The Great Car Tax: How a Treasury Order Threatened Seattle’s Rail Lifeline

An order has recently been promulgated by the Treasury Department which is causing no little disturbance in the Northwestern states and will, if it remains in force, affect the interests of Washington Territory, disorganize trade and traffic to and from the East. The order enforces instructions to customs officers to collect a duty of 25 percent on the valuation of all railroad cars found in the United States, or rather the collection of this amount when they enter the country.

Four trunk lines from New York, together with the roads running west from Chicago, are said to have united to bring about this action in order to protect themselves and secure the trade between New York and the Northwest, which would otherwise go by the way of Sault Ste. Marie and through the Dominion. The conversation believes, of course, that if this rate of duty is imposed on Canadian cars, Canada will at once retaliate and detain our cars, perhaps imposing a duty. This, of course, means the breaking of bulk on all merchandise carried from the West through Canada to the seaboard, and if the law authorizing the order is not repealed it will very greatly prevent through rail shipments from Portland over the West Coast and Canadian Pacific roads.

Every section of country which derives a benefit from a healthy competition between American and Canadian roads will suffer from this action, for delay and some expense must necessarily follow a transfer of freight and passengers every time the boundary has to be crossed. The average cost of a freight car is $400, and a 25 percent duty would amount to $100, enough to place aside the possibility of any Canadian Pacific freight cars or passenger coaches being run direct into this city.

Certainly there is little justice in the order, for the cars may be said to lie merely in transit, are not owned here, and will remain here only temporarily. And any amount lost to American car holders, for whose benefit the duty is supposedly levied, is made up by the use of American cars in Canada, through which country they now have free transit.

American railways doing a heavy transportation business between East and West will approve the strict enforcement of the statute, but American shippers will doubtless rebel at it and endeavor to have Congress authorize the free entry into the United States for short periods of Canadian rolling stock. Levying a duty on cars cannot prevent the transportation of passengers and freight; it will merely cause vexatious delays and irritating difficulties in transfers which may discommode both Canadian and American shippers without materially benefiting the railways which are so eager to see the new order enforced.