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itable return upon their investments and to reasonable freedom in their regulations must be recognized; but it seems only just that, so far as its constitutional authority will permit, Congress should protect the people at large in their interstate traffic against acts of injustice which the State governments are powerless to prevent.”
I desire to draw your attention to the time when these messages were delivered; this was prior to the birth of populism; also to the fact that they come from a Republican President of the United States, who gives authoritative expression of existing facts and of a universal demand for needed legislation. The charge has been made that this demand for the amendment of the interstate-commerce law is populistic in its origin and character. It is no more populistic than the origin of the law, and no law has ever been placed on our statute books which gave greater satisfaction to the general manufacturing and commercial public.
The necessity of this law is made apparent by the study of the number and the variety of cases tried and decided by the Commission before its authority was questioned and denied by the courts.
In his message of December, 1896, President Cleveland says: “The justice and equity of the principles embodied in the existing (interstate commerce) law passed for the purpose of regulating transportation charges are everywhere conceded, and there appears to be no question that the policy thus entered upon has a permanent place in our legislation." He states further that the wholesome effects of this law are manifest and have amply justified its enactment and expresses the hope
hope that the recommendations of the Commission upon this subject will be proniptly and favorably considered by Congress.” Instead of Congress heeding the advice of the nation's Chief Executive, and the nation's spokesman, and carrying out the nation's wishes in this matter, the Supreme Court acted in 1897 and most effectually deprived the Commission of the power necessary to enforce its findings. The immediate result of this decision was the inauguration of a period of extortionate rates, rank discrimination, and a general hold-up of a forbearing, but a determined and outraged public.
President Roosevelt, voicing the sentiment of the general public, again calls the attention of Congress to the need of legislation along this line. He states that the cardinal provisions of the interstate-commerce act were that railway rates should be just and reasonable, and that all shippers, localities, and commodities should be accorded equal treatment.” That “experience has shown the wisdom of its purposes, but has also shown, possibly, that some of its requirements are wrong, certainly that the means devised for the enforcement of its provisions are defective.”
He concludes by saying that “the act should be amended. The railway is a public servant. Its rates should be just to and open to all shippers alike. The Government should see to it that within its jurisdiction this is so, and should provide a speedy, inexpensive, and effective remedy to that end. Nothing could be more foolish than the enactment of legislation which would unnecessarily interfere with the development and operation of these commercial agencies. The subject is one of great importance and calls for the earnest attention of Congress.
The observation of these three Presidents covers a period of twenty years. They agree that an adequate interstate-commerce law is a necessity, that it is indispensalle to the administration of justice, and that the responsibility for the enactment of such a law rests with Congress. For twenty years and more the general public has demanded this law. In 1887 the Commission was created, as was then supposed, with power to stop and correct abuses; in 1897 the Supreme Court held that their powers were purely advisory. Since then the Commission is practically powerless; it is, perhaps, a little better than no Commission, but so far as granting practical relief is concerned the country would be just as well off without any Commission. It is contended by representatives of the railways that the granting of power to the Commission to substitute a just for an unjust rate, or an equitable for a discriminative rate, is equivalent to depriving the roads from the management of their property and investing the Commission with power to make rates. This was not the intention of the law of 1887, nor the practice of the Commission under that law, neither is it the wish of the business men of to-day; what we contend for is a law which will give the Commission power, after a full, fair, and impartial hearing of both parties in interest to put into effect a just and equitable rate, and this rate to be observed by the roads in question until the decision of the Commission is reversed by the Federal courts.
The prosperity of the railways depends on the traffic given them by the public, just as the success of a bank depends on the deposits and business of its patrons. There is no public institution in the land which is administered more autocratically than our national banks by the Comptroller of the Currency. Yet the only bankers that kick against this supervision are those who are determined to do an illegitimate business. The same is true of railroads. Honest railroad men have nothing to fear; they know that the public does not want to rob them, and that the law as it now stands affords them ample protection; they also know that it is the inalienable right of their patrons to be protected by law against the unjust methods of unscrupulous railroad managers.
The lumbermen of Kansas and Oklahoma, and the wholesalers shipping to these points have had special experiences with the railroads on the question of lumber rates. The lumber rates to Kansas and to Oklahoma have not only been arbitrarily high but have been in direct violation of the interstate-commerce law, which provides that a greater charge shall not be made for a short haul than for a long haul, under similar conditions. It is a general rule in both passenger and freight traffic that the company having the shortest and most direct route dictates the rate. This is one of the reasons offered by the railroads why Missouri, Illinois, Indiana, and other States have a much lower average rate on lumber than Kansas and Oklahoma, although the distance from the center of production in the Southern forests to the center of consumption is much shorter, and in many instances the lumber passes through Oklahoma and Kansas to reach these more distant points. The argument advanced has been that some railroad having a direct route to some point in the lumber district makes the rate for all roads to these centers. We do not object to this rule, but we do object to railroads using one method of procedure or one law to make rates to one State and another law to make rates to another State.
The rates from the central points of production to the central points of consumption in the various States are as follows:
This discrimination in rates greatly retards building in this territory; it deprives us of all the natural advantages of location in close proximity to the southern forests. This territory has to pay an excessively high rate to enable the roads to give an extremely low rate to more remote points, in order to get into the territory of roads hauling lumber from Northern forests.
The Kansas rate, established more than fifteen years ago, was made via Kansas City. The rate established then to the central Kansas points was 27} cents per 100 pounds. This rate was made to conform to the existing white-pine rate from the North. Since then white pine has gone out of use, and yellow pine is used almost wholly; in addition diagonal roads were built, running south through Kansas and Oklahoma direct to the forests of Texas, Arkansas, and Louisiana, shortening the distance of the lumber haul 200 miles or more. The route for carrying the Southern lumber product has been changed; the lumber comes no longer by way of Kansas City; and yet these old Kansas City rates are steadily maintained. Kansas City lies 40 miles north of the center of the State, and the opening of the diagonal roads to the south has moved the center of lumber production 80 miles west. This new condition saves to the center of Kansas consumption a haul of over 200 miles, or about 33 per cent of the entire distance. This suortened haul entitles us to a proportionate reduction in rates. But instead of reducing rates, in December, 1899, the roads advanced the rate 10 per cent to this territory, on the plea that they were entitled to share in the general prosperity of the country. Through the efforts of the attorney-general of the State and the political situation in reference to State railroad legislation, we succeeded in getting the advance changed from 23 cents to 1 cent per hundred pounds. But still there was an advance instead of a reduction.
Another reason why lumber rates should be less than local rates per ton per mileand unfortunately they are higher in the State of Kansas and the Territory of Oklahoma—lies in the fact that the kind of service required to haul lumber is less expensive than that required for most other commodities. The roads can use a cattle car, a box car, a flat car, or any other kind of car that may be to them convenient; the lumber is moved whenever it suits the road, without any loss to them, except their own delay; the cost of loading and unloading is borne by the consignor and the consignee; the payment of freight is in large amounts and is always cash; the risk is the minimum as compared with the hauling of other commodities, such as live stock, grain, and other commodities even more perishable; no suits confront the roads in the adjustment of losses; besides the distribution of the Southern lum bertrade extends over the entire year and over the entire territory traversed north and south; the Southern lumbermen are not dependent on winter snow's for logging purposes; their stocks are always full, unless depleted through the channels of trade. The territory intervening between Kansas and the Southern forests is rich in natural resources; every foot of it affords a large amount of traffic in both directions. These considerations ought to be strong factors in determining the rates on lumber. But I shall give you a practical idea of the existing conditions. Let us suppose a train load of lumberoriginates at Conroe, Tex., on the Atchison, Topeka and Santa Fe Railroad, and let us suppose that this lumber is distributed along its line to Chicago, the distances and rates will be as follows:
And all points between Carrollton, Mo., and Chicago on this line get a 24-cent rate. You will notice that the rate from Gainesville, Tex., to Ardmore, Okla., jumps up 64 cents per 100 pounds in a distance of 40 miles, or 304 mills per ton per mile, whereas the through rate to Chicago is 3.6 mills per ton per mile. The rate increases in inverse ratio to the distance the lumber is carried. This is not an isolated case, but is a fair sample of the lumber rates adopted by all the roads operating in the State of Kansas and in Oklahoma.
Texas originates lumber within its own State, and has a stringent State railroad law; this accounts for the advance in freight as soon as the road strikes Oklahoma, and also emphasizes the necessity of an interstate railroad law. The distance from Conroe to Chicago is more than twice the distance from Conroe to Wichita, and yet the rate to Chicago is 24 cents, while the rate to Wichita over the same road under precisely similar conditions is 28} cents per 100 pounds.
Under the existing interstate-commerce law the Commission is powerless. We employed the best legal talent obtainable, and were advised by them that the Commission can only advise and intercede with the railroads to do the right thing by its patrons, but has no power to enforce its findings. They can not inaugurate a fair and reasonable rate; neither can we obtain redress in any court of the land, except in so far that we can bring suit for recovery in individual cases where the roads have made excessive and unreasonable charges; but to prosecute a suit of this nature takes years under our present system, while in the meantime the excessive charges are carried on by the roads,
With these facts and conditions confronting us and affecting all lines of trade throughout the nation, and presented constantly and persistently by the Presidents of the Cnited States to Congress for the last twenty years for favorable action, it seems unnecessary for business men to plead with Congress to do what seems to them their plain duty. The men who are pleading with you to place on our statutes (Federal) such a law as is suggested in President Roosevelt's message are not wildeyed Populists. They are men who own and represent capital. They are men who by brain and brawn develop the varied industries of the nation. They are men who produce the business which makes the railroads a public necessity and a paying investment, men who understand the laws of business, men who realize the cost and appreciate good railroad service and are willing to pay for it.
We desire to draw your attention to the fact that the owners and operators of our great public railroads are men subject to like passions as other men. The fact is that men at the heads of the various departments are able men in the prime of life who have an ambition to make a financial record for their respective departments. To gain their ambition they very often resort to means which are neither just nor legal, and we look to you, the only body of men in the nation who have power to give protection, to pass a law which makes justice available and easy and speedy to the humblest citizen of our land. We know that the interests of the railroads do not weigh heavier with you than the interests of the public, and that you will not by inaction make it possible for unscrupulous railroad men to rob an unprotected public. I know that factitious and misleading arguments are made by the
representatives of the railroads, claiming that this legislation would place the rate-making power in the hands of five inexperienced men, and would deprive them of the management of their business. We do not ask for any such law. We would ask you to pass a law which, while it protects the public, also protects the railroads. Any other law would be unconstitutional. The proposed Nelson bill gives ample protection to both parties in interest, and does not deprive the railroads any more of the management of their business than the rulings of the Comptroller of the Currency deprives national banks of the management of their business, or the rulings of the Treasury Department, in administering the revenue, deprives importers or merchants of the management of their business. These departments see that these lines of business are conducted in a lawful and legitimate way, and the only parties that suffer are those who are guilty of fraudulent methods. The railroads are amply protected in this measure against any mistake made by the Commission, intentionally or otherwise, and can get speedy action in any of the Federal courts.
In conclusion we desire to state that we come not to ask a favor, but simple justice. We do not desire to arraign class against class. We ask you as our representatives and lawmakers to place upon our statute book a law which will prevent this. If in your judgment the general public is to be left to the mercy of conscienceless railroad magnates, either repeal the interstate-commerce law or let it stand in its present worthless form. Their practices of extortion and discrimination turn good and able citizens into anarchists. “Patriotism lives and grows on what it feeds upon.” Create or tolerate a condition which deprives A of an equal chance with B, which will build up one man by pulling down another, or build up one city, community, or State by tearing down another, and let this condition continue for years against the protest of the greatest and most responsible men of the nation, including our Presidents, and you will create a condition of distrust, dissatisfaction, disaster, and political disaffection. All of which is respectfully submitted.
E. M. ADAMS,
Committee. (Dictated by E. R. Burkholder, Hillsboro, Kans.) APRIL 5, 1902.
At the sitting of the committee on Friday, April 11, 1902, the following-named gentlemen appeared: E. P. Bacon, of Milwaukee, chairman of the executive committee of the Interstate Commerce Law Convention, held in St. Louis in November, 1900; Bernard A. Eckhart, of Chicago, representing the Chicago Board of Trade and the Illinois Manufacturers Association; Hon. Blanchard Randall, of Baltimore, president of the National Board of Trade; Charles England, of Baltimore, grain commissioner; George F. Mead, representing the Boston Chamber of Commerce and the New England Manufacturers' Association; J. B. Daish, representing the National Hay Association; Aaron Jones, grand master of the National Grange, Patrons of Husbandry, and Frank Barry, of Milwaukee.
STATEMENT OF E. P. BACON.
The CHAIRMAN. Gentlemen, Mr. Bacon is here and wishes to be heard on what are called the Nelson bill and the Elkins bill. He desires to present the whole question. He has given it a great deal of thought, and, I understand, represents the Interstate Commerce Law Convention that was held in St. Louis some time ago.
Mr. Bacon. Consisting of delegates from various commercial organizations.
The CHAIRMAN. Before you proceed with your statement, Mr. Bacon, give us your place of residence and your business.
Mr. Bacon. My place of residence is Milwaukee; my business is that of grain commission merchant.
The CHAIRMAN. You can proceed.
Mr. Bacon. Mr. Chairman, the convention I represent is termed the Interstate Commerce Law Convention, which was held at St. Louis in November, 1900, consisting of delegates from 41 commercial organizations of various kinds. That convention was called for promoting the passage of the Cullom bill, which was then pending in the Senate, but which, as you all know, failed of passage.
That convention appointed a committee, which, in consequence of the failure of the passage of the Cullom bill, proceeded to frame a new bill, removing the objections which had been urged to the Cullom bill but retaining the principal features of that bill, or at least what were considered the most important and vital features of it, only two or three in number, omitting the other provisions, some of which had been objected to in different quarters, the object being to have the interstate-commerce act so amended as to give it greater effectiveness, and it was desired that the committee should concentrate its efforts upon these two or three vital provisions.
I will state that the committee, after framing a new bill, which was introduced in the House by Mr. Corliss, and by Mr. Nelson in the Senate, proceeded to communicate with the various commercial organizations of the country in order to secure their opinions of the provisions of the bill. The committee received responses from a very large number of those organizations in approval of the bill, and stating that they had passed resolutions requesting their representatives in Congress to give it their support. I will state briefly of what those organizations consist: Of national organizations there are twelve, comprising the various classes of business-grain dealers, millers, livestock associations, retail grocers, wholesale lumber dealers, National Dining Table Association
Senator FORAKER. I suggest that, without reading that list, you hand it to the stenographer to be embodied with your statement, which will give us more time to hear what you have to say.
Mr. BACON. I will do so.
Mr. Bacon. I would like to state, however, that of State organizations there were 18 in number, representing the various branches of trade and industry; and of local organizations there are about 50 in number, making about 80 in all.
The CHAIRMAN. Then you would like to have this paper incorporated as part of your statement?
Mr. Bacon. If you please.
Grain Dealers' National Association.