as watering, and which represent nothing but the avarice and cupidity of the speculator.

The producer and the carrier are dependent upon each other, and neither can afford to cripple or embarrass the other in a legitimate business, but each has the right to demand justice at the hands of the other.

The other provision of the bill objected to is that which prohibits pooling contracts.

I have always understood and still understand the object and purpose of a pooling contract to be the destruction of competition-a contract by which competing parties agree upon rates and a division of the business, or the proceeds of the business.

If this be true, as I am satisfied it is, it brings us to the simple question: Is competition beneficial or injurious to the business of the country?

If beneficial it should be encouraged, but if injurious to the public we should encourage combinations and monopolies and invite them to take charge of and control the various branches of the business of the country.

Why not extend the principle of pooling to fix and maintain rates to the men who sell the common necessaries of life as well as to the men who sell transportation? If it be a good and proper thing in the one case I can not see why it will not be equally good and proper in the other.

But I have a more serious objection to the freight pools now in vogue than that which is found in competing parties agreeing by contract upon rates.

The freight pool provides for a division of freights in fixed proportions between the pooling carriers, and under such arrangement no shipper can control his own shipment.

He may desire to ship over a road that he knows to be solvent and able to respond in damages for any injury to the cargo resulting from the negligence of the agents of the carrier; but the pool, not the shipper, determines the road that shall have the shipment, and his freight may be against his will assigned to an insolvent carrier.

All the good that pooling contracts can accomplish is accomplished by publicity of rates and adherence to the rates so published; while the evils of pooling are avoided by allowing a fair and honest competition in open market to fix reasonable and just rates and allowing every shipper to control his own shipment.

Being satisfied that none of the many evils which have been predicted will follow the passage of this bill, but that great good will result to the public and to the carriers, I shall vote for its passage.

Mr. MCPHERSON. Will the Senator from Tennessee, who is a member of the committee of conference which reported back to the Senate a bill that is a direct contradiction of the expressed judgment of the Senate when taken upon the bill, in his attempt to show the character of the legislation and its effect upon the country, be so kind as to answer me now one single question? I should like to ask the Senator from Tennessee if, in his opinion, the natural and inevitable effect of the legislation of the fourth section of the bill will not be to increase through rates?

Mr. HARRIS. I am satisfied the effect of the bill will prevent what are known as rate wars, which sometimes reduce through rates to a ruinous point, and they ought to be prevented. But as to legitimate, honest, fair, and square through rates, there is not, in my opinion, a single feature in the bill which will necessarily increase them. Upon

the contrary, I think the probabilities are they may be lowered, but at all events they will be uniform and stable.

Mr. MCPHERSON. I am very much obliged to the Senator for that answer. He says if I understand him aright-and I think I do that the tendency of the bill will be to establish equitable through rates and prevent rate wars. The bill confers upon a commission of five members the determination of the question as to whether a rate is a reasonable rate or not. The railway company may fix such rate as they please, but the commission have the revision of that rate, and they may make it such rate as in their view is reasonable. This, I take it, the commission will do; in short, the power to make reasonable within a certain limit is the power to make rates.

Very well, having fixed that through rate, which must be a reasonable rate, how then are the intermediate rates fixed? The bill declares that the intermediate rates shall not exceed the through rate, but are not the intermediate rates subject to revision by the commission also? I wish to ask the Senator if the good people who demand this legislation would be satisfied that a rate fixed for a thousand miles and deemed reasonable by the commission would be accepted by the shipper as a proper and just rate for half the distance?

The inevitable result, therefore, is that unless every railroad company in this country goes into bankruptcy the through rate must be fixed at a point which will give a fair and equitable compensation. In other words, the through rate must be equitable and compensating to the railroads.

Now, let us apply it in practice. The Senator knows that, to-day, 90 per cent. of all the export product of this country is carried at rates which scarcely pay the cost of doing the work. That is the thing the Senator complains of that the through rates are very low, and that the local rate is made correspondingly high to pay dividends. If the local rate is made reasonable in the same sense that the through rate is made reasonable, the natural and inevitable consequence is that the through rate must be made greater.

Now, what is the result as to our export product? The Senator very well knows that the question of the possibility of exporting products from this country depends upon the market. Who controls the market? India controls the wheat market and the grain market of London, where all our goods are marketed. England has spent $500,000,000 in a few years past to move the grain from the wheat-fields of India to the seashore. It has given cheaper food to England, and it has compelled in this country a reduction in the cost of transportation which was never deemed possible by any people.

commerce.

In 1873 the rates were 2 cents a ton per mile. In 1886 they were reduced to half a cent a ton per mile, and without any restrictive legislation whatever, but solely owing to the demands and the nature of The plan which the railroads have adopted to charge no more than the product would bear has moved the grain from the great grain fields of the West and put it in the London market in competition with India. Not to have reduced that rate would have been to put your corn in your stoves for fuel in the West, and leave India withont a competitor in the London or other markets.

Mr. CAMDEN. Will the Senator explain one point?

The PRESIDING OFFICER. Does the Senator from New Jersey yield to the Senator from West Virginia?

Mr. MCPHERSON. Certainly.

Mr. CAMDEN. The product for export is raised in all the States

from the seaboard to the great West.

Take a farmer in West Virginia who raises wheat for export, take a farmer in Ohio who raises wheat for export, take one in Indiana who raises wheat for export, take one in Illinois, and so on until you get to Omaha. The bill does not ask or require railroads to charge any more to the far shipper than it does to the near shipper. Is there any reason why in regard to the product of all these several farms, being carried fifteen hundred or two thousand miles to reach the markets of the world, the near shipper should be discriminated against in favor of the far shipper, when they are all sending to the same market and for the same export purpose? It occurs to me that the fact is lost sight of that there are other sections of the country which make up the amount of product for export besides the border and the far Western States.

Mr. MCPHERSON. That is exactly what I want to aid the Senator from West Virginia and his constituents in securing. I say that no intelligent or wise commission would say that a rate from West Virginia equal to that charged from Chicago would be a reasonable rate. Hence it is that I say the natural and inevitable consequence must be that the bill must increase through rates in order that there may be an equitable and a reasonable rate charged for the shorter distance. Mr. CAMDEN. I think the bill will increase through rates. Mr. MCPHERSON. That is exactly the point.

Mr. CAMDEN. It will increase them from the very fact that the through rates have been too low in proportion to local rates.

Mr. MCPHERSON. Then, so far as I have gone there can be no argument between the Senator and myself. He admits that the en

forcement of this policy will compel high through rates.

Mr. CAMDEN. Let me ask the Senator a question. There is nothing in the bill which will require railroads to do otherwise than they are doing now. The bill does not prohibit them from charging as much for the short rates as they do for the long. But that is outside.

Mr. MCPHERSON. No; but you give the commission the power to fix rates. It is not only a power that is placed in their hands, but it is a responsibility which they must exercise.

Mr. CAMDEN. I beg pardon.

The commission is not given the power to fix rates. I contend that Congress can not give to anybody the right to fix rates; but the commission can decide whether a rate is reasonable or unreasonable. That is the only point in the creation of a commission.

Mr. MCPHERSON. Very well; let me illustrate. president of a great railway corporation

Mr. A is the

Mr. CAMDEN. Let me add one word further in reference to that point. The commission has no power to enforce and control that question. Their decision is not final and they can not impose any penalty. Mr. MCPHERSON. I think the duty of the commission is to make rates reasonable. If a rate is fixed for 500 miles which is the same rate as that fixed by the commission and declared reasonable for 1,000 miles, the intermediate shipper would have a right to complain to the commission. The commission is vested with quasi-judicial power. the shipper fail to secure his rights from the commission he would make an appeal to a higher tribunal, the court which the bill provides for, and the natural consequence of that would be that no court on earth could decide that the shipper should pay the same rate for 500 miles that was paid for 1,000 miles, and still declare both to be reasonable. Mr. CAMDEN. I ask the Senator whether that is not the law now.

If

If a shipper should resort to the courts would he not get the same decision under the law as it stands now that he would under the bill?

Mr. MCPHERSON. I understand that there is no law now except the law which the carriers make for themselves. You propose to make a law, and you propose to put the power in the hands of five commissioners to change a rate which is equivalent to fixing the rate. Now, let us see about a reasonable rate. For instance, the president of a railroad, or a number of them, in the city of Chicago declares that a reasonable rate shall be a rate of $100 per car-load of 10 tons from Chicago to New York. Now step in the commission, and they have the power under the bill to declare that that would be an unreasonable rate. Why an unreasonable rate? Because I take the evidence that you have given to the world here for the past five years, that you have been carrying like cargoes of freight, 10 tons each in a car, for $25 from Chicago to New York.

I wish to know by what right you charge a fixed rate of $100 a car for a like service which you have been giving for $25 a car.

When that rate is fixed by the railroad company, the commission say, no, it must be reduced. The railroad company have the right to appeal to the courts. What would the courts say? You are entitled, as a reasonable rate, to the cost of doing the work plus a fair compensation for the use of the capital invested in the plant. Now, what would that be? That would increase the through rates to a point that the through rates would be paying a share and part of the general fund of the railroads which was applied to the liquidation of debts and paying divi

dends.

Your through rate is fixed and your local rates must be fixed from it. I say that the inevitable result would simply be to increase through rates, and if the Western producer can stand that in the face of present competition then they can stand almost anything.

Mr. President, while I am on my feet there is one other point which I should like to ask the Senator from Tennessee to explain. I understand from him that there can by no possibility be any such thing as an invidious distinction between railroads under the operation of this bill. Let me cite an illustration to the Senator and ask him to solve the difficulty sure to confront him. The city of Buffalo is at the eastern end of Lake Erie, which is the terminal point for the great lake transportation of the West. Cargoes of grain come from different points of shipment in single vessels, by single owners, to Buffalo. That grain is discharged into a single elevator in bulk often and always. That is the end of the transportation so far as the lake is concerned and so far as the carrier to Buffalo is concerned.

At Buffalo this grain is met by six great lines of railroad, reaching Baltimore, Philadelphia, New York, Boston, and Montreal. The shipper from Buffalo elects to take the line of railroad which will reach any of those points of shipment, depending as it will be largely upon the best rates of transportation obtainable from those seaports to London. This grain at Buffalo is the original point of shipment in its relation to those six railroads, as any point in the United States can be. Two of those roads are Canadian roads, lying within the Dominion of Canada. and beyond our jurisdiction. One of them is a State railroad, running within the borders of a single State, from Buffalo to New York. fore, we can neither fix through rates nor local rates upon any of these They are outside our control under this bill.

roads.

There

Now, what of their competitors? Three lines of road, the Erie, the Delaware and Lackawanna, and the Lehigh Valley are interstate rail

roads laid upon the territory of three States. In the first place, the commission from Buffalo eastward will make the rate from Buffalo reasonable. That determines the rate from all intermediate points. As to the other three lines it can not say a single word. They may make the most unreasonable rate imaginable. They may pursue the present policy pursued by railroads, which is simply to take the product for what it will bear. The through rates from Buffalo eastward by the Canadian lines and the New York Central are beyond anybody's control except their own, and whatever they may do touching a through rate it does not interfere with their local rate. Hence they may drive the three interstate railroads out of the competition at Buffalo.

First, I say that the Canada railroads would have the power under this bill to take the products at Buffalo and carry them to Montreal, and thus oppress the three interstate railroads on this side to such an extent that the securities of these roads would depend on the will of a foreign corporation; their securities would become the foot-ball of Wall street, and the quotations or values from day to day be dictated from Canada. That would be the practical operation of it, and without the proviso in the fourth section would destroy half the railroad property in this country. If, however, the commission shall find in this proviso a grant of power to them sufficieat to meet such a case as I have described and to meet all cases when its exercise is needed-and I am sure this proviso fairly construed goes this far-and believing that the commission will apply this proviso power unsparingly, I am content to give the section a trial.

Mr. HARRIS. The proviso of the fourth section confers upon the commission full and complete power whenever application is made to the commission and the commission has become satisfied after investigation that this is an exceptional case under exceptional circumstances which require that the railroad in question should be relieved from the general rule prescribed by the fourth section.

Mr. MCPHERSON. Very well. Then, I take it, the commission would find this an exceptional case and would relieve these three through railroads from the general rule. Having done that, then what becomes of other rivals, the Pennsylvania, the Baltimore and Ohio, and other great lines which would not be relieved because the special case did not apply to them? They would be under the general interstatecommerce law, while the commission would have relieved the three interstate railroads from Buffalo, and they would be outside the interstate-commerce rule.

No, sir, it will not be possible to conduct the commerce of the country under the fourth section without the fullest exercise of the power granted in the proviso. What a commentary upon this Senate upon the ill-advised, reckless character of the legislation we make, that a law must contain the power within itself to annul or make void its enforcement.

Mr. GEORGE. Will the Senator allow me to ask him a question? Mr. MCPHERSON. Yes, sir.

Mr. GEORGE. I understood the Senator to say a while ago that the case of some carriers might be special owing to peculiar circumstances. If that be true what harm would occur if the Pennsylvania Railroad and the other railroads engaged in through travel were not interfered with? They do not lose anything by it.

Mr. MCPHERSON. The Senator will understand in that event they would lose all their through traffic. That, as a matter of course, a line of railroad between given points, say, the Pennsylvania Railroad