pressly say to me that they think the Interstate Commerce Commission ought to have the power to fix a rate, but they do not wish to confer upon the Interstate Commerce Commission the power to fix railroad rates generally.

Mr. BACON. That is precisely the position of our committee. The fixing of rates generally has never been advocated by the committee, and I do not know that it has been advocated by any body of business

men.

Mr. MANN. The power to fix rates is disclaimed generally by your committee?

Mr. BACON. Yes; emphatically.

Mr. MANN. And the power to fix rates is disclaimed generally by the Interstate Commerce Commission?

Mr. BACON. It is; emphatically.

Mr. MANN. You are acquainted, of course, with the case that went to the Supreme Court in which they stated that the Interstate Commerce Commission did not have the power to fix freight rates? Mr. BACON. Yes.

Mr. MANN. You have read that decision frequently, I suppose? Mr. BACON. Yes.

Mr. MANN. How many rates did that one decision determine? Mr. BACON. I could not say definitely. I have the impression that it was somewhere between 200 and 300 rates, but Chairman Hepburn stated that

Mr. MANN (interrupting). Do you know that that decision fixed the freight rates on every class of commodity, on every article in the southern classification, between Chicago and Cincinnati, and every point in the South, east of the Mississippi River and south of the Potomac and Ohio rivers, that that one opinion and decision did that? Mr. BACON. I knew it fixed the rates to a large number of points in the southeastern territory. Whether it fixed the rate to all points or not I do not know.

Mr. MANN. Did you know it fixed the rate to every place in the South, south of the Potomac and Ohio rivers?

Mr. BACON. No.

Mr. MANN. And upon every article of freight?

Mr. BACON. It may have been so, and if you so state I shall not question it.

Mr. MANN. Well, the decision of the Supreme Court determines that question. That was under the authority which you are now seeking to put upon the Commission, where in one order they fix the rates to one quarter of the country, as the Supreme Court said, without much hearing.

Mr. BACON. Without what?

Mr. MANN. Without much hearing.

Mr. BACON. The case was a long time before the Commission, I recollect.

Mr. MANN. The Supreme Court said in that case-I never had the pleasure of reading the testimony of the Commission-that there was practically little evidence taken upon the subject of the rates-what should be the rates; and yet in that case the Commission, under the power, which you say you want, to fix a rate, and not rates generally, undertook to fix the rates to every point in the South upon every

article in a classification. Now, do you think they ought to have that power?

Mr. BACON. I will say in reply to that, Mr. Mann, that that embraced the system of rates in effect from Cincinnati and Chicago to points in the southeastern territory, upon merchandise and manufactures, which, on investigation, had been found to be very much higher for a less distance than rates on the same commodities

Mr. MANN. Oh, well, you are seeking to argue the question as to what rates should go into effect

Mr. BACON. I am not arguing; I am stating the facts. [Continuing] very much higher than the rates from the Atlantic seaboard to the same points, and in the course of the investigation it developed that those rates had been agreed upon by the several lines interested as a matter of regulating the east and the west bound business with the view of securing through merchandise and manufactures from the East and the agricultural products, necessarily, from the West, in order to afford traffic both ways and give them loaded cars both ways, and they were fixed

Mr. MANN. So that are you through?

Mr. BACON (continuing). They were fixed by means of a commission appointed by the several railroads in interest, and from the statements they made it is clear that that was the sole object they had in view in fixing the rates as they did, so very much higher from the western points to the points through the Southeast than from eastern points; and that being the case, the Commission found, when it went into the investigation, that they were unreasonably high compared to rates from the seaboard, and consequently they could do no less than to order them all changed. If, in an investigation of certain rates, there are 200 or 300 or 2,000 or 3,000 found to be wrong, why should not every one of those rates be changed as much as one of them?

Mr. MANN. So that, as a matter of fact, you are in favor of giving to the Interstate Commerce Commission the power to determine the rates upon every article between every point in one complaint?

Mr. BACON. When found upon investigation to be wrong and when related to each other in such a way that they can not be separated. Mr. MANN. That might cover the whole United States in one complaint.

Mr. BACON. Hardly that.

Mr. MANN. Let us see whether "hardly that " or not. The ground of complaint in the case we refer to, the maximum rate case, was that rates from Western points to the South were too high as compared with rates from Eastern points to the South, as you have said.

Mr. BACON. That was it.

Mr. MANN. Now, when the Interstate Commerce Commission passed on rates from Western points to the South that necessarily affected rates from the Eastern points to the South, did it not?

Mr. BACON. That affected them by making them relatively equal. Mr. MANN. Oh, it affected them by compelling the railroad companies to change them?

Mr. BACON. To be sure.

Mr. MANN. Which would also require the Interstate Commerce Commission to pass upon whether they were proper rates or not? Mr. BACON. That is what I mean

Mr. MANN. That would affect also the rates from New York to Chicago, necessarily?

Mr. BACON. It would have no relation to rates from New York to Chicago.

Mr. MANN. I am afraid you have not studied the rates fully enough, although I will admit, as you say, that you are not an expert. Mr. BACON. I beg your pardon; rates from New York to Chicago have no relation to rates to the Southwest.

Mr. MANN. I beg your pardon; I say they have a very strong relation. What is the rate on first-class freight from New York to Chicago?

Mr. BACON. I could not say at the moment.

Mr. MANN. I will inform you. Seventy-five cents a hundred pounds.

Mr. BACON. That was my impression, but I was not clear upon it. Mr. MANN. The rate to every other point between New York and Chicago is based on that.

Mr. BACON. Yes; not only that but the points between the Missouri River and New York.

Mr MANN. Well, you are mistaken about that, Mr. Bacon.

Mr. BACON. Well, perhaps I am.

Mr. MANN. Rates from New York to Chicago are the basis upon which they make the rates from all other points between New York and a line drawn from Chicago to St. Louis, or the Mississippi River. Mr. BACON. Yes, sir.

Mr. MANN. That is the case. Now, if the Interstate Commerce Commission endeavors to pass upon a rate from New York to Chicago it must also at the same time pass upon the rate to every other point within that territory, must it not?

Mr. BACON. That of itself would come about; that would be a natural result of it.

The CHAIRMAN. Excuse me. If there is no objection, we will continue at half-past 10 to-morrow morning.

Mr. SHACKLEFORD. I would like to ask one question. You said that this Quarles-Cooper bill was drafted by counsel for the Pennsylvania Railroad after conference with your committee?

Mr. BACON. Not the Quarles-Cooper bill; the original Elkins bill, of which this is a redraft.

Mr. SHACKLEFORD. This is really a redraft, substantially so?
Mr. BACON. Yes, sir.

Mr. SHACKLEFORD. Did the Interstate Commerce Commission enter into the conference in reference to that?

Mr. BACON. No, sir.

Mr. SHACKLEFORD. Were they consulted about it?

Mr. BACON. It is possible they were consulted after it was done, or at least that they were advised of what was done. I think they were, but they had no part in the conference.

Mr. SHACKLEFORD. They had no part in the manufacture of that bill?

Mr. BACON. No, sir; none at all.

Mr. SHACKLEFORD. Were they consulted as to whether it was satisfactory before it was introduced?

Mr. BACON. I think not before it was introduced. That, however,

I am not certain about. Excuse me--I recall now the bill was previously introduced before this conference between representatives of the Pennsylvania Railroad Company and the commercial organizations. Consequently any reference of it to the Commission was subsequent to its introduction.

The CHAIRMAN. There is one matter I would like to have you explain, if you will. You used the language," the arrangement that was made with the officials of the Pennsylvania Railroad Company." What did you mean by that?

Mr. BACON. The individuals?

The CHAIRMAN. "The arrangement that was made?"

Mr. BACON. It was an understanding that was reached at the conference which I have mentioned, a conference for the purpose

The CHAIRMAN. That you would mutually support that bill? Mr. BACON. Mutually support the bill, with the distinct understanding that we would not support the pooling section, and that we would not oppose it.

Mr. SHACKLEFORD. That is, you would not oppose it?

Mr. BACON. Well, we were neutral.

The CHAIRMAN. You could not be neutral when you were advocating the passage of a bill that contained that clause. You were advocating the passage of the bill?

Mr. BACON. Yes; as a whole.

The CHAIRMAN. And then you were advocating the pooling clause in that bill as well as the other clauses?

Mr. BACON. Whenever the question was put to us as to that clause we said we were neutral.

The CHAIRMAN. But you wanted it passed?

Mr. BACON. We did not care whether that section was passed or not.

The CHAIRMAN. But it was in there, and to pass the bill it was necessary to pass it.

Mr. BACON. We were willing that it should be passed as a whole. The CHAIRMAN. You were anxious that the bill should be passed as a whole, were you not?

Mr. BACON. I would not say that. We were anxious that the bill should be passed.

The CHAIRMAN. You were anxious that the bill should be passed, and this was a part of the bill?

Mr. BACON. To be sure.

The CHAIRMAN. This was a part of it, and under that situation you were just as anxious to have the pooling clause as any other, as a whole?

Mr. BACON. I could not say that, Mr. Chairman. I think I should say to the contrary, in fact; that the commercial organizations almost unanimously dissent from the proposition of pooling, and consequently our committee

The CHAIRMAN. But you, as their agent, were here advocating the passage of a bill that contains the pooling clause.

Mr. BACON. The committee submitted it to the constituent organizations and obtained their assent to the bill.

The CHAIRMAN. You speak of the arrangement made

Mr. BACON. Perhaps I should have said more properly, "the understanding."

The CHAIRMAN (continuing). That means something active, does it not?

Mr. BACON. Perhaps I should have used the word "understanding," the understanding that was had between us.

Mr. ADAMSON. Do you say that the authorities of the Pennsylvania Railroad agreed to support the provision for rate making? Mr. BACON. The first section of the bill.

Mr. ADAMSON. And you say they agreed to it?

Mr. BACON. Not only agreed to it, but they proposed it; they originated it. That is the first section of the bill, and is also the first section of the Cooper bill.

Thereupon at 11.55 the committee adjourned until Monday, January 9, 1905, at 10.30 o'clock a. m.

MONDAY, January 9, 1995.

The committee met at 10.50 o'clock a. m., Hon. William P. Hepburn in the chair.

Mr. LOVERING. Mr. Chairman, I want to object to the methods and manner of carrying on this examination. There is entirely too much personality in it. I am here as one of the committee, to get at facts, and it is a matter of very little consequence to me whether I am one of four men who have been accused of holding up the bill. I do not think that it amounts to anything for us to know it, or to go into that part of it. As to any questions that will elicit facts, I shall be very glad to join with the committee in eliciting such information, but beyond that I want it to be understood that I absolutely disclaim any part or parcel in the manner of questioning that we underwentthat was followed out at the last session. That is all I have to say.

Mr. RICHARDSON. I did not hear distinctly all of your remarks, Mr. Lovering. You were too far from me for me to hear distinctly. I caught the drift of it, I believe, that you thought that there was altogether too much personality and too little reference to the bill in these examinations.

Mr. LOVERING. That was the gist of it.

Mr. RICHARDSON. I am disposed to agree with you.

Mr. BACON. I would like to say that a gentleman is here this morning from Boston, Mr. George F. Mead, who is an officer of one of the important commercial organizations, who has got to go away at 11 o'clock this morning, and if the committee will be pleased to hear him for a few minutes I will give way to him.

Mr. MANN. I think that he ought to be heard. We have heard Mr. Mead before, and we would be very glad to hear him again, so far as I am concerned.

Mr. RICHARDSON. Just one suggestion, if you please, along that line. I would like to know, as a member of the committee, whether to-day is going to be the only time that we will have for the further examination of Mr. Bacon. I am very anxious to ask Mr. Bacon some questions myself, and an intimation was given at the last adjournment of the committee that Mr. Bacon would be here only to-day.