Dear Sir:
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I herewith hand you copy of a letter I have just received from Mr. Sproule, Assistant General Freight Agent of the Southern Pacific Company, this city. This letter I interpret to mean the 90-cent rate is for us to stock up from time to time, and that the $1.25 rate will be in effect whenever we may desire. This $1.25 rate is what Mr. Sproule refers to in the latter portion of his letter, as my offer of 90 cents to Mr. Stubbs was on condition that he has the rate of $1.25 put into effect when we might ask him. This letter also reads as if the 90-cent rate and the $1 rate was to be put in effect January 1st. No doubt Mr. Stubbs was unaware that we were stocked up at the present rate of 82½.
The Transcontinental Association adjourned at Chicago yesterday, and I understand that Mr. Stubbs is now on his way home. I will see him on his arrival here, and if Chairman Leeds of the Transcontinental Association has been notified to put the 90-cent rate in effect January 1st I will have the same corrected by wire and the $1.25 rate put in. As soon as Mr. Stubbs reaches home I will telegraph you whether it is intended that the 90-cent rate should be put in effect January 1st or the $1.25.
Yours truly,
E. A. Tilford
Relations with Standard Oil
The fact that relations between the Southern Pacific and the Standard Oil Company were very close during the late eighties and early nineties is well established, not only by the correspondence just referred to, but also by other available evidence. In June, 1892, to cite a small but interesting episode, the Union Pacific issued a circular applying a rate of 78½ cents per hundred pounds on oil from Colorado points to the Pacific Coast. This rate had been in effect some years before, previous to the organization of the Western Traffic Association, under a rule which made Missouri River commodity rates a maximum on business originating west of the 97th meridian. The rule in question had never been withdrawn, although it developed that the Southern Pacific had forgotten it, and believed that a rate of $1.60 applied.
At this time the independent firm of Whittier, Fuller and Company was endeavoring to find a market for the products of its Colorado plant upon the Pacific Coast. In order to head off this anticipated competition, the Standard Oil representative in San Francisco took the matter up with the general traffic manager of the Southern Pacific, Mr. Gray. The latter at once wired to Mr. Munroe of the Union Pacific as follows:
San Francisco, June 10, 1892