I do not claim there that the question is involved as to whether a rate is too high or not. It is the relationship that I am speaking of; the foundation for the complaint. It being so manifest to all that public sentiment is so strongly crystalized in favor of such legislation as would restore to the Interstate Commerce Commission the powers supposed to have been conferred by the law of 1887, it seems only fair to ask you, gentlemen of the committee, to recommend such a law, and have it enacted, and let time tell whether this will solve this great question.

The CHAIRMAN. Would it interupt you if I were to ask you a question?

Mr. STAPLES. I would be pleased to answer, if I can, Mr. Chairman. The CHAIRMAN. Speaking on that subject of differentials between localities, imagine the condition that existed a few years ago, when the Pennsylvania road had its line to the west from Philadelphia, and the Baltimore and Ohio had its line to the west from Baltimore, and neither had a line between Baltimore and Philadelphia. Suppose that the Baltimore and Ohio Railroad gives to its terminal, Baltimore, an advantage of 2 or 3 or 4 cents; do you think that that would be a proper subject for governmental interference, or for the Commission to act upon? Would not the people of Baltimore have the right to whatever benefit a road coming to their place, and not going to its rival, would give them?

Mr. STAPLES. I will give you my honest opinion about it.

The CHAIRMAN. I want to get your idea about it.

Mr. STAPLES. Yes, sir. I do think, without going into details, that there should be an intermediary tribunal for the purpose of passing upon that question; a tribunal which is disinterested and has the interests of the whole public at heart.

The CHAIRMAN. You think those two rates should be the same?

Mr. STAPLES. Do not understand me to say that. There may be reasons why there should be a difference. But I do not believe that the question should be solely settled by those different companies.

The CHAIRMAN. Then, you think that it would be proper for the Government to provide means by which the rate to Baltimore should be raised, and they lose the advantage that comes to them from this situation that I have described?

Mr. STAPLES. I do. However, upon that question I wish to say that while there might be a case parallel to the one you cite, under the conditions to-day, such cases are rare.

The CHAIRMAN. I was speaking of the conditions that existed.
Mr. STAPLES. I understand that.

Mr. MANN. The condition does exist to-day, in Iowa points, in shipping grain that goes to Liverpool as to whether it shall go to Galveston or to the South, or whether it shall go to New York coming eastThat is a practical condition to-day, is it not?

Mr. STAPLES. Yes, sir; that is true. I agree with you there.

Mr. MANN. Do you think that it is wise to confer upon a commission the power to set aside all rivalry in trade and by an arbitrary order determine that the grain shipments to Galveston shall cease, on the one hand, possibly, or that the grain shipments to New York shall cease, on the other hand, possibly?

Mr. STAPLES. Yes, sir. And as a qualification I wish to say that I

do not believe that a commission would so find under any circumstances. They might, however, find that there should be a certain change in the conditions.

Mr. MANN. Do you believe that it is within the power of finite wisdom, in an order, in a specific case, and upon a hearing, to absolutely determine between these two points, Galveston and New York, say, so as to reach absolute equality that must remain, instead of leaving it to a question of rivalry?

Mr. STAPLES. There can be no such conclusion on the question; under our constitution-getting a little way into law, as I understand it now-that is absolutely precluded, as I understand. There can be no decision by any commission which is final or which is not subject to review by a court.

Mr. MANN. I mean assuming that the courts would review it and come to the same opinion. Assuming all that.

Mr. STAPLES. I reiterate my opinion; restate it-that these different common carriers being public servants you can not present to me a feature or a question which would change my opinion that there should be some supervisory power.

Mr. ADAMSON. Do you not think that a better plan would be that where the railroads are willing to compete they should be allowed liberty to do so, and where they desire to throttle competition and combine on rates that then the intermediate power should take a hand and set that right?

Mr. STAPLES. The railroad companies in certain conditions desire to compete, as you put it, but the cases are rare where, for any length of time, they dare do it. They can not do it and live. If they do it, they will kill each other off.

Mr. ADAMSON. That would be because they cut one another's throats?

Mr. STAPLES. Yes, sir. Now, speaking of the Elkins law which has been enacted, I think it was wise legislation. I have not any doubt in my mind that it was enacted as much, and perhaps more, to benefit the railway companies of the country than the people of the country. Yet I think there is a common benefit, and I think that was very desirable and necessary legislation. I am not able to prove anything, and am making no charges, but it is claimed that that law is evaded to-day in certain localities and by certain railroad companies. I do not make any charges, but it is so stated by persons who claim that they can prove it.

But it is a benefit to the country by preventing this demoralization of the railway situation, and certainly must have added very greatly to the revenues of the railroads of the country, as it has obviated the necessity of refunding to certain favored shippers those charges which properly belong to the carrier, which demoralization would simply result in discriminations between certain individuals or favored localities on the lines. I think this law has in a great measure done away with that, and has been a good thing.

Mr. MANN. You are a practical man, and your views are of great value to us, and you will pardon me if I ask you another question. Mr. STAPLES. You appreciate that I wish to take up as little time. as you wish me to take up.

Mr. MANN. I understand. It is claimed, now, by both Chicago and

New York, that the grain rates from Iowa points through Chicago and New York to Liverpool are too high as compared with the rates from Iowa points to New Orleans or Galveston on the way to Liverpool. Do you think it is wise to permit the Interstate Commerce Commission, after hearing, to raise the grain rates from Iowa points to Galveston and New Orleans, and prevent the railroads now leading south from getting what they consider is their share of that grain trade, and helping those southern ports at the same time?

Mr. STAPLES. I think this, that there is more than the question of grain rates involved in that question. Those roads running south are operated to serve the public. It may work no injustice to the producer of grain in our Western and Northwestern States if that rate shall be raised, thereby enabling them to get a share of that traffic and to have that to help support them in rendering the other necessary service to the communities served by them. As I say, I can only reiterate my opinion. I do not wish to stand here as an advocate of the principle, generally speaking, of the raising of railroad rates. Mr. MANN. We understand that.

Mr. STAPLES. Not at all; and I believe that power should be conferred upon the Commission. I say "the Commission." I mean any tribunal.

Mr. MANN. I understand. You base your answer upon the proposition that the raising of the grain rates to the South might possibly reduce rates on something else, because it would add to the income?

Mr. STAPLES. No, sir; not at all. That answer was based on the principle that they ought to have a share of that traffic if they are in a position to carry it.

Mr. MANN. I base my question upon the proposition that the Interstate Commerce Commission might, within its power, raise the grain rates South so that the roads South would lose that business. I do not think any of the grain ought to go South. It is a longer way round; and the Interstate Commerce Commission might entertain that same view. But the question is whether they ought to have the power to put it into effect.

Mr. STAPLES. We have in our State to-day a law the wording of which is slightly different from the wording of section 4 of the interstate-commerce act. Our law is effective on the question of the long and short haul. Under that law it is left arbitrarily subject to the review of the courts, with our permission, to determine when that clause may be abrogated by the company. They universally apply to the commission for permission to waive that at certain common points. Now, it rests with us to say whether the question of competition which enters and whether the volume of business they would get at that point are such that in our opinion they should be permitted to lower the rates at that common point on their line because of the fact that their line may be one-third longer than the other line. That answers that question.

Mr. ADAMSON. Do you think it would be right, without the consent and contrary to the judgment of a carrier, to raise a rate that carrier thought was fair and profitable and which it was willing to operate?

Mr. STAPLES. I do not think it is fair to take it from that standpoint. You can not determine whether the carrier thinks it is fair and profitable or not. They may have another motive.

Mr. ADAMSON. That is not the case I state.

Mr. STAPLES. Yes; they may have another motive.
Mr. ADAMSON. That is not the case that I state.

The case I state is

that of a rate which a carrier thinks is fair and finds profitable and which it is willing to operate under. Is it right to raise that rate against the judgment and consent of that carrier?

Mr. STAPLES. There may be conditions existing why, in my opinion, it would be fair.

Mr. ADAMSON. You think that if a carrier finds that it is downhill to New Orleans, and that it can haul twice as much, and can get better loading back, and that other conditions combined will enable it to haul cheaper to New Orleans from the grain fields of the West than from those grain fields to New York, it would be right for the Commission to annul natural conditions and rob that carrier of its market, rob that road and that city of its business, to give it to somebody else, do you? Mr. STAPLES. I think there might be conditions where that would be a wise policy. I do not think it often occurs.

Mr. ADAMSON. It would be entirely for the benefit of another fellow that it would be wise, though, would it not?

Mr. STAPLES. No, sir; not in my judgment, not at all.

The CHAIRMAN. A little while ago, in answer to Mr. Mann, when you were discussing the contention between Chicago and Gulf ports, you said, as I understood you, that those people, the Chicago people, would have a right to some part of that traffic?

Mr. STAPLES. I spoke of common western points, between Chicago and St. Louis.

The CHAIRMAN. I thought the contention came from Chicago.
Mr. STAPLES. No, sir.

The CHAIRMAN. As a matter of fact, it does.

Mr. STAPLES. It was a misunderstanding.

The CHAIRMAN. It was a controversy between Chicago and those Gulf ports?

Mr. STAPLES. I had no reference to that in the connection you speak of now.

The CHAIRMAN. I did not understand you, then.

Mr. STAPLES. Proceeding, Mr. Chairman, we are not here to advocate any particular measure; but I wish to call attention to the so-called Quarles-Cooper bill, as it is generally claimed that this measure simply restores the same powers to the Interstate Commerce Commission which it was supposed to have under the former law. This, I think, is an erroneous idea. There seems to be but one question prominent in this discussion, and that is the question of granting power to make rates to an intermediate body. From my view, and so far as I have been able to read from the public press, that seems to be the prime contention here, and I wish to emphasize that, in my opinion, while that is a very necessary power to confer, I do not believe that it is the crying evil to-day; that is, that the chief complaint comes from the source of the rate, particularly.

It comes more from the inequalities of unfair conditions existing between different localities. And in that connection I wish to say that I have in mind somewhat the question of common markets, and also the question of the long and short haul clause or feature of it, as to which our courts have held, as I understand, as in one of the meas

ures referred to here this morning, that that question of determining when competitive conditions are such that the long and short haul clause should be abrogated rests with the judgment of the carrier and not with the judgment of the Interstate Commerce Commission. The law is worded just slightly different from the law of my State, which has been tested and found to be good.

In that connection I want, at this juncture, to give an instance, and I want you gentlemen to consider not to give your opinion to me but to consider this instance. Taking the different stations-which I can name here I have on my desk now, which of course we can not treat because it is interstate commerce, an instance where the railway company takes grain from intermediate points between the Twin Cities and Chicago for the shipper who offers it. The shipper pays the local freight into the Twin Cities; he pays the other freight back to Chicago and makes a half cent a bushel on the transaction. In other words, he saves a half a cent over what he would have to pay if they picked up a car on the road to Chicago. It seems to me that I can not find a clearer case of what to my mind is an unjust relation of rates. I simply ask the question, and ask you gentlemen to consider, whether such a situ ation as that should not be treated by some intermediary body. I do not say that they should have final authority, but the opinion should come in there as to whether those rates are fair.

Mr. MANN. That rate you named is made in the interests of Minneapolis flour, I suppose?

Mr. STAPLES. I am not here to make any but general statements. I simply cite that as an incident.

Mr. MANN. I understand.

Mr. STAPLES. And I could cite many of them, but I do not think it would be right to take up the time of this committee. I could cite other instances; for instance, where companies bringing cement and lime and other necessary commodities in-for instance, for the building of sidewalks-charge the through rate to St. Paul and the local rate back. Now, there may be reasons why that could be justified. There no doubt are, to my mind. But ordinarily I think that is exacting an unfair rate from the intermediate points.

The CHAIRMAN. Will you state, Mr. Staples, why that would not be a case that could be corrected under the long and short haul clause of the interstate commerce act?

Mr. STAPLES. For the very reasons that I have stated to you, Mr. Chairman. Understand, I make no pretenses to being a lawyer, but I have read those decisions, and it is made clear to my mind that the courts have held that the competitive conditions between the distributing and terminal points may be such that that is necessary.

But the point that I criticise or complain of is that the courts only hold that that is left to the opinion of the carriers. They are to be the judges. If you will read the decisions I am confident you will find that that is the finding of that court.

The CHAIRMAN. Then the remedy would be to strike out from section 4 this line: "Under substantially similar circumstances and conditons." Would you strike that out?

Mr. STAPLES. Mr. Chairman, I beg to be relieved from giving specific answers as to the wording or the substitution of words which would cover what I call the defect.