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Railroads that they sponsor a joint exhibit of the transportation interests at the New York World's Fair-1939.

This question was discussed at meeting of the Western Association of Railway Executives on February 5th, and it was the sense of those present that Western roads should not participate in the cost of such an exhibit. It was the feeling, however, that in the event conclusion is reached that the expense of a joint exhibit at the New York World's Fair should be prorated amongst all Western roads, similar consideration should be given to a joint exhibit at the San Francisco Bay Exposition which is also to be held in 1939, and the A. A. R. has been advised of this position on the part of Western lines.

9. General Advertising Rule.-The general advertising rule, as finally adopted by roads in Western territory, has created a more or less unsatisfactory condition as a result of some lines insisting upon the right to interpret the rule themselves, which results in material disadvantage to the lines who are making an earnest endeavor to live up to the spirit of the rule as adopted.

While there was some sentiment in favor of abandonment of the rule, the consensus of opinion at meeting on January 8th was that the rule had material advantages if uniformly observed, and resolution was therefore adopted, ordering a report to be rendered on what amendments should be made.

Such report was presented at meeting of the Association on February 5th, which resulted in the unanimous adoption of the following rule as a substitute for the rule theretofore in effect.

"That it be left to the discretion of the individual lines as to the publications or media in which they may place advertising, subject to the following exceptions: "(a) Advertising is not permitted in or on programs of any kind, or score cards; ball park or other athletic field fences; billboards, including those specially constructed, in ball parks and other athletic fields; theatre curtains; admission tickets or ticket envelopes used in connection with games, theatrical performances, or other entertainments; rosters, year books, directories, or similar publications, issued by clubs, commercial organizations, state, county, or city fairs. Member lines shall refrain from purchasing box seats or season general admission tickets for baseball and football games and other athletic events. Furnishing banners in lieu of advertising in programs, score cards, etc., is not permitted.

"(b) Advertising shall not be permitted in trade, industrial, and technical publications exploiting one or more commodities transported in freight service, except when specific proposal to advertise in such publications is submitted to the Western Traffic Executive Committee for consideration. Nothing in this clause shall prohibit the placing of advertising in the TRAFFIC WORLD and RAILWAY AGE.

"(c) Advertising in anniversary, souvenir, resort, or other special editions of newspapers shall be placed only after conference between passenger traffic officers of all terminal lines serving point at which the special edition is published; notice of intention to advertise in any such special edition to be filed with the chairman of the T-CPA, with copy to other terminal lines, such notice to be filed in ample time to enable other interested lines to take action. No conference or advice to other lines is necessary in placing regular scheduled advertising copy in black-and-white news sections of such newspapers at regular advertising rates, nor in placing regular scheduled advertising copy at regular advertising rates in regular rotogravure sections.

"(d) Advertising is permitted in publications published by and distributed principally to the members of fraternal or club organizations, but notice of intention to advertise in any such publications shall be filed with the chairman of the Trans-Continental Passenger Association sufficiently in advance to enable other lines to take similar action if desired. This clause does not cover any publications referred to under Exception (b)."

In order to assure strict compliance with the provisions of the new rule, a resolution was adopted which will permit any railroad that feels its neighbors are not living up to the spirit of the advertising program to bring the matter to the attention of the chairman, who will cause an investigation to be made and issue an interpretation to be followed by all lines in future similar circumstances. 10. Honoring Intermediate Class Tickets in Club, Lounge, and Observation Cars. Late last year, the Union Pacific served notice of its intention to strip some coaches of fixed seats and install loose furniture therein; thus converting

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them into lounge cars to be operated between the dining car and tourist sleeping cars on their Challenger train, in order to provide seating space for tourist car passengers while berths are being made up.

There was some objection raised to this proposal by other lines who feared the breaking down of the rule prohibiting the honoring of coach and intermediate class tickets in parlor, lounge, and observation cars provided for first class passengers traveling in standard sleeping cars. However, it was recognized that there is necessity for a facility of the sort proposed on trains operating only coach and tourist cars, and the other roads who operate such trains stated they were proposing to offer similar accommodations. This proposal then brought notice from roads which operate one or more tourist cars on trains in which standard sleeping cars and coaches are also operated, that they would permit their tourist car passengers to occupy space in lounge facilities provided for first-class passengers.

11. Advertising and Publicity Literature Distributed by the Association of American Railroads.-The Association of American Railroads is distributing regularly, through various railroad and association mailing departments, literature of various sorts describing railroad activities and telling of the services offered to the public. This literature is enclosed with other mail going to patrons and prospective patrons in all lines of endeavor.

Comments regarding such literature are so rare as to be worthy of special note when such are received. On February 9th, I received a letter from the Highway Engineer of Davidson County, Nashville, Tennessee, reading as follows:

"DEAR SIR: A slip arrived in my office, enclosed in your envelope containing your information on tank cars, which when I read I was so delighted that I hastened to compliment the Railroad Companies on their decided change of attitude toward the public. I hope it is so-I hope it sticks. I have always been a friend of the railroad and often complained about the "nigger sergeant" attitude that the railroad personnel has had toward its patrons, even since I was a kid.

"I believe that the principle expressed in this little slip, if carried out with willingness and not grudgingly by the railroad personnel, will do more to rehabilitate the railroads than any other single factor.

"You may think this letter rather impertinent but it is the sincere expression of my feeling, and it would be hard for me to withhold my complimenting the organization on the step thus taken. This is the first expression of its kind I have ever seen in print."

I made suitable acknowledgment, and also passed his remarks on to President Pelley of the Association of American Railroads.

12. Proposal of the Louisiana & Arkansas Railway to Reduce Rates on Import Sugar from New Orleans to Dallas.—The L. & A. Ry. served notice, through the Texas-Louisiana Tariff Bureau, of their intention to establish a rate of 30¢ per 100 lbs. on import sugar from New Orleans to Dallas, apparently with the intention of equalizing the rate from the port of New Orleans with that from the port of Houston. The import rate on sugar from New Orleans to Dallas is 454 per 100 lbs. The domestic rate from New Orleans is 41¢ per 100 lbs. with a fixed differential of 5¢ per 100 lbs. from Colorado points over the New Orleans domestic rate.

Since it is improbable that an import rate on sugar from New Orleans could be maintained on a lower basis than that applied to domestic sugar, it seemed to roads serving the Colorado territory particularly that the proposal would result in a rate reduction to that territory.

Protest was, therefore, served by the lines serving the Colorado sugar-beet district, as well as lines serving the port of Houston, in which it was claimed that the loss in revenue to those carriers would amount to a substantially greater sum than any revenue which the L. & A. could hope to secure by the adoption of the lower import rate from New Orleans to Dallas.

Upon receipt of this protest, I assumed jurisdiction and notified the L. & A. to hold the proposed new rate in abeyance until hearing could be had, to which they replied that they had decided to withdraw further action in the matter and which removed the necessity for a hearing and report on the protest.

Very truly yours,

H. G. TAYLOR, Commissioner.

EXHIBIT NO. 325

REGULAR MEETING OF THE COMMITTEE OF DIRECTORS

Regular meeting of the Committee of Directors was held at 3:00 P. M., Wednesday, April 14, 1937, in the Board Room of the Bank of the Manhattan Company, 40 Wall Street, New York City.

The following were in attendance: Mr. Stephen Baker, Mr. W. W. Colpitts, Gen. James G. Harbord, Mr. W. A. Harriman, Mr. Will H. Hays, Mr. Francis F. Randolph, Mr. H. W. Rush, Mr. H. G. Taylor.

In the absence of the Chairman, Mr. W. A. Harriman presided at the meeting and F. M. Wilson acted as Secretary thereof.

The minutes of the preceding meeting of the Committee of Directors were read and approved.

Suggestion was made that if the members of the Committee were furnished with a copy of the minutes of the meetings at the time they are written up, it would avoid the necessity of having them read at the following meeting and thus save time. Upon motion duly made and unanimously adopted, the Secretary was directed to inaugurate the practice forthwith.

The Commissioner reported on the following subjects, with which he had dealt since the meeting on February 10, 1937:

1. Proposed Advancement of Delivery of St. Louis Traffic at Ft. Smith, Ark., by the St. Louis-San Francisco Railway Company.-The Commissioner was requested to state his views of what might be involved as the result of notice served by the Frisco of intention to proceed with the advanced delivery at Ft. Smith, which, insofar as carload traffic is concerned, had been found not justified in the Commissioner's report of March 15, 1937.

Mr. Taylor stated that from the facts developed, it appeared to him that the Frisco was justified in making the earlier delivery of less-carload merchandise, which can be done without any increase in train service and probably would not adversely affect other St. Louis-Fort Smith lines to the extent that they would feel it necessary to put on additional train-miles in order to meet the advanced schedule of the Frisco. He stated, however, that the other lines had expressed the view that if carload traffic was advanced to first-afternoon delivery at Fort Smith instead of second morning, they would be compelled to meet the competition, which would involve additional train service, amounting to approximately $11,700 per month.

If the advanced delivery at Fort Smith was confined to L. C. L. traffic, it would not involve very much business outside of that moving from St. Louis to Fort Smith, but an earlier delivery or carload traffic would immediately involve traffic from points east and north of St. Louis and would give the Frisco an advertising advantage which the other Fort Smith lines could not afford to permit.

The Commissioner pointed out that the Frisco's statement that there was no schedule agreement in effect between St. Louis and Fort Smith was not a valid argument, for the reason that the Commissioner Plan covers all features of railroad operation in Western territory generally which might adversely affect the industry.

It was the feeling of those present that the St. Louis-San Francisco Railway Company, along with other carriers, enjoy the benefits accruing under the Commissioner Plan and should be willing to abide by reports which are rendered in the interest of the industry as a whole.

The view was expressed that if the Commissioner's reports were not accepted by the lines adversely affected, it would not be very long until the effect of the plan would be nullified, and the Secretary was directed to present this view to the Frisco's representative on the Committee of Directors for consideration, with the request that he report to the Committee his conclusion with respect to the proposed independent action of the Frisco.

2. Proposal of the Louisiana & Arkansas Railway to Reduce Rates on Import Sugar from New Orleans to Dallas.-The Commissioner explained that protest in this case had been lodged only after all other efforts had failed to induce the Louisiana & Arkansas Railway to withdraw their proposal to reduce the sugar rate from New Orleans to Dallas. On being notified that the Commissioner had assumed jurisdiction in the case, the L. & A. Ry. withdrew their proposal but are continuing to present argument in favor of their proposal.

The Commissioner explained that the sugar rate structure is so interwoven as to cause a revision in rates in all sugar originating districts in Western territory,

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in the event the proposed reduction in rates from New Orleans to Dallas should be given effect.

3. Possible Inclusion of Bus and Truck Operations Performed by Signatory Carriers Within the provisions of the Commissioner Agreement.-Upon explanation of the reasons back of the resolution adopted at meeting of the Western Association of Railway Executives on March 5, 1937, reading as follows:

"Resolved, That the question of extending the provisions of the Commissioner Agreement to include bus and truck operations performed by signatory roads be postponed indefinitely."

it was the unanimous conclusion that in view of this explanation and the more general understanding of the problem, the subject should be laid on the table and the Presidents' action approved.

4. Protest on Proposed Newspaper Rate of $1.40 per 100 Pounds Between Chicago and California Points.-The Commissioner outlined his activities in persuading the North Pacific Coast lines to increase the rate to $1.80 per 100 pounds, in order to eliminate the previously existing 90 cent rate which had been used as a basis for requesting reductions to other Pacific Coast destinations. He stated the action of the Great Western and the Milwaukee in agreeing to revise their rates had removed a serious threat to not only freight revenues from magazine traffic but United States mail revenues.

5. Savings Effected Through Consolidation of Association Activities.-One of the members directed attention to statement of the savings effected through the consolidation of Association activities, attached to the Commissioner's report of April 4. 1937, and expressed himself as being agreeably surprised that these activities had produced a total saving in excess of $1,000,000 from July 1933 to date.

The Commissioner stated that he was giving consideration to consolidations of Association work at points outside of Chicago and expected to see some worthwhile economies brought about.

Other subjects touched upon by the Commissioner were:

Waiving Per Diem on Automobile Cars Held at Detroit.

Extension of Agreement Covering the Construction of Packing Sheds and Other Facilities for Handling Perishables to Include All Texas and Louisiana Points of Origin.

Slowing Down the Movement of Perishables between California Points and Chicago.

There being no further business to come before the meeting, same was duly adjourned at 4:00 P. M.

F. M. WILSON, Secretary.

EXHIBIT No. 326

To the Committee of Directors:

COMMISSIONER OF WESTERN RAILROADS,
Chicago, Illinois, January 3, 1938.

For your information, I am outlining below activities upon which I have been engaged during the month of December 1937:

1. Proposal of the A. T. & S. F. Ry. Co. to Establish 1%-cent Coach Fares Intrastate in California.-There has been no change in the status of this controversy. 2. Freight Schedules to the Southwest via the St. Louis and Kansas City Gateways. In my letter for the month of August 1937 I quoted communication from Traffic Director Hochstedler of the Chicago Association of Commerce, making request for third morning delivery at Houston on package-car traffic from Chicago, and advised that reply had been made to Mr. Hochstedler that the schedule agreement covering this particular traffic contemplated fourth morning delivery at Sou h Texas points, including Houston; that this schedule provided a regularity of service which shippers have on many occasions indicated best suited their requirements, and that schedule as set up was so tied in with other schedules at intermediate points as to make it impossible to make any change in the Houston service without affecting related schedules.

Mr. Hochstedler has not said anything further to me regarding the matter, but in a recent communication addressed to Traffic Vice Presidents of the Houston lines, he stated it was necessary for him to recommend truck service to his mem

bership in view of the refusal of the railroads to accord third morning delivery at Houston.

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 still has this study under way, and it is expected report will be made in the near future.

5. Special Reduced Rates on Corn and Oats To Meet Barge Competition from Points on the Illinois River to Chicago.-In my letter covering the month of November, I reported further progress with respect to this matter. Since that time, however, due to renewed activity by the Barge lines in the Winter season, and complaint from receivers located on the rails against cancellation of these rates on account of the Barge activities, the Rock Island requested a further consideration of agreement reached to suspend the rates on December 31st. They reported on December 21st one barge loading of 40,000 bushels of corn at Morris, Illinois, destined Chicago.

A conference of the interested roads was therefore arranged for Monday, December 27, 1937, and, after a very full discussion of the subject, all lines agreed to permit the rates to lapse at the end of the year, but without prejudice to reconsideration prior to the opening of the Spring season.

At this conference, it was also agreed, if it should be decided next Spring to reestablish these reduced rates, efforts would be made to confine the reductions to points between Ottawa and Chicago and, if possible, to further restrict them to points immediately adjacent to the waterway.

6. Protest on Passenger Train Schedule Changes of the Rock Island and Southern Pacific between Chicago, Kansas City, and Los Angeles, Effective December 12, 1937.-On November 26, 1937, the Rock Island-Southern Pacific served notice under the terms of the Commissioner Agreement of intention to make certain changes in their passenger train service between Chicago, Kansas City, and Los Angeles, among which was the moving up of the arrival time of train No. 11, known as "The Apache" from 9: 40 p. m. to 8:30 p. m.

In addition to this, they proposed to operate a through sleeping car between Los Angeles and Chicago to leave Los Angeles in their train No. 2 departing at 10:00 a. m., this car to be transferred to train No. 12 at El Paso; the latter train having departed Los Angeles 9:15 a. m. The effect of the operation of this through car on train No. 2 out of Los Angeles instead of No. 12 was to reduce the over-all time for passengers in this particular car between Los Angeles and Chicago 45 minutes, which was in violation of the schedule agreement Eastbound of 58'45" for regular passerger trains other than streamliners.

Protest was filed against these particular features of the changes proposed on the basis that, in the first instance, the earlier arrival time at Los Angeles of train No. 11 would require the operation of passenger carrying equipment on the Union Pacific mail train No. 5 from Cheyenne, which would have the effect of shortening the agreed schedule between Chicago and Los Angeles on a combination service, Chicago to Cheyenne-Cheyenne to Los Angeles, as well as protest against the violation of the agreed schedule East-bound through the operation of a through sleeping car out of Los Angeles on a later train for El Paso where it would connect with No. 12 for Chicago.

Protest was based further on shortening schedules which require increased expense on the part of competing lines to provide comfortable service, particularly at a time when all railroads are before the Interstate Commerce Commission for increased passenger and freight rates.

Following an exchange of views amongst the lines concerned, and agreement to permit the earlier arrival at Los Angeles with train No. 11, but providing that the through East-bound sleeping car would be handled out of Los Angeles on No. 12 so as to stay within the agreed schedule, the protests were withdrawn without the necessity of formal hearing and report.

7. Proposed Rate of 60 Cents per 100 Pounds on Magazine Inserts for Newspapers from Chicago to Wichita, Kansas.-The Chicago Great Western recently submitted a proposition to the Transcontinental-Western Passenger Association proposing a rate of 60 cents per 100 lbs., with a minimum of 25,000 lbs., applicable on magazine inserts from Chicago to Wichita, Kansas, statement being made that the Wichita Beacon had arranged with the Hearst publications for their weekly magazine service, but the Beacon people claimed the magazines would have to move by truck unless the 60-cent rail rate was authorized. It was expected that this movement would amount to one car per week and might run as high as 30,000 to 32,000 lbs. on numerous occasions. The proposition was turned down by the passenger association, and the Great Western served notice of intention to

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