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The evening times. [volume] (Grand Forks, N.D.) 1906-1914, April 14, 1906, Image 6

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ther steps and walk deeper and deeper
Into that realm of burled hopes, de
caying ambitions, and molding aspira
If the effect of granting this power
will insure absolute equality to all
shippers from any given point or an*
other, if it will insure that elasticity
in the matter of rates necessary tor
the development of certain sections of
the interior and certain industries in
the interior of the country, so that
such sections of such industry may
compete with others in the markets of
the world if it will tend to open up
and keep open the greatest possible de
gree of competition between roads and
between localities If it will continue
the gradual lowering of freight rates
from the interior, as has been done in
the past if it Is possible for a com
mission to give such enlightenod Judg
ment upon the questions of rates from
overy station on every railway in the
United States as tho demands of jus
lice may require, then truly the rate
making power should be conferred
upon a commission.
But if it can be demonstrated with
almost mathematical accuracy tnat the
placing of this gigantic power—the
commercial destiny of every village,
township, and county In the United
States—in the hands of a political body
of live or seven will strangle the last
vestige of railway competition, bind
every section of our vast domain In the.
clasp of a hard and inflexible sched
ule of rates that it will make the
whole interior of the country pay hom
age to a few seaport cities, and, finally,
that it will build up a great political
machine that u*iJ) hold both or all
political parties bv the throat, then,
in my humble opinion, the people do
not wani u.
At the very threshold of this discus
sion We are met with grave and 1'rfr
reaching questions. Flow will that
mighty power bo exercised? Will it
open up commerce and trathe to the
freest and t'ulVst competition, or will
it practically close the gates against
all competition? Will it tend to build
lip and promote the welfare of the
great interior, the western arid and
semi-arid regions of our extensive do
mains, which require the fullest and
greatest elasticity in tho matter of
rate-making so necessary to the de
velopment of this section? Will it
tend, by a hard rule, to fix rates ab
solutely, or will the result of its ex
orcise leave perfect freedom to vary
rates from day lo day, from week to
week, as the exingencies, the conditions
of any locality along any line of railway
may demand? Will its exercise tend to
build up a few of the great seaports
at the expense of the interior and at
the great seaports, or will it tend to
facilitate the progress and prosperity
of the interior and the country tribu
tary to them? Can a commission by a
single order or 10.000 orders meet every
contingency, every Inequality of dis
tance. inequality in amount carried, in
equality of bonded indebtedness, in
equality in maintenance, inequality of
values, inequality of stock as compared
with actual value, and the thousand
other inequalities whU-li must be
weighed and measured In connection
with rate making? Can five or seven
men perform the duties now Incumbent
upon an army of 50,00o men?
Under our present laws railways may
lower their schedules of rates upon
three days' notice. They may raise tho
.schedule upon ten days' notice. Excent
for these slight limitations the flexi
bility of rates Is free to meet all com
mercial exigencies, the constant shift
ing of demands of production and con
sumption. When such rates shall have
been established or fixed by a commis
sion, their status can onlv be altered
the slow process of the rehearings
before the Commission, In most cases
ineffectual to meet the exigency be
cause of necessary delay. To all in
tents and purposes, therefore, such
rates will become fixed and unalterable.
That this would have little effect upon
a few of the seaport cities of our coun
try may be conceded. But what effect
will it have upon tho Interior, upon the
WS&t and frfGat Northwest? This Is a
question of supreme Importance.
To understand this we must first un
derstand what forces have been re
sponsible for the upbuilding of this
great section In the past. Many
of us on this fldor have spent all of
*«S\ir lives In that section have grown
to manhood in that nart of the United
States. And every man who has
watched our progress or development
and the causes which conduced to it
knows that tho progress* the prosper
ity, the development of that country
and Its industries have been duo to the
efforts of each of the great transcon
tinental lines to build up the industries
and the country along and contiguous
to its own road, and that this has been
accomplished by discrimination In rates
—not discrimination between individ
uals, which Is always pernicious, but
discriminations In favor of their own
territory in other words, it has been
accomplished by giving especially
favorable rates to those sections.
It has been done by giving discrimi
nations in rates at between localities.
It has been done by eriving preferences
where those preferences were abso
lutely needed to build up a grat coun
try. .And this Is something that we can
an* fairly take away from
that section of country.
They have maintained immigration
bureaus to attract settlers along the
lines of their road. They have given
special rates to land seekers. They
have given special rates for the pur
pose of developing industries. They
nave given special rates to laborers to
Grand Forks,
harvest the farmers* grain. They have
iven special rates to develop the turn
industries of the Pacific slope. To
meet these special privilges given by*
one great transcontinental lino other
lines of like character were compelled
to do likewise, and these all working
together have been responsible for
making the interior the best country
that God's sun ever shone upon. It is
due, Mr. President, to this very discrim
ination, and if you enforce the law
rigidly it t*an not but be injurious to
that particular section of the country.
Discrimination lu rates as between
localities Is at tho very foundation of
the progress and prosperity of every
state without the immediate sone of
large manufacturing industries, or
whose products were far removed from
the field of consumption. It Is the ap
plication of tho great republican prin
ciple of protection to infant industries,
a protection growing out of the in
equality of conditions by reason of
greater distance from the field of con
You people of tho East many years
ago said to the government: "On ac
count of cheaper labor we are unable
to compete with the Old World In our
manufactures. To equalize this, give
us a preferential tariff." We of the
West said to the railroads: "On ac
count of shorter hauls we arc unable
to compel*! with the Kastern and Mid
dle states, whose products are raised
at the very gates of the manufacturing
centers which eonsuine them. To
equal this, give us preferential freight
The government gave to the Kast its
tariff, and a* if by magic 10.000 indus
tries sprang into being in all the vil
lages and hamlets, and the whole
length of the Alleghenles became
skirted with fiery furnaces giving a
prosperity undreamed of. The rail
roads gave to the West ratos that made
it possible for it to compete with the
eastern agriculturist and drive him out
of his own fields, and as a result our
Indian plains bloomed with tho grains
and tin* flowers of the white man's
civilization, and homes, those fairest
flowers of civilization, dotted cur ex
pansive ra es.
Without that discrimination there
would have been no Dakotas, no Min
nesota, no Montana, or Idaho, or Wash
ington. Take away that discrimination,
place us on a mileage baste, and our
progress and prosperity would vaulsh
like frostwork in the morning sun.
This matter of discrimination. Mr.
T'resident, Is absolutely necessary for
the building up of certain sections *f
the country, and It Is absolutely neces
sary In order to maintain their present
Mr.^ Reveridge. Mr. President, will
the Senator allow me to ask him a
Mr. MeCumbor. Certainly.
Mr. Beveridge. Is it the Senator's
position, then, that not only the pres
ent proposed law should not be enacted,
but that the existing law on the same
subject should be repealed?
Mr. McCmnber. In my opinion, the
present proposed law should be en
acted witli a modification. So that I
may not be misunderstood. I will state
that I expect to support the law which
the wKsdoni or unwisdom of tho Senate
shall deem to bo for the best interest
of the American people, but I think,
however. It should be modified. I think
our present law In reference to discrim
ination has not been enforced, and be
cause it could not be enforced is tho
reason why it has not been a greater
damage to us than It really has been.
I can show you, and propose to show
before I get through, that Instead of
enforcing the spirit of that law In the
North Atlantic cases the Interstate
Commerce Commission enforced exactly
the opposite, by Its own decision, and
absolutely destroyed the competition
which wo claim is necessary for our
own state.
Mr. StfDoner. When tho Senator
sneaks of discriminations I suppose he
refers to tho discriminations which
were lawful at the common law.
Mr. McCumber. Certainly not dis
criminations between individuals—
Mr. Spooner. Oh, no.
Mr. McCumber. But discrimination
In favor of tho weaker localltv or in
favor of the weaker Industrial concern
as against the stronger that did not
need it-
Mr. Beveridge. Will the Senator per
mit hie?
Mr. McCumber. Certainly.
Mr. Beveridge. My reason was
drawn out by the statement of the Sen
ator that certain portions of the coun
try in the Interior and farther west had
been developed by reason of these dis
criminations which were an economic
necessity and which the present law
prevents, and that If the present law
had been rigidly enforced those dis
criminations by which the interior has
been built up would have been pre
vented and an incalculable injury, to
use the Senator's own words, would
havo been done to the country. That
is the reason why I asked the Senator
whether his position was not only that
the proposed law should not be enacted,
but that the existing law should bo re
Mr. McCumber. I propose to make
that clear before I get through.
Mr. Spooner. My observation had no
reterence whatever to tho Senator's
question. I simply wished to under
stand the Senator from North Dakota
that when he spoke of preferences and
discriminations, and the general ques
tion of facilities in the West, ho re
ferred to those which wore permitted
by the common law.
Mr. Beveridge. He specifically said,
however, they were thoso which were
Built on Original Plans Agents Wanted
Northwestern Collection Agency
The fir^l shipment of Imported Papers and Dec
orations (or retail ever brought into North Dakota,'
will be shown by us Thunday and Friday after
noons, April 12 and 13. All ladies invited to call
and insped the line whether you wish to buy or not
When you buy a
Typewriter with
out first beinii
shown the
Price $75.00
you do yourself
and your business
an injustice.
North Dakota
and Dec
forbidden ly the existing interstate
commerce Act, which, if it had been
rigidly enforced, would have prevented
Mr. McCumber. If the present Inter
state-commerce act had been rigidly
enforced, there could have been no
discriminations between localities, as I
Mr. Beveridge. And therefore the
Senator said the Interior of the country
and farther west would have been in
calculably injured.
Mr. McCumber. 'Certainly. If, as a
matter of fact, the railway company
provides that Its charges for taking our
products out of our country shall be
only ono-halt of what It charges for
bringing things Into our country be
tween cxactly the same points, you can
see there Is a discrimination in favor
of output as against Importation and
that discrimination was absoliitely
necessary for our growth and pros
peri ty.
Mr. President. Minnesota Is riot yet
llfty years of age ate .a state. It Is my
native state, arid as I travel over that
beautiful country with Its fair fields,
with Its massive red barns, with its
great white dwellings, and as I fol
low into my own Kert River Valley of
the North11 will find the same condi
tion. except perhaps on a little larger
scale, as I view the prosperity of those
great Northwestern slates and then
as 1 compare those barns and those
houses with many of those of the Kast
frn ami the Middle stales, whose gray,
decaying walls have not- known the
touch of paint for fifty years—for, Mr.
President, everybody will acknowledge
that rod and white paint are the surest
index in the world of agricultural pros
perity—as I look at those conditions
1 can not but ask myself by what magic
tius it been possible for us of the Da
kotas ami Minnesota and iowa, nearly
2.*)00 miles from eastern seaports, where
every bushel of our grain that we sell
is to be carried across the ocean, to
move that great grain nearly 2,000
mil.'s and drive the eastern agricultur
ist out of his own field? Has it been
by any method of dividing the country
Into great sections, whieh they call
differential sections, and so adjusting
I he rales between the several carry
ing linos that they will each receive
their proportionate share, and also that
each one of the great seaports cities
will receive What this Commission may
declare to be its proportionate share
of the business or lias it been for the
reason that I have stated, of the great
effort of those companies to find out
lets for our own exports?
What difference does it make lo the
Northern Pacific or the Great Northern
railroad company, whieh are the prin
cipal routes in Minnesota and In my
state, whether New York or Boston
or lialtimore or Philadelphia gets their
share of the business? What they are
interested in is In securing the vcrv
lowest rates that ean be secured from
their terminals to the Atlantic coast,
where our goods must pass enroute
across the ocean.
Mr. President, sun^ose that tills gi
gantic power Is given to this Interstate
Commerce Commission, what is going
to be the result? Will it be the destruc
tion of all competition between tho
great carrying lines? I ask that ques
tion in all sincerity—will it be the de
struction of competition between all the
great carrying lines? Mr. President,
coming events cast their shadows be
fore. On the 27th day of April. 1905.
the Interstate Commerce Commission
handed down its findings and conclu
sions in the North Atlantic Seaport
Differential case. That deciaion, to my
nund, projects a shadow Into the future
that is as discernible and as clear as
the shadow of an eclipse across the face
of the earth and demonstrates beyond
any possible question the certainty of
the very danger ihat I have spoken of
thus far in my discussion. This opinion
foreshadows not only tlie condition
which we will he in when the Inter
state Commerce Commission fixes the
rate, instead of the powers that are in
possession today, tint what the govern
ment's position will be when we reach
that next—and, to my mind, sure to fol
low step—Government ownership of the
railways of this great country. Govern
ment ownership in the Old World has
resulted In building up a few of the
great seaport towns, congesting the
people there and congesting traffic
there, while at the same time It has
absolutely destroyed the prosperity of
all of the interior.
might say a great deal, Mr. Presi
dent, upon this subject, but it has been
so eloquently stated by the Senator
from West Virginia (Ur. Scott) and by
the Senator from Massachusetts (Mr.
Lodge), that I will not touch upon that
subject any further than to show that
that has been the inevitable result. It
has been said on this floor that these
Commissioners will be human, men of
good judgment, and the country need
fear no tyrannical action. The surest—
aye. the only—preventive against ty
ranny Is to never place tyrannical
power in the hands of any person or
body of persons. But in this instance
this autocratic power can only be car
ried on by autocratic method3. and
tyranny will be the inevitable result.
Mr. President, it may be said at the
outset that the granting of this power,
in my opinion, will at one blow abso
lutely destroy competition between all
of the great carrying lines of the coun
try it will strangle that very principle
which we have inserted in every law—
the free exercise of the competitive
spirit of every one of the great carry
ing lines. It will be tenfold worse, Mr.
Prsident, than that which we sought
to guard against in the Northern Se
curities case. Why? Because in that
case we simply nrevented two compet
ing lines from combining, while in this
case you will place all of the great
transcontinental lines under one man
agement, and, as I will show vou,
that management will bo forced—abso
lutely forced—by industrial and com
mercial exlngoncles to follow the same
rules that the railways followed when
tlicy made their own arrangements of
pooling, because in offset Is amounts to
Kvor since these great rival lines
connected the Atlantic seaboard with
the interior of the country there has
always been more or less freight war
fare between the great lines and also
between the great cities that were
served by those lines, "growing out of
the adjustment or the lack of adjust
ment of differentials. Whether these
wars were beneficial to the public in
the long run 1 am not prepared to say.
But the condition which existed there,
and which made It possible for those
wars, was of inestimable value to every
shipper from the interior to the sea
Mr. President, this decision makes
perfectly clear what is meant by dif
ferentials but as I am speaking for
more than the Senate here. I will make
my point clear, so that it may be dis
tinctly understood what that term
That territory bounded on the west
by the Mississippi, south by the Ohio
river, east by a line running from
Pittsburg to Buffalo, and north by the
Great Lakes. Is called "differential ter
ritory." All shipments for the east,
originating directly or indirectly in this
territory, had by agreement of the sev
eral lines of road operating between
such territory and said ports, been
based on tiie rate from Chicago to
New York that is. the rate between
any point in this territory to New York
was either the same as tho Chicago
rate to New York or a certain percent
age less or greater than that Tate. To
other points on the Atlantic seaboard
the rate is higher or lower than to New
York by a given number of cents per
hundred pounds. Thus the rate to Bos
ton might be greater, that to Philadel
phia and Baltimore less. These differ
ences above or below the New York
rate are termed "differentials."
At the time that this matter was
considered by the Interstate Commerce
Commission, rates upon ail classes and
commodities, with the exception of
grain and iron, were 2 cents lower to
Philadelphia and 3 cents lower to Bal
timore than to New York. The Boston
rates were the same as New York on
export traffic, while on domestic traffic
they were higher by amounts ranging
from 7 cents per hundred pounds on
first class to 2 cents- on sixth class
commodities. The question Involved,
however, differentials only on export
Now, anyone who has followed the
cases decided by the Interstate Com
merce Commission can not but be im
pressed with the great number which
are Instituted by or through the boards
of trade of our great commercial oities,
and that the snirit which governs the
institution of these actions has not
been so much a. desire to protect the
interest of the individual shippers as
to secure the greatest amount of busi
ness for this or that particular city.
Thi? case was no exception to the rule.
The real parties in interest, as in most
cases, were citics against railroads,
and not the public against railroads.
The public was not the party to this
action. If it was indirectly a party I
can not but feel that its Interests were
shamefully dealt with. The parties to
this action were the municipal corpora
tions of Boston, New York, Philadel
phia and Baltimore, on one part, and
the several railroads operating between
this differential territory and these
cities on the other part.. The interest
to be considered, and which was, in
fact, considered, was not the Interest of
the people of my state who might ship
their grain to New York, Buffalo or
Baltimore, but the Interests of those
particular cities in securing what each
claimed as its share of the business of
the country, lust as though any otty
independent of its location was en
titled to any particular division^ or
share of the business of the countrjO
Now, to show how this Commission
I 1
C' 4 -i. Vi
walked the same path which has led,
in the old country, to preferring great
seaports, at the expense of the Interior,
upon the assumption that such cities
are entitled, as a matter of right,
whether they can honestly compete
under natural conditions with other
cities,.'to their share of the business,
and thus destroying all competition. I
wish to call attention to the reason
ings of a majority of this Commission.
On page 62 of the decision in regard
to North Atlantic seaport differentials
the Commission*ay:
It is said that a fair differential 'is
one which would give to these several
porta the traffic :to which They are en
titled. It is also said that these several
ports are entitled to what of this
traffic they can obtain under a fair
They are entitled not to what they
can secure under fair competition, but
under a fair (equalizing) differential.
By what process of reasoning does the
Commission arrive at a conclusion that
any city as a matter of right is en
titled to such differential that It may
obtain its proper proportion of the ex
port business of the country? It Bal
timore is one-half the size of New
York, then under this decision those
rates must be so made that Baltimore
will get one-third of th export business
and New York will get the other two
Mr. President, we .have condemned,
nnd we condemn tofiay, pooling be
tween railways. This principle adopt
ed by the Interstate Commerce Com
mission not only legalizes pooling, but
imposes it upon all railways. That
simple proposition that rates are to be
made for tho benefit of cities and not'
for the benefit of the public condemns
beyond all measure the power which
would authorize such prfnclnle being
carried (tito effect by a political body.
1 want to say to the Senator from
Massachusetts (Mr. Lodge), who so
ably defended and pleaded for his own
New England states the other day as
against the arbitrary power that might
be given this Commission, toe may well
complain If there is no way that we can
escape that arbitrary power., for It they
follow this opinion they may protect
New Kngland. but that -opinion Is
against the law. If they do not follow
it, they destroy the Industries of New
Kngland and many of the industries of
tile interior.
Again, on page 62, the Commission
If again it can be properly done,
these rates should be so adjusted that
competitive traffic will be fairly dis
tributed between tile different lines of
railways which serve these ports. Each
one or nior great cities is reached by
two or more great railway systems.
.The prosperity of these cities and sys
tems can not be separated. The ability
of a railroad to adequately discharge
its duty for a reasonable charge de
pends upon the business which it can
obtain, and no one of these systems
should be deprived of its fair propor
tion of this export trade.
In simple, plain English what does
this mean? it means that the public
must be compelled to support a road
if that road can not of itself compete
with another road that the rates must
lie so adjusted that the weaker one
shall receive Its proportion of the car
rying business. For illustration: If
the Baltimore and Ohio railroad can
carry my grain from Chicago to Bal
timore for 5 cents per hundred pounds
loss than the Pennsylvania line can
carry it to New York, I shall not have
tho benefit of this natural competition
and Baltimore shall not have the bene
fit of its location but that the Penn
sylvania line must be sunported and
must have its proportion of that traffic,
nnd if It can not bo secured in any
other way, the Baltimore and Ohio
road must raise its rates or else the
other road must lower Its rates and if
the other road cannot afford to lower
its rates, then the Baltimore and Ohio
must raise its rates. That is the same
Commission to whom you are going to
give the power to determine what are
just and fair rates.
Does not the mere statement of the
proposition by the Interstate Commerce
Commission carry with It its own con
demnation? Carrying this proposition
out in all the great transcontinental
lines, that road which has been built
or may in the future be built through
a poor country, a country that will not
give it sufficient business to pay its
running expenses, must have its pro
portion of the carrying trade, and rates
must be so made by the other lines
that it may secure its proper propor
It has alwtiys been supposed in the
past that great cities were entitled to
the enjoyment of the conditions which
made them great so long, and only so
long, as they subserved the Interest of
the public, und that railroads were
quasi-public institutions, because they
subserved the interest of the public.
The conclusion of the Interstate Com
merce commission reverses this rule
and promulgates the startling propo
sition that the public interest must be
subservient to the demands of great
cities for the continuation of their
prosperity, and that the nublic busi
ness is for the benefit of all the roads
or at least all such as the Commission
may consider of sufficient importance
to demand Its protective care. That is
certainly a new theory.
Again thev say, on page 63:
Now, if there had been no export
business In the past, if those domestic
rales had been adjusted solelv with a
view to what was right between the
communities. It is altogether nrobable
that the differentials in favor of Bal
timore and Philadelphia would have
been even greater than they are today.
But constituting itself as the guar
dian of the interests of New York and
Boston, the Commission decided that
the differentials should be even less
than they are todav. so that these lat
ter cities could enjoy greater commer
cial prosperity and the whole country,
the producer, is made to pay higher
freights for the benefit of Boston and
New York.
I am not criticising these Commis
sioners. because I Insist that when that
power is given them it will have to be
exercised along such lines or else they
will so disrupt all rates as to produce
a case of practical anarchy among all
the railroads.
think the true Inquiry In adjusting this
ation the ocean freights. They had to
look beyond Boston and Philadelphia
and Baltimore. Thev found, for in
stance. that our goods, our Wheat and
corn, would go through tho route of
least resistance, and that meant the
cheapest route, not merely to the sea
board, but to Liverpool, where our
grain was carried. They found also
that the rates from Baltimore to Liver
pool were generally a little more than
from New York and Boston, while the
facilities for handling and shipping
at New York and Boston wero better
than at Baltimore. They so equalized
these different conditions and weighed
them and measured them that it be
came possible for them to arrive at a
differential which would allow each of
these roads to carrv what they con
sidered its proper proportion and each
of these cities to have its proportionate
share of the business.
On page 69 of this ODlnlon the Com
mission give us another view. They
"In view of the fact that Baltimore
and Philadelphia have natural advant
ages In location, that Boston and- New
York have certain natural advantages
In the way of ocean facilities, that it
is impossible to make' and maintain the
same rate through all the ports, we
think the true inauiry in adjusty this
differential is. What will equalize the
advantages of transportation through
these various ports? What, part of the
advantage which Baltimore and Phil
adelphia enjoy on the score of the in
land haul shall they be allowed to re
tain to compensate them for their dis
advantage In the water haul?"
In other words, neither Baltimore nor
Philadelphia shall retain the natural
advantages which they have by reason
of location tov any extent that Will
more than equalize any special advant
age that New York and Boston have
in ocean facilities. If this is not tieing
up competition, then I would like to be
Informed of any process or any com
bination of the railroads themselves
which could more effectually strangle
Again, on the same page, thev say:
"The most important factor in de
termining the route is undoubtedly the
rate. It was said in testimony upon
the former investigation, and has been
repeated in this, that a difference of
from one-fourth to one-eighth of a cent
a bushel will determine the port to
which grain shall be exported. Other
traffic Is not equally sensitive, but it
must follow, with respect to this low
grade freight, that the through rate
by all lines should be substantially the
Now, note their decision: "It must
follow with respects to this Idw-grade
freight that the through rate by- all
lines should be substantially the same."
Why should the rates by all lines be
substantially the same? Why, should
not the shipper have the benefit of the
lines which can carry his goods most
cheaply to any port? The answer of
the Commission is that if that natural
rule should apply certain cities would
not receive their share of the export
business' and certain railroads would
not receive their share of the carry
ing trade. They decided that it was
their duty to look after the interest of
those roads and those cities which can
not, under natural laws and natural
-conditions,. compete with other roads
or otk)er cities and they considered It
their duty to so check and interfere
with the natural law of competition
that it shall not work against the In
terest of such roads or such cities. I
candidly ask the question. Is this what
I 1
the people of my country or of any of
the inland country are asking for? If
it is not, is it what they wiU surely get
if the Commission has power to give
it to them? I am not blaming or com
plaining of the. Commission. It will be
compelled to take the place of traffic
managers of all railways. Today each
manager Is compelled to look after
the interests of his own system. When
he is supplanted by the Interstate Com
merce Commission that Commission
must look after the interest of their
system, and it can only do so by so
adjusting rates so that everyone shall
receive its .portion of the business, be
cause it has stated again and again
that the public necessities demand that
each one of these roads shall receive
its proper proportion of the carrying
business in order that It may properly
su,bserve interests of the people along
Its line.
So they are driven into the same
position that they have been driven
Into in the old countries and I am
doubtful if they will get as good an
adjustment of it as they would if they
would leave It entirely in the hands
of tne present managers.
Mr. Dolllver. Mr. President
The Vice President. Does the Sena
tor from North Dakota yield to the
Senator from Iowa?
Mr. McCumber. With pleasure.
Mr. Dolliver. The Senator appears to
be reading from the findings of the
Commission In the case of the seaboard
discriminations or preferentiais sub
*mlttcd to the Interstate Commerce
Commission for a voluntary arbitration.
Docs the Senator claim that there is
anything in the existing law that would
give to the Interstate Commerce Com
mission the jurisdiction which they
voluntarily, at the request of the rail
way companies, exercised in that case?
Beyond that, 1 Call the Senator's at
tention to the fact that the pending bill
expressly excludes, or in effect excludes,
the jurisdiction to .determine their dif
ferentials and confines the jurisdiction
of the Commission entirely to a com
plaint against a given carrier for ex
cessive or discriminating rates, and
does not authorize the Commission in
any way to enter this field of terri
torial discrimination, weighing against
each other the separate and independ
ent railway systems of the country or
the independent and separate markets
of the country.
Mr. 'McCumber. Mr. President, the
Senator speaks of the existing law.
Under the existing law the Commis
sioners held in that case that they
could not make it binding upon the
company, but that that was the law
which should govern and it Is tho law
which they would enforce if they had
to power to enforce it.
The pending bill, by giving them
the power to fix maximum rates, in
my opinion, does give them the power
to enforce exactly that provision. Let
us suppose that here is a line from
Chicago to New York and another line
running from Chicago to Baltimore and
New York. One line can afford, by
reason of Us facilities, by reason of its
not being too greatly in debt, and a
thousand other reasons, to carry grain,
say, at 20 ecilts a hundred. When the
Commission pass upon the question of
the rate on grain for that railroad
alone they are cotnpelled to say that
that 20 cents a hundred Is a reasonable
rate. When they come to the other
road they will find that it cannot pav
dividends unless it charges 25 cents a
hundred, yet by saying that tho rate
upon the first road shall be 20 cents a
hundred they are compelled bv the
logic of events to hold that that is a
reasonable rate between Chicago and
New \ork, becauso the product is going
by the road that will take it the cheap
est. So the other road would be de
stroyed. But following the North At
lanu« differential case, they would bo
compelled to a halt and Say the
interests of the country demand that
reasonable rates shall be so construed
that they will be reasonable to every
one of these roads,
that they all
may participate in the traffic.
I havo tried to study out the real
meaning and intendment of this rate
making power. I should like to ride In
your train, if I knew what station it
was going to land me In but there is
not a single one among your own ad
vocates who can tell me the direction
it is going or on what track it is run
ning. None of you arrive at the same
conclusion as to where you are going,
because you do not start upon your
first basis and that is this basis of
reasonableness. I know of no method
of determining accurately the question
of reasonableness, except you take up
one road at a time, and If you do that
you have got just as many reasonable
rates as there are roads and all dif
ferent. On the other hand, if you take'
a railroad that can haul for the least
amount between two given points and
you make that your basis, then every
oue of the other roads will have. to
carry unreasonably, low to compete
and if you take as a basis the road that
will be the most expensive, whether It
is by valuation or anything else theu
the rate of every other road will be
Unreasonably high and if you take
some middle ground between them,
then half of them, on one side will be
unreasonably high, and the other half
unreasonably low.
Mr. Tillman. Mr. President
The Vice President. Does the Sena
tor from North Dakota yield to the
Senator from South Carolina?
Mr. McCumber. With pleasure.
Mr. Tillman. The Senator said a
moment ago that not one of us knew
where we are going or whfere the train
would land. Does the Senator know
where he is going? (Laughter.)
Mr. McCumber. -I am going to stand
where I am until the Senator shows
where he is going to .land me: .but if
he can show me a better place than
where I am. I am going with him. I
do not want the Senator to understand
that because I criticise this portion of
the bill, I am opposed to the bill 'as a
Mr. Tillman. The Senator said a
moment ago. if he will permit me. that
this territory, speaking of the inland
territory, had been built up by reason
of favoritism. He did not use that
language cxactly, but that was the idea
—that there had been discrimination
in favor of it.
Mr. McCumber. You can use that
language, because that is what I mean.
Mr. Tillman. I have seen p. good
many statements comlftg from farther
west, where there Is a great outcry
over the discrimination against those
points—Denver, Spokane, and other
points are loud, howlfng, in fact, be
cause they say they are practically be
ing destroyed by this very favoritism
and I, for one, have been trying to go
to that point where everybody will
have an equal show, and where you
will have no discrimination between
sections or between localities or be
tween individuals.
Mr. Aldrich. Mr. President
The Vice President. Does the Sena
tor from North Dakota yield to the
Senator from Rhode Island
Mr. McCumber. Certainly.
Mr. Aldrich. I should like to ask the
Senator from South Carolina a ques
tion, if the Senator -from North Dakota
will permit me.
Mr. McCumber. Certainly.
Mr. Aldrich. I should like.to ask the
Senator from South Carolina whether
this bill, in his opinion, gives jurisdic
tion to the Commissioner over the ques
tion of differentials?
Mr. Tillman. I have not examined
that particular point.
Mr. Aldrich. Well, it Is- the most
Made right I purchase
only the best material
that the market afford*.
I make all my bridges to
order from careful meas
urements. My manufac
turing and grinding plant
la the oftly one in the pity.
I can duplicate any pair
ot glasses (without the
My Glaasea Fit the Noae
Doe* Youra7
12 14 & M.ft.--''-' fraair«fa,H. B.
vh 4»f ufm
vital point In thla bill, or one of the
most vital points, and It is a question
about which there seems to be a dif
ference of opinion.
Mr. Dolliver. Mr. President
The Vice-President Does the Senator
from North Dakota yield to the Senator
from Iowa?
Mr. MoCumber. Certainly.
Mr. Aldrich. I would be glad to have
and Senator answer It who thinks he
,The Vice-President. Does the Sen
ator from North Dakota yield to the
Senator from Iowa?
Mr. McCumber. Ipyield to all Sen
Mr. Beveridge (to. Mr. Aldrich). Re
peat the question.
Mr. Aldrich. It is whether the bill
before the Senate gives to the Com
mission jurisdiction over differentials
between different localities and ports.
Mr. Tillman. The main thing in' it Is
to give the Cimmission jurisdiction over
the fixing of rates.
Mr. Aldrich. I was content with the
Senator's first answer, which seemed to
be conclusive. I would be glad, to hear
some one else who will give a different
Mr. Dolliver. The jurisdiction given
by section, 15 of this bill is plain.
I think. It gives jurisdiction to the
Commission, where a complaint is made
that a given rate is too high or Is in
the nature of a discrimination forbid
den by law, to make an order prescrib
ing a maximum rate and an order to re
quire the carrier to cease and desist
from the discrimination In so far as
tney find it to exist. The complaint
authorized is under section 13 of the
existing law, and must be directed
against a given carrier, or, where more
than one carrier participates in a Joint
rate, against the carriers participating
in it. It will be seen, therefore, that
the bill deals with no rates except
rates that are ttoo high, charged by a
carrier, or In the case of a Joint rate,
by the carriers who participate in It,
and with cases of discrimination made
by' a carrier on its own line or upon
the jolnftline of more than one carrier
participating in the same joint carriage.
It is therefore obvious that the bill
applies to no excessive rates and no
discriminations except such as are In
volved in the carriage of goods over
a particular line or a joint line. It
does not therefore include these port
differentials or any of the territorial
conflicts, such -as the one that was re
cently submitted by the trunk lines to
tho volunta-y arbitration of the Inter
state Commerce Commission.
Mr. Mc Cumber. Evldenly we differ
a little upon the construction of that
law. Let us suppose that the board
of trade of the city of Minneapolis, In
Minnesota, should lay before the Com
mission the charge that the rat^s
charged on all of class A freight be
tween Minneapolis and Chicago over
the Chicago and Milwaukee road was
excessively high and unjust. Does the
1 understand the law, you may not only
bring in one little shipment, but you
may also invite the railroad com-'
missioner of any State to make up
a schedule of rates which he says are
too high, and the Commission has to
consider those and If I can understand
law at all, if can construe the
language of that measure, if I read It
correctly, then the power lies with the
board absolutely ,to consider not only
one article, but any class of articles
between any two cities, and that in
effect will determine tho whole ques
tion. If you can take up one class, you
can take them all up in the same
Mr. Aldrich. But thirf provision of
section 15 of the bill as It came from
the House directs the Commission to
inquire into any rates that are other
wise in violation of the provisions of
"this act"—that is, the Interstate-com
merce act and the third section of the
interstate-commerce act reads as
"That it shall be unlawful for any
common carrier subject to the provi
sions of this act to make or give, any
undue or unreasonable preference or
advantage to any particular person,
company, firm, corporation, or locality,
or any particular description of traffic."
Thoso words are written into the
interstate-commerce act, and any rates
which are in violation of that pro
vision it is the duty of the Commission
to consider and report upon as much
as upon the question of reasonableness.
I can not understand the use of
language if that does not give to the
Interstate Commerce Commission Juris
diction over differentials.
Mr. Dolliver. Will my friend the
Senator from North Dakota permit, me?
Mr. McCumber. Certainly.
Mr. Dolllver. Admitting what the
Senator from Rhode Island says, it is
evident that the discrlminatiiniB re
ferred to there are not such discrimina
tions as might be claimed to arise by
comparing the rate on the Illinois
Central from Chicago to New Orleans
with the rate on the Lake Shore and
New York Central from Chicago to New
York City.
Mr. Aldrich. "Any" Is the word used.
Mr. Dolllver. But it is not competent
to establish a claim against the Illinois
Central on account of a discrimination
made by some other railroad. The
whole object of this bill has been to
narrow the jurisdiction of Commission
to a complaint directed to be made by
certain authorized parties against -.a
common carrier, or where there is more
than one, against the railroads inter
ested in the joint carriage. There can
not be found In the bill a line which
authorizes the Commission to weigh
the rates to New York against the rates
on another railroad to New Orleans, or
Baltimore, or Philadelphia, or any
where else.
Mr. Foraker. Mr. President
The Vice-President. Does the Sen
ator from North Dakota yield to the
Senator from Ohio?
Mr. McCumber. I will yield. to tho
Senator, and then I will proceed.
Mr. Foraker. I wish to ask the
Senator from Iowa, if the Senator from
North Dakota does not object, how
otherwise, under this bill. If it become
a law. It would be possible for the
Interstate Commerce Commission .to
hear and determine whether the rate
from Chicago to New York is an un
reasonable rate as compared with the
rate to Baltlmqre ahd Philadelphia,
which, because of the differential, is
put 2 or 3 .cents lower, and for no
other reason?
Mr. Dolliver. The Interstate Com
merce Commission will be required un
der this bill to deal with the complaint
on its merits, to make whatever in
quiry is necessary, to use the infor
mation it has and all the Information
it can get, but directed to the ques
tion whether the rate complained of as
excessive is in reality top high.
Mr. Foraker. That is It precisely
but the question we are determining
is whether or not the rate from Chicago
to New York is excessive as compared
with the rate from Chicago to Phil
adelphia or Chica*™ to Baltimore The
complaint may not be In that exact
form, but necessarily, if there Is an
Intelligent Investigation, ,It wills'com
prehend that, because It is only by con
sidering relative rates that you can
determine whether pr not a difference
of 2 or 3 cents on grain from Chicago
to New York is a discrimination and
if the Commission would be compelled
to consider that, the whole system of
differentials goes to the wall, and the
disruption whith the Senator* from
North Dakota has pictured so eloquent
ly and forcibly would Inevitably fol
olw, for according to the finding of the
Commissioners themselves a differ
ence of one-jelght of 'a cent per bushel
on grain from Chicago to New Tork
would des-troy the whole distribu
tion that has been brought about be
tween the roads and the cities by
this dlfferentlol.
Mr. McCumber. I really can not' un
derstand the position of the Senator
from Iowa when he considers section
3 of the law as It now stands.-* The bill
which He is advocating provides for the
enforcement of the provisions of that
law, and as as this law prevents any
thing which would be a discrimination
as between localities as well- as be
tween persoYis. and as discrimination
between localities !s always a ques
tion of differentials, of course the Com
mission must consider and fix differ
entials in order to prevent those dis
criminations between localities.
Mr. Dolllver. It Is true that pectlon
3 refers to dljfferentials. but not'to dif
ferentials such as he is talking about
It refers to differentials that may ex
ist along a llne-of railroad-between the
localities- served by the railroad.
Mr. Foraker. It the Senator will al
low me. he will certainly concede,
his attention Is called to It, that the
kind of differential, to employ his ex-.
kfc, tf
ression. to which he now refers Is
In technical language as a "pM-'
Mr. Dolliver. Very well.
Mr. Foraker. Differentials are those
that apply to ports, and the term has
been correctly employed by the Senator
from North Dakota..
Mr. Dolllver. The word "differential''
applies to ports, but eection of the
original interstate-commerce aet does.v
not refer to such discrimination' asv
may ar|s*out. of :thefact that 6n«T
railroad charges, more' thaw another,
but out. of the faet that the same rail
road charges one point on Ita line more
than another.'
Mr. AlrlcTh. The Senator from Iowa'
must find that distinction outside of
the language of the set. because the
jMsaibie discrimination bet'
Mr. Foraker. Will the Senator from
North Dakota permit .me t» aah the
Senator fr5m lo*a Just one mure
questlonT /."-.i. V. ,s.
Mr. McCumber. Certauny. Si
Mr. Foraker. lit the interstate/com
merce bill, ae It Is called, pre&ented
by the Interstate Commerce Commis-- 1
sfon, it was carefully provided that
they should have Jurisdiction not only
to determine maximum-rates, but min
imum rates, and. to fix dliterentlals.
When the bill which Je now under eon
sideration was Introduced, or, at least, v":
when it came here,! that had been taken
out of It. I want to- aek the 8enator- Si
from Iowa why it was that all allusion fe
to differentials In terms was strlcken s
out pf the bill, except only for the te
reason that he fore saw that It would
be absolutely Impossible for the" Com-'
mission to fix differentials, that It?
would be In conflict with
Mr. Dolliver.1 I will say frankly that
my study of the question convinced me
that It would be quite Impossible, and
for practical purposes possibly danger
•. ous to the commercial peace of 'the
country, to clothe the Interstate Com
merce Commission with the -. power
against which my honorable frlenT-the
Senator from North Dakota Is con
tending. 1 studied very carefully that
decision and other decisions in which
.they undertook to exercise this ter
ritorial Jurisdiction, weighting one mar
ket against another and one railroad
against another, although they serve
for separate communities and upon a
study of the question, ^running over a
very long space of time.' 1 became con
vinced that such a Jurisdiction ought
not to be conferred'upon the Commis
sion. That suggestion of the Inter
state Commerce Commission was
omitted In th6 bill which I had the
honor to introduce) In the Senate be
cause I recognized tne force of what the
Senator from North Dakota has said
in relation to this matter, and I did
nbt desire to be put in the attitude of
seeking to clothe the Commission with
that vast power' over the competitive
market placeB of the United States.
Mr. McCumber. The Senator undoubt
Mr.-Spooner. Will the Senator al
low me for momentT
Mr. McCumber. Certainly.
Mr. Spooner. I want te ask the Sen
ator from Iowa for his opinion. He has
given the bill icareful examination. In
his opinion, would it work ao change
in this bill to insert in a proviso
that It is not the intention of this
bill and it shall not be construed to
authorize the Commission to fix dif
Mr. Dolllver. If the word "differ
ential has a fixed and technical defini
tion, as my friend from Ohio eoggestB,
I ccrtalnly would have no objection to
that. I would rather, however, clothe
the proposition in such general phrase
ology as would avoid apy uncertainty
as to the word "differential." In the
testimony before our committee the
word seemed to be used Indiscriminate
ly to describe the differences between
the rates of different railroads and be
tween points on the same railroad and
there evidently was some confusion in
the technical meaning of the term. But
so far as this bill iB concerned—and I
do not know whether anybody agrees
with the bill, or not—the Intention of
it was to narrow the Jurisdiction Of
the Commission to simple buslnees of
reducing a rate which, was found to be
a discrimination against localities
along the lines of carriers intereeted
in that rate.
Mr. Bacon. Mr. President
The Vice President. Does the Sen
ator from North Dakota yield to the
Senator from Georgia?
Mr. Bacon. I should Hke te aek tho
Senator from Iowa a question.
The Vice-Presidents The Besato,r
from North Dakota has not yet yielded.
Does he yield?
Mr. McCumber: I would tf had
not yielded so bftenv-for the Beaator
from Iowa to' answer Questions.
Mr. Bacon. Then I will net trespass
upon the Senator.
Mr. McCumber. However, I win yield
this time to let the Senator "films
Georgia ask the question.
The Vice-President. The Beaator
from North Dakota yields.
Mr. Bacon. I appreciate the eourtesy
of the Senator, but I "realise the fact
that possibility he has extended, it as
far aa he should, and desires to con
clude his speech. I can make the in
quiry at some other time. While I
appreciate it, I will not-take advantage
of the Senator's courtesy.
Mr. McCumber. '.I thank the Sen-*
ator very mucn.
Mr. President, I do not. think that the
Senator from IoWa (Mr. Dolllver) com
prehends the point I desire to make in
this respect, and I wlll lftve a concrete
case. We will suppose that the North
ern Pacific .will make rates to Tacoma. -.
on the western coast, lower on a cer
tain class of goods, .or* on all export
goods, than the Great Northern will
make to Seattle. The Meult would be
that the Northern Pacific would get
that business. It would get all of th»
export business, and Tacena would be
tho exporting city.
Now following the decision and the
rule that was laid down in the North
Atlantic Differential case, what would
be the duty of the Commission when
the case is brought up before it? They
have said that It is 'not to the interest
of the public' that the business shall
be taken by one line entirely awav
from the other. They have said that
It is not for the interest of the public
that the people of the great cities
should be debrlved of their export busi
ness. fhey have given that—and with
good, reason, I think, In man" instances
—as the very foundation of their hold
ing. -,
Now, what I m6t*n to say is that
wlten. the Commission pass upon the
reasonableness of the rate of the North
ern Pacific from Minneapolis or St.
Paul to Tacoma, they, wllrbe forced, by
the logic of the situation In order to
maintain a proper equilibrium, which
will be for the benefit of the public,
also to consider what would be the
effect upon the other roads of lower
ing the rate to a certain amount. I
am not only defending them upon that
proposition, but I am insisting that
unless we have absolutely chaotic con
ditions with respect to our railways
that will be absolutely necessary. The
railways themselves have found It
necessary in order to continue the busi
ness without a contluous rate warfare,
and I believe the Commission wlll.be
justified In'holding more or less to that
particular contention.
N°w, Mr. President, I wish to go a
little further.
Mr. Newlands. Mr. President—^—.
The Vice-President. Does the Sen
ator from North Dakota yield to the
Senator from Nevada?
Mr. Newlands. I wish to ask the
Senator a question.
Mr. McCumber. Certainly.
.Mr. New lands. That is. whether
there is not this distinction: I under
stand the Senator to refer to the case
from Minneapolis, to Tacoma
by the Great Northern and from Min
neapolis to Seattle by the Northern
Mr. Keen. Just the reverse.
Mr. McCuiriber. Just the reverse.
Mr. Newlands. Just the reverse: and
he assumes that one rate—the Tate
to Seattle—is less than the other, and
in that way Seattle would absorb all
the export business. Now. we will
assume that these two roads were In
one ownership. I can Imagine then,
-that under this bill If that preference
were given to Seattle over Tacoma or
to Tacoma over Seattle, a complaint
would be made under this act But if
the two roads are In separate owner
ship, each In the ownernhip of a cori
atloh, I do not see how {he Interstate
Commerce Commission could be called
.. luestion
upon them to determine the,que!
,,'the 8e^
I will make that
Mr." McCumber.
"P'y complaint
will be of the actifen of a particular
Ir 5.® area of its own territory.
Mr. McCumber. I know but- sup
Newlands. And a comparison
m1 'w action of another road In
Mr. McCumber. I understand that.
«r- Newlands. ^yiH,not*furnish any
basis ••for determining the reasonable- "i
ness or the unreasonableness of the
charge by the individual road.
Mr. McCumber. The point is slmnlv S
here Suppose the rate on the Horfh- fri
bas sar
to Seattle, and the rate of the
"til! challenged as 7
rate of the
alien sed as
being too hijfh, tnat theyv could afford
flged, then I say that the Interstate i-V'
•end another igJlW.
line, Into bankruptcy*op that it will inr.
•oufly Injure It. That ls the proposU^n W
which I have been tryljig to lay aenrn.
Commerce -Commission will be forced '& -S
to take into consideration what other
carry It for In fixing. a
standard of reasonableness "-'i
Northern Pacific,
.Mr. Newlands.
reduce the rate Tf the effect of.t
auction Would be to deprive
let p»r eay'tO'-t^TflwuMiy

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