Commissioner in an endeavor to have such action held in abeyance, stating that similar cancellation of heater charges would, of necessity, have to be made by competing lines, with resultant decrease in net revenues. This matter is now receiving consideration. However, further meetings of all interested roads are being held in an effort to arrive at some equitable practice to be put in effect for next season. In the event the matter is not satisfactorily adjusted in that manner, I shall, within a short time, furnish my conclusions as provided under the Commissioner Plan. 6. Train Schedules.-A number of questions arising under this subject have been referred to me, both informally as Commissioner, and as Chairman of the Western Association of Railway Executives. A few of these are as follows: (a) Perishable freight schedules from the Imperial and Salt River Valleys to Chicago. Some of the shorter lines had established fast schedules for this service, and in order for competing lines to meet such schedules, it was necessary for them to speed up their established service, resulting in handling lighter tonnage per train, and other uneconomical operations. A schedule for handling this class of commodity was agreed upon by all interested lines, which eliminates unnecessary expense and enables all participating lines to handle on an equal basis. This schedule is now in effect. (b) One of the Kansas City-Denver lines inaugurated a mixed train service which enabled it to provide earlier delivery at Denver on certain classes of freight shipments, than other roads in that territory could meet without establishing a similar service, which would have a tendency to break down freight schedules of long standing between those points, as well as increase operating expenses. The matter was handled informally with the line inaugurating the service, and it was immediately withdrawn. (c) In connection with the anticipated movement of beer immediately after April 7th, some of the transcontinental lines proposed to radically shorten existing freight schedules between St. Louis and Pacific Coast points. This question was likewise referred to me unofficially, and upon making an immediate canvass of the situation, an agreement was secured between all roads involved, that existing freight schedules would be adhered to. 7. Organization Activities of Western Railroads in Chicago.-In keeping with the program of placing in effect all economies possible, the Executive Committee of the Western Association of Railway Executives has directed that a study be made of all organization activities conducted by Western Roads in Chicago, looking toward greater coordination of facilities and possible consolidations. This matter is now being actively handled by a sub-committee appointed to conduct this survey, and it is anticipated that a report will be presented in the near future. Preliminary estimates indicate that substantial economies will be effected through the housing of all organizations in one building, consolidations and coordination of facilities, which should result in a saving of approximately $300,000 to $400,000 per year. I wish at this time to reiterate the statement which I made at the meeting of the Committee of Directors, that I solicit any suggestions which may occur to you as to matters which, in your judgment, might be given attention, or any other suggestions which you may care to make relative to the activities of this organization. Very truly yours, H. G. TAYLOR, Commissioner. EXHIBIT No. 300 COMMISSIONER OF WESTERN RAILROADS, To the Committee of Directors: For your information, I am outlining below activities upon which I have been engaged from August 1, 1936, to date: 1. Proposal of the A. T. & S. F. Ry. Co. to Establish 11⁄2¢ Coach Fares Intrastate in California.-There has been no change in the status of this controversy since my report of May 6, 1936. 2. Proposal of the C. St. P. M. & O. Ry. Co. to Reduce Rates on Fine Coal from Head-of-Lakes to Chaska, Minnesota.-There has been no change in the status of this controversy since my report of July 2, 1936. 3. Freight Schedules.—(a) On August 15th, the Colorado & Southern-Ft. Worth & Denver City Lines advised that, effective September 1, 1936, it was their intention to inaugurate an expedited freight service between Denver and Ft. Worth Dallas-Houston, which would enable that route to compete with existing routes in handling traffic originating North and West of Denver to Ft. Worth, Dallas, and Louisiana territory. While the schedules were being expedited, it was understood that there would be no advancement in delivery of freight over that now obtaining via other routes. The Missouri-Kansas-Texas Lines filed formal protest under the Commissioner Agreement to the inauguration of the proposed schedules, stating that in order to maintain their service into Ft. Worth, Dallas, and adjacent territory in conjunction with connecting lines via the Kansas City gateway, it would be necessary for that company to shorten its freight schedules between Kansas City and Ft. Worth. While the Union Pacific Railroad did not file formal protest, they advised of their intention to establish such schedules between Kansas City and Denver as might serve to protect their interests in Texas via the Kansas City gateway. In this connection, insofar as service between Denver and Ft. Worth is concerned, the route of the Union Pacific-Missouri-Kansas-Texas Lines is approximately 48% longer than the direct route of the Colorado & Southern-Ft. Worth & Denver City Railways. However, with that handicap, it develops that the route via Kansas City has, in the past, been able to afford one day's earlier delivery than has been possible via the Colorado & Southern-Ft. Worth & Denver City. Conference in connection with this subject was held on September 4th and postponed until September 8th in order to permit all interested parties to be represented at the meeting. On September 8th other participating carriers, with the exception of the Missouri-Kansas-Texas Lines (the Union Pacific Railroad not being represented), advised that in the circumstances they would offer no objection to the establishment of the proposed schedule, retaining, however, the right to meet any competition which might result account expedited service between Denver and Kansas City in order to retain the advantage heretofore accruing through the Kansas City gateway. It was further understood that the proposed schedule merely met service of other lines between Denver and Texas points direct, which did not involve Kansas City. Following the conference on September 8, decision under the Commissioner Agreement has been withheld pending opportunity for the Missouri-Kansas, Texas Lines to further review their situation in light of the information developed with the thought that the formal protest might be withdrawn and no change in service made between Kansas City and Texas. In the event such action is not taken, formal report and conclusion will be rendered under the provisions of the Commissioner Agreement. (b) In connection with the recently established expedited freight service between Chicago, St. Louis, and Atlantic Seaboard points by eastern carriers, the Chicago lines adopted the policy that no business originating in California and at Pacific Northwest points, west of the Cascades, would be delivered in time for departure from Chicago or St. Louis on the new trains. This action was taken in order to maintain existing transcontinental freight schedules and avoid the possibility of demand for ninth morning guaranteed delivery at New York and seventh morning guaranteed delivery at Chicago. Subsequently, certain St. Louis lines requested that they be permitted to deliver business from the restricted areas to the new 2:30 A. M. trains for destinations west of the PennsylvaniaOhio state lines. It was felt that if a modification of the understanding were permitted at St. Louis, this wolud have the effect of introducing an element into transcontinental freight schedules which would eventually bring about the breaking down of the various agreements. At conferences between Chief Operating Officers of all western roads held in Chicago on September 8, unanimous agreement was reached to the effect that business from the restricted areas via both Chicago and St. Louis lines would be withheld from the new eastern connections in order to maintain existing transcontinental schedules. 4. Coordination Matters.-Since the expiration of the Emergency Transportation Act, 1933, and the office of the Federal Coordinator of Transportation, further studies are being made of possible consolidation of facilities between carriers looking toward the accomplishment of such economies as were previously held in abeyance because of the labor provisions contained in Section 7-B of act, or for other reasons which have now been eliminated. Any coordinations insofar as they affect labor must now be made under the provisions of the so-called Washington Agreement between all carriers and railway labor execu SCIENTIFIC AND TECHNICAL MOBILIZATION tives. These studies are being progressed as rapidly as possible with the thought that a few possible coordinations at some of the major terminals will be developed in order to test the provisions of the Coordination Dismissal Wage Agreement before action is undertaken at smaller points which might possibly result in establishing precedents. 5. Addition of Special Equipment to Regular Passenger Trains.-During the early spring of this year, controversy arose between certain of the western carriers with regard to the addition of special equipment to regular passenger trains and at that time action was formally taken through the Western Association of Railway Executives to the effect that such addition would be construed as being an innovation within the terms of the Commissioner Agreement, and, as such, would require the giving of due notice before being added to the regular consist. Subsequent discussion developed the opinion that a definite period of time should be established in which notice would be given, particularly in view of the fact that approximately eight months would be required by a competing carrier to arrange for construction of similar equipment in order to meet the competitive feature. This subject was discussed by the Western Association of Railway Executives at meeting held on September 4, 1936, at which time the following resolution was unanimously adopted: "Resolved, That signatory roads to the Commissioner Agreement contemplating the provision of a recreation car on a regular passenger train specifically for such purpose as dancing, athletic exercises, motion pictures, etc., shall give interested carriers eight (8) months' advance notice of such intention." 6. Drought Relief Rates.-During the latter part of August, Governor Landon, of Kansas, addressed the chief executives of Kansas carriers, requesting that, in view of the drought situation, certain reductions be made in rates upon livestock and livestock feed. Consideration was given this subject by traffic executives of Western carriers, as well as by the chief executives, and on September 4 action was unanimously taken permitting the establishment of joint rates on livestock shipped out of drought areas to feeding grounds on the basis of 85% for the out-bound trip and 15% of the tariff rate for the return trip. Likewise, a reduction of 33%% in rates on grain (except wheat and rye) and grain products for animal consumption was approved. I regret very much the necessity for postponing the meeting of the Committee of Directors called for September 9. However, this action was unavoidable and formal call for the postponed meeting will be issued in due course. Very truly yours, H. G. TAYLOR, Commissioner. To the Committee of Directors: For your information, I am outlining below activities upon which I have been engaged during the month of June, 1937: 1. Proposal of the A. T. & S. F. Ry. Co. to Establish 11⁄2 Cent Coach Fares Intrastate in California.-There has been no change in the status of this controversy şince my last report. 2. Freight Schedules to the Southwest via the St. Louis and Kansas City Gateways.-There have been no further developments on this question since my last report. 3. Problems of Employment.-There is nothing to report on this item at the present time. 4. Furnishing of Paper and Coopering of Box Cars.-Committee has this study under way and report will be forthcoming in due course. 5. Average per Diem Plan for Car Hire Settlement.-Following submission of the recommendations of the Western roads to the Board of Directors of the A. A. R. and discussion of the subject at the annual meeting of the OperatingTransportation Division, the question was referred to the General Committee of the Operating-Transportation Division, A. A. R., for report and recommendations to the Board. This report recommended retention of the average per diem plan by a vote of eleven to eight, the Western roads represented on the General Committee voting against retention of the average per diem plan, with the exception of two, who voted with the Eastern roads' representatives in favor of retention of the average per diem plan. Report of the General Committee favoring retention did not receive the support of the Board of Directors at their June meeting and a moratorium was authorized for the period July 1 to December 31, 1937, during which time ordinary box car equipment is again on the $1.00 per car per day basis, with the provision that where two or more roads desire to do so, they are at liberty to agree among themselves to continue the average per diem plán on their particular cars during the period of the moratorium. 6. Effect on Revenue of Declining Average Revenue per Ton-Mile.-This subject was considered at the June 4, 1937, meeting of the Western Association of Railway Executives, at which time opinion was expressed that study of the sort conducted by Dr. Parmelee does not take into consideration all of the factors involved. For example, it was stated that the Eastern roads had benefited to a much greater degree through surcharge rates which, of course, did not apply to agricultural commodities moved in large volume by Western lines. Conclusion was reached that as the matter was on the docket of the Western Traffic Executive Committee for such consideration as seems desirable, it should be stricken from the docket of the W. A. R. E. 7. Basic Passenger Fares in Western Territory.-This subject was referred to the Passenger Traffic Officers for study, and report was submitted at the July 2, 1937, meeting of the W. A. R. E., recommending adoption of a per mile rate of 24 cents for first-class round-trip thirty-day limit tickets estimated to produce $2,500,000 additional passenger revenue, this increase seeming justified at the present time in view of increased expense of providing modern passenger train service, increasing prices of commodities, generally, and recent demands of railroad labor for increased wages. This proposed increase received the affirmative vote of all lines represented, with one exception. Conclusion was reached, therefore, to submit the proposal by letter ballot to the lines not represented. In the meantime, further effort will be made to secure recall of the sole negative vote cast at the meeting. If unanimous consent can be had, the proposed increase will be made effective October 16, 1937. 8. Proposal of the Wabash Railway To Establish Week-End Round-Trip Coach Excursion Fares at 1¢ per Mile Plus 25¢.-On June 10, 1937, formal protest was filed by the Alton Railroad under the Commissioner Agreement to proposal of the Wabash Railway to establish round-trip rates from Decatur to Chicago, Illinois, on the basis of 1e coach fare plus 25¢, to be sold for all Wabash trains on weekends during July and August. If the Wabash proposal became effective, the C. & E. I. announced that they would use the same basis of fares from stations Hillsboro and Villa Grove to Chicago, and the Illinois Central announced that they would authorize similar fares from Springfield to Chicago. The Alton handle a very large amount of traffic between Springfield and Chicago and unless they were to meet the rate put in by the Illinois Central as result of the Wabash rate between Decatur and Chicago, they stood to lose week-end traffic between Springfield and Chicago due to the regular rate being approximately twice the proposed excursion rate. In addition to this, there was also the question of discrimination against territory, there being no more reason for authorizing the one-way fare plus 25¢ for the round trip between Springfield and Chicago than between Springfield and St. Louis. Furthermore, on Saturdays and Sundays round-trip tickets could be purchased between Springfield and Chicago on the excursion rate and between St. Louis and Springfield on the regular round-trip rate of 1.8¢ per mile in each direction, resulting in a round-trip fare of $8.05 instead of the regular fare of $10.71 between St. Louis and Chicago. In view of the showing made of adverse effect on a very large amount of traffic between Springfield and Chicago and the probable demoralization of basic fares, the Wabash withdrew their notice of intention to establish the week-end excursion fares between Decatur and Chicago, and the matter was thus satisfactorily disposed of without the necessity for formal report under the Commissioner Plan. 9. Sampling of Fruit, Melons, and Vegetables at Kansas City, Mo.-One of the practices which has grown up in connection with the handling of fresh fruit, vegetables, and melons is the so-called sampling by representatives of prospective buyers and as might well be expected, some of this so-called sampling is carried to the point where it might be termed pilfering. In addition to loss of the fruit itself, which in some instances has amounted to a whole box or more in a carload, the samplers do not always restow the load so that the car may be moved without breakage to contents. The railroads have been attempting to bring about an improvement in this situation for a long time and have made good progress at many points. However, in an effort to stabilize conditions at Kansas City, Mo., insofar as loss and damage to fruit, vegetables, and melons were concerned, one of the features on which agreement could not be reached was the question of sampling, and the matter was therefore referred to me. I have been giving attention to this matter for some time and arrangements have recently been made to have special officers patrol team tracks at Kansas City so as to permit proper and adequate sampling but to prevent abuses of the privilege. 10. Expedited Passenger Service, St. Louis to San Antonio, in Connection With Weekly Tours to Old Mexico.—Under date of June 29, 1937, I sent you copy of my report and conclusions with respect to protest filed by the Missouri-KansasTexas R. R. and the St. Louis-San Francisco Ry. to proposal of the Missouri Pacific R. R. to operate a weekly tourist train between St. Louis and Mexico City on a schedule which will be somewhat faster between St. Louis and San Antonio than the existing daily schedules of all of the lines involved in the controversy. Advice has now been received from the Missouri-Kansas-Texas R. R. of their disagreement with my decision. 11. Expedited Perishable Schedules by Southern Pacific via New Orleans.— On May 18, 1937, the Texas & New Orleans R. R. Co. served notice of a change in the schedule of its eastbound Colton fruit block to arrive New Orleans 4:30 P. M. of the fifth day instead of 2:00 A. M., sixth day arrival time theretofore in effect. This change was made to meet competition to Atlanta and other Southeastern points, but the advanced time into New Orleans made possible a connection with trains leaving New Orleans that night, which could bring about ninth morning delivery at New York as compared with the present tenth morning delivery. As a result of informal protest filed by several of the roads interested in California perishable schedules to Eastern destinations, the Southern Pacific gave assurance that they would police deliveries and reconsignments at junctions to prevent shortening of present California perishable schedule deliveries to Eastern destinations north of the Southeast territory. The matter was thus disposed of without the necessity of formal hearing and report under the Commissioner Agreement. Very truly yours, H. G. TAYLOR, Commissioner. EXHIBIT NO. 302 COMMISSIONER OF WESTERN RAILROADS, To the Committee of Directors: For your information, I am outlining below activities upon which I have been engaged during the months of January and February 1938: 1. Proposal of the A. T. & S. F. Ry. Co. To Establish 12-Cent Coach Fares Intrastate in California.—There has been no change in the status of this controversy. 2. Problems of Employment.-There is nothing to report on this item at the present time. 3. Furnishing of Paper and Coopering of Boxcars.-Committee still has this study under way and it is expected report will be made in the near future. 4. Request for Emergency Rates on Agricultural Commodities Account Drought Conditions. In my letter for the month of December, I reported request which had recently been received from Governor Huxman, of the state of Kansas, for reduction in freight rates on livestock and feed account drought conditions, and stated that after conference of the Kansas Lines, I had advised the Governor that the financial condition of the railroads was very critical and that, therefore, it would not only be inconsistent but highly improvident for the railroads to grant the reductions asked for, adding that similar requests from Nebraska and Colorado had likewise been declined. Under date of January 20th, Governor Teller Ammons, of Colorado, renewed his request upon the railroads of that state for emergency rates on livestock and feed account drought conditions, and, after conferring with Colorado roads, I addressed the Governor for account of all concerned, under date of January 31st, as follows: "Very careful and sympathetic consideration by the Presidents of the railroads in Colorado has been accorded your recent request for a reduction in freight rates on livestock and feed account drought conditions, and I am directed to advise you that request for reductions at this time must be declined. |