ested but of the communities interested, to a particular tribunal that suits them and that they are willing to submit it to, and the Government saying that every such question may be submitted to a tribunal established by the Government against the consent not only of the railroads but of the interests involved. Arbitration is one thing and compulsory arbitration is entirely another thing, and it does not follow because some people submit some things to arbitration that all the commerce of the country shall be submitted to the compulsory arbitration of any governmental tribunal. The point was raised here-and I think it was made clear to the committee that any plan of apportioning commerce through the action of the Commission necessarily involves the plan of prescribing rates, and any way you look at it, if the Commission determines this question it will say, in effect, to some railroad or some community "You must quit getting as much of this commerce as you are now getting because somebody else ought to have it." That will be a decision in favor of one part of the public against another part of the public, and unless conditions grow very much worse even than they ever have been it seems that individual initiative should be left to work out its own solution in commercial matters. Of course when there is a controversy between a shipper on the one hand and the railroad on the other, I recognize that it is finally estab lished in our theory of government that the parties are not on equal terms and the railroad must be regulated; but when it is a conflict between two sections of the public it is equally a theory of our Government that those two sections of the public shall fight it out and settle it for themselves, that this is not a paternal government, that this is not a government that dispenses prosperity to one or denies it to another or tells how prosperous one shall be or how much prosperity another shall give up; and as soon as you give the government the power to prescribe the adjustment of rates between two communities you do create that dispensing power and depart fundamentally from the theories of our Government. As I said yesterday, one of the difficulties with the commerce of this country has been that there has been more independence and going. ahead and developing every part of the country than could be found anywhere else in the world. That initiative has been made pos- . sible by the fact that a railroad, when it has found that traffic could be created or extended to other points, has gone ahead and made an adjustment to help out the communities on its line. "You can not have your cake and eat it too," and if you say the Interstate Commerce Commission shall control this initiative you necessarily take it away from the railroads and you discourage the railroads from attempting to reach out and get new traffic, because they will realize what they do in that particular instance will be applied as a precedent in some other case, and that instead of simply developing traffic in that particular case they will simply be piling up precedents that will serve to disturb some other relation and bring the matter before the Commission and have its dispensing power extended still further. Considerable reference has been made in the last day or two to the long and short haul clause. I may properly state briefly the exact effect of the present law. The courts have held that where the conditions of competition are substantially dissimilar at the longer distance point and the shorter distance point it is no violation of the long and short haul law for the railroad company to recognize those conditions; but the rate to the longer distance point must be no lower than is necessary to meet the competition, and the rate to the shorter distance point must be reasonable. And the railroad company is not the final arbiter of whether these conditions are similar or dissimilar. The Commission can determine it in the first place. Its finding has prima facie force, and then it may go to the courts to say whether the conditions are similar or not. Mr. Burr, of Florida, cited the case of less charges on freight to Jacksonville, say from the Ohio River, than to Tallahassee. It is obvious that the conditions of Tallahassee and Jacksonville are dissimilar. Jacksonville is on the Atlantic Ocean and has water transportation, and Tallahassee has not. Therefore Jacksonville always has had a substantial advantage, and always will have, in competitive conditions over Tallahassee, which is an interior point. If the rate charged to Tallahassee from the Ohio River is unreasonably high, there is ample provision for correcting that condition under the law to-day; and if the railroads voluntarily give a lower rate to Jacksonville than the conditions justify, that can be stopped under the law to-day. Mr. TOWNSEND. Who is going to determine under the law to-day what the conditions justify? Mr. HINES. The Commission can. They did it in the Social Circle case, and the Supreme Court affirmed its findings. That is one of its prime duties to determine those things and enforce their findings. Mr. STEVENS. As the law stands to-day is it left to the railroads to determine those conditions primarily? Mr. HINES. They are bound to determine it primarily, and will continue to do so until the fixing of rates is left to some other tribunal. The idea seems to be on the part of Mr. Staples and Mr. Burr that there should be an ironclad long and short haul clause, with the idea that the Commission could suspend it. That is what the Interstate Commerce Commission considered at the outset of its career, and in an elaborate opinion of Judge Cooley, in which I think the entire Commission concurred, the Commission announced that the adjustment of conditions between localities which would be thrown upon the Com"mission by that effort to say when the long and short haul clause should be suspended would be an enormous power in a single State and would be absolutely superhuman in the United States as a whole. And it is this power that the Commission condemned in that vigorous language which these gentlemen now urge be conferred upon that Commission. There has certainly been no change in conditions which would make that wise now when it was so unwise seventeen or eighteen years ago. On the contrary, everything has tended toward an equalization, an improvement of these conditions. They have not been wiped out, because you can not legislate commercial conditions out of existence, but there has been a constant tendency to improve in that direction. The Commission has passed on numerous cases, and has decided that those conditions were not substantially dissimilar, and the railroads have complied with the orders of the Commission and put them into effect. Mr. STEVENS. Supposing that ruling were put into effect, what would be the condition and result of such a law in moving corn, for example, or grain from points like western Iowa and Nebraska and South Dakota and that section? Mr. HINES. I would not undertake to make a positive statement about that territory, because I am not familiar with the conditions. Mr. STEVENS. I am speaking of the general effect. Mr. HINES. But I will say that in the Southeast, where I am reasonably familiar with the conditions, one or two results would come about— either that the long-haul business would have to be given up and the markets reached by that traffic would be lost or very much restricted, or the short-haul rates would have to be so reduced as to bankrupt the railroads. The consequence would be that the Interstate Commerce Commission would be compelled to suspend that law. But the Commission has power to remedy conditions under the present law, and this power to suspend that is proposed is something that I can find no foundation for in any part of the history of the traffic of this country. Mr. ADAMSON. Referring to the case where the rate to Jacksonville was cheaper than to Tallahassee, I presume the theory is that from most of the markets of the country it is actually cheaper to go by Jacksonville than by Tallahassee? Mr. HINES. Yes. Mr. ADAMSON. Then would it not be practicable to arrange exceptions in a general freight bill as to those places and as to particular commodities, when it is not cheaper to go by that route? Mr. HINES. That is what the statute does now. Mr. ADAMSON. There may be interior places from which traffic is moved where that theory would not apply at all? Mr. HINES. Yes; it is possible, but not probable, because the commercial status of those two places is fixed by the enormous advantage which Jacksonville has; but if it did exist, as you suggest, the law would apply to it. Mr. ADAMSON. If there was a carload of freight originating in the interior only a few hundred miles away, it would look like the railroad was charging for service it did not perform to charge the rate to Jacksonville and back to Tallahassee. Mr. HINES. The question would be whether the rate to Tallahassee is per se reasonable. If not, it ought to be brought to the attention of the Commission. If the rate is reasonable (to the shorter point) and the rate to the longer distance point is no lower than it should be to meet the conditions, there is no violation of the present law, and it is impossible to see how that condition can be injurious. Mr. ADAMSON. As a lawyer right there I would like you to go on record, if you are willing, with an opinion. If the lines to Jacksonville, by water or otherwise, are carrying freight there at a rate that is profitable to them, a rate they are willing to haul it for, do you think any judgment or order would be valuable requiring them, against their consent, over their objection, to raise that rate, because some other port or some other line could not do as well? Mr. HINES. That is an untried field in Federal constitutional law, as to what could be done under those circumstances. Of course the theory Mr. ADAMSON. It will never be decided until somebody offers an opinion or tries it. Mr. HINES. Of course, the theory of all this regulation for the purpose of deciding the comparative commercial importance of localities is on the idea that you could increase one rate and thereby diminish the importance of that place if the rate to the other place is reasonable. Mr. ADAMSON. These are not the same lines, you understand. Mr. HINES. I understand. Mr. ADAMSON. But there is one line going to New Orleans and one to New York. The line to New Orleans says it can make money and do business at a certain rate that is fair and reasonable, and it objects to changing it because the conditions are such that others can not make profits on the same rates. That states it squarely. Now, is it right, and would it be legal, constitutional, against the consent of that line to order them to raise that for the benefit of some competitor? Mr. HINES. I can not get it into my head that Congress could pass a law that would directly give New York an advantage over New Orleans in that way, and I do not see how the same thing could be accomplished by indirection by delegating the power to a commission. Mr. STEVENS. I would like to ask a question in that connection. Judge Prouty states in one of his papers that the rate on oil from Cleveland to New Orleans was 26 cents: the rate on oil from Chicago to New Orleans was 24 cents. At Cleveland there were independent refiners who sought the southwestern market. At Chicago was the Standard Oil Company, which practically had a monopoly running over that line. The Cleveland rate was fair and reasonable. The rate from Chicago to New Orleans was unfairly low because other commodities of the same character and class had the same rate between Cleveland and New Orleans and Chicago and New Orleans. So that the comparative rates on oil between Cleveland and New Orleans and Chicago and New Orleans were unfairly low as regards Chicago and New Orleans. Now, what could be done under the present law, conceding that condition exists? Mr. HINES. Under our present law the Commission could prevent the charging of more than a reasonable rate from Cleveland to New Orleans. Mr. STEVENS. But it is conceded that that is a reasonable rate-that 26 cents is a reasonable rate-and the other is unreasonably low. How would you remedy that discrimination? Mr. HINES. If some railroad that runs from Chicago to New Orleans establishes that condition, I do not see how it can be remedied, and I do not see why anybody would want to remedy it. If some railroad running from Chicago or New Orleans establishes that condition, and is willing to carry the business for a lower rate, that certainly is an advantage that Chicago ought to have, Mr. STEVENS. Now, conceding that the article is competitive with oil-for example coal, or anything of that sort that would be competitive with oil-and that that article has the same rate between Cleveland and New Orleans and Chicago and New Orleans; the result would be then that there would be a monopoly of oil over every other competitive article and a monopoly of the Chicago market over every other market owing to those conditions. Now is not that discrimination? Mr. HINES. If the traffic conditions are such that oil can be and is carried from Chicago to New Orleans for less than other competitive commodities are carried from Chicago to New Orleans it is entirely probable that as a matter of fact the Commission could find, and could sustain its findings, that it would be unjust discrimination on the part of the railroad from Cleveland to charge more for oil than it does for competitive commodities from Cleveland. Mr. STEVENS. But it is conceded that charge from Cleveland is a fair, just, and reasonable charge, not only as to oil, but competitive commodities; it is conceded that as to the other competitive commodities the charge from Chicago to New Orleans would be the same as from Cleveland. Oil is the one single exception. Mr. HINES. If from a traffic standpoint oil may be an exception at Chicago the Commission might find that to be a basis for dealing with the carrier from Chicago to Cleveland; but if there is a railroad from Chicago to New Orleans that does not go to Cleveland and is not responsible for conditions at Cleveland, and it is willing to carry oil for less than a reasonable rate, whereas that is not true at Cleveland as to the railroads there, that is simply the advantage Chicago has. It may be that the refiners at Chicago are owned by the Standard Oil Company; but if you enforce the law against rebates it gives every body else the same opportunity to establish a refinery there. It gives Chicago the benefit of its favorable location. Mr. STEVENS. Right there, then, you concede that carrying oil from Chicago to New Orleans at less than a reasonable rate would be a discrimination against other competing commodities that ought to be carried at a reasonable rate and are carried at a reasonable rate? Mr. HINES. That is on the same railroad; yes, sir. Mr. STEVENS. How are you going to remedy that discrimination, then? Mr. HINES. If it is on the same railroad, declare that that is an unreasonable discrimination. Mr. STEVENS. What would you provide to equalize conditions? Mr. STEVENS. No; as respects Chicago. Supposing that competitive articles with oil were carried at a reasonable rate from Chicago to New Orleans; that oil was carried at an unreasonably low rate; how would you equalize? Mr. HINES. The Commission could declare that that was an undue discrimination and order a discontinuance of that rate. Mr. STEVENS. In what way? Mr. HINES. Just that the railroad is ordered to cease and desist from charging a lower rate on oil than on other commodities. Mr. STEVENS. And that means they have to increase the rate? Mr. HINES. One or the other, either increase one rate or lower the other rate. Mr. STEVENS. A condition might occur by which they would have to increase their rate? Mr. HINES. Certainly. Mr. STEVENS. That is what I wanted to know. Mr. ADAMSON. If conditions are such that without dishonesty or improper purpose that rate is a profitable and desirable rate to the line that makes it and acts on it, is it really a discrimination for it to establish that rate to which its energy or nature or the situation entitles it? Would it not be just as much discrimination for a woman to be by nature prettier than other women? Mr. HINES. I would like to make myself clear on that. What I intended to say to Mr. Stevens was this: If the A. B. railroad from |