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islatures which had legislated thus and stopped there had done most toward a favorable and satisfactory solution of the railroad problem in the States. For instance, all the legislation of the State of Massachusetts upon this subject is to be found in a single statute which is in chapter 225 of the acts of May 16, 1882. I read it. It is an amendment to a former statute which imposed penalties for violations of the common law. It is this:

SECTION 1. Chapter 94 of the acts of the year 1882 is amended by striking out the first and second sections thereof and inserting instead the folowing words: "No railroad company shall in its charges for the transportation of freight or in doing its reight business make or give any undue or unreasonable preference or advantage to or in favor of any person, firm, or corporation, nor subject any person, firm, or corporation to any undue or unreasonable prejudice or disadvantage."

That and a short-haul law upon which largely the short-haul provision of the Senate bill was modeled, and a single statute in relation to the transportation of milk, is all the remedial legislation which has been resorted to in the State of Massachusetts.

In addition to that, they have a railroad commission. That commission has very little power. It has power to hear complaints and to make report to the attorney-general of the State and to the Legislature. That simple legislation has been found to be the most effective State legislation in the United States, and it is in that State where the legislation has been most simple, where it has been strictly confined to a declaration and enforcement of the common law, where the fewest complaints against railroads now exist. It is in those States which have legislated most severely and rigidly where the most numerous complaints, and, in my judgment, the best-founded complaints, of railroad abuses now exist.

The committee believed that it was not best in experimental legislation to go too far, and this legislation is experimental. They believed that it was unwise to attempt to prescribe a remedy for every alleged abuse in railroad management by specific legislation, by hard and fast iron-bound statutes applying thereto. I think the committee were right, and therefore I have great pleasure in standing by the committee bill with the single exception to which I am to-day to call the attention of the Senate.

The discussion upon this bill is narrowed to two issues, and I think the committee and the Senate may be congratulated that the work of the committee has been practically adopted by both branches of the national legislature, with the exception of these two topics which still excite discussion. These two questions are, first, whether the Senate will adopt the modification proposed by the conference committee in the short-haul section, and, second, will it prohibit pooling instead of leaving it for the present to the investigation of the commission.

Now that these two issues come clearly before the Senate, I wish to put in juxtaposition, side by side, the provisions of the Senate bill and the provisions of the bill recommended by the conference committee upon these topics. First, I read the short-haul clause of the Senate bill, section 4:

SEC. 4. That it shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, and from the same original point of departure or to the same point of arrival; but this shall not be construed as authorizing any common carrier within the terms of this act to charge and receive as great compensation for a shorter as for a longer distance: Provided, however, That upon application to the commission appointed under the provisions

of this act, such common carrier may, in special cases, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property: and the commission may from time to time make general rules exempting such designated common carrier in such special cases from the operation of this section of this act; and when such exceptions shall have been made and published they shall, until changed by the commission or by law, have like force and effect as though the same had been specified in this section.

That is all there is of it except the penalty clause, which appears elsewhere in the conference bill. The section in the conference bill is this:

SEC. 4. That it shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance.

It will be seen that those words have been substituted for the words "and from the same original point of departure or to the same point of arrival."

But this shall not be construed as authorizing any common carrier within the terms of this act to charge and receive as great compensation for a shorter as for a longer distance: Provided, however, That upon application to the commission appointed under the provisions of this act, such common carrier may, in special cases, after investigation by the commission, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property; and the commission may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section of this act.

The main change, as will be seen, recommended by the conference committee is as I have indicated, the striking out in the Senate bill of the words and from the same original point of departure or to the same point of arrival," and substituting therefor the words "the shorter being included within the longer distance."

Now, I read the Senate bill provision with regard to the subject of pooling. It is this:

SEC. 19. That the said commission shall specially inquire into that method of railroad management or combination known as pooling, and shall report to Congress what, if any, legislation is advisable and expedient upon that sub

ject.

tee on the subject of pooling: I read next the section in the bill proposed by the conference commit

SEC. 5. That it shall be unlawful for any common carrier subject to the provisions of this act to enter into any contract, agreement, or combination with any other common carrier or carriers for the pooling of freights of different and competing railroads, or to divide between them the aggregate or net proceeds

of

agreement for the pooling of freights as aforesaid, each day of its continuance shall be deemed a separate offense.

Elsewhere in the bill it is provided that the commission of any act which it is provided shall be unlawful may be punished by a fine not exceeding $5,000.

one.

ate.

Now, with regard to the change in the short-haul clause, I have this to say: I do not think as an original proposition the change was a wise I do not think it is an improvement of the bill as it left the SenI think the Senate bill recognized a principle which was sound, and that principle was that the question of what is a reasonable charge upon freight to a station or from a station is not to be determined by question of what is charged for freight to or from another station. In other words, the question of reasonable freight charges must vary with the location of the place to or from which the freight is shipped,

the

the volume and character of the business to be transacted going to and from that place. I believe that was a wise provision based upon a sound principle, and I do not think it was wise to depart from it; and I think that these words which have been inserted about the shorter distance being included within the longer distance are uncertain and ambiguous. I do not think any man knows to-day what they do mean. I think it will greatly trouble courts and commission to decide what they mean.

It is certain that the introduction of these words makes an exception to the rule. It is certain that the bill, as it stands reported by the conference committee, implies that there are some shorter distances for which more may be charged than for longer distances. It is for courts and the commission to find out what those shorter distances are, for, mathematically speaking, every shorter distance is included within the longer distance. But this bill says on this subject that it shall not be lawful to charge more on the same line in the same direction, under similar conditions and circumstances, for a like kind and amount of freights, for the shorter than for the longer distance which includes the shorter. Mathematically speaking, we should say that was impossible. Speaking of the words when put into a statute, we know they must have a construction. I have never yet seen the man who was able to say what those shorter distances were in which railroads were to be permitted to charge more than for longer distances. They are there in the bill if it passes, and the courts will have to say what they mean.

But, notwithstanding all this, I stand by the short-haul clause for the purpose of getting legislation on this subject. I am willing to surrender, so far, my judgment as to what is wise and best. Right here I want to allude to an objection based upon a possible construction which I have heard urged against this short-haul clause.

I am told that there is fear in many quarters that this construction will be put upon it: that where two or more independent lines of railroad (independent in ownership and operation) contract with each other to forward freight over the entire line so made up, and for each independent link the railroad company owning and operating it to accept a certain proportion of the through freight as its share, that portion which it so agrees to accept under these circumstances will be made the measure of the charge upon freight shipped over its own. road or any portion of it. I do not think that such can be the construction of the bill.

Every road must stand by itself. It is upon the company's own road that the short-haul clause takes effect. If a number of independent companies, having independent lines which together form a continuous through route, contract as to the freights which shall go over those routes, then they, as contracting parties, are bound as to freight which is shipped over those roads as to the price, and may not charge more on freight sent under contract between those points for the shorter than for the longer distance; but the share which each road may receive for carrying such through freight does not, in my judgment, furnish the measure by which any one of those independent and independentlyoperated companies is to measure the rate for other freight upon its own road.

I have said this much to explain the fact that, although I do not think we have improved the Senate bill on this subject, I still take it and stand by it.

But the section of the bill proposed by the conference committee

which prohibits pooling under criminal penalties I can not consent to. I would for the sake of getting legislation assent to it if I did not believe in my inmost mind that it was impolitic, unjust, and calculated to embarrass and possibly defeat the beneficial operation of the bill.

I do not think that to justify my dissent I must hold affirmatively that pooling contracts are legal and right. I think the burden of proof is upon them who would make such contracts criminal. Can it be that in the Senate of the United States and in the House of Representatives of the United States crimes are to be made and penalties of $5,000 a day are to be inflicted, and the parties who propose it are not to show why the contracts for which those fines are imposed are illegal or wrong? And to give reasons why I can not assent to such legislation, must I prove affirmatively that such contracts are right and are according to the common law? It is for those who say that pooling between railroads shall be criminal to show that such arrangements are either opposed to the common law, condemned by the common law, or they are 80 far wrong in principle, as being opposed to public policy, that it is just and wise legislation to make them criminal offenses.

Mr. President, we must get back to definitions. I apprehend that these contracts, which are known as "pooling contracts," are entirely misunderstood in character, in purpose, in results, and it is the evil significance which attaches to this unfortunate word "pool," which railroads never apply to these contracts, which has created an unreasonable prejudice in the minds of the people of the country, upon which it is supposed that, without investigation and without affirmatively showing anything wrong or improper in these contracts, we are to brand the making of them as criminal. It is said that "that which we call a rose by any other name would smell as sweet," but the converse of that proposition does not hold true. These contracts under other names would never be supposed to be against the public interest. Railroad companies have tried to escape from the fateful influence of that name. They have called such contracts what they more properly are-co-operation-contracts for traffic unity-but without avail; that unfortunate name is fastened upon these contracts. But I do not propose, therefore, to strike at what can not be shown to be wrong, improper, or against the public welfare or opposed to public policy.

What is a pool? What is a pooling contract? It is simply an agreement between competing railroads to apportion the competitive business; that, and nothing more. I repeat it-it is an agreement between competing railroads to apportion the competitive business. It does not touch the local business; it does not reach it; it has no reference to it. The local business is left to each individual company. It is non-competitive. A pool has nothing to do per se with making rates. And right here I want to call attention to a glaring inconsistency in this proposed legislation. The proposed prohibition of pooling does not prohibit the railroad companies from making rates. Indeed, the whole bill compels agreements between competing roads for the making of rates. The section does not propose to prohibit a hard and fast agreement between railroads to maintain rates. Indeed, it almost compels it. It does not propose to interfere with any other means which railroads may adopt, which are inducements to the railroads themselves to maintain rates. All that it does propose to do is to make criminal the apportionment of freight between competing railroads, or the division of earnings by competing railroads. With that criminal clause in the bill, it would still be open to railroads to enter into any other kind of contracts which they might invent for the purpose of main

taining rates agreed upon. It would be open to competing roads to put a sum of money in the hands of a commissioner or an arbitrator to be used as penalties, as liquidated damages to be recovered by the other companies of any company that should violate the agreement to maintain rates. It does not apply to a hundred means by which railroad companies may in some way make it for their interest to maintain the rates which they themselves have fixed and have legally agreed to maintain under this bill. Is it not pretty remarkable legislation that there should be left the right of competing roads to fix rates jointly for competitive business; that there should be left the right to agree to maintain those rates and not cut or vary from them; that there should be left free to them every means to protect themselves against the violation of those agreements, except just this matter of apportioning between them the competitive business of the roads or the division of joint earnings?

It may be said that perhaps it is not so bad a measure after all if it leaves all those things open to the railroads, but the inconsistency of it is intensified many times.

Mr. MCPHERSON. Would it interfere with the Senator to ask a question at that point?

Mr. PLATT. I think not, though I am making an argument which rather requires a connected thread of thought in order to be intelligible, not to say effective.

Mr. MCPHERSON. I shall not ask the question.

Mr. PLATT. I say, then, that the thing which it is proposed to make criminal is contracts for the pooling of freights of different and competitive railroads or the division between them of the aggregate or net proceeds of the earnings of such railroads. Now, I want to read a word from Mr. Nimmo's report, which is called the report on the Internal Commerce of the United States in 1879, showing what a pool really is. And I want to say a word about Mr. Nimmo, whom I shall frequently quote during this discussion; I shall not quote railroad presidents, with a single exception or two; I shall not quote pool commissioners. I propose to fortify what I have to say on this subject by quotations from men who have studied this question from an independent standpoint and with no interest to favor railroads. Mr. Nimmo, Chief of the Bureau of Statistics until 1884, is an able statistician and a careful student of political problems, who in the nice adjustment of offices to civil service reform principles by the present administration was asked to make way for another man. Mr. Nimmo is certainly good authority by reason of the attention which he has given to this subject. As far back as 1879 he said:

The use of the term "pool as a designation of the agreements entered into between railroad companies for the apportionment of traffic, or the receipts from traffic, is of recent application. The term has usually been applied to a game of chance, in which all the players contribute toward making up the stake or pool, and the winner in the game gets the whole, whereas what is now known as a railroad "pool" is simply an agreement entered into between companies for the apportionment or division of the traffic between roads engaged In competitive traffic. By this arrangement they take no chance, but seek to escape the chances that, under unrestrained competition, they may be able to secure less than what they deem to be their equitable share of trafficnd reduce to a certainty the share of the traffic which they shall secure. The main object, however, is to avoid the great losses inevitably resulting from wars of rates. In its application to the apportionment of division of railroad traffic, the meaning of the word “pool” appears to be, in a double sense, the reverse of its ordinary significance in its application to games of chance.

Again, in 1881, he said:

A railroad freight pool is simply an agreement that, at competing points, the

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