has instructed me to appear here, is a commercial body composed of merchants, manufacturers, bankers, brokers, and business men generally, of nearly all lines of business, aggregating about a thousand members in New York City, and with a large nonresident membership throughout the United States footing up to something like thirty-five thousand merchants, each having what is known as a credit rating. Let me say here that the affairs of the association are controlled by the usual executive officers a president, first and second vice-presidents, secretary, treasurer, and board of directors. The nonresident members have no voice in the management of the association, but are kept in touch with its work. The subject of this bill came before the board of directors at its meeting in December, and the board adopted a series of resolutions indorsing the Nelson-Corliss bill, a certified copy of which I ask leave to file.

RESOLUTIONS, ETC., INTERSTATE COMMERCE ACT.

Whereas a bill known as the Cullom bill was pending in the last Congress, but failed of passage, the purpose of which was to restore to the Interstate Commerce Commission certain of its powers which, by the decisions of various courts, had been taken from it; and

Whereas a large number of commercial bodies throughout the United States, over 40 in number, among which was the Merchants' Association, advocated the passage of this bill, the position of the Merchants' Association having been set forth in an argument prepared by William R. Corwine, of the office staff, in which, while the passage of the bill was advocated, certain suggestions were made which, in the opinion of the officers of the association, ought to be incorporated therein in the shape of amendments; and

Whereas the commercial bodies which were in favor of the measure held a convention at St. Louis in November, 1900, at which an executive committee was appointed to take charge of the matters connected with the bill; and

Whereas Mr. William R. Corwine was recently elected by the members of the committee to fill a vacancy thereon, and, with the consent of the officers of the association, accepted that election and is now a member of that executive committee, the full title of the committee being the "Executive Committee of the Interstate Commerce Law Convention, held at St. Louis, Mo., November 20, 1900," of which Mr. E. P. Bacon, of Milwaukee, Wis., is chairman, on which are a number of prominent gentlemen throughout the country representing large commercial and shipping interests; and

Whereas the bill proposed to be introduced in the current session of Congress differs in certain respects from the Cullom bill of last session, and some of the ideas advanced by the Merchants' Association, through its representative, referred to above, have been incorporated in the new bill; and

Whereas the bill as now drawn has been approved by the members of the executive committee above mentioned, and has received, as we understand it, the approval of the Interstate Commerce Commissioners, and we are informed is accepted by many railway officials as being reasonably fair in its provisions; and

Whereas President Roosevelt, in his annual message to the current Congress, has referred to this subject, and in connection therewith has said:

"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. At the same time it must not be forgotten that our railways are the arteries through which the commercial lifeblood of this nation flows. 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 the Congress;" and

Whereas the principal provisions of the bill are:

First. That the Commission be invested with power when it is found, after a full hearing of all parties in interest, that an existing rate or differential in rates is unreasonable or unjust, to prescribe the necessary change to be made therein to

bring them into conformity with the provisions of the interstate commerce act. The Commission is to have the same power in relation to the classification of freight articles.

Second. That the rulings of the Commission, issued in pursuance of such hearing, shall be operative twenty days from the service thereof upon the defendant carriers, subject to appeal on the part of the carriers to a circuit court of the United States, these courts being empowered to suspend the operation of the order of the commission, pending the hearing of the appeal, and it is made the duty of the court to vacate such order if found to be illegal or unreasonable upon the facts of the case. Either party may appeal to the Supreme Court.

Third. That imprisonment penalties be done away with, and proper fines substituted therefor, in case of violation of the act. It is believed that this will facilitate .the obtaining of evidence necessary for the conviction of guilty parties, which the severe penalties of the present act strongly operate against. The act provides penalties for shippers as well as for carriers: Now, therefore, be it

Resolved, That in view of the position already taken by the Merchants' Association, based upon the foregoing statement, the directors of the Merchants' Association hereby approve the general terms of the bill referred to, and ask for its careful consideration and passage by Congress, and indorse the appointment of Mr. William R. Corwine upon the "executive committee of the Interstate Commerce Law Convention, held at St. Louis, Mo., November 20, 1900," and request him and the officers of the association to cooperate as fully as possible in obtaining the passage of this bill or of such amended bill as may finally be agreed upon, if amendments be found necessary, as will insure the end desired.

I hereby certify that the foregoing is a correct copy of the preambles and resolution unanimously adopted by the board of directors of the Merchants' Association of New York at a meeting on the 5th day of December, 1901. Dated New York, April 14, 1902.

[SEAL.]

S. C. MEAD,

Assistant Secretary, the Merchants' Association of New York. These resolutions, in substance, set forth that in the opinion of the directors something ought to be done by which the decisions or rulings made by the Interstate Commerce Commission may be made effective; that in the judgment of the directors the provisions of the bill which had been submitted to them-they having considerable knowledge of the general subject would produce the results desired by shippers without undue hardships to the carriers.

The question seemed to us to resolve itself into the very simple one of whether or not the Interstate Commerce Commission should be given powers which it seems to the shippers they ought to have, or whether or not the Commission should be abolished. As the Interstate Commerce Commission stands now, it seems to be nothing more than a statistical bureau, composed of very estimable gentlemen, in whose integrity and ability the public have confidence, but whose powers seem to be limited to the issuing of statistical information and propaganda at various times, which people read, but to which they pay no attention. It seems to us that, owing to the changed conditions existing throughout the country, to the community of interest chiefly, which is bringing the great railway systems into closer harmony, it would be wise, in fact, is necessary, that something be done which, on the one hand, will not be too harsh against the railroad interests, which we recognize as being a very important interest in the country, but which, on the other hand, will conserve the interests of the shippers. How far it is wise to go is of course a question which Congress must determine. I am not here for the purpose of voicing any specific complaints of shippers just at this particular moment. We have had a number of such complaints, and, in fact, our position in this matter grew almost entirely out of the very numerous complaints which were

filed with us and which we were asked to consider at the time the railroads, in the latter part of 1899 and in the early part of 1900, arbitrarily and without any hearings or conferences with shippers, attempted to obtain a larger revenue, not by an increase of rates-to which I think as a rule shippers would not have objected, owing to the prosperous condition of the country-but to a very violent change in the method of classification.

It is not necessary to go into the details of that subject. These details were fully laid before you at the last session, when the Cullom bill was being considered. Mr. J. M. Langley, representing our association, testified before this committee, and went into a very thorough analysis of the changes made by the different railways of the country in regard to classifications and the percentages of increase in items, showing the effect of those percentages upon the rates and the average increase of rates which resulted from that change of classification. We felt then and we feel now that the method pursued was not a fair or an equitable method; that it did result and has continued to result in a very serious detriment to many lines of industry, more particularly on account of the arbitrary change which the railroads made in what may be called the widening of the difference between the carload lot and less than carload lot.

I am not an expert on the subject of rates, Mr. Chairman, but there are a few general principles which we all understand fully. In the particular changes I have in mind, where carload lots were classed, say, fifth class, and less than carload lots were classified in the fourth class, the railroads in the new classification of 1900 kept the carload in the class in which it had stood for many years, and advanced the less than carload lots to a higher classification, for instance, the third class, thereby making the difference of two classes between the carload and less than carload lots. This served to advance the rate charged for less than carload lots. We claim, without going into the details as to the effect of this change upon the rate, that it has necessarily worked injuriously to the small shipper through lessening the area of his distribution. The tendency of the times is toward concentration. in commercial industries and transportation. There is a very serious endeavor on the part of thinking men of the country to ascertain how far this concentration is being brought about by natural conditions, and how far it is artificial. Monopolies are not desired by the people, but how far legislative bodies ought to go in an endeavor so to regulate the results of conditions as to minimize the evils complained of is a serious problem.

These changed conditions, whether due to natural causes-to the growth of business resulting in the creation of great industries throughout the world-tend to drive the small man out of business or to force him to combine with the larger organizations. We ought not unduly or arbitrarily make it harder for him to live. The narrowing of the area of distribution, whether it be of New York, of Chicago, of St. Louis, of Minneapolis, of Atlanta, or of New Orleans, or any other distributing center, is certain to contract the business of the small man. By widening the difference between carload and the less than carload lots, you make it harder for him to compete with the men who get the carload rate. That is so plain that it seems to me to need no explanation.

As I said, I think, at the outset, there is no disposition on the part of our people to harass the railways. The consideration, originally by the Merchants' Association, of the question under discussion was due to the fact that there were in effect certain discriminations as between localities, which operated unfavorably as against other localities; and as those discriminations operated against us locally, selfpreservation forced the organization of this institution, for the purpose of seeing if it were not possible to place New York upon a parity with other localities by doing away with the discriminating rates in freight and passenger business which were being practiced.

Mr.

I am frank to say, and am very glad to be able to say, that in all the relations which we have had with the railways the latter have been fair with us. They have lived up always, not only to the letter, but to the spirit of the agreements which they have made with us. And I am glad and proud to say that on our part we have done the same. Blanchard, whom you knew, and who is now dead, put himself on record in writing as to the fairness of the dealings on the part of the Merchants' Association of New York with the great railway interests of the country.

We feel, as I have said, that there ought to be some power somewhere, either in the present Interstate Commerce Commission or in some other body to be created, if need be, by or through which these two great interests of shipper and carrier, which are very largely the bone and sinew of the country, may be conserved fairly and equitably to all. So far as we have been able to study the subject, it seems to us that the provisions of the so-called Nelson-Corliss bill meet the situation as the conditions are to-day.

Several criticisms have been made by those opposed to that bill. One that I have in mind, that has been urged quite strenously, is that its operations will be unfair to the railroads, because under it the decisions of the Interstate Commerce Commission would go into effect practically immediately, and remain in effect for two years, even though the railroads had the right of appeal to the circuit court, but that, notwithstanding the appeal, the decision of the Commission would remain in force and effect while the appeal was pending. In other words, it is claimed by the legal fraternity, who are investigating the bill from the railroad point of view, that this is a reversal of general legal proceedings, where an appeal from the decision of a lower court stays the effect of the decision which has been rendered until such time as the appeal may have been determined. It seems to me that those who are making that criticism are looking from the wrong point of view. I do not want to be unfair or unjust or appear to be put in the position of asking for that which is harsh or arbitrary. But I do not view the Interstate Commerce Commission quite in that light.

It seems to me if I may use a phrase which does not, perhaps, exactly fit the situation, but which, in general, describes it-that we may look upon that Commission more as a legislative than as a judicial body. It is not a body appointed, as are the judges of the Supreme Court of the United States and its subordinate branches, with general powers to interpret the laws that are upon the statute books, but is a body of men, five in number, appointed to determine certain minor-or great, if you like-questions of fact raised by the specific act under which that body has been created, and their jurisdiction goes no farther.

In other words, it seems to me that we might better make a comparison of that body with the Treasury Department or any department of the Government which has powers of that kind. The Treasury Department, for instance, has charge of the customs, in which an enormous amount of money is involved and where there are very important questions, in the solution of which there is a great deal of friction. The decision of the Department becomes, as I understand it, binding, although the person against whom the decision is rendered has the right of appeal-a right which the law gives him. But that decision is binding not only as against him, but as against all others under like conditions, until the courts have determined that the original decision was wrong or unconstitutional, or not in accordance with the law, as you care to put it. That is the way I think you will find we look at this matter, and it occurs to me that that is the solution, from our point of view.

There is another criticism that has been made.

Senator TILLMAN. Mr. Chairman, before the gentleman leaves that point I should like to ask him a question.

The CHAIRMAN. Certainly.

Senator TILLMAN. As I understand your contention, or the contention of the association which you represent, it is that the Interstate Commerce Commission, composed of men who devote, or are supposed to devote, their whole study and time to questions of transportation and railroad matters, are fully competent to make the first decision as to what would be a just and equitable rate; whereas the judges of the courts, who are engaged in the study and determination of questions of law not specifically connected with those matters, and have made no study of them and can not make them a study, but must determine them from the showing made before them, and are not calculated to have any special understanding of railroad matters, are more competent to decide these questions equitably than the Interstate Commerce Commission. Is that your contention?

Mr. CORWINE. Practically, yes. We believe that the Interstate Commerce Commission is thoroughly capable of reaching a determination as to the reasonableness or the unreasonableness, the fairness or unfairness, of a rate, certainly as well as and possibly better than the determination of that question could be reached by a court.

Senator TILLMAN. Has it occurred to you that the judges of the United States courts are selected by the President and confirmed by the Senate, just as the members of the Interstate Commerce Commission are selected by the President and confirmed by the Senate; that, while they had their appointments from practically the same source, they are in effect chosen for supposed fitness and qualifications, and that choice is ratified by the Senate? Would you not, therefore, imagine that the object to be accomplished through their appointments for the specific work that each is to do would be all equally well performed?

Mr. CORWINE. Yes. I think the appointment of the Interstate Commerce Commission is thoroughly safe-guarded, and we may rest assured that this conservative body, the Senate, will pass upon the appointments which the President has made and may make from time to time, so that it is reasonably sure that good men will get in. We are not at all afraid of the contrary of that proposition any more than we are afraid of our courts, of which we are proud.