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the Cooper-Quarles bill the Interstate Commerce Commission would have the power to revise the classifications, fixing the rates generally, and put them into operation, and that they would have to remain in operation without any authority of the railroad companies to change them unless permitted to do so upon further hearing by the Interstate Commerce Commission?
Mr. MEAD. I did not suppose that they had the power to do that under one complaint.
Mr. Mann. That is the power that is proposed to be conferred upon the Commission.
Mr. MEAD. I did not suppose that the committee would be considering a bill embodying such a power.
Mr. Mann. That is the Cooper-Quarles bill.
Mr. Mead. I am not a railroad lawyer, but simply a plain business man, and knowing the past and knowing the conditions to which we have been subject for some years past.
Mr. RICHARDSON. Do you not understand the Cooper-Quarles bill to go one step further and to provide that after the Interstate Commerce Commission has investigated a rate and found it unreasonable and has fixed another rate, and the case has gone up to the district court, then either party, as soon as it goes to that court, has the right to send for witnesses in order to investigate to see whether the Commission has fixed a just rate!
Mr. Mead. Yes, sir; I understand it so.
Mr. RICHARDSON. After that they call witnesses and bring them around and they investigate in the court and have the testimony of the witnesses as to whether the Commission has fixed a fair and reasonable rate?
Mr. MEAD. Yes, sir; I so understand it. It seems to me what we desire to ask for is this, that the present conditions be reversed, so that pending the review of the case we shall not be subjected to the old rates, but the railroads shall be unable to keep these rates in effect from three to six years after the passage of an order, and so that the further time which it takes to get one of these cases through the courts and define what is right shall not be spent under the old conditions. The ordinary business man can not afford to prepare a case and have it held up that length of time. During that time we should have relief. We are asking simply that the conditions be reversed, and if the railroads then want to keep their cases in the court four or five years, all right. They will find a means of reaching the cases quicker than that.
Mr. Mann. Are you aware that under the Cooper-Quarles bill the Interstate Commerce Commission could of itself, on its own initiative, cause an investigation to be made of all the classifications of rates, and of all the rates in the United States, and enter an order which would have to remain in force until passed upon by the Supreme Court of the United States, unless some circuit court should decide upon the face of it that it was plainly or clearly unlawful or unreasonable?
Mr. MEAD. I do not know what the powers of the Interstate Commerce Commission are at the present time regarding their own initiative, instituting proceedings under their own initiative. I understand that what we are asking by this bill is that this shall be done upon a complaint.
Mr. Mann. This bill says “complaint;” but the interstate-commerce law says that the Interstate Commerce Commission shall have the same power to have an inquiry made on its own motion as it would have if a complaint were filed.
Mr. MEAD. I suppose that if there was a conflict between this bill and the interstate-commerce act it would modify it.
Mr. Bacon. May I ask you a question in that connection?
Mr. Bacon. Do you understand that this power in the present act, given the Interstate Commerce Commission, to institute an action on its own motion, would apply under a case brought under the CooperQuarles bill, which confines the Commission to a complaint in its action?
Mr. MANN. No, sir; I do not understand that at all. Mr. Bacon. I inferred that from your question. Mr. Mann. This bill says “complaint.” Referring to section 13 of the interstate-commerce act, we find section 13 of the interstatecommerce act says that the Commission shall have the same power on its own motion as it would have when a complaint was filed; so that the Interstate Commerce Commission under the two laws together, if this be made into a law, would have the same power on its own motion as it has on a complaint.
Mr. Bacon. Not by any means.
Mr. Bacon. The Cooper-Quarles bill limits the power of the Commission in changing a rate to a case in which there is a complaint and limits it to the complaint made, and it can not go out of that complaint in determining the question.
Mr. MANN. I have not the slightest doubt what the decision of the court would be under the circumstances; that the court would hold that under the two bills the Interstate Commerce Commission had the same power under its own initiative as it had in cases where a complaint was filed, because the law specifically says so. This bill refers to the provisions of section 13 of the interstate-commerce act.
Mr. Bacon. The court says, under the present act the Commission has no power to change a rate. Now, this bill confers the power to make a rate. Do you think that they could go further, in the exercise of that power, when the Cooper-Quarles bill does not confer the power to change rates, except upon complaint ?
Mr. Mann. The Cooper-Quarles bill says that when a complaint is made, under section 13 of the interstate commerce act, that the power shall be enforced. It con fers the power indirectly.
Mr. Bacon. But only to the extent that the complaint goes.
Mr. Mann. Not at all. You use the word " complaint” in relation to section 13, and a part of section 13 is this clause, that the inquiry by the Commission shall be exactly the same upon its own initiative as upon a complaint.
Mr. Bacon. But the Supreme Court says that the power is limited to declaring whether the existing rate is unreasonable or not, and that it can not go further and say what is unreasonable or not.
The CHAIRMAN. Suppose a complaint should be made under the Cooper-Quarles bill that a rate is unreasonably low, is it your understanding that under this law the Commission would have the power
to investigate that matter, and in case they found that it was unreasonably low to raise it?
Mr. MEAD. I think that if such a case as that should occur-I can hardly conceive of it, but I think if it should occur—it would be only justice to the railroad to make a fair rate. I do not see why they should not have the right, under the construction of the statute given by Mr. Mann, to change a rate under their own initiative. The statute says that the rate must be unreasonable. That is all the business man wants. This question has come to such a pass that we find that relief must be given somewhere. We are looking to this committee to pass a bill that shall not be in conflict with the interstate commerce act. The railroads absolutely hold to-day the power to make or break localities or men without any supervision whatever being given over their rates. We hold that it is an unfair thing to the public, and the Interstate Commerce Commission should represent the interests of the public and of the business community on this question.
Mr. Mann. Do I understand you that the business interests of the country are on the point of ruin?
Mr. MEAD. Many men have been ruined.
Mr. Mead. I can cite you to specific instances of the way the thing works.
Mr. Mann. I am talking of business interests generally.
Mr. MEAD. In our business; yes, sir. The Armour Company sent out a notice, dated August 22, that after the 1st of September no goods carried in their cars should be owned by the Armour interests or people. He testified in Chicago that he loaned a man $400,000 to go into business. He may go into our line of business to-morrow, and cut our throats. He has the power to do it. He has the power to raise or lower these rates absolutely in his own hands. Take, for instance, some shipments to the city of Worcester. Armour & Co. had all the information about those shipments, they knew the tinke they were shipped and when they were due, and they knew the cost of the car when it was bought in the open market, and if that carload of freight was due on Wednesday, they would put a carload of freight in there on Tuesday and fill the market, and when the carload of freight got in there on Wednesday they found the market cut from underneath them.
Mr. Mann. The tribunal to which you ought to go is not the legislature, but the Executive branch of the Government, because all those things which you have suggested are positively prohibited by law, now under heavy penalties.
Mr. LOVERING. Would the railroads welcome a change regarding the contracts with regard to the refrigerating cars?
M: MEAD. I am not, of course, empowered to speak for the railroads. I do know this, that the largest railroads in this country absolutely refused to make an exclusive contract with Armour & Co. They have used all kinds of persuasion and threats with the Pennsylvania and the New York Central railroads. They say “We absolutely refuse to make a contract with you. We believe that we should haul any car or any refrigerator car tendered to us." I have no right to speak for the railroads, but personally I believe that the rail
roads of the country would welcome such a change and a chance to escape from the domination of Armour & Co. Armour & Co. hold over those railroads to-day the threat of the loss of their business. They say “ You must make an exclusive contract with us or you will lose so many carloads a week of freight." Railroads have made exclusive contracts with Armour & Co. under such a threat as that. If the railroad is a comparatively weak one the traffic manager of the road has to have freight or he loses his position. The president of the road has to show results or he loses his position. At the hearing in Chicago the Atchison Railroad put a man on the stand who actually swore that they paid a rebate of 25 cents.
Mr. ADAMSON. You think that they need protection against Armour & Co.?
Mr. MEAD. I think that Mr. Armour uses his immense business to force the railroads into these exclusive contracts.
Mr. ADAMSON. It seems to me that they might, while they are making so many contracts and agreements among themselves, combine against the robber to protect themselves.
The CHAIRMAN. Now, you have spoken a number of times of “exclusive contracts.” Do you understand them to be numerous? Are there many of those contracts!
Mr. MEAD. Yes, sir; more than we have any knowledge of. We know of the instance of the Marquette and Michigan Railroad. Those contracts were produced at the hearing in Chicago.
The CHAIRMAN. Do you know of any other exclusive contracts!
Mr. MEAD. In Georgia. There are other refrigerator cars that do the work at less cost to the producer and also with a less consumption of ice. They do work that the Armour Company cars can not do; and yet the shipper can not use those cars because the Armour Company has an exclusive contract. I wrote to the railroad commission of Georgia and asked them if they would furnish me with the names of the roads which had exclusive contracts, and I'found that they had exclusive contracts with every railroad' bringing peaches out of Georgia. The shippers of Georgia are prevented from getting a better rate and a better car simply because Armour uses no cars but his own.
Mr. ADAMSON. Have you that letter from the railroad commission of Georgia?
Mr. MEAD. That letter is filed with the Interstate Commerce Commission in Chicago.
Mr. ADAMSON. We would like to have a copy of it here.
Mr. MEAD. You can have a copy of it. I have had several letters from them. I had a letter from the secretary of the railroad commission of Georgia, and in one or two instances he simply sent me the letter which he had received in reply from those railroads that had exclusive contracts.
Mr. Adamson. If you have a copy of that, I would like to have that filed here.
Mr. MEAD. I will have to send that to you.
Mr. LOVERING. Are these contracts for private cars entirely for refrigerating cars-these exclusive contracts!
Mr. MEAD. Practically so. Armour & Co. some years ago saw the possibilities of getting practically an absolute control of the refrigerator-car service of the country, and Armour to-day practically controls it. He can give us cars or not, as he sees fit. He has it in his power to ruin the
shippers of Georgia, so far as their peach business is concerned. He can refuse to-day, under one pretext or another, to put his cars into Georgia.
Mr. LOVERING. And ruin the railroads too?
Mr. MEAD. Yes; and the railroads would have no way to transport that freight to-day from Georgia—that is, in a safe way. They could go back to their box cars, or whatever equipment they might have, and get ready for the service; but there were this last year in Georgia thousands of baskets of peaches which lay on the ground and rotted because the Armour equipment was not there to take care of them. That is, according to their statements. Armour, if he wanted to do so, could go into the market next year and buy up their peaches and shut out those producers. He did that in Michigan. He bought up all the potatoes there. He had the shippers at his mercy, and he could buy the potatoes at his own price simply because they could not get the cars to ship them out except from him.
Mr. TOWNSEND. Are you talking about the testimony given at the hearing up there?
Mr. Mead. That particular part of it was given there.
Mr. Mead. From potato shippers and from men in the potato business who are unable to get cars. That has all been published in our trade papers, columns and columns of it.
Mr. RICHARDSON. Do you know what would be the freight from Georgia if Armour did not have these contracts? What is the difference between those charges that Armour makes on those refrigerator cars and what would exist if he did not have the contracts? Do the producers suffer?
Mr. MEAD. Of course. The refrigerator car gives them the facility for getting their freight to distant markets, and to get that facility we are willing to pay a fair price. I myself paid $100 for icing a car from Michigan to Boston. In addition to what Armour got on that he received a mileage of $25, so that for that one car he received $125. We claim that that is an exorbitant charge.
Here is another instance. The railroad companies of the country have put all icing facilities into the charge of Armour & Co. Up to within two months Armour & Co. had absolute charge of all icing, by reason of the cars, at Jersey City. It was in the power of Armour to ice a car for me there or not, as he saw fit. He charged me, an outsider, $5 a ton for icing a car, and he charged the Pennsylvania Railroad $2.50 a ton. After this hearing this last year the Pennsylvania Railroad saw the injustice of that. There the icing of the produce in every car at Jersey City was in the hands of Armour, and it was a very easy matter for him to forget to ice my car, if he chose to do so, and to send it through in bad condition.
Mr. Mann. Let us do justice even to Armour. Under the contract with the railroad company was he not required to ice that car! You say that he could ice it or not, as he chose.
Mr. Mead. You can call it a requirement or a privilege. He had