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MARINE REVIEW Published every Thursday at 418-19 Perry- Payne Bldg., by the Marine Review Pub. Oo. VoL. XX. COMPETITION FROM THE RAILROADS. LEADING TRUNK LINES HAVE HAD A LARGE BUSINESS OUT OF CHICAGO THIS YEAR--IT IS DUE PARTLY TO HIGH LAKE FREIGHTS, BUT MODERN HIGH- POWERED LOCOMOTIVES AND INOREASE OF CAR EQUIPMENT WILL BE A NEW FAOTOR IN THE SITUATION. During five or six years past the eastbound movement of freight of all kinds from Chicago, as reported by the Chicago Board of Trade, has aver- aged in the lake navigation period--May to November inclusive--about 5,500,000 net tons. Grain is, of course, the principal item in this freight. In all these years the vessels have had about 65 per cent of the grain trade. This year the situation has been reversed. Reports for the full season will very probably show that the railroads have had full 65 per cent of the business, if not more. It will, of course, be understood at once that the change was due largely to the great demand for ships to carry ore, coal, lumber, etc., which resulted in rates fully three times as high as the con- tract figures of early spring. From the vessel standpoint it may be said that there would be no such gain for the railways if they were compelled to meet a l-cent grain freight from Chicago to Buffalo, at which the large vessels can make some money, instead of the 3-cent rate that prevailed throughout the greater part of the season on account of the general ac- tivity in lake trade. In other words, it will be claimed from a vessel point of view that the railroads secured the grain because it was impossible to get vessels to move it, even at 3 cents. However this may be, it is quite evident that the railroads are under- eoing improvements that will have an important bearing on the Chicago business and which should have the attention of the vessel interests. One of the managers of a leading trunk line declared, only a few days ago, in discussing this subject, that they were after the Chicago grain business and that modern high-powered locomotives with a big increase in car equipment would enable them to meet vessel competition as they had never been able to meet it in the past. He was referring to the action of the iron ore interests in securing the great bulk of lake vessel capacity for . next season and the fear that few of the ships would be left for the grain trade. The railroads would care for the grain trade. he said, to a far greater extent than in the past. When questioned as to the proposed Erie canal enlargement with the facilities which it would provide in canal boats three or four times the size of those now in use, he was willing to concede - the advantages that would accrue to the water route from an enlarged Frie canal, but he was not, of course, concerned on that score, in view of the demoralized condition of New York state canal affairs. ; A representative of large vessel interests in Buffalo, who is well posted on everything pertaining to the lake trade, adds interest to the above dis- cussion by giving to the Review his views along similar lines. He says: "Tn connection with this matter of railway competition, it has been claimed this season that the railway managers deliberately refused grain from Buffalo with a view to putting the cars into Chicago so as to more effectively compete with the lake route. T have seen nothing to warrant such a charge. The trouble this season has been due to the very great scarcity of cars in every line of rail transportation. The shortage in Buffalo is to some extent due to the fact that the seaboard terminals are filled with grain as are the elevators at Buffalo, and there are many thou- sands of cars at those ports, which can not be unloaded, as there appears to be a scarcity of ships to take the grain from the seaboard. It is said that the war in South Africa is also to some extent the contributing cause, as it has called for a great many ships to transport men and material to South Africa, a comparatively long voyage which consumes a good deal of time. These conditions. in addition to a generally good demand for ships in other lines of sea-going trade, account for the drawbacks of the present season. As an evidence of the scarcity of cars, it. may be noted that although steamboat fuel is selling at $2.50 a ton, a higher price than it has brought in a number of years, it is very hard to brine enough fuel to the docks here to supply the trade, and I understand that the same con- ditions exist at other ports. We are told that at every way station along the railways from Buffalo east, there are large quantities of fruits, vege- tables and other perishable goods for which cars cannot be secured, and if that is the case it is not surprising that cars are scarce for the grain trade. Another point in evidence on the score of the present car shortage and the ability of the railways to compete with water rates when normal see tions prevail, is found in the matter of canal rates. Up to the past month, when it has been impossible to get cars to move the grain, the canal rates were at the lowest point ever known--2% cents for wheat. and perhaps < low as 254 cents--and our shipments by canal this year will be the ome ie est in a great many years. Canal freights are now 5 cents, but that 1s because the railroads cannot get cars to move the grain. seen "The railroad people are undoubtedly right in the claim t 2 in the future they will get a much larger part of the east-bound grain eines from Chicago than they have been getting in the past. They can undou a edly haul the grain cheaper with their big cars, powerful con ae other improvements, than they have been able to haul heretofore. Doubt- less by the opening of navigation next year. after having an a as drain on the grain, and with the winter fleet of vessels also lage the railways will be in evidence as competitors for the Chicago trade. Faust cially will this be the case when the summer dullness comes on. W : ei is a much longer haul from Duluth to the seaboard by rail than go Chicago, there is a very large part of the grain producing territory tha ie contributory to both of those ports, and whether the grain will go to Duluth or Chicago will depend to a great extent upon what the rates are east of Chicago. As for myself I am not at all bullish in my views on the CLEVELAND, O., NOV. 16, 1899. Subscription $2.00 a year. | Foreign $3.50 a year. No. 20 outlook for next season's business, outside of what has already been done at liberal rates on iron ore. Buffalo's receipts of grain by lake, in- cluding flaxseed, last year were about 222 million bushels. This year they will probably not reach 170 millions. The late opening of navigation last spring and the grain shovelers strike, which lasted three and a half weeks, contributed somewhat to the reduction in grain traffic by lake, but the high rates of freight undoubtedly caused the diversion of a large amount of the grain to the railroads. "Shipments of coal by lake next season will undoubtedly be much larger than usual, for the reason that there will be a shortage of soft coal in the northwest and perhaps no surplus of hard coal. Naturally another season the coal dealers will guard against this condition and if they can do so conveniently will lay in more coal than they have any use for. But in this trade the railroad also comes into play when high rates are reached. Coal freights from Buffalo to Chicago and Milwaukee have since Sept. 5 last been $1 a ton. (Just now reduced). The all-rail rate, taking into account the cost of handling the coal at Buffalo and at Chicago and Mil- waukee, switching charges, breakage, etc., is only equal to a 70-cent lake freight. The dollar rate could never have been made or maintained if there had been cars enough to do the business, or even a large part of the business. I mention this as further evidence of the importance of the car question which the railroads hope to solve shortly." LAKE FREIGHT MATTERS. It is certainly not to the advantage of the vessel interests of the great lakes that the present season should close with ore rates on a dollar basis from the head of Lake Superior, or 25 cents below the figure at which con- tracts for millions of tons of iron ore to be moved next year have been made. Still there is more of next year's ore to be had at $1.25 from the head of the lakes, and Duluth grain shippers are offering 3 cents for open- ing shipments to Buffalo in 1900, although paying only 2%4 cents now. The slump in rates during the past few weeks is, of course, due almost entirely to the fact that great quantities of grain in the west, which it was expected would move this fall, is now being sold and remains in elevators and in farmers' hands. To the vessel owner the question of how much of this grain will be moved by railroads during the winter is quite important. The ships will get a large part of it next spring, no matter what the extent of the rail movement may be, but the vessel owners are, nevertheless, con- gratulating themselves that the pace for next year was set at $1.25 a ton before the present decline in rates was inaugurated. They are still thank- ing John D. Rockefeller for the move he made a few weeks ago, on account of his transportation lines outweighing other interests. It is now certain that if it were not for the stand taken by 'Mr. Rockefeller's repre- sentatives immediately upon the opening up of negotiations for next year, the vessel owners would undoubtedly be carrying ore in 1900 at $1 and very probably at 90 cents, instead of the $1.25 rate at which the business is now closed up. The announcement from Pittsburg of the formation. of the. Pittsbutg¢ Steamship Co. very probably means that the Carnegie-Oliver vessels are to be operated under that name. In vessel circles there was no need of a denial of the report that the Carnegie interest intended opening up a ship yard on the lakes. Such a move was not considered at all probable, as the American Ship Building Co., a big, strong corporation that is here to stay, is a very large buyer of material from the Carnegie company and the same is true also of ship builders on the lakes who are not connected with the consolidation. NAVAL ARCHITECTS AND MARINE ENGINEERS. Special Dispatch to the Marine Review. New York, Nov. 16.--At a meeting of the council of the Society of Naval Architects and Marine Engineers, preliminary to the reading and discussion of papers at the general meeting of the organization now under way, about 100 new members were elected. The society is most pros- perous in every way with a very bright future on account of increasing in- terest in shipping and naval affairs throughout the country. Admiral Sampson was placed on the list of vice-presidents, succeeding Gen. T. W. Hyde of the Bath Iron Works, who has been in very poor health for some time past. Mr. W. I. Babcock, general manager of the Chicago Ship Building Co., was elected a member of the council to succeed Admiral Sampson. The place of Wm. H. Webb of New York, whose death was announced a few days ago, was left vacant. Mr. Webb was first vice- president. The new list of officers is as follows: President--Clement A. Griscom. Vice-Presidents--Charles H. Cramp, Philip Hichborn, Chas. H. Lor- ing, George W. Melville, George W. Quintard, Irving M. Scott, Frank L. Fernald, Francis M. Bunce, Wm. T. Sampson, Edwin A. Stevens. 'Members and Associate Members of the Council--Wm. F. Durand, Francis T. Bowles, French E. Chadwick, H. Taylor Gause, Nathaniel G. Herreshoff, William H. Jacques, John C. Kafer, Frank B. King, Frank E. Kirby, Jacob W. Miller, Washington L. Capps, Edward Farmer, Lewis Nixon, Harrington Putnam, W. I. Babcock, Horace See, E. Platt Strat- ton, Stevenson Taylor, George E. Weed, James E. Denton, Walter M. (McFarland, Geo. W. Dickie, Cecil H. Peabody.. Executive Committee--Francis. T. Bowles, Chairman; H. T. Gause, Harrington Putnam, Lewis Nixon, Edwin A. Stevens, Clement A. Gris- com, Ex-officio. ~ Secretary and Treasurer--Francis T. Bowles, U. S. N., 12 W. 3lst st., New York.