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The CHAIRMAN. Have we not a Commission whose duty it is to make inquiry with regard to all violations of the provisions of that statute?

Mr. BACON. We have, and they have made inquiries and have found that violations do occur in many instances, and have attempted to remedy it, without effect.

The CHAIRMAN. Whenever they find that there is a violation of the statute it is their duty, is it not, under the statute, to proceed to the courts for remedies?

Mr. BACON. I do not understand that it is their duty to proceed through the courts. It is their duty to hear any complaint respecting such violations.

The CHAIRMAN. And when they hear that a violation of the statute has occurred, you say that you have not yet known that it was their duty to proceed to the courts?

Mr. BACON. No, sir. It is their duty to investigate.

The CHAIRMAN. To investigate?

Mr. BACON. And report.

The CHAIRMAN. Yes. And your understanding of the law-the present law-is that whenever they find that there is a violation, that ends the matter, except as they may advise the discontinuance of it?

Mr. BACON. The act states that on finding any violation of the law the Commission shall notify the carrier to that effect and notify it to discontinue that violation.

The CHAIRMAN. Yes.

Mr. BACON. Those are the words the statute uses.

The CHAIRMAN. And in your judgment that ends the duty and the power of the Commission.

Mr. BACON. The Commission is authorized

The CHAIRMAN. Will you just answer that question, please?
Mr. BACON. What is the question? Just let me have it again.
The stenographer read the question as follows:

And in your judgment that ends the duty and the power of the Commission?

The CHAIRMAN. When they have ordered the Commission to desist? Mr. BACON. No, sir; it does not.

The CHAIRMAN. That is, for the railroad companies to desist?

Mr. BACON. No, sir. It is authorized to proceed to enforce its orders through the courts.

The CHAIRMAN. Yes.

Mr. BACON. In case that is not obeyed by the railway company. But let me say right here

The CHAIRMAN. Go on and answer that point.

Mr. BACON (Continuing). The extent of the power conferred by the act upon the Commission in regard to a discriminative rate or an excessive rate is to so declare it, and to notify the company to cease and desist from that violation. The result of it is that its order may be complied with by a change of 1 per cent, we will say, on the existing rates, when under the existing circumstances, it is plain that there ought to be a change of 10 or 20 per cent.

The CHAIRMAN. Yes.

Mr. STEVENS. I wish you would file with the committee all the instances you know of that thing having been done. I think it will be of great use for us to investigate.

Mr. BACON. It will be a pretty difficult thing to do.

Mr. STEVENS. That thing has been done, I understand.

Mr. BACON. It has been done.

Mr. STEVENS. I would like to know the instances. I wish that you would file that information with the committee.

Mr. BACON. I will give you one instance right at this present

moment.

Mr. STEVENS. If you have time, I wish that you would file full information on that with the committee.

Mr. BACON. I will give you one instance right now, of a case in which I had an important part myself, known as the Milwaukee case, which was brought against seven different railroads transporting grain from west of the Mississippi to Milwaukee on one hand and Minneapolis on the other. The rates to Milwaukee were believed to be unreasonable in proportion to the rates to Minneapolis. That case was brought before the Commission, and was decided favorably to the Milwaukee people, and a definite order was issued by the Commission requiring that the rates to Milwaukee should not exceed the rates to Minneapolis by a greater sum than the difference shown in the distances carried on the roads in question-the difference shown in the rates carried on the roads in question for corresponding distances.

I will say that the distances carried are applicable only to short distances, and are not applicable to terminal points; but the differences between those short distances the local traffic, as it is called-were applied to the terminal rates, and the roads were required to change those terminal rates in conformity therewith. That would have involved a reduction from Milwaukee, from the points in question-two or three hundred of them, probably-of from 2 to 3 cents per hundred pounds, and would have equalized the two markets. That is, it would have placed the two markets upon a par for grain shipments west of the Mississippi River on their way to the seaboard. But the railway companies declined to make the change, and instead of making the change required, made a change of about one-half, in most cases less than onehalf, of the difference required by the Commission. That, as you will readily see, afforded no relief, for the reason that it required the full change which the Commission found was necessary in order to put the markets on an equality. That is one case that I have given you. I could propably cite a great many others by looking over the records, but this shows the difference, clearly.

Thereupon the committee adjourned until Friday, December 16, 1904, at 10.30 o'clock a. m.

Hon. JOHN SHARP WILLIAMS,

NEW ORLEANS, December 6, 1904.

Washington, D. C.

DEAR SIR: I wish to assure you of the appreciation of the members of the Central Yelow Pine Association for the interest you express in your recent letter to me, in legislation to amend the interstate commerce act to the extent that the Commission, upon complaint, will have the power to fix a reasonable rate after hearing.

A number of bills have been introduced into Congress, all seeking to amend the law in about the same way, some, however, to a greater extent than others.

In view of the fact that the railroad interests will oppose any kind of legislation enlarging the powers of the Interstate Commission it has been deemed best to try, at this time, to secure only such an amendment as is represented by the Cooper bill. If any larger powers are undertaken to be secured it is feared that through the opposition of the friends of the railroads legislation of any kind in the interest of the the public will fail.

It has been suggested by some who are in favor of legislation that the Cooper bill is not adequate, and that the measure is imperfect and if enacted into law will afford very little if any relief, for the following reasons:

First. That the first clause of the bill does not sufficiently authorize the Commission or make it its duty to find what is a reasonable and lawful rate to be substituted in lieu of one found to be unreasonable and unlawful; and, second, the provisions of the bill which authorize the court to set aside the order of the Commission if it is found to be unjust or unreasonable on the facts is, in the opinion of some who have given the subject thought, fatal to the purposes of the bill.

I have asked Mr. Bacon, chairman of the executive committee of the Interstate Law Association, who is in Washington at the present time, in charge of the measure, to confer with you and to secure your assistance in getting a favorable report from the House committee.

If the Cooper bill as presented is not adequate to secure small measure of relief contemplated, I hope through your efforts it can be, in committee or after it is presented to the House, amended so that shippers when they are unjustly treated by the railroads can be assured of prompt relief upon complaint and after hearing.

Yours, very truly,

GEO. S. GARDINER,

President Central Yellow Pine Association.

List of cases decided prior to the Supreme Court decision in the Maximum Rate case May 24, 1897 167 U. S., 479), in which the Commission ordered changes to be made in rates found to be unjust or unreasonable.

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List of cases decided prior to the Supreme Court decision in the Maximum Rate case May 24, 1897, etc.-Continued.

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List of cases decided subsequent to the Maximum Rate decision of the Supreme Court, May 24, 1897 (167 U. S., 479), in which the Commission found rates complained of to be unjust or unreasonable and ordered them to be discontinued.

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NOTE.-The foregoing cases of the Commission involved the unreasonableness and injustice of rates only.

Numerous other decisions of the Commission involved the reasonableness of rates considered collaterally with unjust discrimination, undue preference, and violations of the long and short haul section.

EDW. A. MOSELEY,

Secretary.

FRIDAY, January 6, 1905.

The committee met at 10.40 o'clock a. m., Hon. William P. Hepburn in the chair.

The CHAIRMAN. We will resume the hearings upon the interstate commerce propositions. Mr. Bacon is here, and Mr. Mann, I understand, desires to ask him some questions.

STATEMENT OF MR. E. P. BACON-Resumed.

Mr. MANN. How long have you been interested in the proposed amendment or proposed amendments to the interstate commerce law? Mr. BACON. I have taken an active part in the matter for five years past, and have felt interested in it ever since the decision of the Supreme Court which denied the power to the Commission to designate what change should be made in a rate found to be unjust

criminative.

Mr. MANN. And during that time have you given very special study to the subject?

Mr. BACON. I have, so far as I could do so in connection with proper attention to my business.

Mr. MANN. You are the chairman of the executive committee of the so-called Interstate Commerce Law Convention?

Mr. BACON. Yes, sir.

Mr. MANN. Do you consider yourself an expert on the subject of rate making?

Mr. BACON. I would not make such a statement; no, sir. I have given a good deal of study to it and feel fairly well informed in regard to it, but I would not consider myself an expert, by any means. Mr. MANN. Do you consider yourself an expert upon the question of what legislation should be enacted to give the Interstate Commerce Commision power to make freight rates?

Mr. BACON. I have definite ideas in relation to it.

Mr. MANN. Well, if you would answer my question I think we would get to it easier.

Mr. BACON. I should not say that I am an expert in legislation, for I am not.

Mr. MANN. Do you consider yourself an expert on the question as to whether changes should be made, and if so, to what extent, in the power of the Interstate Commerce Commission?

Mr. BACON. I must say that I do not consider myself an expert in any of these matters. I have given much attention to them and have reached definite conclusions in relation to them, which are mature, and on which I am very clear.

Mr. MANN. Do you consider that the subject of rate making by railroads is a matter requiring expert or technical knowledge, or a subject which can be passed upon by the ordinary layman without expert knowledge?

Mr. BACON. Railroad men have recently testified that the making of rates is not a science.

Mr. MANN. If you will answer my question I will be very much obliged to you.

Mr. BACON. Please repeat it.

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