called to the attention of the carriers, eight out of ten have been adjusted to the satisfaction of all parties. Railway companies can not maintain unreasonable rates or carry on their business in violation of law. Public sentiment is, after all, the great controlling force.

I thank the committee.

STATEMENT OF STUYVESANT FISH.

Hon. W. P. HEPBURN,

NEW YORK, May 13, 1902.

Chairman Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C. MY DEAR SIR: The printed copy of the hearings before your committee on bills to amend the interstate commerce law (H. R. 146, 273, 2040, 5775, 8337, and 10930) contains at page 229 the following in the statement of Hon. Charles A. Prouty, Interstate Commerce Commissioner:

I have in my hand here an article written by a gentleman named Kuneth. I do not know him, but I have taken this from the World's Work for February, 1902. I say I do not know him, and I attach no particular importance to his opinion, but I use these tables merely for the sake of reference.

Mr. Prouty then went on to describe what that article shows, and after mentioning various large railroad systems said, at page 230:

That leaves the Harriman system, which is set down here at 21,000 miles, and in respect to that I will say we know that from sworn testimony given by Mr. Harriman before our commission.

Mr. Prouty further said:

You have left the Atchison system, the Rock Island system, the San Francisco, and the Milwaukee, and those are the only important independent systems there are.

A copy of the World's Work for February, 1902, is before me. It contains on pages 1775 et seq. an article by M. G. Cunniff on "Increas ing railroad consolidation," and a map entitled "The railroads of the United States, showing the five great groups of roads each controlled by a single interest." On this map there are marked in red what Mr. Cunniff calls the "railroad lines controlled by HarrimanKuhn-Loeb & Co." Among them are included the railroads which are operated by the Illinois Central Railroad Company, and by the Yazoo and Mississippi Valley Railroad Company, respective. Of each of those corporations I am president, and have been ever since 1887, the year in which the Interstate Commerce Commission was created.

I should not venture to trouble you with correcting the statement made by Mr. Prouty, if it were based solely on Mr. Cunniff's article, but as Mr. Prouty said that in respect to the so-called Harriman system, in which Mr. Cunniff includes the Illinois Central Railroad and the Yazoo and Mississi pi Valley Railroad, "we know that from sworn testimony given by Mr. Harriman before our Commission," it becomes necessary for me to let you know how far Mr. Prouty has been misled.

The facts are that neither the Illinois Central Railroad Company nor the Yazoo and Mississippi Valley Railroad Company has any relation whatever to the so-called "Harriman-Kuhn, Loeb & Co. syndicate," or any other syndicate, further than this: That the names of

Messrs. Kuhn, Loeb & Co. stand registered on the books of the Illinois Central Railroad Company as holding a few shares, and that Mr. E. H. Harriman is not only a stockholder, but is and has been a director of the Illinois Central Railroad Company for nearly nineteen yearsi. e., since May 30, 1883. Mr. Harriman also was at one time, but is not now, a director of the Yazoo and Mississippi Valley Railroad Company. No member of the firm of Messrs. Kuhn, Loeb & Co., nor anyone representing them, has ever been a director of either the Illinois Central Railroad Company or of the Yazoo and Mississippi Valley Railroad Company. Mr. Harriman is not an officer of the Illinois Central Railroad Company, and has not been for more than twelve years past, although he was for a time associated with me as vicepresident of the Illinois Central Railroad Company-from September 28, 1887, to October 20, 1890.

Further than as here stated there is no relation whatever between Mr. Harriman or Messrs. Kuhn, Loeb & Co. and either the Illinois Central Railroad Company or the Yazoo and Mississippi Valley Railroad Company. Neither of those corporations has ever had any interest whatever in any of the railroads of which Mr. Harriman is an officer, nor have I personally had such interest.

Each of our railroads begins at New Orleans, the foreign commerce of which exceeds in value that of any other port in the United States, New York alone excepted. The Yazoo and Mississippi Valley Railroad ends at Memphis, which in 1900 had a population of 102,320. The Illinois Central goes to Chicago, the second city in population; to St. Louis, the fourth; to Louisville, the eighteenth, and ends at Omaha, a city of 102,550 people. Taken together these two railroads serve various parts of each of the ten States of Minnesota, Iowa, Missouri, Arkansas, and Louisiana, and of Wisconsin, Illinois, Kentucky, Tennessee, and Mississippi, which border the Mississippi River on its right and left banks, respectively, from its sources to the Gulf of Mexico.

The last annual reports of our two companies for the year ended June 30, 1901, show that they then had in operation 5,356 miles of railroad, being 2.79 per cent of all the mileage then operated in the United States, and that they had in that year derived therefrom a gross revenue equal to 2.73 per cent of that of all the railroads in the country.

No railroad companies are or can be more absolutely independent of outside control, more self-governing, or more free from alliances with other corporations than are the Illinois Central Railroad Company and the Yazoo and Mississippi Valley Railroad Company. They are controlled by their respective boards of directors and by no one else. It appears from Mr. Prouty's testimony and that of Mr. Knapp that he is now absent at St. Louis. Knowing that your committee may report at any time, I avail of this opportunity of laying the facts before you and them. A copy hereof also goes by mail to Mr. Prouty, who, if called upon, will, I doubt not, be glad to correct his statement in so far as it relates to the two corporations which I have the honor

to serve.

For the accuracy of the rest of Mr. Cunniff's article, and the soundness of the deductions sought to be drawn therefrom, I can and do accept no responsibility. Like Mr. Prouty, I have no knowledge of Mr. Cunniff, and indeed had never heard of his article until I read Mr. Prouty's statement.

Very respectfully, yours,

STUYVESANT FISH.

THE POLITICAL ASPECTS OF GOVERNMENTAL REGULATION.

A SUPPLEMENTAL STATEMENT BY JOSEPH NIMMO, JR.

[Submitted May 22, 1902.]

Mr. CHAIRMAN: In his testimony before the Committee on Interstate and Foreign Commerce of the House of Representatives, Commissioner Prouty stated, at page 238, that 807 complaints against advances in rates or against rates which are alleged to be too high have been filed with the Commission during the last three years. A similar statement was made by Commissioner Prouty in an address delivered at Chicago on April 2, 1902, before the Illinois Manufacturing Association. On that occasion he said:

While it [the Commission] can not grant relief, there are now pending before it for investigation complaints involving millions of dollars-I think I might say millions annually.

Of

Manifestly these statements are calculated to convey the impression that the charging of exorbitant rates is now rampant throughout the country. But this is absolutely refuted by the annual reports of the Commission, which show that during the last three years only 23 cases in all were decided by the Commission upon formal hearings, which cases embrace only 8 complaints of unreasonable rates per se. these the unreasonableness of only 4 was sustained by the Commission, constituting less than one-half of 1 per cent of the 807 complaints alleged to have been made to the Commission. This clearly indicates either that the Commission has been derelict in the discharge of its duties or that nearly 800 of the 807 complaints were inconsequential or outside the function of the Commission. The latter is undoubtedly the correct view of the case. Besides, the fact that not a single case of exorbitant rates has been sustained in the courts during the fifteen years of the life of the Commission raises the presumption that not one of the 4 cases of exorbitant rates in the entire United States, as determined by the Commission during the last three years, would stand the test of judicial inquiry.

The total number of cases decided by the Commission each year during the last three years, and the number of cases of unreasonable rates tried and sustained, according to the last three annual reports of the Commission, are stated in tabular form as follows:

The data from which this statement was compiled are found on pages 20 to 43 of the report of the Commission for 1899, on pages 34 to 48 of the report for 1900, and on pages 22 to 39 of the report for 1901. Hon. Martin A. Knapp also attempted to create the same impres

sion as to the charging of exorbitant rates, notwithstanding the fact that the statistics of the Commission indicate an average reduction of 22 per cent for the entire country from 1890 to 1900, and a substantial reduction in the average rate in each one of the ten groups into which the railroads of the country are divided by the Commission. Mr. Knapp attempted to overcome these facts by asserting that the apparent reduction in rates is the result of a disproportionate increase in the quantity of low-grade freights, such an iron ore and coal transported during the last ten years. This statement is without any foundation in fact, the tonnage of merchandise transported other than coal and iron ore having increased faster from 1890 to 1900 than did the tonnage of coal and iron ore transported. This is explained at length on pages 24, 25, and 26 of my recent pamphlet entitled A Commercial and Political Danger. It is also confirmed by the traffic records of the leading trunk lines of the country east and west.

The following table compiled from the data of the Interstate Commerce Commission for the years 1890 and 1900 indicates the fall in rates by groups and for the whole country:

Revenue per ton per mile charged by railroads of the United States according to stotistics of the Interstate Commerce Commission.

Data in the column for 1890 is from the statistics of the Commission for 1890, page 72, and the data for 1900 is from statistics of the Commission for 1900, page 95.

The facts thus stated prove beyond all doubt that in all our splendid American railroad system, embracing about 200,000 miles of road, over which moves about $25,000,000,000 worth of merchandise annually, or more than twice the value of the entire railroad system of the country, and involving millions of transactions every year, only 34 cases a year of unjust discriminations were proven in formal hearings before the Commission during the ten years from April 16, 1890, to April 16, 1900, a fact stated by the Interstate Commerce Commission in Senate Doc. No. 319 of the Fifty-sixth Congress, first session. Of this small number less than one case a year of unjust discriminations was sustained by the courts. Furthermore, not a single case of unrea sonable or exorbitant rates has been sustained by the Federal courts during the fifteen years since the Interstate Commerce Commission was organized.

THE POLITICAL ASPECTS OF THE CASE.

The fact adduced by Commissioner Prouty that during the last three years 807 complaints of unreasonable rates were filed with the Com

mission, of which only 4, or less than one-half of 1 per cent, were found to be well founded, has a much more important significance than the members of the Interstate Commerce Commission seem to have imagined. It serves to illustrate a fact of controlling force respecting the broad subject of regulating commerce among the States, namely, the fact that from the beginning the complaints which have been filed with the Commission have had their origin chiefly in the discontent incident to struggles for commercial advantage. But such discontent is the chief stimulant of commercial enterprise. It involves problems which must be wrought out by human intelligence and enterprise and not by any sort of governmental interference; for we live in a world in which we are all debating. Every individual, and every section, State, city, county, town, village, and hamlet in this country is at rivalry with competitors near and far and it is preposterous for any governmental agency to attempt to reconcile those antagonisms. They are intangible to any sensible or just method of governmental regulation. The exemption of such antagonisms from governmental interference is a natural and proper expression of the freedom of commercial and industrial intercourse.

Faith in the conservatism, which inheres in the untrammeled interaction of commercial forces has begotten the maxim "competition is the life of trade," a maxim which has found its way into our statute laws and has become a tenet of judicial faith and practice. So firmly are the people of this country imbued with this sentiment that for nearly an hundred years after the founders of our Government had incorporated into the national Constitution the provision that "Congress shall have power to regulate commerce among the States," no systematic attempt was made to exercise that power, and clearly owing to the danger attending any attempt to meddle with a commercial interaction which is not and can not properly become the subject of governmental concernment.

But at last by the act to regulate commerce approved February 4, 1887, an apparent but limited and clearly defined exception was made to this policy of noninterference with commercial struggle. The restraints provided by that act, however, applied exclusively to the struggle of railroad transportation and not to the struggles of trade or of industrial pursuits. Moreover, the restraints imposed by the statute had already become approved as proper methods of railroad self-government after the various lines of the country had become closely connected and cooperative members of one great transportation organism-the American railroad system. As such, these restraints constituted a part of the American common law of the highway, being based upon the lessons of experience and that consensus of public sentiment which Lord Bacon has characterized as leges legum. Unfortunately, and as subsequently was proved, without any sanction of law the Interstate Commerce Commission assumed, in the maximum-rate case decided by it in the year 1894, that the act to regulate commerce authorized it to prescribe both absolute and relative rates for the future. This assumption of authority clearly and inevitably embraced the power to determine the relative commercial status of competing cities, towns, States, and sections affected by that decision. This monstrous assumption of political power was denied by the Supreme Court of the United States in the year 1897 (167 U. S., 479.) But not satisfied with this judicial determination of the case, the Commission has ever since importuned Congress to grant to it the