ber, in prohibiting pooling in that bill, and that afterwards we both concluded that under proper restrictions pooling was desirable, because it was necessary to prevent unjust discriminations. Both of these laws were founded on a Massachusetts railway commission law, which confers full powers of investigation upon the Commission, with power to appeal to the courts, or to the legislature, to enjoin abuses and fix rates; and in both Massachusetts and New York this has been found sufficient to protect the public interests; better, indeed, than in those States which conferred rate-making powers upon their railroad commissioners. This is illustrated by the following article from the Railroad Gazette of December 30: ARE RATE MAKING COMMISSIONS SUCCESSFUL? It is an interesting phenomenon, in connection with the agitation for the enlargement of the powers of the Interstate Commerce Commission, that so much effort is expended in the exploitation of the evils alleged to exist, that none is available to show the applicability of the proposed remedies. Without for a moment admitting that the frictional evils incident to the mutual adjustments necessary between a rapidly developing transportation system and an industrial organization, of which the former is a part, which is moving forward with equal speed, are as great as the proponents of the Quarles-Cooper bill contend, it is worth while to ask whether, if they were, the remedy proposed would correct them. Thirty States of the American Union now have railroad commissions, and in 22 instances these commissions have rate making powers. Would it not be reasonable to investigate the results in these States before adopting similar legislation concerning Interstate Commerce? Such data as are now available indicate that official rate making has not been very satisfactory to those states which have tried it. Georgia, for example, was one of the earliest States to adopt a drastic railroad commission law, and has consistently followed the plan of interposing its authority between the buyers and sellers of railroad transportation. Yet the newspapers of Georgia to-day declare that the shippers of their State pay more than their neighbors in adjoining States, and that interstate traffic, which the Interstate Commerce Commission so loudly complains is not subject to effective regulation, is carried similar distances at much lower rates. A recent editorial in the Atlanta Journal contains the following: "A merchant in Marietta can ship certain goods to Chattanooga for 15 cents per hundred; to Knoxville for 19 cents per hundred. To ship the same goods to Atlanta he must pay 30 cents per hundred; to Macon 70 cents per hundred. Atlanta is 20 miles from Marietta; Chattanooga is 128 miles, and yet the Chattanooga merchant pays just one-half of the freight the Atlanta merchant does." Mr. ADAMSON. That argument relates to interstate commerce and not to the Georgia railroad situation. Mr. THURBER. Well, sir; it speaks of the Georgia railroad situation, and it has a bearing on the interstate rates. Mr. ADAMSON. There is no trouble about the Georgia railroad commission, you can rest easy on that; the only question is, Has the Federal Government the same right to make such a law as the State has, the State chartering those corporations and the Federal Government not chartering them? The Federal Government derives its power solely from the interstate commerce clause of the Constitution. Mr. THURBER. Yes, sir. Mr. ADAMSON. And not from the fact that it is the father of these corporations. Mr. THURBER. Yes, sir; that is true. I think this article is pertinent to the situation and tends to touch the various sides of this question. Mr. ADAMSON. You can find newspaper articles pertinent to the general subject that you could read until doomsday. Mr. THURBER (continuing to read): "Why? Because Chattanooga is out of the State, and Atlanta is in it. This is merely one of a hundred instances where Georgia points are placed at a positive disadvantage in freight rates because they are located in the State." The editorial from which the foregoing is an extract shows traces of feeling which suggest the attitude of an advocate rather than one of judicial impartiality And then it goes on to discuss it, and it shows that the reason for it is that it is the arm's length situation; that the railroad agent simply refers a shipper to the State commission, and says: "Those are the rates fixed by the State commission, and we have nothing to do with it." It removes the incentive he has to endeavor to meet situations that arise in business. Mr. ADAMSON. It is plain to any man, and I think to the Atlanta Journal, that rates between Atlanta and Knoxville are not Georgia railroad commission matters at all; they are interstate commerce matters. Mr. THURBER. The Railroad Gazette goes on to say: The shipper is told, in effect, that the State will look out for the needs of business in the way of reduced rates of transportation, and he knows that, until driven to plead confiscatory taking of property without due process of law at the bar of justice, the revenues of his corporation will have no defender but himself and his fellow officers. He knows that a justifiable reduction will be made in argument for others that are wholly devoid of justification, and he naturally assumes an attitude of hostility to all reductions. Again, capital is reluctant to engage in railroad enterprises where the rate-making power has been taken from its employees and lodged in political officers, and the States which have the most drastic regulative laws have usually seen the slowest development of railroad facilities, with the natural accompaniment of slow development, the retardation of the natural decline in rates. From my own knowledge, I can testify that it was not intended to confer rate-making powers upon the Interstate Commerce Commission. This is proven by the following extracts from the debates in Congress when the bill was pending and I have a quotation here from what Mr. Findlay said on December 8, 1884, and also what Mr. Reagan said, in answer to Mr. Findlay. Later, on January 7, 1905, Mr. Reagan said: One of the greatest troubles I have had, even with the friends of legislation in this direction, has been to get them to understand that this is not a bill to regulate freight rates; that it does not undertake to prescribe rates for the transportation of freight. I know the difficulties which would attend any measure attempting to prescribe rates of freight. I am persuaded that no law fixing rates of freight could be made to work with justice either to the railroads or to the public; and I have intended from the beginning to avoid that difficulty. And in the Senate, May 6, 1886, Mr. Kenna said: What constitutes a reasonable rate is precisely the thing which the people of this country are unwilling to leave to the arbitrary discretion of the railroad commission. Judge Cooley, its first chairman, recognized this; but after his retirement the Commission assumed that it had this power, and exercised it until the Supreme Court of the United States decided it had not, since which time the radical element in the Commission has been seeking to get this power, and has invoked the influence of the radical element among shippers to induce Congress to confer it. The state of mind of this element is illustrated by the fact that at the interstatecommerce law meeting held at St. Louis, October 27, 1904, it was stated that the railroads owned the Congress of the United States, and no longer ago than December 30, 1904, Mr. Prouty of the Inter state Commerce Commission, in an interview published in Chicago, is reported to have said that "If the Commission was worth buying, the railroads would own it." Mr. BACON. May I ask to whom that is attributed-Congress being owned by the railroads of the United States? Mr. THURBER. Well, Mr. Bacon made a statement there which I had not intended to say he was entirely responsible for, because it was made by others. The attorney for the Texas cattle shippers-what was his name? Mr. BACON. Mr. Cowan. Mr. THURBER. Mr. Cowan also made that same statement. I was present and heard it, and the whole trend of the papers and speeches which were made there was so radical that it did not commend itself to my judgment, although I am in favor of the regulation of the railroads. Mr. BACON. I asked who made the statement that Congress was owned by the railroads. Mr. THURBER. I think you did, Mr. Bacon, and I think that Mr. Cowan did. Mr. BACON. I never made such a statement and never had such a thought in my life. Mr. THURBER. That was the impression I got. Mr. BACON. And I wish to say the trend of thought in that convention was decidedly conservative and reasonable. The statements that were made were reasonable, and a resolution was adopted that the statements of one man were not indorsed and would not be allowed to go out as the expression of the convention. Mr. MANN. When I asked you yesterday, quoting from "Freight, whether you made such a statement, you said that you did not remember, as I recall it. Mr. BACON. I said that on two or three occasions. Mr. MANN. And now you say you did not make such a statement? Mr. BACON. I say I have no recollection of such a statement as the one attributed to me. I will say now that if you can prove I made such a statement I will stand by it. Mr. MANN. I never wanted to prove it; I wanted you to deny it, for your own good name and the good name of the members of Congress, and you refused to deny it when I gave you the opportunity. Mr. BACON. I stated that I had no recollection of making such a statement. You did Mr. MANN. I think you will find the record says that you say you do not remember whether you made the statement or not. say afterwards that you never had such a thought. Mr. BACON. I think there has been enough said about that. Mr. ADAMSON. You were given the opportunity to deny it for the good sense of yourself and the integrity of yourself and your associates. Mr. THURBER. I can only say that I went into that convention with a paper which advocated reasonable control of railroads, and after three papers had preceded me which, in my judgment, advocated unreasonable control of railroads, I was cut off by the passage of a resolution limiting debate to two minutes. Mr. BACON. Let me say, Mr. Chairman, that Mr. Thurber offered his resolution after the committee on resolutions had made its report and there was no time to consider it. When the meeting of the committee on resolutions was held a motion was passed that no further resolutions would be entertained other than those that had been presented to the committee. Mr. THURBER. I endeavored to speak to the report of the committee on resolutions but was cut off by the two-minute rule. Mr. MANN. That is, there were only two minutes allowed to discuss the report of the committee on resolutions? Mr. THURBER. No person was allowed more than two minutes. Mr. MANN. I think that I read some report of a speech that certainly took more than two minutes to deliver, discussing the report of the committee on resolutions. Mr. THURBER. That was before the passage of the rule. Mr. BACON. I will say that nearly an hour was devoted to the discussion of the report of the committee on resolutions. This was on the second day, past noon on the second day, when there were only two or three hours remaining for action and a large number of delegates were desirous to return home by afternoon or evening trains, and consequently a limit was set to debate; after there had been some considerable debate a limit was set to further discussion on the question, and finally the report was adopted, on the previous question being adopted. Mr. THURBER. Mr. Prouty, of the Interstate Commerce Commission, in an interview published in Chicago, is reported to have said that "If the Commission was worth buying, the railroads would own it." The reasonable element among shippers does not believe this, but they are less demonstrative than the radical element and do not make themselves heard. Their view is well expressed by resolutions adopted by the New York Board of Trade and Transportation. Mr. ADAMSON. Are you still reading from a newspaper or is that your own production? Mr. THURBER. No, sir; I am not reading from the newspaper now. The resolutions referred to are as follows: Resolved, That to invest the Interstate Commerce Commission with power to declare "what rate or rates" are "unjustly discriminative or unreasonable," and "what rates would be just and reasonable," and to further provide that the rates which the Commission deem just and reasonable shall be substituted, is, in our judgment, a long step toward conferring the general rate-making power upon the Commission, if, indeed, the provisions of the Quarles-Cooper bill would not confer precisely that power. The advocates of that bill disavow any intent to confer such power and do not defend the conferring of such power. The Commission has heretofore claimed the rate-making power, and has endeavored to exercise it in various decisions, which has been overruled by the courts. It seems to have been made clear that neither the framers of the act nor Congress intended to confer that power on the Interstate Commerce Commission. The Quarles-Cooper bill confers that power to the extent of pronouncing rates and classifications to be unreasonable and how far they are unjust, or the naming of a rate or practice in substitution. This confers a judicial power upon a constantly changing body, appointed without special reference to that phase of their duties; and while the country has been fortunate thus far in the character of their men placed on the Commission, political and other considerations may have undue weight in the selection of Commissioners, and the Commission would be more likely to be influenced by such considerations than the judiciary. The Commission has full power of investigation and can appeal to the court to enforce its conclusions, and the courts have supported the findings of the Commission by injunction when the prohibition of unjust discriminations was concerned. This is the effective remedy that has been found to exist under the present law. Mr. ADAMSON. Will you let me ask you a question right there? Mr. ADAMSON. Do you believe that it is more dangerous to invest the Commission with the rate-making power, so far as the question of possible partisanship is concerned, than to invest that power in railroad men? Mr. THURBER. I do not know that, sir; but I do think they would be more likely to err than the courts. Our Atlantic-port people are afraid that the Gulf-port people will get the advantage of them, and the Gulf-port people are afraid that the Pacific-coast people will get the advantage. So this question of rates is a very intricate question for the Interstate Commerce Commission to consider. Mr. ADAMSON. Would not partisanship be the most dangerous factor to be reckoned with in investing the Commission with that power? Mr. THURBER. I think sectionalism or partisanship would be most dangerous. This country is a country where the great object is to get the products of the country to a market abroad, and I don't think that the power in any narrow way should be lodged anywhere where it might interfere with the Constitution of the United States, which is a safeguard in these great matters. Mr. TOWNSEND. Would not the Supreme Court look after that, if it interfered with the Constitution? Mr. THURBER. Yes. That is where our safety lies-in our courts. And if we have not enough courts now to give speedy decisions, then we should have more, courts established for that purpose. I am now reading from the resolutions of the New York Board of Trade and Transportation, adopted by them, and which have been placed on the programme for consideration at the meeting of the National Board of Trade in Washington the coming week [reading]: We believe, therefore, that the decisions of the Interstate Commerce Commission should be, and can be, enforced when made upon complaint of unjust discrimination; but we are not prepared to commend a measure which gives the Interstate Commerce Commission a power so general. It seems to us wiser, for the present at least, to rely upon the recently applied method of enforcing the decisions of the Commission by injunction than to enact the Quarles-Cooper bill, the provisions of which may be construed to be much more far-reaching than even its advocates are willing to defend or consent to. Resolved, That this Board earnestly advocates legislation by Congress to amend the interstate-commerce law so as to permit pooling by railroads, under the supervision and control of the Interstate Commerce Commission, to the end that unjust discrimination may be prevented and reasonable, uniform, and stable rates be established. This view is further emphasized by the following resolutions, adopted by the directors of the United States Export Association January 3, 1905: Resolved, That in the opinion of this association the bill now pending in Congress known as the Cooper-Quarles bill, conferring in some degree rate-making powers upon the Interstate Commerce Commission and making its findings operative until reversed by the courts, is a step in the wrong direction; that while the Interstate Commerce Commission performs a useful function in investigating and making recommendations, it should not have powers equivalent to prosecutor, judge, and jury combined; that to make its findings operative until reversed by the courts is like hanging a man and trying him afterwards, for rates are so related that one affects a thousand or a million, and a damage thus done can not be estimated or repaired. Resolved, That this association is opposed to unjust discrimination in any form in the operation of our public highways, but a reasonable elasticity in their operation is necessary in order to market our surplus products abroad, and that to deny this |