are now being made of the feasibility of meeting highway competition between Chicago and the Twin Cities, both through the use of Railway Express Agency, as well as by pooling train service, etc. It is anticipated that the studies will be completed during the month of January, and a definite recommendation made to Chicago-Twin Cities Lines regarding this matter. 4. Regional Coordinating Committee, Western Railway Group.-With the exception of twelve points, surveys have been completed of all of the major terminals in Western territory, under the direction of the Coordinating Committee, looking toward the development of plans for the consolidation or unification of terminal facilities and operations. The remaining studies will be consummated within the next thirty days. As a result of the L. C. L. merchandise plan submitted by Mr. Turney, of the Coordinator's staff, the Western Committee determined to fully develop the possibilities between Chicago and San Francisco Bay area. This study is now under way and conclusions will be submitted in the near future. As a matter of information, it may be interesting to note that a number of the major projects formerly being surveyed by the Coordinating Committee have, since the formation of the Association of American Railroads, been referred to that organization for study and report back to the Coordinating Committees in each of the three regions. It is rumored that a report will soon be issued by Mr. Turney, of the Coordinator's staff, covering suggested passenger train pooling as well as carload pooling. These reports are being awaited with much interest. SUMMARY OF ACTIVITIES DURING YEAR 1934 As a matter of interest, I am summarizing below subjects which have been referred to me under the Commissioner Agreement during the year 1934, this being supplemental to the summary furnished you for the year 1933. 1. Schedule Changes. In connection with the application of the Commissioner Agreement, considerable confusion existed as to the extent to which changes in schedules, both freight and passenger, should be reported to permit orderly handling. In an endeavor to establish a uniform practice to be followed by all roads signatory to the Agreement, a definite procedure was set up whereby any road proposing to make a change in schedule should notify all competing companies at least fifteen days prior to the effective date of the change, furnishing a copy to this office as a matter of record. This plan has been operative since August, 1934 and thus far has proven highly successful in that all roads are currently advised of any schedule changes and may, if they so desire, invoke the Commissioner Agree ment, or, as has more often happened, confer with the line making the change, with the result that a complete understanding is had of the necessity for changed schedules. In a number of instances this has prevented the addition of train miles to meet compettion. The procedure for handling schedules in no way affects schedules local to a particular railroad but involves only those in which there is competition with other companies. This procedure affords the necessary advance information concerning proposed changes and has a tendency to reduce service installed for competitive reasons. 2. Proposed Reduction in Rates on Miscellaneous Packinghouse Products, Westbound, and Inedible Packinghouse Products, Eastbound, Between Chicago and Missouri River Points.-This proposal was presented during 1933, at which time report was rendered by me, disapproving the action contemplated. The Chicago Great Western Railroad Company served notice of intention to proceed with the establishment of such rates. However, at the request of the Committee of Directors, conference was held between the President of the Chicago Great Western Railroad Company and the subcommittee of the Committee of Directors following which a further meeting of the Chief Executives of all roads involved was held, and the position formerly taken, disapproving the establishment of rates proposed, was reaffirmed. As a result of the conference with the subcommittee of the Committee of Directors, the Chicago Great Western Railroad Company indicated a willingness to abide by my conclusions under the Commmissioner Agreement, and the proposal was withdrawn. 3. Freight Train Schedules Between California Points and Seattle.-This subject also was presented in 1933 and related to a shortening of freight train schedules between California points and Seattle by the Southern Pacific Company. At the request of the Great Northern and Western Pacific, the case was reopened and again considered during March 1934, following which report approving the action of the Southern Pacific Company in shortening the schedule was reaffirmed, for reasons outlined in my circular letter C-14-4 of March 21, 1934. 4. Application of Intrastate Rates to Interstate Shipments of Dressed Stone Between St. Louis and Kansas City, Missouri.-On January 8, 1934, protest was filed by the Missouri Pacific Railroad Company to the establishment of an interstate rate of 11% cents per 100 lbs. on dressed stone from St. Louis to Kansas City, Mo., by the Missouri-Kansas-Texas Railroad Company, as affecting the through rate on this commodity from Indiana to Kansas City. Conference was promptly held between representatives of the carriers involved and agreement reached resulting in the withdrawal of the rate proposed and the establishment of a higher rate acceptable to all concerned. This without the necessity for formal action by me as Commissioner and as reported to you in my letter C-20-2 of January 22, 1934. 5. Practice of Accepting Precooled Shipments of Fruit and Vegetables by California Originating Lines.-In connection with the handling of perishable shipments from California points, eastbound, it was the practice of originating lines to accept cars of fruit and vegetables precooled by shippers as released from precooling devices at various hours during the day up to as late as 2:00 P. M. of the day following day of loading, but waybilling as of the former day, with the result that such cars were handled on schedule one day shorter than provided in eastbound schedule agreements. Protest was filed under the Commissioner Agreement to the continuance of such practice as endangering the eastbound Trans-Continental freight schedules. Conference was called of representatives of the roads involved, which resulted in agreement being reached by California originating lines on a method of procedure for handling precooled shipments which would not disturb existing schedules. This without necessity for formal action on my part as Commissioner. 6. Passenger Fares.-In connection with the establishment of experimental passenger fares in Western territory, under the so-called basic passenger fare agreement, numerous cases were reported and the provisions of the Commissioner Agreement invoked account violation of the provisions of the agreement. A majority of these instances arose through misunderstanding or misinterpretation of the agreement as drawn and in each case a conference was promptly held with passenger traffic officers interested, with the result that while it was impossible in all cases to correct the situation, a large majority of them were disposed of through agreement satisfactory to all roads involved. These experimental passenger fares have been continued in effect during 1934 and extended through 1935 to a time sufficient, it is hoped, for a decision to be rendered by the Interstate Commerce Commission on the general investigation it is conducting into passenger fares throughout the United States. The results of this experiment, from reports received, indicate that it has been successful in securing a return to the railroads of traffic which has been moving over the highways, and at the same time it has, for the first time in many years, resulted in lessening the downward trend in passenger traffic. 7. Request for Seventh Morning Delivery of California Deciduous Fruits at the Auction House, Chicago.-For some time past there has been agreement between Trans-Continental lines to the effect that perishable fruits from California points destined Chicago will be placed upon team tracks seventh morning after date of departure from concentration points and placed at the auction house upon eighth morning. On account of the quantity of this movement, it has been necessary for fruit trains to run in advance sections in sufficient time to permit placement of the last section under the agreed schedule. This resulted, in numerous instances, in cars destined the Chicago auction arriving in ample time to make seventh morning placement. As result of this condition, the Fruit Auction Sales Company registered a protest alleging discrimination as between the auction and team tracks. This allegation was not justified, because of the difference in handling of cars destined to the auction as against those which merely were placed at team tracks, several hours being required for delivery to the auction house, whereas team track delivery could be made upon arrival. This subject was given very careful consideration by representatives of all roads involved in Trans-Continental service and the request declined a number of times. However, upon making investigation, it was later found that with the general speeding up of schedules, practically all east-bound California deciduous fruit actually arrived at Chicago in time to accomplish seventh morning auction house delivery and, as a result, agreement was reached that this service could be afforded, and a schedule providing for such deliveries, as well as seventh morning delivery at team tracks, is now in effect. 8. Employment of Railway Express Agency to Handle L. C. L. Merchandise on Passenger Trains at Freight Rates by the Illinois Central and Yazoo & Mississippi Valley Railroads.-For some time past railroads in Southeastern territory have turned the handling of the first four classes of L. C. L. mer. chandise over to the Railway Express Agency. This resulted in an increase in the volume of this class of freight handled by the railroads, a major portion of which was recaptured from the highways. In July 1934 the Illinois Central Railroad, having lines falling in both Western and Southeastern territories, announced its intention of establishing a similar service, between St. Louis and Memphis and intermediate points, as well as points south thereof, including the line of the Yazoo & Mississippi Valley Railroad Company. Protest against the establishment of this service was filed under the Commissioner Agreement and, on July 24th, conference between interested lines was held in St. Louis, following which report was rendered, as outlined in my letter to you, C-31-2, of August 3, 1934, to the effect that so far as the rates might concern the territory from Vicksburg to Shreveport they should be withdrawn and cancelled, whereas they should be permitted to remain in effect on that portion of the Illinois Central Railroad lying north of the Ohio River, west of the IllinoisIndiana state line and south of the line of the Southern Railway System between Louisville, Ky., and St. Louis, Mo. It was concluded that the two portions of the Illinois Central System mentioned above were those lying within Western territory and coming within the provisions of the Commissioner Agreement; no opinion was expressed with regard to action taken in territory lying south of the Ohio River and east of the Mississippi, inasmuch as that mileage lies within Southeastern territory. 9. Proposal To Reduce Rates on Sugar From New Orleans and Sugarland, Texas, to Springfield, Missouri.-In order to meet barge competition, the St. LouisSan Francisco Railway proposed to establish reduced sugar rates from New Orleans and Sugarland, Texas, to Springfield, Mo. This action was protested under the Commissioner Agreement by a number of roads in that territory, as well as by a number of Trans-Continental lines, such protest being based upon the effect which the proposed reduction would have upon all sugar rates in Western territory. Conference between representatives of interested carriers was held on August 1st, at which time it was concluded that inasmuch as sugar rates were being given consideration by the Standing Rate Committees in Western freight bureaus, the subject would be held in abeyance pending result of that study, which had the effect of disposing of this protest without the necessity for formal action by me as Commissioner. 10. Establishment of 13-Hour and 50-Minute Passenger Train Schedule Between Denver and Salt Lake City via the Union Pacific Railroad.—In connection with the opening of the Dotsero Cut-off by the D. & R. G. W. R. R., that company established a passenger train service between Denver and Salt Lake City on a schedule materially shorter than the service previously in existence via Pueblo. Subsequently, the Union Pacific announced a change in its schedule to 13 hours and 50 minutes west-bound and 15 hours east-bound on its DenverSalt Lake City passenger trains, which retained to that company the fastest schedule between those points. Protest against the establishment of this service was filed under the Commissioner Agreement by the D. & R. G. W. R. R. Co. After conference, at which both roads were represented, report and conclusion was rendered by me that the schedule of the Union Pacific was not justified and recommending a return to the former 17-hour schedule. The Union Pacific immediately requested a rehearing on the grounds that it was desired to present additional information that had not been developed when the subject was first considered. Further conference was then held and, following presentation of further facts, supplemental report was rendered, reversing the original conclusion and finding that the Union Pacific was justified in the establishment of their 13-hour and 50minute and 15-hour schedules. Request has now been received from the D. & R. G. W. R. R. to again reopen the case, alleging there is no necessity for such expedited passenger train service and that if the D. & R. G. W. meets such schedule, it will be at a sacrifice out of proportion to any revenue that can be realized. This request is now under advisement and determination has not as yet been reached as to further action. 11. Sixth Morning St. Louis Arrival of California Traffic via Missouri Pacific Railroad. As a result of the change to seventh morning auction delivery at Chicago of perishables from California, heretofore referred to, the Missouri Pacific Railroad announced its intention of handling perishable traffic into St. Louis at 10:00 A. M., on the sixth day instead of 9:00 P. M. on the sixth day, in order to permit the St. Louis Gateway to remain on a parity with the Kansas City Gateway in handling Chicago traffic. This proposed change in schedule was protested under the Commissioner Agreement by the Union Pacific and Southern Pacific. Meeting between representatives of interested parties was called to further consider the matter. However, prior to the holding of such conference, the Missouri Pacific Railroad advised that the proposed change in schedule would not be made, which disposed of the subject without the necessity for formal action under the Commissioner Agreement. 12. Industrial Track Extension by Missouri-Kansas-Texas Railroad at San Antonio, Texas.-In order to permit direct service being given at industry located on trackage now served by the Southern Pacific Company, the Missouri-KansasTexas Railroad announced its purpose to build an extension from its main line, connecting up with the industry track, such extension to be made at the sole expense of the railroad company. Protest was filed by the Southern Pacific based upon the allegation that the extension would be an unnecessary duplication of facilities and result in a dissipation of the revenues of both companies. It was the position of the Missouri-Kansas-Texas Lines that the Commissioner Agreement was not applicable in circumstances of this nature. However, it was my position that the agreement did apply and, after conference between interested companies, report and conclusion was furnished that the extension proposed by the Missouri-Kansas-Texas Lines was not justified. Exception to this report was filed by the M.-K.-T. Lines and, as you will recall, the matter was discussed at some length at meeting of the Committee of Directors held on November 14th, following which it was concluded that conference be had between the President of the Missouri-Kansas-Texas Lines and myself, looking toward a possible adjustment of the matter. Owing to conflicting engagements, it has not as yet been possible to meet Mr. Sloan, but Vice President Atkins, representing Mr. Sloan, has advised that in order to avoid controversy and in the interest of the Southwestern railroads as a whole, the Missouri-Kansas-Texas withdraws its proposal. 13. Chicago-Denver and St. Louis-Denver Freight Train Schedules. Following the inauguration of Trans-Continental service via the Dotsero Cut-off, the Burlington Railroad established a new Trans-Continental train west-bound, arriving Denver at 6:30 P. M. on the second day from Chicago. This had the effect of permitting the delivery of Denver and connecting line traffic at that point twelve hours earlier than schedules via competing lines. The Union Pacific Railroad, in conjunction with the C. & N. W. Ry., then announced a Chicago-Denver service, as well as a St. Louis-Denver service, which would arrive Denver at 11:30 A. M. the second day and give second morning or second noon delivery on Chicago-Denver and St. Louis-Denver freight. This expedited service was immediately protested, under the Commissioner Agreement, by all other Denver delivering lines. A number of conferences were held, with the result that agreement was reached providing that delivery would not be made prior to 5:30 P. M. of freight arriving Denver on trains scheduled into that point subsequent to 7:00 A. M. This agreement eliminated the necessity for formal action under the Commissioner Agreement. 14. Proposal of Union Pacific System To Reduce Coal Rates From Southern Wyoming and Utah Points to the Pacific Northwest.-In order to meet a situation in the Pacific Northwest territory resulting from the increased use of other types of fuel, the Union Pacific Railroad announced its intention of reducing rates on fuel from Southern Wyoming and Utah points into that territory, which it is alleged would have had the effect of stimulating coal traffic. This action was protested by other Pacific Northwest lines on the ground that such reduction would fail to accomplish the purpose desired and would result in a loss of revenue to all participating carriers. Following conference, at which all phases of this matter were considered, report and conclusion was rendered, recommending the withdrawal of the tariff reducing the coal rates by the Union Pacific. The recommendation was accepted by the Union Pacific and the tariff withdrawn. 15. Proposal of the C. R. I. & P. Ry. To Reduce Rates on Agricultural Implements Between Council Bluffs, Iowa, and Nebraska Points and Stations in Kansas.-Proposal was made by the C. R. I. & P. Ry. Co., in accordance with the above and protest filed under the Commissioner Agreement by a number of com> peting lines in Western Trunk Line territory. Conference has not as yet been arranged, but it is hoped to hold a meeting between representatives of interested carriers early in January. Very truly yours, H. G. TAYLOR, Commissioner. EXHIBIT No. 314 COMMISSIONER OF WESTERN RALROADS, To the Committee of Directors: For your information I am outlining below a summary of the various matters upon which I have been engaged during the month of August 1933. This report will be supplemented further by me at the meeting of the Committee which has been called for September 13, 1933. 1. Basic Passenger Fares in Western Territory. This matter is still pending upon the docket of the Western Association of Railway Executives. Disposition has been held in abeyance pending decision by the Interstate Commerce Commission in connection with I. C. C. Docket 26000. Decision was handed down during the month of August denying the petition for reduction in freight rates, and meeting of executives of all Western roads has been called for Friday, September 1st, with the thought that final disposition may now be made of this subject. 2. Regional Coordinating Committee, Western Railway Group.-During the month of August plans were completed by the Western Association of Railway Executives for the initiation of an active campaign under the direction of the Committee on Elimination of Preventable Waste, looking toward the voluntary adoption of joint economies between carriers in Western Territory, which it was felt would not come within the provisions of the Emergency Railroad Transportation Act, 1933, which places a restriction upon economies developed by carriers where labor is affected. It had been generally understood that such action met with the approval of the Federal Coordinator of Transportation inasmuch as the effectiveness of the law, as adopted, had been greatly curtailed by the inclusion of Section 7 (b), which prohibits the reduction of labor beyond the number of employees in service as of May 1, 1933. In furtherance of establishing a definite routine for dealing with this matter, the Western Territory was divided into six divisions, each division covering a certain prescribed area. The chairmen of divisional committees were in each Instance executives of Class 1 roads in Western Territory. Meetings of the divisional committees were held at key points, and at all of these I was in attendance. At these conferences the method of making surveys, as well as the nature of reporting their progress and results, was thoroughly discussed. A much better understanding of the railroads' responsibilities under the law was thus promoted. Just prior to the holding of the last of this series of meetings, advice was received from the Federal Coordinator of Transportation that he felt the action contemplated was being taken merely as an evasion of the law, and that the Regional Coordinating Committees, which had been established by by statute, should take active charge of the work outlined for the Committee on Elimination of Preventable Waste. The Regional Coordinating Committee, Western Railway Group, accordingly assumed jurisdiction over such studies. This has no reference to economies which may be effected locally by any railway system, and such action as may be taken by it will be restricted only by the question of policy which may be involved in reduction in forces at a time when action is being pursued vigorously by other industries to increase employment under the National Industrial Recovery Act. 3. Organization Activities Conducted by Western Railroads in Chicago.—The final steps have been taken in concentrating Chicago organizations supported by Western Railroads in the Union Station, and the economies which it has been stated would accrue as a result of this action are now being developed. 4. Air Conditioning of Passenger Equipment.-It has been brought to my attention that certain carriers in Western Territory are now contemplating the expenditure of considerable sums of money for the air conditioning of passenger equipment. With the thought that it may be possible to reach an agreement among Western railroads, with respect to this matter, I have docketed the subject for consideration at the meeting of the Association to be held on September 1st, and will advise you as to developments at the meeting of the Committee of Directors. 5. Proposed Cancellation of Heater Charges on Potato Shipments.-As advised previously, disposition of this matter has been purposely delayed owing to the |