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Mr. Bacon. That is a mistake, Mr. Richardson. I intend to remain here a week or ten days yet.
Mr. RICHARDSON. Very well; then that is all right.
The CHAIRMAN. If there is no objection the committee will hear briefly from Mr. Mead.
STATEMENT OF MR. GEORGE F. MEAD, OF BOSTON, MASS.
Mr. MEAD. I thank you for your courtesy. I represent the National League of Commission Merchants, and also the Boston Fruit and Produce Exchange, a body which, at their annual meeting on Saturday last, passed resolutions in favor of the Cooper-Quarles bill, and reaffirmed their former action.
Mr. Chairman, I appeared here three or four years ago in behalf of the Nelson-Corliss bill. At that time I gave some testimony relative to the inroads made upon our business by the private car lines, and the chairman of the committee was anxious to get some information at that time. I think that the events since that time have confirmed my statements, namely, that Armour & Co., and those interests, have gone into the lines of business in which the fruit and produce men are engaged to such an extent that at the present time the car-line company known as “Armour & Co.” controls the price of the perishable fruit products of this country; and perhaps no other men have suffered more, and no other business has suffered as ours has, from the exactions and abuses of these private car lines. I take it that whatever bill your committee would see fit to report, if your committee should report a bill, should include a remedy for those abuses.
In 1900—and this was all brought out at the hearing in Chicago in June and in October—these facts were proven. Our fruit is brought from Michigan at one tariff charge, and there was a tariff of $20 a car for icing. In 1893 Armour came upon the field with an exclusive contract, and at the present time, as appears from the testimony, they will not put their cars upon any railroad without an exclusive contract with that railroad, and instead of having in vogue a rental of $55 for a car, that enables then with the mileage they receive to charge $70 a car from Michigan to Boston. At the same time that Armour was engaged in the fruit and produce business he was engaged also extensively in handling pineapples and deciduous fruits, potatoes, apples, and, in fact, almost any kind of fruit in which he thought there was a possibility of making a dollar, so that we have this situation confronting us: Mr. Armour can go into Michigan and buy a carload of potatoes at the same price that I pay there and bring it on to Boston, and the tariff being $70 a car, he can sell it in Boston and make a profit of $35, and I would lose $35 on my carload.
But one of the worst features of that contract was this, that the railroad with which he makes an exclusive contract binds itself to furnish to him full information in regard to every other car on the line. So if I have a car of fruit on the line they telegraph to Armour when that car was shipped, who shipped it, to whom it was going, when it left and when it is due in Boston, and the contents and value of the car, which practically makes the railroads of the country trustees of our business; and it has come to such a pass that the business interests are demanding some relief. It can not go on any longer. We have either to go out of business or else give up our business to Messrs. Armour & Co.
The CHAIRMAN. Will you explain, now, to the committee how this legislation that you are asking for would relieve this situation that you have spoken of!
Mr. Mead. It would relieve it in this respect, that other refrigerator cars might be put upon those lines where Armour & Co.
The CHAIRMAN. But I am asking you now where, under the provisions of this bill, you would get the relief that you seek?
Mr. MEAD. You mean under the provisions of the Cooper-Quarles bill?
The CHAIRMAN. Yes. I understand you to say that your association on Saturday expressed their approval of the Cooper-Quarles bill?
Mr. MEAD. Yes, sir.
The CHAIRMAN. Now, if you will explain to this committee how relief would come to you from the provisions of this bill the committee would be glad to have that information.
Mr. MEAD. I will not read the resolution, because it is the same as we have passed in previous years.
The CHAIRMAN. It is just like a great many of those things we receive from gentlemen who evidently have great interest in this matter and who ask us to vote for this bill. They complain of rebates, and they complain of preferences, and they complain of discriminations, and ask us to vote for this bill that relates solely to rate making. Now, explain to us, if you please, any relation that the provisions in this bill have that would ameliorate the situation that you have complained of.
Mr. MEAD. There is a clause in this resolution, Mr. Chairman, which I will read, as it is very brief:
This exchange also urges that the jurisdiction of the Interstate Commerce Commission be extended to include all charges or practices of refrigerator car lines of other companies or agencies having contracts with railroad companies in respect to care and transportation of freight, vegetables, and farm products: Therefore, be it
Resolved, That this exchange hereby respectfully petitions Congress for the passage of the Cooper-Quarles bill or to indicate such legislation as will, in its judgment, accomplish the purpose indicated above.
The CHAIRMAN. Now, you have asked us to pass the Cooper bill as a means of relief, in the alternative of something else, and you have taken an interest in this matter—this is the second time that you have been before the committee—and you have undoubtedly studied this question and ought to know, and we ask you now to inform us how this bill will in any way relieve the situation of which you complain?
Mr. MEAD. The abuse of the private car lines is but one feature of it. We believe that the Cooper-Quarles bill might be amended in the manner to which I have referred.
The CHAIRMAN. Yes.
Mr. MEAD. And that would give adequate relief by making them common carriers, and then they would come under the jurisdiction of the Interstate Commerce Commission. At the meeting in Chicago and at the one recently held there was one of the most flagrant instances of this abuse brought out. There was a charge on a carload
of freight of $35, and the Armour Company charged under an exclusive contract $45 to ice and refrigerate that car. The shipper refused to pay it, and they have sued him for it. Now, we claim that the railroad companies should undertake to transport what we give them for shipment in safety.
The CHAIRMAN. There is no doubt about that. No one here will dispute that. Is there not a discrimination there against you and in favor of Armour & Co., and is that not prohibited by law to-day?
Mr. MEAD. Yes, sir. The CHAIRMAN. And can you not go to-day before the Interstate Commerce Commission and compel them to act ?
Mr. MEAD. I do not so understand it. And I want to say this, that the ordinary business man to-day does not propose to spend his time and money in the preparation of a case and take it before the Interstate Commerce Commission when, after everything has been decided in his favor, he has got to go to the courts to have the order of the Commission enforced, as the average time to put a case through the courts after it has been decided favorably by the Interstate Commerce Commission is four years. In the meantime the railroads hold us and we are subjected to delay and expense; so that at the present time, under the present conditions, we do not feel like bringing a case to take before the Commission.
The CHAIRMAN. Do you expect to get a self-operating law?
The CHAIRMAN. Are you not asking for such a law as that when you advocate such a law as this will be?
Mr. MEAD. I do not so understand it.
Mr. MEAD. Yes, sir; but may I cite a concrete example of the working of this?
Last summer a session of the Interstate Commerce Commission was held in Boston. We complained of an unfair rate of one of the railroads there from Harlem River to Boston. They charged $80 on a carload there, and on the same train they brought a carload of beef for $30. They prorated on the beef and not on the peaches. It did not take the Commission long to determine that that was an unreasonable and unjust rate. They suggested that $50 would be a just rate. This power that we are asking to have given to the Interstate Commerce Commission is, as I understand, the power to revise an .unfair rate, and when the Commission says that $50 would be a fair rate for a carload of peaches between those two points, that that rate should stand until it has been passed upon by the courts.
The CHAIRMAN. Now, you are talking about an entirely different subject. I can see that this argument is entirely pertinent to your purpose. But you were talking a minute ago about these discriminations in rates, and about the discriminating contracts that were made, and asking us, inferentially at least, to pass this bill as a remedy for that.
Mr. Mead. One of the reasons for asking for that is illustrated by the statement of Armour's attorney in Chicago. When asked about the rates of the Central Traffic Association Armour said: “ We are not amenable to the interstate-commerce law. We send a check to the railroad company to pay the freight, and they take out what they see
H. Doc. 422, 58-3
fit and turn over the balance to Armour & Co., and we have nothing to say in this matter."
I am simply saying, Mr. Chairman, that something might be added to this bill to cover the private car lines, which constitute the greatest abuse we have and suffer from. Of course, we all recognize the necessity of taking some action as to railroad rates, because we believe unless something is done the business interests of this country will rise up and demand more drastic legislation than is contained in the Cooper-Quarles bill. Within a week I have heard a railroad president in Massachusetts go before a meeting and ask this question: “Do you want the railroad rates all over this country fixed by five men who know nothing about it!” That is not the question at all. That is not what we ask for. What we ask is simply the power to revise an unfair rate, and pending the decision of the court that that rate shall stand; and we feel that circumstances are such that some relief is necessary at once. The interests of the country which we represent are large and great. That is the feeling that we have, that something must be done, and some great relief must be given. We do not feel that this is an unfair bill to the railroads. We have suffered this injustice since 1897, and if all these terrible consequences are going to ensue, such as the railroads claim will ensue, and the mere agitation of this bill is going to bring such results to the railroads, why have they not shown some sympathy for the business men, who have been suffering from this since 1897? We feel that we are entitled to relief, and that at once.
Now I shall be glad to answer any questions.
Mr. RICHARDSON. Did you not read the President's message, and did he not make some reference there to the trouble that you complain of-private cars?
Mr. MEAD. Yes, sir; I think he sees the absolute necessity of action along that line.
The CHAIRMAN. Have you read the bill introduced a few days ago by Mr. Stevens, of Minnesota?
Mr. Mead. I did not read it carefully: I read it through, but not carefully. I think I know, in a superficial way, what it is.
The CHAIRMAN. Does that meet your approval, so far as you have judgment on the subject?
Mr. MEAD. No, sir; I would rather, at the present, see the CooperQuarles bill pass, and then see more time taken for a comprehensive bill that would embrace whatever the situation demanded. But the business interests of the country at the present time almost entirely demand some relief now. We feel that at the present time Armour & Co. are under no regulation whatever. I can not imagine how the railroads of the country have a right to license Armour & Co. to prey upon us, and to transfer the functions of a common carrier to a private individual, practically allowing them to hold us up by the throat and demand what they see fit.
Mr. MANN. Has not the Interstate Commerce Commission held that under the present law it had authority to dispose of that evil ?
Mr. MEAD. I think not. I asked Commissioner Prouty at the end of our hearing in Chicago in June as to what relief he could give. He stated that he questioned whether the Interstate Commerce Commission had the power. But the revelations there were so startling
that Congress, he said, could not help but give us relief. The revelations made there and the showing made in that investigation were so startling that he said Congress could not help but give us relief.
Mr. Mann. Did not they hold in that Michigan peach growers' case that they had jurisdiction to continue the case to see whether the railroad companies and the shippers would adjust their differences !
Mr. Mead. In answer to that I can say the hearing was adjourned from June. The hearing pertained only to Michigan, was limited to Michigan, and the Commission stated at that time, “ If you will put in another petition we will open this whole broad question all over the country.” They did that, and the second hearing was held in October. The final result of the June hearing was that they would give Armour & Co. until October or November 1, I think, and then if that practice was not discontinued they would take some other action; but no action has been taken up to the present time.
I do believe that the Interstate Commerce Commission have more power than they have exercised. I believe if they had been more aggressive in exercising some of the power that they have it would have afforded us some measure of relief.
Mr. ADAMSON. Armour & Co. use their own cars exclusively to ship over all railroads?
Mr. MEAD. They use their own cars exclusively under these exclusive contracts.
Mr. ADAMSON. The railroads must take their cars and then further their business all the time in the use of them
Mr. MEAD. And if they do not do that they induce the withdrawal of that traffic. They have been able to make some exclusive contracts, as in the case of the Marquette Railroad, for their beef shipments, and whenever they find a weak sister among the railroads they make an exclusive contract with them. In the case of the Marquette Railroad it was shown that they made a low contract over that railroad, though is was not so direct, so as to be able to get their beef in
Mr. Adamson. How far do you think Congress should go in conferring power upon the Interstate Commerce Commission to make or fix rates?
Mr. Mean. The Interstate Commerce Commission are supposed to represent the public and the shippers; and I understand that when the interstate commerce act was passed it was supposed that they were to pass upon the railroads and the interstate commerce of the country. The President has paid a great tribute to the Massachusetts corporation laws in his desire to extend them to interstate commerce.
Mr. Mann. The Massachusetts laws are not the only thing from your State that the President pays a great tribute to.
Mr. Mead. Thank you, sir. I understand this, that the Commission has power over interstate traffic. They have now the power to say what is a fair rate, after investigation, and after all interests have been heard, and I do not believe in giving the Commission the power to fix initial rates.
The CHAIRMAN. What do you mean by“ initial rates ?
Mr. MEAD. I believe that the railroad companies of the country should fix their rates, as they do at the present time. The traffic managers of the railroads have that in their power to-day, to fix rates, and no one shall supervise them. They can make them as unfair and as