: . .v
. * . . . . .a , * . * ,
Conservative *
have received the support of a large
majority of the senate had not the rules
of that body and the early approach of
the end of the session , combined with
the obstructive tactics of a numerically
insignificant minority , made it impos
sible to secure a vote upon its passage.
It should be observed that whatever
pooling measure may finally be adopted
by congress , operations under it will
certainly bo free from objections such
as those growing out of the instability
which characterized pooling arrange
ments prior to 1887. The contracts
permitted will have the express sanction
of a federal statute , and any railway
corporation that may be injured by the
failure of another to observe the terms
of a pooling agreement to which both
parties may invoke judicial aid in se
curing the particular redress that is
found to be adequate and suitable.
Such agreements will naturally provide
for a definite period of operation , with
possibly continuance thereafter subject
to notice of the intention of any party
to withdraw. The possibility of unjust
personal discriminations will , it may
reasonably be hoped , be minimized by
the discontinuance of separate soliciting
for traffic , and the substitution of joint ,
for independent ticket and freight
agencies.
Mr. President , I believe it only reason
able to assert that the facts to which I
have directed your attention establish
the existence of a natural tendency
toward combination in the railway in
dustry , that they demonstrate the futil
ity and the fatuity of legislation inten
ded to prevent such combinations , and
establish beyond controversy the advis
ability of restoring the pooling privilege ,
with federal supervision and legal effect
and sanction added. Tt would be almost
superfluous to introduce evidence , as
would be easily practicable , that the
prohibition of pooling itself a restriction
upon freedom of contract artificially
stimulates the tendency toward other
forms of combination. All are familiar
with the facts which amply prove this
to have been the case since 1887.
It remains to consider the relation
between railway combinations and com
binations in other lines of industry.
Nearly every one who has addressed
this conference has alluded to discrimi
nations in railway rates as one of the
causes of industrial combinations , and
perhaps the most important public con
tribution made by this body will , when
in the lapse of time its results can ade
quately be summarized , be found to bo
the classification of combinations with
regard to whether they are the result of
superior efficiency in production ,
whether of machinery or organization ,
or of special privileges at the hands of
government or the agents of govern
ment.
Whatever may be held as to the con
sequences of the first class there 'can be
no doubt that those combinations that
are dependent upon special favors of any
kind are harmful in the extreme.
Railway corporations are ngonts of
government in the sense that they are.
empowered thereby to exercise functions
usually and properly regarded as govern
mental. If these agencies unjustly dis
criminate among their patrons , those
receiving unfair advantage may be able
to dominate markets and destroy com
petition. In the words of the present
chairman of the Interstate-Commerce
Commission , whoso clear and vigorous
English is always quotable :
"The ultimate effect of preferential
rates is to concentrate the commerce of
the country in a few hands. The
favored shipper , who is usually the
largo shipper , is furnished with a
weapon against which skill , energy and
experience are alike unavailing. "When
the natural advantages of capital are
augmented by exemptions from charges
commonly imposed , it becomes powerful
enough to force all rivals from the
field. "
Wo have found , therefore , in unjust
ly discriminating rates a primary causn
of a dangerous and harmful industrial
growth. Wise statecraft will seek to
remove the cause. But how ? Can this
be accomplished by making it a felony
to grant special rates , as suggested by
the great orator from New York , Hon.
Bourke Cockran , who has preceded me
in indicating this cause of industrial
combination ? Apparently not , for it is
now nearly a decade since the interstate-
commerce law was so amended as to
provide the penalty of imprisonment ,
not- only for the railway official who
makes but for the shipper who accepts
any concession from the open published
rates. Nothing could be more drastic ,
yet discriminations so accomplished
have been a conspicuous feature of the
railway situation during nearly the
entire subsequent period , the existence
of the evil has attained public notoriety ,
and its magnitude has alarmed and
amazed the nation , yet no prison door
has over opened to receive an individual
convicted of violating the statute.
These practices are not contrary to
the ethics of modern business , soiling or
buying at lower than the usual prices or
giving or accepting special rates are not
recognized evidences of depravity , the
methods of making concessions are
easily hidden , and those interested in
their detection are , as compared with
their beneficiaries , too frequently inex
perienced and powerless.
A little while ago I endeavored to
show that discrimination is the natural
result of competition among railways
seeking the same traffic. These conces
sions are not voluntarily granted by
railway officials , but are wrung from
them through fear of losing important
traffic j they are grudgingly and reluc
tantly given to those who control traffic
that is vitally important. To quote
Chairman Knapp once more :
" * * * it is simply out of the
question to have at once the absence of
discrimination a.id the presence of
competition. " And :
" * * * the choice lies between
competition on the one hand , with the
inevitable outcome of discriminations
which favor the few at the expense of the
many , or like charges for like service ,
which can be realized only by permit
ting and encouraging cooperative action
by rival railroads. "
Mr. President , I can add nothing to
this extract from one who has been for
years charged with the duty of attempt
ing to enforce a statute that in its pres
ent shape is unenforceable. To prevent
railway discrimination , to destroy many
of that evil class of combinations which
is based upon illegitimate advantages , it
is necessary to restore to railway cor
porations under federal supervision the
power to divide competitive business.
Then the possibility of unjust personal
discrimination will , it mny reasonably
be hoped , bo minimized by the discon
tinuance of separate soliciting for traffic ,
and the substitution of joint for inde
pendent ticket agencies. The temporarily
arily divergent interests of separate
bodies of stock and bondholders will be
subordinated to the general interest of
all the carriers in the satisfactory ad
justment of the railway system to the
ends for which it exists , and the latter
will constitute a powerful agency for
the elimination of unjust discrimina
tions , including those among competing
localities and communities. Whenever
the exact proportion of competitive
traffic which will fall to each particular
route is as certain as that it will receive
all of the non-competitive traffic , both
will bo treated with equity , for there will
be no reason for favoring cities served
by more than one railway. The selfish
interests of carriers will then make
powerfully for justice , while such regu
lative instrumentalities as may be estab
lished by the public will have the
advantage of dealing with a railway
system that has become practically
unified. Until then the existence of
unjust discriminations must not be
charged against railway corporations or
railway officials , but against the public
agents , legislative or otherwise , which
have insisted upon the continuance of
the uneconomic , wasteful and socially
detrimental form of railway compe
tition.
The mutual fire
MUTUAL UECKIT. .
insurance com
panies of Nebraska are doing a tremendous
deus business and House Rent Holcomb
is president of one of them. When dis
astrous and extensive losses come to the
policy-holders in these companies will it
transpire that , unconsciously and with
no evil or fraudulent intent , they have
been mutually deceived ?
