E. E. CLARK, EDITOR.

C. D. KELLOGG, AssoCIATE.

The Railroad and Warehouse Commission for Illinois has for some time been conducting hearings on petitions from shippers and shippers' associa tions for reduction in freight rates on the railroads in that state. It is significant that the petitions were principally from middle men who are between the producer and the consumer and whose interests are necessarily confined to the margin of profit that can be made in passing from producer to consumer the commodities in which they deal.

The Chicago Shippers' Association was one of the most active of the petitioners up to the date upon which arguments were to be made before the Commission, on which morning a telegram was sent to the Commission by their representative expressing the desire of the Association to withdraw its petition.

The Divisions and Lodges of the different organizations of railway employes addressed many communications to the Governor and to the Commission voicing protest against granting the petitions for reduction in rates. They also formed a large committee and arranged for an interview with the Governor and to be heard before the Commission. Brother W. M. Clark,

Chief Conductor of Division No. 1, O. R. C. at Chicago, was chosen chairman of the joint committee. Grand Chief Conductor, E. E. Clark, responded to the urgent invitation of a number of the Illinois Divisions and met the committee at Springfield. It was the unanimous wish of the committee that he speak for them in conference with the Governor, which he did. He then, by request of the committee, made an argument before the Commission which was taken stenographically and which we here present, by request. He said: GENTLEMEN OF THE RAILROAD AND

WAREHOUSE COMMISSION:

I think, perhaps, it is proper for me to make some explanation of my presence here. I will say that the railroad employes of the State of Illinois have been much interested in this subject for some time, and as you know, have been addressing from time to time, communications to the Commission, and similar communications to the Governor, voicing their objections to a horizontal or general reduction of the freight rates of the state, which would necessarily affect, seriously affect, the earnings of these railroads.

Within the last few days they decided to arrange for a committee of

their own to come to Springfield. The committee came to Springfield and asked for an audience with the Governor which was accorded to them yesterday. No effort was made to get as large a committee as could be gotten, but the 'committee or delegation that met the Governor yesterday consisted of representatives of the engineers, firemen, conductors, trainmen, switchmen, machinists, freight handlers, boiler makers, car repairers and clerks.

At the solicitation and invitation of these employes, many of whom are members of the organization which I have the honor to represent in its international capacity, I came and made a brief argument of their views before the Governor. That is one excuse of my being here before you today, and the other is, the gentleman who was expected to make the argument before the Commission got mixed up with a sky rocket and has not been, as yet, able to get around. I don't mean to infer that he went up with the sky rocket, but it put him out of commission.

Chairman Neville: Went up like one, perhaps.

MR. CLARK: Perhaps he would if he

had been here.

I haven't heard the testimony in this case throughout these protracted hearings, and I shall endeavor to be concise and brief in voicing the opposition felt by railroad employes to the granting of the requests which have been made upon this Commission. I shall not indulge in statistics to any great length. Whatever I shall present in that line will be from official records, very easily verified beyond contradiction.

To begin with, this delegation that was here yesterday and who left a subcommittee here today, represent practically all of the more than one hundred thousand employes of the railroads in the state of Illinois. These employes drew from the pay cars of the several railroads of this state, in the year 1904, some seventy millions of dollars

as compensation for their services. Now, taking the usual basis of computation, these railroad employes

represent a half million of the population of the state of Illinois and they represent, I think, generally, as high a standard of citizenship and character as is represented by any like number of citizens of the state.

It may be said that the wages of the railroad employes of this state are what would be considered good, as 'compared with wages received by men in industrial trades and other capacities. If it be true that the employes of these railroads have good wages, it is because of two reasons: First, and principally, because they are right; and second, because of the fact that in their organized capacity they have been able, through friendly negotiations and conferences with the managements of these railroads, to reach agreements carrying with them the rates of pay which they now receive. But it is not fair to compare the wages of railroad employes, especially in the operating department, with the wages of men in other employments requiring an equal amount of skill, intelligence or education because the railroad employes, in addition to the services which they perform and the labor or the work which they do, assume a risk that can not be ignored and can never be compensated for entirely in money and which is, and should always be, taken into consideration in fixing their wages. We don't believe these wages have yet reached a point where they fairly compensate the men for the work which they do and the risks which they assume. There are several of the classes of employes for whom I speak whose wages are far below what we believe they ought to be. We expect in the proper time, in the proper way, and at the opportune moment, to ask railroads to increase the wages of these employes until they do reach or have reached what we believe to be reasonable and fair limit.

If the railroads earn liberal incomes, we will have an opportunity of getting what we hope for in time, but if we have to go to a lot of railroads that are on the verge of bankruptcy and are struggling along under every economy which their ingenuity can devise, we

don't think our prospects of success are very bright.

It may be pointed out that at times the wages of these railroad employes, and especially the men in the engine or train department, are high. That, perhaps, is true, but we must not lose sight of the fact that there are two wages in this country. One is the economic wage, and the other is the sociological wage. It may be said that three dollars a day is good pay for a certain line of work. So far as the statement goes, it may be true, but we must, in order to arrive at a reasonable sociological wage, take into consideration the number of days the man is permitted to work and the amount of money he earns in the whole year, which is the amount he has got to depend upon for sustenance, because he has to live the year through whether he works or not.

Now, the public, the shippers and the traveling public demand continually better facilities, additional train service, more rapid movements, and many other things, all of which mean additional expenditure of money on the part of the railroads. The continually changing conditions of transportation, faster movement and the increased volume of tonnage necessitate large expenditures in the maintenance and equipment of the railroads.

We, as employes of these railroads, have secured some little legislation at the hands of the legislators of this state which necessarily imposes additional expenditure of money upon the railroad companies. We expected that when we asked for it, and we intended it should cost them some money, and we expect to ask for more legislation some of these days which will cost these railroads some money.

I was amused at the little tilt between General Hamlin and some of these other gentlemen about personal injury suits. We hope to see the day when the railroads will be obliged to assume more liability in that regard and we want them to have enough earnings so they can assume those things and so they can pay what they ought to pay.

In looking over this question of a horizontal or general reduction in rate for transportation in this state, we, in our homely and practical way naturally look to where the amount involved is going to go, and how it is going to be distributed. We are not able to see any practical benefit in it or that the producer will receive any more for his product, or the consumer get his necessitities any cheaper as a result of any general reduction of freight rates which is possible within the limits of sanity. We believe the interests of the half a million people represented by the railroad employes themselves as well as the interesis of retail dealers with whom they trade in the towns where they live, will be much more seriously affected by any important reduction in the freight rates of this state than possibly could be compensated for by any reduction which you could make. We believe the amount involved will go to just such associations as the one that has undertaken this morning to withdraw by telegraph from this controversy, and that neither the farmer who grows the wheat or the workman who eats the bread will derive one penny of benefit from it.

I want to call attention for a few moments to the increased cost of the necessary comforts of life and will refer briefly to a report made by Carroll D. Wright, United States Commissioner of Labor, as the result of a special investigation prosecuted in 33 states and confined to families of men earning not more than $1200 a year, in which he says that the price of food in 1903 was 15 per cent. higher than in 1896. The price of beef was lowest in 1896, and in 1902 had increased 100 per cent, as compared with 1896. In 1904, the wholesale price of farm products was 26 per cent. higher than the average price between 1890 and 1899. Of 52 articles of food it was shown that all but 14 commanded higher prices in 1904 than in the period between 1890 and 1899. Of 70 articles under the head of clothing, the average price was about 10 per cent. higher, while fuel

and light are found to have increased in cost 32.6 per cent. in the same period.

Inquiries along the same lines with regard to supplies which must of necessity be purchased in large quantities by railroad companies, develop the fact that the United States Industrial Commission reports that from 1897 to 1900 there was a percentage increase in the price of such staple supplies as steam coal of 44 per cent.; ties, 20 per cent.; iron and sheet steel, 48 per cent.; nails, 109 per cent.; lubricating oil, 120 per cent; while steel rails increased in cost from $18 to $35 per ton, an increase of 94 per cent.

This United States Commission, speaking of the slight increase of freight rates in 1900, said that the plea of the railroads that justification for the increase was found in the enlarged cost of operation due to the higher cost of supplies, was based upon a substantial foundation; and, that the steady fall in prices from 1873 had been rudely interrupted by increase all along the line in 1900, which was peculiarly marked in the case of supplies largely consumed by railroads, namely, coal, iron and steel.

Now, this increase in the cost of living supplies was accompanied by no increase in the carrying rates on railroads, excepting the slight increase in 1899, of about .045 of a cent per ton per mile, and even after that increase had been made, the rate per ton per mile for moving freight was less than onehalf of what it was in 1870.

It has been shown that clothing, food, fuel, beef and so forth increased in price to the consumer from ten to one hundred per cent. Now if railway rates had been reduced at the same time, would the producer or the consumer have reaped any benefit whatever from that reduction?

The only increase in carrying rates which has occurred since this rapid raise in price began is that of about five per cent. before referred to. It may be well to note that this is five per cent. of the carrying charges and not five per cent. of the cost of the

commodity. The carrying charges on commodities probably represent about two per cent. of their price and it should also be noted that this five per cent. increase in the freight rates was upon the lowest rates that ever existed.

I was chatting pleasantly yesterday with a gentleman who is on the other side of this case, and he jokingly remarked they were going to reduce rates and raise wages.

It is no joke gentlemen, when I say that for the past fifteen years the rates for hauling freight have steadily decreased, except as to the raise of five per cent. already spoken of, and the rates of wages of employes and cost of supplies have steadily increased.

This can not go on indefinitely and would have been impossible so far but for the increased volume of business and the increased train haul which the companies have adopted as a means of hauling freight at a less cost per ton per mile.

We recognize the public character of the service performed by the railways, and yet we cannot lose sight of the fact that they are not permitted to apply to their business the same principles of wholesale and retail trade that are applied in their several businesses by those who now petition for this reduction in rates. They are not allowed to do as coal operators and others do when the cost of production is increased, and pass that increase along to the consumer in the form of higher prices. They can not raise the prices when there is increased volume of business. They must maintain their properties and keep their equipment in repair during a dull time as well as during a busy time, and we all know that a railroad cannot earn any money whatever with locomotives and cars that are standing still. Nothing is more certain than that the railroads can not live between the upper and the nether mill-stones of constantly increasing cost of operation and steadily decreasing revenues. There is a limit beyond which they can not be attacked without involving the material interests of their employes, and we believe that limit has been reached.

which will show, as I have stated, a steadily decreasing rate for the transportation of freight from 1870, when it was the merest fraction below 2 cents per ton per mile, down to 1899 when it was about .724 of a cent per ton per mile; after which some slight increase was noted, until in 1902 it was about 763 of one cent per ton per mile. That, of course, is the average for the railroads of the United States. Overcapitalization of railroads may be alleged, and no doubt exists in some cases, but we don't believe that justifies any crippling of the earning power of those that are not overcapitalized, or that it justifies jeopardizing the interests of the army of employes of the railroads by taking away from the railroads, to give to those who are no more in need of money than are the railroads, and who certainly will not apply it in any way giving more benefit to the public.

The international Conventions of these organizations have taken up this question of regulation or governmental control of railroad rates, more praticularly with regard to the question of appointing a Commission with power to fix all of the rates. Two of the older of these associations which have recently held conventions, the Order of Railway Conductors and the Brotherhood of Railroad Trainmen, adopted resolutions voicing their opposition to that, and I will leave with you a copy of the resolution adopted by the International Convention of the Order of Railway Conductors in Portland, Oregon, in May last.

I can say without fear of successful contradiction that inquiry and investigation will show that the American railways furnish the best service in the world, pay the best wages known on railroads, and receive less for transportation than the railroads of any other country.

MR. HAMLIN: Mr. Clark, let me ask you a question.

MR. CLARK: Yes.

MR. HAMLIN: Does that statement apply to local traffic, that these companies charge lower rates for local traffic?

MR. CLARK: ment I refer to the railroads of the

In making that state

United States.

MR. HAMLIN:

MR. CLARK:

Yes.

I haven't before me

and I have not had time to look up the details of the local traffic that may be in your mind. I make that state

ment

on

as

the

based

reports

States Industrial

more

We protest in the name and on behalf of the railroad employes of this state against any material or horizontal reduction in the rates which may be lawfully charged for the transportation of goods. If there are discriminating rates in individual cases, we concede, of course, the propriety of appropriate correction.

particularly of the United Commission and of

the Interstate Commerce Commission,

We believe that the railways should have earnings sufficiently large to permit them to keep their equipment in the best of shape, affording the best and safest accommodation and service to the public and the safest possible conditions of employment for the employes, provide needed betterments for increased business and the permanent improvements which the future demands, leave a reasonable return for the capital invested, and pay their employes full compensation for their services and for the risks which they assume. having provided the possibility for earnings and revenue permitting such administration of their affairs, we believe that they should be obliged to assume and meet all of the responsibilities and liabilities that properly attach to corporations engaged in the public service as they are.

And,