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STATEMENT OF ROBERT W. HIGBIE.
The CHAIRMAN. Please give your business address and whom you represent.
Mr. HIGBIE. I represent the committee on legislation of the National Wholesale Lumber Dealers’ Association. My business address is 45 Broadway, New York. I am also a manufacturer of lumber in the State of West Virginia.
This association which I have the honor to represent before this committee is composed of several hundred of the representative lumber dealers of the United States, with a membership extending from Maine to Minnesota on the north, to the south and southwest, Alabama and Arkansas, and thence across to the Atlantic seaboard.
This association has indorsed the principles of the Nelson bill and also certain features of the Elkins bill for two or three successive years in their annual conventions. The board of trustees of our association appointed a small committee to represent the association before Congress in the advocacy, in a general way, of these two bills, more particularly the Nelson bili.
We feel, Senators, that the necessity exists for some additional legislation by way of amendment to the interstate-commerce act, and the necessity for that is so apparent that it is not necessary for me to take up your valuable time in making any extended argument along that line, but rạther to suggest our thought as to how the act should be amended and in what respect the powers of the Commission should be increased.
There are four things, particularly, in which our association is very much interested.
In the first place, we think the railroads should be placed in the position where they should treat all shippers alike; that they should charge like pay for like service under similar conditions.
In the second place, we feel that when an important case has been brought before the Interstate Commerce Commission and they have carefully investigated it and decided as to what is a proper rate or proper adjustment between railroads and shippers, of course conserying the interests of both, that they should have the power to say what is right, and, having said it, that they should have the power to enforce it. This covers the second and third of the additional powers for which we are asking.
In the next and last place, we think that these orders, when once entered, should be made effective within a reasonable time.
The act as originally passed, and as interpreted by the Commission itself, practically covered most of these points which we are now asking. I am not undertaking to say whether the original law actually conferred these powers or not. I simply say that the interpretation of that act by the Commission itself was that they had, and as a matter of fact they used, most of these powers for several years.
The courts have, however, in various decisions in cases coming before them under this act, held that the Commission did not possess certain of the powers which they had been exercising and which they thought the act conferred upon them, and as a result of these decisions the Commission has been compelled to desist from the exercise of those powers.
For instance, one, which is the only one I shall speak of, is that part of the act which is known as the long and short haul clause. As I understand it, this clause was put in the act for the benefit of small individual shippers, whose shipments were made at noncompetitive points. The courts have held, however, that the conditions under which shipments were made by the railroads were such that the railroads in certain cases were justified in charging a less rate for a long haul than for a short haul. The result is that the individual shipper from what we term way stations is left high and dry and is compelled to pay whatever the railroad sees fit to charge him from that particular point, because he has no other way of getting his property to the markets.
I know of no case which better illustrates the necessity of some change in that particular than a case which the association I am representing here at one time brought before the Interstate Commerce Commission. I will very briefly state the case and the developments arising therefrom. The National Wholesale Lumber Dealers’ Association lodged a complaint against the Pennsylvania Railroad, the Baltimore and Ohio, and the Norfolk and Western railroads. The basis of that complaint was that shippers on the Norfolk and Western were discriminated against in comparison with shippers from the Chesapeake and Ohio and from the Baltimore and Ohio, and that the rates were very much higher to them than were given to their competitors on other lines, and that those rates were unreasonable, unjust, and discriminative. The testimony in that case brought out these facts: That the three railroads named were under the practical control of the Pennsylvania Railroad and to all intents and purposes were one system. It also brought out this fact: That the three roads had connections with and entrances into the city of Cincinnati; that the rate on lumber from Cincinnati to New York was 214 cents per hundred pounds; that all of these roads were parallel and shipments were made from all of them to the New York market; and this additional fact, that two of these roads gave to points east of Cincinnati the benefit of the Cincinnati rate. But the Norfolk and Western in their wisdom saw fit to refuse to give the 214-cent rate to its shippers east of Cincinnati, but charged such shippers an average rate of 274 cents, and the result was that such shippers on the Norfolk and Western were compelled to pay from 30 to 35 per cent more than the shippers on the two parallel roads.
The Commission, in writing the decision in that case, closed by say ing that inasmuch as these three roads were under the control of the Pennsylvania system, they saw no reason why all the shippers on the three lines should not be treated alike. The order that finally came in reference to this matter from the Commission, instead of reducing the rate, as the opinion would seem to have indicated we had reason to expect, only reduced the rate 10 per cent, still leaving us 15 or 20 per cent above the rates for shippers from the other two roads. I infer and assume, although I have no authority for the assumption, that the reason why the larger reduction was not ordered was because the railroads might not have been willing to obey it. But they did obey the order of the Commission. If, however, the Commission had the power which we are asking now to be conferred upon them and had followed logically the line of the opinion in that case, the shippers on those three roads would have been placed upon an equal footing. As it is, the shippers on the Norfolk and Western, of whom I happen to be one, are still at the disadvantage of at least $1 per thousand.
The CHAIRMAN. On the rate to New York ?
Mr. HIGBIE. Yes. I have had prepared a table which I will file with the committee, showing the distances, the rate in cents per bundred, per ton per mile, on lumber from some 25 or 30 different points to New York City.
These points cover twelve to fifteen States and fairly represent the shippers of lumber from inland points to New York City. În selecting these various points I wanted to be fair, and so I showed no preference at all and made no selection except the natural one. I had no foreknowledge of what the result would show when tabulated in this form. The result is as follows: The point enjoying the most favorable rate to New York City is Menominee, Mich., which has a rate of 0.423 cent per ton per mile, this distance being 1,182 miles and the rate being 25 cents per hundred. The point which is compelled to pay the highest rate is Elizabethton, Tenn. The distance from that point to New York is barely more than half the distance of Menominee from New York, being but 628 miles. The rate per hundred is 28 cents, or three cents per hundred more for practically half the distance, while this rate per ton per mile is 0.892 cent, or more than double. The intermediate points on the table vary.
The CHAIRMAN. Does your table show what lines those points are on? Mr. HIGBIE. It does not.
The CHAIRMAN. That would add a valuable feature if you would show the lines.
Mr. HIGBIE. I will be glad to make that addition.
The CHAIRMAN. If it will not interrupt you, and with the consent of the committee, I suggest that you put in an additional column to your table showing, for instance, that lumber from Menominee to New York passes over the following lines, and from Elizabethton to New York over the following lines.
Mr. HIGBIE. I shall be very glad to do that, Senator.
The CHAIRMAN. I think that would look well and would be valuable information.
Following is the amended statement here referred to:
Statement showing the distance, rate in cents per 100 pounds, and rate per ton per mile on
lumber from points shown below to New York, N. Y.
1,182 Menominee, Mich..
818 Indianapolis, Ind
915 Chicago, Ill 1,097 Appleton, Wis..
757 Cincinnati, Ohio 980 Petoskey, Mich.. 865 Louisville, Ky. 715 Bay City, Mich. 709 Dayton, Ohio.
0.423 .476 .489 .512 .538
546 .565 .568 .571 .578 .588 592 .589 .628 .628 .629 .632 .641
702 Saginaw, Mich 1, 273 Helena, Ark.
685 Ironton, Ohio 683 Ashland, Ky 411
Buffalo, N. Y 671 Kenova, W. Va..
21 21 21 40 211 211 13 2111
Statement showing the distance, rate in cents per 100 pounds, and rate per ton per mile on
lumber from points shown below to New York, N. N.—Continued.
C., M. & St. P. Ry., or C. & N. W. Ry. to Chicago, and via any line east of Chicago
C. &N. W. Ry., or Wisconsin Central Ry., to Chicago; via any line east of Chicago, Ill.
D., S. S. & A. Ry. Canadian Pacific Ry. N. Y. C. & H. R. R. R.
C. & N. W. Ry., or Wisconsin Central Ry., to Chicago, and any line east of Chi
C., C., C. & St. L. Ry.
L. E. & W. R. R.
East of Buffalo:
West Shore R. R.