2d Session.

No. 4147.

INVESTIGATION OF LABOR TROUBLES IN PENNSYLVANIA. [To accompany bill H. R. 12654.]

FEBRUARY 27, 1889.-Referred to the House Calendar and ordered to be printed.

Mr. TILLMAN, from the Seleet Committee on Existing Labor Troubles in Pennsylvania, submitted the following report, with the separate views of the minority:

The resolutions of the House authorizing the appointment of the committee are as follows:

On the 17th of January, 1888,

Mr. ANDERSON, of Kansas, offered the following resolution; which was read and referred to the Committee on Commerce:

Resolved, That the Committee on Commerce is hereby empowered and directed to investigate forthwith the extent, causes, and effect upon interstate commerce of the continued failure by the Reading Railroad Company to transport such traffic, and to report to the House by bill or otherwise for consideration at any time such legislation as is necessary to secure to the public the regular and complete execution by a railroad company of its obligations to serve as a common carrier of interstate commerce. Such investigations may be made by a subcommittee at such places as it shall deem proper, and the said committee, or subcommittee, is hereby authorized to send for and examine persons, books, and papers, and administer oaths to witnesses, and to employ a messenger and stenographer; and the expenses of said investigation, not to exceed $5,000, are hereby authorized to be paid out of the contingent fund of the House in the manner now provided by law.

The Committee on Commerce kept the matter under consideration until February 2, 1888, when it reported the resolution favorably to the House, but suggested amendments which, after discussion participated in by Messrs. Anderson of Kansas, Clardy, Brumm, Rayner, Randall, and others, resulted in the passage of the resolution in the following amended form:

Resolved, That a special committee of five of the House of Representatives be appointed to investigate forthwith the extent, causes, and effect upon interstate commerce of the continued failure by the Reading Railroad Company to transport such commerce, and to report to the House, by bill or otherwise, tor consideration at any time, such legislation as is necessary to secure to the public the regular and complete execution by a railroad company of its obligations to serve as a common carrier of interstate coinmerce, and to investigate the difficulties existing in the Schuylkill and Lehigh coal regions of Pennsylvania between the corporations mining coal and the miners, and to further investigate all the facts in relation to the mining corporations and individual miners of anthracite coal in connection therewith, and all the facts in relation to the matter, and report the same to the House, with such recommendations as the committee may agree upon; and that said committee be authorized to sit during the session of the House, and at such places as it may find necessary; to employ a stenographer, to administer oaths, examine witnesses, compel the attendance of persons, and the production of books and papers; and the expense of such Investigation shall be paid out of the contingent fund of the House.

On the 9th of February, 1888, the Speaker announced the followingnamed members as the select committee authorized by the foregoing resolution:

G. D. Tillman, of South Carolina; W. J. Stone, of Missouri; J. Logan Chipman, of Michigan; John A. Anderson, of Kansas; and A. X. Parker, of New York.

On February 10, 1888, the following additional resolutions were introduced by Mr. Anderson, of Kansas, and adopted by the House:

Resolved, That a sum not to exceed $5,000, sufficient to pay the expenses of the special committee of the House appointed to investigate the extent, causes, and effect upon interstate commerce of the continued failure of the Reading Railroad Company to transport such commerce, etc., shall be immediately available and payable out of the contingent fund of the House on the order of the chairman and one member of said committee, in sums not exceeding $1.000 at one time; and all vouchers for any such expenditures shall be likewise certified to by the chairman and one member of the committee.

Resolved, That said special committee be authorized to employ a clerk.

The committee proceeded at once to organize and get to work. Testimony was first taken at Washington, and then at Philadelphia, Pottsville, Shenandoah, and Hazelton, in Pennsylvania; and after returning to Washington, one witness-Hon. Eckley B. Coxe, of Drifton, Pa.whose evidence was deemed very important, was summoned to the National Capital and a whole day spent in his examination. Three entire days were consumed in taking testimony at Washington and eight whole days were occupied in examining witnesses in Pennsylvania. Thirty-seven witnesses were carefully questioned and cross-ques tioned and six of them were recalled for further questioning, besides which a good deal of germane documentary and statistical evidence was procured.

The provisions of the resolution creating the committee are very comprehensive and imposed three onerous duties upon it:

First. To investigate forthwith the extent, causes, and effect upon interstate commerce of the continued failure by the Reading Railroad Company to transport such

commerce.

Second. To investigate the difficulties existing in the Schuylkill and Lehigh anthracite regions of Pennsylvania between the corporations and individuals mining coal and the miners, and to further investigate all the facts in relation to the matter. Third. To report the same to the House with such recommendations as the committee may agree upon [and also] to report to the House by bill or otherwise, for consideration at any time such legislation as is necessary to secure to the public the regular and complete execution by a railroad company of its obligation to serve as a common carrier of interstate commerce.

The testimony taken by the committee is herewith submitted in full.. After careful investigation and reflection your committee is unanimously of the opinion that most of the recent labor troubles in the anthracite regions of Pennsylvania arise from the railroads in that section being permitted to mine as well as transport coal.

"The evils which result from such inconsistent joint business are many and grievous. All classes of the community are injured by it. A coal operator disconnected with coal transportation will naturally put out all the coal he can at a reasonable profit, which tends to cheapen the article to the public. So, too, a coal carrier having no connection with mining will seek to move all the coal he can at a fair profit, which operates to keep coal at a just price to the consumer, whose interests should be paramount to all others. But the functions of coal extracting and coal carrying when blended in the same person or corporation are antagonistic to the interest of both the coal consumer and the coal operator, where the latter has no transportation facilities under his own control, because the man who combines the double business of

carrying and mining has a virtual monopoly of the output, the transportation, and the price.

It was by getting possession, almost without regard to cost, of nearly all the routes of transportation by water or rail from the mines to market and then freezing out the private mine operators, either by putting down the price of coal at the mines or by limiting the supply of cars or by charging high freights, that the Philadelphia and Reading Railroad Company has been enabled within, say, the last eighteen years to obtain practical control of the Schuylkill Canal and Navigation Company, also of the Susquehanna Canal and of about 1,700 miles of railroad, as well as of about one-third of the whole anthracite coal fields of Pennsylvania, and at the same time to put up the average price of coal at least 50 per cent. to the consumer. In fact, seven coal-carrying railroads, which are at the same time coal miners, may be said to own or control all the anthracite of the United States.

It is true a few private coal operators still doggedly cling to their property and their business, but the testimony taken by your committee abundantly shows that the Reading devil-fish," as Congressman Bramm calls it, has been steadily branching out throughout the whole region, absorbing both coal mines and railroads. Other carrying Companies in Pennsylvania are doing the same thing, and your committee. believes it has good cause for saying that more than one, if not all, of the anthracite monopolies run several of their mines in the name of private operators to quiet the general clamor against carrying compa nies having a monopoly of mining also.

In order to rob the public by controlling the price of coal through limiting its output and charging an exorbitant freight for its transportation, the Reading has both purchased and leased many of its coal lands at "speculative" values on credit, giving bonds of the railroad for security as well as a mortgage on the coal lands, having no sufficient amount of cash to pay down so as to let the coal land be its own security. In this way the bonded debt of the Reading Railroad has been increased to one hundred and sixty million dollars, although the capital stock of the company is only about forty million. The company has twice been in the hands of receivers, and after recently collecting an assessment of about twelve millions upon the stock it is even now by consent of the stockholders in the custody of trustees for the benefit of its bond-holders. It has not paid any dividend for twelve years, although its average annual dividend for a long while immediately preceding the time it commenced to mine coal was over 10 per cent., frequently 15, sometimes 20 per cent. Many sagacious railroad experts think it never will pay another dividend to the present stockholders, so that the railroad company itself has been a great sufferer financially as well as the public by the unity of the two inconsistent pursuits of coal carrying and coal mining, which, while tempting to speculation, stock gambling, and affording monopoly an opportunity to advance the price of coal by charging an extortionate royalty for mining and an unjust freight for transportation, yet in the end punishes itself.

This experiment has entailed upon the stockholders a loss of $60,000,000, according to one expert witness, John Norris. (Testimony, p. 294.) From the day that the Reading Railroad Company first fairly entered upon the joint business of mining and carrying coal in 1871 down to the present hour, it has been rapidly sinking more hopelessly into bankruptcy. Judging from the evidence taken, and especially from the tergiversations, evasions, and general conduct of the present controlling officials of the road while testifying before your committee, there is