Road electrified and extended via Northern Avenue to reach the yards of the New Haven without congesting traffic on Atlantic Avenue at the South Terminal; with the inner belt line of the Grand Junction from East Boston through Chelsea, Everett, Somerville, Cambridge, and Allston to the South Bay; and with the existing outer belt line, which now connects Fall River and Lowell via Framingham, Metropolitan Boston will have facilities for factory development with easy access to the home and foreign market which will be equal to any in the world. The advantage of these plans is, that the expense is moderate because it requires only hitching up and connecting existing facilities, in a way that should have been done years ago.

JOINT TERMINALS NEEDED

"The obstacle in Boston to solving terminal problems is the false relations which have gradually grown up in regard to the control of these facilities. It is only within a few years that any attention has been given to the terminals provided by the railroads. As a consequence, some railroads have better terminal facilities than others, and the natural disinclination of these roads to share with others the fruit of their expenditure and enterprise has caused the main trouble. If the State were a private corporation in the situation we find ourselves, it would simply utilize existing facilities and make only those additions absolutely necessary. Such an improvement as the connection of the South Bay Yards with the Grand Junction Railroad should be financed by the railroads jointly and charged to capital account, putting the burden on the various systems affected proportionately as they participate in its benefits, The State should encourage such terminal improvement by light taxation. and freedom from burdensome restrictions, so long as they are made to fit into, and not obstruct, unity of plan in administration. What we need is the substitution of joint and cooperate terminals for separate and competitive terminals. This cannot be brought about by sudden and drastic agitation, but by such steps as may be taken from time to time with due regard to financial and operating conditions.

THE OBSTACLES TO PORT DEVELOPMENT

"Boston, one of the great ports of the United States, is not being utilized to half its capacity. Is there any reason for this? and what are the obstacles operating to retard its progress, if any?

"The export and import freight hauled to and from the railroad docks in Boston amounts to about 2,000,000 tons a year. This business is not forced. The Boston and Maine has no solicitors for business in the West, and the Boston and Albany depends on the agents of the New York Central. The New Haven's business is largely local to New England, and therefore this road did not encourage export and import business. Counting the interest on the capital investment for water terminals exclusively, depreciation and repairs on these terminals, adding the $300,000 annual loss on the Commonwealth Pier, the actual expense to the

railroads and the Commonwealth to do this export and import freight business amounts approximately to $4,000,000 a year.

"The total income received by all the roads for carrying this export and import freight does not exceed $2,300,000 a year, so that the dead loss to the Commonwealth and the railroads is about $1,700,000 more than the total receipts. This is the price the railroads and the Commonwealth pay for the privilege of handling the export and import freight coming into Boston, and makes a perfect example of the economic principle of the law of diminishing returns. If export and import traffic is considered only by itself, the more business the railroads do under existing conditions the nearer they will be to bankruptcy.

THE SHIPPING TRUST

"The reason for this annual loss of $1,700,000 is that the shipping trust has been able to force our railroads to grant them free wharfage, which costs just about the amount of the annual loss, on the threat that if refused they will carry the shipping business to Baltimore or Philadelphia, which also give free wharfage. New York is a concentration point with sufficent business to deny free wharfage, and the New York docks are, therefore, on a self-sustaining basis. New Orleans, Los Angeles, San Francisco, and Montreal also make the water-front holdings pay their way. In these ports, ships pay wharf fees as they do in their home ports in Europe. They do not expect everything free except in Boston and its competing ports. If a railroad is caught splitting a rate with an American shipper, it is punished. If, after a shipper has paid a freight rate, the railroad returns a rebate, it is illegal. Yet, because the beneficiary of this almost $1,700,000 of free wharfage in Boston is a foreign shipping trust, it is not amenable to our laws, and this extortion has been tolerated.

"The annual loss from free wharfage for five years would provide adequate carfloats, belt lines, and switching facilities and in addition save. Metropolitan Boston in time and money an amount equivalent to a million. dollars upwards a year, now wasted in teaming, delay and loss of perishable goods, particularly produce, not to consider the congestion of the The Boston and Maine losses, due to free wharfage alone, if capitalized, would provide the necessary income to solve immediately its financial complications. The railroads, the commercial and official interests. of Massachusetts, should immediately join in an appeal to the Interstate Commerce Commission to declare free wharfage as illegal as a rebate.

COMMUNITY VALUE OF A PORT

"What has been said above does not, however, take into account direct and indirect benefits which come to these roads because of their export and import trade, or the community value of a port, which cannot be expressed in dollars and cents because many of the benefits are so indirect as not to be recognized as springing from the harbor.

"Foreign and coastwise ships spend in Boston over $5,000,000 in a normal year in 'port expenses.' They would also spend it if they paid

port dues. This item includes only the amounts spent in connection with getting the ships in and out of the harbor, such as coal, provisions, towing charges, longshoremen's pay, etc. This is the equivalent of a manufacturing establishment employing 8,000 men, and, at four persons per family, supporting 32,000 persons.

"It is impossible, also, for the Port of Boston to measure in dollars and cents the indirect benefits of its port to the manufacturer who makes the goods, the warehouse owner who stores them, the banker who attends to the finances, or to the merchant who sells them. The benefits of the harbor to Boston proper are comparatively small, however, when considered with those of Massachusetts and New England served by it. Three-fourths of every ton of goods received or shipped by water at Boston comes from inland points. And, when we consider that New England is not a producing, but a manufacturing, centre, the value and necessity of a near-by and up-to-date port cannot be overestimated.

SHIPPING TRUST

"I wish I had time to go fully into the facts regarding the foreign shipping trust, which, backed by certain financial interests of this country, with headquarters in Europe, completely controls the oversea shipping of the United States,-when ships shall sail, the routes to be taken, the rates to be enforced; in short, every detail of the shipment of our goods is worked out for us by our bitterest rivals. It would be no less absurd if a merchant chose his strongest competitor as his expressman in the delivery of his goods, and then wondered why the other fellow got the cream of the trade. One of the prime elements of good business demands that the seller of goods get into personal touch with his buyers, and this is the one thing this country has, thanks to our shipping laws, absolutely ignored.

"To show how completely we are under the sway of foreign steamship combinations, I have but to point to the South American services coming to Boston, which for the year 1914 ran on an average of three boats a month. There are sufficient inbound cargoes of wool and hides and skins for New England points to give us an average of three boats a month direct services from South America. These steamship lines, acting under instructions from their New York offices and their principals in England, refuse to take on while at Boston any outbound cargo for South America, thus forcing New England shipments which may be actually within a few miles of the ship, to be sent to New York and at that port loaded into the ship which refused them at Boston. The result is that the difference in the rail rate to Boston as against New York from New England points is lost to the shipper when it might just as well have been saved, thereby making it harder for him to compete and preventing him from practising those transportation economies which must be afforded him if New England is to market its surplus product in South America. From time to time small quantities of outbound goods have been loaded at Boston onto these boats, but this is the great exception rather than the rule, and

in fact is rather secretly done, no solicitation whatever being made or allowed for this business. This is one way that access to foreign markets is made difficult for us.

"Another illustration in regard to trade to South America, where a system of ship rebates is in operation: South America ships great quantities of coffee to the United States, but by a system of deferred rebates which provide that if a coffee exporter patronizes an independent line to the United States, the conference lines will refuse to take his shipments to Europe, practically the whole coffee industry in this country is at the mercy of the shipping trust.

"The rate for apples from New York to South America, a trip consuming 21 to 25 days, is $1.10 a box, while the rate on apples from Tasmania to England, a trip consuming 42 days, or from Australia to England, requiring 35 days, is but 66 cents. This fact in itself is important only in showing the underlying motive of the trust to discourage our foreign trade.

"After the war began, American exporters having contracts at a stated price with foreign ships with six to nine months to run could not get their goods taken to Europe because the Trust could get sometimes as high as five times as much from other shippers. The cold avarice and broken pledges shown by these shipping companies during the past year should be sufficient to force us to establish our own merchant marine and thus make ourselves independent of the ship combine, whose allegiance is elsewhere, and which, while accepting toll from us, does everything possible to keep us weak on the seas, to insure the primacy of our alien competitors in the markets of the world. The only defense offered by the shipping trust has been shown to be false. Since the war everything that could float has paid for itself in one year.

THE DIFFERENTIAL

"Twenty per cent. of the imports and eighty per cent. of the exports, or fifty per cent. of the total foreign commerce at the Port of Boston is to and from the West, and this business through the port is severely penalized by the Interstate Commerce Commission by means of its differential decisions and policy which allow Philadelphia and Baltimore an advantage of 2 and 3 cents per 100 pounds lower railroad rate on exports from the Middle and Far West and 6 and 8 cents per 100 pounds on imports to those sections of the country. This difference is based on the theory that a longer inland rail haul to and from Boston and the West is compensated by a shorter ocean haul abroad, and that thereby the through rates- -ocean and rail-between points in the interior and points abroad should be the same, no matter what Atlantic port is used. But this theory does not work out in practise. Port to port rates are the same, and in fast its absurdity is manifest when a differential is allowed in other cases because the haul is longer. Foreign steamship companies inaugurate services at those ports given the lower inland rail rates, for they can thus take up the slack' in the inland railroad rate and add it to the ocean

haul, and so increase their steamship earnings. But they do not take it all up. They are too wise for that, for to do so would result in making the through rate the same no matter which port is used; and so they take up the greater part, but leave enough to make the through rate via these ports lower, thus enticing business their way and defeating the intention of the Interstate Commerce Commission in the matter.

"Being foreign corporations, they can do this with impunity and are not subject to the jurisdiction of our laws. Business follows the line of the cheapest rate, and the beneficiaries of this policy of the Interstate Commerce Commission are the foreign steamship companies, who, in addition to free wharfage, are thus practically subsidized to the amount of the railroad rate differential.

"This is not a healthy condition of affairs, and the remedy lies solely with the Interstate Commerce Commission, which has to date, over a series of years, denied the petitions for relief of the business organizations and railroads of Boston.

"On a 10,000-ton export cargo, this differential gives a Chicago shipper, via Philadelphia or Baltimore to Europe, approximately $2,000 gross advantage over Boston. The transportation costs of an import cargo of 10,000 tons from Europe to Chicago would be approximately $6,000 less via Baltimore and about $4,000 less via Philadelphia than if it went through Boston.

"During the year 1914, Boston had 378 less ships and 1,145,579 less net tons of shipping 'clearing' from Boston than 'entered' here in the foreign trade the export differential driving this amount of business to other ports for outbound cargoes.

"The grain export records show that from January to October, 1915, due to this differential, Baltimore shipped 60,000,000 bushels of grain against 9,000,000 bushels from Boston for the same period.

"The question is not advantage in distance, but rates. Ports having the lowest railroad rates, regardless of other conditions and with no appreciable effort on their part, get the business. While the differential helps Baltimore and Philadelphia, it is not in the interest of the individual inland shipper, nor do the railroads benefit thereby; in fact they lose, for with the railroad rates lower to and from Philadelphia and Baltimore than Boston, the foreign steamship companies secure the real profits on the through haul.

"The treatment of the entire port situation by the Interstate Commerce Commission is to say the least inconsistent, for we find New Orleans, which is 207 miles nearer Chicago than Galveston, having the same import and export rates, together with all the other Gulf ports, to and from common points in the interior.

"If the Gulf ports enjoy the same export and import rates to and from common points, the North Atlantic ports should in equity be placed on a similar basis. The Boston railroads are willing. The Chamber of Commerce and other bodies have been pressing it for years, but the Interstate Commerce Commission will not allow it. This fight must be renewed by Boston business organizations, railroads, and the Port Directors.