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unjust and as extortionate as they see fit. They can break men and firms and States and localities by those rates.
The CHAIRMAN. What I wanted to attract your attention to was the question as to how far you think Congress ought to go in conferring power on the Interstate Commerce Commission to make rates. You say that you do not believe in allowing the Interstate Commerce Commission to initiate rates?
Mr. MEAD. Yes, sir.
The CHAIRMAN. I mean the rates as initiated already in this country to-day?
Mr. MEAD. Yes, sir.
The CHAIRMAN. And that is an absurdity, to talk about initiating rates, in the ordinary sense of the words?
Mr. Mead. Yes, sir; of course.
The CHAIRMAN. Now, you say to fix rates-you said a while ago to fix a rate”-how far should the Interstate Commerce Commission have the power to go? Should they fix rates in a certain section, or should they have the power to fix the rates in the whole United States in one order?
Mr. Mead. No, sir; power to make a rate after a rate has been shown to be unfair, unjust, and unreasonable; to fix a rate and have it put in force and maintained until the railroads have gone to the Supreme Court and that rate has been upset.
The CHAIRMAN. Now, do you mean that they should have the right to fix a rate upon the moving of a quantity of merchandise or property at one time from one point to another point-one transaction? That is what you mean, is it?
Mr. MEAD. Yes, sir; and only after a complaint has been entered and a full hearing has been held upon that.
The CHAIRMAN. Yes. Mr. MEAD. And just as a sample of that, take the case of the Harlem River and Boston rate. They claimed that $50 was a fair rate, and $50 was a much larger proportion of the whole than the other roads received from the peach fields to the Harlem River. Pending a decision of the court, the $50 rate should stand until it was shown that it was unjust to the railroads. It would be simply reversing the situation of to-day, under which we have been suffering since 1897.
Mr. Mann. Let me put this case to you. There is a dispute in the country as to what should be the relative charges on carload rates and less than carload rates. It is to the interest, say, of the larger cities to have carload rates very much less than rates on smaller quantities—that is, on carload quantities. It is to the interest, say, of the hamlets to have the same rates for carloads and for less than carloads. Now, would you have the power conferred upon the Interstate Commerce Commission, if a dozen or three or more merchants in a hamlet should organize an association of retail merchants, to give them authority to file a complaint with the Interstate Commerce Commission asking the Commission, first, to revise the classification, so that carload rates and less than carload rates should be put in the same class, and then to fix the rates on those all over the United States on that one complaint ?
Mr. MEAD. No, sir. It seems to me that your premise is wrong there. I do not think that 10 or 12 little hamlets would form a national organization.
Mr. Mann. Oh, one man often forms a national organization.
Mr. MANN. It is not restricted. Any organization under the Cooper-Quarles bill, any association, or anyone can bring a complaint before the Interstate Commerce Commission, and under the CooperQuarles bill the Commission could extend its jurisdiction to that, and, pending hearing, could enter an order upon the case which I have stated to you. Do you think that power ought to be given to the Interstate Commerce Commission?
Mr. Mead. I do not think any such power is asked for as you have stated. As to a specific case and an investigation, the merits, of course, of the larger cities and smaller towns being taken into consideration and a finding made upon that complaint, that is all right. I do not think that an effort would be made to fix rates all over the country upon that basis.
Mr. Mann. Are you in favor of the bill, which covers the power which I have just suggested, which confers that power to fix the rates, to make them higher or to lower them, anywhere the people choose to complain, including in that order the entire United States?
Mr. MEAD. I should say no. If you mean that after complaint has been heard, that, of course, was confined to the locality.
Mr. MANN. Oh, well
Mr. Mead. It would not be pertinent for that Commission to make a finding there that would apply all over the country.
Mr. Mann. You are familiar, of course, with the fact that on one complaint taken before the Interstate Commerce Commission, and afterwards decided by the Supreme Court of the United States, the vew York Board of Trade and the Philadelphia board which corresponds with it and the San Francisco board which corresponds with it filed complaints under which the Interstate Commerce Commission was asked to enter orders affecting the rates on every railroad in the United States that touches at the seaboard ?
Mr. Mead. You mean differential rates ?
Mr. Mann. No, sir; I do not mean differential rates at all. I mean actual rates. And you know, do you not, that they entertained jurisdiction of the case ?
Mr. MEAD. Yes.
Mr. Mann. Well, now, do you think that they ought to have that power, and, if you do, do you call that revising rates or initiating rates ?
Mr. MEAD. I suppose that would be revision of rates, if they substituted for one in vogue, fixed by the traffic managers, another fixed. by themselves. I should call that revision of rates.
Mr. Mann. That is what I say. So that it is impossible for the Interstate Commerce Commission to initiate rates now. Rates are already in existence, and a change of the existing rates would be merely a revision of rates.
Mr. MEAD. I think so.
Mr. MEAD. I do not see how the railroad commission, however knowing they may be, would have sufficient knowledge to fix such rates.
Mr. TOWNSEND. Do I understand you to say that the only object of this Cooper-Quarles bill, as you understand it—that is, the only
object of the shippers and others interested in the bill—is that the Commission should have power to fix rates in cases where complaints have been made?
Mr. Mead. Yes, sir; I so understand it, that they have power to make rates after a full investigation has been had, and that pending a review by the circuit court the interests of the railroad are still preserved, and the rate that the Commission says is a fair one is in effect and shall be in vogue until it has been upset by the court.
Mr. TOWNSEND. Would that affect any other rate except the particular rate about which you are talking?
Mr. MEAD. I should say not.
Mr. TOWNSEND. There is no case suggested to your mind that might depend upon this particular rate about which there was a complaint ?
Mr. MEAD. That would be a specific case for them to investigate and pass upon, and if the rate was found unreasonable, to make a rate to take its place.
The CHAIRMAN. Now, one other question. In a case where the rate complained of that you want the Commission to have the power to revise is a rate from a terminal, one of the termini of a railroad, and they reduce that rate upon a complaint simply with regard to one rate and one transaction, in cases where the long and short haul is en forced, would not a change in that rate necessarily, under the law, effect a change in the rate from every other station on that line?
Mr. MEAD. I should want to consider that question. I should not want to answer that offhand. I should want to give that question some consideration.
The CHAIRMAN. After what you have said in reference to confining the Commission to a particular rate and a particular transaction, would you desire to give the Commission the power to so change all intermediate rates?
Mr. MEAD. In one sense, I think the Commission ought to have the power to revise that rate in the interests of the public, if the public interests demand it, because they stand to represent the public in this case.
The railroads can take care of themselves. To-day the traffic manager of the railroad can put any rate that he sees fit in vogue, and there is no one to pass upon the reasonableness of that rate now except that it can be touched upon by a recommendation of the Commission and taken into the courts.
Mr. Bacon. I believe that I can clear the chairman's mind on that.
The CHAIRMAN. I am trying to get the idea, not of what the condition is, but the idea of the petitioners for this relief, as to what the relief should be, as they are represented by Mr. Mead.
Mr. MEAD. I have stated our views of the commercial interests in Boston and of the National League of Commission Merchants, organized and represented now in 27 cities of the country-27 of the largest cities.
Mr. RICHARDSON. Is it not a fact that in reference to the relative rates, a reasonable, common sense solution of it is found in the fact that there are different classifications of rates by railroads-first, second, third, fourth, fifth, and sixth? Now, take it for granted that the railroads should raise the charges in the third classification, does it not affect all the rates through that entire territory? Is there not
an increase in the third class, and from that throughout the entire province that the railroads occupy?
Mr. MEAD. Yes, sir.
Mr. RICHARDSON. Then, if the Interstate Commerce Commission were passing upon a complaint that related to freights of the third class, would it not be right and proper, relatively speaking, that it should affect all the rates within that railroad province? Would you say that it should pick out one single rate, one single charge, and affect that, and not affect those that related to that class of freight? Would you not expect the Interstate Commerce Commission to be common sense
Mr. MEAD. Sure.
Mr. RICHARDSON (continuing). And businesslike, and would you not expect them to apply it from a common-sense business standpoint? If the Commission found that all the freights related to class 3 related to each other and depended upon each other would it be right, for instance, to take just one axe or a lot of axes that were in that rate and affected each other and not allow it to the general trade matters that would have to enter into their finding? At the present time, when they change the classification they change it from the fourth to the third class, and that raises or lowers the railroad charges, as the case may be.
Mr. Mead. They change it so as to raise the rates tremendously at times.
Mr. RICHARDSON. For instance, you take the rate from New York to Atlanta. It is $1.14 per 100 pounds, and second class is 96 cents, and the third class is 83 cents, and the fourth class is 74 cents or 75 cents, and then come the fifth and the sixth class. It comes on down gradually. Now, do you not believe that when the railroad classified that freight they classified the freights that related to each other?
Mr. MEAD. Without doubt.
Mr. RICHARDSON. Without doubt. Now, if a complaint was filed before the Interstate Commerce Commission under this bill we are considering now and the Commission were to find that there were rates or that there were charges--or the petition included rates that were not relevant to other rates, do you not think that they would allow an amendment to that bill and knock out the charges that were not related to the things in the complaint, being sensible, practica men?
Mr. MEAD. Certainly. We have to trust somebody. At the present time we simply trust the railroads and the traffic managers, without any supervision whatever.
Mr. RICHARDSON. And the Commission under this bill, as I understand it—and I want to get your idea about it and to get at the merits of this bill-has first the right to have an investigation, and after having challenged certain rates and finding them to be unreasonable and unjust and unfair, you think that the Commission ought to have a right then to say what is a just and a reasonable rate!
Mr. MEAD. Yes, sir.
Mr. RICHARDSON. And that rate which they fix is subject to revision by the courts, after thirty days' notice, and so on?
Mr. MEAD. Yes, sir.
Mr. RICHARDSON. And if within sixty days an appeal is taken from the district or the circuit court to the Supreme Court of the United States your rate still goes on, the rate which the Commission has fixed still goes on, and remains in effect !
Mr. MEAD. Yes, sir.
Mr. RICHARDSON. Now, right then and there, do you not think that the objection that has been so universally made throughout the country, that the Supreme Court refused to pass upon a rate for the future—that is the objection, and that is the only objection that the Supreme Court of the United States refuses to pass upon a rate for the future—that that question is met right there where this CooperQuarles bill gives the Commission the right to fix a rate temporarily until the Supreme Court of the United States passes upon it, and when the Supreme Court passes upon it the Supreme Court finds a rate already fixed, and it is not passing upon a rate for the future! Do you not think that that avoids the trouble!
Mr. Mead. That is what we desire to accomplish under this CooperQuarles bill.
Mr. Mann. Did I understand you to say in answer to Mr. Richardson that you believe that if the Interstate Commerce Commission should fix a rate from New York to Atlanta on one commodity it would be necessary, or that they would have the right, under the same complaint, to fix the rates not only from New York to Atlanta, but from New York to all other points in the South?
Mr. Mead. Oh, no, sir. They would have to consider only what was complained of in that specific complaint. There might be, of course, other things to be taken into consideration.
Mr. Mann. Oh, yes. Let me see if I do not get your view. I think your views are nearly in accord with what my views are on this question. You will pardon me if I seek to elucidate the point. I take it from what you say that you are in favor of giving this power to the Interstate Commerce Commission to permit a complaint to be filed by some person who is interested, say, and let the freight rate on some commodity or certain commodities between certain points named be unreasonably high, and you would permit the Interstate Commerce Commission to decide what shall be the reasonable rate on that commodity or that class of commodities between those points named, of course taking into consideration in the hearing what rates are the basis, but simply entering an order as to what the rates shall be according to the petition in that regard.
Mr. Mead. Yes, sir.
Mr. Mann. That would not give to the Interstate Commerce Commission the power, upon a complaint, to revise—using the term " to revise ” in place of “initiate ”—rates generally?
Mr. Mead. That would be a very disturbing factor, I should say, if they had that power.
Mr. Mann. Are you aware that the Cooper-Quarles bill would confer upon the Interstate Commerce Commission the power to fix rates generally on one petition anywhere; that the Cooper-Quarles bill would permit one petition to be filed by any person or association in the United States, alleging that all the rates in the United States or one part of the United States were too high and asking the Interstate Commerce Commission to fix the rates, and that under