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more attention to the bills than I have, and are therefore more competent to discuss them.
Senator FORAKER. Do you prefer the Nelson bill to any of the others?
Mr. ECKHART. No. So far as I am personally concerned, and so far as the interests I represent are concerned, I am not particular what bill is enacted if there shall be some supervision exercised over the transportation companies. We realize that it is the tendency of the times that consolidation and federation are taking place. We realize, too, that the transportation companies, unless some supervision be exercised by the General Government, can build up one set of men at the expense of another set of men; that they can build up one section of the country at the expense of another section, so that our only hope is in national legislation.
Senator DOLLIVER. We have nationai legislation now that makes criminal the payment of secret rebates. I will state to you that six suits have been brought by the Interstate Commerce Commission against six lines of railway to enjoin them from any secret departure from their published rates; and, as I understand it, they have entered a court of equity and secured a decree to that effect, which would seem to be a pretty effective remedy for the trouble you complain about.
Senator CARMACK. You have read this bill. What is there in it in the way of more stringent regulations against secret rebates?
Mr. ECKHART. I understand that this bill will correct the defects of the interstate commerce law that have been found to exist against the shipping interests. It was supposed when the original interstate commerce law was enacted that it would cure the evils that then existed, but of course it was in the nature of experimental legislation and in many respects was somewbat crude and imperfect, and the decisions of the courts of the country have shorn it of many of its salient fea
I understand that the Nelson bill, if enacted, will remedy some of the defects that have been encountered in the execution of the interstate commerce law.
But what I desired was to call your attention to the difficulties under which a great industry like the milling business is suffering and for which they are asking a remedy.
Senator CARMACK. The whole burden of complaint of the milling industry is against secret rebates, I understand.
Mr. ECKHART. I do not share entirely the views expressed by Mr. Bacon that discriminations in favor of persons are but a trivial matter. I believe that the discriminations practiced by the transportation companies in favor of certain persons against others are destructive of our commercial system, and will ultimately result in the absolute destruction or confiscation of the property of certain people and certain industries. While discrimination has been practiced, and can continue to be practiced, in favor of certain sections against other sections, and while that is a great evil, I believe that the evil of transportation companies giving certain people secret rebates, giving special rates and special privileges, to the exclusion of the public, is detrimental to and destructive of our commercial interests.
Senator CARMACK. The secret rebate of which you complain, however, could not be secret as a rebate in favor of certain individuals against certain other individuals. It is a secret rebate in favor of one class of freight against another class of freight, is it not?
Mr. ECKHART. No. I mean to say that transportation companies have practiced secretly in the past the giving of special rates.
The CHAIRMAN. To individuals?
Senator CARMACK. As I understand your statement, while through rates for flour and wheat are the same, yet by secret rebates there are differences made?
Mr. ECKHART. Yes.
Senator CARMACK. By that do you mean secret rebates to particular individuals, or is it a general system by which flour is discriminated against?
Mr. ECKHART. That is general. But in discriminating against flour they give certain shippers, located in certain sections of the country, a special rate which is not open even to competitors.
Senator KEAN. For instance, Minneapolis would get a special rate while Chicago would not?
Mr. ECKHART. Chicago could get a special rate and Minneapolis not be able to enjoy it.
Senator CARMACK. What is the cause of this action on the part of the railroads in making this discrimination against flour; what object have they in that?
Mr. ECKHART. Of course I only have a general knowledge; what they tell us. They say, for instance, that one of the transportation companies is out for business; wants to increase its tonnage from a certain section. They go out and get business. Their solicitors want business, and they make special rates. Then another transportation company, finding that the traffic is going over another line, says: "Well, some other fellow is making a special rate; we want business, and we will make a special rate also.”
Senator CLAPP. Why does not that apply to flour as well as to wheat?
Mr. ECKHART. That is due, possibly, to this fact, that the railroad companies claim that they can get from 150,000 to 200,000 bushels of wheat to move within a very short space of time, whereas flour will come anyway, because the mills have got to grind, and they will keep in operation, and so they will get that product anyway. That is where they are mistaken, for if they carry the wheat to the seaboard and it goes out of this country as wheat the millers of this country will certainly not be able to grind it into flour, and so it is against their own interest, because they would invariably get the same tonnage at a reasonable freight rate, at the tariff or the published rate. It would go forward because the foreign countries have got to have our surplus and will take it. In that respect I think the transportation companies ought to favor this bill in order to protect themselves against each other.
Senator DOLLIVER. Have you ever received an order from the Interstate Commerce Commission declaring that flour should have the same rate as wheat?
Mr. ECKHART. No. It has said substantially that they believe there should be a small differential, and of course we are willing to abide by that. I think the differential is 2 cents a hundred.
Mr. BACON. Not to exceed 2 cents a hundred.
Mr. ECKHART. Not to exceed 2 cents a hundred. We are perfectly willing to abide by that.
Senator DOLLIVER. On what theory is that based?
Mr. ECKHART. On the theory that the Interstate Commerce Commission, after hearing the evidence, believed that it costs a little more to discharge or unload flour at the other end than wheat. Personally, I believe that the differential established by the Interstate Commerce Commission is a little excessive.
Senator DOLLIVER. Is there not a very substantial difference in the value, by weight, of flour as compared with wheat?
Mr. ÉCKHART. There is some little difference, but it is not very great.
Senator DOLLIVER. To start with, you have to put the flour in the package, whereas the wheat is shipped in bulk.
Mr. ECKHART. That is true, but the package only costs about 10 cents per barrel.
Senator DOLLIVER. It certainly takes more than a bushel of wheat to produce a bushel of flour.
Mr. ECKHART. Oh, yes; and the labor and the package must be added to the value.
Senator DOLLIVER. I mean there must be more wheat than a bushel to produce a bushel of flour.
Mr. ECKHART. Oh, yes.
Mr. ECKHART. Let me see if I can explain that. You can get just as much flour into a car as you can of wheat, so that a 50,000-pound car can be loaded with 50,000 pounds of flour. So they lose nothing in that direction.
Senator FORAKER. How much difference would there be between the value of 50,000 pounds of flour and 50,000 pounds of wheat?
Mr. ECKHART. The difference would probably be-
Mr. ECKHART. Oh, no. The difference is possibly 25 cents on the barrel of flour, taking the same weight in wheat. In other words, the value would possibly be from 10 to 12 cents a hundred pounds.
Senator KEAN. That is on 50,000 pounds.
The CHAIRMAN. Is it true that if you could get the same rate on flour and wheat to New York and London the mills of the country would grind all the wheat?
Mr. ECKHART. Yes.
The CHAIRMAN. Do you think this would be in the interest of the American millers?
Mr. ECKHART. Yes; and in the interest of the American transportation companies and
American labor. The CHAIRMAN. Do you think we could pass laws to regulate those matters?
Mr. ECKHART. No, sir; but I do believe that we can pass laws in this country to exercise supervision over our interstate commerce so as to prevent transportation companies who are common carriers from building up one interest and ruining another interest. What we desire is equality. Of course many of the foreign nations go a great deal further than that. France, for instance, protects its millers by giving them a bounty. The CHAIRMAN. Is this about what you would like to submit?
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Mr. ECKHART. Yes.
Senator CARMACK. I want to ask one question. I understand that the Interstate Commerce Commission have made an order in respect to this matter of differential between wheat and flour, with which I understand you are fairly satisfied.
Mr. ECKHART. Yes.
Mr. ECKHART. They can not enforce it, they tell me, because they have not the power to enforce their finding.
Senator FORAKER. That is, the Commission can not?
Senator CLAPP. I suggest, Mr. Chairman, that the real issue here is as to what can be accomplished by these bills.
The CHAIRMAN. That is correct.
STATEMENT OF AARON JONES.
The CHAIRMAN. Please state your residence, your business, and whom you represent.
Mr. Jones. Mr. Chairman, my name is Aaron Jones; my residence is South Bend, Ind.; I am a farmer. I am here as the representative of the National Grange, a farmers' organization composed of an active membership of about 500,000 people, all farmers. This organization is a nonpartisan organization. It has subordinate branches which hold their meetings throughout the States. We have a national organization which is composed of delegates from the various State organizations. I appear before you as chairman of the committee on legislation, and also as master of the National Grange.
This question of interstate commerce is one that the farmers of the United States, irrespective of party aftiliations, have a very deep interest in. It is one upon which they have thought more earnestly and deeply than perhaps any other single question. The farmers, as you know, are not a class of men very much given to talking. Yet they feel earnestly upon this question, as it underlies the prosperity of the agricultural classes.
I desire to say that our organization and the farmers generally, so far as I know, have the most friendly feeling for the railroad interests of this country, as well as all the other transportation interests of the country. There is not a particle of prejudice in our minds as against any of the transportation companies of the country. We desire that all these transportation companies should be fairly remunerated for the services that they render to the people. But the growing consolidation of these organizations and the increase of freight rates has impressed us with the fact that the time has come when a power beyond that of the railroads themselves should review the prices that they charge for the transportation of commodities and say what is fair and equitable.
We believe that a commission or a committee having this matter in charge should be composed of men not engaged in the business of transportation, either as shippers or carriers; that they should be men of the broadest information and fairness. We believe that that commission, when appealed to, should examine into all the facts relative to the cost of transportation, and that whatever their findings may be, those findings should be binding upon the shipper and the carrier until they have been reviewed by a competent court, and affirmed or overruled, as the case may be. This we believe to be equitable and fair.
We are led to this conclusion by the power of the railroad companies to confiscate our property or by excessive charges of freight and passenger take it by the strong hand of the law. State commissions appraise and fix upon a valuation of property that is to be used in the building of a railroad; whatever this commission may find to be the true amount of damages is awarded, and the owner of the real estate has no alternative but to accept the award or to appeal to the court, as the case may be. We believe that is right. We believe that railroads could not be built in this country if the law were otherwise.
Now, if State or national law can create a commission, which commission can fix the price of citizens, property taken for the building of a railroad, and compel them either to accept the amount awarded as damages or to appeal to the court, it seems to me that, when they are shipping the products of their farm to the markets of the world in order to get any benefits from their land, the same rule of action ought to apply.
We believe that the farmer is more interested in this question than any other class of people in this country. Statistics tell us that 60 per cent of the freights upon the railroads of the United States are the products of our farms. Therefore, as farmers, we are vitally interested in this one proposition, and that is equitable charges.
I was present this morning and heard arguments as to differences of rates as between one man and another, and also the question of rebates. It might be said that the farmer would have no particular or direct interest in that. But he has, because if there is a rebate or a lower schedule fixed for one shipper that man gets control, and shuts off competition. We believe that equity and fairness in all trade and business, with an open competitive market, is the only salvation for the American Republic. We believe that if you depart from this great principle and allow the consolidation of great interests to dictate and arbitrarily fix prices, which may be just or unjust, and appeal to the people to stand by them and to transact business upon that plan, it will eventually deprive this Republic of all the liberty it has.
The point that we desire to reach is that every man doing business with a railroad corporation shall receive the same service for the same money, and have the same advantages--one with the other and that all charges shall be reasonable. That gives everyone an equal opportunity. As the practice has been, and is now, we know that that is not the case.
I was here this morning when one of the committee asked the question if the pending suits would not cover every point that I make upon this subject. If those pending suits are decided in favor of the Government, and the permanent restraining order is issued against the railroads, so far so good. But I want to say that the passage of this bill will simply strengthen the law and make sure the decisions of the courts along the lines of equity, and in my judgment could, therefore, do no harm.
My experience among farmers has been quite considerable. I have come in daily contact with the farmers in all parts of the country, and I have ascertained that the conviction has become fixed in their minds that they ought to have some definite relief in reference to this matter.