Indeed, this verdict of the leading commercial body of the country emphatically confirms the verdict of separate commercial and industrial organizations throughout the country. I am convinced that beginning with the tiller of the soil and proceeding through all the stages of production, transportation, manufacture, and sale of the merchandise and commodities of the country, no transportation bill was ever before so thoroughly and heartily recommended by the people. This, I take it, is the result of much thought. It is the crystallization of the sentiment that is gaining force daily and which is merging itself into a demand for justice. I am firmly convinced that unless Congress enacts needed legislation along the lines suggested in this bill, the danger of injurious State legislation will be intensified. We are all convinced that the common carriers of the country should have ample justice and should enjoy full protection of their rights and privileges under the law. This we may grant them and still insist upon the observance of every feature of the measure now in your hands.

It should be regarded as the duty of all good citizens, it seems to me, to avoid in every manner possible the spread of that sentiment favorable to the Government ownership of common carriers. Such a consummation will be no less than a calamity to the nation and as surely as it comes to pass will establish a dynasty in this country that nothing short of revolution will be able to overthrow. It has been wisely said, by many able students of this subject, that the disposition of this transportation question will be the settlement of the trust question in America. I believe this thoroughly. I know that many combinations and trusts are not only able to exist but thrive upon the profits obtained by rebates, underbilling, false classification, or other pernicious practices permitted by railroads which favor them. Knowing this, it is fair to presume that the trust or combination system has for its allies the railroads of the country.

This bill guarantees justice to the trust or combination just as it does to the individual. It guarantees justice to the carrier and shipper alike, and I am unable to understand upon what ground serious objection can be made to its fair and impartial terms. Its provisions with relation to the publication of tariffs are certainly wise, and surely guard the public welfare. With regard to the publication of rates, it is plain that the interests of carriers and shippers are both conserved. To protect a competing shipper against the evil effects of midnight tariffs means the protection of competing lines against that sort of rate making. The authority asked for the preparation and publication of a national freight classification is the echo of a public demand from every section of the country. The change in classification effected by the railroads January 1, 1900, which has for its object the advancement of rates from 25 to 200 per cent or more, is a striking example of the need of Federal regulation of this character.

The inspection of records is a feature of this bill that can not be too highly commended. By no other means does it seem possible to discover the villiany of some shippers and the dishonest element in railway management. And I would add that authority for the breaking of car seals by agents of the Government would tend to render more certain the discovery of underbilling, false classification, and other frauds practiced by dishonest carriers in collusion with shippers of like character.

It is a well-established fact that the cost of transportation deter

mines almost generally throughout this and other countries whether or not it is possible for individuals, firms, or corporations to transact business. Bidders for merchandise and commodities well understand the market rates. Their offers are passed upon by sellers with strict regard to the transportation rates obtainable. And it thus happens that, under the present unsatisfactory system of railway conduct, in every section of the country certain interests are permitted to do business and flourish while others, equally as well equipped, aside from transportation advantages, are forced to languish, many of them ultimately to destruction.

The period of theory on this subject has long since passed. These are facts, the glaring proofs of which are on every hand. One great provision of this bill is that requiring defendant carriers to appeal to the courts to set aside an order of the commission, and is directly in the interests of those who either can not afford to engage in such litigation or whose business would not survive the delay incident upon such an appeal.

To make the rulings of the commission mandatory is to give prompt relief to the oppressed. The people-that is, the great mass of people supporting this measure--are a unit in demanding the enactment of this feature of the bill.

The proposed amendment permitting carriers to become complainants is amply justified and should have the hearty support of all shippers. Briefly these expressions are, to my mind, the popular views of the people of this country. I believe that it will appear to you, and very soon, that commercial and industrial America, the public prints and leading students of this question, all concur in the demand for this legislation, and very generally heartily approve the terms of this measure.

Reverting to the resolution of the National Board of Trade which I read a few moments ago, recommending an amendment to this bill, the effect, as understood by the railway attorneys and by the shippers in this committee, of the enactment of that feature in the bill will be this: it would give legal status to the trunk line association and the Trans-Missouri, which was dissolved and its influence destroyed by the decision of the Supreme Court, and to any organization deemed necessary by the transportation lines within a certain territory, and would avoid throwing the entire transportation interests of the country into one organization, in the belief that the railways of New England and the managers of the railways of New England would rather have a small amount of sympathy and rather a vague understanding of the necessities of the railroads of the far Southwest, we will say the Territory of Oklahoma, and that they in turn, would have very little in harmony with the people of the far East. On due consideration of this it was accepted by all parties as the most reasonable, the most promising way out of the disagreement that has heretofore existed between the carrier and the shipper.

I thank you, gentlemen, for your attention.

Senator ALLEN. If the milling interest and the elevator interest and the transportation companies could pool, would they not all be concerned in depressing the price of wheat?

Mr. GALLAGHER. I do not understand the question. You say the milling interests?

Senator ALLEN. If the milling interests, the transportation interests,

and the elevator interests could all be pooled or be harmonious so that they would work without friction among themselves, would they not all be concerned in depressing the price of wheat?

Mr. GALLAGHER. There is no question of it. It is human nature to get the best of it if you can.

Senator ALLEN. Very well. Would not the adoption of this proposed amendment then bring about exactly that state of affairs?

Mr. GALLAGHER. No, sir; I think not. The milling interest is represented in 2,800 counties in the United States.

Senator ALLEN. You are counting the little mills?

Mr. GALLAGHER. Yes, sir.

Senator ALLEN. They are not in your organization.

Mr. GALLAGHER. Permit me to explain. The kind of wheat grown in Kansas can not be grown anywhere else in the country.

Senator ALLEN. Take a little town of 800 people, with one little mill, not in your association. There are hundreds just like that. If the organization of which you are the representative and other large organizations, those which largely control the milling interests of the United States, could reach a basis of adjustment with the elevator companies and the transportation companies, who is to stand for the men who produce wheat?

Mr. GALLAGHER. No one in such a combination; but you say "if.” Senator ALLEN. Yes.

Mr. GALLAGHER. "If they could reach." Pardon me if I suggest that the matter is beyond any reasonable conception of possibility. For instance, the miller has no common interest with the railway, particularly that railway that goes beyond its charter rights as a common carrier to engage in business along its line and favor a few shippers to the injury of many.

Senator ALLEN. Between two enemies you placate the more powerful?

Mr. GALLAGHER. We deem it impossible to placate. I say it is impossible to combine all. The conditions are so varied. The grades of wheat in New York are entirely different from those grown in South Dakota. You can not agree upon a uniform price, even.

Senator ALLEN. You complain that this discrimination occurred last February for the first time. It was harmony, or practically so, at other times. The divergence between these organizations is of recent times. Now, suppose the status quo could be reached by which there would be perfect harmony and perfect equality in rates between the millers and the elevator men. Under those circumstances, is there anything to prevent those organizations from making a raid upon the prices of what is produced by the farmer?

Mr. GALLAGHER. That is a proposition, of course, that has its phase of reasonableness, but to one like myself, who has acquaintence with this trade all over the country, and knowing how impossible it is to bring it into an agreement with 18,000 mills in the country, how impossible it is even to get the mills in one State to observe à grade of grain for instance, 58 pounds will be No. 2, or 59 pounds, and so on-knowing how imposible it is to get them to do that, I consider the proposition of the Senator entirely improbable. Here comes a fellow who wants the wheat, and he will take a half pound less of it than the other.

Senator ALLEN. The little mills consume but comparatively a small

portion of the product; the large mills and the exporters consume the rest. Now, I raise grain. If I can feed it I do that as the least of the evils. I haul my grain to a mill within 7 miles and there is one price. I haul it 8 miles another way and there is the same price. I haul 5 or 6 miles still another way and still there is the same price. That price is fixed by the miller's association, and by the elevator company, and there is but one thing for me to do-it does not make any difference if that price is below the cost of production-and that is to take the price you offer me or to haul it back and let the sheriff sell it out. Mr. GALLAGHER. That is probably forced on the grain buyer in the locality by the favored shipper who handles the grain

Senator ALLEN. If you bring about harmonious action by this bill or otherwise between the elevator men and your associates do you not both become an enemy of the producer in depressing the price of what he produces?

Mr. GALLAGHER. The possibility is so remote in my mind and it seems such a long distance off that I would not venture an opinion as to what would happen in a case like that.

Senator ALLEN. Has not that been the experience of the producers of grain heretofore?

I

Mr. GALLAGHER. As I said in my first remarks in reply to your question, I believe it is human nature to get the best that you can. am not here to say that the miller is more virtuous than any other man, but he is unfortunate in obtaining freight rates.

Senator ALLEN. I should say that that is perverted human nature. Mr. GALLAGHER. To the extent of granting and receiving unequal favors I think we agree.

The CHAIRMAN. You have read the resolution of the National Board of Trade in which they indorse this bill with an amendment suggesting the power of contract between competing lines of railroad to a certain extent. Now, is it your judgment that the bill with that amendment will protect the interests of the people of this country better than they are protected now?

Mr. GALLAGHER. Much; very much. That amendment, Mr. Chairman, does not permit the power of contract as generally understood. It will permit Chicago lines, for instance, to form an organization, but not to contract with New York lines, for instance.

The CHAIRMAN. It is only a limited sort of a suggestion of pooling. Senator ALLEN. Is not this proposed amendment of yours the substance of the old pooling bill which has been before Congress several years?

Mr. GALLAGHER. No, sir.

Senator ALLEN. It is the essence?

Mr. GALLAGHER. I think not.

Senator ALLEN. Do you think this will lead to general pooling? Mr. GALLAGHER. No, sir. I think the effect of it will be so good that the people who now advocate pooling will abandon the idea. I arrive at that conclusion from the fact that the railway attorneys at the National Board of Trade meeting, who, at the beginning insisted upon pooling, yesterday evening were of the opinion that they had done the wisest thing by adopting the resolution.

Senator ALLEN. You provide that this schedule or the pooling contract shall be approved by the Interstate Commerce Commission. You do not provide that they shall have any power after that.

Mr. GALLAGHER. They are to have the power to regulate. The act gives them that power.

Senator ALLEN. You concede that that is nugatory?

Mr. GALLAGHER. I do not recall the exact lines of the resolution, but I think the commission is thoroughly empowered.

Senator ALLEN. The general question I wish to put to you is not in respect of any technical construction of it but that amendment adopted and the contract approved by the Interstate Commerce Commission, where is the power to remedy any abuse?

Mr. GALLAGHER. I can bring a complaint

The CHAIRMAN. Can they not set aside the contract any time they choose?

Senator ALLEN. The Interstate Commerce Commission have no judicial power-not the slightest.

The CHAIRMAN. I do not think it is a question of judicial power. I do not think that is involved in the power proposed to be given.

Mr. GALLAGHER. In the first place, if you will permit me, the amendment does not carry the authority for a contract. The proposed amendment carries authority to form an association; that is, to restore to a legal status what out in my country we call-I speak of your country, Senator Allen, as mine, because I live out there-the TransMissouri Association.

Senator ALLEN. You live in a good country.

Mr. GALLAGHER. Yes, sir. The powers and functions of the TransMissouri Association were these: Believing they understood the physical conditions of the country better than the railway men of other sections, they would agree and determine what the rate out there should be. Under this proposed amendment after they are ready to promulgate those rates they must file them with the commission and they must meet the commission's approval.

Now you ask me, In case the commission approves them, how are we to get relief? We will get relief just as we would in any other case. In this millers' case, I, as an individual, brought an action against some thirty-two or thirty-three railways. It went to hearing, and we got an order; but, as you say, the commission has no authority and can not enforce it. But I can take an appeal just as well in that case. Senator ALLEN. These measures are merely palliative, and you come under the insuperable objection that the road or interest itself is the final judge of what it will do. There is no power behind it short of the judicial power, which we are not invoking here, to enforce any of these orders. You have an impassable chasm, where, after all, the last analysis is the discretion or caprice of the organization itself.

Mr. GALLAGHER. I do not know. We have instances in legislation to which that would not apply. For instance, we had enacted by Congress a couple of years ago a bill to prevent the adulteration of flour, to regulate the mixed-flour trade. We were told in the beginning that that law could never be enforced. It was put in the revenue department, and I want to say to you that I do not believe there ever was a law put on the statute books that is respected more generally; and I do not believe that there is a mill, an individual, or a firm in the United States of America to-day that would dare to adulterate wheat flour. Senator ALLEN. The vital element of a law is the power to enforce it. Mr. GALLAGHER. Certainly; there are other considerations. We came to the conclusion that the people interested might themselves