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mill at Niagara with its new traffic; he does not see how he may have prevented the growth of the old traffic at Rochester.
On the other hand, the great majority of local and personal discriminations are in favor of the strong. As such they do great harm to the community by increasing inequalities of power; and in the end they are apt to do harm to the roads themselves. The Standard Oil Company was fostered by a system of special rates until it became strong enough to dictate its own terms.
This was an extreme case; but there is almost always a certain opposition between the present and future interests of a railroad. If a company's object simply is to make as good a dividend as possible for the current year, that object is best obtained by squeezing the local business, of which it is sure, and securing competitive business on almost any terms, however low. But for the permanent interests of the road this is bad policy. The local business may bear the squeezing for a year or two, but it will gradually die under the effects. Such å policy destroys a road's best customers and strengthens the hands of those who are in a position to dictate their own terms.
Again, on pages 20 and 21 of his work, the professor remarks: Reference has already been made to the inequality of railroad rates. This inequality always operates in favor of large cities. The reduction in rates was made under the stress of competition. It was made first and fullest where competition was sharpest. Even in those countries in Europe where the State owned many of the railroads but feeble opposition was offered to this tendency during the years 1850-1872. In England and the United States it was pursued with utter recklessness,
The aggregation of business in cities of itself gives the large establishment an advantage over the small dealer. The latter has no longer a local custom of which he is sure. His personal attention to details begins to count for less. His competitor's large capital and wide connection count for more. Too often mere unscrupulousness in business may seem to count for most of all. The small capitalist and the independent workman are crushed out. The distinction of employers and employed becomes more sharply drawn. The workman can no longer confidently hope to become the employer of his own labor. It is these tendencies which give force to the agitation in favor of socialism. Unfortunately, the effect of the policy of most of our railroads is to intensify these tendencies. They do not merely favor cities; they favor individual producers. The largest or most unscrupulous concern gets the best rates. Differences are made which are sufficient to cripple all smaller competitors and sooner or later drive them to the wall, and concentrate industry in a few hands.
But where one set of men own a railroad and another set of men use it, the two only coming in contact through the medium of the railroad management, we have a state of things corresponding to the “ absenteeism" of Irish landlords and involving conflicts or dangers of the same kind.
And again the professor, on page 138, adds: If the object of a railroad manager is simply to pay as large a dividend as posşible for the current year, he can best do it by squeezing his local traffic, of which he is sure, and securing through traffic at the expense of other roads by specially low rates--that is, by a policy of heavy discrimination. But the permanent effect of such a policy is to destroy the local trade, which gives a road its best and surest custom, and to build up a trade which can go by another route whenever it pleases. The permanent effect of such a policy is thus ruinous to the railroad as well as the local shipper.
Mark the language. “The permanent effect," mark you, “of such a policy”-that is, discrimination between localities ——" is thus ruinous to the railroads as well as the local shipper." Here is a calm,“ conservative" railroad authority-for manifestly he leans that way—as to the short-sightedness, deleterious and baleful effect, of local discriminations. Undue and unjust discriminations have always been frowned upon and held illegal by our courts, in whatsoever form manifested. Our courts have always aimed to uphold and enforce equality in rates and facilities. (Messenger_vs. Railroad Company, 7 Vroom (N. J.), 407; Railroad Company vs. Railroad Company, 110 United States Supreme Court Rep., 667; Pierce on Railroads, 498; Hutchinson on Carriers, sections 297–303; McDuffie vs. Railroad Company, 52 N. H., 430.)
In the Messenger case the court says: “I am not able to see how it can be admissible for a common carrier to demand a different hire from various persong for an identical kind of service under indentical conditions. A person having a public duty to discharge is undoubtedly bound to exercise such office for the equal benefit of all, and, therefore, to permit the common carrier to charge various prices, according to the person with whom he deals, for the same services, is to forget that he owes a duty to the community.” The very groundwork of the Munn case was clearly outlined in the Messenger case.
The bill in sections 2 and 3 prohibits upjust discriminations between individuals and classes of business. Mr. Blanchard says that conservative railroad men concede the justice of this prohibition. As a matter of law and ethics there can be no question of its justice. If it is our duty as legislators to protect individuals against unjust discriminations, surely it is much more our duty, as greater interests are involved, to protect our little communities against the rapacity of the large cities and large terminal points. Discriminations between individuals are unjust and illegal because they tend to crush out the weak and poor, the small shippers, and build up the rich and strong, the big shippers. So discriminations between localities, while it builds up large terminal points, utterly dries up and crushes out the numerous small intermediate points. The life blood of these smaller places is transfused by discriminating rates into the vitals of the large terminal points. My notion is, I am free to state, and I can see no other honest conclusion, that remedial legislation should be extended to protect the weak and helpless locality as well as the weak and helpless individual. We owe a duty to both, and it would be gross shortsightedness, nay more, it would be cowardly at this juncture to forego our duty to either.
In this connection, too, we must not lose sight of the fact that while the bill absolutely and totally prohibits unjust discriminations between individuals, it is only to a limited extent and in a qualified degree that discriminations between localities are prohibited; it must be as to the like kind of property, under substantially similar circumstances and conditions, over the same line, in the same direction, and where the shorter distance is included within the longer, that no more can be charged for a shorter than a longer haul, and even this limited inhibition the commission may, in its discretion, in particular instances, waive or modify, thus leaving the provision with ample elasticity.
When the railroads now contend that the right of unlimited local discrimination, as distinguished from personal discrimination, is essential, and a sine qua non to their well-being and existence, we have good ground to question and doubt the sincerity and truthfulness of such contention. For it is but a very short time ago that they made exactly the same claims as to the necessity and justice of personal discriminations. We were then gravely told that it was both just and necessary to discriminate in favor of the great shipper as against the smaller-railroads could not well exist or prosper without this privilege. But all this, Mr. Blanchard informs us, is now obsolete and a thing of the past.
Not only is the power of unlimited local discrimination not necessary or essential to the railroads, but the free exercise of such power is in the long run detrimental and destructive to the best interests of the roads. Professor Hadley is clearly of this opinion, for he says, in speaking of such practice (page 138):
“But the permanent effect of such a policy is to destroy the local trade, which gives a road its best and surest custom, and to build up a trade which can go by another route whenever it pleases. The permanent effect of such a policy is ruinous to the railroad as well as the loc shipper,'' This is the unbiased opinion and judgment of a great thinker and student on this subject-a gentleman who certainly can not be
accused of unfairness or unfriendliness to the railroads. We have no fears that this trifling and limited protection which section 4 aims to throw around our small towns, cities, and villages will of itself occasion any increase of rates from the large terminal cities or large terminal points. These competitive" places, under a law prohibiting pooling, will take care of themselves, and suffer no harm; and we believe, as Mr. Hadley suggests, that this bit of relief and justice given to the smaller towns will so stimulate the business at these non-competitive points that the slight reduction in rates will be more than made up by the increased volume of business, and that prosperity and commercial success will be more evenly distributed and diffused, and not confined, as now, to a very large extent, to the large terminal points.
But, Mr. Speaker, there is involved in this section 4 something still more important than anything I have so far suggested, or than any mere commercial considerations. The discriminations between localities as practiced by our great trunk lines builds up abnormally fast, at the expense of the small intermediate towns, a few large and immense terminal points; and it is in these great commercial centers where, along with their huge volumes of traffic and commerce, large masses of combustible human material are gathered together and stored. This human dynamite is attracted by and the product of the concentrative policy of the railroads; and we are already clearly admonished that the weak point in our social fabric is in these great human masses concentrated in our larger cities, and that if any harm happens to the Republic it will be found that the seat of danger and the stress and strain are in our New Yorks, Chicagos, and other great terminal points. Not that these poor, toiling human masses thus gathered together are to blame for all this. They are thus driven and huddled together by the stress of traffic, propelled by concentrated capital back of a locomotive engine.
The mainstay and balance-wheel of free institutions—the seat of a pure and honest ballot-is ever mainly to be sought among our smaller towns and rural communities. These, therefore, as a matter of sound State policy, it is folly and sheer wantonness to neglect or suffer to be overrun. We are convinced that, looking to the great future of our country-and our legislative vision surely ought to extend beyond the ruffled and fleeting present—that true wisdom and true statesmanship lie in diffusing rather than concentrating, territorially speaking, our labor, capital, manufactures, commerce, and traffic. The prosperity of all this multitude of small hamlets can alone render our country truly prosperous and progressive.
Mr. WEAVER, of Iowa. Mr. Speaker, in compliance with oft-repeated pledges made to my constituents when they elected me to this and to the Fiftieth Congress, in obedience to the dictates of my conscience, and following my best judgment, I rise to oppose this measure.
For eight years-ever since I became acquainted with the provisions of what is so widely known as the Reagan bill, I have given it my unqualified support. I voted for its consideration in the Forty-sixth Congress. Under the leadership of the gentleman from Texas (Mr. REAGAN) I voted with the majority of this House at the last session to strike out all after the enacting clause of the Cullom bill, and to substitute in its stead the Reagan bill. The motion was adopted, and I then voted for its passage. In common with my constituents, I considered the Reagan bill a wise and well-guarded measure for the regulation of commerce among the States. I considered it both safe and conservative, and free from dangerous experimental provisions.
But the bill now under consideration is in no sense the Reagan bill, nor does it bear the slightest resemblance to that measure. To prove this, I first quote from the conference report signed by Mr. REAGAN and the other managers on the part of both the House and the Senate:
The committee of conference on the disagreeing votes of the two Houses on the amendment of the House to the bill (S. 1532). " to regulate commerce," having met, after full and free conference have agreed to recommend, and do recommend, to their respective Houses as follows:
That the House recede from its amendment, and agree to the bill of the Senate, with the following amendment thereto in the nature of a substitute, and that the Senate agree to the same:
In other words, the managers recommend that the House recede from the Reagan bill, which it has passed, and agree to substantially the Cullom bill, which it has heretofore refused to pass.
The author of the bill, Senator CULLOM, in closing the debate, said concerning the action of the Senate conferees:
We tried to do the best we could with the bill that the Senate passed during the last session, to keep the bill as near to what the Senate had it as we could do, and to arrive at an agreement between the House and the Senate conferees.
I submit that the majority of the assaults on the bill now under consideration have been against provisions that were in the bill when the Senate voted for it during the last session of Congress.
And I submit that the assaults made on the bill in this House to-day have been on sections which were in the Cullom bill when the House rejected it at the last session. Again, he declares that “the Senate conferees considered it their duty to cling as far as possible to every portion of the bill as it was passed by the Senate." The bill under consideration shows that they held their grip successfully. This will still more clearly appear as we proceed with a comparison of the two rival bills.
Mr. ANDERSON, of Kansas. Whom are you quoting now? Mr. WEAVER, of Iowa. I am quoting from Mr. CULLOM. The third section of the Reagan bill relates to rebates, and is as follows: SEC. 3. That it shall be unlawful for any person or persons engaged in the transportation of property as aforesaid, directly or indirectly, to allow any rebate, drawback, or other advantage in any form upon shipments made or seryices rendered as aforesaid by him or them.
There the section stops, just as the commandment stops when it says "Thou shalt not steal." [Laughter.]
The language is plain and unequivocal. It carries with it no doubt, no uncertainty. But it was discarded hy the conferees and the second section of the Cullom bill substituted in its place. It is as follows:
That if any common carrier subject to the provisions of this act shall, directly or indirectly, by any special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered, or to be rendered, in the transportation of passengers or property subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful.
It will be noticed that this is taken from the Cullom bill word for word. In the name of all the schoolmasters at once, I want to know what this section means. One thing is clear: it allows special rates, rebates, drawbacks, and other devices whereby a common carrier may receive from one person greater compensation for services rendered than it receives from other persons for like services, provided the service is not “contemporaneous ” and “under substantially similar circumstances and conditions." No provision of this character was ever inserted in the Reagan bill from the time it was first introduced in the Forty-fourth Congress down to the present hour. The language used in the Reagan bill is, as I have shown, an unequivocal prohibition; but this conference bill merely limits the right to give rebates, drawbacks, &c.; nothing more.
A common carrier may continue to grant special rates, rebates, drawbacks, &c., subject only to this limitation. The gentleman from Ohio (Mr. BUTTERWORTH) yesterday asked the gentleman from Georgia (Mr. CRISP] to give him an illustration of how this provision would work. I will give the House an illustration : Here is a poor shipper who has annually four car-loads of freight to ship from a given point in the West to the city of Chicago. For that freight he is charged a certain rate. Here is another shipper, right along side of him, who, by reason of special favor, rebates, drawbacks, &c., received in the past, has become rich and is a cattle merchant, an extensive lumber dealer, and a grain merchant, and he ships, perhaps, 200 car-loads annually from the same point to the same market. The poor shipper is charged, we will say, $60 a car; the rich shipper, having tifty times the amount of business per annum, is charged the same rate per car, but is allowed a rebate of $20 per car. I want to know whether the granting of such a rebate would be a violation of this section?
Mr. CRISP. I will answer the gentleman.
Mr. WEAVER, of Iowa. Let me answer my own question first, and then I will hear your answer. I undertake to say, Mr. Speaker, that that would not be a violation of this section, because the services rendered to these two shippers would not be likely to be rendered “contemporaneously” nor under substantially similar circumstances and conditions." I say that is the meaning that will be given to this section. I yield now for the answer of the gentleman from Georgia.
Mr. CRISP. I only wish to say, in reply to the question of my friend from Iowa (Mr. WEAVER), that that section of the bill is intended to probibit a rebate in just such cases as the one he has stated, and the terms employed in the section, “substantially similar circumstances and conditions," were put there in the interest of the people, so that the railroads might not say that because one shipper had two car-loads and the other had two hundred they should not be treated alike. The section provides that there shall be no discrimination in cases substantially alike.
Mr. WEAVER, of Iowa. That is the gentleman's interpretation of it. Mr. CRISP. It is the uniform interpretation of it. Mr. WEAVER, of Iowa. There was no such provision in the Reagan bill. It was in the Cullom bill, which the gentleman voted against at the last session of Congress, but it never was in the Reagan bill from the time it was first presented down to the present hour.
Mr. CRISP. Will the gentleman permit me to inquire
Mr. WEAVER, of Iowa. Wait a minute. The gentleman says that provision was put in there to prevent such discriminations. If so, why was it not put into the Reagan bill at some time during the protracted controversy that has taken place during the past ten or fifteen years? If the gentleman is right it is a little strange that the distingaished gentleman from Texas never thought it was necessary curing those long years. Why was it not put into the Reagan bill at the last session of Congress?
Mr. CRISP. One word, if the gentleman will allow me. The distinguished gentleman from Texas (Mr. REAGAN] being absent, and the