THE RAILROAD RATE BILL. 
 
 SPEECH 
 
 OF 
 
 HON. SAMUEL W. McCALL, 
 
 OF MASSACHUSETTS, 
 
 Jr 
 
 IN THE 
 
 HOUSE OF REPRESENTATIVES, 
 
 Friday, February 2, 1906. 
 
 WASHINGTON. 
 
 1906. 
 
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 I 
 
 
 
 
 
SPEECH 
 
 OF 
 
 HON. SAMUEL W. McCALL. 
 
 The House being in the Committee of the Whole House on the state 
 of the Union and having under consideration the bill (H. R. 12987) to 
 amend an act entitled “An act to regulate commerce,” approved Feb- 
 ruary 4, 1887, and all acts amendatory thereof, and to enlarge the 
 powers of the Interstate Commerce Commission — 
 
 Mr. McCALL said: 
 
 Mr. Chairman : If the pending bill made an effective re- 
 sponse to public opinion upon the railroad question, it would 
 deal in the most comprehensive and the most particular terms 
 with rebates or favored rates, whether given directly or in 
 any of the indirect forms in which they have been extended. 
 A secret rate lower than the rate which is published for 
 all or valuable concessions given shippers, under whatever 
 subterfuge, are obnoxious to the law, which contemplates not 
 merely a just and reasonable but an equal rate. What is de- 
 manded to meet the real evil, and what was demanded by public 
 opinion until its attention was diverted to an utterly irrational 
 and haphazard remedy, is legislation making clear beyond ques- 
 tion the right of every man to equal treatment and giving 
 him the amplest remedy for every violation of his right. The 
 private car, refrigerator car, the industrial switch, receiving a 
 part of the through rate as if it were an independent line, every 
 instrument of favoritism and injustice, had justly received pub- 
 lic condemnation. These evils were dealt with in general terms 
 by the amendment known as the “ Elkins Act.” But that act 
 needed to be broadened ; it needed to be made more specific, so 
 that it should prohibit unequal treatment under whatever guise, 
 and then it needed to be enforced, not merely by a fine, but in 
 clear cases of evasion by imprisonment both for the giver and 
 the receiver of the secret rate. If a law had been passed upon 
 these lines one year ago, every demand of what can justly be 
 called “ public sentiment ” would have been satisfied. The Re- 
 publican national convention in 1904 made no declaration what- 
 ever regarding railroads. The Democratic convention declared 
 against rebates and discrimination. Rebates and discrimina- 
 tions in all their protean forms were the real evil. The Presi- 
 dent in his annual message declared against them, but he pro- 
 mulgated as a remedy that the Commission be given authority 
 to fix railroad rates whenever a complaint should be made. 
 
 The leading authority upon railroad economics in the British 
 Empire said, not long ago, of the bill passed by the House last 
 winter in line with the President’s recommendation, that it 
 would have done no more to stop rebates than would the reen- 
 actment of Magna Charta. I endeavored to point out at that 
 time upon this floor that there was no possible relation between 
 6512 3 
 
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 the giving of rebates and the fixing of rates by a commission, 
 and that a railroad could as easily give a criminal rebate from 
 a rate fixed by a commission as from one fixed by itself. And 
 the advocates of this legislation have refrained from penetrat- 
 ing the awful mystery and have discreetly permitted the rela- 
 tion between rebates and commission rate making to remain a 
 secret until this day. 
 
 The issue of political rate making in the Congress of the 
 United States is not the result of any evolution or of any 
 expression of public opinion, but it is a mere fungus growth. 
 It sprung up in a night. It grew out of the Presidential non 
 sequitur, and I am very willing to concede that a non sequitur is 
 something in which a busy man may sometimes indulge. If 
 teachers of logic are looking for a perfect example of a non 
 sequitur for their classes, I commend them to the statement of 
 the evils and the statement of the remedy contained in the 
 President’s annual message to Congress in December, 1904. 
 
 And at once political rate fixing became a burning issue — I 
 mean in Congress, but not before the people, for there has been 
 no election since it was so suddenly and so illogically sprung 
 upon the country. Mr. Bryan, the once idolized leader of his 
 party, for a, time dethroned, but summoned back again by the 
 overwhelming exodus of Silver Democrats at the last election, 
 Mr. Bryan, who might have brought action for infringement, 
 generously hailed political rate making as a decisive step 
 toward his cherished dogma, Government ownership, and he 
 fixed upon it the stamp of his emphatic approbation. He looked 
 upon it as his own child, and not long ago, as he was starting 
 around the globe, in almost the last words he uttered upon 
 American soil, with a paternal solicitude he commended the 
 bantling to the tender care of the President. 
 
 The Democratic party followed its leader and took up the 
 cause of rate making with enthusiasm and unanimity. As for 
 the Republicans, rate fixing had been made party policy by our 
 just elected President, and, logic or no logic, we were expected 
 to get in line. This is the genesis of the public opinion upon 
 this point. If any political platform adopted prior to the 
 President’s message by either of the great parties suggested any 
 form of rate making by the National Government as a remedy 
 for discrimination or for any other purpose, I trust some gentle- 
 man will cite it. 
 
 So far as favoritism is concerned, in every one of its forms 
 I am opposed to it. I would have you enact against it the 
 most drastic law which ingenuity could devise. And I would 
 have the right of every man to a just, reasonable, and equal 
 rate taken to the courts at the expense of the Government, in 
 the first instance, and ultimately of the railroads, if they were 
 held to be in the wrong, under every effective species of remedy, 
 taken to that forum where Anglo-Saxon freedom has won its 
 noblest triumphs. For my part I prefer the natural and benefi- 
 cent liberty of the courts to the cast-iron regulations of a com- 
 mission. I would encourage proceedings such as that in Scot- 
 land, which, for a differential given in good faith, took from a 
 railroad company in damages and costs about $700,000. But 
 in this measure we are neglecting to follow the vital line and 
 paltering with the highest interests of the country. I am for 
 every feature of your bill aimed at discrimination, and I would 
 favor far more stringent features ; but your rate fixing, which 
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 is the substantial part of your bill, is economically as vicious as 
 it is illogical and I propose to submit to you some reasons why 
 I can not give my support to a measure which I fear you have 
 already almost unanimously determined to enact. 
 
 And I shall at the outset dispose of two or three preliminary 
 propositions. It is claimed that it was intended to confer the 
 rate-making power when the interstate act was passed, and that 
 the Commission for ten years exercised it. The facts are that 
 the framers of the act declared in the debate that it did not 
 confer the rate-making power ; the courts as early as 1890 
 decided that the power did not exist ; there was no general be- 
 lief that it had been conferred, and although the Commission 
 assumed to pass on the relative reasonableness of rates in a 
 few cases, when it attempted to exercise the power in a really 
 important case, its authority was challenged, and the Supreme 
 Court finally decided that the act did not confer the power of 
 fixing a rate. 
 
 Of the same character as the misapprehension which I have 
 referred to is the pretense that the rate-fixing power in this 
 bill is altogether exceptional in its character — not for every-day 
 use, but likely only to be exercised upon rare and great occa- 
 sions. Gentlemen simply run away from their proposition, and 
 it is little cause for wonder. Their bill confers the power to 
 revise all the rates in the country and to substitute other rates 
 for them upon the happening of a mere formality. In the maxi- 
 mum-rate case thousands of rates were involved, and there is 
 the testimony of a high officer of one of the railroads concerned 
 that the reduction ordered by the Commission in that case would 
 have cost the railroads $3,000,000 a year. It would have meant 
 bankruptcy to some of the railroads. But if you need a decision 
 of a court upon so plain a proposition, read what the Supreme 
 Court said when it passed upon the asserted power which is 
 similar to that granted in your bill : 
 
 If — 
 
 Said the court, in 167 United States, 510 — 
 
 the power existed as is claimed there would be no escape from the con- 
 clusion that it would he within the discretion of the Commission, of its 
 own motion, to suggest that all the interstate rates on all roads of the 
 country were unjust and unreasonable, notify the several roads of such 
 opinion, direct a hearing, and upon such hearing make one general 
 order reaching to every road and covering every rate. 
 
 It is clear that the present bill gives the Commission, upon 
 the mere formality of somebody’s filing a complaint, power to 
 set aside great groups of rates and to substitute other rates for 
 them. The pretense that it contemplates only the challenging 
 here and there of a single rate demonstrates clearly that the 
 advocates of this measure do not understand it or that they do 
 not dare avow its purpose. On the theory that a mere isolated 
 rate is to be tried here and there your bill amounts to nothing 
 from your own standpoint, for, as was said by a railroad presi- 
 dent the other day, it would take hundreds of years for your 
 court to sit in judgment upon each of the billion or more rates 
 in the country. Indeed, the new rates would increase faster 
 than your Commission could decide them. I shall therefore 
 assume that this measure is a rate-fixing scheme of the most 
 sweeping character. 
 
 The fundamental question, then, involved is, Do we want 
 rate making by a Government board? The burden of proof 
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rests upon the man who contends that such a system should be 
 substituted for the system at present in force. It is upon the 
 advocates of this bill to show that we should set aside the 
 American system of fixing freight rates which has given us 
 rates hardly half as high as are paid by the other great coun- 
 tries of the world, although our railroads pay their labor twice 
 the wages paid in the other countries. The burden of proof, I 
 say, rests heavily upon those who would radically substitute 
 for our present system the foreign system of fixing rates by the 
 Government. Magnificent platitudes about eminent domain and 
 our duty to exercise the great commerce powers of the Constitu- 
 tion will not sustain the burden. Give us a reason why we 
 should discard a system which has been a success for a system 
 which has been a failure. 
 
 The experiment has been thoroughly tried. We have the re- 
 sult of the experience of other nations and of our own. You 
 will find the experience of the great countries of the world ad- 
 mirably set forth in a book by Professor Meyer upon Govern- 
 ment Regulation of Rates. If Professor Meyer is wrong in 
 any of his important statements, I have not observed that those 
 who differ with him have pointed out his errors. And my friend 
 from Pennsylvania [Mr. Sibley], in his masterly speech yester- 
 day, left little to be said upon this point. 
 
 Take first the experience of Germany, which for more than 
 a quarter of a century has had rates fixed by the Government. 
 In the case of Germany, however, the Government owns the rail- 
 roads and has all the rights which go with the proprietor and 
 also with the state. The state is pimply managing its own 
 property and manfully paying the bills. In that country the 
 rates were made upon a mileage basis, and this difficulty was at 
 once encountered. If the rates were high enough per mile so 
 that traffic hauled for a short distance would yield a net revenue, 
 they would be so high for a long haul as to be practically pro- 
 hibitive of long-distance traffic ; and on the other hand, if the 
 mileage rate were so low that merchandize could be carried a 
 great distance profitably, the short-distance traffic would be 
 carried at a loss. The German Government made repeated at- 
 tempts to give concessions from the mileage rate in favor of 
 long-distance traffic. For instance, it made the so-called “ taper- 
 ing rate,” that would permit the wheat of eastern Germany to 
 find its way by rail to the great manufacturing centers along 
 the Rhine. Saxony, in the center of Germany, also produces 
 wheat, and the Saxon millers and landowners contended that 
 they had a “ natural right ” to the market in their neighborhood, 
 and that it was a discrimination for the Government to bring 
 the wheat of eastern Germany at an exceptionally low rate 
 to western Germany in competition with the wheat and flour 
 of Saxony. The German Government is a reasonably autocratic 
 Government, and yet, resist as it would, it was finally compelled 
 to yield and to reestablish the mileage rate upon the eastern 
 wheat ; and the German minister declared that 125 miles was 
 the maximum distance at which wheat could be carried by 
 rail in Germany for domestic consumption. The same minister 
 said that for most purposes of trade eastern Germany and the 
 Rhine country were farther apart than Germany and New 
 York or Germany and Buenos Ayres. 
 
 The same thing was illustrated in the raising of sugar. At 
 the time of the sugar campaign there is a great demand for 
 6512 
 
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 labor in the sugar-producing sections, and the state railroads 
 would sell excursion tickets to the laborer for less than the 
 regular rates ; but the landowners of other portions of Ger- 
 many claimed that these special rates had the result of induc- 
 ing the labor, which they would naturally employ, to leave them 
 unless they paid higher wages — in effect these landowners 
 claimed that the excursion tickets operated to take away from 
 them their natural rights— and although it was admitted that 
 the laborer secured higher wages and these wages resulted in 
 a better standard of living and that the travel which the work- 
 ingmen got broadened to an extent their intellectual horizon, 
 yet the Government finally yielded and stopped the practice of 
 selling excursion tickets and restored the hard and rigid state 
 rate. 
 
 This insistence upon the right to a market which proximity 
 gives, this resistence to discrimination and favoritism shown by 
 hauling at a low rate the merchandize of a community at a great 
 distance so that it may compete in the same market with the near- 
 by community, is also seen in the manufacture of iron and steel. 
 And the effect of the recognition of the natural-right theory, the 
 mileage theory, in Germany, resisted in vain by that Government, 
 has been undeniably toward establishing a zone system of com- 
 merce, toward preventing Germany from becoming a common 
 market, and to break it up into little principalities for the pur- 
 poses of trade. And it is most striking and significant that the 
 German Government, in order to escape from the consequences 
 following its own exercise of the rate-making power upon rail- 
 roads, expended millions of dollars upon canals connecting its 
 rivers so that traffic might be conducted by private parties be- 
 tween remote parts of the Empire. 
 
 Waterways are to-day the vital currents of German trade, 
 although wherever railroads are permitted to compete with 
 water they secure the bulk of the traffic. This is proven by the 
 vastly greater tonnage of export coal carried by railroad than by 
 the Rhine. Traffic upon the railroads along the Elbe greatly ex- 
 ceeded the traffic upon that river, but after the Government as- 
 sumed control the situation was reversed. The German Gov- 
 ernment therefore has expended vast sums of money in order to 
 confer upon private parties the power to fix under the operation 
 of natural laws the rates for long-distance traffic. There could 
 not be a more striking example of the evils of government rate 
 fixing than is afforded by the experience of that great and highly 
 civilized country. 
 
 In France the rates are made by the Government, not by a 
 political commission of seven men, as the bill before the House 
 would result ultimately in establishing for this country, but by 
 a bureau of thirty-three highly trained experts with a great 
 staff of assistants, although B^rance has barely a tenth of the 
 mileage of the United States. The Government of France has 
 a very large financial investment in its railroads and, as in Ger- 
 many, it exercises to quite an extent the functions of proprietor 
 as well as the regulating power of the nation when it fixes rates. 
 You will find a similar condition in France to that which exists 
 in Germany. The natural waterways, supplemented by canals 
 built by the state, are the props which chiefly support industrial 
 France. And you will find, as I have said, in both France and 
 Germany freight rates at least twdce on the average what they 
 are in America, although the great item in the operation of the 
 6512 
 
8 
 
 railroad, the wages paid the workingmen, are on a scale less than 
 half what the American railroads pay. 
 
 The French experts find it necessary to deviate from their 
 ordinary rates, and in a single year 80 per cent of the traffic was 
 carried at speoial rates. What would be the effect upon public 
 opinion in this country if our national railroad Commission 
 should yield to fair economic demands and permit, if they could 
 do so under this bill, such a deviation from the regular rates? 
 
 In England the railroads are not owned by the nation, and 
 the Government, with the conservatism toward private prop- 
 erty which characterizes the British people, permits great lati- 
 tude to the railroads, and they approach in cheapness of serv- 
 » ice and efficiency the railroads of the United States, although 
 their rate is much higher and their average wage is much 
 lower than in this country. In England, however, the Govern- 
 ment established parliamentary rates which, as Mr. Ackworth 
 says, were obsolete almost before they were enacted. They 
 were maximum rates such as you propose to have created under 
 this bill. The tendency has been for the railroads to adhere to 
 the maximum rate or to approach it closely. The establishment 
 of rates materially lower would be a confession that the maxi- 
 mum rates were unreasonably high and might lead to action by 
 the Government reducing the maximum rate. In all of these 
 countries we see a rigidity to the rates established by the Gov- 
 ernment, and we see, too, the lack of constant supervision of 
 detail, due to the enormous task of revising the great mass of 
 rates, and a lack of responsiveness to the temporary conditions 
 of business which an army of traffic agents, scattered over the 
 country at the sources of freight supply, would keep in touch 
 with and fully recognize in the making of rates. 
 
 The Governments of Austria-Hungary and Russia absolutely 
 fix their railroad rates, and substantially the same results are 
 witnessed there as in Germany, only in a more exaggerated 
 form. I have not alluded to Canada because its rate system 
 has been in operation only a year, and so short an experience 
 would be of little value. But even in that short time the com- 
 mission have begun to readjust rates from the standpoint of 
 distance and to operate as a protective tariff, and they have 
 succeeded in classifying beans, which are carried in small 
 quantities, with wheat which moves in train loads. 
 
 The experience of Australia, where the railroads are con- 
 trolled by the government, is valuable. Her railroads are every- 
 thing that the people of this country would not desire. Their 
 operation throws a striking light upon one of the favorite 
 theories of our own Commission — a theory that is entirely 
 natural and would have been effective had the Supreme Court 
 not intervened, and which would be effective under this bill. 
 
 Our railroads have made certain points, scattered all over 
 the country, what are termed “ basing points,” and have given 
 them a special rate slightly better than that to the communi- 
 ties immediately about them. This system results in build- 
 ing up centers of trade and distribution at different points in 
 the country, and it results also in giving the localities around 
 these centers lower freight rates, notwithstanding the claim 
 that they are discriminated against, because it enables the 
 railroads to consolidate their freight and haul it from the sea- 
 board or other sources of supply to the center of distribution 
 at greatly less expense, in perhaps 2,000-ton train loads. The 
 6512 
 
9 
 
 Australian system is hostile to the basing point because it 
 adopts to an extent a mileage rate, as our Commission would 
 be compelled to do, and what is the result? A road is built, 
 say from Melbourne 100 miles into the interior, and at its 
 terminus a town springs up which becomes a center for supply- 
 ing the country about it and the still farther interior. But 
 the road is afterwards extended, and the manufacturer or the 
 jobber in the once flourishing interior town is obviously at a 
 disadvantage with his competitor at Melbourne, because he has 
 a freight rate from Melbourne and another freight rate when 
 he ships his goods to the buyer. He must either retire from 
 business or go to Melbourne, and the result is that the commer- 
 cial and banking and great industrial business of Australia is 
 done at the four or five ocean termini of the railroads. The 
 freight trains from the seaboard centers peddle out small 
 parcels of freight at a great number of points, and such distri- 
 bution is enormously expensive. 
 
 The destruction of “ basing points,” so called, in the United 
 States, would take awmy a great part of the business of 
 Atlanta, Memphis, and Kansas City, and scores of other inte- 
 rior centers, and would transfer it to New York and Chicago 
 and St. Louis. If you think our industry and trade should be 
 centralized in a few great cities instead of being diffused 
 throughout the States of the Union, then you will support this 
 bill, because, if it permits the adjustment of relative rates, it is 
 an admirable instrument to accomplish that purpose. 
 
 Then first-class passenger fares are lower in this country than 
 in Europe, but if one travels third or fourth class he may 
 sometimes travel more cheaply abroad than first-class here, and 
 in Germany one may save by traveling fourth-class in a box 
 car on a slow train. But if one traveled on a corresponding 
 scale of luxury in the United States he would bill himself 
 through and go as freight. 
 
 Now, what is the American system which, without any con- 
 sideration worthy of a great economic subject and upon mere 
 generalities, you are airily proposing in this bill to set aside 
 for the policy which I have been describing? In this country 
 the interstate rates ha,ve been made by the railroads with 
 practically no check, so far as governmental interference is con- 
 cerned. It has been the prime policy of the railroads to de- 
 velop a vast continental traffic drawn at low rates and between 
 the most remote sections of the country. It has been to make 
 of America a common market. The “ natural-right ” theory has 
 more than once been involved. The low long-distance rates 
 brought the agricultural products of the West in competition 
 with the farms of New York, New England, and Pennsylvania, 
 in markets which, on the •“ natural-right ” theory, belonged to 
 the farmers of the last-named States. And while your lands 
 have gone up enormously in value the farms of New England 
 and the East have greatly decreased in value. Yet on the whole 
 the East has benefited because it concentrated its energies upon 
 manufactures and trade and the railroads took its products to 
 the West at low rates in the cars which bore your produce East, 
 and which would otherwise have returned empty. 
 
 If we had had since 1865 a railroad commission with the 
 power in this bill to fix railroad rates it is a moral certainty 
 that many now civilized portions of the West would be un- 
 settled regions, and as a necessary consequence your great 
 6512 
 
10 • 
 
 cities would not be the magnificent affairs they are to-day. 
 The East, relatively powerful, would have resisted the invasion 
 upon its natural markets by the low long-distance rates, with the 
 inevitable result that has been witnessed in Germany. There 
 would have been a distance tariff, and a distance tariff would 
 have held back the settlement of the far western lands for 
 generations. 
 
 The Interstate Commerce Commission has more than once 
 affirmed the “ natural-right ” theory, and if it is to pass upon 
 the conflicting claims of sections it can not escape from that 
 theory. The elevator and dock owners and great merchants 
 of New York protested against a rate from the West to New 
 York on wheat destined for export lower than the rate to that 
 city on wheat for internal consumption. The low rate for the 
 export wheat was directly for the benefit of the farmer, but it 
 took from the men of New York certain profits that they 
 claimed the “ natural right ” to have, because their city was the 
 gateway to the Continent, and the Interstate Commerce Com- 
 mission ordered that the rate on the wheat destined for export 
 should be the same as that for New York. The question in- 
 volved was of vital importance to the farmer, and it is sig- 
 nificant that the railroads were fighting his battle, which the 
 Commission decided against him in effect upon the natural-right 
 theory. The Supreme Court supported the railroads and over- 
 turned the decision of the Commission. 
 
 The striking feature in the American railroad system, then, 
 has been the remarkable development of the low long-distance 
 rate which has made of the country a common market and has 
 stimulated trade between its most remote parts. The Ameri- 
 can railroad rates, in the mass, are not the arbitrary fiat rates 
 such as would be ground out by a governmental machine, but, 
 in a sense, they are self-made rates, and result from the free 
 play of commercial and industrial forces. Even such a differ- 
 ential as that established in favor of Baltimore and Philadel- 
 phia against New York and Boston, which would at first sight 
 appear artificial, was the result of one of the fiercest and most 
 expensive commercial wars ever waged upon this continent, 
 and when a few months ago the Interstate Commission was 
 called upon to arbitrate, under an agreement between the 
 cities, as to this differential it reached the very conclusion that 
 was the outcome of that war. 
 
 The enormous expansion following the civil war was suc- 
 ceeded by the severe financial crisis of 1873, and for a half 
 dozen years the country was in the gloom of a profound depres- 
 sion. There were armies of unemployed in the factory cities 
 of the East, vast numbers of immigrants seeking employment 
 who had poured into the country during the years of its appar- 
 ent prosperity. Our industrial collapse would have been even 
 more serious and profound had it not been for the policy of our 
 railroads. New lines had been ppened up through rich areas, 
 inhabited only by the buffalo and the wolf. But in spite of the 
 fact that the price of wheat had fallen 30 per cent, the railroads 
 established such low rates to the seaboard that the lands were 
 quickly put under the plow, and a great portion of the surplus 
 population of the East was transferred to the farms of the 
 West. Nearly the entire wheat crop of some of the States be- 
 yond the Mississippi found a market on the other side of the 
 Atlantic. Mr. Edward Atkinson, as exact an economic author- 
 6512 
 
11 
 
 ity as ever lived in America, estimated that the saving upon the 
 transportation of wheat from the Mississippi to the Atlantic 
 during the fourteen years succeeding 1873 amounted to 33 cents 
 on every bushel. Suppose we had had a governmental commis- 
 sion at that time, when the East was politically the strongest 
 section and held the dominant power. Is it not almost a cer- 
 tainty that they would have listened to the protest of the latter 
 section against the disturbance of their domestic market in those 
 depressed times, and that those now mighty and stable Com- 
 monwealths that lie beyond the Mississippi would have waited 
 for that great development which the railroads forced upon 
 them? Why, those great States are the very daughters of the 
 economic American system of making freight rates. They would 
 not have come into being under the system established by this 
 bill, and yet they are now blindly clasping hands to strangle 
 the mother who bore them. The working of natural laws and 
 the unhampered genius of the enterprising American railroad 
 men proved during that great crisis the salvation of the country. 
 
 The rate making of our railroads is done by an army of tens 
 of thousands of men, picketing every part of the country. Often 
 cars have to be returned empty over a long route. A rate that 
 would pay the difference between hauling a car loaded and 
 hauling it empty in such a case would pay the railroad. The 
 traffic agent will often discover a commodity of low value in 
 one part of the country that can be used in another part, and 
 which, unless carried at a very low freight charge, can not be 
 carried at all. The transportation will pay the owner of the 
 commodity something ; it will also pay the railroad, and the 
 commodity will be used to advantage by a distant consumer. 
 That traffic would be at once set in motion. The nicest curve, 
 the strain of a swift train upon a bridge, the building of tun- 
 nels, can present no more technical questions to the engineer 
 than are often faced by the thousands of traffic men who, in 
 their eager search for tonnage, must consider rival markets and 
 the relative demands of localities. 
 
 ' The flexibility of this system, where rates are fixed by eco- 
 nomic laws, is infinitely preferable to the wooden system estab- 
 lished by this bill, where, after a rate has been determined, you 
 walk off and leave it a fixed and immutable fact for three years, 
 unless a decree can be obtained from an overworked Commis- 
 sion changing its decision and establishing a new rate. And by 
 the time the authority would be conferred the necessity for a 
 change of rate would probably have passed away. 
 
 The editor of the London Statist, perhaps the leading financial 
 organ of the British Empire, in writing recently of a typical 
 report — that of the American Great Northern Railroad — said the 
 results shown in that report would fill the shippers of Great 
 Britain with envy, in which country he declares that, notwith- 
 standing the density of traffic, the people under tariffs directed 
 by government have had very little reduction in a quarter of a 
 century. 
 
 Gentlemen talk of throttled competition. You must remember 
 that the most effective competition is not between two or more 
 parallel railroads serving the same points, but between railroads 
 connecting different sources of supply with the same market. 
 The competition between markets has done more to reduce 
 freight rates permanently in this country than the competition 
 between parallel roads, including the injurious and spasmodic 
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 “ cutting ” in rate wars. The rates from Chicago to New York 
 compete with the rates from Chicago to New Orleans and, it may 
 be, with the rates from Chicago to the Pacific. The lines from 
 St. Paul to New York or Boston run in opposition to the steam- 
 ships plying between South America and London or with the 
 railroads that carry the wheat of interior Russia to the sea. 
 The primary instinct of self-preservation will inspire railroads 
 to protect the markets of the territory they serve. Every in- 
 terest of private property impels them not merely to preserve, 
 but to build up their communities. But here you propose to have 
 a governmental agency step in and set aside the primary edicts 
 of commerce and trade. It may be for this agency to say not 
 that the railroad shall serve its own interests by serving the 
 interests of its territory, but to say that the natural advan- 
 tages of its community are not equal to those of a competing 
 community a thousand miles distant served by another railroad, 
 and that the latter community should have a relatively better 
 rate. And it will doubtless be claimed that it has the power, in 
 order to prevent what may be called discrimination between 
 communities to readjust the rates. 
 
 Suppose the farmers of Vermont should contend before the 
 Commission that they were only 200 miles from Boston, and 
 that it was a destruction of their natural market for the agri- 
 cultural products of the West to be brought 1,000 miles into 
 Boston as cheaply as their own produce, and that their rate 
 to Boston should be relatively reduced. What will your Gov- 
 ernment commission say to that? Or, suppose some iron-manu- 
 facturing locality in Pennsylvania should assert that the low 
 rates on coal and pig iron to Worcester, in New England, was 
 a discrimination against the rights of the former locality, what 
 will your railroad commission say to that? It is inevitable thaj: 
 sooner or later, struggle as you may, you will repeat the ex- 
 perience of Germany and have a distance tariff. Mr. Ack- 
 worth, the leading English authority, speaking fifteen years 
 ago of the effect of low rates to bring distant markets together 
 and of the inevitable tendency of government rates t" become 
 distance rates, said if anyone “ wishes to put an end to this state 
 of things and to return as near as may be to the age of gold, 
 when the Middlesex farmers had in the London cattle market 
 the full advantage of their geographical position, he can not do 
 better than devote his energies to securing a government con- 
 trol of railway rates.” There is no reason why you gentlemen 
 from the South and West should not have the mileage basis 
 if you want it, but I shall do what I can — I fear much too 
 little — to make you see just what you are voting for. If you 
 want sooner or later to put an effective brake upon our progress, 
 you will find no better way to do it than to vote for the policy 
 upon which the pending bill embarks the country. 
 
 ‘ Then, the port-preference clause of the Constitution would 
 prohibit the Commission from giving one port an arbitrary dif- 
 ferential rate better than another port. Do aw T ay with these 
 differentials and you strike a mortal wound at competition. 
 
 I have not understood that a popular government was adapted 
 to carrying on to advantage, even on its own account, a busi- 
 ness ordinarily conducted by private enterprise. From the time 
 when the Pilgrims saved themselves from starvation only by 
 abandoning the practice of raising corn in common and permit- 
 ting each family to raise its own corn to the time when Massa- 
 6312 
 
13 
 
 chusetts built the Hoosac Tunnel for about thirty millions, which 
 it afterwards sold for ten millions, or when Illinois completely 
 bankrupted itself in building railroads and canals and conduct- 
 ing the banking business, the experiments of government on 
 this continent in running business enterprises have uniformly 
 been attended with great waste, if not uniformly with failure. 
 But what may not be expected when a governmental agency 
 manages business for which private individuals pay the bills? 
 The pending measure not merely confers upon a commission 
 the power of establishing a rate, but it makes them in important 
 particulars general managers of the railroads. 
 
 It confers upon them authority to prescribe just and fair 
 and reasonable regulations or practices in respect to transpor- 
 tation. It attempts to give them both judicial and legislative 
 powers, making thein now a little congress and now a little 
 court, for the Supreme Court has held that it is for the ju- 
 diciary to say what is a reasonable rate and for the legislature 
 to prescribe what a future rate shall be. The latter is the 
 least of the legislative powers conferred. The Commission may 
 by an order destroy the prosperity of a section of the country 
 and may, in effect, impose restrictions upon commerce between 
 States which it was the prime purpose of the Constitution to 
 prevent. With the Government fixing rates, constituencies 
 would inevitably carry their grievances into politics. I believe 
 it will be contended that your bill in substance confers the 
 power to impose a rate for one section in its relation to the rate 
 of another section. You will therefore have the different parts 
 of the country knocking at the door of the National Government 
 for favors, and intrigue and politics will rekindle the sectional 
 jealousies that have now been happily allayed. This policy 
 will again plant the seeds of discord in the hearts of the 
 American people. 
 
 The railroads are not even permitted by this bill to give ex- 
 cursion rates between interstate points without first publishing 
 a schedule thirty days in advance, or unless the Commission 
 makes a special dispensation or a general regulation permitting 
 it. If that does not make a legislature of the Commission, then 
 the hitherto accepted notions of the function of legislation will 
 need to be radically revised. The “ Be it enacted by the Phil- 
 ippine Commission,” which gives vitality to the laws of a people 
 who are neither a citizen nor a foreign people, will be matched 
 by the “ Be it enacted by the Interstate Commerce Commission ” 
 in laws passed for the government of the people of the United 
 States. If the making of railroad rates is a legislative func* 
 tion which can be delegated by calling it administrative, why 
 may we not in a bill originating in the House confer upon a 
 commission the power to fix tariff rates? 
 
 You propose to confer upon a mere human agency a practical 
 task that would be superhuman. It is made their duty upor 
 complaint to revise any and all the thousand millions or more 
 freight rates in the country and an untold number of passengei 
 rates. In addition to administrative functions, in defiance ol 
 the Constitution, you confer upon them, as I have said, judicial 
 and legislative powers. They are to be vested with author- 
 ity over a dozen billions of property and nearly a million and 
 a half of employees. The enormous magnitude of the task is 
 admitted, but there Is to be an easy solution for it all. 
 
 6512 
 
14 
 
 We are to have a Commission made up of prodigies and paid 
 splendid salaries. The President, at Austin, Tex., last April, 
 before the two houses of the Texas legislature, gave his notion — 
 and a lofty one it was — of the character of the men who should 
 constitute the Commission. “ They should not,” he said, “ be 
 swayed by any influence whatever — social, political, or any 
 other — to show improper favoritism to the railroads,” and, “ on 
 the other hand, if the rate is unjustly attacked, no matter if 
 that attack has behind it the feeling or prejudice of 99 per cent 
 of the people,” they will stand up against that attack. This is 
 a noble ideal, but where are these paragons to be found? Even 
 far higher officers than commissioners are not always found to 
 be unresponsive to public sentiment. The President has un- 
 doubtedly selected for the commissions he has already filled 
 the men whom he believed the best adapted to the work. 
 Nearly all the members of the present Commerce Commission 
 were appointed by him, and yet the Administration bill intro- 
 duced in the House a year ago proposed to abolish this Com- 
 mission absolutely. The first Canal Commission were paid 
 magnificent salaries, and yet they were unceremoniously deposed 
 from office in scarcely a year after the President had appointed 
 them. And the present Canal Commission, even with the aid of 
 the $10,000 press agent, does not seem to command the admiring 
 approval of the country. [Applause.] The President will be 
 compelled to discover a new field if he finds the remarkable men 
 that he undoubtedly desires to appoint. But, even if he should 
 find them, he can not endow them with immortality, and some 
 day another President will appoint their successors, provided 
 the Board should not be abolished beforehand, and these suc- 
 cessors may be made of common official clay. For my part, I 
 doubt that you will get a better Commission than the one you 
 now have. I have known the New England member from boy- 
 hood. He is a brilliant lawyer, and one whom it is not possible 
 to corrupt. The chairman is an able and fair-minded man. The 
 other members command the respect of the people who know 
 them. 
 
 But the difficulty will be not so much with the men as with 
 the system. They will be unable to perform those impossible 
 duties, and then their work is near the political line, across 
 which they will inevitably drift, and, as has been attempted 
 already in some of the most enlightened States in the Union, 
 some day, acting under pressure or under the spur of ambition 
 or of a desire to “ do things,” some great schedule is liable to 
 be broken into atoms, and the commerce and industry of one sec- 
 tion may be arbitrarily transferred to another. I believe that 
 it is vastly better for the interests of the country, so long as 
 rates can be fixed under the operation of economic laws, to re- 
 ject the artificial method proposed by this bill, which makes of 
 a commission a sort of Providence with power to create one 
 city and destroj^ another. 
 
 It is an extraordinary power — the power to fix railroad rates. 
 It might be so exercised as to act as a tariff between States ; to 
 strike down trade between remote sections of the country ; to 
 dissipate the foreign and domestic commerce of New York ; 
 to cause the great city of Chicago, like many another exhalation, 
 to sink back again in the marshes from which she sprang. And 
 yet gentlemen contend that this power is so unimportant that 
 we can call it “ administrative ” and delegate it. 
 
 6512 
 
15 
 
 As representing some of the people of New England upon this 
 floor, I say to you that I believe they do not care to offer up 
 supplications to any statutory deity at Washington for the 
 right to continue to exist, but that they will bravely take their 
 chances with those economic forces which, with a disastrous 
 exception, have hitherto ruled. Having seen her commerce 
 swept from the seas by the action of the national Government 
 in imposing an utterly useless and unstatesmanlike embargo, 
 New England can more safely reckon with the constant or 
 slowly changing economic forces than to have her domestic 
 commerce subject to the “ theories of progress ” of a commis- 
 sion, possibly of martinets and almost certainly of politicians. 
 The prosperity of her people is vital to the existence of the 
 great railroads which now serve them, but if that should be 
 entirely disregarded, if the railroads should attempt to destroy 
 themselves by destroying the communities which support them, 
 the people of New England still have the courts, and if you 
 will perfect their remedies the dangers that they will be under 
 in even the extreme case I have supposed will be less than the 
 dangers you are creating by the policy of this bill. 
 
 Economic writers divide American railroad commissions into 
 two classes — the strong and the weak. The strong ones are 
 those bristling with formidable legal powers and the weak ones 
 have commonly powers of investigating and reporting facts 
 and making recommendations. Mr. Charles Francis Adams, 
 an admirable authority, says the strong commission means “ the 
 constable ” and the weak one “ public opinion.” The difference 
 in the effect upon its possessor of the authority to advise and 
 the authority to command is strikingly illustrated by the so- 
 called “ strong ” and “ weak ” commissions. The strong com- 
 missions, as a rule, are in antagonism with the railroads and 
 often also with the courts which are compelled to intervene to 
 set aside decrees essentially confiscatory. The weak commis- 
 sions, having the power only to advise, base their advice upon 
 rational and reasonable grounds. The best illustration of the 
 weak commission is that of Massachusetts. Its power regard- 
 ing rates is purely advisory. When a complaint is made, it in- 
 vestigates and reports, advising the rate which it deems rea- 
 sonable, and I believe in every instance in the history of the 
 commission its advice has been accepted by the railroads. I 
 venture to say that the Massachusetts commission has done as 
 much for the development of the railroad system and for the 
 protection of its public as any State commission in the Union. 
 
 If you are seeking a model for a national commission, I do 
 not know of a better model. The national commission has been 
 most successful in those cases where it has acted somewhat 
 upon the theory upon which the Massachusetts commission is 
 constituted. Over 90 per cent of the complaints made to the na- 
 tional commission have through its influence been adjusted be- 
 tween the railroads and the complainants to the satisfaction of 
 both parties. But in the cases in which the Commission has 
 fulminated decrees as to rates it has accomplished very little 
 for the public or the railroads. Of thirty-four decisions which 
 have been carried to the courts it has been overruled in thirty- 
 two cases and only successful in two. If you want to change the 
 rate-making provisions of the present law, permit the Commis- 
 sion, as now, to declare a rate to be unreasonable and then let 
 them, as in Massachusetts, suggest the rate that they deem rea- 
 6512 
 
16 
 
 sonable. If tlieir suggestions are rational, they will have public 
 opinion behind them and the railroads will be forced to com- 
 ply ; but arm them, as you do in this bill, with the terrors of the 
 law, with the power to command railroads to make a rate or to 
 fix a so-called maximum rate, with authority to promulgate 
 little statutes, and you are sure to breed antagonism between the 
 Commission and the railroads. Then confer upon them the 
 powers proposed in a bill prepared by a very able member of the 
 Senate, against every species of favoritism, let them proceed in 
 the courts in the interest of individuals who have suffered by 
 unreasonable rates or unfair practices of railroads, have the de- 
 cision of these cases expedited, and it seems to me you will have 
 made a much better solution of the railroad question than you 
 afford in your bill. 
 
 Much could be accomplished by the equal enforcement of the 
 laws already upon the statute books if those who enforce our 
 laws are possessed by the unappeasable rage of justice. Sir, I 
 have no sympathy with that vicious sentiment which would 
 prosecute a man, not because he is guilty, but because he is rich, 
 and that would make our prosecuting offices the refuge of every 
 demagogue and mountebank. But great as is our country, it is 
 not and it never will be great enpugh to shelter two kinds of law, 
 the one for you and me, for the general mass of American citi- 
 zenship, and the other for some executive grand duke. 
 
 A railroad rate is a fluctuating thing in the cost of its pro- 
 duction, and from an economic standpoint no law can fairly 
 fix a future rate which does not fix those material elements upon 
 which the rate depends. As was pertinently asked by Mr. 
 Benton, an able lawyer of my own State, if the State fixes the 
 price that railroads are to receive for transportation, would it 
 fix also the prices that go into the making of the cost of that 
 transportation? 
 
 Will it fix the price of coal and ties and iron, the wages of 
 labor, and those other varying elements of the cost of service, 
 all of which absorb by far the greater part of the rates they 
 receive? What prudent man would care to conduct a business 
 with the Government fixing the price at which he should sell 
 his product and leave him subject to the laws of supply and 
 demand for everything he was compelled to buy? A rate that 
 is reasonable to-day may be unreasonable to-morrow simply 
 from the standpoint of the cost of production, and, under the 
 present law, what is a just rate can always be determined at 
 any given time by a court and jury whenever an individual 
 claims that an unreasonable rate has been exacted. The ques- 
 tion of unreasonableness can be tested in the courts. The juries 
 will not hesitate to do as they have done in England, and the 
 public will be protected. Is that not far more rational than the 
 method you propose in this bill? 
 
 Mr. STEPHENS of Texas. Will the gentleman yield for a 
 question? 
 
 Mr. McOALL. If I can get through in the limited time which 
 I have, at the end I shall be very glad to yield to the gentleman. 
 
 I can not find an economic authority worthy of the name who, 
 prior to one year ago, supported the theory of Government- 
 made rates for this country. After the President had promul- 
 gated the notion of rate making as a cure for rebates and dis- 
 criminations, there appeared a crop of economists whose names 
 had previously escaped the attention of the country, each with 
 6512 
 
IT 
 
 a patent nostrum guaranteed to work a cure on the President’s 
 plan. It was the heyday of the economic quack. We have 
 even had it proposed, on high authority, that if it were dis- 
 covered that one of many competing railroads, say, between 
 Chicago and New York, had given low, secret rates, those rates 
 should immediately be declared to be the reasonable rates 
 although they would be forced upon the competing railroads, 
 who were eifcirely innocent, and might be made bankrupt by 
 them. That is a fair illustration of some of the economic 
 theories that have been evolved upon this question. 
 
 It is said that the sentiment of the shippers is behind this 
 rate-making proposition. With the exception of isolated indi- 
 viduals, whatever sentiment has been expressed in favor of 
 this policy did not appear until it was proposed fourteen months 
 ago and was authoritatively put forth as the remedy for the 
 evils of discrimination and the giving of rebates. Even then, 
 few complaints were made that the rates were too high, but that 
 they were unequal, and on the assumption that the proper 
 remedy for that inequality was in the fixing of rates by the 
 Commission, the proposition was supported by business organi- 
 zations. But the more the plan was studied the less- it received 
 the approbation of the business men of the country. The first 
 serious opposition came at the convention of shippers called 
 by Mr. Bacon, the promoter of this movement. The organiza- 
 tions in that convention were those which he himself had selected 
 and the most important of them, and probably the majority of 
 them, were opposed to his scheme and were therefore ruled out 
 of the convention. It is said that those protesting delegations 
 were packed by the railroads. But what shall be said of the 
 great national convention of the boards of trade of the country, 
 the most representative convention of business men that is held 
 upon this continent? This convention, held in the city of Wash- 
 ington during the last month and only a year after this new 
 gospel had been preached, adopted a resolution with regard to 
 rate fixing where the proceeding was to begin with the courts 
 and end with them and was, in effect, a most emphatic condem- 
 nation of this policy. 
 
 That resolution was adopted by a vote of ten to one of the 
 delegates assembled. And let me say to Members on the other 
 side of the House that this rate-fixing policy found no more un- 
 compromising opponents in that convention than were found 
 among the delegates from the great cities of the South. They 
 saw its viciousness not merely from the traditional Democratic 
 standpoint, but also from the position of self-interest. They 
 saw the South standing exultant upon the threshold of a bril- 
 liant era of prosperity, just entering upon her career of indus- 
 trial glory, and that the railroads will do for her what they 
 have already done for the North and West unless the capital 
 which would naturally be invested in them should be frightened 
 aw^ay by this populistic hullabaloo in which you are joining. 
 
 Mr. ADAMSON. May I interrupt the gentleman? 
 
 The CHAIRMAN. Does the gentleman from Massachusetts 
 yield to the gentleman from Georgia? 
 
 Mr. McCALL. Certainly. 
 
 Mr. ADAMSON. I do not wish to injure the gentleman by 
 taking his time, but I will endeavor to make reparation. I 
 know the gentleman desires to be correct, therefore I desire to 
 make a correction. I understood the gentleman a few moments 
 6512 2 
 
18 
 
 ago to declare that under this law excursions could not be per- 
 mitted without taking time in going before the Commission. I 
 wish to call the gentleman’s attention to section 22 of the “ act 
 to regulate commerce.” It makes a provision for excursions as 
 well as for governmental and charitable purposes. 
 
 Mr. McCALL. It may be that I am mistaken, but I think that 
 it is provided that schedules of all rates and fares shall be 
 printed thirty days before they are put in force. That would 
 operate by implication to change the existing law. 
 
 I willingly agree that my friend has studied the bill more 
 carefully than I have. But that is my conclusion. 
 
 Mr. ADAMSON. I do not think there was any intention to 
 alter that special section. 
 
 Mr. BARTLETT rose. 
 
 The CHAIRMAN. Does the gentleman from Massachusetts 
 [Mr. McCall] yield to the gentleman from Georgia [Mr. 
 Bartlett] ? 
 
 Mr. BARTLETT. May I be permitted to say that in this bill 
 there is a distinct provision that none of the provisions of the 
 act of 1887, unless repealed or altered by this bill? The saving 
 clause of this particular bill is that it saves to the Commission 
 every right and power they had under the act of 1887. 
 
 Mr. McCALL. It covers that particular point of that particu- 
 lar subject in the act of 1887, and *what the gentleman says 
 upon that point is all right. 
 
 Mr. BARTLETT. We do not cover the point. 
 
 Mr. McCALL. I beg the gentleman’s pardon. I think the 
 bill very clearly covers the point of supplying the schedules for 
 rates for a period of thirty days before they are put in force. 
 
 Mr. BARTLETT. That is the act of 1887 also. 
 
 Mr. McCALL. Yes ; I may be mistaken, but I am still of the 
 opinion strongly in my reading of the bill that I am correct. I 
 thank the gentleman for calling my attention to the point. 
 
 It is contended that the policy of national rate making is 
 necessary in order to avert governmental ownership. Either 
 governmental ownership is an evil or it is not. If it is a wise 
 policy, we should embark upon it, but if it is an evil, the way to 
 avert it is certainly not to take the first long step from economic 
 rectitude that lies in its direction. Some very vicious policies 
 have threatened our country and have been made dangerous by 
 our taking the first step as a compromise. That is true with 
 reference to inflation. It is emphatically true with reference 
 to the coinage of silver, when the reason was given for taking 
 repeated steps in coining or buying that metal that they were 
 necessary to avert free coinage, until finally we had thousands 
 of tons of silver stored in the Treasury, and it was only by an 
 almost unexampled act of Presidential heroism that we did not 
 go to the silver standard by the mere force of gravitation. 
 
 You do not propose to have the Government take the railroads 
 by this bill, but you propose to have it take away from the con- 
 trol of the owners their only beneficial interest, which is the 
 rate. It is said by the advocates of the bill, for purposes of 
 prejudice or extenuation, that the securities of our railroads 
 are bountifully watered. If true, that would be a relevant mat- 
 ter, perhaps, for the courts to consider when a shipper claimed 
 that an unreasonable rate had been exacted. Certainly it fur- 
 nishes no argument for the passage of this bill. It must be 
 considered as a matter of denunciation and indulged in for 
 6512 
 
 \ 
 
19 
 
 the purpose of exciting prejudice. But let us see what the fact 
 is. There is no higher authority upon the subject of railroads 
 in the United States that President Hadley, of Yale, who first 
 won distinction as professor of railroad economics in that uni- 
 versity. 
 
 Last year he made the statement in a letter published in the 
 Boston Transcript — and the letter was by no means generally in 
 favor of our railroads — that the railroads of the country could 
 not be duplicated for $50,000 a mile. In other words, counting 
 their franchises as of no value, the material and labor necessary 
 to duplicate them would be in the aggregate not less than ten 
 and a half or eleven billion dollars, which is substantially the 
 amount of their outstanding capitalization. Probably it would 
 cost the Government, if it undertook to * duplicate the work, 
 twice that amount, and that would not include the enormous 
 sums that have been thrown away in reconstruction, where, in 
 order to do away with curves and grades, much original con- 
 struction has been abandoned. If you count the franchises as 
 nothing — and your railroads can not be duplicated to-day by 
 private enterprise for less than substantially the amount of the 
 capitalization — how can you say that there is aqy material 
 amount of water in their securities? In the capitalization of 
 some railroads the nominal capital is not equal to the amount 
 actually paid in. In some cases the stock was sold by the rail- 
 road at a high premium and the premium went into its treas- 
 ury. Undoubtedly there are cases where railroads were built 
 over a new country at great risk, where business was not de- 
 veloped, and the men furnishing the capital received stock 
 bonuses. These bonuses were offered openly in order to attract 
 capital necessary for the work. I fancy you will hardly deny 
 that the investor was fairly entitled to a chance for extra profit 
 to pay him for the risk he assumed. If the railroad should 
 turn out to be unprofitable, he might lose his entire investment 
 The man who paid $2 an acre for his land saw it increase, in 
 many cases, by the building of the railroad, by the jeopardy of 
 the money of other men, to $100 an acre. Are we to call the 
 $98 water? Gentlemen are not heard to advance that theory. 
 
 Mr. MANN. Will the gentleman permit me a suggestion in 
 that line? 
 
 Mr. McCALL. With pleasure. 
 
 Mr. MANN. The total capitalization of the railroads of the 
 United States is about thirteen billion dollars. 
 
 Mr. McCALL. I think the total outstanding capitalization is 
 less than twelve billions. 
 
 Mr. MANN. The total amount of stocks and bonds is some- 
 thing over thirteen billion dollars, with a railroad mileage of 
 over two hundred thousand miles. In Great Britain, together 
 with continental countries, the total amount of mileage is con- 
 siderably less than two hundred thousand miles, with a total 
 capitalization of over eighteen billion dollars, so that the 
 amount of capital we have invested per mile in this country is 
 far less than the amount of capital per mile invested in the 
 roads owned by the European governments or by private owner- 
 ship there, notwithstanding the prevalent opinion that every- 
 thing here is watered and everything there is not watered. 
 
 Mr. McCALL. I am very much obliged to the gentleman for 
 his interruption, and it only adds another excellent authority to 
 6512 
 
20 
 
 the authority whom I have already quoted, President Hadley, 
 of Yale University. 
 
 Then it is said that money bonuses and land grants were given 
 to encourage railroad building, and in listening to the very elo- 
 quent speech of the gentleman from Michigan on Tuesday I at 
 first thought he was entirely overlooking the fact that there 
 had been any material investment of private capital. That 
 bonuses were given does not now impress me as of the greatest 
 consequence, because the Government, or the people who gave 
 them, did so from the standpoint of their own self-interest, and 
 in many cases they profited richly by the building of the rail- 
 road ; but I think it fair for gentlemen to correct the order in 
 which they mention the sources of supply of capital to build 
 railroads. I believe T am entirely within the truth when I say 
 your bonuses and grants from national and local governments 
 and individuals would not all combined pay 5 per cent interest 
 for a single year upon our railroad capitalization. 
 
 There is no species of property that deserves the grateful con- 
 sideration of Congress more than the railroad property, for it 
 has conferred incalculable benefits upon the country. Without 
 the railroads our population would be confined to the seaboard 
 and the water courses. Three-fourths of the country would be 
 unsettled and uncivilized. But largely as a result of daring 
 investments that have been made we have to-day, with one- 
 twentieth of the population of the globe, a valuation of more 
 than a hundred billions, or one-third of the entire capital of the 
 globe. 
 
 Mr. SIBLEY. Will the gentleman pardon an interruption? 
 The gentleman speaks of one-twentieth population. I think it 
 is important that you also show that with one-twentieth popu- 
 lation w r e are furnishing one-third, or thirty-three and a third 
 per cent, in round numbers, of the entire food products of the 
 world. 
 
 Mr. McCALL. Yes. 
 
 The great factor in the advancement of America has been the 
 free play given for individual action. If at the outset we had 
 tied up the energies of men by statutes and removed the spur 
 of ambition from the inventor, the railroad builder, and the 
 man of business, the progress of our country would have been 
 far less marked than it has been during the last century, and 
 the progress that the rest of mankind has gained under the in- 
 fluence of our example would also have been less. The Amer- 
 ican railroad managers, not through altruism or philanthropy, 
 but by their individual genius, called into play by the benefi- 
 cent influence of our free institutions, have been working out 
 the destiny of the American people. They have helped power- 
 fully to mold a vast and naturally diverse continent into one 
 people. They have, in a double sense, bound together the most 
 remote parts of the country by cords of steel. The have inter- 
 woven our interests and our hearts inextricably with the meshes 
 of the iron net. And if they are to receive your denunciation 
 intead of your gratitude, then there is no species of property 
 in the country which may not be plundered by law. There is 
 a prescription that will almost infallibly work in forcing 
 through such legislation. Fiercely denounce some Wall street 
 magnate by name and then add some lurid declamation about 
 6512 
 
21 
 
 insurance, and you could successfully rob any business in the 
 country except farming, and if farmers were not so numerous 
 they too would not escape. 
 
 Mr. ADAMSON. Will the gentleman allow a question? 
 
 Mr. McCALL. Certainly. 
 
 Mr. ADAMSON. Do you suppose the law would allow any 
 farmer in this country who would be guilty of such an action to 
 escape the penitentiary? 
 
 Mr. McCALL. I trust the gentleman did not think I was re- 
 flecting upon the farmer. 
 
 Mr. ADAMSON. You are claiming immunity for the others. 
 
 Mr. McCALL. I was applying your prescription, that was 
 
 all. 
 
 Mr. ADAMSON. My prescription simply requires those who 
 are powerful to do right — to practice equality and justice — as 
 well as the other classes of the people. 
 
 Mr. McCALL. That is a magnificent generality upon which 
 you could put any proposition through in legislation. 
 
 Mr. ADAMSON. We have not indulged in generalities, but 
 we have provided some magnificent specialties in this bill. 
 
 Mr. McCALL. We often make a mistake, I venture to say, 
 in thinking that there is a genuine public opinion. Quite too 
 often here we think there is a raging popular sentiment when 
 it is only that we have a tendency of blood to our heads. The 
 people do not send us here to enact every popular noise into law. 
 [Applause.] We often make a mistake, I venture to say. 
 
 We have seen, then, two clearly defined systems of rate mak- 
 ing — that of France and Germany and other foreign countries 
 and that of America. We have seen that the foreign system, 
 although put in force in countries having dense populations and 
 with 'a relatively low scale of wages has led to high rates and 
 restricted trade, and that any extensive commerce between por- 
 tions of these countries remote from each other has only been 
 made possible by rivers and canals. On the other hand, we have 
 seen the American system put in force over a sparsely settled 
 area and, although the wage scale has been more than twice 
 that abroad, the average freight rate has been only half as great, 
 and we have seen the most remote parts of a continent trading 
 with each other, the whole country made a common market and 
 a commerce pouring over our railroads not far in volume from 
 the combined railroad commerce of all the rest of the world, an 
 interstate commerce so vast as to make even our prodigious for- 
 eign commerce seem insignificant. And you are proposing by 
 this bill to strike down the American system under which these 
 marvels have been produced and substitute the foreign system. 
 Measuring my word and speaking to the exact relation be- 
 tween the system you are overturning and the system you are 
 adopting I say that I believe you are about to vote for the most 
 un-American proposition ever submitted to an American Con- 
 gress. The fundamental question here, stripped entirely of 
 sentiment, is whether we shall continue the American system, 
 where the rates have inevitably sprung from the action of 
 economic forces, or whether we shall adopt the expensive for- 
 eign system of government-made rates and have the management 
 of your railroads thrown into politics, as if there were not al- 
 ready enough in this country upon which the politician can lay 
 his felonious paws. [Applause.] 
 
 6512 
 
22 
 
 The Government may, if it desires, provide and operate at its 
 own cost highways over which its citizens may travel and move 
 their property, but it has not been a commonly exercised func- 
 tion to require citizens, at their own cost, to carry the persons 
 and property of other citizens. It certainly has been a no less 
 common function of government to fix the price of bread and 
 to establish public granaries for corn. And if either of these 
 functions must be exercised, it should be under the most careful 
 safeguards or it will be attended with grave danger. Burke 
 says that certain of the Pope’s territories, being obliged to fur- 
 nish Rome and the State granaries with corn, were utterly 
 ruined, and then he adds : “ Having looked to the Government 
 for bread, they on the first scarcity will turn and bite the hand 
 that fed them. To avoid that evil, Government will redouble 
 the causes of it.” The philosophy of Burke’s illustration ap- 
 plies to the pending bill. It is not the least weighty of the 
 objections against it that it will tend to corrupt the American 
 people. It implies no defamation, but only a slight knowledge 
 of human nature to see that you are holding out to them a 
 temptation dangerous to their morality and dangerous also to 
 the rights of private property. Your railroad securities are 
 held in a comparatively small portion of the country, and the 
 great mass of people scattered over the rest of the country, with 
 little interest of ownership, will be interested in cheaper trans- 
 portation. Will not the pressure of the greater mass of what 
 you call public opinion have the same effect upon the national 
 Commission as it has had upon State commissions, against 
 whose rates the courts have felt compelled to intervene? If so, 
 you must remember that the constitutional safeguards against 
 the National Government are fewer and less effective than 
 against the State governments.' 
 
 Can anyone justly say, in view of the history of our rail- 
 roads and the splendid service they are rendering, that the time 
 has arrived for our Government to embark upon so venturesome 
 a policy? The great organizations of labor, with their admirable 
 sense of self-preservation, clearly see the danger. 
 
 Your bill pretends to grant a judicial review of orders of the 
 Commission fixing rates, but it adopts the device of permitting 
 this to the railroad on the peril of its life. If the railroad avails 
 Itself of your inestimable privilege of review and the courts 
 decide in its favor, it costs the Government nothing and the rail- 
 road has the enjoyment of its former rate; but if, as has hap- 
 pened in two cases out of thirty-four, the court sustains the 
 Commission, the railroad, if it has not adopted the Commission’s 
 rate, which may prove to be confiscatory, must pay a penalty to 
 the Government of $5,000 per day, multiplying each day by the 
 number of times the rate is enforced, a penalty that in some 
 cases would mount into the millions. Do you call this a fair 
 judicial review? Would there be any taint of a “ square deal ” 
 in saying to a man whom a police justice had fined, “ Yes ; the 
 justice may be wrong, as justices usually are, and you may 
 appeal ; but if the higher court happens to sustain the justice, 
 you shall lose your life?” 
 
 Mr. ADAMSON. May I interrupt the gentleman? 
 
 Mr. McCALL. Certainly. 
 
 Mr. ADAMSON. Does not the gentleman think that the 
 carriers can avoid all such risks by putting in force the rates 
 fixed while they litigate to set them aside? 
 
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23 
 
 Mr. McCALL. Certainly ; and that illustrates the point. 
 You are trying to coerce the carrier on penalty of his life. 
 
 Mr. ADAMSON. But if a man is going to the penitentiary he 
 may appeal without asking a supersedeas, then if he does not 
 win he saves that much time. 
 
 Mr. McCALL. There is no such proceeding in the bill, as I 
 understand it. 
 
 Mr. BARTLETT. The gentleman certainly does not under- 
 stand that there is no provision in this bill permitting an inter- 
 locutory order by the court to stay the enforcement of the 
 order until it can be adjudicated? This bill provides for the 
 interlocutory order. 
 
 Mr. McCALL. I think it is doubtful if that is in. Evidently 
 the gentleman’s opinion is different from the opinion of his col- 
 league who just interrupted me. I understood him to say the 
 railroad might yield and adopt the rate. 
 
 Mr. ADAMSON. I suggested that he might litigate the rate 
 without asking a supersedeas. 
 
 Mr. BARTLETT. I started to say it is true that it says 
 unless it is stopped by an injunction. I apprehend that the 
 gentleman must know and believe as a lawyer that it is not in 
 the power of Congress to prevent a railroad from appealing to 
 the court and the processes of the court until the questions have 
 been decided. 
 
 Mr. McCALL. In my opinion it is entirely clear that that is 
 the purpose of the bill. 
 
 Mr. BARTLETT. I wish I could make it accomplish that. 
 
 Mr. McCALL. There may be evidence of a sense of justice 
 in all this, but, if so, it is the sense of justice not of man, but 
 of the hyena and the bear. The philosophy of it is that you 
 may run fof your life, but you are eaten if you stand, and you 
 will be eaten if you are caught. Compared with the scheme 
 of this bill there is a certain nobility in the policy of govern- 
 ment ownership, wrong as I believe that policy to be. You 
 carve our magnificent railroad system not as a feast fit for the 
 gods, but hew it as a carcass fit for hounds. 
 
 We pass laws here with an easy optimism and a profound 
 faith that, so great are the American people, their prosperity 
 is proof even against vicious government. And so the two 
 great parties, in playing the game of politics, sometimes vie 
 with each other in pandering to the popular passion of the 
 hour, and court the roar of the galleries rather than history’s 
 approved voice. Undoubtedly the splendid strength and youth 
 of the American people are well-nigh unconquerable, but no 
 state was ever yet so great that a persistence in evil courses 
 could not lay it low. We may presume too far. If we are 
 guilty of reckless and impulsive action here we may wreck 
 the nation. If you will pardon an old fable : As the boy 
 Phaeton, driving the horses of the sun, but lacking Apollo’s 
 dattting glance and unerring touch of rein, did not follow the 
 safe middle course, and thus wrought havoc to both the earth 
 and sky ; so by impulse and unsteadiness in driving this 
 Washington chariot of ours, now steering too high and now 
 too low, we may put our American constellations to flight, dry 
 up the courses of our iron rivers, and make of our fertile 
 prairies the sands of another Libya. [Applause.] 
 
 In some remarks which I submitted on this floor one year 
 ago upon a similar measure I dwelt upon what I regard as much 
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 41 
 
 D970 
 
 more important aspects of the proposed legislation than its 
 economic features. I shall not repeat what I then said, but 
 content myself with the barest reference. This bill makes 
 an enormous contribution to what I regard as an evil of the 
 times — the steady encroachment of the legislature upon liberty. 
 Our boasted American freedom is being construed to mean the 
 power to weld statutory fetters upon the individual — to impose 
 upon our own selves a species of slavery. We sometimes say 
 that we are restraining the individual in the interest of the 
 other eighty millions, and we thus take away the rights of every 
 individual man in the whole mass and sacrifice liberty to a mere 
 abstraction. This is a condition abhorrent to the idea of the 
 founders of the Republic, who knew that men had suffered as 
 greatly from too much as from too little government ; that they 
 had thousands of times been punished by law for actions essen- 
 tially virtuous, and so, taking care to safeguard that high kind 
 of liberty which would protect the individual against the 
 encroachments of the Government, they set our State upon the 
 middle course that lies between anarchy and despotism. This 
 tendency to too much government is not confined to one party, 
 for I have observed that gentlemen who delight most in quoting 
 the immortal Jefferson are sometimes the fondest of imposing 
 these fetters upon the people. The aggregate achievement of 
 individuals has made America. To my mind, American free- 
 dom is individual freedom. Give men as much liberty as you 
 can consistently with order and under the stimulus of freedom 
 and order and the right to enjoy what they accomplish and 
 what they gain this nation will keep magnificently moving on. 
 
 And then there is centralization. At the rate we are now 
 moving it will not be long before we regulate everything and 
 everybody from Washington. You can not govern the whole 
 universe from a single point and have a shred of liberty survive. 
 
 Instead of chasing every will-o’-the-wisp that shows itself 
 upon somebody’s horizon, let us then guide ourselves by the 
 great first principles of the American Government. And to 
 return to this bill, you will have, in my opinion, a better 
 railroad system and a better people if you safeguard in the 
 courts the fundamental right of every man to a reasonable 
 and equal rate and permit those rates to respond, as they have 
 hitherto, to economic forces. In the conditions existing to-day 
 I believe the people would shrink from governmental ownership, 
 because of the expense and danger incident to governmental 
 management. But that expense and that danger would cer- 
 tainly not be less when you make our Interstate Commission 
 general managers of railroads built and owned and operated at 
 the risk of private capital. [Loud applause.] 
 
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