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railway companies of the country in any way after they shall have adapted themselves to it. But I want to say here that if I thought it would be unjust to the railway companies I should not hesitate for one moment, standing here in the United States Senate, to say so. When the time comes, if it ever shall come, that I shall be deterred from saying what I think I ought to say or from doing what I think I ought to do upon any subject pending before the Senate, by the fear that some man here or elsewhere will wrongly charge me with representing an interest upon this floor, other than that of my constituency, I shall give back to my people the trust which they gave into my hands and ask them to place their interests in the care and keeping of some one more manly and more independent.
Sir, I think the amendment proposed by the Senator from West Virginia, and he does not misunderstand its scope, strikes a steady, direct blow at competition all over the United States. I can understand why that Senator and others situated as he is support it, but I fear it strikes at the producer and merchant of the West and at the merchant, the manufacturer, and the consumer of the East. I think it is a proposition to put upon the statute-book a discrimination worse than any which is now complained of as made by railway companies. What is it?
It is a declaration by the Congress of the United States that under no circumstances shall a railway company charge more for a short haul than it charges for a long haul on the same line and in the same direction, subject if you please (but I attach little consequence to that) to a power in these commissioners to unshackle the competitive forces thus chained in spots throughout the country where in their judgment it is advisable.
The Senator from Ohio [Mr. SHERMAN) never uttered a truer word in all his long and splendid public career than the statement which he made here the other day while favoring this amendment, that it would result in increasing the through or competitive rates. The Senator from West Virginia in the speech, very able and exceedingly frank, which he made the other day, admitted, because he must admit it, the same thing; and no truer prophecy ever was made, in my judgment, than that which you, Mr. President, then made that if the Congress should pass such a provision and so chain the competitive forces engaged in the transportation business of the country, it would bring a demand for its repeal, and that quite speedily, which Congress would not disregard
Now what is there in this proposition that a railroad company shall not charge more for a short hani than for a long haul which Senators think is so fair? Chicago is often referred to in this discussion. The Senator from West Virginia complained that the rates from local points through West Virginia, between Chicago and tide water, are higher than they are from Chicago to tide water. That is doubtless true. During the season of navigation it is true, and it is often true when the lakes and the canals and rivers are locked and the competition is only by rail. Why ought it not to be true? What right have you at a local station in West Virginia to demand that Chicago shall be deprived by law of the competitive forces which God and nature have given her, or that you shall have the benefit of competition which you do not possess ? Chicago is situated upon a lake. She may ship to Buffalo, from Buffalo she has water carriage to tide water; four or five trunk lines of railway run out Chicago, brought there by the expenditure of millions of dollars, invited there by the expenditure locally of millions of dollars, for what?
In order to give Chicago, one of the great gateways through which the West has been for years pouring her wealth to the Atlantic seaboard, the benefit of competition. The position of Milwaukee is similar. This question is discussed here from the beginning as if the railway companies, of their own motion, out of favoritism to Chicago and other competitive points, made low through rates. Is that true? We all know, as the Senator from Georgia (Mr. BROWN] very truthfully said the other day, that rail transportation can not compete with transportation by water. When navigation is open from Chicago to tide water the railway companies carrying freight from Chicago to New York have no more to do with fixing the through rate than I have with fixing the income which the Senator from West Virginia shall receive from his investments. In order to carry at all, they must bring their rates down to the lowest point for which another will carry; and when navigation is open, whether by lake, by canal, or by river, the railway companies have to bring rates down low, very low in order to carry through freight at all, because a rate which is ruinously low to the railroad carrier affords a handsome profit to the carrier by water.
The conditions of water transportation, as to cost, &c., are essentially different to that by rail. The river and the lake are natural highways, free to all; they are highways furnished ready-made, free of cost, for the use and benefit of all. No cost of maintenance or repair rests upon any one as a condition of such use. If the river needs improvement, or the harbor on the lake, the necessary expenditure is made by the general public.
Now tell me, pray, what philosophy or reason there is, as a matter of principle, for declaring that because the railway carrier from Chicago to tide water in the East is obliged to meet a rate which is made by the vessel, and therefore to give a low rate through to the ocean, that those who live at a station fifty or a hundred miles out from Chicago, situated on only one railroad line, shall have the benefit of that competition ? It is an attempt to take away from communities and from people natural advantages which they have, and advantages which they have acquired and paid for, under the supposition that it will tend to give advantages to other points to which, in my judgment, they are not entitled.
Mind you, I do not attempt to justify on the part of any railway company exorbitant and unfair rates from local points. I do not attempt to justify charges upon the part of a railroad company from local and non-competing stations which are made with sole reference to enable them to recoup and make up from such localities what they fail to get because of the competition at other points. I think this bill will, if enforced, prevent extortion; but what I assert is this, that situated on one line of railway only, without any lake, without any river, without any competition, you have no right to complain that you have not the same competition that Chicago and other points differently situated have, nor have you a right to demand by operation of law the benefit of competitive prices which nature has denied you, and which you have not possessed either the power or the enterprise to acquire. Railway companies meet at Chicage a rate made by water. It is too low, if you please. It is not too low because they want it to be low. It is not voluntarily made too low to enable them to make money by discriminating against local points, for railway companies want to get from competing points as well as from local stations all the traffic they can and the highest rates they can, but the through rate is made low because of the competition, it is made low because the river and the lake will carry the freight if the railway carrier does not, and it is low because it must meet that rate or not take it all.
Now, this proposition that a railway company shall not charge more for a short haul than for a long haul, is to do what? It is to say that a station 50 miles this side of Chicago which has but one railway, which has no transportation by water, which has no competitive forces whatever, shall have precisely the benefit of the competitive forces that Chicago has, that Milwaukee has, that Omaha has, that certain points in Kansas have, that Saint Louis has, that Kansas City has, that Saint Paul has, that Minneapolis has. Is there any justice in that? To my mind it is a species of communism; it is an attempt to take from those who have competition that which they have and to give it to those who have it not and who, by the operation of natural laws, are not entitled to it. Įt is an attempt by this amendment to provide what? To provide that the maximum rate-and Senators say it is not a bill relating to rates at all—from local and non-competing stations shall be the competitive rate from the competing point. The West never could have been built up but for the competition which has brought it near to tide water.
It has been considered a desirable thing to the whole country that the frontier should be pushed rapidly farther and farther to the westward. To that end, hy the expenditure of millions and millions of dollars brought here from the Old World and from the New England States, as well as that contributed by the West and by the localities to be immediately benefited, hundreds and thousands of miles of railroads have been constructed. What for, if not to bring nearer to the markets of the East and to export facilities those distant regions and their products? How could this result if the mileage basis of freights is to be applied ?
Natural advantages are pretty well distributed after all. We have been brought by this immense expenditure of money nearer to the tidewater. We have abundance of water competition, and our lands are more easily tilled and cost less money than lands in West Virginia probably. But the Senator from West Virginia must not forget that his constituents have advantages over us. Our people occupy the boundless prairies, and are far from fuel, which comes to them at great cost, and are far from manufacturing centers, while West Virginia-and this is true of many of the other States-has wood and coal and iron and manufactures in abundance and at hand.
Mr. President, I admit the difficulty of the subject. I do not claim to absolutely know that I am right about it; I have great faith in the opinions of the Senator from West Virginia; but if I can reason upon this subject, it is a proposition which, while it will injure the West, while it will destroy the competitive forces which we have there and to which we are entitled, while it will destroy largely the export business of the country and will injure the merchants and manufacturers and business of the East, it will not benefit the people who are so strenuous in favor of the adoption of this amendment.
I want to ask the Senator from West Virginia what percentage of the business of the Pennsylvania Railway Company, to which he referred the other day, is its through business?
Mr. CAMDEN. Ten per cent.
Mr. SPOONER. Ten per cent. Now, look at that a moment. Ten per cent. of the business of the Pennsylvania Railway Company is its through business, which you say is done at a low rate, affording very slight profit. Ninety per cent. of its business is local business, 90 per cent. of it is the business which gives life and strength and power and wealth to the Pennsylvania Railway Company. Now, if you provide that the Pennsylvania Railway Company shall, if it takes business at the low through rate which is necessary from Chicago, correspondingly reduce its local rates between New York and Chicago; if you say to the Pennsylvania Railway Company “the maximum rate from all your local stations between Chicago and the seaboard shall be this competitive rate fixed at Chicago," what will the Pennsylvania Railway Company do? It would not hesitate one moment as to what it would do. No man of sense could hesitate for a moment as to what it should do. It would simply no longer meet that competitive rate. It would not give away 90 per cent. of its business, the business upon which it relied to pay its interest and keep its road-bed in repair and keep its rolling-stock in condition and in good supply-it would not give away that business.
Mr. CAMDEN. It does not do it now. It has established the long and short haul principle.
Mr. SPOONER. I do not know about that. I do not know what rebates that company is giving. I do not know anything about the inside history of its transactions, but I do know this, I think, that if the Congress of the United States says to the Pennsylvania Railway Company "whatever rates you put upon this 10 per cent. of through busiDess, which you take in competition with the lake and the river and the canal during the season of navigation, will be the utmost limit of your local charges,'' the Pennsylvania Railway Company would not hesitate one moment to say that it would rather sacrifice the 10 per cent. through business than lower their local rates.
Would they hesitate to say it? It can not be possible. The result would simply be this: They would put up their through rates. They would not get the freight, of course, but they would rather throw away that 10 per cent. of business which they carry at trilling profit, if any, than to sacrifice one single farthing of their local rates between Chicago and the seaboard. That is what they would do. That is what the Lake Shore would do. That is what those two competing lines would do, iind what other roads would do throughout the country where such competition exists. They would say to the carriers by water, “Take this freight at your price until navigation closes and our turn comes. We will not throw away our local freights in order to be able to carry this small percentage of our business for little or nothing from Chicago and Milwaukee and Omaha and the other competitive points of the West to tide water."
Then what will come about? Do you think they will then lower the local rates? Not at all. They would have lost what little business they had on the through freights, and they would feel just that much less inclined to lose anything on the local rates. They would put up the through rates and they would not lower the local rates a cent. On the contrary, they would be likely to raise them, and they could do it with impunity, keeping up the through rates, for the local rates of the country are as a rule high only by comparison with the through rate. If they charged too much for carrying from a local station, you would make your complaint to the commissioners, under this bill, that they were discriminating against you, that they were perpetrating extortion npon you, and seek a remedy here; but you would not get any reduction of local rates, it seems to me, by the railway company by reason of your having destroyed their business from competitive points.
But that is not all. What else would result? While it would not benefit these local stations at all it would injure the West and the East (for the low through rates are from east to west as well as from west to east), because it is with the carriers by lake and river as it is with the carriers hy rail; they get the highest price they can, and if the railroads are not longer obliged to compete with the river and lake and canal, if that transportation belongs entirely to the water, the water rates will go up and they will stay up as long as navigation lasts; and when navigation is closed, what then? You can not pool very well the business of the railway carriers with the business of the steamboat and vessel men, because the water is free as air, and the interests are diverse, the ownerships are not brought together; but the very moment navigation closes, the very moment you can not carry by water any longer, the very moment the interests of the country are dependent upon rail transportation, and the farmers of the West will have to send by rail or not at all, then the merchants of the West who want their goods from New York, from Baltimore (if Baltimore wants any more of our products or any more of our trade), must rely solely upon the railway carriers. Under such a law as this, which lays upon the railway carriers a command to keep up their through rates under penalty of reducing their local rates upon which they rely for their life, they will be forced to combine, to consolidate, and to keep up the through rates lest their local rates suffer.
Sir, experience may lead me to a different conclusion; further investigation by competent men bent upon arriving at a correct result, laid before Congress, may lead us all to a different conclusion; but for the life of me I can not see any other effect from this short-haul and long-haul provision which the Senator from West Virginia and some of his friends seek to ingraft upon the bill than that it shall stifle the competitive forces of the country, and that not for the benefit either of local points.
Mr. CONGER. Will the Senator allow me to ask one question ? Mr. SPOONER. Certainly.
Mr. CONGER. The Senator does not deny or affirm that a charge twice as much for half the distance on the same road is either right or wrong, or that this bill in its further provisions would affect it in any way. That he leaves untouched. But the Senator dissuades me from voting for this amendment by saying that these great monopolies have the power to increase the proportion between the short and the long haul to the disadvantage of local points, and that because they have this terrible monopoly of power it is best to succumb to it and yield to it for fear of something worse. Now if I understand his argument, that is it; and if it is different I should like to have it settled.
Mr. SPOONER. My argument is this: I do not claim that it is fair to charge twice as much for half the distance if you state that abstract proposition; I claim no such thing; but I claim that if the railway company, in the case you put the other day, is perpetrating an outrage upon the people of Michigan, under this bill if it becomes a law it will rest in the power of the commission to bring the company “to book." I claim that without the short haul and long haul provision it will be, upon complaint, in the power of the commissioners, and their duty, to decide against the company. It will be the ty of the district court