would operate to the detriment of our producers, manufacturers, laborers, and the general public. square deal," Resolved, That the courts are the best judges of what constitutes a and if there are not now enough to give prompt decisions, more should be established to that end. Mr. Chairman and gentlemen of your committee, there are a few great facts that are not generally recognized. Among them are, first, that all combinations and consolidations of transportation lines in this country have resulted in better service and lower rates. This is illustrated by the following figures from the United States Bureau of Statistics. I have the figures here giving the average receipts per tonmile of leading railroads in 1870, 1880, 1890, and 1902, inclusive. This shows a progressive decline, which it is not necessary for me to give in detail, but the decline in average receipts on these leading railroads in the time given is from 1.99 in 1870 to 0.75 in 1902; that is, per ton-mile. This result has been attained largely through combinations and consolidations, which, contrary to the impression generally entertained, have not resulted in abolishing competition, but rather in economies of operation and improvement in service, accompanied by a steady reduction of rates, with but few exceptions, which prove the rule. During the past three years rates have slightly advanced, owing to a much greater advance in labor and materials. Railway freight rates in the United States are, however, less than one-half those of other principal countries. Our railroads carry our chief products 1,000 miles to our seaboard for less than the railroads of other countries charge for carrying these products 200 miles inland from the seacoast after they have crossed the ocean. And the railroad rates abroad and in the United States have been graphically illustrated by the Philadelphia museums in a diagram which I have had reproduced, which is attached to this paper. Mr. RICHARDSON. What is the difference between local rates in this country and in England? Mr. THURBER. They are about double in England what they are here, sir-our local rates. Mr. BACON. Do you not know that the rates in England include delivery at both ends-teaming? Mr. THURBER. They do in some instances. Mr. RICHARDSON. What is the difference between the profits of the local rates in this country and the through rates-the long haul and the short haul? Mr. THURBER. As to the profits? Mr. RICHARDSON. Yes; what is the proportion; what is the difference? Mr. THURBER. That I don't know; but my impression is Mr. RICHARDSON. Is it not five times as great in local rates as in the through rates? Mr. THURBER. I do not think it is five times as great, but I think it is greater. Mr. RICHARDSON. Do you not know that it is five times greater? Mr. THURBER. No; that does not come under my observation. Mr. LAMAR. Do you know whether the capitalization of railroads is under Government supervision and control in England? Mr. THURBER. No, sir; I do not know; but they are capitalized much higher in England; the cost of construction in England is much greater than in the United States, and the land costs them more than here; the damages are much greater in England. The capitalization in England, I think, is more than double what it is in the United States. Mr. LAMAR. What is the relation of capitalization to cost in England, if you know? I ask for information; I do not know myself. Mr. THURBER. I think the board of trade, a department of the Government there, has a very general supervision over capitalization, as well as everything else. No railroad can be constructed in England unless it has the approval of the board of trade, and second, get the authority of Parliament. Mr. RICHARDSON. What is the difference between the classification of this country and England? Mr. THURBER. The classification of freight? I don't know. Mr. THURBER. No, sir. Mr. RICHARDSON. You do not know how it comes in as to classification in this country and in England? Mr. THURBER. No, sir; I do not. Mr. SHACKLEFORD. In England they have a statutory maximum rate, do they not? Mr. THURBER. No, sir; I think not, unless it is in the charters of the various railroads. I think that that was in the earlier charters, from what I have read and studied, that the earlier charters of the railroads all imposed maximum rates. Mr. SHACKLEFORD. I think I noticed in Mr. Prouty's testimony before this or some other committee that he stated that Parliament had established maximum rates. Mr. THURBER. So far as my knowledge extends, the maximum rates were, in the beginning, in the charters of the roads, and they have always been so much higher than those rates obtaining in actual business that had no bearing To continue along the line I was on That this great result has been attained by free and unhampered American railroad men, who have induced investors to put ten thousand million dollars into making this possible. It has merged the fertile furrow of the prairie farm in the closing furrow of the sea, and made myriad acres valuable which otherwise would be valueless. It has made us the leading nation of the world. Are the men who have done this less entitled to reward than those who invested in the land and waited for the unearned increment? It isn't what you have got, but where you have got it, that constitutes value, and this applies alike to fields, forests, mines, and factories. Every private car line which gives its owners an advantage over the average shipper should be absorbed by the railroads, just as the privately owned fast freight lines were absorbed. Every terminal railroad which gives its owners a like advantage should be thus absorbed. If all the railroads in the United States were consolidated into one great system under corporate management, it would be to the public advantage, just as previous consolidations have been.. It would not abrogate competition, for the great competition is that of sections, States, and nations. If a manufacturer in one State wants to bid on a contract in another State, where a low commodity rate would get the business and keep his works running, and a railroad has empty cars going that way, it should be allowed to make a special rate, provided that rate is open to all manufacturers on equal terms. If an exporter can sell a cargo of wheat in Europe in competition with Argentina, if he can get a special rate at a minute's notice, and the railroad can make the deal possible, it should be allowed to do so. The rate there is a very important consideration. In the great movements in trade to-day the bargains are made largely by telegraph. It requires instant decision. An importer abroad will cable to his correspondent here an offer. Whether that offer can be accepted depends upon the rate of freight. The correspondent in this country will go to the proper railroad man and if that can be decided right off, without any regulations and laws to interfere, it is greatly to the interest of this country. For the last five years my study of this question has been very largely in creating foreign markets abroad, widening the markets for American products. I have seen the absolute necessity for an absolute reciprocity in that business, and I believe that there should be, in whatever legislation may be enacted in regard to the control of rates, some provision which would, so far as our export trade is concerned, give a greater reciprocity so far as our domestic trade is concerned. It is an absolute requisite. All questions of shipping, and the ocean rates, come in. But it is all summed up in the total which enables the trade to be made, and it all has to be made, by telegraph. Mr. ADAMSON. Do you recommend any legislation at all, or do you hold that it is unnecessary to have any? Mr. THURBER. I think, so far as the present situation is concerned, that if you will create another court which will enable speedy decisions to be made in all controversies that arise between shippers and carriers, and you will give the railroads the right to make reasonable agreements between themselves, subject to the approval of the Interstate Commerce Commission Mr. ADAMSON. You want a pooling clause? Mr. THURBER. Yes, sir; because that is absolutely necessary to prevent these unjust discriminations. I formerly was in favor of the prohibition of pooling. I did all I could with the commerce of this country to prohibit pooling, because we felt that it was likely to result, if the railroads had that power, in exorbitant rates for transportation; but the experience of twelve years has shown me that there was no danger of unjust rates, and there was great danger of unjust discriminations; and the prevention of pooling, the making of agreements between railroads allowed the unscrupulous element in railroad management to sand bag the honest element in railroad management into making these unjust discriminations, and Mr. Reagan wrote a letter, which was submitted here to Congress, in which he stated that subject to reasonable control by the Interstate Commerce Commission he thought such agreements should be allowed, and he wrote to me to the effect that he agreed with me in my conclusions that the law had operated differently from what he thought it would when it was enacted. Mr. BACON. I would like to ask one question, whether Mr. Thurber is not aware that when pooling was in operation very extensively in this country it failed to prevent discrimination, from the fact that pooling arrangements were temporary and limited to a certain time, and every railroad was striving to secure the advantage, so that upon the renewal of pooling arrangements it could acquire a larger percentage of the rate, and therefore the efforts of each railroad were bent to the end of increasing their percentage, so as to make a better arrangement upon the renewal of the pooling contract. Mr. THURBER. I will say in answer to Mr. Bacon's question that Mr. Albert Fink, one of the ablest railroad men in this country, considered that it was impossible to stop unjust discriminations, or to minimize them, unless the railroads had the right to enforce their agreements upon each other-in other words, the same right that all other corporations or other individuals have. Mr. BACON. That does not answer my question. What I want you to state is if you do not know that discriminations were actually made under pooling contracts, during their continuance? Mr. THURBER. I think that it was greatly minimized. I do not think that it was stopped entirely. The CHAIRMAN. There never has been a time when a pooling contract could be enforced in the courts. They were always contrary to the common law, and never have been enforced by the courts. Mr. THURBER. I do not know as to being contrary to the common law, but I do know that when the trunk lines were upheld, and Mr. Fink was commissioner, it resulted in fair rates and greater stability than after that commission was pronounced illegal. The CHAIRMAN. But the enforcement of those contracts was dependent entirely upon the integrity of the parties and not at all upon fear of the operation of the courts. Mr. THURBER. That is my impression. Mr. BACON. May I say a word? The CHAIRMAN. After Mr. Thurber has answered. Mr. THURBER. Certainly. Mr. BACON. I want to say that while they were subject to the integrity of the parties they were very largely observed by them, but that whether or not, even though they were legally binding, the same inducement would remain for a poor road getting a larger part of the traffic than its percentage in order to get a higher percentage in the next contract, and I will say that I have had repeated offers of rebates from different roads on traffic that was comprised in the pools years ago. Mr. THURBER. I see that your time is very short now, Mr. Chairman, and I will abbreviate my remarks. It is this freedom which has reduced our rates in this country to one-half those of other countries, and we should not put our railroads in official clamps which would prevent this. There is a broad distinction, however, between rate-making and preventing unjust discriminations. We need the Interstate Commerce Commission to police the latter, but it should not be the judge of the former. I think that the rest of what I had to say has been practically covered here. Mr. ADAMSON. Do you not think that the prevention of discrimi nation should be the limit of Federal interference? Mr. THURBER. Yes, sir: I do. Mr. RICHARDSON. How would you enforce the power to prevent the discrimination? Mr. THURBER. I would have the Interstate Commerce Commission as a prosecuting body, and I would have the courts as judges of what was just and what was unjust, and what in accordance with the law: Mr. LAMAR. Are you acquainted with the President's views on this matter? Mr. THURBER. I can not say that I am. Mr. LAMAR. You read his message to Congress ? Mr. THURBER. Yes, sir. Mr. LAMAR. You understand from that that he recommends that the commission shall have the power, not exactly for original ratemaking-rate-making in general-but that they may have the power to correct an unjust rate and put the corrected rate in effect at once, subject to the action of the courts? Mr. THURBER. Yes, sir; I think he has imbibed Mr. Bacon's views. Mr. LAMAR. Yes. You do not think, then, that he is safe and sound on that? Mr. THURBER. I think that he is one of the most honest and wellmeaning men in the world, but he is just as liable to be mistaken as anybody else, and just as liable to error, because of not knowing about the subject under consideration. Mr. STEVENS. I think the committee would like to have you and your association identified, and I would like to know if you are the same person and if the United States Export Association is the same body, which received funds from Gen. Leonard Wood when he was governor-general of Cuba, and from Mr. Havemeyer, of the sugar trust, on this so-called reciprocity treaty ? Mr. THURBER. The bureau did receive money for the purpose of endeavoring to get a reciprocity treaty between Cuba and the United States. Mr. STEVENS. What I wanted to know is whether you are the same person as the Mr. Thurber who was then connected with that? Mr. THURBER. I am. Mr. STEVENS. And whether this association is the same association as endeavored to get funds from General Wood and Mr. Havemeyer? Mr. THURBER. It is; yes, sir. Mr. BACON. I would like to ask one question, and that is, in view of the fact that you have appeared at several of the commercial conventions in opposition to this legislation-I wish to make this inquiry for the information of the committee-whether you have received, are receiving, or expect to receive compensation from any of the corporations for that service? Mr. THURBER. No, sir; I do not. Mr. BACON. That is all. Mr. TOWNSEND. Is this gentleman going to be here after to-day ? The CHAIRMAN. Do you desire to ask him any questions? Mr. TOWNSEND. Yes, I want to, very much. The CHAIRMAN. Mr. Thurber, can you appear before the committee on Friday? Mr. THURBER. I can if it is desired. The CHAIRMAN. I wish you would. Thereupon the committee adjourned until to-morrow, Thursday, at 10.30 o'clock a. m. Mr. CHAIRMAN. I wish to correct my statement of Wednesday, to which you called my attention, in regard to the matter of stating that the Hon. John H. Reagan was "the father" of the present interstatecommerce bill. Mr. Reagan was perhaps the most prominent advocate of legislation for the regulation of railways at that time, in which I |