioned sleeper by The Alton in its night trains would result in compelling its competitors to provide air-conditioned equipment on all of the night trains between Chicago and St. Louis, I can with difficulty make myself believe that the results of such infrequent and unadvertised service on The Alton would have such far-reaching results as you seem to fear, and I therefore hope that you will not feel constrained to make a decision adverse to our views. Yours very truly, Mr. H. B. VOORHEES, H. B. VOORHEES, Vice President. EXHIBIT No. 291 APRIL 4, 1934. Vice President, The Alton Railroad Company, 340 West Harrison St., Chicago, Illinois. DEAR MR. VOORHEES: Referring to previous correspondence, your last letter of March 26, 1934, protesting the conclusions reached with respect to air-conditioning equipment on night trains between Chicago and St. Louis, as contained in my letter of March 21st, File C-19-1, and specifically to that portion of your letter reading "I note you believe the Alton should refrain from carrying out its plan, except to the modified extent suggested, and it is your opinion the Alton's plan, if carried out, would be disturbing and might lead to an expenditure of a considerable sum of money and an increase in operating expenses which does not appear to be justified, but you do not make a positive ruling." While perhaps the language of my conclusions in this matter was not as clear as might be desired, it was my intention that the conclusion therein contained should be positive and not merely an expression of opinion. I have given this subject a great deal of thought and believe that after taking all phases of the matter into consideration, the best interests of the roads involved would be served by your company following the plan which I suggest, and cannot see my way clear to change the position I have taken. Very truly yours, H. G. TAYLOR, Commissioner. EXHIBIT NO. 292 Mr. H. G. TAYLOR, THE ALTON RAILROAD COMPANY, Commissioner of Western Railroads, Chicago. DEAR MR. TAYLOR: Referring to your letter of April 4, 1934, ruling against the occasional use of air-conditioned sleeping cars in Alton night trains between Chicago and St. Louis. Hereafter when air-conditioned sleeping cars are occasionally used in Alton night trains between Chicago and St. Louis, we expect to give the public the full benefit and comfort of the car and do not propose to shut off the air-conditioning apparatus while the car is in service. Please understand that we do not propose to operate any air-conditioned sleeping cars regularly in Alton night trains between Chicago and St. Louis, and the above refers only to the occasional car used under conditions previously explained. Yours very truly, cc Messrs. L. A. Downs, C. T. O'Neal, Norman E. Pitcairn. H. B. VOORHEES, Vice President. EXHIBIT No. 293 To the Committee of Directors: COMMISSIONER OF WESTERN RAILROADS, For your ready reference, I am attaching hereto copy of my letter to you dated March 21, 1934, enclosing report and conclusion with respect to handling air conditioned equipment on night trains between Chicago and St. Louis. Subsequent to the issuance of this report and under date of June 25, 1934, notice was filed with me by the Alton Railroad of intention to handle air conditioned sleeping car equipment in service when occasionally necessary, contrary to the conclusions reached. Copy of Mr. Voorhees' letter of that date is attached hereto. Advice has now been furnished me by the Illinois Central Railroad and Wabash Railway of their intention to operate air conditioned sleeping cars on night trains between Chicago and St. Louis as soon as the equipment may be secured from the Pullman Company. The matter now having reached its present stage, I am submitting this report to you in accordance with the provisions of Section 8 of the Commissioner Agreement. Very truly yours, H. G. TAYLOR, Commissioner. EXHIBIT No. 294 WESTERN ASSOCIATION OF RAILWAY EXECUTIVES, To Member Roads: Referring to previous communications relating to air-conditioning programs of Western Railroads for 1935: At meeting of the Association held on October 4, 1934, this subject was considered at length and the following resolution unanimously adopted: "Resolved, That every road be free to adopt such program as it desires with relation to air-conditioned and air-cooled passenger carrying equipment, and that the Chairman be relieved from any further responsibility in connection with this matter, except that each road shall advise the Chairman, and he in turn shall transmit such advice to Member Roads, of any additional programs over and above those filed with him within thirty days from the date of this meeting; such advice of additional programs thereafter to be filed sixty days in advance of date the additional air-conditioned equipment is to be placed in service; notice served by Western carriers shall also indicate the type of equipment to be air conditioned and trains upon which cars are to be used. Nothing herein shall be construed to |