pooling are very vague and general. I acquiesce in all that may be said in regard to unjust and unfair discriminations. There shall be no improper discrimination between the same classes of freight under like circumstances. That affords a wide margin of difference. However, I am anxious to arrive at something practical. I am anxious to have the Senate submit to the country the idea in the form of law that transportation must be made as cheap as is consistent with the proper remuneration of the honest capital honestly expended in the construction of these great highways.

In these days, when there is a spirit abroad in the country questioning the expediency of the systems of economy which permit and encourage accumulations, which reward individual activity and enterprise, when the power of combination is so great in all the elements of the country, when public opinion can so easily, in classes or sections of the people be concentrated, and there are so many and powerful incentives to a public opinion adverse to the policies which encourage individual activity and enterprise, which have been the great factors in our success heretofore, I am anxious that some rule shall be adopted which will be just to both, which will protect capital, which will protect individual enterprise and a reasonable accumulation, and at the same time bear upon the great mass of the community with great lightness, impose no additional burdens and make transportation, which is the great avenue for the return of compensation to the labor of the country, as cheap as is possible.

This can only be done, not by prohibiting any and all discriminations, but by severely prohibiting improper discriminations, discrim inations which are not in the interest of reducing the total cost of transportation, and the terms in which this should be done will have to be very carefully considered. It will produce discrimination, unequal and oppressive discrimination, to say that all freights shall be carried alike. It will produce it to say that there shall be collected from the people of the country, as a reasonable rate, money to pay for that which has never been used. It may produce it by fixing one arfreights, whether of one value or another, shall not, when passed from one State to another, pay more for a shorter than a longer distance, however reasonable it may appear. If it were possible to apply and enforce a law that there should be no agreements between railway companies either to divide earnings or to

time impose greater burdens on the country.

a

You can not avoid discriminations in any other way than by prescribing general principle, first, that no money shall be taken in rates or charges upon the interstate commerce of this country to pay for anything but the reasonable and proper cost of the operation of a neration for the money actually expended. You can not reach the result in any other way; and when you come to apportion these elements between the local rate and the freight at the terminal points you must do it, first, upon the principle of compensation or payment of the actual cost of transportation of the thing transported, whatever it is, and, secondly, that it shall bear, according to its value in the markets of sale and delivery, its proportion of the compensation, of the interest, of the

fixed charges,

with it.

or whatever phrase you may choose to use in connection

Living in a terminal State, while I am in favor of going much further than this bill goes, while I am willing to vote for a law which shall de

clare that the rate is only reasonable which shall be imposed to pay for money actually and not falsely pretended to be used, while I am willing to vote for a law which shall prohibit, under penalties, unjust discriminations, which shall make all discriminations subject to the authority and supervision of the National Government or officers appointed by it, while I am willing to vote to define that discrimination in the clearest and most positive terms, while I am entirely opposed to making what is called local business, or short hauls, or the points which are intermediate between terminal points, or which are non-competitive pay the cost of transporting the products of the terminal countrieswhile in regard to all this class of business I am entirely opposed to any and every system which shall make them pay the cost of transporting through business, and am willing to vote for such provisions, I think they should be modified and clearly addressed to the question, and that in cases where it is the interest of the local business that through freights should be carried at smaller rates, it ought to be so allowed and so provided for.

I submit the question to Senators who have considered this great subject, what advantage is it to the men living along a line of road that there shall be no through business over it, although the through business carried over it should be done at smaller rates than the cost of transporting any part of its business over the shorter line? Of what advantage is it? Does not every pound of through business add that much to the profits of the road? Do not the greater profits of the road enable it always to decrease the rates on local business? We are not inquiring now what they do, or what their practice is, but what the necessary economy in the matter is; what the effect of additional business is; whether a railroad company will not be enabled to reduce local freights by having through businsss that will pay, although it does not pay as much for the longer distance as local freights do for a shorter distance. The only real object or benefit in such case is that both through business and local business shall, in the aggregate, pay their reasonable share of the expense and profit.

If that be so, it would be within the province of law, in imposing a reasonable rate, to say that the reasonable rate should be fixed according to the gross amount; that it should not exceed, but go down in a descending scale, according to the profits received. But it is not true as a proposition that the local business, the intermediate country, the short haul, is benefited by excluding, by any means whatever, the through business, no matter at what or how small a cost it may be carried over a road.

Mr. GEORGE. If carried at a loss?

Mr. CALL. The question whether it is carried at a loss will involve several different elements. The specific article may be carried at a loss in the individual cases. The bulk of the articles may not be carried at a loss. Of course, if in general terms all the through business is carried at a loss then unquestionably the local business has to pay it. But you provide a rule by which you say that in all cases this through business is carried at a loss to the injury of the intermediate shipper, the local man, because he has to pay more for carrying it 10 miles or a hundred miles than the through business pays for carrying it 500 miles or the whole distance.

I say there is no foundation for that proposition. It is unknown. It is one that can not be sustained. It rests upon quantities and elements which nobody can ascertain and nobody can determine, but it is peculiar to each particular case.

I desire to say that it is no remedy for these evils. I desire to say that it is no triumph to those who desire that the interstate commerce of this country shall be regulated and that transportation shall be made as cheap as possible, with a just system of economy in the operation, maintenance, and compensation for money actually and honestly used in the construction of these highways. For myself, I do not want any half-way or halting measures on this subject, nor to be drawn away by them from the great fact that we are only providing methods by which this vast amount of over three thousand millions of dollars, for which no consideration and no value has ever been given, shall be freed from the labor and products of the people with the least amount of inequality and oppression.

Now, Mr. President, we come to another proposition, which I think is the great crowning feature of this bill, and which receives my most hearty commendation. With so powerful an agency as this the abuses of power by which it has created all the great evils which the Senators from Kentucky and Texas [Mr. BECK and Mr. COKE] referred to in their speeches, with a power of collecting greater revenues than the Federal Government, with its nine hundred million or its one thousand million dollars of annual tax levied as its gross earnings upon the labor of this country, upon the food and clothing of this country, upon the comforts of the laborers of this country, with its vaster power of annual taxation than all the States possess, with its between three and four thousand million dollars of fraudulent debts, fraudulent not in the terms of the law, but in fact issued upon false pretenses, because it has the power to tax the people for it. With this vast power it is evident that no citizen can obtain any right by litigation. Assuming, which is not always the case, that the judge is incorruptible; assuming that he is not influenced by the political, the social, the professional considerations which those who represent this great power are able to cast around him; assuming that he is not mercenary and venal-and there are many cases, I am afraid, in which the facts would justify condemnation and conviction of persons occupying this high station in these relations; assuming all that to be true, supposing the judge to be honest, incorruptible, wise, and learned, our system of law, and any system of law, and every system of law belonging to modern times will enable natural or artificial persons of vast wealth to maintain an endless litigation.

What is the citizen to do when deprived of his right, when his property is taken from him, when excessive rates are imposed upon him. when an interest in his neighbor's business is taken by a great transportation company, his freights delivered at lower charges, when his town property is destroyed by the building of another town, by establishing a depot, because they have been paid to leave his place of business and the natural place of delivery of trade and build their depot elsewhere two or three or four miles from the town, as I have seen done, and as is frequently done? What is he to do? Sue in the courts? Such a suit is useless; it is beyond his means. He is entirely at their mercy; he has no rights. Very often the men who own the stock of these corporations, broad-minded, liberal-minded men, merchant princes of finance and commerce, have no knowledge of the manner in which these roads are operated. The shipper is completely at the mercy of the management of the road. How is he to be protected? The bill provides, I think, a great remedy. It provides that the power of this great Government, that the power of the people's President, their executive, their representative, directly responsible every four years to them and amenable to their servants in the Senate and in the House

of Representatives for his official conduct, shall be charged with the duty of defending and prosecuting and protecting that right of the humblest citizen.

I regard this as the great and crowning feature of the bill, the appointment of these commissioners, themselves amenable to the President, the President amenable to the people for their official and personal responsibility in the administration of this great trust, the greatest and most important possessed by his office in time of peace. He is charged with the duty, under this bill, of protecting the humblest citizen, and I commend the bill in this respect; it excuses many defects and many shortcomings.

I am inclined to vote for the bill notwithstanding the objections I have pointed out, but I would prefer, if it were possible, that it should be further considered by the conference committee. I would prefer that these provisions should be modified. I believe that it is true of this long and short haul provision that it is useless, and perhaps injurious, and that it is a mere definition of what is a reasonable rate. I think that provision of the law (although the commission has the right to supersede it, to set it aside in cases where it presses hardly) might operate injuriously at times.

Take, for instance, the State I represent. There are many lines of road having the same terminal points of departure and arrival connected as lines with other lines, the Coast Line, the Kenesaw Line. I see the enterprising Baltimore and Ohio Railroad Company have just opened a line now by the Kenesaw route into Florida and Louisiana.

Take these different lines of road diverging and traversing different distances, at a very great difference of cost of operation, and very great difference of cost of construction, some going by Pensacola, some going by Macon, Ga., others going by Charleston, Savannah, Richmond, Washington, and following the coast line, others going by Cincinnati, the Pennsylvania Central, and the Baltimore and Ohio. These different lines of road are all used by our people. They make their rates of freight, in one sense of the word, under a certain degree of competition; that is, they know that if they do not agree upon some basis which is reasonable to the people, one or the cheapest line will be preferred. But this provision of the law in regard to long and short hauls may place the whole traffic in the power of the shortest line.

So far as pools operate to prevent a reasonable rate on either or all of these several lines they are very objectionable. I am willing to legislate that they shall not combine for any unreasonable rate that would be wrong, but what do we do when we say now that none of these lines of roads shall impose on this interstate commerce from the State of Florida coming along any part of that line a higher rate for the short distance than for the long one? I do not know, you do not know, whether that specific sum will be the sum that will enable some of those lines to do any part of the business. You do not know but that the shortest line may be enabled to do the carriage profitably under this rule and that the longer lines can not.

Representing a terminal State, approving the policy of the bill, the spirit of the bill, objecting most earnestly as I do to the implied legalization of the bill of $3,000,000,000 of fraudulent debt upon the people of this country and $300,000,000 of annual taxation for nothing, objecting to legalizing this enormous and oppressive taxation upon the people, I still approve the policy, the great features of the measure, and expressing my dissent upon these subjects I now expect to give the bill ultimately my support; but I should prefer and I should vote for its

further consideration upon these points by the committee of conference if there was or shall appear to be any reasonable probability of a modification of its provisions, and of action at this session; but I am satisfied that every interest of the people and of the railway corporations themselves demand that the power of Congress should be asserted and exercised over them in respect to the interstate commerce of the country. I have omitted some quotations which I have here, and I simply ask the privilege of inserting them.

FROM "THE RAILWAYS AND THE REPUBLIC," BY J. F. HUDSON. The effect of stock inflation upon the financial interests of investors is more direct and vast than its bearing upon the shipping interests of manufacturers, merchants, and producers. Although the latter is our special subject in this Work the importance of the former question warrants this sketch of the financial evils of fictitious values. In fine, this practice of creating securities in excess of actual values has, by one method or another, imposed upon investors a volume of fictitious stocks and bonds more than double the amount of the national debt. According to the estimate of the most widely acknowledged statistical authority upon railways, through the methods of sale or hypothecation, $3,700,000,000 of purely paper values have been sold to the public.

The creation of these fictitious securities has sometimes been so open and notorious that the successful sale of them seems to indicate eagerness to be cheated on the part of the public. In other cases the methods used have been 80 secret and so plausible that it has been almost impossible for the legitimate investor to detect them. In the end the false values have been so mingled with the real, and the fraudulent investments made to bear so close a resemblance to the honest ones, that at the present time the greater part of the railway securities of this country are clouded by the suspicion of illegitimacy. In the presence of this mass of falsehoods and pretenses, imitating real investments, it is not strange that a period of public credulity should be followed by a period of general suspicion, when none of these doubtful investments are trusted; but it is strange that another period of credulity should come, allowing new inflations and fresh issues of fictitious capitalization. Suspicion is the natural and legitimate condition while such practices are possible.

The gigantic wrong upon investors, perpetrated in the creation of this $3,700,000,000 Offictitious railway investments, is one of the most serious and unanswerable counts in the indictment against the railway kings. Besides this imposition on the confidence of the public, the practice of stock inflation reacts disastrously upon legitimate railway interests. The loss which this wanton violation of public confidence inflicts upon the railways themselves, is apparent in the rate of interest which they must pay on their bonded debt. If the bonds of the railways were confined to one-half the actual and honest cost of construction, they Would be eagerly sought for at 4 per cent.; and in that case $72,000,000 would have sufficed to pay the interest charges in 1884. This would have left from the net earnings of that year $196,000,000 as net profits instead of the $91,000,000 realized under the rule of inflation; so that the second count in the indictment against stock inflation is that it has for several years inflicted an annual loss upon the honest share-holders of the railways exceeding a hundred millions a

year.

*

Although the charge was made against the Reagan bill that this section requires rates to be strictly in proportion to distance, every leading advocate of railway reform recognized the folly and uselessness of such requirement. The provision as to long and short hauls in the Reagan bill is the best that can be done by that kind of regulation; but its failure to afford any remedy for a vast multitude of discriminations shows the weakness of the scheme. These inequalities must be left unchecked until legislation finds a way to give free play to the laws of trade, which will determine rates with unerring justice.

To show how easily an arrangement with much more than the power of an agreement or pool may be made, I read from a speech of Hon. WILLIAM M. SPRINGER a statement of what was actually done:

THE PENNSYLVANIA COMPANY.

The Pennsylvania Railroad Company owns a majority of the stock of what is called the Pennsylvania Company," an organization chartered by the State of Pennsylvania, April 7, 1870, for the purpose of managing, in the interest of the Pennsylvania Railroad Company, the railroads running west from Pittsburgh, and the connecting lines thereof, extending west and south, lately owned, leased,

IS C-11