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benefit yourselves. The intelligent marketing and distribution of your 

 fruit is one of the directions which has been suggested, and that strikes 

 me as being a very important feature, more so indeed than is the question 

 of freight rates. 



In regard to certain statements that have been made by some gentlemen 

 as to the rate for simple cost of transportation in America and in this 

 State as compared with India, I will say that when we are prepared to 

 work for 20 cents a day, as they work and live in India, and when all the 

 materials cost in like ratio, the wheat grower can then raise wheat 

 cheaply, the fruit grower can raise fruit cheaply, and the railroads can 

 carry freight cheaply. Then every product of the growers of this State 

 can be produced as cheaply as is done in India. 



I desire to touch upon the potato story that we have heard for the 

 last ten years. That story as related to-day is not true. But concern- 

 ing the principle of inquiring as to the valuation of products in one 

 market and in other markets throughout the country, in order to deter- 

 mine whether it is practicable to move produce at a certain rate from 

 one market to another, I will say that that principle is followed in 

 practice every day, otherwise railroad rates could not be made intelli- 

 gently. It is exemplified in your own fruit industry. You are argu- 

 ing in favor of that principle as a basis of rate-making. You have 

 competition for instance in the markets of Chicago and in other sections 

 of the country. You know what it costs to produce fruit, and to deliver 

 it to those markets. You take the question of competition into consider- 

 ation as well as the question of cost of production and you ask us for a 

 reduction of rates. The transportation question is no exception to the 

 rule. We take into consideration the cost of service, and if we can figure 

 that we can make any money over and above the cost of doing the busi- 

 ness, we take the business. In the matter of the San Luis Obispo wheat 

 rate; it has been asserted here that the rate has been $100 per car to San 

 Francisco. I take it that the gentleman means the usual standard ten- 

 ton car. That if true would place the rate at $10 per ton. There never 

 has been a rate on wheat of $10 per ton from San Luis Obispo to San 

 Francisco. My recollection is that it is in the neighborhood of $4 50. 



I desire to say that the estimate or the statement that the cost is 

 about 35 cents a ton for moving freight from New York here is not 

 correct. I will not present Southern Pacific figures in contradiction 

 of that statement. I will simply refer you to the Interstate Commerce 

 Commission, which is the recognized authority in this country to-day 

 on freight rates and transportation. It is the highest authority, as 

 your Supreme Bench is the highest judicial authority. That Commis- 

 sion states that the average cost, without allowing anything for interest, 

 taxes, and various other expenses which we are continuously under, is 

 nearly one cent per ton per mile. I mention this in order that you 

 may have our view of what we regard as the correct idea. 



Mr. A. N. Judd: I understand that you run over your road all the 

 Santa Fe freight at the rate of half a cent per ton, and that you call 

 that the cost. 



Mr. Smurr: The fact is that we exchange with the Santa Fe at 

 Mohave. We pro rate with that road. We divide with them the 

 through rate, mile for mile, west of the Missouri River. The statement 

 that we do it for half a cent a ton is not correct. Comparison has 

 been made between the orange orchards of Southern California and the 



