as to what it will do now when it will take for its starting point what it did in the maximum-rate case.

I wish to submit that if the Commission once fixes these rates, and of course it will fix them, and it will fix a great many of them, especially in trying to readjust the relations between different localitiesand of course every time it silences one complaint it will necessarily immediately start up another one by the other fellow-it will make a great many rates, and those rates will practically continue until the Conamission sets them aside. While the bill says those rates shall be for only two years, as a matter of law they will, as a matter of fact, continue. Thus there will gradually pile up a set of rigid rates, minimum rates as well as maximum (in order to control the relations between localities), which will be a most serious discouragement to the railroads in the development of traffic; and I take it it will eventually get to the point where the railroad company must come here to Washington and consult the Commission before it can take a step to encourage the starting of a new enterprise on its line.

Mr. ADAMSON. If they are going to fix the maximum rate, would it not be better for them to fix the minimum rate also?

Mr. HINES. That would be just an additional restriction. Under the present law every tariff is a maximum and also a minimum rate. They have got to charge that sum, and it has been the duty of the Commission to make them charge that sum. It seems that they have not been able to do that, so that I do not see how they could, as a matter of fact, enforce minimum rates if they put them in; but the result would be that a system would be piled up where the railroad would either have to make secret charges in many instances to meet legitimate requirements or they would have to suspend things and come to Washington in order that the industrial development of their section should continue. That is one of the most important functions that the railroad practically performs. It is not the function of a common carrier, but it is a function that is performed by them.

Coming here on the Southern Railway the other day from Atlanta I was very much struck with the number of factories put up along the railroad in the last few years, largely if not entirely by reason of the activity of the Southern Railway in encouraging the establishment of industries on their line. The rates made to develop such industrial activity are legal and public. The railroad decides what is necessary, and gives legal notice and publishes it. If anybody is hurt he has his remedy; and that section of the country gets the benefit of the development. I do not know of anything in the railroad situation in this country which will justify the conclusion that the railroads have been so unsuccessful in the development of the resources of this country that the matter should be turned over to the Interstate Commerce Commission, when it is not necessary to cope with any tangible evil that now exists and when the necessary effect would be to put these constantly increasing restrictions upon the constantly increasing activities of the railroad companies.

Mr. MANN. Mr. Hines, you have written several articles upon that subject?

Mr. HINES. Yes, sir; a number.

Mr. MANN. Have you any copies of them here?

Mr. HINES. I have not them here, but I can very readily send them

here.

Mr. MANN. Would it not be a good idea to have those go in the hearings here?

Mr. HINES. I beg pardon?

Mr. MANN. They are not very long?

Mr. HINES. Some of them are long. They are of various lengths. I might select some of the short ones.

Mr. WANGER. I understand you to say that Mr. Morgan did not cause the raising or lowering of rates upon the railway systems under his control?

Mr. HINES. I have never been aware of it, and have never had any reason to believe that such was the case.

Mr. WANGER. Do you think that he could not do it if he desired to? Mr. HINES. I think that as a business proposition he would not desire to. He would not know enough about it to, and he would not attempt to give attention to the details necessary to pass upon a matter of that sort. The railroad is there, and that is the business of the traffic people, to develop the traffic so as to make it a paying institution; and a great many years spent in the management of the railroads of this country seems to have taught the traffic people that the way to increase the amount of the revenue is to increase the traffic, and that ordinarily they can only attain by charging reasonable rates; and there has been a constant downward tendency despite a few instances to the contrary. This matter is so important that there is a constant readjustment of rates to meet the conditions and to keep on encouraging the development so as to increase the volume of the traffic.

Mr. WANGER. Do you know of any instances of increased rates? Mr. HINES. Yes, sir; I do. But I think that they are the exceptions and not the rule. I think you will find that there is a steady tendency downward, and that the change is in that direction.. Of course, you can pick out cases where there are increases. There were numerous changes two years ago, but I do not think there has been any serious contention there has certainly been no official statement-that those changes are unreasonable. The Commission had the power and the jurisdiction to prevent those increases, if they had thought them unreasonable; and while their unreasonableness may be suggested in their annual reports, they did not take the reponsibility of saying so officially, so far as I am advised.

Thereupon the committee adjourned until Tuesday, May 27, 1902, at 10.30 o'clock a. m.

INTERSTATE COMMERCE COMMISSION'S PLAN FOR DEVELOPING WHAT IT CALLS A "POPULAR DEMAND" IN FAVOR OF ITS SCHEME TO REVOLUTIONIZE THE INTERSTATE-COMMERCE ACT.

In its long-continued and never-flagging campaign for revolutionizing the act to regulate commerce, the Interstate Commerce Commission now lays great stress on what it calls the "popular demand" in favor of the gratification of its desires. In some recent comments on the Commission's last annual report I stated that this so-called "popular demand" had been inspired, either directly or indirectly, by the Commission itself. Various interesting facts corroborate this statement

and indicate that the Commission seems to be devoting a large part of its energies to originating a "popular demand," otherwise nonexistent, to suit its purposes and to further its schemes.

A very recent example of this work is a letter sent out by the Commission, apparently to all parts of the country, dated February 3, 1900, written on its official letter head and signed by its secretary in his official capacity, designed to secure support for its pretensions. This earnest appeal assures the persons to whom it is addressed that Senate bill 1439, which embodies its desires, proposes to give the Commission merely the authority which Congress originally intended to confer upon it, and that it does not propose to invest the Commission with any general rate-making power.

Since under Senate bill 1439 the Commission may, in a single proceeding, on its own motion, fix maximum and minimum rates for every interstate carrier in the country on all the interstate traffic in the country, its claim that the bill gives it no general rate-making power is incorrect.

Since the voluminous debates of Congress, preceding and relating to the enactment of the act to regulate commerce, show conclusively that Congress had no intention of giving any rate-making power to the Commission, the latter's claim that the new bill is designed merely to give the power which Congress originally intended to confer is untrue. In many other respects also the new bill proposes to give powers of the utmost importance which Congress never intended to give to the Commission, and which would radically change the character of the law and the character of the Commission.

This remarkable document concludes as follows:

If the general features of this bill as above outlined meet your approval, it is respectfully suggested that you take action expressing your approbation and support to the Senators and Representatives from your state and to the Committee on Interstate and Foreign Commerce of the United States Senate and House of Representatives at Washington, either alone or with others, or by petition or otherwise. I would be glad to hear from you in respect to the matter, and would be pleased to receive advice of any action you may take, and copies of any letters, petitions, or other documents which may be forwarded to Senators and Representatives or either of the committees.

Very respectfully,

EDW. A. MOSELEY, Secretary.

It is not necessary to point out the various fallacies and errors in this unusual communication. It is desired simply to emphasize the fact that the Commission in its unreasonable desire for extraordinary powers is going beyond the limits of propriety and using its official position to secure support for measures calculated to gratify its own personal ambition, and that to this end it even goes to the extent of making misleading and unfair representations. Congress and the public should understand just what weight to attach to any apparent support for this measure which may in this way be developed, and may be assured that it is simply the result of a not unnatural compliance with the Commission's importunities on the part of people willing to gratify what is made to appear to them as a harmless, if unnecessary, request for power, and who assume that the Commission's representations are disinterested and reliable, when, unfortunately, such is not the case.

WALKER D. HINES, Assistant Chief Attorney Louisville and Nashville Railroad Company.

LOUISVILLE, KY., February 13, 1900.

THE FACTS AS TO PRESENT POWERS OF INTERSTATE COMMERCE COMMISSION AND AS TO POWERS PROPOSED BY SENATE BILL 1439--SUPPORT FOR LATTER BASED UPON MISUNDERSTANDING OF THESE FACTS, AND MISTAKEN IDEA THAT IT WILL CORRECT EVILS TO WHICH THE PROPOSED POWERS HAVE NO RELATION.

Hon. SHELBY M. CULLOM,

LOUISVILLE, KY., April 12, 1900.

Chairman Senate Committee on Interstate Commerce,
Washington, D. C.

DEAR SIR: At the hearings of your committee upon the bill now before it, proposing to give the Interstate Commerce Commission additional powers, and known as S. 1439, or the Cullom bill, there have been made numerous statements of a character calculated to create a radically wrong impression as to the present interstate-commerce law, as to the extent of the powers conferred by the bill in question, and as to the efficacy of those powers in correcting supposed evils. Wholly erroneous impressions seem to prevail in some quarters that the Commission and the courts are now without effective power over rates, and that the powers proposed to be given the Commission are not extensive or radical. The belief also seems to be widespread that granting these powers, which are practically unlimited and dangerous in the e treme, will in some way prevent rebates and other illegal concessions from tariff rates which are now believed to be frequently given in the interest of favored enterprises and to the serious injury of other shippers, when the fact is that those powers have no relation whatever to that evil, and can not possibly correct it or improve the situation. I therefore take this method of presenting to you and to the committee the precise facts on these po nts.

I. In its last annual report the Commission states that any railroad company can charge for its services whatever it pleases, and as much as it pleases, without any power in the Commission or the courts to prevent it. This was substantially reiterated by Chairman Knapp and Commissioner Prouty in their recent statements before the Senate Committee on Interstate Commerce. Commissioner Prouty added, in effect, that the Commission had no more control over railroad rates than it had over divine Providence, and said that the Commission had absolutely no power except that of an advisory commission, and less power of that sort than the advisory commission of Massachusetts. The impression has been industriously disseminated by and on behalf of the Commission that this state of affairs has been brought about by the unfavorable decisions of the Supreme Court of the United States. These representations are so incorrect and misleading as to call for an accurate statement of the provisions of the present law and of the powers of the Commission and the courts under it.

The interstate-commerce act prohibits unjust and unreasonable rates, unjust discrimination in the performance of like services, undue preference in favor of any particular person, locality, or description of traffic, charging more for a short than for a long haul under similar circumstances, and pooling; requires all rates to be printed, posted at stations, and filed with the Commission, and prohibits charging any person a greater or less compensation than the published tariff rates. It makes any carrier violating its provisions liable in damages to the parties injured, and in addition denounces heavy penalties for its vio

lation against the carriers, and against shippers obtaining less than the lawful rates. (Secs. 1 to 10, both inclusive.) A new section, added March 2, 1889, empowers the courts to issue writs of mandamus compelling any carrier to move interstate traffic for the party complaining upon the same rates, terms, and conditions as it does for other ship

pers.

Sections 11 to 20, both inclusive, relate to the Commission, its powers and duties. The Commission is given the most ample power of investigation; is charged with the duty of enforcing the act and keeping itself informed as to the manner in which the business is conducted; and is authorized to require any district attorney of the United States to prosecute, under the direction of the Attorney-General, all necessary proceedings to enforce the act and to punish violations of it.

These provisions give as complete power as can possibly be given to prevent the only evil which at this day is seriously charged or complained of, i. e., unjust discrimination in favor of trusts and combinations and other favored shippers by making, either directly or indirectly, illegal concessions from the published tariff rates charged the general public for like services. It is just as unlawful for the carriers to charge less than the tariff rates they fix themselves as it could possibly be for them to make similar concessions from tariff rates fixed by the Commission or by Congress itself. The temptation to violate is just the same, and it is just as easy and just as hard in the one case as in the other to prevent such violations. Under no possible scheme can they be punished except by producing competent evidence on which to convict; and if such evidence be produced, punishment will follow as surely under the present law as under any that could be devised. Those persons laboring under the delusion that such discriminations now complained of are due to the weakness of the present law, or that that weakness can be remedied by the Cullom bill, are simply the victims of skillful misrepresentations.

The only respects in which it is seriously claimed that the present law is insufficient, or in which substantial changes are proposed, are not at all the powers of the Commission and the courts to prevent illegal departures from tariff rates, but the Commission's power to change tariff rates which are in themselves illegal because unreasonably high in themselves or unjustly discriminatory between different localities or descriptions of traffic. It is as to these illegalities that the Commission proclaims most loudly that the railroads are absolutely without restraint either by the Commission or the courts. Yet (entirely aside from the undisputed power to award damages for violations of the law) the Commission and the courts have distinct, substantial, and effective powers to prevent these very evils.

Rates in general are very low in this country, and if any rate is too high it is out of line with the general rate adjustment, and therefore amounts to an unjust discrimination, and may be corrected as such, as will be pointed out below. But it may also be corrected when regarded purely as a rate unreasonable in itself. Any such unreasonable rate is a violation of the act. (Sec. 1.)

The Commission may hear complaints as to violations of the act, not only by a party having a direct pecuniary interest, but by any mercantile, agricultural, or manufacturing society, or any body politic or municipal organization, or by any State railroad commission. More