Tenn.; Memphis, Tenn.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; New Orleans, La.; Pensacola, Fla.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill., and Saint Louis, Mo.

In addition to the above-mentioned competition of carriers not subject to the act to regulate commerce, there is also the competition of rail lines, or of rail and water lines, for traffic passing between most of the points enumerated. Besides the traffic passing between the points above enumerated, all or most of the traffic passing between such points and points beyond them is taken in competition with carriers not subject to the act. To illustrate: traffic between New York and other eastern cities, and Louisville, Ky.; Owensborough, Ky.; Henderson, Ky.; Clarksville, Tenn.; Nashville, Tenn., and Memphis, Tenn., may be, and is, shipped by consignors to Cincinnati, consigned to a forwarding merchant, or to an agent of water carriers, the contract for shipment only providing for delivery to such merchant, or agent, who, on receipt of the property, forwards it to destination, neither the rail carrier nor the water carrier being a party to any arrangement for a continuous carriage.

Traffic passing between New York and other eastern cities and New Orleans, La.; Mobile, Ala.; Selma, Ala., and Montgomery, Ala., is taken in competition with water carriers not subject to the provisions of the act. There are also numerous rail lines and rail and water lines, competing for this traffic.

Traffic passing between points not on this company's lines, but for which this and connecting lines compete, is also subject to similar competition of lines not subject to the act. As an illustration, traffic passing between Chicago, Ill., and Savannah, Ga., may be, and is, shipped by consignors from Chicago on contracts requiring delivery to a forwarding merchant or to an agent of a water carrier at Baltimore, Md., who forwards the same to destination, the shipment not being covered by any through contract or arrangement. This company and its connections also compete with other all-rail and with rail-and-water lines for traffic passing between the same points, some of which lines are not subject to the provisions of the act.

All traffic passing between nearly all points North, West, and East, like Cincinnati, Chicago, Saint Louis, Pittsburgh, Philadelphia, New York, and points south, southeast, and southwest, like Savannah, Charleston, Augusta, points in Florida, Montgomery, Selma, Mobile, New Orleans, points in Arkansas, and in Texas, is subject to similar competitive conditions.

Traffic subject to still other competitive conditions is that passing between points, one or both of which may not be located upon this company's lines, but for which it and its connections have to compete with all-rail, and with rail and water lines, which may be subject to the provisions of the act, to wit, traffic passing between Chicago and Atlanta, Ga., or New York and Birmingham, Ala. Nearly all traffic passing between points on and north of the Ohio, in the Northeast, and Northwest, as Louisville, Indianapolis, Saint Louis, Pittsburgh, etc., and points in the South, Southeast, and Southwest, such as Atlanta, Ga.; Macon, Ga.; Chattanooga, Tenn.; Birmingham, Montgomery, and Selma, Ala.; New Orleans, La.; Little Rock, Ark., and points in Texas, is subject to such competition.

Then, again, there is traffic for which, practically, only all-rail lines compete, such as that passing between Cincinnati, Ohio, and Chattanooga, Tenn.; Louisville, Ky., and Birmingham, Ala.; Louisville, Ky., and Atlanta, Ga. While such traffic may be, and has been, to some extent competed for by a rail-and-water line, in practice, such competition is not effective, and does not have a material influence in the adjustment of rates. Rates between such points may be said to be adjusted by the competition between the rail lines; but, in effect, they are made relative to rates between other points. To illustrate: The rates from Saint Louis to Birmingham, Ala., being fixed by the competition between the river and rail routes via Vicksburgh, New Orleans, Memphis, Cairo, etc., and the all-rail lines running from Saint Louis to Birmingham, those rates fix the rates from Louisville, Ky., to Birmingham, Ala.; and the rates from Chicago to Atlanta being fixed by competition between the rail and water lines via Baltimore and the all-rail lines, those rates fix the rates from Cincinnati, Ohio, to Atlanta, Ga.

An examination of this company's tariffs heretofore submitted to this Commission will show that in many instances the rates of transportation for the shorter are greater than for the longer distance, over the same line in the same direction, the shorter being included within the longer distance. But this is only the case where the circumstances and conditions are, as petitioner is advised and insists, substantially dissimilar. As an illustration, the rates between Louisville and the intermediate stations are, as hereinbefore shown, just and reasonable; and, while the rates between Louisville and Nashville on most classes of traffic are less than between Louisville and some of the intermediate stations, the rates between Louisville and Nashville are fixed by competition with water lines, and the rail line can secure only what the transportation between such points is worth to the shipper, which is what the water lines will accept for carriage,

lus the value to the shipper or owner of the property, of prompt transportation, and he absence of marine risk. With perhaps but two exceptions, the rates between points on the lines owned, controlled, or operated by the Louisville and Nashville Railroad Company are not less for the longer than for the shorter haul, except between points where water carriers, not subject to the act, compete. The rates to and from railroad crossing points like McKenzie, Tenn., Milan, Tenn., Humboldt, Tenn., Danville Junction, Ky., Stanford, Ky., Livingston, Ky., Nortonville, Ky., Central City, Ky., and other points, are not less than the rates from intermediate local stations.

Cincinnati, Ohio; Newport, Ky.; Louisville, Ky.; Frankfort, Ky.; Henderson, Ky.; Clarksville, Tenn.; Nashville, Tenn.; Memphis, Tenn.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; New Orleans, La.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo., were natural commercial centers, or points where traffic was interchanged with the surrounding country, before railroads were constructed to or from them. They were natural commercial centers, or distributing points, by virtue of their natural location and of the facilities they enjoyed by reason of water transportation. As railroads were constructed across the country which intervened between those natural commercial centers they provided facilities for the country through which they passed superior to those theretofore possessed, and at greatly reduced rates, such rates being just and reasonable. When the roads were completed between those natural commercial centerswhere they came in competition with water lines which also connected those centersthey found the circumstances and conditions entirely dissimilar from those which existed at intermediate stations in the intervening country. The volume of traffic concentrated at such points was found to be many times greater than at intermediate stations, and that the value of the transportation to shippers was fixed by competition with water carriers, as hereinbefore described. The railroad companies adjusted their rates to the conditions found to exist when the roads were so completed. They did not attempt to materially disturb the relations of such distributing centers as Louisville, Nashville, etc., with the surrounding country.

While the competition between the rail lines and water lines has materially reduced the rates of transportation between these natural commercial centers, they have also furnished much improved facilities to the intermediate local stations at greatly reduced cost, such intermediate points participating in any reduction in rates between the competitive points. As an illustration, the rates from Louisville to Franklin, Tenn., are never greater than the rates from Louisville to Nashville plus the rates from Nashville to Franklin. The rates from New York to Brownsville, Tenn., are never greater than the rates from New York to Memphis plus the rates from Memphis to Brownsville; so that the last-named point always receives the benefit of any reduction in rates to Memphis, resulting from competition between the all-rail lines and the water lines, between the all-rail lines and all-rail lines, and between all-rail lines and rail and water lines. Rates between points on this company's lines and points beyond this company's lines, for the traffic of which this company competes, and Savannah, Charleston, Port Royal, Brunswick, Florida points, etc., are less than to intermediate points to which the distance is shorter, as Augusta, Atlanta, Macon, etc. The circumstances and conditions are dissimilar, as the competition of the water carriers and of the rail and water carriers, between the points of shipment and Savannah, Charleston, etc., renders transportation of less value to the shipper or owner.

The practice of making rates between points on this company's lines and local stations on connecting lines greater than to competitive points beyond is also in effect. As an illustration, the rates from Louisville to some of the stations on the Western and Atlantic Railroad, between Chattanooga and Atlanta, are greater on some articles than from Louisville to Atlanta, the circumstances and conditions being dissimilar; traffic to and from Atlanta being secured in competition with numerous competing lines and markets, and the volume of traffic being far greater.

There is another condition of competition where rates are made less for the longer than for the shorter distance over the same line and in the same direction, as illustrated by the rates in effect between Cincinnati, Ohio, and Lexington, Ky. The line operated by the Louisville and Nashville Railroad Company between these points is an indirect line, the distance being 150 miles. There are two other all-rail lines competing for the traffic between the same points; one the Kentucky Central, distance 99 miles; the other the Cincinnati Southern, distance 79 miles. The rates submitted heretofore between these points are the rates fixed by the shorter lines. The rates between Cincinnati and some of the local stations on the Louisville and Nashville Railroad are greater on many articles than between Cincinnati and Lexington, and the rates between Louisville and some of the intermediate local stations, on many articles, are greater than between Louisville and Lexington. It is believed that the circumstances and conditions are sufficiently dissimilar to justify this practice.

The same basis of adjusting rates is in effect and has been in effect ever since through rates have been made throughout the entire country, or at least throughout that portion of the country for the traffic of which this company competes.

It is believed that the rates as set forth in the tariffs heretofore submitted to the Commission by this company are in compliance with the spirit and letter of the "act to regulate commerce." Should any of the rates prove to be not so adjusted, errors and omissions of that character will be promptly corrected when ascertained.

As a matter of interest the following statement is submitted, showing the number of tons, ton miles, revenue, rate per ton per mile, and percentage of revenue derived from the transportation of property moved by the Louisville and Nashville Railroad Company over lines owned, leased, and operated, to and from local stations and between competitive points, and total during the fiscal year ended June, 1886:

As the profit per ton for transporting local traffic is greater than that received for the transportation of competitive traffic, it is estimated that not less than 80 per cent. of the net earnings accruing to the Louisville and Nashville Railroad Company from the transportation of property is derived from that which is moved to and from local stations.

If petitioner is forced to abandon either its competitive or its local traffic, self-preservation will force it to abandon the competitive traffic, from which so small a proportion of its net revenue is derived.

While the abandonment of its competitive traffic will inflict a loss upon petitioner of over $3,000,000 per year, the loss to those cities between which said competitive traffic has heretofore been carried will, it is believed, be far greater. Petitioner fears that the sudden withdrawal of railroad competition from all of the large commercial cities of the South will have a disastrous effect upon the commerce of that section, if not upon the commerce of the whole conutry.

All of the railroad companies north of the Ohio River have notified petitioner in effect that they will, on April 5, withdraw all through rates from petitioner's lines unless peti tioner will agree to reduce its local to its competitive rates. Petitioner is, therefore, compelled to apply to this honorable Commission to be relieved from the operation of the fourth section of the act of Congress, entitled "An act to regulate commerce," so far as the same relates to the transportation of property between competitive points.

The premises considered, petitioner prays to be relieved from the operation of said section of said act by this Commission, and to be authorized to charge less for longer than for shorter distances for the transportation of property from Cincinnati, Ohio, and through Cincinnati, Ohio, from points beyond, to Frankfort, Ky.; Lexington, Ky.; Louisville, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La. ; and from Newport, Ky., to Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from Lexington, Ky., and through Lexington, Ky., from points beyond, to Cincinnati, Ohio; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from points beyond Lexington, not in the State of Kentucky, via Lexington, Ky., to Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Owensborough, Ky.; and Henderson, Ky.; and from Frankfort, Ky., to Cincinnati, Ohio; Evansville, Ind.; Shawneetown, Ill., East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from Louisville, Ky., and through Louisville, Ky., from points beyond, to Cincinnati, Ohio; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from points beyond Louisville, Ky., not in the State of Kentucky, via Louisville, Ky., to Newport, Ky.; Lexington, Ky.; Frankfort, Ky.; Owensborough, Ky.; Henderson, Ky.; and from Owensborough, Ky., and through

Owensborough, Ky., from points beyond, to Cincinnati, Ohio; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from points beyond Owensborough, not in the State of Kentucky, via Owensborough, Ky., to Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; and Henderson, Ky., and from Henderson, Ky., and through Henderson, Ky., from points beyond, to Cincinnati, Ohio; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La. ; and from points beyond Henderson, Ky., not in the State of Kentucky, via Henderson, Ky., to Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; and Owensborough, Ky.; and from Evansville, Ind., and through Evansville, Ind., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from Shawneetown, Ill., to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from East Saint Louis, Ill., and through East Saint Louis, Ill., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from Saint Louis, Mo., and through Saint Louis, Mo., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from Nashville, Tenn., and through Nashville, Tenn., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; and from points beyond Nashville, not in the State of Tennessee, via Nashville, Tenn., to Clarksville, Tenn., and Memphis, Tenn.; and from Clarksville, Tenn., and through Clarksville, Tenn., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La.; and from points beyond Clarksville, Tenn., not in the State of Tennessee, via Clarksville to Memphis, Tenn., and Nashville, Tenn.; and from Memphis, Tenn., and through Memphis, Tenn., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; New Orleans, La. ; and from points beyond Memphis, Tenn., not in the State of Tennessee, via Memphis, Tenn., to Clarksville, Tenn., and Nashville, Tenn.; from Birmingham, Ala., and through Birmingham, Ala., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Pensacola, Fla.; New Orleans, La. ; and from points beyond Birmingham, Ala., not in the State of Alabama, via Birmingham, to Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; and from Montgomery, Ala., and through Montgomery, Ala., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough. Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Pennsacola, Fla.; New Orleans, La.; and from points beyond Montgomery, Ala., not in the State of Alabama, via Montgomery, to Birmingham, Ala.; Selma, Ala., and Mobile, Ala.; and from Mobile, Ala., and through Mobile, Ala., from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owenshorough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Pensacola, Fla.; New Orleans, La.; and from points beyond Mobile, Ala., not in the State of Alabama, via Mobile, to Montgomery, Ala.; Selma, Ala; and Birmingham, Ala.; and from Pensacola, Fla., and through Pensacola, Fla.; from points beyond, to Cincinnati, Ɔhio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.;

Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; New Orleans, La.; and from New Orleans, La., and through New Orleans, La, from points beyond, to Cincinnati, Ohio; Newport, Ky.; Frankfort, Ky.; Louisville, Ky.; Lexington, Ky.; Owensborough, Ky.; Henderson, Ky.; Evansville, Ind.; Shawneetown, Ill.; East Saint Louis, Ill.; Saint Louis, Mo.; Nashville, Tenn.; Clarksville, Tenn.; Memphis, Tenn.; Birmingham, Ala.; Montgomery, Ala.; Selma, Ala.; Mobile, Ala.; Pensacola, Fla.; to an extent that will enable the Louisville and Nashville Railroad Company and connecting lines to make such rates between the points of shipment and the points of destination on property that may be transported as competition may render necessary; and petitioner prays for all such other and further relief as it may be entitled to, as in duty bound it will ever pray.

ED. BAXTER, Solicitor for Petitioner.

DISTRICT OF COLUMBIA, Washington City: Personally appeared before me, a notary public, duly commissioned and qualified in and for the district aforesaid, Milton H. Smith, with whom I am personally acquainted and whom I know to be vice-president of the Louisville and Nashville Railroad Company, the above-named petitioner, and who made oath in due form of law that the facts stated in the foregoing petition, as of petitioner's own knowledge are true, and that those stated upon information and belief he believes to be true.

Sworn to and subscribed before me this day of April, 1887.

Notary Public.

Extracts from argument of E. B. Stahlman, in support of application of Louisville and Nashville Railroad Company for relief from the operations of the fourth section of the act to regulate commerce.

Mr. CHAIRMAN AND GENTLEMEN:

WASHINGTON, D. C., Submitted May 27, 1887.

The application of the Louisville and Nashville Railroad Company for relief from the operations of the fourth section of the act known as "An act to regulate commerce" quite clearly and specifically sets forth the territory in the transportation of property to and from which relief is sought.

Concisely put, this application embraces transportation of property to, from, and through the following points, to wit:

Cincinnati, Ohio., Newport, Ky., Lexington, Ky., Frankfort, Ky., Louisville, Ky., Owensborough, Ky., Henderson, Ky., Saint Louis, Mo., East Saint Louis, Ill., Shawneetown, Ill., Evansville, Ind., Clarksville, Tenn., Nashville, Tenn., Memphis, Tenn., Birmingham, Ala., Montgomery, Ala., Selma, Ala., Mobile, Ala., Pensacola, Fla., and New Orleans, La.

The transportation facilities of the Ohio and Mississippi River cities and the Gulf ports are so well known that it is not necessary to refer to them except in a general way.

OHIO AND MISSISSIPPI RIVER CITIES.

The city of Cincinnati, located on the Ohio River, has the following lines of steamers plying southward:

The United States Mail Line, daily between Cincinnati and Louisville.

The Cincinnati and Memphis Packet Company, composed of six steamers, between Cincinnati and Memphis.

The Cincinnati and New Orleans Packet Company, composed of six steamers, between Cincinnati and New Orleans.

In addition to these regular lines there are a number of steamers plying between Cincinnati and various points which have no connection with the lines named. It is hardly necessary to say that these lines and independent outside crafts afford active competition to the rail lines on all traffic to and from Cincinnati destined for important points located on the Ohio, Mississippi, and tributary rivers and Gulf ports.

The city of Newport, Ky., on the opposite side of the Ohio River from Cincinnati, enjoys like advantages.

The city of Louisville enjoys the same advantages, with the addition of a line of steamers between Louisville and Henderson, Ky.

The cities of Owensborough and Henderson, Ky., have all the benefits enjoyed by the city of Louisville.