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What we want is that all the railroad and transportation interests of this country shall be placed upon the same plane with each individual of the Republic; that because they are public carriers engaged in public service their rates should be subject to review by a disinterested tribunal, and that the findings of that tribunal should be operative upon the railroads until they have been reviewed and changed by a competent court.
If you should examine the records of our organization, you would find that in our three or four hundred thousand meetings annually all over this country these matters have been brought up and discussed, and that, with hardly one dissenting voice, they have demanded of the highest legislative body in the world that they be given this kind of protection. You would find upon our records resolutions, passed by our subordinate granges, asking this relief; and I think last year I transmitted petitions for the Cullom bill, signed by at least 100,000 farmers-perhaps 300,000—asking for the passage of that bill, because it covered the very points that I understand are in this bill.
Not only that, but our State granges and our national granges have all directed the legislative committee to do what it could to impress Congress with the importance of this measure.
As a farmer, I want to say that the value of all farm lands depends largely upon the enactment of a law of this kind. Our farms are only valued in proportion to the revenues derived from them. If the power is given to the railroads to discriminate and to make unjust and excessive charges, thus robbing us of the benefits of our lands, it results in actual confiscation. I recollect very well of traveling in Kansas and Missouri when the rate was but 13 cents a hundred for corn from Kansas to New York. I recollect after the great corn crop of 1899 that rate was changed to 23 cents. I do not know whether 13 cents a hundred was a remunerative or a fair price, but I know it was the price fixed by the railroads---for which the railroads carried the corn. If that was a fair price, when the price was raised to 23 cents it was an unjust rate, and it took from the farmers of the country over $130,000,000 in the value of one crop of corn. Not only the amount we sell but the amount that we have kept at home is to be considered. Every bushel of corn that is sold in any market of this country is based upon what it is worth in the markets of the country.
This is a matter of vital importance. The matter of hay was discussed this morning in the House committee. As it was not discussed here, perhaps I should not refer to that. But, at all events, the change of rates from $1.50 to $2.60 for shipping hay from Iowa to the seaboard was absolutely prohibitive and did prevent the shipping of hay. The man who made the speech in the House committee this morning said that since this change in the rates he had not bought a single ton of hay west of the Mississippi River, whereas heretofore he had bought a great deal. That is a matter that affects every ton of hay grown in the great West. The same principle applies to every other product requiring transportation from one part of the country to the other.
I want the Interstate Commerce Commission to have the power, after receiving evidence from the shipper and from the transportation lines, to say what shall be a fair and equitable rate. After taking the evidence in the case, as a fair and equitable tribunal, a disinterested tribunal, I would like for that Commission to have the power to prescribe a fair and equitable rate, and when they have so prescribed it I want the railroads of this country to obey the order of that Commission until the Commission shall be found by a competent court to have been in error in its finding.
Another point: This morning before this committee the gentleman from Chicago (Mr. Eckhart), who represented the milling interests of the country, was talking about the differences between the export rate on flour and the export rate on wheat, and he said that there were rebates given to such an extent as absolutely made it prohibitory to the shipper of flour, because he could not compete with the shipper of wheat. I want to say, as a farmer representing agriculture, that we are vitally interested in having equity between these two classes of men who buy our products. Why? Because then they become competitors one with the other. You may say that millers may combine and establish prices, and that the farmers are willing to put themselves into their hands to be scalped. I am not a particle afraid of that. Why? Because there is the shipper, who will hold him in check to a certain extent. They are competitors for the trade. I want them to be competitors. It is to our interest that they be competitors, and it is to the interest of the entire people. I believe that our prices the year round will be more uniform for our home people—our men who have established their mills in our localities to grind our wheat giving us a uniform market, and we would thereby get better prices.
There is still another ground, a broader and wider ground; not only are we as farmers interested in it, but every business man in this Republic is also interested in it; and that is that it is to the interest of the farmers of this country to have the mills of the country grind our grain, so that we farmers may have the by-products to feed to our stock, by this means keeping up the fertility of our soil. Otherwise our grain would go to foreign countries and go to maintain the fertility of the farms of Europe. As statistics show, year after year we have been depleting the fertility of our soil by shipping out the grain and its by-products; I mean the bran and shorts and all that stuff derived from our cereals, and which ought to go back to our own soil to be reproduced in fine cattle, in good hogs, and in dairy products, thus inuring to the interest of every man in this country, not merely that of the farmers alone. But if we allow this discrimination to take place, our wheat goes abroad, and that source of fertility is lost to the American farmer; and upon that ground I oppose discriminations.
But the broad ground of equity and fairness is the ground on which we stand.
And I want to say as a farmer, I want to say as the master of the National Grange, and I want to say in the interest of the people of the United States that they demand of this Congress that it shall pass a law that will give equity to every business interest and every locality in this broad land of ours in the matter of transportation. I want to say also that in my humble judgment the people of this Republic have got their eyes upon this legislation and are determined that they will watch and see to it that they have that kind of legislation.
I want to say that all the railroads of this country ought to be willing to have a disinterested tribunal to review all their acts, to see that to every man is meted out exact justice, exact fairness; to see that the schedules are right and reasonable.
I can not imagine a single objection to the passage of this bill. I believe that Congress, in justice to the American people, in justice to the farmers of this country, ought to see to it that if they have a hundred bushels of corn or wheat to sell or ship to the seaboard, or a single firkin of butter to ship, or a single head of cattle, that they be placed upon an equitable basis, the poor with the rich. I believe that that is the only safety, the only road that leads this Republic to that freedom of all the people which is the incentive to go out and labor.
I base my argument upon the equity of this case. If these bills do not cover the ground, and you understand now fully the purposes I have in view, then I hope the wisdom of this committee will make such changes as in your judgment will serve to carry out these purposes. I believe that one of these bills, the Nelson bill (S. 3575), will fully carry out that purpose, will enlarge the powers and duties of the Interstate Commerce Commission, and secure fairness and equity in transportation.
The CHAIRMAN. I may say that we all agree that we should take all proper steps that we can, and especially as regards secret rebates. On that point I do not think there can be any difference of opinion, either in the committee or in Congress. Everybody is committed to that. We should like to find a remedy and have the law enforced. As to these particular bills, however, we should like to hear from you.
Mr. Jones. May I ask you this question, Mr. Chairman: Are you in favor of submitting the railroad schedules to a disinterested tribunal and compelling the railroad companies to obey that disinterested decision
The CHAIRMAN. I think both these bills allow that; one of them, I know, allows the Commission, upon complaint, to change the rate. As to pooling, the Commission is to have exclusive jurisdiction over agreements and over every rate and every classification. I am willing to go that far.
Mr. JONES. That is right. The CHAIRMAN. Here are two questions: Shall we put in the hands of the Commission the power to change the rate? That is the first question. Secondly, shall we allow the railroads to pool under absolute restriction on the part of the Commission to control all contracts for pooling, or to reject in whole or in part? As to discrimination, that is wicked, unrighteous, unjustitiable, and robbery.
Mr. JONES. As to the first question, yes. And all pooling contracts must be approved by the Interstate Commerce Commission before going into effect.
STATEMENT OF GEORGE F. MEAD.
The CHAIRMAN. Please state your business and whom you represent.
Mr. MEAD. I am engaged in the produce commission business. I represent at this hearing three large business organizations. First is the National League of Commission Merchants of the United States, having constituent bodies in twenty-three or twenty-four cities, and which, at its national convention held in Philadelphia last January, passed resolutions asking Congress to give the Interstate Commerce Commission the requisite power to enforce its findings. The second organization is the Boston Fruit and Produce Exchange, composed of 350 firms and over 600 members, engaged exclusively in the butter, cheese, eggs, provisions, and fruit business. The third is the Massachusetts State Board of Trade, composed of 41 different State organizations throughout Massachusetts.
Everyone of these business organizations has considered this matter. One of them has indorsed specifically the Nelson-Corliss bill, believing that the provisions of that bill will accomplish what they desire. The other two ask generally that Congress shall give whatever power may be necessary to the Commission to enforce its findings, so that it shall be a benefit to the business interests of the country.
We in Boston had an experience with the Interstate Commerce Commission in 1890. We brought a case before the Commission. An exhaustive hearing was had, lasting three or four days, with the final arguments heard here in Washington. The result of that hearing was that the Commission found entirely in our favor—that the rates were exorbitant and oppressive. But the fact that the Commission had not the power to enforce its own findings rendered that decision utterly useless to us. The railroads absolutely refused to abide by the conclusions of the Commission, so that, so far as any practical benefit to us from that decision was concerned, we received none, as the railroads would not abide by it.
So, Mr. Chairman, believing that the business interests of the country demand just this power to be given to the Commission, not primarily to fix the rates, but, after a full and fair investigation, if they find the rates unjust and oppressive, we come to this committee asking that some power be given so that those rates may be in force and in vogue pending revision of the Commission's order by the circuit court or by the Supreme Court.
I notice that the chairman of the committee has a bill here that I have not studied. I have buen over the provisions of the NelsonCorliss bill, and we think that that would meet the necessities of the business community.
If pooling is a distinct feature of the other bill, and if it is to be under the supervision of the Interstate Commerce Commission, I should say that, in my judgment, that ought to be the system.
The CHAIRMAN. That provision is just as strong as it could be made by very able lawyers to put that power in the hands of the Commission. The bill known as the Elkins bill gives the Commission the right and power in a similar case to determine whether the rate is reasonable or not, and to fix the rate as well.
Senator CLAPP. In the Elkins bill the court, on application, being satisfied that the case is one which sbould call for such a proceeding, may make an order that the decision of the Commission stand in effect pending appeal. Under the Nelson bill it is provided that the decision of the Commission shall stand unless the court makes an order suspending it. That is the practical difference between the two billswith the pooling clause added to the Elkins bill.
The CHAIRMAN. As to the supervision by the Interstate Commerce Commission, I have made it still stronger-saying that they shall have absolute control in whole or in part of every classification and agreement, and that the agreement shall not take effect until they say so.
Mr. MEAD. Two of the organizations I represent ask for such powers for the Commission as the wisdom of the committee may deem wise to enable the Commission to carry out the provisions of the lawthat they may have power to enforce their own orders. We feel now very much as a criminal feels who is brought into court when all the evidence points to his guilt, and where the judge may say, “If you are willing to take a year's sentence, the law will be justified; but I have no power to enforce my decision.” Certainly, business men are loath to bring cases and go to the extent of preparing them before the Commission when they know in advance that the railroads, if the decision is against them, will not carry out the orders of the Commission. That keeps them from it.
The other provision, as to rebates and discriminations, has already been so well covered by those who have preceded me that perhaps I should say nothing about it, except that I believe that the business interests of the country feel to-day as they never have felt before regarding that injustice, because that is driving ordinary business men to the wall very rapidly.
Senator CLAPP. As to both bills, if anybody can suggest anything which will provide a more specific remedy, I am sure this committee will jump at it.
Mr. MEAD. I will not say an thing along that line, then.
The CHAIRMAN. Senator Clapp is a good lawyer, and if he can make it stronger he will do so.
Mr. MEAD. Congress has already assumed a limited supervision of the railroads, and we believe that work ought to be carried to a conclusion. Monopoly does not control and can not control public service corporations, as we believe that in the end one company will be bought by another, to the disadvantage of the public. The fact is, as stated by the Commission in its report for 1900, that the matter of rates decides very largely who shall do the business and where it shall be done, and we think that, inasmuch as Congress exercises a limited supervision over public service corporations, it ought to exercise full control over them. If the provisions of either of these bills should become law, we feel that it will then put the business men of the country upon an equality. As it is at the present time, the ordinary business man has no show against those great combinations that are enabled to obtain concessions and rebates which give them the power to drive the ordinary competitor to the wall. It seems to me, Mr. Chairman, therefore, that this committee should determine to recommend the provisions of one bill, or an amalgamation of the two.
The CHAIRMAN. Whatever is best in both we are going to try to put into whatever we recommend.
Mr. MEAD. Then I do not think I will take any more time.
Senator CLAPP. Assuming that this provision for pooling puts it completely in the hands of the Commission, I think the committee would like your view as to that policy.
Mr. MEAD. I understand the Nelson-Corliss bill provides that where there is no through rate, and the railroads can not agree upon one, then the Commission are given power to fix it.
Senator CLAPP. That would only be in a case where there was a complaint and after investigation.
Mr. MEAD. Yes.
The CHAIRMAN. The other bill gives the right to pool. A great many railroads are opposed to that. If you have that rate made public, and in the hands of the Commission, then rebates are almost impossible.
Senator KEAN. There is not a railroad west of the Mississippi River that wants pooling:
The CHAIRMAN. No.
Mr. Jones. Senator Elkins, I see that your bill provides that the findings shall not go into effect until after the order of the court.