May 11. WOl 



HOKTICO LTUlRJL 



619 



THE S. A, R vs, THE U. S, EXPRESS CO, 



INTERSTATE COMMERCE COMMISSION UPHOLDS THE SOCIETY'S CLAIM— REDUCTION IN RATES IS 



ORDERED. 



The Story of the Case. 



Chapter I. 



THE GRIEVANCE. 



Extiuct From tUe Report of Secretary 

 Wm. .1. Stewart to the Society at Its 

 Meeting in Dayton, Ohio. Aug. 21, lOUO. 



Acting on the complaint of members 

 living in New Jersey an effort was 

 made by your secretary and also by 

 the chairman of the legislative com- 

 mittee to get from the manager of the 

 U. S, Express Co. a statement as to 

 the reasons for the increased trans- 

 portation charges made since last May 

 upon flower shipments from New Jer- 

 sey points to New York city, but we 

 were met with a very decided refusal 

 to give any explanation. A second re- 

 quest did not even receive the cour- 

 tesy of an answer. Your secretary, in 

 the meantime, had been making some 

 investigations as to our privileges un- 

 der the new Interstate Commerce Act, 

 and on August 7, 1906, wrote the fol- 

 lowing letter: 



Boston, August, 7, 190G. 

 Mr. T. M. Jones, Mgr., 



U. S. Express Company, 



39 Broadway, New York, N. Y. 



Dear Sir: — Referring to my letter of 

 May 11, 1906, which thus far remains 

 unanswered, 1 beg to state that in 

 view of the universal sentiment of 

 protest on the part of flower growers 

 who are members of our society and 

 whose interests are affected by the ad- 

 vanced rates on flowers shipped from 

 producers in your territory to the New 

 York wholesale market, I deem it to 

 be my duty to submit this matter to 

 the Interstate Commerce Commission 

 for investigation and adjustment as is 

 ray privilege under the provisions of 

 Section 13 of the amended Interstate 

 Commerce Act, unless I receive some 

 assurance from you that the increased 

 charges complained of will be given 

 prompt reconsideration by your com- 

 pany. 



It would give me much pleasure to 

 be able to rei>ort to our society at its 

 convention in Dayton, Ohio, August 

 21-24, that the United States Express 

 Company had taken this question un- 

 der advisement and hoped to be able 

 to announce a rate which would be 

 generally accepted as just and reason- 

 able. Yours respectfully, 



(Signed) WM. J. STEWART, 

 Secretary. 



This letter shared the same fate as 

 its predecessor, no acknowledgment 

 having thus far been received. I be- 

 lieve we have a good case; I know that 

 the Interstate Commerce Commission 

 will give us a prompt and courteous 

 hearing, and hope we shall be able to 

 arrange for the appearance of our 

 legislative committee with necessary 

 witnesses before that body at an early 

 date. 



Chapter II. 



THE HEARING. 



From Horfii-ulture, March 23, 1907. 

 The hearing on the complaint made 

 by Secretary Stewart of the S. A. F. 

 last year against the increased trans- 

 portation rates on cut flowers exacted 

 by the United States Express Com- 

 pany finally came up before the Inter- 

 state Commerce Commission at Wash- 

 ington, on Friday, March 15, and con- 

 tinued two days. Attorney Frank 

 Lyon appeared for the complainants 

 and testimony was given by Frank L 

 Moore of Chatham, N. J., L. M. Noe 

 of Madison, R. M. Schultz of Madison, 

 L. B. Coddington of Murray Hill, F. 

 H. Treandly, New York, A. Farenwald 

 of Roslyn, Pa., A. J. Guttman, Nev/ 

 York, and President W. J. Stewart of 

 the S. A. F. Cost of special delivery 

 service in New York city and reduced 

 receipts because of the wagon express 

 which has operated in competition 

 with them for several years were given 

 by the attorney tor Piatt's corpoi'ation 

 as the reason for the high charges 

 which, it was shown, are almost 

 double those charged for similar serv- 

 ice Dy other expiess companies. The 

 attorneys have now been given thirty 

 days in which to flle briefs based on 

 the testimony given and the decision 

 will then be given by the Commission. 



Chapter III. 



THE DECISION. 



As.soclated Press Report, Washington, 

 May 6, 1907. 



The Interstate Commerce Commis- 

 sion has rendered its first opinion in 

 a case involving the reasonableness of 

 au express rate. The case was brought 

 by the Society of American Florists, 

 who asserted that the rate charged by 

 the United States Express Company on 

 cut fiowers from New Jersey points 

 to New York City was unreasonable, 

 excessive, and unjust. This rate till 

 July, 1906, was 50 cents per 100 pounds 

 and at that time was raised to $1 per 

 100 pounds. Commissioner Franklin 

 Lane, who delivers the opinion of the 

 commission, holds that the rate should 

 be red\iced to 60 cents per 100 pounds. 



The expi'ess company defended its 

 increase by asserting that the de- 

 livery service given cut flowers in 

 New Y'ork was much more expensive 

 than that given other articles, and 

 that it could not increase its rate a 

 sufficient amount to meet the expense 

 of this special gervice without largely 

 increasing the total rate, because of 

 its contracts with the railroads, under 

 which it was required to pay 45 per 

 cent, of its gross receipts to them. 



From the opinion of Commissioner 

 Lane it appears "that the United 

 States Express Company has contracts 

 with the Delaware, Lackawanna & 

 Western Railroad Company by. which 



the railroad company leceives 45 pet 

 cent, of the total gross receipts of the 

 express company; that the service 

 rendered by the railroad company is 

 no greater or different under the new 

 rate of |1 than it was under the old 

 rate of 50 cents." The Cential Rail- 

 road Company of New Jersey receives 

 43 per cent, and the Lehigh Valley 

 Railroad Company 40 per cent, under 

 the same conditions. Agents ai-e also 

 liaid on a percentage basis. 



The opinion continues: "Elaborate 

 tables have been presented by the de- 

 fendant tending to prove that the rate 

 of 50 cents was unremunerative, owing 

 to the percenta.gp which it paid to the 

 railroad, added to the percentage 

 which it paid to its agents and the 

 cost of delivery in New York. FYom 

 these same figures it can also be ad- 

 duced that the present rate of $1 is 

 unremunerative; and it may well be 

 said that from an analysis of the 

 charges made upon any single com- 

 modity or class of commodities trans- 

 ported by this company a similar re- 

 sult could be arrived at. 



"In order to increase its business, 

 the express company gives an especi- 

 ally prompt service to flower raisers. 

 There is no evidence that this is not 

 done by all express companies or that 

 it does anythin,g with respect to this 

 traffic which transportation companies 

 do not generally do as to certain 

 classes of perishable freight. But, 

 admitting that an extra return should 

 be made over and above that received 

 for the carrying of articles generally 

 transported by express, no reason has 

 been shown why the railroad charges 

 and agents' pay should be doubled, 

 excepting that the expi'ess company 

 has to pay double the amount under 

 its contracts to its agents and to the 

 railroad company — ^a necessity or con- 

 dition which we cannot recognize as 

 controlling as to rates. 



"The defense of this rate is not at 

 all unlike that which a railroad might 

 make were it to attempt to show that 

 the value of the service which it rend- 

 ers was based upon contracts made 

 with its bondholders by which the 

 latter were entitled to receive a pro- 

 portion of the proceeds of each in- 

 dividual rate, no matter how grossly 

 excessive the resulting amount might 

 be. Neither this commission nor the 

 courts have given sanction to any such 

 inequitable and unscientific method of 

 rate adjustment. 



"Such contracts are entirely be- 

 tween the parties themselves. They 

 are not in the nature of fixed charges, 

 because they are not fixed. They move 

 upon a sliding scale, dependent en- 

 tirely upon the rate. And it would be 

 against the highest public policy to 

 permit rates to be controlled by such 

 contracts, because such practice must 

 inevitably tend to promote the in- 

 crease of rates on express service. 



