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portation on that basis that a man may know for a week at least what he is going to pay for his freight.
Mr. GORMAN. All the best minds of this country who have examined' this question have come to but one conclusion, that it is not possible to regulate the through rates so long as the Canadian competition exists, except by meeting cut by cut, competition by competition on our side and on theirs. From Chicago until the Canadian road crosses the Detroit River, the line is upon American soil; but the moment it crosses the Detroit River and enters the Dominion of Canada we have no control over it; and there is not any legislation that can be devised that will enable this country to control that road except the branch of it within the limits of our own territory. To-day our roads are able to compete with them in price, and we shall always be able to compete with them. We have the shorter line, we have a better climate, and we are able to compete with them if we are left unhampered. But if the amendment of the Senator from New Jersey is adopted, there is not a railroad man in the United States who does not know that it would destroy the American roads. I do not believe I do the Senator from New Jersey injustice when I say that he offers the amendment not with that view, but to emphasize his opposition to what has already been inserted in the bill.
Mr. SEWELL. Will the Senator allow me a word ?
Mr. SEWELL. I offered the amendment in connection with a series of amendments based on the bill as reported. The Senator from Mary.. land voted for the amendment offered by the Senator from West Virginia, which practically places the railroads of this country in such a condition that the roads east of Chicago, known as the trunk lines, will, rather than sacrifice their local business, say to the merchants and shippers of Chicago, “We will not take your freight, except on a basis where we can he left to regulate our local rates profitably.” That will not only apply to Chicago, but it will apply to all the great competitive points in this country running from Duluth on the north to New Orleans on the south, and it will apply more to the roads running from here in the direction of the southwest to New Orleans, the Gulf coast, and Atlantic seaboard than it will even to Chicago.
The great lines running to Chicago have been long enough in existence and mostly running through a country that has very large mining or manufacturing interests which have been built up so that there is a local trade to that extent that the companies can say to the people west of Chicago, “If you choose to hamper is with any enactment of this kind, we prefer to attend to our local business and let you get your grain to the seaboard by water or in any other way you can. In other words, when rates get down to the point that they have done, these roads can not possibly exist, and I say it knowingly if that rule is to govern that the through rates are to be the guide for local rates from point to point.
The Pennsylvania Railroad is probably an exception to the general trunk lines. The New York Central probably comes next. Both these great corporations have given a great deal of time and attention and have in many instances spent a great deal of money for the purpose of building up what they considered the great interest of their stockholders, the local business. Wherever it was possible to encourage a flour-mill or a rolling-mill or any great industrial work to come on the line they have done it.
The Pennsylvania Railroad Company has, under her contract with the State of Pennsylvania when she took the public works of that State, agreed that the rate from Pittsburgh to the Delaware River should at no time be greater than the rates from the points west of the Delaware River. Therefore that corporation has so fixed its business, so encouraged its local traffic in the great underlying strata of coal and iron over which its road bed runs, and the great industrial establishments employing thousands of men that have grown up in Pennsylvania, that it is enabled to live entirely without any risk of competitive business from Chicago, which now amounts to about 10 per cent.; and if the other corporations which have not these great advantages, which have not the coal and iron of Pennsylvania, were obliged to carry their way business to any point between this side of Chicago and New York, the Lake Shore, the New York Central or Erie, or any great competing line, if they were obliged to do it, would simply have to say we can not do it.
What will be the result? The result is to tear down the fabric you have been building for fifty years. You have demonstrated to the great West that you may transport a cheap class of freight 2,000 miles to the seaboard. You have built up, commencing with the Illinois Central land grant, the States of Illinois, Wisconsin, Iowa, Kansas, Missouri, and all the other great States of the West by what? Many of their inhabitants went there by wagons, but the great majority of them were attracted there by the railroads, by the transportation facilities, by being able to get their produce to market, by being able to have some profit after they have paid for the transportation.
If the railroads say to the great grain depots of Chicago and Saint Louis, “If we are to be governed by this rate for our way freight we prefer not to take it,” where do you leave the people of the West ? If you insist that the through rate shall in all cases govern the way rate it will result in the great cereals being shipped entirely by water, the elevators and their owners being transferred to New York, Baltimore, Newport News, Philadelphia, Boston, and Portsmouth in the United States, and Montreal in Canada.
Mr. GORMAN. I was not discussing the long and short haul. I was discussing the amendment of the Senator from New Jersey as to the notice to be given of the reduction of rates of railroad companies; but I can not refrain from again calling the attention of the Senate to the statements of two of the most distinguished railroad men in this country: one Mr. Fink, at the head of all the railroad pools, who is regarded by the railroad people as authority on this question, and the other, Mr. Blanchard, of no less distinction, once vice-president of the Erie Railroad.
Mr. Blanchard, in his statement on page 151 of this report, states, speaking of the long and short haul:
Next take interior interstate commerce, originating from a point illustrated by Columbus, Ohio, and destined, if you please, to Pittsburgh, Pa. The modern and better practice of the railroads is, that although there is nothing between those two points limiting the charges of the railroad companies except the respective State charters of the railroads, not one-fifth of the rates authorized by the charters are in effect charged; and in another respect, it has not been the case in ten years that the tarift from Columbus to Harrisburg has been higher than the tariff from Cincinnati to New York. I say the better practice of railroads, because I think public agitation has probably had good effect in this respect. It has, however, been greatly aided, and the result is much more due to the economies of steel rails, straightened lines, and lower grades, greater loads carried per car, improved ballasting, the increased weights of locomotives and trains, and all the effects of railroad competition, inde. pendent of the water competition I have referred to, than to any other causes.
Going on to show that the practice of the railroads themselves, where they had an intelligent view of their own interests, was never to charge more for the short than for the long haul, Mr. Fink is equally emphatic on the same point; and I say to my friend from New Jersey that there is scarcely a railroad man in this country of intelligence who does not recognize the rule as a proper one, with the exceptions in this bill that in certain specific cases a different rule may prevail.
Mr. SEWELL. I have before me here the rates from New York by rail to certain points in the South and Southwest:
The short rates are more than the long ones. If the amendment of the Senator from West Virginia becomes the law, the roads which are now charging to Atlanta $1.24 will be obliged to come down to 70 cents. And let me say that there is not one of them to-day, and the Senator from Georgia will bear me out, that is paying any dividends.
Mr. EDMUNDS. Do they make or lose anything by the New Orleans rate?
Mr. SEWELL. They make in this sense, that if they have cars there and they can take a lot of stuff and load it and send it North, they make more than they would by sending empty cars.
Mr. EDMUNDS. Do they make anything as a general rule ?
Mr. EDMUNDS. If they do they are evidently making too much at Atlanta and those inside places.
Mr. GORMAN. It will be remembered that Mr. Fink verified the statement I have made. The great trouble with the transportation interest is that there is no stability in rates. He maintains that there would be no substantial trouble in the question of the long and short haul if there was stability. When the pool was inaugurated he maintained that the local rates between Chicago and New York were maintained on the proper basis; and then the chairman of the committee put him a question which I will read with his response:
The CHAIRMAN. While you are regulating freights on a road from here to Chicago, for instance, you begin at Chicago to charge so much from there to New York or from New York to Chicago; and you do the same thing as to every other point where there is another road that comes this way? You let each one of the roads out and carve at every station where there are not two roads, do you?
Mr. FINK. No; there are certain rules upon which tariffs are made from local points. After a rate has been established from a competing paint, say from Indianapolis, it being 93 per cent. of Chicago, then the rate from a point beyond Indianapolis (if it is not a competing point, but a local point on any one of the various roads that run to Indianapolis) is added to the through rate. The local rate, which is generally for short distances, can only be charged to the point where the freight reaches the first competing point The roads can never do more than that. And bere I would call your attention to this fact: that high local rates can only be made for short distances. For example, I suppose in Illinois there is no place more than 10 or 20 miles from some competing railway station. In such a case the local rates could only be made high for 20 miles. As soon as the freight strikes a competing point, and is intended to go beyond that point, it gets the advantage of whatever low rates may exist from that point. The local shipper has the full advantage of competing rates.
The CHAIRMAX. Why do you not make the tariffs as though there were no competing points? In other words, if you charge so much from Chicago to New York, and there is a station 10 miles this side which is not a competing point at all, why do you not say that the charge from that point to New York shall be so much less, and control that charge as well ?
Mr. Fink. It is a rule that this freight should not pay more than from Chicago
That is the station 10 miles this side of Chicagobut you can understand that it may cost more to take freight from a point 10 miles east of Chicago than from Chicago. But, nevertheless, the roads generally follow the rule not to charge more.
That is all their own action, as Mr. Fink states. All the bill does is to say that that shall be the rule, “You shall apply the very rules you have laid down in the management of your own roads to the whole public and not make it an exceptional case."
Mr. EDMUNDS. That, I may suggest to the Senator from Maryland, though it is not the rule of the bill, can be made so if the amendment of the Senator from West Virginia should not be agreed to in the Senate. The bill as it stands only provides for a common point of departure and not for a common point of arrival. So in the case supposed the rate might be a dollar a ton, for instance from Chicago to New York, and it might be $2 a ton from a point 10 miles east of Chicago on the same line and going by the same train to New York.
Mr. HARRIS. Not as the bill stands amended.
Mr. EDMUNDS. As the bill stands amended, it does not, but as it stood reported. Now, if you add to the clause that was stricken out in committee the common point of arrival as well as the common point of departure, then you have got the status that nothing can be charged greater for carrying goods to New York from any point on any line east of Chicago than you may charge from Chicago itself. And of course I only take that as an illustration. It applies all over the country and in all directions, west as well as east. But if you strike it all out and say that every local rate everywhere shall be no greater than the through rate everywhere, there is a great deal of force in what the Senator from New Jersey has said in respect of going too far in the opposite direction.
Mr. GORMAN. I do not believe that it is proper to hamper the railroads to too great an extent; but there are innumerable cases like that stated by the Senator from California where a shipper from New York is compelled to send his goods through to San Francisco and other competing points 300 miles on the same road beyond the destination and pay the local charges from San Francisco back to the point of destination. Is that an unusual case? There are hundreds of cases on the railroads that enter Washington city where through rates from Chicago are paid and the goods sent back 150 and 200 miles toward the Ohio River paying the local rates back. That is an outrage which is committed by all or nearly all the railroads. It is a practice that they are all engaged in, and it is impossible to control them except by national legislation.
The Senator from Kansas in alluding to the action of the Senator from West Virginia, made the statement that this short-haul amendment was practically in the interest of one road, the Baltimore and Ohio Railroad. If the Senator had consulted a railway map he would have seen at a glance that the Baltimore and Ohio Railroad is the one road above all others of the trunk lines that is mostly affected by this very amendment. It has not 100 miles running continuously in any one State between here and the Ohio River. It passes through Maryland into West Virginia and back to Maryland again and then into West Virginia, so that nine-tenths of all its local trade is interstate commerce, whereas the great trunk lines of Pennsylvania and of New York, except the Erie, pass through one State for three or four hundred miles, and all that great traffic is local and not to be controlled or affected by the provisions of this bill.
So the Senator from Kansas was entirely mistaken, and I regretted exceedingly to see the turn this debate has taken-that it should be attempted to make the impression here that any local interest was being considered in this amendment or in framing the bill. I regretted that my friend from Iowa should make an appeal to his Western friends that this provision was against the interests of the great West. Nothing can affect the interests of the great West as long as you have independent lines competing with each other and affected by the Canadian roads and by the water lines.
Mr. McMILLAN. Will the Senator from Maryland permit me to call his attention to the fact that the Senator from West Virginia took the ground distinctly that the effect of his amendment would be to prevent transportation from the Mississippi Valley at a less rate than it could be done from Ohio and West Virginia, and he said distinctly that that was all the Mississippi Valley could ask, that they had no right to ask to have their freight transported from the Mississippi Valley to the Atlantic coast for a less råte than freight could be transported from West Virginia or Ohio. I think it is a very unsound proposition. If we have in the Mississippi Valley advantages which enable us to transport our grain to the Atlantic coast cheaper than you can transport it from West Virginia or Ohio to the Atlantic coast, then you are depriving all that region of country of the benefit of competition and you are hampering trade, you are hampering commerce, and depriving the commerce of the Mississippi Valley of the benefit which it naturally possesses.
Mr. GORMAN. Mr. President, I happen to hold in my hand a statement prepared by Mr. Fink, showing the rates of freight between the cities of New York and Chicago, and I desire to say to my friend from Minnesota that all the rates of freight from every point nearly in the West, except the extreme point of the Pacific roads to the Eastern seaboard, are governed or made by the rates from Chicago to the city of New York.
The rate of freight in 1865 of $1.60 on 100 pounds from Chicago to New York city, rate had run down in 1884 to 12 cents per 100 pounds. Now
Mr. EDMUNDS. With the permission of my friend from Maryland I move that the Senate do now adjourn.
The PRESIDENT pro tempore. Before the motion is put the Chair will submit two bills from the House of Representatives.
Mr. CULLOM. I desire to remind the Senate that by unanimous consent this bill and the amendments to it are to be disposed of tomorrow.
Mr. EDMUNDS. Decidedly.