Mr. CHADWICK. The real thought that is in my mind, Governor, and which has crystallized itself from all the conferences in which I have participated, is that another bill should be drawn and perhaps adopted as a substitute by the committee for both these bills. I am chairman of the transportation committee of the Chicago Board of Trade, and all these matters come under my administration. I go before our local body there, the board of railroad and warehouse commissioners, and I am pretty well versed in all these things pertaining to transportation, as well versed as many laymen; and I know that if a proper bill is drawn, and honestly drawn, that will do all it pretends to do which the original bill did not, because it was deftly drawn, in my opinion-then that bill ought to be submitted to this committee. Now, I say if an honest bill is drawn, by honest men, and submitted to a jury of their peers, and subjected to scrutiny on the floor of the Senate and of the House, and then if you will have another meeting of the committee while it is under your consideration, so that people can come here and criticize it and tell you where the loopholes are, it is my belief that you can get a bill which will better serve your purposes than these bills. But if you Senators try to deal with this question on the floor of the Senate with only such information as is brought before the committee without dispute, then the case is hopeless, and must be. I wish to say to you now that what I have said, if you will permit me, by way of a partial answer to the questions that have been asked me, is exemplified by the testimony of Mr. Counselman, of Chicago, a brainy millionaire broker, a broad man, who knows all about this subject, as printed in Senate Document 39, Fifty-fifth Congress, first session. Mr. Foraker presented the report to the Senate, and it was ordered to be printed April 15, 1897. He testifies hereThe CHAIRMAN. Give us a reference to the page, if you please. Mr. CHADWICK. He testifies on page 25 as follows:

Senator CHANDLER. Do I understand Mr. Counselman, as a shipper of grain, to say that the reduction of rates from Chicago to New York made last fall, which Mr. Blanchard has described, was an injury to the people of the United States?

Mr. COUNSELMAN. I believe that the reduction made in the way it was, day by day, rapid as it was, was an injury to the people of the whole Western country. I do not know whether it was an injury to the consumer. He got some benefit from it. Senator CHANDLER. But to the producer you think it was an injury?

Mr. COUNSELMAN. Yes, sir.

Senator CHANDLER. Please explain that a little more fully.

Mr. COUNSELMAN. As the rates went down the prices at the seaboard declined. We therefore had to make our buying price accordingly as the rate went down. Senator CHANDLER. Did that reduction grow out of the manipulation of the market? Mr. COUNSELMAN. No; but of the rates.

Senator CHANDLER. It did not necessarily or logically grow out of the reduction of rates?

Mr. COUNSELMAN. Necessarily, and, I think, logically.

Senator CHANDLER. Logically the reduction of freight rates from Chicago to New York is an injury to the farmer who produces the corn?

Mr. COUNSELMAN. In this way: We will say 25 cents is the market price, and that there is a reduction of 5 cents a hundred, if you choose. You reduce that rate 5 cents per hundred and he can reduce his price 2.80 per bushel, because you can get corn in Chicago and ship it to New York for 5 cents per 100 pounds less than he used to, or 2.80 per bushel less. "I am not going to pay 40 cents when I can get it for 2.80 less," he says. The rate from the West to Chicago is not changed in this trouble. It is the same. How is the Chicago shipper to protect himself unless he buys that grain just in proportion as the eastern rate is reduced?

Senator CHANDLER. It seems to me to be a paradox-I may be able to work it out— that the reduction of rates from Chicago to New York hurts the producer, the farmer. Mr. COUNSELMAN. Just remember in your reflections on the subject, and it may not

appear so paradoxical, that the freight rate from the West to Chicago is undisturbed, and that the disturbance in this instance was from Chicago East. It cost just as much to get the grain to Chicago, but the rate was reduced from Chicago eastward. Therefore, way back West we look finally where we are going to land, as the Chicago price is reduced in proportion to the reduction in freight eastward.

Senator CHANDLER. If the rate from Chicago to New York were suddenly put up from 25 cents to 30 cents the farmer would gain?

Mr. COUNSELMAN. He would.

Senator CHANDLER. He would get a higher price for his product?

Mr. COUNSELMAN. Yes, sir. The freight makes the price at the seaboard.

The purport of that testimony is that an advance in the rate of freight is a benefit to the farmer. That does not require any argument at my hand, does it?

Senator TILLMAN. Is it not so absurd on its face that nobody would swallow it?

Mr. CHADWICK. I am only showing what comes before committees, and that when such testimony comes to be considered on the floor of the Senate or the House, upon the strength of which you make such and such assertions, I think you will then see that you have not secured the evidence you ought to have. If you are going to try to amend any of these bills now pending, I think you should have the proper kind of testimony before your report is made to the Senate. In order to secure this testimony you should allow the people to appear before you and criticize the proposed amendments and the bill as a whole.

Senator CLAPP. I think you have struck a practical keynote. There are two bills here, one of which provides for pooling. Have you examined that?

Mr. CHADWICK. Yes.

Senator CLAPP. If there could be a proper provision made for pooling which you would indorse, what suggestion have you to make as to the improvement of that provision?

Mr. CHADWICK. I could not answer you offhand in this way.

Senator CLAPP. But you say that we ought to get the opinions of people as to the defects of the bills. That is what we want, as I understand.

. Mr. CHADWICK. But being called upon suddenly I can not give an offhand opinion that would be of value.

Senator CLAPP. We do not ask it offhand. Take that bill and study it, and give us your views.

Senator TILLMAN. That bill has not been reported to the Senate yet, and therefore it is not a matter that would meet his requirements.

Senator CLAPP. It is a tentative proposition upon which we should have the opinions of just such men as Mr. Chadwick. First, is it advisable to admit pooling under all circumstances? If so, then does this bill properly safeguard it? I would like his suggestions.

Senator TILLMAN. I want an answer from anybody who can give it. The CHAIRMAN. Mr. Chadwick is a very intelligent gentleman. He has read the pooling clause of what is known as the Elkins bill, and I will state to Mr. Chadwick, as I have stated before, that I propose to make that as strong as it can be made by the help of intelligent men, leaving it within the power and jurisdiction of the Interstate Commerce Commission to approve or to disapprove in whole or in part of any pooling contract, agreement, or arrangement between railroads, this action to be taken by the Commission before such pooling arrangement shall become effective, so that no pooling agreement can go into effect without the consent of the Commission. Section 2 of that bill is

strong as it stands, but I will state that I have on my table a propo amendment which will make it still stronger. That proposed amer ment I shall submit to the committee, and when we come to consideration we shall be glad to have the testimony of so intellige a witness as Mr. Chadwick, who has evidently given the subject mu thought. The question has been put by Senator Clapp and Senat Tillman in the best possible way: First, is it desirable? secondly, so, what would you suggest? The law says the railroads must freight rates and publish them. The Supreme Court of the Unit States says that the railroads shall not make agreements as to rat because that would be a violation of the Sherman Act. The railroa must be given some latitude, but how are they to make any agreeme fixing rates? As it is, three or four railroad men are afraid now get together in a room.

Mr. CHADWICK. The last utterances of the legislature would contr would they not?

The CHAIRMAN. Of Congress, you mean?

Mr. CHADWICK. Yes; any legislative body. The last utterances any legislative body control. Is not that a principle of law? The CHAIRMAN. Until something else is enacted.

Mr. CHADWICK. That controls, I say.

Senator CLAPP. There is no question about that.

Mr. CHADWICK. The last utterance of Congress on this subject, think, was the Sherman antitrust law, and your bill might deal wi that in plain English. But that law was drawn with great care, a it might seem presumptuous for a layman to make any suggestion regard to your action in reference to that law.

Senator CLAPP. Do not understand us as expecting you to comm yourself offhand to anything in this bill.

Mr. CHADWICK. If it be the pleasure of the committee, I w appear before it at a later day, after I shall have had more time think about this.

Senator CLAPP. But you said that the proper way to deal with th is for a bill to be prepared, and then let men who are familiar wit the subject come before us and point out its defects.

Mr. CHADWICK. Yes.

Senator CLAPP. For one, I will say that I should like to have me of experience, like yourself, point out the defects of these bills an suggest improvements; and I think the committee agrees with me i

that.

The CHAIRMAN. Certainly I do.

Senator TILLMAN. If I may be permitted, some of those gentleme who were here yesterday appeared to me, while stating their griev ances, to be liberal in their desire to safeguard the railroads. I mak the suggestion that it might facilitate our work as a committee if thes various boards of trade and chambers of commerce, through thei representatives, would take these two bills as a basis, and from then prepare a bill; then after they have exhausted their ingenuity, ability and experience in fixing up what they want, let us have a hearing from the railroads to show us wherein their opponents are wrong. am willing to work a reasonable amount of time two or three days in a week at hearings of an hour or two each day. If we should reques that, and ask them to act promptly in taking up these two bills as basis for the preparation of another bill, I think something practica

might result. The railroad people would in that way have a chance to show us wherein these merchants and business men are trying to tamper with, injure, or destroy the railroad interests by this proposed legislation. Then we would get into a practical situation, from which could possibly be evolved some valuable legislation.

Senator CLAPP. I want to make an additional suggestion, Mr. Chairman, and which I can not help but think would be a better one. If these gentlemen should formulate a bill it would necessarily be, as between themselves, a compromise, and the views of the different men, which might be of great value to the committee, would be lost so far as they were swallowed up in the compromise bill. Now, my idea would be for these men to take these bills, which are purely tentative; Mr. Chadwick may have one view, and some one else may have another. I say, let these men get together and present their views on these distinct propositions, and then let us have the benefit of the views that they entertain, which would otherwise be lost in a compromise bill from them.

The CHAIRMAN. That is a very good suggestion.

Mr. CHADWICK. I will say that we have been over these bills time and again; we have discussed them line upon line and precept upon precept. But it would be unfair to ask me to get up here and state a definite conclusion without time for consideration, and if I did so perhaps it would not be heard. A bill of this character should have the most careful consideration and scrunity-every word of it. I will state to the committee that I expect to leave the city this afternoon for New York State, and on Monday I expect to be in Baltimore, on this business. Quite recently I have interviewed some of the greatest men in the country; the last man I left was Mr. MacVeagh, yesterday, I think. We are working along on the lines not for compromise. The people will never compromise a hair in this matter. We will fight to the last gasp but what we will have the law properly safeguarded this time. The only place where we can not be heard is when you get into action. That is the time when the men who are in the ranks are set aside, and the journals get together and fight it out among themselves; but they do not know what they are about, and that is the great trouble.

Senator FOSTER. Let me make a suggestion: Here are two bills before the committee now, both more in a tentative shape than otherwise. The principal object of these hearings is to get views and opinions as to the merits and demerits of these bills. Then the committee, after hearing parties favorable to or opposed to these measures, will probably shape the bill to be reported to the Senate.

Mr. CHADWICK. Here is where it ought to be done.

Senator FOSTER. We have heard your evidence and the evidence of others for and against the propositions. When the bill shall be presented to the Senate those favoring or opposing the bill will be armed with full information of all the facts that you gentlemen can give to That is what we are trying to reach now.

us.

The CHAIRMAN. I suggest that when you return next week or the week following, Mr. Chadwick, you appear again and give us the result of your conferences.

Senator FOSTER. The suggestion of Senator Clapp strikes me as preeminently practical, that you gentlemen take these two bills, examine them thoroughly, analyze every provision in both of them, and then come before the committee to-morrow, or next day, or next week.

Mr. CHADWICK. How do we know when we can get before the committee?

The CHAIRMAN. I will let you know.

Mr. CHADWICK. We will do what you want us to. But here is the point. You are now hearing one side of the case. Heretofore there has been delay by the railroad people putting things off forever and a day. If you will fix a day when both sides can be heard then we shall all be on a fair footing. But there is no use for us to try to patch up bills, and then have the railroad people come in here and deftly suggest some law that will have the effect of skinning us alive.

The CHAIRMAN. Do you not think it would be fair to suggest, for our guidance, just what you think would be a proper remedy?

Mr. CHADWICK. Why in the meantime can you not hear the railroad people, and get the thing to a focus?

Senator TILLMAN. I will tell you why: The railroads do not want anything; they are not taking steps to facilitate legislation; they are obstructing that, so far as I can understand the situation, and they will never move until you have lined up in battle array and moved forward to give battle.

Mr. CHADWICK. The point I am trying to make, Governor Tillman, is that the railroads shall not be heard except purely in rebuttal; then if they do not come in here and take a stand, they will be out of the fight. Set a day beyond which they shall not come in, and give them plenty of time and opportunity.

The CHAIRMAN. We are going to hear the railroad people, and I hope you will find it consistent to act upon the suggestion of these Senators, and perhaps come in here next week with your suggestions embodied in a paper, so as to be able to say to us that if you were drawing the bill you would make it that way, or suggest this amendment or that provision. We will hear you with pleasure. I will call a special meeting for that purpose. You shall not go without a hearing and you shall be facilitated.

Senator FOSTER. Please impress upon Mr. Chadwick, Mr. Chairman, the advisability and importance of his people discussing among themselves and suggesting legislation or no legislation upon this question of pooling.

Senator TILLMAN. Pooling, on the one hand, with its benefits to the railroads, and, on the other, giving the Interstate Commerce Commission the power to fix rates to go into effect immediately and stay in effect until reversed. Those are the two issues.

Senator FOSTER. Those are the two preliminary issues before the committee.

Senator ELKINS, Chairman.

APRIL 18, 1902.

SIR: As I am obliged to go to Chicago to-day, may I ask you to kindly permit the following suggestions to go to the Committee on Interstate Commerce:

The rate, or relation of rates, being fixed primarily by the carrier, is, therefore, ex parte.

Objection being raised by any party in interest, both sides are heard by the Commission, which, acting as arbitrator in the hearing, determines what is proper and necessary to correct any wrong which may be found to exist, and issues an order as provided.

An appeal may be taken from the decision of the Commission.

Thus far the question has been treated by experts-carrier, shipper, Commission. That all the proceedings may continue to enjoy the benefits of expert treatment, why may not the Attorney-General of the United States be vested with power to