The Chicago, Burlington and Quincy Railroad Company and the Burlington and Missouri River Railroad Company in Nebraska, answering jointly, deny that said rates effect any unlawful discrimination in favor of Chicago or against Omaha, or that they are contrary to the letter or spirit of the third section of the Act to regulate commerce, and they aver that the rates between Chicago and Omaha and between Chicago and interior Nebraska points are just, reasonable, non-discriminating, and in accordance with the letter and spirit of said act.

The Chicago and North-Western Railway Company avers that the rates are lawful and reasonable; denies that Omaha is thereby unlawfully discriminated against or subjected to undue and unreasonable prejudice and disadvantage, and avers that the freight carried by it to the several points mentioned in the complaint is so carried without going through Omaha, and that Omaha is on a different line from that on which the business is conducted to the other points named in Nebraska. It avers further that "there is a contest between the business men of the city of Omaha and those of the city of Lincoln, each claiming to be the distributing point for the State of Nebraska and cach demanding more favorable rates from the carriers than those allowed to the other; but this respondent avers that the rates established by the tariffs now in force are in every respect reasonable and just.” The answer also raises the question of the competency of complainants as an unincorporated body to institute the proceeding.

The Chicago, Milwaukee and St. Paul Railway Company answered the original petition only, but when the amended petition was filed elected to stand upon the answer instead of filing another.

The answer claimed that defendant has the shortest line of railroad from Chicago to Omaha; that it has nothing to do with the making of rates from Omaha to the five Nebraska points named in the original petition, but accepts the rates made by connecting lines; that the Chicago, Burlington and Quincy is the shortest line from Chicago to Lincoln, and by that line the distance from Chicago to Lincoln is 549 miles,

which is but 41 miles greater than the distance from Chicago to Omaha by the same line; "that the distance from Chicago to Omaha by this respondent's railway and the Union Pacific is 490 miles; to Wahoo, 519 miles; to Fremont, 537 miles; to Lincoln, 558 miles; to Beatrice, 623 miles, and to Blue Springs, 637 miles; that the distance from Chicago to Omaha is 95 per cent. of the whole distance from Chicago to Wahoo by the line of this respondent and the Union Pacific, and more than 90 per cent. of the whole distance from Chicago to Fremont by the same route, and nearly 90 per cent. of the entire distance from Chicago to Lincoln, about 80 per cent. of the entire distance from Chicago to Beatrice, and 78 per cent. of the entire distance from Chicago to Blue Springs; that said distance from Chicago to Omaha is also 90 per cent. of the entire distance from Chicago to Lincoln by way of the Chicago, Burlington and Quincy; that the tariff of freight charged by the respondent from Chicago to Omaha is only 90 per cent. of the rate charged from Chicago to Lincoln, Wahoo, and Fremont, and 79 per cent. of the rate charged from Chicago to Beatrice and Blue Springs on firstclass freight, and on all other classes of freight named in said complaint the rate from Chicago to Fremont and the other points named is less than that percentage. A division of the rates charged, as stated in the complaint, from Chicago to the points in Nebraska west of Omaha, on a strictly mileage basis, would give a higher rate than is now charged to Omaha on shipments to each of the places named except Blue Springs, and the proportion to Omaha on shipments to that point would amount to nearly 90 cents on first-class freight."

The answer further says that "the complaint does not state that the rates to Omaha are too high, but complains that the rates to points beyond Omaha are too low, and asks that the several respondents shall be restrained and compelled to withdraw the freight tariffs in reference to points. west of Omaha, and substitute therefor such freight tariffs. from Chicago to the Nebraska points in question as shall be just and equitable to the reasonable demand of the city of Omaha to be considered as the chief distributing point for

Nebraska, and substantially asks to have rates to all points west of Omaha increased; but this respondent respectfully shows that the rates now in force are not in any respect in violation of any provision of the Interstate Commerce Act, and that they are substantially upon a mileage basis, and that it is not competent for railway companies under said act to so arrange their tariffs as to make any particular city or point the chief distributing city or center for the freight of any particular State, and that no such practice can be recognized or enter into the making of tariffs under the Interstate Commerce Act."

The answer of the Chicago, Rock Island and Pacific Railway Company avers the rates complained of to be just, and denies any unjust or unlawful discrimination or preference.

The answer of the Union Pacific Railway Company denies responsibility for rates east of Omaha, justifies the rates actually made by it, and avers them to be just, reasonable, and non-discriminating.

On issues thus made the case was brought to a hearing at Omaha, March 19, 1888, and was submitted on testimony given and arguments made in open sessions. The testimony was not voluminous, and was directed in the main to showing that the rates complained of operated injuriously to the business interests of Omaha.

W. A. L. Gibbon, wholesale dealer for three years in iron, steel, and hardware, testified that the rates had a very injurious effect on the wholesale business of Omaha. His house had been compelled to give up the trade in a great many towns where they formerly did business because they could no longer do business there except at a sacrifice of their profits. He gave an instance of an order for a car-load of iron from Fremont. But the freight from Chicago to Omaha was 30 cents, and from Omaha to Fremont 19 cents, while from Chicago to Fremont it was 35 cents. The figure he made on the iron was 12 cents higher than was offered at Chicago, and the Chicago dealer got the trade. He gave another instance, of a sale at Lincoln, which he was only enabled to make by having the goods shipped directly from the

mill, though he had the same goods in stock and should have preferred to ship from Omaha. The witness testified how rates were customarily made, as follows:

"We purchased goods in Boston, New York, Troy, Philadelphia, Pittsburgh, Johnstown, Pennsylvania; Youngstown, Ohio; Cleveland, and other places. These are the principal towns that we buy our goods at. The. manufacturers would sell goods sometimes at the mill, sometimes delivered at Chicago, and sometimes in Omaha. We bought in these ways, and of course became familiar with the rates from these points, both to Chicago and Omaha. With very few exceptions the through rate was the sum of the two local ratesthat is, the rate from the mills to Omaha was the sum of the rate from the mills to Chicago and the rate from Chicago here. That was the universal rule and is."

In answer to a question, What it is precisely which the people of Omaha demand? the witness said:

"The only rule we advance is that the rates between competing trade centers should be made nearly, if not exactly, upon the basis of the sum of the two locals. We don't care anything about the locals purely, as that is a private matter for the railroad companies to adjust. But this rule that we want is the one that covers shipments from the Atlantic seaboard to the Missouri river. We want that same rule here."

Further on the following proceedings took place :

"By Mr. THURSTON:

"Q. Mr. Gibbon, are you Omaha people willing to have the same rule applied, which you now contend for, to shipments made from Omaha, Lincoln, and Fremont to points. common to all?

"A. Yes, sir; unquestionably.

"Q. You are willing to have the rate from Omaha to Kearney, on the Union Pacific railroad, made of the sum of the locals from Omaha to Fremont and from Fremont to Kearney?

"A. That's a ridiculous comparison, sir; Kearney is not a distributing center.

"Q. Are you willing, as a merchant of Omaha, to have the rate from Omaha to Beatrice made up of the sum of the locals from Omaha to Lincoln, and from Lincoln to Beatrice?

"A. That is the same comparison. Beatrice is not a distributing center. When Beatrice becomes a distributing center we are willing to recognize it.

"Q. How about Lincoln?

"A. We are willing to recognize that as such. "Q. And Fremont ?

"A. Yes, sir.

"Q. You are willing that these two towns should be afforded these rates, then? They are interior Nebraska points. "A. A town of consumption and of distribution are two entirely different sort of points.

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Chairman COOLEY: Do I understand that this principle that you are contending for is that this method of making up the rates shall apply from Omaha to trade centers and from thence to small towns beyond?

"A. It is to be applied to Omaha in connection with competing trade centers and towns beyond.

"Mr. THURSTON :

"Q. To all towns beyond?

"A. Yes, sir.

Q. This is to apply to Omaha, Fremont, and Lincoln? "A. Yes, sir.

"Q. And applied from Fremont to all these other towns. beyond, irrespective of their being trade centers?

"A. It should apply from trade centers to all these towns. "Q. Then it would apply from Fremont to all these towns the same as regards Omaha ?

"A. Yes, sir.

"Q. So that Fremont could buy and sell goods as cheap as you can ?

"A. Yes, sir.

"Q. And as cheap as Chicago?

"A. Yes, sir.