CONGRESSIONAL LEGISLATION AS TO INTER- STATE RAILWAY TRAFFIC. To the Editor of The Tribune : Sir : The conservative action of the House of Representa- tives’ Committee of Commerce, which is announced as nine in fifteen in favor of a National Railway Commission, ren- ders a brief review of the Reagan bill, Avhich is five years old, and which this vote would * seem to have defeated in a committee of which its author is chairman, of probable public interest. Its leading features were as follows : UNJUST DISCRIMINATIONS. First . — It applied its restrictions and penalties only to rail- roads and exempted inter-State pipe lines, express companies, lakes, rivers, oceans and canals covering 30,000 miles of car- rying routes. The injustice of bridling the carriers upon land by fixed conditions where there was doubtful jurisdiction, owing to State lines, charters, etc., while leaving the parallel carriers upon controlling water routes free, but over whom there was undisputed National authority, seemed too apparent to fair minds to require argument. The further vote of the committee by two to twelve not to include the waterways under any proposed jurisdiction, would seem a fair corollary of the justice of its first conclusions to regulate railways only by a Commission, which would of course then equitably de- termine the transportation question as a whole from both water and rail standpoints, and the influence and bearings of each upon the other. REASONABLE RATES. Second. - -It required that all rates should be reasonable. It is clear that a rate that might be unreasonable upon a mineral road carrying a million tons of coal per annum, might be less than reasonable for a road of the same length carrying 4 I only winter travel and a small fruit and general business in Florida. A railway of 200-foot grades, like the Denver and Rio Grande, liable to winter storm stoppages, and carrying a small tonnage through a rocky country, might reasonably be entitled to much higher rates than the same number of miles of railroad in Illinois that had been aided by Government grants of land, built upon a prairie, and carrying grain, agri- cultural implements, etc., through a much more thickly set- tled and temperate country. The bill provided the reverse by regulating the former because inter-State, and not touch- ing the latter because within one State. Varying standards of rates would therefore exist as*now, as courts or juries in differ- ent parts of the country might interpret “ reasonable charges;” but our citizens now have access to the same and State courts on the same questions, and in no case east of the Rocky Mountains that is known are the charter charges ever reached by actual rates. We concur that railways should charge only reasonable rates, if they can be reasonably deter- mined. EQUAL EXPEDITION. Third . — The bill next required equal expedition. It is a well-known fact that dry t goods, paying 75 cents per 100 pounds from New York to Chicago, go quicker than coarser goods that pay 30 cents ; but if, to fill dry goods trains to an economical carrying maximum, railways put on some cars of coarser freight and carry it at quick speed, they would violate the bill if they did not carry all the coarse freights at the same quick speed. Every railway company of the State also runs, say, one train for fruits, etc., at special speed ; they always give live stock trains a preference over dead freight in speed and running rights, and run butter and cheese express freight trains on quicker time than they run aU butter and cheese, in order that the former may catch foreign steamers, etc., but these differences of speed were declared illegal by the bill. PROHIBITION OF “ POOLS.” Fourth . — The bill next forbade “ contracts, agreements or combinations for pooling freights, or to pool the freight of different and competing railroads, by dividing aggregate or net proceeds.” To this answer was made that many railway pools are now governing and forceful under existing contracts. Such old pools could and would continue, but new ones were prohibited and new companies were prohibited from entering old pools, and that would result in injustice to some one , because different and therefore discriminating rates would certainly ensue. On this general point the railways claim, without possibility of refutation, that the great majority of all the railway rates on the general tonnage of the country are lim- ited by the charges on streams, lakes, canals and tides, to standards which are much lower than anywhere in the world for like service, speed and distances. There are 20,000 miles of such river rivalry, 3,000 miles more of routes on the great lakes, and a vast free coast line that is a veritable coast guard against railway extortion, and Congress constantly appropri- ates vast sums to deepen old water channels, create new ones, improve harbors, the Eads jetties, for example, etc., while the Reagan bill urged in the same Congresses sought to, or would have, the certain effect of crippling the parallel railways. The rail rates being regulated and kept low by these limita- tions of nature and statecraft, the railways argued that what they and the public should alike desire is stable and fixed rates, alike to all under like facts and by all routes. If harmony, and not . transportation strife, confusion and differ- ences, was the honest purpose of the bill, why prohibit pools, which are the best devices for securing that great and uni- form result, stopping rate wars, secret and unjust discrimina- tions, and contests of localities, which destroy financial secur- ities and promote corporate wrong doing, if the rates under pools be not unreasonable and no higher with than with- out them? Mr. Reagan repeatedly stated that his bill did not attempt to fix rates, but left them free to be made by each carrier for itself. Any fair person will say that if there were but one railroad from Chicago to New York, which on one and the same day made six different rates that varied but two and one-half cents per 100 pounds each from 30 cents per 100 pounds downward, and 30 cents was a reasonable charge, the forwarder receiving the lowest rate would get seventeen and 6 I one-half cents, which would be a discrimination of twelve and one-half cents and in its worst form, it being merely a ques- tion of time when whoever paid 30 cents ivould be bankrupt, while those who paid seventeen and one-half cents might get rich, if continued long or on large quantities, and smaller dif- ferences would make and unmake markets as well as men. Sure commercial wrong would exist whether one road has six different rates or six roads have them, as the Reagan bill authorized and stimulated. Railway through rates being restricted by the free waterways, they cannot be excessive upon the great carrying bulk of the country, and therefore, pools which secured low and equal rates, were vastly better for every investor, forwarder, railway consignee and competitor involved, than to foster the different rates clearly encouraged by the terms and conditions of the bill, apparently under the hallucination that unjust railway war is honorable, or rational railway and public competition. The thoughtful mercantile as well as railway sentiment of the country now favors honorably observed pools. Their result is adopted in other forms in England, and governs the French, Prussian and Belgian railways, because Governmental supervision or purchase has almost stopped competition, and therefore made the rates uniform, as was the clear and avowed purpose of such purchases and control. It seemed clear to those arguing the railway views in this country that any railway alliances or pools that would secure by fair trade and public methods only the results of the Clearing House in England, territorial dis- tricting as in France, or Governmental purchase as in Prussia and Belgium, would prove deeper National wisdom than for Congress to enact a law which in spirit or result would pro- long demonstrable hostile trade or railway conditions, and such pools should be legalized and not outlawed. The Chief of Governmental Statistics has reported to Congress that freight pools have accomplished good results, and many of their former antagonists now publicly favor them. Yery much more can be said in their favor. STOPPAGE OF CONCESSIONS. Fifth . — The bill prevented “ all rebates, drawbacks or ad- vantages in any form,” even if published and allowed alike 7 to all patrons for good and public commercial reasons. It was argued by tlie railway companies that certain draw- backs, if granted alike to all under substantially like circum- stances, are mercantile and customary, and universally recog- nized by all branches of trade. The Government buys ts supplies at a scale of discounts based on quantity, deliver- ies, sure pay, etc. ; it demands transportation from the same railways the bill sought to regulate, at less than the rates charged to individuals ; and the Government pays drawbacks upon whiskey, etc., exported and certain articles imported, under mature and wise provisions of law open alike to all. Railway concessions to large coal companies as compared with occasional car-load shippers ; to large manufacturing estab- lishments, which change crude into manufactured articles, and thus furnish two shipments for the railways ; and many other like and recognized equities of allowance are clearly reason- able and defensible, work good to both capital and labor, surely equalize localities, develop resources, employ people in new industries, and more harm than benefit would follow their stoppage, because they are justified by the wholesale principles of trade. A great many undisputed instances of this need and equity were cited without refutation being at- tempted, but I cordially agree that all discriminating and preferential inter-State drawbacks should be stopped by national law if needful. THROUGH AND LOCAL RATES. Sixth . — The bill next provided that no local charge, if inter- state, should be higher than a through inter-State rate. Judge Reagan said that if one company should purchase and consolidate under one authority, a line from Boston to San Francisco, it could then charge as much between any two intermediate points in different States as from Boston to San Francisco. Another and parallel inter-State company, unable to consolidate, or which was “frozen out” in such an amalga- mation, as for example, from North Adams, Mass., to Troy, N. Y., forty -two miles long, could not however charge for its local traffic more than it received as its small proportion of the lowest rate made on the same goods from Boston to New 8 Orleans against the free ocean routes, although it handled, warehoused at both ends, loaded and unloaded, and delayed its cars for the local traffic, while it simply acted as a bridge for the through transaction to pass quickly over. The two transactions cited clearly have no possible relation to each other, and in no sense does either call for such unjust National interference. It was shown that the country is thickly strewn with such striking illustrations. PUBLIC ANNOUNCEMENT OF RATES. Seventh . — The bill required the posting of all rates publicly five days before their adoption. This is clearly impracticable and unjust, when the parallel water carriers, from Chicago to Buffalo, and on the Erie canal, for examples, change rates on a moment’s notice, and by always changing immediately after the railways post their several rates, the water transport- ers could keep enough under the railways to render competi- tion with them practically nil, and the railways empty of through trade. The same objection held as to the interna- tional competition of the Grand Trunk Railway, which Con- gress is of course unable to reach by its law making or en- forcing powers, and this principle and fact becomes more im- portant as the Canadian Pacific road approaches competition with our own Pacific railways. In our rivalry with the Grand Trunk Railway we now have three sources of preventing it from unduly diverting traffic away from American rails : first , by freight or tonnage pools ; second, by the payment of draw- backs, if that company compels such a course ; and third , by being able to meet its rates promptly by telegraph if neces- sary. Each and every of these just means of needful protec- tion and defence was wholly taken from every railroad of the Union by the Reagan bill. We could not pool with a Canadian company and thus amicably restrict its traffic by agreement ; we could not pay a drawback, however many it secretly paid out of its earnings in Canada, or however much freight it so diverted, and if compelled to publish our rates five days before we could change them, that company might yet alter or rebate the part of its rates accruing in Canada at a moment’s notice against its and our water routes, which 9 could all do tlie same thing. Was this National justice, pro- tection or equality ? DAMAGES FOE VIOLATION OF THE ACT. Eighth . — No damage for violating the proposed Act was to be less than $500 with a further penalty of $1,000, one-half this penalty to be paid to the human dandruff called “ in- formers.” The District Attorneys were required by the bill to prosecute suits in their discretion “ when advised of violation by the affidavit of any reputable citizen ; ” and judgments so rendered were to be against the persons as well as corporations offending. It seems only to require a state- ment of these Star Chamber provisions to stamp them with just answers from just minds. The 25,000 or more railway station agents of the country, with vast numbers of clerks and others having power necessarily delegated to them to secure public promptness, and all with varying degrees of discretion and intelligence, might commit errors, either of judgment, or under instructions, or by wrong intent, or by collusion, which would create the shysters’ and informers’ harvest. Above all this petty espionage the railway com- panies claim that they are performing great public functions and vast benefits honorably and efficiently in the main, and should not be treated as if the preliminary methods of the Inquisition had been restored by an Act of the Congress of a Nation that should be alike free and just to all. These are the general provisions of the bill stated against the greatly condensed grounds for the direct business and practical opposition to them ; but there were other and larger objections. INEQUALITY OF APPLICATION. The New York Central road is entirely within the limits of one State, in this respect sovereign, from Buffalo to Albany and New York, and the Pennsylvania Railroad is entirely within one State, from Pittsburg or Erie to Philadelphia, thus covering both the vast river and lake traffic upon which those great companies were to be legally free by the bill. The Pennsylvania Railroad being free at Philadelphia and under the bill bound at New York, it would naturally work against 10 I New York more than it does now, and this was one of many geographical discriminations not now existing, encouraged by the bill and its penalties. • The West Shore, Erie and the Baltimore and Ohio railways parallel to the New York Cen- tral and Pennsylvania, but happening to pass through different States, were per contra , and for that inter-State reason only, seized by the bill and all their inter-State local rates were to be fixed and regulated by their through charges in manner before stated. The Grand Trunk Kail- way, the St. Lawrence River carriers, those upon the Erie canal and the New York Central and Pennsylvania railways were therefore free from the proposed legislative forgings upon an immense tonnage, while the operations of the vari- ous limitations and penalties would, in many and essen- tial respects, throttle the equally useful parallel West Shore, Erie, Lackawanna, Baltimore & Ohio and Chesapeake and Ohio railways. The alleged legislative and national equality claimed by Mr. Reagan therefore became gross inequality, which was to be confirmed and perpetuated by national enactment. For example, it required that the Erie Company’s rates from Buffalo to New York be not exceeded by its local rates from any points east of Buffalo to New York. No such prohibition by Congress could affect the New York Central road, which could there- fore carry the 50,000,000 bushels of grain arriving at Buffalo annually, at any through rates it saw fit, and without any national legal result upon its local or way traffic. It could get 25 or other per cent, more for 'the recognized and just increased expense of local over through freight, while the Erie Company could not under the same bill get a corresponding or any increase, although it handles its local freight twice and its through freight but once. It would therefore become only a question of time when the New York Central Company might bankrupt the Erie Company, and any other parallel, if inter-State, railway, if the State of New York or the courts did not interfere. In many other cases there are certain great carriers in various parts of the country that by natural and legislative limits, as for example, the Illinois Central and Chicago & Alton, escaped the provisions ! 11 and limitations of the bill yet paralleled others which fell under its unequal and unjust operation. The Mississippi Biver boats, the Illinois Central road, the lakes, and the New York Central could form a free through freight line from Memphis to New York that might take all the business or shackle their all rail inter-State rivals with legal manacles upon the local traffic of each, if the latter simply and equally met the former’s rates. Clearly the former could increase their through traffic at the expense of the latter and get better average rates from their untouched local traffic than the latter, and would, therefore, seriously injure the latter in a prolonged period. In the first instance, not a local or way rate was affected by those free and exempted routes. In the latter- all way rates w^ere decided by the shares each received of the same through rates. ADVOCACY OF A NATIONAL COMMISSION. To consider equitably and wisely these and many other special and general data as applied to a vast variety of climate, conditions, rivalry and tonnage, the railway officials advocated a National Bailway Commission, mainly of inquiry into the wrongs, dangers and ranges of the problem, rather than enact unwise and surely injurious experimental legisla- tion without requisite pre-knowledge. In a small and iso- lated country like England, governed by one Parliament, which enforces like laws over an undivided and insulated territory, over 2,000 bills bearing upon this subject have been introduced and repealed since 1840. If the problem has been so difficult there, it is infinitely greater in a territory vastly larger in ex- tent and traffic and in national, international and waterway complications. The transportation question in Maine, with its lumber and small manufactories, differs from that in Florida. The problem in Pennsylvania in the movement of iron, ores and coal, differs from that in Texas in the trans- portation of live stock. And the problem which might be solved in grain-carrying Illinois and Iowa, or even on the Northern Pacific road, would differ essentially from the conditions surrounding the Denver & Bio Grande and the Mexican Central companies running different merchandise, 12 through sterile countries with over long distances and con- necting foreign nations. The questions on interior railways differ from those parallel to water, as from St. Louis to New Orleans, and the theorem was perhaps easier of solution on the Pacific roads chartered by the National Legislature than on the New York Central, chartered only by the State Legis- lature. So on almost ad infinitum through the great varieties of locality, circumstance and traffic which demand thought and forethought. For these and many other equally cogent trade reasons a commission was strongly advocated, and also because the railways prefer to deal with a board ap- pointed for the purpose and charged by the Government with investigating and stopping, if found, any unjust railway action under its control, no less than to garrote any unjust anti-monopolistic or communistic doctrines. It is far better than to be annually subjected to the impracticable and hurt- ful disposition of the questions suggested by Mr. Reagan, who, notwithstanding the proofs repeatedly adduced upon all the points involved, came back year by year with the old bill, and always with lack of practical knowl- edge, yet actuated by a spirit of animosity to what he regards and calls the monopolies of the country. We preferred, there- fore, upon both broad and selfish grounds, and believed the forwarders of the country would intelligently prefer, to go to fair men appointed for the purpose rather than to impending victims or favorites of the ballot alone. All the millers of the country are monopolists because nobody else makes flour ; while there are many other carriers than the railroads. It has not, however, for that reason been proposed to regulate the inter-State commerce in flour. It was cited, for example, that flour made in Minneapolis and sold in New York was perhaps true inter-State commerce within the meaning of the Constitution. If flour sold for $5 a barrel in New York and the freight was 10 per cent, of that sum, the right of Con- gress to legislate upon the 10 per cent, only and discard the 90 per cent., was of questionable public utility and legality. The railways have in the past made the farms of the country somewhere near equal average values, while yet transporting the products of all to common destinations 13 at varying rates per mile for varying distances. Tlieir policy lias selfishly or intelligently resulted in National develop- ment, and mainly through them the farms and homes of Minnesota find the same domestic and foreign markets and re- sources as those of New York. The public generally knows the past growth of Minnesota, but they do not know that New York Secretary of State Bigelow said in the census report for 1875 : “ The net increase in the number of farms of all sizes in this State since 1870 is 25,586, while farms from 100 to 500 acres have increased 34,548.” This answered the charge that the low through rates injured the agricultural interests of this State. People do not usually increase the number or size of unprofitable farms. EVILS OF “TINKERING.” If this wise equalizing railway policy were improperly interfered with by National railway tinkering, the re- sult might be disastrous. Tonnage would seek the nearest seaport because of lower rates and fewer interferences with local traffic. Baltimore would gain at New York’s expense. If, to protect local rates, which railways frankly admit yield greater profit than through rates, although both give forwarders a return for values received, the through rates were put up by each carrier so that the through cost from St. Paul to New York was advanced to the sum total of varying and many local tariffs charged in order to protect local traffic, the Northwest would be injured past belief, and an extra session of Congress would be perhaps invoked. If, for further illustration, we bring the wheat of the Genesee Valley farmer to New Y^ork for 10 cents per bushel while it costs the Winnipeg pro- ducer 30 cents, of which we keep only 6 cents per bushel instead of 10, is our policy wise nationally or a wrong locally, and in a national congress which should govern ? Should the local rate, over which Congress has no control, go down, or the through rate go up because it controls it, and is either course demanded by public justice or need ? Clearly, the New York farmer pays but ten cents to get his grain to mar- ket — the Winnipeg farmer three times as much. The Reagan / 14 bill forced these unwise local alternatives upon most inter- state railways in the country, and it is a national good that the bill was defeated for that reason alone. I have refrained from stating the legal objections on the score of charter rights, State limits, original rates, railway consolidations, geographical rivalries, as Baltimore against New York, etc., etc., preferring to present a few of the many practical and business objections to the bill. IMPORTANCE OF A NATIONAL TRIBUNAL. A railway commission was therefore strenuously urged by the railways, and no intelligent railway officer should deny that the question is “affected with a public interest.” We have had Tariff Commissions, one on the Geneva award, boundary, fishery and postal commissions, and an Electoral Commission, all for comparatively smaller ends, and conced- ing all that has been claimed of vast public interest in the railway question, the vaster it is the more surely its diversity and importance need a tribunal to winnow away the chaff from both sides of the issue and grind only sound grains into intelligent and fair national laws of railway supervision. The nation should watch closely and prescribe little. The mere fact that the Government is watching and admonishing will correct many wrongs that should be corrected. A question that touches so nearly the whole people, and is so nearly the foundation of all fiscal credit, should be approached with dig- nity and intelligence on both sides. Robert Stephenson said to the Parliament of Great Britain what our railway men now respectfully say to our Con- gress : “What we want is a tribunal upon those subjects competent to judge and willing to devote its attention to railway subjects alone. We do not impute to Parliament that it is dishonest, but we impute that it is incom- petent. Neither its practical experience, no:: its time, nor its system of procedure, is adapted for railway legislation. . . . . What we ask is knowledge. ‘ Give us,’ we say, * a tribunal competent to form a sound opinion. Commit to that tribunal, with any restrictions you may think necessary, the whole of the great qxiestions appertaining to our system.