of the producers and the manufacturers of the United States who live at intermediate points should be protected against an unfair imposition of transportation rates which may disadvantage them in the markets of the world, is the most manifest proposition and the most important duty which now rests upon us. The committee in this bill have provided simply that there shall be no discrimination in this one respect, that there shall be no greater charge for a shorter than for a longer distance by these lines. The amendment of the Senator from West Virginia only goes to that extent with a limitation; and when you strike out "the original point of departure" it leaves that to apply to the roads in general, and that I think is exactly where we ought to stand without any amendment which may limit it, which may render it doubtful, which may deprive it of its full effect in protecting the intermediate points, to that extent at least that there shall not be a greater compensation for a shorter distance than for a longer one. If we try that and find we can go further, certainly the interests of the country will demand it. The amendment of the Senator seems to be difficult to understand as to its precise effect on the great body of interstate commerce, which necessarily comes from intermediate and not from terminal points. It proposes to make the law read that all freight "from the same original point of departure or to the same point of arrival shall not pay a greater amount for a shorter than for a longer distance.” To me the effect of this language seems to be nearly if not exactly the same as the amendment of the Senator from West Virginia. There can not be, I think, a pound of freight on any railroad anywhere which does not depart from the same original place of departure, or arrive at the same place of arrival. Every station on every railroad is the same original place of departure and the same place of arrival for all the freight which departs from or arrives at that station, and the sum total of all places where freight is received and from which it is forwarded must embrace the total of the road's business; and the amendment of the Senator from Vermont expressly says that both for freight from the same original point of departure an the same place of arrival there shall be no greater charge for the shorter distance than for the longer; but I prefer the amendment of the Senator from West Virginia, because it is more easily understood. Judge Cooley, a distinguished man and a thoughtful observer, makes the following statement on the same subject: I shall venture to say, also, that there are in the country two distinct and very dissimilar classes of railroad men, one of which would manage the roads so as to make them legitimately useful to both the stockholders and the public, white the other embraces men who find their profit in the manipulation of stocks, whether at the stock board or elsewhere. The two characters may of course be combined in the same man, but the stock speculator is supposed to carry into his road management an inordinate and unscrupulous greed, and he stands in the public mind as the representative of all, and is assumed to be a man of great wealth, which, by tricks and extortion, has been taken from the pockets of the public, and requiring legislation to hold him in check. But it is matter of public notoriety that this second class has thriven rather from the handling of wrecks than of substantial properties, and that their business has largely consisted in possessing themselves of failing or bankrupt concerns and loading them by consolidation or otherwise upon better enterprises, to the ruin, in many cases, of those thus loaded. But the man who finds his profit in "systems into ruin hurled," where the stockholder and the public are alike sufferers, may feel little or no interest in better management than now exists. The injury inflicted on the country by such men can not be estimated. They should be regarded as the enemies of the people. Mr. President, before concluding my remarks I will call the attention of the Senate to the following observations of the committee on a subject of great importance which claims careful consideration: FICTITIOUS CAPITALIZATION. Another serious evil incident to the prevailing methods of railroad management, and one which is especially conspicuous in connection with the construction of unnecessary roads is fictitious capitalization, popularly known as stock watering. This pernicious practice has unquestionably done more to create and keep alive a popular feeling of hostility against the railroads of the United States than any other one cause. It has been the favorite device adopted to illegitimately increase the profits of these corporations and their speculative manipulators, and has been made use of to cover up and conceal from the knowledge of the public the returns really received from the capital actually invested. It has encouraged extravagance and corruption; has been made the means of swindling innocent investors out of millions of dollars; has promoted stock gambling, and, worst of all, has imposed a serious and continuous illegitimate burden upon commerce. In the words of Mr. F. B. Thurber," Excessive capitalization operates as a mortgage upon the industry of the country, and as a machinery for concentrating wealth in few hands wherever the power exists to impose rates for transportation which will yield dividends on watered stock." By reference to the statement of Mr. Poor (testimony, page 228), the extent to which this vicious practice has been indulged in will be better understood. Mr. Poor estimates that of the capital stock, bonds, and other evidences of indebtedness issued by the railroads of the United States, amounting in the aggregate at the close of 1883 to $7,495,471,311, at least $2,000,000,000 represents what is known as "watered stock." Others have pronounced this estimate too low; and attention is invited to the statements of Messrs. Poor, Sterne (page 79), Thurber pages 274 and 295), O'Donnell (page 46), King (page 130), for illustrations of the effects of this practice. As the committee is not prepared to suggest any method by which Congress can directly regulate such financial operations on the part of railroads chartered by the States, it is only deemed necesary at this time to call attention to the need of State legislation calculated to effectively check such speculative transactions. Mr. CULLOM. Mr. President, I think it is pretty evident that every Senator on this floor has made up his mind on this question. I hope we shall have a vote on the amendment. Mr. EDMUNDS. I wish to say a word about the particular question which is pending before the Senate. The paragraph that I propose to amend is a part of the bill. The question is whether we will make that paragraph perfect and complete before we vote upon the question of striking it out. That is the pending question, and no her. As the paragraph now stands as part of the bill-and we do not yet know that it will go out-it merely provides for equality and security in respect of people who are bringing things into the State of Ohio from some common point outside of it. If my amendment be adopted it will provide for the farmer and the manufacturer of Ohio-I take that for an illustration as the center of the country-as well as for the farmer and manufacturer of California east of San Francisco, the extreme western point, who wishes to send his goods to a common point of arrival; that is, one of the great markets. If that is not just, if it is not indispensable to the protection of the farmer and the home manufacturer who wishes to send his goods out, then I am incapable of understanding the effect of the English language or the effect and application of just principles to transportation. When we come to the other and the broader question of intermediate traffic from one local point to another, it will secure against excessive charges even then. But if you strike it all out there is danger, as has been stated by Senators, that in respect of transporting the great products of the West, the wheat, the corn, the pork, the bacon, the beef, and all that to the Atlantic seaboard or to the Pacific seaboard for exportation, you have reduced them to a point where the rate must be put up to the local rate or the local rate put down to a point where it will not pay as a local rate, and thus break up this exporting business altogether. That I do not wish to do, but I do wish to prevent a discrimination against the farmers of Vermont and Ohio and California and even of Oregon who wish to send their things to New York or to Chicago or to any of these great markets, and against their being obliged to pay more than they would have to pay if they sent them one hundred or a thousand miles west or east to start to go to the point of destination. That is the point of my amendment, and as long as this paragraph is in the bill the question is-and we can not avoid it-whether it can not be perfected by providing for the point of arrival as well as that of common departure. Mr. HARRIS. If the amendment of the Senator from Vermont shall not be agreed to and the amendinent made in Committee of the Whole shall be agreed to, this principle of limiting the right to charge more for the short than the long haul applies all along the line; but if his amendment be adopted and the amendment of the Committee of the Whole shall not be adopted, then a very different rule will prevail and the principle will not apply all along the line. I shall therefore vote against the amendment of the Senator from Vermont and for the amendment made in Committee of the Whole. Mr. EDMUNDS. You do not know that the clause will be stricken out. I ask for the yeas and nays on my amendment. The yeas and nays were ordered. Mr. GEORGE. I wish to ask a question. If the amendment offered by the Senator from Vermont should be adopted how will it affect the words proposed to be stricken out by the Senator from West Virginia? We first vote to put the amendment in, and how are those of us who think the amendment of the Senator from West Virginia is better than the amendment of the Senator from Vermont to get rid of this amendment after it is put in? Mr. EDMUNDS. The question then recurs, if my amendment be agreed to, on striking out the whole paragraph including what now is in the text and including mine, so that it is a perfectly fair way. Mr. HARRIS. The question will be on agreeing to the amendment of the committee as amended. Mr. EDMUNDS. That is it. Mr. ALLISON. strike it out. Mr. EDMUNDS. We can vote this amendment in, and then vote to Together with the other one. Mr. GEORGE. I think the amendment of the Senator from Vermont improves the bill as it now stands, but I prefer the amendment of the Senator from West Virginia. Mr. EDMUNDS. You can do that by then voting to concur with the committee in striking out the clause. The PRESIDENT pro tempore. of the Senator from Vermont [Mr. as in Committee of the Whole. The question is on the amendment Mr. HARRIS. I desire to say that if we vote for the amendment of the Senator from Vermont, those of us who prefer the bill as amended in committee can not afford afterward to vote against agreeing to the amendment made in committee. I am in favor of sustaining the amendment made in committee, striking out those words that confine the application of this rule to shipments made from the common point of departure. Hence I simply wanted the Senator from Mississippi and others to understand that the vote on the amendment of the Senator from Vermont would not enable us to defeat his general idea by then voting against the whole amendment as made in committee. Mr. EDMUNDS. Why not? Mr. HARRIS. Because I do not want to strip the bill of the amendment made in committee; I am for that. Mr. EDMUNDS. But you do not strip it of it; you then vote to concur in the amendment made in Committee of the Whole as amended. Mr. HARRIS. Exactly. Mr. EDMUNDS. Then you strike it out, but you do not know yet that you can do that; and you want therefore if you can not do it to perfect the paragraph and make it as good as you can, and then if it is not as good as you want strike it out. Mr. HARRIS. It is an amendment striking out. I concede the point. I was in error. The Secretary proceeded to call the roll. Mr. GEORGE (when his name was called). On this amendment I am paired with the Senator from Maine [Mr. FRYE]. Mr. GORMAN (when his name was called). On this amendment I am paired with the Senator from Oregon [Mr. DOLPH]. He was called from the Chamber temporarily. I should vote "nay "and he would vote "yea" on this amendment. I have, however, transferred the pair to the Senator from Virginia [Mr. RIDDLEBERGER], and therefore vote “ nay.” Mr. MCPHERSON (when his name was called). I am paired with the Senator from Michigan [Mr. CONGER]. I do not know how he would vote. Mr. MANDERSON (when his name was called). I would, if privileged to vote, vote "yea" on this amendment, but I am paired with the Senator from Kentucky [Mr. BLACKBURN]. I do not know how he would vote. Mr. MITCHELL, of Oregon (when his name was called). On all questions concerning the fourth section I am paired with the Senator from South Carolina [Mr. HAMPTON]. I do not know how he would vote. I should vote "yea" on this amendment. Mr. STANFORD (when his name was called). I am paired with my colleague [Mr. HEARST]. The roll-call was concluded. Mr. PALMER. My colleague [Mr. CONGER], if he were here, would vote "nay" on this question. I think he is paired with the Senator from New Jersey [Mr. MCPHERSON]. Mr. MCPHERSON. Do I understand that the Senator's colleague would vote "nay?" Mr. PALMER. He would vote "nay." Mr. MCPHERSON. Understanding that the Senator from Michigan [Mr. CONGER] would vote "nay" on this question, I vote "nay. Mr. FRYE. I am paired with the Senator from Mississippi [Mr. GEORGE]. Mr. COCKRELL. The Senator from Massachusetts [Mr. DAWES] was called away. I am paired with him. He would vote "yea" and I should vote nay" on this proposition. 66 Mr. HOAR. My colleague [Mr. DAWES] is absent in the discharge of his duty as a member of a committee of the Senate. Mr. FRYE. The Senator from Mississippi [Mr. GEORGE] is now in, and therefore I vote "yea." The result was announced-yeas 23, nays 24; as follows: So the amendment to the amendment was rejected. The PRESIDENT pro tempore. The question recurs on concurring in the amendment made as in Committee of the Whole. Mr. BLAIR. Is that the question necessarily now? The PRESIDENT pro tempore. It is. Mr. BLAIR. I desired to offer an amendment to the section before that was acted upon. The PRESIDENT pro tempore. It is not in order now. The ques tion is on concurring in the amendment made as in Committee of the Whole. Mr. EDMUNDS. I ask for the yeas and nays. The yeas and nays were ordered. Mr. INGALLS. Let the amendment be reported so that we may vote understandingly. The PRESIDENT pro tempore. The amendment will be stated. The CHIEF CLERK. In section 4, line 6, after the word "direction," the Senate, as in Committee of the Whole, agreed to strike out the words: And from the same original point of departure. The PRESIDENT pro tempore. The Secretary will call the roll on concurring in this amendment. The Secretary proceeded to call the roll. Mr. PLATT (when Mr. CAMERON'S name was called). The Senator from Pennsylvania [Mr. CAMERON] yesterday requested me to announce that he is paired with the Senator from South Carolina [Mr. BUTLER]. He did not state how he would vote on any of these amendments, but I wish to make the announcement of his pair for all the votes that may be taken on the bill. Mr. COCKRELL (when his name was called). The Senator from Massachusetts [Mr. DAWES] is still absent from the Senate Chamber, and I am paired with him. I should vote "yea" and he would vote nay.” Mr. PALMER (when Mr. CONGER'S name was called). My colleague [Mr. CONGER] would vote "yea" on this question if he were IS C- -26 |